BSIC.OB

[setravis]

Basic is an oil and gas exploration and production company with primary operations in south Texas and in the Williston basin. Basic is traded on the "over-the-counter - bulletin board" under the symbol BSIC.

[setravis]

I know it has small volume, but I like the chart.
Upside potential, as this cup and handle is headed upward again.
Take a look at the 3 year chart.

[setravis]

 

End of day Chart.......How sweet it is!!!

************************************************************************
Basic Earth Reports 166% Increase in Net Profit for Fiscal Year 2005

DENVER, June 29, 2005 /PRNewswire-FirstCall via COMTEX/ -- Basic Earth Science Systems, Inc. (Basic or Company) (BSIC, Trade) reported net income of $1,845,000, slightly over eleven cents ($0.111) per share, on oil and gas sales revenue of approximately $4.8 million for the year ended March 31, 2005 (2005). This compares to net income from operations of $694,000, slightly over four cents ($0.042) per share, on oil and gas sales revenue of approximately $3.0 million for the year ended March 31, 2004 (2004). The $1.86 million (62%) increase in oil and gas sales revenue and $1.15 million (166%) increase in net income from operations was due primarily to sharply higher commodity prices and an improvement in both oil and gas sales volumes relative to 2004. In addition to other factors disclosed in the Company's most recent Form 10-KSB, results for 2004 also included the cumulative effect of a change in accounting principle resulting from the adoption SFAS No. 143 in June 2003. After incorporating the resulting cumulative effect of a change in accounting principle the net income and earnings per share in 2004 were $1,256,000 and $0.076 per share, respectively.

Ray Singleton, President of Basic, commented, "We are particularly pleased to announce these results. It has been an exciting year. We participated in drilling six new wells; resulting in four producers, three of them extremely successful. Certainly commodity prices have propelled, what is for Basic, an unprecedented level of drilling activity. Our new wells are generating increased cash flows that we plan to reinvest in, yet, new ventures. The Company is continuously pursuing opportunities; several in the final stages of review and approval. As commodity prices continue to trend higher, we believe we are on the verge of a breakthrough to even higher revenues and profits. In any case, this year is on track to be as exciting as the last one."

"We encourage all of our shareholders to read our new Form 10-KSB," David Flake, Basic's Chief Financial Officer added. "It is easy to say our results have been driven by commodity prices. However, and more importantly, we have had solid gains in both oil and natural gas sales, too; a turnaround from the last several years. We have added more then five million dollars in additional reserves; solely from our new wells. We hope to continue this trend in 2006."

Basic is an oil and gas exploration and production company with primary operations in both the Williston and Denver-Julerburg basins and south Texas. Basic is traded "over-the-counter" under the symbol BSIC.

Information herein contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which can be identified by words such as "should," "may," "will," "anticipate," "estimate," "continue," "believe" or comparable words. In addition, all statements other than statements of historical facts that address activities that Basic expects or anticipates will or may occur in the future are forward-looking statements. Readers are encouraged to read the SEC reports of Basic, particularly its Annual Report on Form 10-KSB for the fiscal year ended March 31, 2005, for meaningful cautionary language disclosing why actual results may vary materially from those anticipated by management.


Financial Highlights 
                                                   Year Ended March 31 
                                                   2005           2004 
     Revenue                                    $4,856,000     $2,987,000 
     Net income before change in 
      accounting principle                       1,845,000        694,000 
     Net income after change in 
      accounting principle                       1,845,000      1,256,000 
     Basic net income per share after 
      change in accounting principle                 0.111          0.076 
     Diluted net income per share after 
      change in accounting principle                 0.108          0.074 
     Weighted avg. number of shares 
      outstanding, basic                        16,586,309     16,530,487 
     Weighted avg. number of shares 
      outstanding, diluted                      17,054,290     16,904,086 

SOURCE Basic Earth Science Systems, Inc.


Ray Singleton of Basic Earth Science Systems, Inc., +1-303-296-3076 

http://www.prnewswire.com 

Copyright (C) 2005 PR Newswire. All rights reserved.

