Isramco, Inc. Reports Fourth Quarter Results

HOUSTON, March 23, 2012 /PRNewswire/ -- Isramco, Inc. (Nasdaq: ISRL) reported today revenues for the fourth quarter ended December 31, 2011 of $11,574,000 compared to revenues of $12,580,000 for the fourth quarter a year ago. The company reported net loss of $4,308,000, or ($1.59) per share, for the fourth quarter of 2011 compared to a net loss of $2,600,000, or ($0.96) per share for the same quarter a year earlier.

In 2011, revenues from oil and gas sales were $44,228,000, compared to $39,329,000 in 2010. The net income for 2011 was $7,381,000 or $2.72, per share compared to a net loss of $2,787,000 or ($1.03) per share in 2010.

The increase in net income was primarily due to the impact of sale of marketable securities, derivatives and higher oil and natural gas liquids ("NGLs") sales revenues due to higher prices and lower depreciation, depletion and amortization expenses. This was partially offset by a decrease in sales volumes of natural gas, oil and NGLs caused by natural decline in production, higher taxes paid due to increase in revenues, higher impairments of oil and gas assets and higher lease operating expenses.

In August 2011 the Company sold all of its investment in a company called MediaMind Ltd. The realized gain from this transaction amounted to $15,910,000.

As part of the closing of our Israeli office, we retained certain rights to royalty interests in certain properties.  Those interests include an overriding royalty interest of 1.5375% in a field called Tamar, which will increase to 2.7375% after payout. We have a third party reserve report from independent petroleum engineers dated March 21, 2012 covering our overriding royalty. This reserve report estimates that by reason of its ownership of the Tamar Royalty, we have proven undeveloped reserves in these leases are estimated in the amount of 154.1 billion cubic feet of natural gas.  The report indicates that there are no commercial oil deposits that are included as reserves. The amount of proceeds, if any, we receive from the production of the natural gas will be determined not only by the timing of production and price received but, as our interest increases at payout, the expenses and costs incurred by the operations will also affect payments to us.  Payout is the point when all the cost of leasing, drilling and operating the leases have been recovered from production from the leases as defined in the royalty agreement.  As we do not control many of those factors affecting our payments (time of production, price received, costs incurred) for our interest and other risk factors as set out in our Form 10-K it is difficult to determine the amount we will receive with precision. 

The number of outstanding shares was 2,717,691 on December 31, 2011 and 2010.

The Company's financial statement information is summarized below:

FORWARD-LOOKING STATEMENTS

ALL STATEMENTS CONTAINED HEREIN, AS WELL AS ORAL STATEMENTS THAT MAY BE MADE BY THE COMPANY OR BY OFFICERS, DIRECTORS OR EMPLOYEES OF THE COMPANY ACTING ON THE COMPANY'S BEHALF, THAT ARE NOT STATEMENTS OF HISTORICAL FACT, CONSTITUTE "FORWARD-LOOKING STATEMENTS" AND ARE MADE PURSUANT TO THE SAFE-HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.  SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT COULD CAUSE THE ACTUAL RESULTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM THE HISTORICAL RESULTS OR FROM ANY FUTURE RESULTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS.  SUCH RISKS AND UNCERTAINTIES ARE OUTLINED IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR 2011, ITS QUARTERLY REPORTS ON FORM-10-Q, AND SUCH OTHER DOCUMENTS AS ARE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FROM TIME TO TIME.  THE COMPANY IS NOT OBLIGATED TO REVISE OR UPDATE ANY FORWARD-LOOKING STATEMENTS IN ORDER TO REFLECT EVENTS OR CIRCUMSTANCES THAT MAY ARISE AFTER THE DATE OF THIS RELEASE.

SOURCE Isramco, Inc.