UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
Date of Report (Date of earliest event reported): April 18, 2018
NEW CONCEPT ENERGY, INC.
(Exact Name of Registrant as Specified in its Charter)
|
Nevada |
000-08187 |
75-2399477 |
|
(State or other jurisdiction of incorporation) |
(Commission File No.) |
(I.R.S. Employer Identification No.) |
|
1603 LBJ Freeway, Suite 300 Dallas, Texas |
75234 | |
| (Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code 972-407-8400
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Section 2 – Financial Information
Item 2.02. Results of Operations and Financial Condition
On April 18, 2018, New Concept Energy, Inc. (“GBR” or the “Company”) announced its operational results for the year ended December 31, 2017. A copy of the announcement is attached as Exhibit “99.1.”
The information furnished pursuant to Item 2.02 in this Form 8-K, including Exhibit “99.1” attached hereto, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, unless we specifically incorporate it by reference in a document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934. We undertake no duty or obligation to publicly update or revise the information furnished pursuant to Item 2.02 of this Current Report on Form 8-K.
Section 9 – Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
The following exhibit is furnished with this Report:
| Exhibit | |
| Designation | Description of Exhibit |
| 99.1* | Press Release dated April 18, 2018 |
| _________________________ |
* Furnished herewith
| 2 |
| Dated: April 19, 2018 | NEW CONCEPT ENERGY, INC.
By: /s/ Gene S. Bertcher Gene S. Bertcher, President and Chief Financial Officer |
| 3 |
Exhibit 99.1
|
NEWS RELEASE FOR IMMEDIATE RELEASE |
Contact: New Concept Energy Inc. Gene Bertcher (800) 400-6407 info@newconceptenergy.com
|
New Concept Energy, Inc. Reports Fourth Quarter and Full Year 2017 Results
Dallas (April 18, 2018) New Concept Energy, Inc. (NYSE American: GBR), (the “Company” or “NCE”) a Dallas-based oil and gas company, today reported Results of Operations for the fourth quarter ended December 31, 2017. During the three months ended December 31, 2017 the Company reported a net loss of $2,851,000 or ($1.39) per share, compared to a net income of $641,000 or $0.32 per share for the same period ended December 31, 2016
For the full year ended December 31, 2017 the Company reported a net loss of $3,246,000 or ($1.59) per share, compared to a net income of $48,000 or $0.02 per share for the same period ended December 31, 2016.
Included in the 2017 loss are non-cash expenses of $3,047,000 including an impairment expense of $2,626,000 to reduce the carrying value of the Company’s oil and gas properties, depreciation, depletion and amortization expense of $396,000 and a $25,000 expense to write off assets from the operations at a retirement center that was discontinued in 2017.
Revenues: Total revenues from the oil & gas operation was $791,000 in 2017 and $764,000 in 2016. Net revenue for our oil and gas operation increased by $27,000 in 2017 as compared to 2016. Included in 2016 revenue is a onetime fee of $30,000. The increase in revenue in 2017 was principally due to an increase in the quantity of oil and gas produced.
Operating Expenses: Operating expenses for continuing oil & gas operations was $1,027,000 in 2017 and $1,181,000 in 2016. This decrease of $154,000 was principally due to a reduction of depreciation and depletion expense of $174,000. The remaining increase was the result of an overall reduction in operating expenses
In 2017 pursuant to the requirements of the “full cost ceiling test” for oil & gas companies we recorded a non-cash charge to operations of $ $2,646,000 to write down its investment in Ohio and West Virginia. This charge to earnings was caused by a revaluation of the Company’s non- producing oil and gas reserves.
Corporate Expenses were $408,000 in 2017 and $352,000 in 2016. The increase is due to an overall increase in operating expenses.
Interest Expense: Interest Expense was $24,000 in 2017 as compared to $38,000 in 2016. The decrease was due to a reduction in the long term debt.
Other Income & (Expense): Other income & (expense) was $28,000 for 2017 as compared to ($110,000) in 2016. In 2017 the most significant item was the receipt of $64,000 for a receivable the Company had previously written off. .The expenses in 2016 were principally the write off assets pertaining to the termination of the lease at the retirement center.
Discontinued Operations: The Company leased and operated Pacific Pointe Retirement Inn (“Pacific Pointe”) a retirement community in King City, Oregon. Our lease provided that should the property be sold the lease maintained by the Company would be terminated. The owners completed the sale of the building on March 30, 2017 and our lease terminated on that date. These financial statements reflect the operations of the retirement community as a discontinued operation. Net income (loss) from discontinued operations was ($5,000) and $4,000 in 2017 and 2016 respectively.
About New Concept Energy, Inc.
