Business

NGAS Resources posts quarterly loss

Lexington-based NGAS Resources posted a loss for its first quarter on Monday, attributing the performance to declining commodity prices for natural gas.

Revenue fell to $17.2 million from $17.6 million in the same period a year ago. The company posted a net loss of $537,000, or 2 cents a share, down from a profit of $163,000, or 1 cent a share, a year ago.

The company said its average realized natural gas price fell year-over-year from $8.51 per Mcf, or thousand cubic feet, to $6.74.

The price declines more than offset an 18 percent increase in oil and gas production volumes from its horizontal drilling programs that began more than a year ago.

The company also announced that it has sold a 50 percent stake in the portion of its business that spans 485 miles through parts of Kentucky, Tennessee and Virginia.

Seminole Gas Company, a gas-processing partner, will pay $28 million for that stake.

NGAS will continue to operate the facilities and retain its capacity rights. Seminole will have a six-month option to buy NGAS' remaining 50 percent stake for $22 million.

NGAS president Bill Daugherty said the deal will help reduce NGAS' outstanding debt and offer financial flexibility.

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