HOUSTON, Nov. 19, 2008 (GLOBE NEWSWIRE) -- Index Oil and Gas Inc. (OTCBB:IXOG) today announced its unaudited financial results and operational highlights for the second fiscal quarter ended September 30, 2008 of the 2009 fiscal year.
The company incurred a net loss of $3.4 million during the quarter, inclusive of a non-cash impairment charge arising from the full cost ceiling test limitation, due to a reduction in estimated reserves and in oil and natural gas prices. This compares to a net loss of $0.5 million in second quarter ended September 30, 2007. Oil and natural gas sales revenues for the second quarter of fiscal year 2009 were $697,769 as compared to $137,575 for the equivalent period in the previous fiscal year.
Production volumes for the period were 65.6 million cubic feet (MMcfe), an increase of 47.6 MMcfe from 18.0 MMcfe reported from the same period in fiscal year 2008. The volumes reflect a 39 percent decline from the first quarter of fiscal year 2009 due to production shutdowns during Hurricane Ike and production declines in certain wells. Natural gas production for the quarter provided 83 percent of total production, on an energy equivalent basis. Average natural gas sales price in the quarter was $8.68 per thousand cubic feet of gas.
Lyndon West, chief executive officer for the Company, stated: "Our financial performance for the quarter was affected by lower prices and a drop in production volumes that was further complicated by an impairment of assets. Our growth over the past year has positioned us to better weather such difficulties. We continue to make significant progress in our growth activities with the ongoing drilling of our Alligator Bayou prospect and the acquisition of new exploration opportunities."
The net loss for the quarter includes several non-cash charges, specifically $0.054 million in stock compensation expense, $0.591 million in depletion, depreciation and amortization expense, and $2.587 million in impairment expense for the full cost ceiling test limitation. Commensurate with increased production volumes, lease operating expenses and production taxes were higher compared with the same period in the previous fiscal year. Also, as a result of increased corporate activity, general and administrative costs were higher during the fiscal quarter while interest income on cash balances was lower compared to the same period in the previous fiscal year.
The key operational activity in the quarter was the drilling of the initial test well on the Alligator Bayou Prospect. Drilling and logging operations continue at the Armour Runnels #1ST exploration well in Matagorda County, Texas. The well has been logged to 23,053 feet and is currently drilling below 23,500 feet. The well is targeting natural gas in the Wilcox formation. Further information will be available when the well reaches total depth and has been fully logged and evaluated.
The Quarterly Report on Form 10-Q for the quarter ending September 30, 2008 was filed on November 14, 2008 with the Securities and Exchange Commission. It is also available by accessing the filing section under the Investor Relations tab at www.indexoil.com.
About Index Oil and Gas:
Index Oil and Gas Inc. (OTCBB:IXOG) is an oil and gas exploration and production company with activities primarily in Texas, Louisiana and Kansas and offices in Houston. Its goal is to generate increasing reserves and cash flow from a portfolio of moderate and higher risk potential prospects in the United States. To learn more about Index Oil and Gas, please visit the Company's web site at http://www.indexoil.com. To receive news about the company as it becomes available, please contact Adam Brooks at abrooks@cfsg1.com or 1-800-625-2236.
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. This release may also contain other "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. Because 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.
For a description of risks and other factors that may affect the Company's results of operations and financial performance, see the Company's reports filed with the Securities and Exchange Commission, including the Company's annual report on Forms 10-K and 10-K/A for the fiscal year ended March 31, 2008 and the Company's quarterly reports on Forms 10-Q, copies of which may be obtained from the SEC's website at http://www.sec.gov.