[setravis]

A nice steady move up......

[setravis]

Who would have thought it.An oil stock reports decent earnings
and it takes a dive.Results were good,spent $127,000 to repair a well,without this expense the numbers would have been awesome.Earnings will get better for the current quarter.I will see how the market reacts tomorrow.
Did I miss something here

[setravis]

Basic Earth Reports 1st Quarter Profit


DENVER, Aug 15, 2005 /PRNewswire-FirstCall via COMTEX/ -- Basic Earth Science Systems, Inc. (Basic) (BSIC, Trade) in its most recent Form 10-QSB reported net income of $547,000, approximately three and a half cents ($0.033) per share, on oil and gas sales revenue of $1,525,000 for the quarter ended June 30, 2005. This compares to net income of $351,000, approximately two cents ($0.021) per share, on oil and gas sales revenue of $965,000 for the quarter ended June 30, 2004. These increases in revenue and net income are primarily the result of increases in sales volume and commodity prices in the current year versus the comparable year ago period.

Also in its Form 10-QSB for the quarter just ended, the Company provided an update of its recent activities, including a report that the southern lateral of the Halvorsen #31X-1 had finally been stimulated.

"We are pleased to report another profitable quarter," commented, Ray Singleton, President of Basic. "With widely dispersed exposure, our efforts over the next several weeks and months will continue to search for both natural gas and oil exploration and development drilling opportunities in North Dakota, Montana, Colorado and Texas. In addition to these efforts, the Company continues to investigate other strategic opportunities which may provide long-term growth potential."

Information herein contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which can be identified by words such as "should," "may," "will," "anticipate," "estimate," "intend" or "continue," or comparable words. In addition, all statements other than statements of historical facts that address activities that Basic intends, expects or anticipates will or may occur in the future are forward- looking statements. Readers are encouraged to read the SEC reports of Basic, particularly the Company's Annual Report on Form 10-KSB for the fiscal year ended March 31, 2005, for meaningful, cautionary language disclosing why actual results may vary materially from those anticipated by management.

Basic is an oil and gas exploration and production company with primary operations in the Williston basin portion of Montana and North Dakota, south Texas and Colorado. Basic is traded on the "over-the-counter -- bulletin board" under the symbol BSIC.


Financial Highlights 
                                                     Quarter Ended June 30 
                                                      2005           2004 
     Total revenue                                $1,534,000       $975,000 
     Net income                                      547,000        351,000 
     Basic net income per share                        0.033          0.021 
     Diluted net income per share                      0.032          0.021 
     Weighted average number of shares outstanding: 
        Basic                                     16,661,805     16,555,212 
        Diluted                                   17,111,656     17,031,917 

SOURCE Basic Earth Science Systems, Inc.


Ray Singleton or David Flake of Basic Earth Science Systems, Inc., +1-303-296-3076 

http://www.prnewswire.com 

Copyright (C) 2005 PR Newswire. All rights reserved.

[setravis]

BASIC EARTH SCIENCE SYSTEMS INC Files SEC form 10QSB, Quarterly Report



Form 10QSB for BASIC EARTH SCIENCE SYSTEMS INC


--------------------------------------------------------------------------------

15-Aug-2005

Quarterly Report


Management's Discussion and Analysis and Plan of Operation
Liquidity and Capital Resources



LIQUIDITY OUTLOOK The Company's primary source of funding is the net cash flow from the sale of its oil and gas production. The profitability and cash flow generated by the Company's operations in any particular accounting period will be directly related to: (a) the volume of oil and gas produced and then sold,
(b) the average realized prices for oil and gas sold, and (c) lifting costs. Assuming that oil prices do not decline significantly from current levels, management believes the cash generated from operations will enable the Company to meet its existing and normal recurring obligations as they become due in fiscal year 2006. In addition, as mentioned in the "Debt" section below, Basic has $1,000,000 of borrowing capacity as of August 9, 2005.

