‘CEGX continues its transition to contract drilling and field development operations’
Abilene TX, December 8, 2015 — Cardinal Energy Group, Inc. (“Cardinal Energy” or “the Company”) (OTCQB: CEGX) reports that “EBITDA” (earnings before interest, taxes, depreciation and amortization) for the quarter ended September 30, 2015 was $92,390 compared to $454,330 for the quarter ended September 30, 2014. “EBITDA” for the nine months ended September 30, 2015 was a negative $93,061 compared to a negative $1,130,059 for the comparable period of 2014.
The Company reported an Operating Loss (operating revenues less operating expenses) for the third quarter of 2015 of $344,964 compared to operating income of $233,819 recorded in the third quarter of 2014. The Company’s Operating Loss for the nine months ended September 30, 2015 narrowed to $716,366 from an Operating Loss of $1,305,638 for the comparable period of 2014. The current periods’ results were hampered by delays in the receipt of capital required for the development of the Bradford leases which necessitated a cessation of operations during the third quarter of 2015. Capital funding resumed in mid-September and the Company has resumed drilling and development activities on the properties. Operating results during the three month and nine month periods ended September 30, 2015 also reflect lower crude oil prices and lower production volumes due to mechanical down-hole problems and legal issues at some of our recently developed properties in north-central Texas. These negative factors were partially offset by decreases in operating and production expenses which reflect the Company’s decision to shift its primary focus from the re-working of existing wells on its Texas oil and gas properties to providing contract drilling and field development services to third parties.
The three month and nine month earnings reflect not only the operating factors previously cited but also reflect higher interest related costs due to the higher level of debt outstanding partially offset by a reduction in administrative and general expenses as the Company has reduced staffing levels and has moved to lower home office and public company costs.
The following are summarized comments from Cardinal’s CEO/President and Chief Operating Officer concerning the third quarter 2015 results:
“Again, we are very appreciative of our loyal shareholders and other stakeholders as we continue to transition the Company from primarily the operator of modest and older oil and gas leases to a provider of contract drilling and field development services” remarks Timothy W. Crawford, CEO of Cardinal, “Our drilling programs continue to be successful. We are also maintaining our commitment to shallow oil development in order to keep our finding and lifting costs for properties in which we retain a working interest low. We believe that this two pronged approach of selective development of shallow proven undeveloped reserves for our own account and the providing of drilling and development services to third parties will partially mitigate the impact of depressed oil and gas prices and allow us to be profitable in this down market. We are also actively pursuing, with and without the participation of others, several acquisition candidates in shallow oil plays in central Texas.”