[X]
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 5(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the Year ended December 31, 2011
|
|
OR
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
FOR THE TRANSITION PERIOD FROM TO
|
|
Commission File Number 000-08187
|
NEW CONCEPT ENERGY, INC
.
|
Nevada
|
75-2399477
|
|
(State or other jurisdiction of
Incorporation or organization)
|
(IRS Employer Identification Number)
|
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1603 LBJ Freeway, Suite 300
Dallas, Texas
|
75234
|
|
(Address of principal executive offices)
|
(Zip Code)
|
|
Registrant’s Telephone Number including area code
|
(972) 407-8400
|
Title of Each Class
|
Name of each exchange on which registered
|
|
Common Stock, $0.01 par value
|
American Stock Exchange
|
Large accelerated filer
|
______
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Accelerated filer
|
______
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Non-accelerated filer
|
______
|
Smaller reporting company
|
__X___
|
Dated: March 11, 2013
|
New Concept Energy, Inc.
|
By:
/s/ Gene S. Bertcher
|
|
Gene S. Bertcher
|
|
Principal Executive Officer,
|
|
President and Chief Financial Officer
|
Forward-Looking Statements
|
5
|
PART I
|
5
|
Item 1. Business
|
5
|
Item 1A. Risk Factors
|
9
|
Item 1B. Unresolved Staff Comments
|
10
|
Item 2. Properties
|
10
|
Item 3. Legal Proceedings
|
12
|
Item 4. Mine Safety Disclosures
|
13
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PART II
|
13
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Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
13 |
Item 6. Selected Financial Data
|
15
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation
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16
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Item 7a: Quantitative And Qualitative Disclosures About Market Risk
|
19
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Item 8. Financial Statements
|
19
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Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure
|
19
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PART III
|
21
|
Item 10. Directors, Executive Officers and Corporate Governance
|
21
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Item 11. Executive Compensation
|
25
|
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
27 |
Item 13. Certain Relationships and Related Transactions, and Director Independence
|
28
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Item 14. Principal Accounting Fees and Services
|
29
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PART IV
|
32
|
Item 15. Exhibits and Financial Statement Schedules
|
33
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SIGNATURES
|
35
|
·
|
Expanding the definition of oil and gas-producing activities to include the extraction of saleable hydrocarbons, in the solid, liquid or gaseous state, from oil sands, coal beds or other nonrenewable natural resources that are intended to be upgraded into synthetic oil or gas, and activities undertaken with a view to such extraction;
|
·
|
Amending the definition of proved oil and gas reserves to require the use of an average of the first-day-of-the-month commodity prices during the 12-month period ending on the balance sheet date rather than the period-end commodity prices;
|
·
|
Adding to and amending other definitions used in estimating proved oil and gas reserves, such as "reliable technology" and "reasonable certainty";
|
·
|
Broadening the types of technology that an issuer may use to establish reserves estimates and categories; and,
|
·
|
Changing disclosure requirements and providing formats for tabular reserve disclosures.
|
|
Production
|
|
2011 - 176,654 Mcf of natural gas and 5,074 Bbls of oil
|
|
2010 - 192,000 Mcf of natural gas and 1,855 Bbls of oil
|
|
2009 - 236,000 Mcf of natural gas
|
|
Average sales price per unit
|
|
2011 - $5.29 per Mcf and $92.98per Bbls
|
|
2010 - $6.37 per Mcf and $74.54 per Bbls
|
|
2009 - $5.26 per Mcf
|
|
Average production cost per unit
|
|
2011 - $0.79 per Mcf and Bbls
|
|
2010 - $0.49 per Mcf and Bbls
|
|
2009 - $0.30 per Mcf
|
|
Productive wells
|
|
2011 – 129
|
|
2010 – 121
|
|
2009 – 122
|
|
Developed acreage – approximately 20,000 acres
|
|
Drilling activity – The Company acquired the operations in Ohio and West Virginia in October 2008 andinitially focused on networking existing gas wells. During 2011 the Company has drilled 8 wells at a total costof approximately $950,000.
|
|
●
|
the requirement of an 80% vote to make, adopt, alter, amend, change or repeal our Bylaws or certain key provisions of the Articles of Incorporation that embody, among other things, the anti-takeover provisions;
|
|
●
|
the so-called business combination “control act” requirements involving the Company and a person that beneficially owns 10% or more of the outstanding common stock except under certain circumstances; and
|
|
●
|
the requirement of holders of at least 80% of the outstanding Common Stock to join together to request a special meeting of stockholders.