New Concept Energy, Inc. is a Dallas-based oil and gas company which owns oil and gas wells and mineral leases in Ohio and in West Virginia. For more information, visit the Company’s website at www.newconceptenergy.com.
| Contact: |
New Concept Energy, Inc.
Gene Bertcher, (800) 400-6407
info@newconceptenergy.com
| NEW CONCEPT ENERGY, INC. AND SUBSIDIARIES | ||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
| (amounts in thousands, except per share data) | ||||||||||||
| Year Ended December 31, | ||||||||||||
| 2017 | 2016 | 2015 | ||||||||||
| Revenue | ||||||||||||
| Oil and gas operations, net of royalties | $ | 791 | $ | 764 | $ | 820 | ||||||
| 791 | 764 | 820 | ||||||||||
| Operating expenses | ||||||||||||
| Oil & gas operations | 1,027 | 1,181 | 1,800 | |||||||||
| Corporate general and administrative | 408 | 352 | 605 | |||||||||
| Impairment of natural gas and oil properties | 2,626 | — | 2,717 | |||||||||
| 4,061 | 1,533 | 5,122 | ||||||||||
| Operating earnings (loss) | (3,270 | ) | (769 | ) | (4,302 | ) | ||||||
| Other income (expense) | ||||||||||||
| Interest income | 25 | 23 | 12 | |||||||||
| Interest expense | (24 | ) | (38 | ) | (62 | ) | ||||||
| Gain on prepayment of debt | — | 888 | — | |||||||||
| Gain on sale of land | — | 50 | — | |||||||||
| Bad debt expense (recovery) - note receivable | — | — | 1,430 | |||||||||
| Other income (expense), net | 28 | (110 | ) | (32 | ) | |||||||
| 29 | 813 | 1,348 | ||||||||||
| Earnings (loss) from continuing operations | (3,241 | ) | 44 | (2,954 | ) | |||||||
| Earnings from discontinued operations | (5 | ) | 4 | 332 | ||||||||
| Net income (loss) applicable to common shares | $ | (3,246 | ) | $ | 48 | $ | (2,622 | ) | ||||
| Net income (loss) per common share-basic and diluted | $ | (1.59 | ) | $ | 0.02 | $ | (1.35 | ) | ||||
| Weighted average common and equivalent shares outstanding - basic | 2,037 | 1,947 | 1,947 | |||||||||
| NEW CONCEPT ENERGY, INC. AND SUBSIDIARIES | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (amounts in thousands) | ||||||||
| December 31, | ||||||||
| 2017 | 2016 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 419 | $ | 113 | ||||
| Accounts receivable from oil and gas sales | 67 | 119 | ||||||
| Current portion note receivable | 36 | 206 | ||||||
| Total current assets | 522 | 438 | ||||||
| Oil and natural gas properties (full cost accounting method) | ||||||||
| Proved developed and undeveloped oil and gas properties, net of depletion | 2,721 | 5,608 | ||||||
| Property and equipment, net of depreciation | ||||||||
| Land, buildings and equipment - oil and gas operations | 661 | 706 | ||||||
| Other | — | 25 | ||||||
| Total property and equipment | 661 | 731 | ||||||
| Note Receivable | 301 | 401 | ||||||
| Total assets | $ | 4,205 | $ | 7,178 | ||||
| NEW CONCEPT ENERGY, INC. AND SUBSIDIARIES | ||||||||
| CONSOLIDATED BALANCE SHEETS - CONTINUED | ||||||||
| (amounts in thousands, except share amounts) | ||||||||
| December 31, | ||||||||
| 2017 | 2016 | |||||||
| Liabilities and stockholders' equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable - trade (including $412 and $160 in 2017 and 2016 due to related parties) | $ | 446 | $ | 238 | ||||
| Accrued expenses | 29 | 59 | ||||||
| Current portion of long term debt | 81 | 96 | ||||||
| Total current liabilities | 556 | 393 | ||||||
| Long-term debt | ||||||||
| Notes payable less current portion | 243 | 296 | ||||||
| Asset retirement obligation | 2,770 | 2,770 | ||||||
| Total liabilities | 3,569 | 3,459 | ||||||
| Stockholders' equity | ||||||||
| Series B convertible preferred stock, $10 par value, liquidation value | ||||||||
| of $100 authorized 100 shares, issued and outstanding one share | 1 | 1 | ||||||
| Common stock, $.01 par value; authorized, 100,000,000 | ||||||||
| shares; issued and outstanding, 2,036,935 and 1,946,935 shares | ||||||||
| at December 31, 2017 and 2016 | 21 | 20 | ||||||
| Additional paid-in capital | 59,000 | 58,838 | ||||||
| Accumulated deficit | (58,386 | ) | (55,140 | ) | ||||
| 636 | 3,719 | |||||||
| Total liabilities & stockholders' equity | $ | 4,205 | $ | 7,178 | ||||