WORKING CAPITAL At June 30, 2005 the Company had a working capital surplus of $887,000 (a current ratio of 1.42:1) compared to a working capital surplus at March 31, 2005 of $574,000 (a current ratio of 1.38:1). In the June 2005 quarter Basic realized significant increases in cash, accounts receivables and accounts payables. All three of these accounts were impacted by the extensive workover on the PIDCO #2 well discussed in the Capital Expenditures section below. Since Basic is the operator of the well but has only a 12.77% working interest, it collected and received in advance, as is standard industry practice, a proportionate share of the total estimated cost of the workover from all other interest owners. Since a large portion of the advance payments were collected prior to June 30 but most of the invoices were not paid until after June 30, the cash and payables balances saw significant increases over March 31. In addition, the receivables balance was affected by those whose advance payments were received after June 30.

CASH FLOW The Company's cash balance also benefited from a $392,000 (71%) increase in cash flow from operations in the June 2005 quarter over the year ago period. The 2005 quarter benefited from both higher commodity prices and oil production. Although Basic did not drill any new wells during the June 2005 quarter, a $388,000 investment was made to acquire various acreage blocks in North Dakota and Montana. The strategy is to position the Company to take advantage of the developing, but as yet unproven, extension of the Bakken horizontal play from Montana into North Dakota. This investment also included acquiring acreage to further exploit possible development potential in areas where the Company currently has production.

DEBT The Company's current banking relationship, established in March 2002, is with American National Bank (the Bank), located in Denver, Colorado. Under the terms of its loan agreement, Basic has a $1,000,000 line of credit with a current borrowing base of the full $1,000,000. Any outstanding loan balance will be due and payable on December 31, 2006. The interest rate charged is the prime rate plus 2%.

With the continued strength of the current commodity pricing environment, the Company's successful drilling program last year and its solid balance sheet and fundamentals, the Bank has expressed an interest in increasing Basic's borrowing capacity and reducing the interest rate that is more reflective of the Company's current level of estimated oil and gas reserves and strong cash flow.

If necessary, Basic may borrow funds to reduce payables, finance drilling and/or recompletion efforts, fund property acquisitions, or pursue other opportunities the Company cannot contemplate at this time but which may arise at a future date.

HEDGING In the past, the Company has used hedging techniques to limit its exposure to oil price fluctuations. Typically Basic will utilize either futures or option contracts. The Company did not hedge any of its production during the quarter ended June 30, 2005 and at June 30, 2005 the Company had no contracts in place to hedge future production. The Company continues to monitor the futures market in an effort to identify, and participate in, hedging opportunities that the Company views as favorable.

The continuation of hedging activities may vary or change due to change of circumstances, unforeseen opportunities, inability to fund margin requirements, lending institution requirements and other events which the Company is not able to anticipate.

CAPITAL EXPENDITURES - U.S. Operations
In late April 2005, Headington Oil L.P., the operator of the Halvorsen 31X-1 dual-lateral, horizontal well in Richland County, Montana, opened the southern lateral and commingled the production from this lateral with the northern lateral. Prior to opening the southern lateral the well averaged 180 barrels of oil per day. Following this modification, in May 2005 the well averaged approximately 325 barrels of oil per day. The cost to perform this procedure was minimal. At June 30, 2005, the southern lateral remained unstimulated. The Company and Headington had elected to delay stimulation of the southern lateral to allow time to reduce the near-wellbore, formation pressure prior to hydraulically stimulating this second leg. This decision was based on the prevalence of natural fractures encountered while drilling this lateral and the expectation that these lower pressures will enhance fracture containment upon stimulation.

During the June 2005 quarter, the Company made a significant investment in new leases in both North Dakota and Montana. The majority of these leasehold rights are in the developing, though unproven, extension of the Bakken horizontal play into North Dakota. The Bakken formation in North Dakota is geologically equivalent, though depositionally distinct, from the Bakken formation "sweet spot" in Richland County, Montana. While great lessons have been learned in Montana in developing the resource there, challenges unique to North Dakota have stymied development on the North Dakota side. Several wells have been drilled in extremely promising areas in North Dakota that encountered mechanical, in addition to formation, difficulties. The Company is positioning itself in areas that it believes will prove advantageous as this play develops. Additionally, the Company has acquired acreage offsetting its Indian Hill acreage in McKenzie County, North Dakota and in other areas of Montana. As of the end of the quarter, Basic had spent approximately $388,000 on lease acquisitions.