|
Gas
|
Oil
|
|||||||
(MMCF)
|
(MBBLS)
|
|||||||
Proved Reserves
|
||||||||
U.S. Onshore
|
||||||||
Developed Producing
|
1,105
|
57
|
||||||
Developed Non-Producing
|
-
|
-
|
||||||
Undeveloped
|
1,447
|
47
|
||||||
Total Proved Reserves
|
2,552
|
104
|
Gas
|
Oil
|
|||||||
(MMCF)
|
(MBBLS)
|
|||||||
Proved undeveloped reserves as of December 31, 2010
|
5,055
|
57
|
||||||
Revaluation of undeveloped reserves
|
(3,608
|
)
|
52
|
|||||
Conversion to proved developed reserves
|
(42
|
)
|
||||||
Proved undeveloped reserves as of December 31, 2011
|
1,447
|
47
|
Acres
|
||||||||
Gross (1)
|
Net (2)
|
|||||||
U.S. Onshore
|
||||||||
Producing
|
121
|
121
|
||||||
Non-Producing
|
95
|
95
|
||||||
Total wells
|
216
|
216
|
Acres
|
||||||||
Gross (1)
|
Net (2)
|
|||||||
U. S Onshore
|
||||||||
Developed
|
19,375
|
19,375
|
||||||
Undeveloped
|
-
|
-
|
||||||
Total Acreage
|
19,375
|
19,375
|
2011
|
2010
|
|||||||||||||||
High
|
Low
|
High
|
Low
|
|||||||||||||
First Quarter
|
6.76
|
2.96
|
5.30
|
3.26
|
||||||||||||
Second Quarter
|
3.87
|
2.23
|
5.30
|
3.30
|
||||||||||||
Third Quarter
|
2.53
|
1.85
|
3.69
|
2.14
|
||||||||||||
Fourth Quarter
|
2.39
|
1.76
|
5.49
|
2.63
|
December 31,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
(amounts in thousands, except per share amounts)
|
||||||||||||
Operating revenue
|
$
|
3,901
|
$
|
4,213
|
$
|
4,098
|
||||||
Operating expenses
|
5,762
|
4,257
|
6,827
|
|||||||||
Operating profit (loss)
|
(1,861
|
)
|
(44
|
)
|
(2,729
|
)
|
||||||
Earnings (loss) from continuing
operations before income taxes
|
(11,793
|
)
|
(11
|
)
|
(2,210
|
)
|
||||||
Income tax (expense)
|
—
|
—
|
—
|
|||||||||
Earnings (loss) from continuing
operations
|
(11,793
|
)
|
(11
|
)
|
(2,210
|
)
|
||||||
NET EARNINGS (LOSS)
|
$
|
(11,793
|
)
|
$
|
(11
|
)
|
$
|
(2,210
|
)
|
|||
Earnings (loss) per common
share – basic and diluted
|
||||||||||||
Continuing operations
|
$
|
(6.05
|
)
|
$
|
(0.01
|
)
|
$
|
(1.14
|
)
|
|||
Net earnings per share
|
$
|
(6.05
|
)
|
$
|
(0.01
|
)
|
$
|
(1.14
|
)
|
|||
Basic weighted average
common shares
|
1,947
|
1,947
|
1,947
|
|||||||||
Balance Sheet Data
:
|
||||||||||||
Total assets
|
$
|
13,450
|
$
|
24,067
|
$
|
25,121
|
||||||
Long-term debt
|
3,431
|
2,984
|
2,332
|
|||||||||
Asset retirement obligation
|
2,702
|
2,573
|
2,450
|
|||||||||
Total liabilities
|
6,972
|
5,796
|
6,839
|
|||||||||
Total stockholders equity
|
$
|
18,271
|
$
|
18,271
|
$
|
18,282
|
Director
|
Audit Committee
|
Governance and Nominating Committee
|
Compensation Committee
|
Roz Campisi Beadle
|
ü
|
Chairman
|
|
Gene S. Bertcher
|
|||
James E. Huffstickler
|
ü
|
Chairman
|
ü
|
Dan Locklear
|
Chairman
|
ü
|
|
Victor L. Lund
|
ü
|
ü
|
SUMMARY COMPENSATION TABLE
|
|||||||||
Change in
|
|||||||||
Non-
|
Pension
|
||||||||
Equity
|
Value and
|
||||||||
Name
|
Incentive
|
Nonqualified
|
All
|
||||||
and
|
Plan
|
Deferred
|
Other
|
||||||
Principal
|
Stock
|
Option
|
Compen-
|
Compensation
|
Compen-
|
||||
Position
|
Year
|
Salary
|
Bonus
|
Awards
|
Awards
|
sation
|
Earnings
|
sation
|
Total
|
Gene S. Bertcher
(1)
Chairman, President
& Chief Financial
Officer
|
2011
|
$98,500
|
$98,500
|
||||||
2010
|
$98,500
|
$98,500
|
|||||||
2009
|
$98,500
|
$98,500
|
|||||||
|
Commencing in February 2008, three other publicly held entities needed a chief financial officer, Income Opportunity Realty Investors, Inc. (“IOT”), Transcontinental Realty Investors, Inc. (“TCI”) and American Realty Investors, Inc. (“ARL”) each of which have the same contractual advisor, now Pillar Income Asset Management, Inc. (“Pillar”). On an interim basis, these three entities made an arrangement with the Company for the accounting and administrative services of the Company, specifically Gene S. Bertcher, President and principal executive officer of the Company who is a certified public accountant and has a long history in that industry. At the time NCE through Bertcher was also providing accounting and administrative services to other entities on a fee based arrangement to assist those entities when NCE has excess capacity and personnel to provide accounting services. Commencing February 2008, Mr. Bertcher was elected as an officer and chief financial officer of each of IOT, TCI and ARL. As a compensation arrangement evolved over time, the three entities agreed to reimburse NCE for one-half of the gross compensation and related expenses of Bertcher at NCE and from and after December 31, 2010, arranged to provide office space for Mr. Bertcher and certain other NCE personnel rather that requiring operating out of two separate locations. Beginning January 1, 2011, the NCE accounting department moved into offices maintained by the contractual advisor of the three entities. Further, NCE was allowed then use of certain administrative services such as space on the contractual advisor’s computer server, use of copiers, telephone services, etc. NCE has not been charged for the use of office space, computer services, telephone service or other day-to-day cost of operating an office. Each of IOT, TCI and ARL effectively split the cost one-third each. ARL owns in excess of 80% of the Common Stock of TCI and TCI in turn owns in excess of 80% of the Common Stock of IOT. The agreement renews on an annual basis and is terminable on sixty days written notice.
