SAN DIEGO--(BUSINESS WIRE)--Osage Exploration and Development, Inc. (OTCBB:OEDV), an independent exploration and production company focused on the Horizontal Mississippian and Woodford plays in Oklahoma, announced today record revenues, production, and earnings for the three months and for the nine months ended September 30, 2012.
Mr. Kim Bradford, Chairman and Chief Executive Officer of Osage Exploration and Development, commented on the Company’s third quarter results, “The third quarter of 2012 was the strongest quarter in Osage’s corporate history owing to solid results from our first three wells in the horizontal Mississippian. Osage has achieved profitability with only three gross wells and our legacy assets in Colombia.” Mr. Bradford continued, “We currently have two additional wells drilled plus a third being drilled now that will be fracture treated in December. Effectively, with the fracture treatment of three wells in December, Osage will be doubling the number of producing oil wells to its portfolio during the late fourth quarter of 2012. We intend to maintain this accelerated drilling pace throughout 2013. We are just now beginning to realize the potential asset value and production rates that we have long recognized to be inherent in our Logan County acreage.”
Revenues - Three Months Ended September 30
For the three months ended September 30, the Company reported oil revenues of $1,262,050, pipeline revenues of $508,505, and natural gas revenues of $84,572 for total operating revenues of $1,855,127. These numbers represent a year-over-year increase in oil revenues of 230%. Total operating revenues increased 117% versus the same quarter in 2011. Oil sales increased in 2012 over 2011 due to the early development of the Company’s Nemaha Ridge project in Logan County, Oklahoma. Osage’s revenues for the three months ended September 30, 2012 and 2011 are highlighted below.
|Natural Gas Sales||84,572||4.6||%||-||0.0||%||84,572||-|
Oil & Natural Gas Production - Three Months Ended September 30
Oil production, net of royalties, was 14,102 BBLs, an increase of 195.9% for the three months ended September 30, 2012. U.S. production accounted for 68.6% and 3.4% of total production for the three months ended September 30, 2012 and 2011, respectively.
Natural gas production was 50,153 Mcf for the three months ended September 30, 2012. Gas production began in the first quarter of 2012 in our Logan County properties. For the three months ended September 30, 2012 and 2011, Osage’s production of oil and natural gas is highlighted below.
|Oil Production:||Net Barrels||% of Total||Net Barrels||% of Total||Barrels||%|
|Natural Gas Production:||Mcf||% of Total||Mcf||% of Total||Mcf||%|
Operating Costs Reduced
Operating costs as a percentage of total revenues were reduced to 21.9% in the 2012 period from 33.2% in the 2011 period as new wells came into production. More significantly, average operating costs per barrel of oil equivalent (“Production Cost/BOE”) in the U.S. for the three months ended September 30, 2012 was $4.65.
Operating Income Improvement
Osage generated cash flow from operations for the three months ended September 30 of $740,845, a 605% increase from the same quarter in 2011. For the nine months ended September 30, cash flow from operations was $922,076 as compared to a loss of $411,069 for the same period in 2011. Osage’s operating costs and expenses for the periods ending September 30, 2012 and 2011 are highlighted below.
|Percent of||Percent of|
|General & Administrative||447,649||24.1||%||569,263||66.6||%||(121,614||)||-21.4||%|
|Depreciation, Depletion and Accretion||226,682||12.2||%||112,900||13.2||%||113,782||100.8||%|
|Total Operating Expenses||$||1,114,282||60.1||%||$||1,000,847||117.2||%||$||113,435||11.3||%|
|Operating Income (Loss)||$||740,845||39.9||%||$||(146,647||)||-17.2||%||$||887,492||605.2||%|
Net income was $250,976 for the three months ended September 30, 2012 which compared to a net loss of $142,787 for the three months ended September 30, 2011. The $393,763 improvement was as a result of revenue growth which exceeded growth in operating costs and expenses, offset in part by increased interest expense.
Based in San Diego, California, with production offices in Oklahoma City, Oklahoma, and executive offices in Bogotá, Colombia, Osage Exploration and Development, Inc. is an independent exploration and production company with interests in oil and gas wells and prospects in the U.S. and Colombia. http://www.osageexploration.com
Safe Harbor Statement
The information in this release includes certain forward-looking statements as defined by the Securities and Exchange Commission that are based on assumptions that in the future may prove not to have been accurate. Those statements and Osage Exploration and Development, Inc. are subject to a number of risks, including production variances from expectations, volatility of product prices, inability to raise sufficient capital to fund its operations, environmental risks, competition, government regulation, and the ability of the Company to execute its business strategy, among others.