DUBLIN, OH, United States, via eTeligis Inc., 05/16/2014 - - Cardinal Energy Group, Inc. ("Cardinal Energy" or "the Company") (OTCQB: CEGX) announced financial results for the three months ended March 31, 2014. The Company has achieved the following milestones in its strategy for growth:
Divesting California and Ohio assets
Entering Texas to capture higher oil growth opportunities
Retired selective costly convertible debt
First Quarter 2014 Financial Results
Revenues from oil and gas were $14,794 for the three months ended March 31, 2014, up from $1,871 in the same period a year ago due to initial sale of crude oil from its Texas properties and higher prices for natural gas produced and sold from the Company's California properties.
Operating and production expenses increased to $114,627 for the quarter ending March 31, 2014 compared to $1,709 for the quarter ending March 31, 2013. The primary reason for the increase was higher lease operating expenses for the oil and gas properties recently acquired in Texas. General and administrative expenses increased approximately 2% to $491,507 in the first quarter of 2014 compared to the same period a year ago.
Net loss for the quarter ending March 31, 2014 was $745,557 compared to a net loss of $460,205 for the same period a year ago. The increase reflects the aforementioned higher operating and production expenses and higher interest costs due to the increased borrowings required to fund the Company's growth and development activities. Net loss per share was $0.02 for the first quarter of 2014 compared to $0.01 in the first quarter of 2013. The weighted average shares outstanding increased to 36.6 million shares in Q1 2014 from 34.8 million shares in Q1 2013.
Cash and cash equivalents were $1,316,627 at March 31, 2014, up from $18,694 at December 31, 2013. The Company used $612,995 of cash in operations and invested $855,326 to acquire and develop oil and gas properties during the quarter ended March 31, 2014. Management anticipates incurring additional costs to acquire leases, rework and recomplete existing wells and to drill development wells during the remainder of 2014.
In the first three months of 2014, the Company has sold $3,225,000 of 12% senior secured convertible notes. Through May 14th, 2014 Cardinal Energy has raised a total of $4,075,000 through the sale of the 12% senior secured convertible notes, which includes the $3,225,000 raised in the first quarter of 2014. The notes have an initial conversion exercise price of $1.00 per share of common stock, are callable by the Company and mature on December 15, 2015 unless converted or redeemed earlier. Proceeds will be used to fund the Company's well work over and drilling programs, strategic acquisitions, retire selected costly convertible debt and for working capital.
Timothy Crawford, CEO of Cardinal Energy stated, "We see meaningful opportunities to increase production from existing wells and by drilling additional development wells on our existing Texas leases. We are continuing to build our seasoned team which has demonstrated a solid track record of identifying, remediating and operating oil and gas properties in key areas throughout Texas. We are being prudent with the capital that we have recently secured which will allow us to rework and recomplete our recently acquired wells and to drill selected in-field development wells to exploit reserves from currently producing and heretofore untapped new formations. We expect this low-risk, capital-light strategy to significantly increase production throughout the remainder of 2014 and beyond."
Recent Business Highlights
In an attempt to focus its capital and drilling activities solely in Texas, Cardinal Energy recently sold its oil and gas assets in California and Ohio to California Hydrocarbons, Inc. The assets disposed of were originally acquired in 2011. In exchange for the assets California Hydrocarbons, Inc. agreed to return 3,000,000 shares of the Company's common stock valued at $2,010,000.
Cardinal Energy completed the first sale of oil from its Dawson-Conway, Powers-Sanders and Stroebel-Broyles prospects in Texas. This was a key milestone and marks the first production sale report from the Company's wholly owned subsidiary, CEGX of Texas, LLC. The three prospects yielded 560 barrels of "light" (API 35-38 gravity) oil since Cardinal's recompletion program resumed the fields' production. The Company acquired its initial 85% working interest in the Dawson-Conway leases in July 2013 and acquired the remaining 15% working interest plus its 100% working interests in the Powers-Sanders and Stroebel-Broyles leases in March of 2014.
On May 13th, Cardinal Energy announced the hiring of Edward Mitchell, former Vice President and Corporate Controller for Bob Evans Restaurants, as Cardinal's Vice President and Controller. Mr. Mitchell is a Certified Public Accountant executive with over 20 years of extensive vice president and director level managerial and supervisory experience including 15 years with Deloite & Touche. He is a successful team leader with excellent communication skills and a collaborative style.
Texas Expansion Strategy
The Company will continue to deploy the following growth initiatives:
Re-work and recomplete its 78 wells located on 1,238 acres in Shackelford and Eastland Counties.
Cardinal will continue to invest approximately $4.0 million over the next several months and anticipates obtaining an estimated 400 BOPD from these existing properties
Cardinal will continue production expansion by:
Recomplete existing wells into multiple formations which are "behind-pipe" in Shackelford and Eastland Counties to increase oil production substantially.
Drilling and completing multiple development wells in already proven formations
Acquiring geological and reserve qualified inactive and orphaned wells for "cents-on-the-dollar" (There are currently 900+ inactive and/or "orphaned" wells available for purchase in Shackelford and Eastland counties alone)
Investor Conference Call
The Company will host a webcast and conference call with investors at 11:30 am ET on Monday, May 19, 2014. President and CEO Tim Crawford and CFO John Jordan will discuss the company's assets, growth strategy and financial position.
Date: Monday, May 19, 2014
Time: 11:00 am ET
Dial-in (US): 877-941-2068
Dial-in (International): 480-629-9712
Conference ID: 4682451
Webcast: http://public.viavid.com/index.php?id=109136
A replay of the call will be available from 2:30 pm ET May 19, 2014 to 11:59 pm ET June 2, 2014. To access the replay, use 877-870-5176 for U.S. callers and 858-384-5517 for international callers. The PIN number is 4682451.
Forward Looking Statements
In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Cardinal Energy Group, Inc., is hereby providing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in forward-looking statements (as defined in such act). Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "intends," "plans," "believes" and "projects") may be forward-looking and may involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. These statements include, but are not limited to, our expectations concerning our ability to obtain financing and close on the acquisition of the oil and gas leases and property, our beliefs concerning our ability to increase the rate of oil and gas production, and the expected demand, pricing and operating results for our oil and gas operations.
About Cardinal Energy Group, Inc.
Cardinal Energy Group, Inc. is a U.S producer of oil and natural gas within the United States. The Company is based in Dublin, Ohio. Cardinal focuses on known formations that have significant proven reserves remaining that can be produced economically. Cardinal targets fields with wells that may need remediation due to neglect or undercapitalization. We select prospects that offer a strong up-side for production. The upside we seek in a prospect is twofold -- it must have the potential to be restarted or have its current production increased using newer technology and remediation methods and; it must also have additional lease acreage which can be further developed by completing development wells adjacent to existing producing wells. Cardinal exploits these undervalued assets by acquiring a majority working interest in the prospect and then applies the Company's calculated development plan. Cardinal also seeks acquisitions of over-leveraged companies when there is a clear upside from their purchase based on strong commodity prices. The Company operates throughout the Continental United States. More information on Cardinal Energy Group, Inc. is available at www.cegx.us.
Contact:
Redbird Social, LLC
A Cardinal Energy Group, Inc. Company
614-459-4959
info@cegx.us
MZ North America
Ted Haberfield
President
Tel: +1-760-755-2716
Email: thaberfield@mzgroup.us
Web: www.mzgroup.us
SOURCE: Cardinal Energy Group, Inc.