The Affects of the $597,773 Charge on Q4 and FY2005 Results
The One Time Charge for Warrants in Concert with Sarbanes-Oxley Year End Accounting Pushed Costs Higher than Normal

The $597,773 one time Charge for Warrants on the income statement (page 55 of the 10K) had the effect of:
*Reducing Q4 fully diluted EPS by $0.04.
$0.22 with charge
*Reducing FY 2005 fully diluted EPS by $0.04
$0.75 with charge
*Increasing Total Costs per BOE Produced by $3.46
$26.17 with charge
*Reduced Net Margin an additional 6.3 Points
32.2% with charge

What happens if we ignore the $597,773 one time charge?
* Q4 fully diluted EPS is $0.26.
*FY'05 fully diluted EPS is $0.79 ($0.80 if rounding)
*Q4'05 Total Cost per BOE is $22.70
*Net Margin is 38.5%

Ignoring the one time charge my estimates of Net Margin and EPS would have been much closer. I was calling for:
Net Margin of 43.5%
EPS of $0.31

Instead of being off 25% on my Net Margin estimate I would have only been off 11%.
Instead of being off 29% on my EPS estimate I would have only been off 12% (9% if you round.)

The Sarbanes Oxley Year End accounting expenses is tacked on Q4. So that also had a significant impact of artificially reducing Q4 margins and EPS.

If you factor out the one time charge of $597,773 and expenses related to Sarbanes Oxley year end accounting I feel I"m very near the actual target Net Margin and Target EPS. Certainly I'll have to factor that in for Q4 2006. All in all I feel the Q4'05 and FY2005 results were a resounding success!