|
|
The salary in the above table represents the portion of Mr. Bertcher’s compensation paid by the Company.
|
DIRECTOR COMPENSATION
|
|||||||
Name
|
Fees Earned
Or Paid in
Cash
|
Stock
Awards
|
Option
Awards
|
Non-Equity
Incentive Plan
Compensation
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
|
All Other
Compensation
|
Total
|
Roz Campisi Beadle
|
$ 10,500
|
$10,500
|
|||||
Gene S. Bertcher
|
$ —
|
$ —
|
|||||
James E. Huffstickler
|
$ 10,500
|
$10,500
|
|||||
Dan Locklear
|
$ 10,500
|
$10,500
|
|||||
Victor L. Lund
|
$ 10,500
|
$10,500
|
Common Stock
|
||||||||
Name of Beneficial Owner
|
No. of Shares
|
Percent of Class*
|
||||||
Arcadian Energy, Inc
.(3)(5)
|
868,398
|
44.60
|
%
|
|||||
Roz Campisi Beadle
|
100
|
**
|
||||||
Gene S. Bertcher
(2)
|
40,811
|
2.1
|
%
|
|||||
Go Green Fuel N.A., L.P.
(6)
|
100,000
|
5.14
|
%
|
|||||
HKS Investment Corporation
(1)
|
108,944
|
5.6
|
%
|
|||||
James E. Huffstickler
|
—
|
0
|
%
|
|||||
Dan Locklear
|
—
|
0
|
%
|
|||||
Victor L. Lund
|
—
|
0
|
%
|
|||||
TacCo Financial, Inc.
(3)(4)
|
500
|
**
|
||||||
URC Energy, LLC
(3)(5)
|
740,430
|
38.03
|
%
|
|||||
All executive officers and directors as a group (five persons)
|
40,911
|
2.1
|
%
|
(1)
|
Consists of 108,994 shares of common stock owned by HKS Investment Corporation (“HKS”). According to an original statement on Schedule 13D dated January 9, 2006, the group consists of HKS Investment Corporation, David Hensel, John Kellar and Marshall Stagg, each of whom are deemed to be the beneficial owner of all 108,994 shares. Hensel is stated to be a shareholder, director and President of HKS; Kellar is a shareholder, director, Vice President and Treasurer of HKS; and Stagg is a shareholder, director and Secretary of HKS.
|
(2)
|
Consists of 40,811 shares of common stock owned by Mr. Bertcher.
|
(3)
|
Based on Amendment 20 to Schedule 13D, amended March 2, 2012, filed by each of these entities. Arcadian Energy, Inc. owns 127,968 shares direct and is the sole member of URC Energy, LLC which owns 740,430 shares. The amended Schedule 13D indicates that these entities, collectively, may be deemed a “Person” within the meaning of Section 13D of the Securities Exchange Act of 1934.
|
(4)
|
Consists of 500 shares of common stock. Officers and Directors of TacCo Financial, Inc. (“TFI”) are Ted P. Stokely, Chairman; RL S. Lemke, President and Treasurer and Craig E. Landess, Secretary. TFI’s stock is owned by Ted P. Stokely (100%).
|
(5)
|
The direct owner of the 740,340 shares of common stock is URC Energy, LLC. Under Rule 13d-3 of the Exchange Act, Arcadian Energy, Inc. as the sole member of URC Energy, LLC is deemed to be the beneficial owner of such shares.
