Great results in spite of bad O&G markets !
American Resources of Delaware, Inc. Announces First
Quarter Results of Operations
VERSAILLES, Ky.--(BUSINESS WIRE)--May 15, 1998--American Resources of Delaware,
Inc. (the ''Company'') today announced results of operations for its first fiscal quarter ended March 31, 1998. The Company is pleased to report another significant quarterly increase in Company-owned production revenues. Production revenues increased 66% for the first three months of 1998 to $6,253,877 as compared with $3,763,097 for the same period in 1997. Net income for the quarter was $302,641, or $0.03 per share, on operating income of $1,425,337. This compares with net income of $278,181, or $0.03 per share, on operating income of $1,127,012 during the same period in 1997. The financial results for the first quarter of 1998 were significantly impacted by increases of i) $2,086,550, or 151%, in depreciation, depletion and amortization expense, a non-cash item; ii) $264,757, or 39%, in interest expense; and iii) $326,295, or 60%, in operating expenses. All of these expenses increased primarily as a result of the Company's acquisition of previously reported offshore Gulf of Mexico properties and the debt incurred to finance the purchases.
Due to the Company's elimination of third party sales on the spot market, marketing revenues decreased 80% from $10,534,742 during the first quarter of 1997 to $2,164,558 for the same period in 1998. However, this did not adversely affect the Company's net income as marketing expenses also decreased 80% to $2,087,862 for the first three months of 1998 compared with $10,548,429 for the first quarter of 1997. As a result, total revenue for the period decreased 40%
to $8,702,552 as compared with $14,520,973 for the same period the prior year.
Rick Avare, President and CEO, stated: ''We continue to increase our reserves, production and cash flow through the addition of Gulf Coast proved producing properties which also contain significant development and exploration opportunities. In addition to another great quarter for production revenues, our EBITDA exceeded $4.9 million, which is nearly double the $2.5 million achieved during the first quarter of 1997, and we are currently producing approximately 40 million
cubic feet equivalent of gas per day. We realize that we are in a transitional period and will experience some challenges to our net income for the next three to six months, particularly in the area
of depletion and interest expense, until we have brought additional production on line as we develop the Gulf Coast prospects. However, we view these challenges as opportunities to strengthen our operations; and we are extremely excited about the direction in which our Company is moving forward.''
EARNINGS RECAP:
Quarter Ended
March 31
1998 1997
Revenue $ 8,702,552 $14,520,974
Income (loss) from operation 1,425,337 1,127,012
Net income 302,641 278,181
Net income per share $0.03 $0.03
Basic weighted average
shares outstanding 9,998,564 7,224,600
OTHER FINANCIAL DATA:
EBITDA(a) $4,917,652 $2,574,598
(a) EBITDA is earnings before interest, taxes, depreciation,
depletion and amortization. EBITDA is presented because it is a
widely accepted financial indication of a company's ability to
service and incur debt. EBITDA should not be considered as an
alternative to earnings (loss) as an indicator of the Company's
operating performance or to cash flow as a measure of liquidity.
American Resources of Delaware, Inc. is an independent producer of oil and gas. The Company owns pipelines and production primarily in the Gulf Coast Region.
Certain of the above statements may be forward-looking that involve risks and uncertainties. Actual results may differ materially. The information contained in this News Release is qualified in its entirety by the information contained in the Company's current report on Form 10-Q for the fiscal quarter ended March 31, 1998.
For more information, contact the Company's Investor Relations Department at (606)873-5455; or
visit our website at arisgc.com.
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