New Concept Energy, Inc
New Concept Energy, Inc. (NYSE: GBR) is focused on North American oil and gas drilling and exploration projects. Current properties are concentrated in the Appalachian and Utica Basins.
The company, through wholly owned subsidiaries Mountaineer State Energy, Inc. and Mountaineer State Operations, LLC, owns and operates oil and gas wells and mineral leases in Athens and Meigs Counties in Ohio and in Calhoun, Jackson and Roane Counties in West Virginia. The majority of their oil & gas operation was acquired through the acquisition of the Carl E.Smith Companies in 2008. As of December 31, 2015 the Company has 153 producing gas wells, 31 non-producing wells and related equipment and mineral leases covering approximately 20,000 acres
The company also leases and operates Pacific Ponte Retirement Inn located in King County Oregon – a retirement centre with a capacity of 114. The residents do not need assistance or support in the activities related to daily living, but prefer the comfort, both physical and psychological, of a residential community made up of like-minded people providing access to services oriented towards seniors.
The company is a Nevada corporation and intends to continue the pursuit of acquisitions of undervalued or troubled oil and gas businesses as well as the additional acquisition of leases relating to oil and gas. It may opt to develop or resell their lands. The strategy is dependent on available financing as well as the market and the prices for oil and gas. The company also intends to maintain the interest in the retirement centre, which is currently operated, but the management has no intention at present to own or operate additional retirement facilities.
Results for the second quarter of FY 2016
The company reported a net loss for the quarter ending June 30, 2016 of $133,000 ($ 0.07 per share) compared to $110,000 ($ 0.06 a share) for the same quarter of the previous year. The results for the quarter ending June 30, 2015 included a recovery of bad debt expenses of $386,000 which was provided for in a previous year. For the six months ending June 30, 2016, the loss came to $ 429,000 ($0.22 per share) compared to $424,000 ($0.22 a share) compared to the corresponding six months of the previous year. The figure for the previous year includes a recovery of batted expenses of $1,124,000.
For the quarter ended June 30, 2016 the company reported oil and gas revenues, net of royalty payments of $170,000 compared to $259,000 for the same period of the previous year. The decline was primarily due to the reduced prices of oil sales during this quarter, compared to the price in the previous year. The company has taken corrective measures by reducing production of oil from wells which have become unprofitable due to the current market prices of oil. Revenues for the quarter from the retirement property were $665,000 compared to $774,000 for the same period in the previous year.
For the quarter ending 30 June 2016, oil and gas operating expenses came to $233,000 compared to $440,000 for the corresponding period of the previous year. The decrease in expenses was due to an increase in the overall operating expenses. For the same period, operating expenses at the retirement property came to $389,000 compared to $415,000 because of a decrease in expenses not related to payroll. For the quarter, administrative and general expenses came to $101,000 compared to $155,000 for the same period of the previous year.
The bottom line
The results for the latest quarter are awaited by analysts. The historical business during the past five years have included the ownership and operation of nursing and retirement centres, real estate investment, and the manufacturing and leasing of electrical vehicles. The nursing and retirement centres and the vehicle business have been disposed of and the real estate portfolio is in the process of being liquidated. There has been no insider stock purchases but three institutional sales for net value of $452,941. Major shareholder Arcadian Energy Inc sold 108,500 shares on October 4th for an average price of $2.58 for a total value of $279,930 and the company now owns 68,331 shares valued at $176,293.98. Investors should conduct their own due diligence before taking any action regarding this stock.