REPX(REPX) - 2019 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS This section presents Tengasco, Inc.'s unaudited condensed consolidated financial statements, including Balance Sheets, Statements of Operations, and Cash Flows, with detailed notes Unaudited Condensed Consolidated Balance Sheets As of September 30, 2019, total assets decreased to $9.18 million from $9.48 million, primarily due to reduced oil and gas properties, impacting equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | Total current assets | $4,510 | $4,347 | | Oil and gas properties, net | $4,344 | $4,804 | | Total assets | $9,182 | $9,484 | | Total current liabilities | $556 | $548 | | Total liabilities | $2,670 | $2,717 | | Total stockholders' equity | $6,512 | $6,767 | | Total liabilities and stockholders' equity | $9,182 | $9,484 | Unaudited Condensed Consolidated Statements of Operations The company reported a net loss of $182,000 for Q3 2019 and $269,000 for the nine months, primarily due to lower oil and gas revenues Statements of Operations Summary (in thousands, except per share data) | Metric | Q3 2019 | Q3 2018 | Nine Months 2019 | Nine Months 2018 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $1,215 | $1,654 | $3,777 | $4,497 | | Total cost and expenses | $1,396 | $1,369 | $4,083 | $3,997 | | Net income (loss) from operations | ($181) | $285 | ($306) | $500 | | Net income (loss) from continuing operations | ($182) | $298 | ($269) | $530 | | Net income from discontinued operations | $— | $— | $— | $1,120 | | Net income (loss) | ($182) | $298 | ($269) | $1,650 | | EPS from continuing operations (basic & diluted) | ($0.02) | $0.03 | ($0.03) | $0.05 | Unaudited Condensed Consolidated Statements of Cash Flows Net cash from operating activities significantly decreased to $371,000 for the nine months ended September 30, 2019, with cash and equivalents ending at $3.48 million Statements of Cash Flows Summary (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | Net cash provided by operating activities | $371 | $1,063 | | Net cash provided by investing activities | $36 | $2,184 | | Net cash used in financing activities | ($40) | ($30) | | Net change in cash and cash equivalents | $367 | $3,217 | | Cash and cash equivalents, beginning of period | $3,115 | $185 | | Cash and cash equivalents, end of period | $3,482 | $3,402 | Notes to Unaudited Condensed Consolidated Financial Statements These notes detail the company's oil and gas operations, key accounting policies, new lease standard adoption, capital stock, related party transactions, discontinued operations, and commitments - The company's primary business is the exploration and production of oil and natural gas in Kansas[22] - On January 1, 2019, the company adopted the new lease accounting standard ASU 2016-02, resulting in the recognition of right-of-use assets and lease liabilities of approximately $98,000 for operating leases[56] - The company has a Rights Agreement in place, effective March 2017, designed to protect its ability to use net operating loss carryforwards by discouraging any person or group from acquiring 4.95% or more of its common stock[47][48] - The company sold its methane facility assets on January 26, 2018, for $2.65 million. The results of this business are reported as discontinued operations, which included a gain on sale of $1.157 million in 2018[23][81] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management attributes the decline in financial performance to lower oil prices and sales volumes, with net revenue decreasing and operating cash flow significantly reduced Q3 2019 vs Q3 2018 Performance | Metric | Q3 2019 | Q3 2018 | Change | | :--- | :--- | :--- | :--- | | Net Income (Loss) from Continuing Ops | ($182,000) | $298,000 | ($480,000) | | Revenues | $1.21 million | $1.65 million | ($439,000) | | Average Oil Price | $51.18/barrel | $64.34/barrel | ($13.16)/barrel | Nine Months 2019 vs Nine Months 2018 Performance | Metric | Nine Months 2019 | Nine Months 2018 | Change | | :--- | :--- | :--- | :--- | | Net Income (Loss) from Continuing Ops | ($269,000) | $530,000 | ($799,000) | | Revenues | $3.8 million | $4.5 million | ($720,000) | | Average Oil Price | $52.09/barrel | $61.27/barrel | ($9.18)/barrel | | Net Oil Sales Volume | 72.1 thousand barrels | 73.0 thousand barrels | (0.9) thousand barrels | - As of September 30, 2019, the company had a revolving credit facility with a borrowing base of $4 million and a credit limit of $3.8 million, with no outstanding borrowings. The facility's maturity was extended to July 31, 2021[100][102] - Net cash from operating activities decreased to $371,000 in the first nine months of 2019 from $1.0 million in the same period of 2018, primarily due to lower revenues and higher production costs[103] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The company's primary market risk is volatile crude oil prices, with minimal interest rate risk and no derivative hedging activities - The company's major market risk exposure is the volatile and unpredictable pricing of its oil production[113] - The borrowing base under the credit facility is subject to redetermination, and reductions could adversely affect liquidity and capital availability. As of September 30, 2019, the borrowing base was $4 million[111][112] - Interest rate risk is low, as there was no balance on the variable-rate credit facility. A 10% increase in the interest rate would have approximately zero impact on interest expense based on the September 30, 2019 balance[115][116] - The company had no open derivative agreements for commodities or interest rates as of September 30, 2019[114][116] ITEM 4. CONTROLS AND PROCEDURES The CEO and CFO concluded that disclosure controls and procedures were effective, with no material changes to internal controls over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were adequate and effective as of September 30, 2019[121] - No changes were made to the company's internal controls over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[122] PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The company reports no pending material legal proceedings - The company is not a party to any pending material legal proceedings[123] ITEM 1A. RISK FACTORS Risk factors are incorporated by reference from the company's Annual Report on Form 10-K for the year ended December 31, 2018 - Risk factors are incorporated by reference from the Form 10-K for the year ended December 31, 2018[124] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS The company reports no unregistered sales of equity securities or use of proceeds during the period - None reported[125] ITEM 3. DEFAULTS UPON SENIOR SECURITIES The company reports no defaults upon senior securities - None reported[126] ITEM 4. MINE SAFETY DISCLOSURES This item is not applicable to the company - Not Applicable[127] ITEM 5. OTHER INFORMATION The company reports no other information for this item - None reported[127] ITEM 6. EXHIBITS This section lists the exhibits filed with the report, including CEO/CFO certifications and XBRL data files - Exhibits filed with the report include CEO/CFO certifications (31, 32) and XBRL interactive data files (101 series)[128]