DENVER, Feb. 17 /PRNewswire-FirstCall/ -- Basic Earth Science Systems, Inc. (Basic) (BULLETIN BOARD: BSIC) reported a net loss of $1,570,000, nine cents ($0.09) per share, on oil and gas sales revenue of $2,164,000 for the third quarter ended December 31, 2008 (2008). This compares to net income of $437,000, nearly three and a half cents ($0.03) per share, on oil and gas sales revenue of $2,080,000 for the third quarter ended December 31, 2007 (2007). The $2,007,000 difference in net income was caused by an impairment to oil and gas property, along with an increase in depletion expense, both due to a precipitous drop in oil commodity prices relative to 2007. Oil and gas production, on a BOE basis, increased nearly one hundred percent (98.7%) from 2007 and, despite the drop in oil prices, oil and gas revenue increased by four percent (4.0%). Other factors which impacted this quarter's results are disclosed in the Company's most recent Form 10-Q, filed February 17, 2009.
"You've just got to love GAAP accounting," commented Ray Singleton, President of Basic. "We had a great quarter! In terms of production increases, we have just posted our best quarter ever! It is unfortunate that current accounting rules regarding oil and gas property valuation, which will change next year, have created this twist. Indeed, had the new rules been effective now, an impairment to oil and gas property would not have been mandated. More importantly, these events do not affect cash. Despite this 'paper loss', we have not lost one dime of our shareholder's cash. In fact, cash flow from operations was nearly one and a half million dollars for this quarter alone. The Company remains optimistic and continues to pursue projects in the Williston basin, along the Gulf Coast and in other areas that will enhance the Company's growth and profitability."
Founded in 1969, Basic is an oil and gas exploration and production company with primary operations in select areas of the Williston basin, the Denver-Julesburg basin in Colorado, the southern portions of Texas, and along the on-shore portions of the Gulf Coast. Basic is traded on the "over-the-counter - bulletin board" under the symbol BSIC. Basic's web site is at http://www.basicearth.net/ where additional information about the Company can be accessed.
Information herein contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which can be identified by words such as "should," "may," "will," "anticipate," "estimate," "intend" or "continue," or comparable words or phrases. In addition, all statements other than statements of historical facts that address activities that Basic intends, expects or anticipates will or may occur in the future are forward-looking statements. Readers are encouraged to read the SEC reports of Basic, particularly the Company's Quarterly Reports on Form 10-Q for the quarters ended June 30, September 30, and December 31, 2008, in addition to the Company's Annual Report on Form 10-KSB for the fiscal year ended March 31, 2008, for meaningful cautionary language disclosing why actual results may vary materially from those anticipated by management.
Financial Highlights Nine Months Ended Quarter Ended December 31 December 31 2008 2007 2008 2007 ----------------- ----------------- Revenue $8,259,000 $5,489,000 $2,205,000 $2,081,000 Net Income (Loss) 756,000 1,154,000 (1,570,000) 437,000 Basic Net Income per share .04 .07 (.09) .03 Diluted Net Income per share .04 .07 (.09) .03 Weighted average number of shares outstanding, basic 17,468,613 16,993,676 17,474,638 17,051,709 diluted 17,490,461 17,133,559 17,474,638 17,135,650