|
(6)
|
Consists of 100,000 shares of Common Stock owned by Go Green Fuel N.A., L.P. a Texas limited partnership, the sole General Partner of which is GGF North American, LLC, a Texas limited liability company. According to an original statement on Schedule 13D dated December 31, 2009, Go Green Fuel N.A., L.P. acquired 100,000 shares of Common Stock from West Go Green, LLC a Nevada limited liability company at a price of $6.90 per share and Go Green Fuel N.A., LP granted to West Go Green LLC a “Repurchase Option” for a period of three calendar years from December 31, 2009 to repurchase all or any portion of the 100,000 shares purchased at the original purchase price of $6.90 per share, which Repurchase Option may be exercised by West Go Green, LLC or its assignee by written notice given to Go Green Fuel N.A. LP at least two calendar days prior to the date of exercise of the Repurchase Option.
|
Type of Fees
|
2011
|
2010
|
||||||
Audit Fees
|
$
|
47,000
|
$
|
45,000
|
||||
Audit Related Fees
|
—
|
10,214
|
||||||
Tax Fees
|
8,325
|
8,500
|
||||||
Total Fees
|
$
|
55,325
|
$
|
63,714
|
Exhibit
Designation
|
Exhibit Description
|
3.1
|
Articles of Incorporation of Medical Resource Companies of America (incorporated by reference to Exhibit 3.1 to Registrant’s Form S-4 Registration Statement No. 333-55968 dated December 21, 1992)
|
3.2
|
Amendment to the Articles of Incorporation of Medical Resource Companies of America (incorporated by reference to Exhibit 3.5 to Registrant’s Form 8-K dated April 1, 1993)
|
3.3
|
Restated Articles of Incorporation of Greenbriar Corporation (incorporated by reference to Exhibit 3.1.1 to Registrant’s Form 10-K dated December 31, 1995)
|
3.4
|
Amendment to the Articles of Incorporation of Medical Resource Companies of America (incorporated by reference to Exhibit to Registrant’s PRES 14-C dated February 27, 1996)
|
3.5
|
Certificate of Decrease in Authorized and Issued Shares effective November 30, 2001 (incorporated by reference to Exhibit 2.1.7 to Registrant’s Form 10-K dated December 31, 2002)
|
3.6
|
Certificate of Designations, Preferences and Rights of Preferred Stock dated May 7, 1993 relating to Registrant’s Series B Preferred Stock (incorporated by reference to Exhibit 4.1.2 to Registrant’s Form S-3 Registration Statement No. 333-64840 dated June 22, 1993)
|
3.7
|
Certificate of Voting Powers, Designations, Preferences and Rights of Registrant’s Series F Senior Convertible Preferred Stock dated December 31, 1997 (incorporated by reference to Exhibit 2.2.2 of Registrant’s Form 10-KSB for the fiscal year ended December 31, 1997)
|
3.8
|
Certificate of Voting Powers, Designations, Preferences and Rights of Registrant’s Series G Senior Non-Voting Convertible Preferred Stock dated December 31, 1997 (incorporated by reference to Exhibit 2.2.3 of Registrant’s Form 10-KSB for the fiscal year ended December 31, 1997)
|
3.9
|
Certificate of Designations dated October 12, 2004 as filed with the Secretary of State of Nevada on October 13, 2004 (incorporated by reference to Exhibit 3.4 of Registrant’s Current Report on Form 8-K for event occurring October 12, 2004)
|
3.10
|
Certificate of Amendment to Articles of Incorporation effective February 8, 2005 (incorporated by reference to Exhibit 3.5 of Registrant’s Current Report on Form 8-K for event occurring February 8, 2005)
|
3.11
|
Certificate of Amendment to Articles of Incorporation effective March 21, 2007 (incorporated by reference to Exhibit 3.13 of Registrant’s Current Report on Form 8-K for event occurring March 21, 2005)
|
3.12
|
Amended and restated bylaws of New Concept Energy, Inc. dated November 18, 2008.
|
10.1
|
Registrant’s 1997 Stock Option Plan (filed as Exhibit 4.1 to Registrant’s Form S-8 Registration Statement, Registration No. 333-33985 and incorporated herein by this reference).
|
10.2
|
Registrant’s 2000 Stock Option Plan (filed as Exhibit 4.1 to Registrant’s Form S-8 Registration Statement, Registration No. 333-50868 and incorporated herein by this reference)
|
14.0
|
Code of Ethics for Senior Financial Officers (incorporated by reference to Exhibit 14.0 to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003)
|
21.1*
|
Subsidiaries of the Registrant
|
23.2*
|
Consent of Lee Keeling & Associates, Inc.
|
31.1*
|
Rule 13a-14(a) Certification by Principal Executive Officer and Chief Financial Officer
|
NEW CONCEPT ENERGY, INC.
