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Magellan's president, Dan Samela, said, "We are pleased with our operating results for this quarter. Operating income is up by $3.4 million compared to last year's quarter and $816,000 over the fourth quarter of fiscal 2008. Though oil production was down 33% over last year, oil sales increased 19% due mostly to a 65% increase in the average price per barrel compared to last year's quarter."
The Company's Mereenie gas contract expires in June 2009. Mereenie gas sales were approximately $3.5 million (net of royalties) or 84% of total gas sales for the quarter ended September 30, 2008. Though the competition is strong, the Company is actively pursuing gas sales contracts for its remaining Mereenie reserves.
Depletion, depreciation and amortization costs for the 2008 quarter are down $1.9 million over the 2007 quarter due mostly to lower depletable costs and the 5% increase in the average exchange rate.
Statements in this press release which are not historical in nature are intended to be, and are hereby identified as, forward looking statements for purposes of the "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995. The Company cautions readers that forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward looking statements. Among these risks and uncertainties are pricing and production levels from the properties in which the Company has interests, and the extent of the recoverable reserves at those properties. In addition, the Company has a large number of exploration permits and faces the risk that any wells drilled may fail to encounter hydrocarbons in commercially recoverable quantities. The Company undertakes no obligation to update or revise forward- looking statements, whether as a result of new information, future events, or otherwise.
Comparative, consolidated results for the three month periods are shown in the following consolidated statements of operations:
MAGELLAN PETROLEUM CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) THREE MONTHS ENDED September 30, 2008 2007 REVENUES: Oil sales $5,645,587 $4,732,820 Gas sales 4,309,072 3,989,184 Other production related revenues 484,025 599,929 Total revenues 10,438,684 9,321,933 COSTS AND EXPENSES: Production costs 2,986,862 2,098,026 Exploration and dry hole costs 723,400 2,013,474 Salaries and employee benefits 466,192 444,509 Depletion, depreciation and amortization 2,500,950 4,408,364 Auditing, accounting and legal services 267,470 237,051 Accretion expense 158,415 170,208 Shareholder communications 90,579 47,066 Gain on sale of field equipment (3,506) (9,653) Other administrative expenses 769,069 869,913 Total costs and expenses 7,959,431 10,278,958 Operating income (loss) 2,479,253 (957,025) Interest income 628,169 489,217 Income (loss) before income taxes 3,107,422 (467,808) Income tax provision (1,599,611) (6,638) NET INCOME (LOSS) $1,507,811 (474,446) Average number of shares outstanding Basic 41,500,325 41,500,325 Diluted 41,511,775 41,500,325 NET INCOME (LOSS) PER SHARE (BASIC AND DILUTED) $0.04 $(0.01)
SOURCE Magellan Petroleum Corporation
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