SAN FRANCISCO--(Business Wire)--
GeoPetro Resources Company ("GeoPetro", "we" or the "Company") (NYSE Amex: GPR)
today announced financial results for the three months ended March 31, 2009.
During the three months ended March 31, 2009, the Company reported a net loss of
$1,857,403 ($0.05 per basic and diluted share), compared to a net income of
$344,126 ($0.01 per basic and diluted share) in the previous year three month
period. The net loss in 2009 was primarily due to lower average gas prices and
lower production volumes in the three months ended March 31, 2009. Production
volumes were lower in the first quarter 2009 compared to the prior year period
due to higher shrinkage rates in the plant (largely attributable to reduced
plant maintenance performed by the previous owner) and production restrictions
due to high inlet pressures into the natural gas treatment plant (the "Plant")
at the Madisonville Field located in East Texas.
The Company is taking immediate steps to increase production volumes. Following
the acquisition of the Plant, GeoPetro is currently reconfiguring idle equipment
and implementing operating efficiencies in the Plant to reduce the inlet
pressure into the Plant. This work is projected to be completed around mid-May
and is expected to result in an immediate increase in production from the two
wells currently producing, the Magness and Fannin wells. Preliminary test
results suggest that the combined production from the Magness and Fannin wells
could be increased significantly.
The Company expects to realize intermediate and long term cost and operating
efficiencies by consolidating the upstream and midstream portions of
Madisonville under common ownership. As noted in previous communications, we
have made substantial reductions in the post-consolidation workforce. Despite
the challenges of the current environment, we accomplished the necessary goal of
vertically integrating our position in the Madisonville field. The Company
continues to explore other longer term cost saving and efficiency measures in
the Plant.
In addition, subject to capital availability, the Company plans to workover the
Mitchell #1 well and plans to frac and connect via gathering line the Wilson #1
well. Accordingly, once the above production enhancements are completed, the
Company estimates the combined Rodessa Formation production from the four wells
to be significantly higher than current rates.
Stuart J. Doshi, Chairman, President and Chief Executive Officer, commented, "we
have taken steps to address liquidity concerns arising from weaker commodity
prices and severely limited access to the capital markets. The increase in
production resulting from lower inlet pressures is projected to occur during
this month and should result in improved cash flow from operations. In December,
GeoPetro arranged, in a difficult financial environment, a $6.7 million
financing on favorable terms in the form of a 3 year loan with the Bank of
Oklahoma to acquire the Plant. The Company raised an additional $1.05 million by
issuing promissory notes, also on attractive terms. I am pleased to inform you
that we have successfully raised the first tranche of Series B Convertible
Preferred stock in the amount of $1.85 million. All of these financings have
been done in the most difficult of circumstances and yet on terms that are
highly competitive considering the state of the capital markets. We are also
focused on striving to build a strong balance sheet and greater liquidity during
these demanding times. We continue to look to the future and are positioning our
company to emerge from this economic downturn as a strong and profitable
company."
The following represents selected financial results for the three months ended
March 31, 2009 and 2008:
For the Three Months Ended
March 31, 2009 March 31, 2008
Revenues
Natural gas sales $ 876,068 $ 2,142,598
Costs and expenses:
Plant operating 1,044,772 -
Lease operating 300,879 343,823
General and administrative 848,938 715,423
Net profits interest - 228,061
Depreciation and depletion 310,086 534,430
Total costs and expenses 2,504,675 1,821,737
Income (loss) from operations (1,628,607) 320,861
Net Income (loss) $ (1,857,403) $ 344,126
Income (loss) per Share:
Basic $ (0.05) $ 0.01
Diluted $ (0.05) $ 0.01
About GeoPetro
GeoPetro is an independent oil and natural gas company headquartered in San
Francisco, California. GeoPetro currently has projects in the United States,
Canada and Indonesia. GeoPetro has developed a producing property in its
Madisonville Project in Texas. Elsewhere, GeoPetro has assembled a
geographically diversified portfolio of exploratory and appraisal prospects.
Cautionary Statements
This news release contains forward-looking information. Statements contained in
this news release relating to future results, events and expectations are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934,
as amended. These forward-looking statements may involve known and unknown risks
involving market prices for natural gas and oil, economic and competitive
conditions, regulatory changes, estimates of proved and probable reserves,
production forecasts, geological and engineering uncertainties, potential
failure to achieve production from development drilling projects, capital
expenditures and other risks and uncertainties, which may cause the actual
results to be materially different from those expressed or implied by such
statements. Additional risk factors include, among others, those described in
the Company's Annual Report on Form 10-K on file with the U.S. Securities and
Exchange Commission. We do not have any intention or obligation to update
forward-looking statements included in this press release after the date of this
press release, except as required by law.
No stock exchange or regulatory authority has approved or disapproved of the
information contained herein.
GeoPetro Resources Company
Stuart J. Doshi, 415-398-8186
President & CEO
E-Mail: sdoshi@geopetro.com
Copyright Business Wire 2009
