(Source: Business Wire)
BASIC EARTH SCIENCE SYSTEMS, INC. (OTCBB:BSIC) reported net earnings of $249,000, $.01 per share on a diluted basis, on revenue of $1.5 million, for the first quarter of fiscal 2010, ended June 30, 2009, compared with $1.4 million, $.08 per share on a diluted basis, on revenue of $3.3 million, for the same period ended June 30, 2008.
Chief Executive Officer and President Ray Singleton said, "Oil production for the first quarter was essentially the same as it was a year ago. However, our revenue and earnings declined because of the significant drop in the price of oil from a year ago. At $52 per barrel, our realized price for the first quarter was 57% lower than the $120 per barrel that we realized a year ago in the first quarter of fiscal 2009. Gas prices were also lower at $5.40 per thousand cubic feet, 46% less than the $10 per thousand cubic feet received for the year ago quarter."
Oil production for the first quarter of fiscal 2010 was 24,343 barrels, a slight increase over the 23, 911 barrels produced in the same period of 2009. Gas production was 35,186 thousand cubic feet in the first quarter of fiscal 2010 compared to 43,072 thousand cubic feet in the same period of 2009. This decrease was due to a decline in production from the Antenna Federal property in Weld County, CO, where we have recently drilled 16 new wells. This decline is considered normal for the first year of production in this field.
Total lifting costs (production costs plus severance taxes) for the first quarter dropped by 29% to $19.47 per barrel of oil equivalent compared to $27.28 for the same period in 2009. This was accomplished primarily by both shutting-in higher cost wells and by incurring lower severance taxes, a result of lower commodity prices.
"Our objective has been to lower our operating costs, and with the decline in oil prices, efforts to reduce service company costs are generating positive results. In the first quarter of fiscal 2010, we were able to reduce production expenses by 17% and overall lifting costs by 29%," said Singleton.
Operating Highlights
In May 2009, the Roscoe 2H-8 well located in eastern McKenzie County, ND, came online and is currently producing 100 barrels of oil per day. Basic Earth has a 6.5% interest in the well, located in the Bakken formation on the Banks Prospect. The well was drilled by and is operated by Panther Energy Company, LLC, Tulsa, OK.
Also in May 2009, the Halvorsen State 31X-36, a new Bakken well in Richland County, MT, began producing. During June, the well produced an average of 255 barrels of oil per day. The well has stabilized and all stimulation fluid has been recovered.