|
|
March 11, 2013
|
by:
/s/ Gene S. Bertcher
|
Gene S. Bertcher, Principal Executive
|
|
Officer, President and Chief Financial Officer
|
Signature
|
Title
|
Date
|
/
s/ Gene S. Bertcher
Gene S. Bertcher
|
Chairman, President, Principal Executive Officer, Chief Financial Officer and Director
|
March 11, 2013
|
/
s/ Roz Campisi Beadle
Roz Campisi Beadle
|
Director
|
March 11, 2013
|
/
s/ James Huffstickler
James Huffstickler
|
Director
|
March 11,2013
|
/
s/ Dan Locklear
Dan Locklear
|
Director
|
March 11, 2013
|
/
s/ Victor L. Lund
Victor L. Lund
|
Director
|
March 11, 2013
|
NEW CONCEPT ENERGY, INC AND SUBSIDIARIES
|
||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||||||
(amounts in thousands)
|
||||||||||||
Year ended December 31,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Cash flows from operating activities
|
||||||||||||
Net income
|
$
|
(11,793
|
)
|
$
|
(11
|
)
|
$
|
(2,210
|
)
|
|||
Adjustments to reconcile net income to net cash provided by (used in) operating activities
|
||||||||||||
Depreciation, depletion and amortization
|
416
|
363
|
359
|
|||||||||
Impairment of natural gas and oil properties
|
1,428
|
-
|
1,695
|
|||||||||
Accretion of asset retirement obligation
|
129
|
123
|
117
|
|||||||||
Write-off of affiliate receivable
|
10,361
|
-
|
157
|
|||||||||
Changes in operating assets and liabilities
|
||||||||||||
Other current and non-current assets
|
(202
|
)
|
(271
|
)
|
(153
|
)
|
||||||
Accounts payable and other liabilities
|
106
|
275
|
771
|
|||||||||
Interest receivable
|
-
|
(496
|
)
|
-
|
||||||||
Interest payable
|
121
|
121
|
-
|
|||||||||
Net cash provided by (used) in operating activities
|
566
|
104
|
736
|
|||||||||
Cash flows from investing activities
|
||||||||||||
Investment in oil and gas properties
|
(1,074
|
)
|
(219
|
)
|
(344
|
)
|
||||||
Fixed asset additions
|
(262
|
)
|
(48
|
)
|
(107
|
)
|
||||||
Funding of notes receivable
|
-
|
-
|
(372
|
)
|
||||||||
Net cash provided by (used in) investing activities
|
(1,336
|
)
|
(267
|
)
|
(823
|
)
|
||||||
Cash flows from financing activities
|
||||||||||||
Proceeds from loans to affiliates
|
-
|
142
|
58
|
|||||||||
Payment on notes payable
|
(31
|
)
|
(75
|
)
|
(6
|
)
|
||||||
Proceeds from loans
|
851
|
-
|
-
|
|||||||||
Debt incurred in connection with acquisition
|
-
|
-
|
-
|
|||||||||
Net cash provided by (used in) financing activities
|
820
|
67
|
52
|
|||||||||
Net increase (decrease) in cash and cash equivalents
|
50
|
(96
|
)
|
(35
|
)
|
|||||||
Cash and cash equivalents at beginning of year
|
59
|
155
|
190
|
|||||||||
Cash and cash equivalents at end of year
|
$
|
109
|
$
|
59
|
$
|
155
|
Series B
|
Common
|
Additional
|
Accum-
|
|||||||||||||||||||||||||
Preferred stock
|
Stock
|
paid in
|
ulated
|
|||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
capital
|
deficit
|
Total
|
||||||||||||||||||||||
Balance at December 31, 2008
|
1
|
$
|
1
|
1,947
|
$
|
20
|
$
|
58,838
|
$
|
(38,367
|
)
|
$
|
20,492
|
|||||||||||||||
Net Income
|
(2,210
|
)
|
15,495
|
|||||||||||||||||||||||||
Balance at December 31, 2009
|
1
|
1
|
1,947
|
20
|
58,838
|
(40,577
|
)
|
18,282
|
||||||||||||||||||||
Net Income
|
(11
|
)
|
(11
|
)
|
||||||||||||||||||||||||
Balance at December 31, 2010
|
1
|
1
|
1,947
|
20
|
58,838
|
(40,588
|
)
|
18,271
|
||||||||||||||||||||
Net Income
|
(11,793
|
)
|
(11,793
|
)
|
||||||||||||||||||||||||
Balance at December 31, 2011
|
1
|
$
|
1
|
1,947
|
$
|
20
|
$
|
58,838
|
$
|
(52,381
|
)
|
$
|
6,478
|
2011
|
2010
|
|||||||
Notes payable from the acquisition of Mountaineer State Energy, Inc.
