Of the total of $1,727,000 in revenues for the six months ended
December 31, 1995, approximately $1,308,000 was from the sale of oil and gas -
44,351 barrels of oil at an average price of $16.19 per barrel and 479,149 mcf
of natural gas at an average price of $1.62 per mcf. The remaining $419,000 of
revenues represented primarily administrative fee income.
Clint Hurt. Clint Hurt was acquired in March 1995 . Comparable numbers
for the prior quarter are, therefore, not available.
Depreciation, Depletion and Amortization
Depreciation , depletion and amortization expense increased 44% from
$1,245,000 to $1,794,000 during the six months ended December 31, 1995 as
compared with the prior period. The increase was primarily due to oilfield
service depreciation expense, which resulted from increased capital expenditure
depreciation for the current period compared to the prior period. In addition,
depletion expense, generated by Odessa Exploration, increased for the current
period due to the increase in the production of oil and natural gas.
Interest expense for Key increased 40% from $627,000 during the six
months ended December 31, 1994 to $877,000 for the current period. The increase
was primarily the result of acquisitions and the addition of certain oil and gas
properties by Odessa Exploration .
General and Administrative Expenses
General and administrative expenses include those of Key as well as
Yale E. Key, Odessa Exploration and Clint Hurt. These expenses increased 31% to
$2,390,000 during the six months ended December 31, 1995 as compared to
$1,822,000 for the three months ended September 30, 1994. The increase was
primarily attributed to the acquisition and subsequent inclusion of Clint Hurt's
general and administrative expenses.
Income Tax Expense
Income tax expense for Key for the six months ended December 31, 1995
and 1994 was $730,000 and $476,000 respectively.
Net income before income taxes was $2,224,000 for the six months ended
December 31, 1995, which was an increase of $737,000 or 50% over $1,487,000 for
the comparable quarter in 1994. The increase in net income before income taxes
was primarily due to the addition of Clint Hurt and increased oil and gas
revenues. Net income for the six months ended December 31, 1995 was $1,494,000,
an increase of 48% from $1,011,000 for the six months ended December 31, 1994.