HOUSTON, Nov. 16, 2007 (PRIME NEWSWIRE) -- Index Oil and Gas, Inc. (OTCBB:IXOG) ("Index" or "the Company") announced today it has filed the Company's unaudited financial results for the second Fiscal Quarter ended September 30, 2007 ("Q2 FY 2008", "the quarter"). Form 10-Q ("Quarterly Report") was filed on November 14, 2007 with the Securities and Exchange Commission. The Company's fiscal year ("FY") 2008 ends March 31, 2008.
Highlights for the quarter include a continued increase in production volumes, with the Schroeder Gas Unit 1 well coming into production during the period.
Significant progress continues to be made on the FY 2008 drilling programme, and the Company expects an increase in reserves and production from its ongoing projects by the end of this fiscal year.
Milestones expected prior to December 31, 2007 include:
* First gas sales from Cason 1.
* A production test on Shadyside 1, Index's second largest
prospect.
* The drilling of the first well on the Supple Jack Creek
prospect.
* Pipeline construction and hook up of the successful
Outlar 1 and Hawkins 1 wells.
In addition:
* Completion operations are in progress on the Ducroz 1 well
and are awaiting resumption on the currently suspended
Ilse 1 well.
* The first well on the important, potentially very large,
Alligator Bayou prospect remains planned for early calendar
year 2008.
Lyndon West, CEO of the Company, stated, "Our balanced portfolio of projects is progressing well, and we remain excited by the potential that our strategy provides for our company and our shareholders. The results for the second quarter of our fiscal year 2008 are as anticipated, reflecting production from relatively small-volume wells from our FY 2007 portfolio. Wells from our FY 2008 drilling programme have recently contributed new reserves and are close to contributing to production and revenue. Results from the potentially high impact Shadyside well will be known soon."
Results reported in the Quarterly Report are as follows:
Oil and gas sales were $137,575 for the second quarter of the Company's fiscal year 2008 ending March 31, 2008 and $288,948 for the six months to September 30, 2007, compared to $103,354 and $173,811 respectively for the equivalent periods in the previous fiscal year. Gas production for the quarter was approximately double that of oil production, on an energy equivalent basis, and this ratio is expected to grow in the near future.
The increase in oil and gas sales over the comparative quarter reflected an increase in production volumes of 1.4 MBoe (thousand barrels of oil equivalent), from 1.6 MBoe in Q2 FY 2007 to 3.0 MBoe in Q2 FY 2008. The increase was primarily due to production from the Schroeder and Friedrich wells, offset by lower volumes on other wells. Additionally, revenues reflected lower average commodity prices as our average price per Boe (barrel of oil equivalent) decreased by $18.44 in the quarter to $45.76 per Boe from $64.20 per Boe in Q2 FY 2007, reflecting the increased gas volumes within the production mix and Index is now planning to include gas and gas equivalent measures in future reporting. Average gas sales price in the quarter was $5.29 per Mcf (thousand cubic feet of gas).
Net loss for Q2 FY 2008 was $(0.475 million) as compared to $(0.541 million) for Q2 FY 2007. The loss for the quarter includes $0.045 million of non-cash stock based compensation costs. Commensurate with increased production volumes, production expenses and depletion costs were higher, with interest income on cash balances slightly lower compared to the previous year.
The Company invested $3.050 million and $4.367 million in capital expenditures in the quarter and six months to September 30, 2007, respectively, principally on its oil and gas properties.
About Index Oil and Gas
Index Oil and Gas, Inc. is a dynamic gas-biased oil and gas exploration and production company, with onshore activities primarily in Texas, Louisiana, and Kansas and offices in Houston. The Company's goal is to generate increasing reserves and cash flow from a portfolio of moderate and higher risk potential prospects. After successfully focusing on lower risk prospects to build reserves and near term cashflow in Fiscal Year 2007 (ended March 31, 2007), Index has embarked upon a drilling program in Fiscal Year 2008 of a balanced, risk-managed portfolio of prospects designed to generate significantly higher reserves and production. The Company has an enviable drilling record and intends to grow its existing asset base and revenues through further investment in the U.S.
To find out more about Index Oil and Gas Inc. (OTCBB:IXOG), visit our website at http://www.indexoil.com.
The statements in the press release that relate to the Company's expectations with regard to the future impact on the Company's results from acquisitions or actions in development are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The statements in this document may also contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, such statements should not be regarded as a representation by the Company, or any other person, that such forward-looking statements will be achieved. Since the information may contain statements that involve risk and uncertainties and are subject to change at any time, the Company's actual results may differ materially from expected results. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. In light of the foregoing, readers are cautioned not to place undue reliance on such forward-looking statements.
Pursuant to a September 1, 2007 agreement, Consulting For Strategic Growth 1, Ltd. ("CFSG1") provides the Company with consulting, business advisory, investor relations, public relations and corporate development service, for which CFSG1 receives cash and/or stock compensation.