|
$
|
1388
|
$
|
1,308
|
||||
Bank Debt
|
$
|
861
|
||||||
$
|
2,249
|
$
|
1,308
|
2012
|
$
|
47
|
||
2013
|
337
|
|||
2014
|
367
|
|||
2015
|
1,034
|
|||
2016
|
49
|
|||
Thereafter
|
415
|
|||
$
|
2,549
|
2012
|
$
|
924
|
||
2013
|
942
|
|||
2014
|
961
|
|||
2015
|
980
|
|||
2016
|
1,000
|
|||
2017
|
83
|
|||
$
|
4,890
|
Year ended December 31,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Basic Earnings Per Share:
|
||||||||||||
Numerator:
|
||||||||||||
Net income from continuing operations
|
$
|
(11,793
|
)
|
$
|
(11
|
)
|
$
|
2,210
|
)
|
|||
Denominator:
|
||||||||||||
Weighted average shares outstanding
|
1,947
|
1,947
|
1,947
|
|||||||||
Basic earnings per share from
|
||||||||||||
continuing operations
|
(6.06
|
)
|
(0.01
|
)
|
(1.14
|
)
|
||||||
Basic earnings per share from
|
||||||||||||
discontinued operations
|
$
|
-
|
$
|
-
|
$
|
-
|
Outstanding Preferred Stock
|
|||
Preferred stock consists of the following (amounts in thousands):
|
|||
Year Ended
|
|||
December 31,
|
|||
2011
|
2010
|
||
Series B convertible preferred stock, $10 par value, liquidation value of
$100, authorized 100 shares, issued and outstanding one share
|
1
|
1
|
Year ended December 31,
|
||||||||||||
2011
|
2010
|
2009
|
||||||||||
Write off of Sterling investment
|
$
|
-
|
$
|
(350
|
)
|
$
|
-
|
|||||
Other
|
(155
|
)
|
10
|
68
|
||||||||
$
|
(155
|
)
|
$
|
(340
|
)
|
$
|
68
|
Year ended December 31, 2011
|
Oil and Gas Operations
|
Retirement Facility
|
Corporate
|
Total
|
||||||||||||
Operating revenue
|
$
|
1,020
|
$
|
2,881
|
$
|
-
|
$
|
3,901
|
||||||||
Operating expenses
|
1,095
|
2,154
|
577
|
5,217
|
||||||||||||
Depreciation, depletion and amortization
|
335
|
42
|
2
|
416
|
||||||||||||
Accretion of asset retirement obligation
|
129
|
-
|
-
|
129
|
||||||||||||
Impairment of oil and gas properties
|
1,428
|
|||||||||||||||
Total Operating Expenses
|
2,987
|
2,196
|
579
|
5,762
|
||||||||||||
Interest expense
|
-
|
-
|
(131
|
)
|
(131
|
)
|
||||||||||
Other income
|
-
|
-
|
(10,161
|
)
|
(10,161
|
)
|
||||||||||
Interest income
|
-
|
-
|
360
|
360
|
||||||||||||
Segment operating income
|
$
|
(1,967
|
)
|
$
|
685
|
$
|
(10,511
|
)
|
$
|
(11,793
|
)
|
|||||
Assets
|
$
|
12,376
|
$
|
254
|
$
|
820
|
$
|
13,450
|
Year ended December 31, 2010
|
Oil and Gas Operations
|
Retirement Facility
|
Corporate
|
Total
|
||||||||||||
Operating revenue
|
$
|
1,248
|
$
|
2,965
|
$
|
-
|
$
|
4,213
|
||||||||
Operating expenses
|
970
|
2,072
|
729
|
3,771
|
||||||||||||
Depreciation, Depletion and Amortization
|
322
|
39
|
2
|
363
|
||||||||||||
Accretion of Asset Retirement Obligation
|
123
|
-
|
-
|
123
|
||||||||||||
Total Operating Expenses
|
1,415
|
2,111
|
731
|
4,257
|
||||||||||||
Interest expense
|
(124
|
)
|
-
|
-
|
(124
|
)
|
||||||||||
Other income
|
-
|
-
|
(340
|
)
|
(340
|
)
|
||||||||||
Interest income
|
-
|
-
|
497
|
497
|
||||||||||||
Segment operating income
|
$
|
(291
|
)
|
$
|
854
|
$
|
(574
|
)
|
$
|
(11
|
)
|
|||||
Assets
|
$
|
12,950
|
$
|
220
|
$
|
10,852
|
$
|
24,022
|
Year ended December 31, 2009
|
Oil and Gas Operations
|
Retirement Facility
|
Corporate
|
Total
|
||||||||||||
Operating revenue
|
$
|
1,206
|
$
|
2,892
|
$
|
-
|
$
|
4,098
|
||||||||
Operating expenses
|
1,173
|
2,118
|
1,342
|
4,633
|
||||||||||||
Depreciation, Depletion and Amortization
|
325
|
57
|
-
|
382
|
||||||||||||
Accretion of Asset Retirement Obligation
|
117
|
-
|
-
|
117
|
||||||||||||
Impairment of oil and gas properties
|
1,695
|
