New Concept Energy, Inc. Reports Fourth Quarter and Full Year 2012 Results

New Concept Energy, Inc. (NYSE MKT:GBR), (the “Company” or “NCE”) a Dallas-based oil and gas company, today reported Results of Operations for the fourth quarter ended December 31, 2012. During the three months ended December 31, 2012 the Company reported net income of $84,000 or $0.045 per share, compared to a net loss of $11.9 million or $6.11 loss per share for the same period ended December 31, 2011.

For the twelve months ended December 31, 2012 the Company had net income of $168,000 or $0.09 per share, compared to a net loss of $11.8 million or $6.06 loss per share for the twelve months ended December 31, 2011.

In the fourth quarter of 2011 the Company had a $10.3 million note receivable and determined that the financial condition of the debtor had deteriorated and there could be no assurance that the amount owed would or could be collected. At that time the company recorded a loss and established a reserve of $10.3 million. In 2012 the Company recorded a $2.1 million gain from the partial recovery of the previously reserved note receivable. The Company will continue to attempt to collect the balance of the receivable.

The Company recorded net revenues from its oil and gas operation for the years 2012 and 2011 of $1.2 million and $1.0 million respectively. In early 2012 the Company entered into a five year contract to sell its gas at an agreed upon price. The company sells its oil production based upon the prevailing market price. The increase in revenue was due to an increase in the production and sale of oil.

Operating expenses for the oil and gas operations were $1.8 million and $1.4 million for the years of 2012 and 2011 respectively. Included in operations were depreciation, depletion and amortization expense of $727,000 in 2012 and $335,000 in 2011.

In 2012 the Company recorded a non-cash charge to operations of $912,000 pursuant to the requirements of the “full cost ceiling test.” In 2011 the Company recorded a similar write down of $1.4 million

Revenue at our Retirement Center was $2.8 million in 2012 and $2.9 million in 2011. Occupancy decreased from 91% in 2011 to 85% during the same period in 2012. The decrease was offset by an increase in the rates charged at the facility.

For 2012, interest income was $0 as compared to $360,000 for the comparable period in 2011. In December 2011 the Company became concerned about the collectability of a certain note receivable and determined that the note and any accrued interest be fully reserved. The company continues to accrue interest but provides a full reserve. Should the Company collect the interest in the future the collected funds will be recorded as income at that time.