Also during the June 2005 quarter, Kerr-McGee Rocky Mountain Corporation, successor operator to Westport Oil and Gas Company, L.P., began drilling one of two previously disclosed horizontal wells in the TR-Madison Unit in Billings County, North Dakota. Basic has a 1.075% working interest in the entire TR-Madison Unit and anticipates spending approximately $25,000 on this well.

In June 2005 Basic undertook a significant workover on a well in Matagorda County, Texas that the Company purchased in May 2000. This well, the PIDCO #2, is a high pressure gas well that produces from the Frio formation. The well,

which had not produced significant amounts of gas in the last 12 months, finally plugged off in February 2005. The Company intended to clean out the well to bottom at 14,275 feet. During this clean-out operation, it was discovered that production equipment in the bottom of the well was severely damaged and considerable effort was necessary to recover some of this equipment. Efforts to recover all of the equipment and clean to bottom were hampered by some unknown obstruction in the well. Operations on this well have been suspended while Basic confers with its joint venture partners as to its course of action. Basic has a 12.77% working interest in this well and has spent approximately $127,000 as of June 30. Since this downhole work was to repair an existing producing horizon, these costs were classified as a workover expense and had a significant impact on the Company's net income for the quarter and the cash, accounts receivable and accounts payable balances at June 30. For further discussion of the impact this well had on the financial statements, see Item 2, Management's Discussion and Analysis and Plan of Operation.

CAPITAL EXPENDITURES - Canadian Operations Legent Resources Corporation (Legent), Basic's wholly-owned Canadian subsidiary, along with its Canadian partners, elected to plug and abandon the Westerose 6-6-46-1W5, operated by Zinke & Trumbo Canada Corporation. This well was drilled in August 2004 and was being evaluated for other opportunities (i.e. deeper objectives or conversion to water disposal). Despite this decision, as of June 30, the well had not actually been plugged due to wet conditions at the well site. However, based on this decision, at June 30 Basic wrote off the remaining $85,000 balance in its Canadian full cost pool. The Company had previously written down the value of its Canadian assets in fiscal 2005 and 2004 by $240,000 and $90,000, respectively. At this time, Legent has no plans to lease additional acreage and, with the exception of abandonment costs on the Westerose, has no further plans for Canadian operations.

SUBSEQUENT EVENTS In early July 2005, Headington Oil L.P., the operator of the Halvorsen 31X-1 well, performed subsurface modifications to the southern lateral in anticipation of hydraulically stimulating (frac'ing) the well the following week. Unfortunately, frac equipment and crews are in tight supply and, though previously scheduled, this equipment was not available. As a result, the stimulation was not performed until August 2. Consequently, the Halvorsen well remained shut-in nearly the entire month of July. Production following this stimulation has not yet stabilized and the well is flowing back primarily frac fluids. The Company anticipates an initial stabilized flowing rate of approximately 225 barrels of oil per day from this lateral. Management cautions that until post-frac pressures subside and the wellbore is re-configured, production will, in the interim, come solely from the southern lateral. Basic estimates that it spent approximately $120,000 on this effort.

CONTEMPLATED ACTIVITIES In addition to the Subsequent Events described immediately above, the Company anticipates pursuing the following activities in year end March 31, 2006 (fiscal 2006).

By virtue of its acquisitions in the mid- and late-1990s, the Company has interests in the heart of the developing horizontal Bakken play in Richland County, Montana. While some of these interests have been developed, or are in the process of development, Basic has a few more significant drilling opportunities in this immediate area. Basic's interest is dependant upon the size of the approved well spacing unit and could range from a 6.25% to 26% working interest in each well. At these levels, Basic's financial commitment could vary from $165,000 to $800,000 per well.