-
|
1,695
|
|||||||||||||
Total Operating Expenses
|
3,310
|
2,175
|
1,342
|
6,827
|
||||||||||||
Interest expense
|
(123
|
)
|
-
|
-
|
(123
|
)
|
||||||||||
Other income
|
30
|
-
|
38
|
68
|
||||||||||||
Interest income
|
-
|
-
|
574
|
574
|
||||||||||||
Segment operating income
|
$
|
(2,197
|
)
|
$
|
717
|
$
|
(730
|
)
|
$
|
(2,210
|
)
|
|||||
Assets
|
$
|
13,103
|
$
|
292
|
$
|
11,816
|
$
|
25,211
|
First
|
Second
|
Third
|
Fourth
|
|||||||||||||
Year ended December 31, 2011
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
||||||||||||
Revenue
|
$
|
1,009
|
$
|
1,013
|
$
|
1,003
|
$
|
876
|
||||||||
Operating (expense)
|
(948
|
)
|
(911
|
)
|
(990
|
)
|
(2,334
|
)
|
||||||||
Corporate general and administrative expense
|
(124
|
)
|
(126
|
)
|
(101
|
)
|
(228
|
)
|
||||||||
Impairment of natural gas and oil properties
|
—
|
—
|
—
|
—
|
||||||||||||
Other income (expense) net
|
160
|
90
|
30
|
(10,212
|
)
|
|||||||||||
Net income (loss) from continuing operations
|
97
|
66
|
(57
|
)
|
(11,899
|
)
|
||||||||||
Income (loss) allocable to common shareholders
|
$
|
97
|
$
|
66
|
$
|
(57
|
)
|
$
|
(11,899
|
)
|
||||||
Income (loss) per common share – basic
|
$
|
0.05
|
$
|
0.03
|
$
|
(0.03
|
)
|
$
|
(6.10
|
)
|
Year ended December 31, 2010
|
||||||||||||||||
Revenue
|
$
|
973
|
$
|
1,082
|
$
|
1,112
|
$
|
(3,167
|
)
|
|||||||
Operating (expense)
|
(950
|
)
|
(948
|
)
|
(891
|
)
|
2,789
|
|||||||||
Corporate general and administrative expense
|
(199
|
)
|
(124
|
)
|
(124
|
)
|
447
|
|||||||||
Impairment of natural gas and oil properties
|
—
|
—
|
—
|
—
|
||||||||||||
Other income (expense) net
|
126
|
285
|
91
|
(512
|
)
|
|||||||||||
Net income (loss) from continuing operations
|
(40
|
)
|
(273
|
)
|
188
|
125
|
||||||||||
Income (loss) allocable to common shareholders
|
$
|
(40
|
)
|
$
|
(273
|
)
|
$
|
188
|
125
|
|||||||
Income (loss) per common share – basic
|
$
|
(0.02
|
)
|
$
|
(0.12
|
)
|
$
|
0.10
|
$
|
0.06
|
Year ended December 31, 2009
|
||||||||||||||||
Revenue
|
$
|
1,068
|
$
|
1,049
|
$
|
970
|
$
|
1,011
|
||||||||
Operating (expense)
|
(965
|
)
|
(992
|
)
|
(864
|
(1,288
|
)
|
|||||||||
Corporate general and administrative expense
|
(262
|
)
|
(235
|
)
|
(169
|
)
|
(357
|
)
|
||||||||
Impairment of natural gas and oil properties
|
—
|
—
|
—
|
(1,695
|
)
|
|||||||||||
Other income (expense) net
|
182
|
94
|
112
|
131
|
||||||||||||
Net income (loss) from continuing operations
|
23
|
(84
|
)
|
49
|
(2,198
|
)
|
||||||||||
Income (loss) allocable to common shareholders
|
$
|
23
|
$
|
(84
|
)
|
$
|
49
|
$
|
(2,198
|
)
|
||||||
Income (loss) per common share – basic
|
$
|
0.01
|
$
|
(0.04
|
)
|
$
|
0.03
|
$
|
(1.27
|
)
|
2011
|
||||||||
Gas
(MMCF)
|
Oil
(MBBLS)
|
|||||||
Proved developed and undeveloped reserves —
|
||||||||
January 1, 2011
|
6,954
|
72
|
||||||
Purchase of oil and natural gas properties in place
|
-
|
-
|
||||||
Discoveries and extensions
|
-
|
37
|
||||||
Revisions
|
(4,227
|
)
|
-
|
|||||
Sales of oil and gas properties in place
|
-
|
-
|
||||||
Production
|
(176
|
)
|
(6
|
)
|
||||
End of year
|
2,551
|
103
|
||||||
Proved developed reserves at beginning of year
|
1899
|
14
|
||||||
Proved developed reserves at end of year
|
1,105
|
57
|
||||||
2010
|
||||||||
Gas
(MMCF)
|
Oil
(MBBLS)
|
|||||||
Proved developed and undeveloped reserves —
|
||||||||
January 1, 2010
|
7561
|
19
|
||||||
Purchase of oil and natural gas properties in place
|
-
|
-
|
||||||
Discoveries and extensions
|
-
|
55
