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AMERICAN OIL AND GAS CORPORATION ANNOUNCES EARNINGS FOR THE SECOND QUARTER AND SIX MONTHS ENDED JUNE 30, 1993

 HOUSTON, Aug. 9 /PRNewswire/ -- American Oil and Gas Corporation (NYSE: AOG) today announces net income applicable to common stock of $2.0 million or $0.08 per share for the quarter ended June 30, 1993, compared with $3.8 million or $0.18 per share for the second quarter of 1992. For the six months ended June 30, 1993, AOG reports net income applicable to common stock of $5.3 million or $0.20 per share, compared with $7.1 million or $0.37 per share for 1992.
 The decrease in earnings was due primarily to a $2.9 million reduction in gross margin on sales of natural gas. This reduction related principally to lower margins on sales under fixed-price contracts. Hedging activities and higher sales volumes only partially offset the effects of higher natural gas supply costs. Additionally, the second quarter of 1992 included a $1.7 million contribution to operating income in connection with the favorable disposition of certain contractual matters. Gas sales volumes for the current quarter were approximately 48 Bcf, reflecting a 9 percent increase over the second quarter of 1992. Although this increase reflects modestly higher gas sales volumes for irrigation, irrigation volumes for the last two years have been below historical averages due primarily to weather.
 The company's risk management strategy did not fully offset the effects of price volatility on sales under fixed-price contracts, including monthly index-based contracts. To improve margins on natural gas sales, the company is reviewing its sales portfolio and purchase practices to utilize more effectively financial derivatives and other resources, including the company's expanded storage facilities. The company is also reforming certain of its sales contracts to reflect the value of the services provided.
 Gross margin on sales of natural gas liquids (NGLs) increased slightly during the current quarter due to higher sales prices compared with the second quarter of 1992. The higher sales prices were offset by a 9 percent decrease in sales volumes related to lower plant throughput. The increase in natural gas purchase costs during the current quarter had minimal impact on NGLs gross sales margin as the company had hedged its plant fuel and shrinkage.
 The company believes that improvements in operating practices, as well as the enhancements to its pipeline and storage facilities, will favorable impact future operating results. These improvements will be completed in 1994.
 American Oil and Gas Corporation operates in the mid-stream segment of the natural gas industry providing essential services between the wellhead and the end user. These services include gathering, processing, transporting, storage and marketing.
 AMERICAN OIL AND GAS CORPORATION AND SUBSIDIARIES
 Consolidated Statements of Operations
 (Unaudited, in Thousands, Except Per Share Amounts)
 Periods ended June 30 Three Months Six Months
 1993 1992 1993 1992
 Revenues:
 Natural gas sales $105,071 $ 73,364 $219,562 $162,716
 Natural gas liquids
 sales 15,892 16,398 32,457 17,522
 Transportation 2,706 2,262 5,501 4,788
 Other 1,139 705 1,294 775
 Total 124,808 92,729 258,814 185,801
 Operating Costs and
 Expenses:
 Cost of sales 104,030 69,865 216,449 146,485
 Operation and
 maintenance 5,723 4,940 10,915 7,493
 General and
 administrative 4,725 4,036 9,347 7,757
 Depreciation and
 amortization 4,312 3,986 8,565 6,548
 Taxes-other than
 income taxes 838 911 1,660 1,535
 Total 119,628 83,738 246,936 169,818
 Operating Income 5,180 8,991 11,878 15,983
 Other Income (Expense):
 Interest income 180 273 332 472
 Interest expense (2,197) (2,684) (4,514) (4,309)
 Other, net (32) 161 155 269
 Total (2,049) (2,250) (4,027) (3,568)
 Income Before Income
 Taxes 3,131 6,741 7,851 12,415
 Provision for Income
 Taxes 1,111 2,422 2,472 4,249
 Net Income 2,020 4,319 5,379 8,166
 Preferred Stock Dividends -- 548 43 1,096
 Net Income Applicable
 to Common Stock $ 2,020 $ 3,771 $ 5,336 $ 7,070
 Primary Earnings Per
 Common Share $ 0.08 $ 0.18 $ 0.20 $ 0.37
 Number of Shares Used
 in Computing Earnings
 Per Share 26,902 20,746 26,582 19,034
 AMERICAN OIL AND GAS CORPORATION AND SUBSIDIARIES
 Operating Highlights
 (In Thousands, Except Per Unit Data)
 Periods ended June 30 Three Months Six Months
 1993 1992 1993 1992
 Average Sales Prices--
 Natural gas, per MMBtu $ 2.17 $ 1.65 $ 2.18 $ 1.69
 Natural gas liquids
 (NGLs), per gallon $ 0.33 $ 0.31 $ 0.33 $ 0.31
 Condensate, per barrel $ 16.06 $ 16.56 $ 15.60 $ 16.56
 Average Cost of Sales--
 Natural gas, per MMBtu $ 1.97 $ 1.37 $ 1.97 $ 1.43
 NGLs, per gallon $ 0.19 $ 0.18 $ 0.20 $ 0.18
 Natural Gas Sales (in MMBtu) 48,351 44,368 100,611 96,065
 NGLs Sales (in gallons) 41,770 45,985 83,812 48,176
 Condensate Sales
 (in barrels) 133 140 286 156
 Average Daily Throughput
 (in MMBtu) 936 823 958 842
 NOTE: 1.025 MMBtu of natural gas approximates 1.0 Mcf.
 -0- 8/9/93
 /CONTACT: William P. Conner or Thomas H. Fanning, both of American Oil and Gas Corporation, 713-739-2900/
 (AOG)


CO: American Oil and Gas Corporation ST: Texas IN: OIL SU: ERN

TM -- NY085 -- 0908 08/09/93 16:52 EDT
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Publication:PR Newswire
Date:Aug 9, 1993
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