Magellan Petroleum Corporation Announces Second Quarter Results
PORTLAND, Maine, Feb. 23 /PRNewswire-FirstCall/ -- Magellan Petroleum Corporation (Nasdaq: MPET) (ASX: MGN) reported a consolidated net loss of $525,000 ($.01 per share) on gross revenues of $5.2 million in its fiscal second quarter ended December 31, 2008, as compared to a net loss of $10.8 million ($.26 per share) on revenues of $10.4 million in last year's second quarter.
For the six-month period ended December 31, 2008, the Company reported net income of $1.0 million ($.02 per share) on $15.6 million in revenues, compared to a net loss of $11.3 million ($.27 per share) on revenues of $20 million in the prior period last year.
Magellan's President and Chief Executive Officer, William H. Hastings said "We are adversely affected by the world's economic slowdown and resulting weakness in energy markets. Magellan continues to face challenges in 2009; we are actively addressing these issues. Our Company has oil and gas reserves "available" in good markets where energy supply is needed. We have a debt-free capital base, and are working to access more capital in equity markets" Hastings also said, "We recently announced that Magellan has entered into a definitive securities purchase agreement with Young Energy Prize S.A. ("YEP"), a Luxembourg corporation, providing for a $10 million equity investment in our Company. This is the first step toward Magellan's growth plan."
The Company's base Mereenie gas contract expires in June 2009. Mereenie gas sales were approximately $6.0 million (net of royalties) or 84% of total gas sales for the six months ended December 31, 2008. The Mereenie Producers have been advised by PWC, the purchaser of all Mereenie gas production that the development of the Blacktip gas field has been delayed and there is the likelihood that the first gas from that field may not be available until the third or possibly fourth quarter of 2009. Nominations under a second Mereenie contract, backing up Blacktip, have now been made through the end of 2009. The Company is actively pursuing further gas sales arrangements and ventures for its remaining Mereenie and Palm Valley reserves.
Depletion, depreciation and amortization costs for the 2008 quarter and six month period were down $2.3 million and $4.2 million over the 2007 periods due to lower depletable costs, mostly in Nockatunga as depletion is greater than new spending and the decrease in the average exchange rate from the prior periods.
Statements in this press release which are not historical in nature are intended to be, and are hereby identified as, forward looking statements for purposes of the "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995. The Company cautions readers that forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward looking statements. Among these risks and uncertainties are pricing and production levels from the properties in which the Company has interests, and the extent of the recoverable reserves at those properties. In addition, the Company has a large number of exploration permits and faces the risk that any wells drilled may fail to encounter hydrocarbons in commercially recoverable quantities. The Company undertakes no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.
Comparative, consolidated results for the three and six month periods are shown in the following consolidated statements of operations:
MAGELLAN PETROLEUM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2008 2007 2008 2007
REVENUES:
Oil sales $1,832,005 $4,887,721 $7,477,592 $9,620,541
Gas sales 2,999,857 4,772,980 7,308,929 8,762,164
Other production
related revenues 340,422 713,280 824,447 1,313,209
Total revenues 5,172,284 10,373,981 15,610,968 19,695,914
COSTS AND EXPENSES:
Production costs 1,279,944 2,525,231 4,266,806 4,623,257
Exploration and dry
hole costs 543,977 724,117 1,267,377 2,737,591
Salaries and employee
benefits 347,793 375,840 813,985 820,349
Depletion, depreciation
and amortization 2,060,331 4,365,856 4,561,281 8,774,220
Auditing, accounting and
legal services 422,329 321,052 689,799 558,103
Accretion expense 119,861 176,180 278,276 346,388
Shareholder
communications 122,593 154,222 213,172 201,288
Loss (gain) on sale
of field equipment 15,367 (17,304) 11,861 (26,957)
Other administrative
expenses 524,181 771,732 1,293,250 1,641,645
Total costs and
expenses 5,436,376 9,396,926 13,395,807 19,675,884
Operating (loss)
income (264,092) 977,055 2,215,161 20,030
Interest income 460,375 569,862 1,088,544 1,059,079
Income before income
taxes 196,283 1,546,917 3,303,705 1,079,109
Income tax provision (720,977) (12,327,026) (2,320,588) (12,333,664)
NET (LOSS) INCOME $(524,694) $(10,780,109) $983,117 $(11,254,555)
Average number of shares
outstanding
Basic 41,500,325 41,500,325 41,500,325 41,500,325
Diluted 41,500,325 41,500,325 41,500,325 41,500,325
NET (LOSS) INCOME PER
SHARE (BASIC AND
DILUTED) $(0.01) $(0.26) $0.02 $(0.27)
SOURCE Magellan Petroleum Corporation
Released February 23, 2009