|
||||||
Revisions
|
(415
|
)
|
-
|
|||||
Sales of oil and gas properties in place
|
-
|
-
|
||||||
Production
|
(192
|
)
|
(2
|
)
|
||||
End of year
|
6,954
|
72
|
||||||
Proved developed reserves at beginning of year
|
2,867
|
19
|
||||||
Proved developed reserves at end of year
|
1,899
|
14
|
||||||
Gas
|
Oil
|
|||||||
(MMCF)
|
(MBBLS)
|
|||||||
Proved undeveloped reserves as of December 31, 2009
|
4,694
|
-
|
||||||
Revaluation of undeveloped reserves
|
361
|
57
|
||||||
Proved undeveloped reserves as of December 31, 2010
|
5,055
|
57
|
||||||
Conversion to proved developed reserves
|
-
|
42
|
||||||
Revaluation of undeveloped reserves
|
(3,608
|
)
|
(52
|
)
|
||||
Proved undeveloped reserves as of December 31, 2011
|
1,447
|
47
|
2011
|
2010
|
|||||||
Property acquisition costs:
|
||||||||
Proved properties
|
$
|
12,862
|
$
|
11,928
|
||||
Unproved properties
|
-
|
-
|
||||||
Accumulated depreciation, depletion and amortization
|
||||||||
and valuation allowance
|
(1,721
|
)
|
(703
|
)
|
||||
Net capitalized costs
|
$
|
11,141
|
$
|
11,225
|
2011
|
2010
|
|||||||
Property acquisition costs:
|
||||||||
Proved properties
|
$
|
-
|
$
|
-
|
||||
Unproved properties
|
-
|
-
|
||||||
Exploration costs
|
-
|
-
|
||||||
Development costs
|
934
|
219
|
||||||
Total cost incurred
|
$
|
934
|
$
|
-219
|
2011
|
2010
|
|||||||
Oil and gas sales
|
$
|
1,020 $
|
1,248
|
|||||
Production expenses
|
(1,095
|
)
|
(702
|
)
|
||||
Exploration expenses
|
-
|
|||||||
Depreciation, depletion and amortization
|
(335
|
)
|
(323
|
)
|
||||
Impairment of oil and gas properties
|
(1,428
|
)
|
-
|
|||||
General and administrative expenses
|
(335
|
)
|
(390
|
)
|
||||
Income tax benefit (expense)
|
-
|
-
|
||||||
Results of operations
|
$
|
(1,967
|
)
|
$
|
(167
|
)
|
2011
|
2010
|
|||||||
Future oil and gas cash inflows
|
$
|
23,395
|
$
|
51,928
|
||||
Future oil and gas operating expenses
|
(5,036
|
)
|
(12,265
|
)
|
||||
Future development costs
|
(2,343
|
)
|
(15,123
|
)
|
||||
Future tax expense
|
(370
|
)
|
(244
|
)
|
||||
Future net cash flows
|
15,404
|
24,296
|
||||||
10% discount to reflect timing of cash flows
|
(4,505
|
)
|
(11,878
|
)
|
||||
Standardized measure of discounted future net cash flows
|
$
|
11,141
|
$
|
12,418
|
2011
|
2010
|
|||||||
Beginning balance
|
$
|
12,418
|
$
|
11,372
|
||||
Oil and gas sales, net of production costs
|
(75
|
)
|
(275
|
)
|
||||
Purchase of reserves, net of future development costs
|
-
|
491
|
||||||
Net changes in prices and production costs
|
(1,202
|
569
|
||||||
Extensions and discoveries, net of future development costs-
|
261
|
|||||||
Revisions of quantity estimates
|
-
|
-
|
||||||
Other changes
|
-
|
-
|
||||||
Ending balance
|
$
|
11,141
|
$
|
12,418
|
(in thousands)
|
2011
|
2010
|
||||||
Asset retirement obligation, January 1
|
$
|
2,573
|
$
|
2,450
|
||||
Acquisition of oil and gas properties
|
-
|
-
|
||||||
Revisions in the estimated cash flows
|
-
|
-
|
||||||
Liability incurred upon acquiring and drilling wells
|
-
|
-
|
||||||
Liability settled upon plugging and abandoning wells
|
-
|
-
|
||||||
Accretion of discount expense
|
129
|
123
|
||||||
Asset retirement obligation, December 31
|
$
|
2,702
|
$
|
2,573
|
CERTIFICATIONS
|
EXHIBIT 31.1
|
/s/ Gene S. Bertcher | |
Gene S. Bertcher, Principal Executive | |
Officer, President and Chief Financial | |
Officer |
/s/ Gene S. Bertcher | |
Gene S. Bertcher, Principal Executive | |
Officer, President and Chief Financial Officer |