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Lexington-based NGAS Resources Inc. reported higher earnings and lower revenues Thursday for the first three months of 2008.
NGAS also said it is shifting most of its Eastern Kentucky drilling to so-called horizontal wells that can bypass underground coal mines and other obstacles to reach previously untapped gas deposits.
NGAS reported earnings of $163,189, or 1 cent a share, for the 2008 first quarter, compared with a loss of $254,264, or 1 cent a share, for the same period a year ago.
Revenue totaled $17.65 million for the 2008 quarter versus $17.9 million a year earlier, the company said.
The decline was due to an expected decrease in contract drilling revenue that was not completely offset by a 26 percent increase in oil and gas revenue, and a 31 percent gain in transmission revenue.
The company's cash flow improved to $4.14 million, or 15 cents a share, from $2.73 million, or 13 cents a share, for the first quarter of 2007.
CEO William S. Daugherty said NGAS has done five horizontal wells since February.
"We are very pleased with the initial results and plan to drill a total of 20 horizontal wells in our core area this year," Daugherty said.
As many as 50 similar wells could be drilled in 2009.
"With our large acreage ... our horizontal drilling program has the potential to significantly increase production and reserves," Daugherty said.
