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 DENVER, Nov. 15 /PRNewswire/ -- Gerrity Oil & Gas Corporation (NYSE: GOG) today reported net income of $4.8 million for the three months ended Sept. 30, 1993, or after preferred dividends, net income of 27 cents per common share, compared to net income of $1.3 million, or 14 cents per common share, for the same period in 1992. For the nine months ended Sept. 30, 1993, Gerrity reported net income of $11.2 million, or after preferred dividends, net income of 68 cents per common share, compared to 1992's nine-month net income figure of $2.4 million, or 26 cents per common share. Third quarter 1993 revenue was $17.9 million, up 142 percent over 1992's figure. Revenue for the nine months ended Sept. 30 was $50.1 million, compared to $17.5 million reported in 1992.
 The year-to-date 1993 results do not include charges, net, of $1.3 million, or 10 cents per share, for a non-cash adjustment realized for the cumulative effect of adopting FAS 109 and for recognizing an extraordinary, non-cash, after-tax loss for the early extinguishment of debt.
 Discretionary cash flow generated during the quarter was $11.4 million, an increase of 157 percent over 1992. Year-to-date discretionary cash flow is $30.3 million, compared to $10.5 million in 1992.
 Oil and gas sales during the quarter were up 145 percent over the similar period in 1992, due primarily to a 166 percent increase in barrels of oil equivalent production and a 15 percent increase in gas prices over third quarter 1992, offset by a 14 percent decrease in oil prices. Although world oil prices dropped considerably during the quarter, natural gas markets remained strong as domestic markets continued the recent trend of converting to this form of energy.
 Third quarter crude oil production was a record 5,857 barrels of oil per day (bopd), an increase of 165 percent when compared to the 2,211 bopd produced in 1992. Gerrity received an average price of $15.69 per barrel for its oil production in the third quarter, a decrease of 24 percent from 1992. Natural gas production was also at record levels, averaging 55.5 million cubic feet per day (Mmcfpd) during the quarter. This compares favorably to the 20.8 Mmcfpd produced in 1992. Prices realized in the quarter by the company for its natural gas production were $1.84 per thousand cubic feet (mcf), compared to $1.60 per mcf in 1992, an increase of 15 percent.
 The increase in oil and natural gas production during the quarter and for the year was a result of the company's aggressive drilling and recompletion programs. Through Sept. 30, the company had successfully drilled 354 wells and recompleted into 89 formations. Of the 354 wells drilled, 109 were successfully drilled on probable locations. As of Sept. 30, the company had 617 probable well sites, 189 of which represent behind-the-pipe opportunities. During the first nine months of 1993, the company drilled one dry hole. As of Sept. 30, the company had in excess of 1,700 gross producing wells, with an average working interest ownership of 94 percent.
 Robert W. Gerrity, chairman and chief executive officer, said of the third quarter results, "Our primary focus this year is to convert our inventory of drilling locations to producing assets. Our success in achieving this goal has resulted in an increased reserve base and lowering of the company's DD&A rate. The current DD&A rate is based on an estimated increase in excess of 50 percent of the company's proved reserves since Dec. 31, 1992. Not included in the proved reserves are approximately 500 Niobrara formation locations that the company is currently evaluating for uphole recompletion possibilities.
 "Operating costs per barrel of oil equivalent (boe) were 78 cents, compared to 78 cents per boe reported in the second quarter 1993. These costs have remained flat as our production base has more than doubled. The company's operational advantage in the Denver-Julesburg Basin has generated increasing quarterly net income margins. Net income margins for the quarter were $3.44 per boe, up 36 percent from 1992's figure of $2.53 per boe. Our continued success of controlling operating and drilling costs, coupled with production maximization has provided Gerrity with significantly higher net income margins when compared to most of its competitors."
 As previously reported, the company is pursuing discussions with several interested parties related to the possible sale of the company. The company is making no assurances that a transaction will be consummated.
 Denver-based Gerrity Oil & Gas Corporation enjoys a significant acreage position in the Denver-Julesburg Basin of Colorado and Wyoming. From Jan 1, 1985, through Sept. 30, 1993, the company drilled 1,077 wells, 99 percent of which were commercially successful.
 (Financial and Operational Summaries follow.)
 Consolidated Statements of Operations and Retained Earnings
 (In thousands except per share amounts)
 Three Months Ended Nine Months Ended
 Sept. 30, Sept. 30,
 1993 1992 1993 1992
 Oil and gas sales $17,830 $7,286 $48,877 $17,127
 Interest and other
 income 54 98 1,259 362
 Total revenue 17,884 7,384 50,136 17,489
 Costs and expenses:
 Lease operating
 expenses 1,089 410 3,103 1,093
 Production taxes 1,317 578 3,633 1,335
 Depletion, depreciation
 and amortization 6,011 2,809 18,048 7,319
 General and
 administrative, net 2,187 1,136 5,898 2,812
 Interest expense 1,397 566 5,681 1,279
 Exploration 14 59 23 186
 Other expense 5 123 66 252
 Total costs and
 expenses 12,020 5,681 36,452 14,276
 Income before income
 taxes 5,864 1,703 13,684 3,213
 Provision for income
 taxes (1,085) (380) (2,532) (803)
 Income before
 extraordinary item and
 cumulative effect of
 accounting change 4,779 1,323 11,152 2,410
 Extraordinary item -
 loss on early
 extinguishment of
 debt, net of tax
 benefit of $551 -- -- (2,429) --
 Cumulative effect of
 adopting FAS 109 -- -- 1,100 --
 Net income 4,779 1,323 9,823 2,410
 Retained earnings,
 beginning of period 15,683 6,651 10,639 5,564
 Dividends on $12
 Convertible Preferred
 Stock ($3.30 per share) (1,252) -- (1,252) --
 Retained earnings,
 end of period $19,210 $7,974 $19,210 $7,974
 Per Common Share:
 Income before
 extraordinary item
 and cumulative effect
 of accounting change $.27 $.14 $.68 $.26
 Extraordinary item -
 loss on early
 extinguishment of debt -- -- (.18) --
 Cumulative effect of
 adopting FAS 109 -- -- .08 --
 Net income $.27 $.14 $.58 $.26
 Weighted average shares
 outstanding 13,715 9,450 13,669 9,450
 -0- 11/15/93
 /CONTACT: Greg Barnett of Gerrity Oil & Gas Corporation, 303-757-1110/

CO: Gerrity Oil & Gas Corporation ST: Colorado IN: OIL SU: ERN

TW -- NY019 -- 4136 11/15/93 07:01 EST
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Publication:PR Newswire
Date:Nov 15, 1993

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