ALAMCO, INC., ANNOUNCES EARNINGS
ALAMCO, INC., ANNOUNCES EARNINGS CLARKSBURG, W.Va., March 23 /PRNewswire/ -- Alamco, Inc.
(AMEX: AXO) announced net income for the fourth quarter of 1991 of $225,000 or $0.09 per share (including and extraordinary tax provision of $19,000 or $0.01 per share) compared to fourth quarter 1990 net income of $585,000 or $0.23 per share (including and extraordinary tax benefit of $103,000 or $0.04 per share).
For 1991, Alamco reported net income of $543,000 or $0.21 per share, as compared to net income of $3,240,000 or $1.25 per share for 1990. Results of 1991 and 1990 include extraordinary gains of $712,000 or $0.28 per share and $1,395,000 or $0.54 per share, respectively, related to the extinguishment of debt. Results in 1990 also included an extraordinary gain to recognize prior years' income tax benefits of $531,000 or $0.20 per share. Results in the fourth quarter and full year 1991 include revenues of $398,000 attributable to gas sales from 88 wells acquired as of Oct. 1, 1991, from Phillips Petroleum Company (Phillips Acquisition). In addition, well tending fees earned from the operation of a substantial number of these wells contributed $13,000 to revenues. Results in the fourth quarter and full year 1990 include revenues of $142,000 associated with the distribution of funds from an escrow account established under the 1988 Columbia agreement. Fourth quarter 1991 revenues increased $152,000 or 6 percent to $2,811,000 as compared to fourth quarter 1990 revenues of $2,659,000. Increased revenues from the Phillips Properties were partially offset by lower gas and oil prices on existing properties in the fourth quarter of 1991 as compared to 1990. Other nonoperating income decreased $246,000 primarily due to the absence of gains on the disposal of certain assets in the fourth quarter of 1990. Expenses for the fourth quarter 1991 of $2,492,000 increased $242,000 or 11 percent as compared to $2,250,000 in the fourth quarter 1990 resulting from expenses to operate the Phillips properties and higher employee-related costs. In addition, interest associated with the revolving credit facility established in March 1991 is being charged to expense as it accrues, whereas under the former loan arrangement, the company recorded interest payments as reductions to long-term debt. Accordingly, interest expense of $199,000 increased by $157,000 over the same period last year. Also, the company recorded an income tax provision of $71,000 in the fourth quarter of 1991 as compared to a provision of $169,000 last year. Revenues in 1991 of $9,653,000 increased $470,000 or 5 percent compared to 1990 revenues of $9,183,000. Higher gas sales volumes resulting from the installation of a gas gathering system in the company's Tennessee field in late 1990 and higher well tending income contributed $165,000 and $247,000, respectively, to the increase. Lower oil prices and volumes adversely affected 1991 revenues by $128,000 compared to last year. Other nonoperating income decreased $1,106,000 to $166,000 for 1991 due to, among other things, the absence of $675,000 in capitalized interest reversals and lower interest income of $97,000. Expenses in 1991 total $9,833,000, an increase of $1,143,000 or 13 percent from 1990. Operating expenses of $3,657,000 in 1991 were up by $198,000 or 6 percent over 1990 mainly due to higher employee-related costs and expenses incurred to operate the Tennessee gas gathering system and the newly acquired producing properties. General and administrative expenses were up $731,000 to $2,846,000 in 1991 compared to $2,115,000 in 1990, primarily due to positive adjustments to the litigation reserve which reduced general and administrative expense in 1990, expenses incurred to establish the company's new revolving credit facility and adjustments to receivables for uncollectible accounts in 1991. Interest expense increased in 1991 for the previously stated reason. The company recorded a 1991 income tax provision of $155,000 compared to a provision of $451,000 in 1990. John L. Schwager, president and chief executive officer, stated that barring unanticipated events, 1992 general and administrative expenses are presently budgeted to be approximately $500,000 lower than the 1991 general and administrative expense levels due to implementation of certain cost containment measures and the absence of one-time transaction costs incurred in 1991. Schwager also stated that the Phillips Acquisition and Tennessee gas gathering system installation illustrates the company's ongoing investment strategy designed to build its gas and oil reserves and revenues while holding general and administrative expense levels nearly constant. Due primarily to these investments, 1991 gas sales volumes exceeded 1990 levels by 9 percent and the company expects 1992 gas sales volumes to exceed 1991 levels. The administrative activities related to these investments were absorbed by the company's existing management organization without increasing staff levels or other general and administrative expenses. These economies of scale are expected to result in lower unit costs on expected increasing production volumes in future years. Schwager further stated that the company will continue this investment strategy through the acquisition of existing producing properties and the development of gas and oil reserves on properties held by the company. The company will use its operating cash flows and available lines of credit to fund these investment opportunities. Alamco, headquartered in Clarksburg, W.Va., is an independent producer of gas and oil in the Appalachian Basin with a major operating concentration in West Virginia gas fields. The company's stock is traded on the American Stock Exchange under the symbol AXO. ALAMCO, INC. AND SUBSIDIARY Condensed Consolidated Statement of Operations (Unaudited) (In thousands, except share data) Period Ended Three Months 12 Months Dec. 31 1991 1990 1991 1990 Revenues $2,811 $2,659 $9,653 $9,183 Operating expenses 1,025 893 3,657 3,459 General & administrative expenses 479 563 2,846 2,115 Depreciation, depletion & amortization 789 752 2,805 2,950 Interest expense 199 42 525 166 Total expenses 2,492 2,250 9,833 8,690 Income (loss) from operations 319 409 (180) 493 Other nonoperating income (expense), net (4) 242 166 1,272 Inc. (loss) bef. inc. taxes & extraordinary items 315 651 (14) 1,765 Income tax provision 71 169 155 451 Income (loss) before extraordinary items 244 482 (169) 1,314 Extraordinary items: Gains on debt extinguishment -- -- 712 1,395 Income tax (provision) benefit (19) 103 -- 531 Net income 225 585 543 3,240 Earnings per share: Income (loss) before extraordinary items $0.10 $0.19 $(0.07) $0.51 Extraordinary items $(0.01) $0.04 $0.28 $0.74 Net income per share $0.09 $0.23 $0.21 $1.25 Weighted average number of shares outstanding 2,540,785 2,588,882 2,575,103 2,586,802 -0- 3/23/92 /CONTACT: Jane Merandi of Alamco, 304-623-6671/ (AXO) CO: Alamco, Inc. ST: West Virginia IN: OIL SU: ERN
DM-JH -- PG004 -- 0388 03/23/92 08:02 EST
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|Date:||Mar 23, 1992|
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