The Company envisions developing drilling opportunities on its North Dakota Bakken acreage by the end of this fiscal year. Management intends to capitalize on new drilling techniques, pioneered by others, to mitigate various drilling risks unique to North Dakota. The Company's ownership in specific well(s) will vary by location and may range from 5% to 20%. At these levels, Basic's financial commitment could vary from $150,000 to $700,000 per well.

The Company also envisions further development on its Antenna Federal property in Weld County, Colorado. Basic has received proposals from its joint venture partner to deepen three additional Codell formation wells to the J-Sand formation. Basic currently has a 5% overriding royalty interest in these Codell wells and will earn a 60% working interest in the J-Sand once the wells are deepened to that formation. The Company estimates the total cost to deepen all three wells to be approximately $380,000.

Basic has received proposals to drill two additional horizontal wells in the TR-Madison Unit in Billings County, North Dakota. Basic has a 1.075% working interest in the entire TR-Madison Unit and has budgeted $30,000 for these two wells. The TR-Madison Unit is currently operated by Kerr-McGee Rocky Mountain Corp., successor operator to Westport Oil and Gas Company, L.P.

The Company may alter or vary, all or part of, these contemplated activities based upon the following: changes in circumstances; unforeseen opportunities; the inability to obtain drilling rigs, workover rigs or other field services; the inability to negotiate favorable acquisition, farmout or joint venture terms; the lack of cash flow, loan availability or other funding sources; and/or other events which the Company is not able to anticipate.

DIVESTITURES/ABANDONMENTS The Company has previously disclosed that it holds a number of marginal, operated and non-operated properties that provide minimal impact to the Company's operations. The adoption of SFAS No. 143 in April 2003 has caused management to carefully quantify and evaluate the Company's asset retirement liability and the possibility of realizing salvage value from equipment in excess of plugging costs. As a result, management intends to more actively direct and exploit these assets in the future.

Results of Operations



Quarter Ended June 30, 2005 Compared to Quarter Ended June 30, 2004


OVERVIEW Net income in the quarter ended June 30, 2005 (2005) was $547,000 compared to net income of $351,000 in the quarter ended June 30, 2004 (2004), an increase of 56%.

REVENUES Oil and gas sales revenue increased $560,000 (58%) in 2005 over 2004. Oil sales revenue increased $525,000 (69%) as a result of both higher sales volume and prices. The increase in oil sales volume contributed $160,000 while higher oil prices added $365,000. Gas sales revenue increased $35,000 (17%) in 2005 over 2004. A positive variance of $51,000 from higher natural gas prices was reduced by a $16,000 negative variance from lower gas sales volume.

VOLUMES AND PRICES Oil sales volume rose 21%, from 21,300 barrels in 2004 to 25,800 barrels in 2005 while there was a 40% jump in the average price per barrel from $35.73 in 2004 to $49.87 in 2005. The four new wells that were drilled and completed beginning in the second quarter of 2004 contributed 7,600 barrels to the current year's first quarter. Gas sales volume declined 8%, from 41.7 million cubic feet (MMcf) of gas in 2004 to 38.5 MMcf in 2005, while the average price per Mcf rose 27%, from $4.87 in 2004 to $6.19 in 2005. The 10.5 MMcf of additional gas production in 2005 from the four new wells drilled last year was more than offset by the loss of 2.1 MMcf from the PIDCO #2 and a drop of 9.8 MMcf of gas sales from the Company's natural gas wells in Weld County, Colorado. On an equivalent barrel (BOE) basis, sales volume increased 14% from 28,300 BOE in 2004 to 32,200 BOE in 2005.

EXPENSES Oil and gas production expense increased $132,000 (35%) in 2005 over 2004. Oil and gas production expense is comprised of two components: routine lease operating expenses and workovers. Routine expenses typically include such items as daily well maintenance, utilities, fuel, water disposal and minor

surface equipment repairs. Workovers, on the other hand, which primarily include downhole repairs, are generally random in nature. Although workovers are expected, they can be much more frequent in some wells than others and their cost can be significant. Therefore, workovers account for more dramatic fluctuations in oil and gas production expense from period to period.

Routine lease operating expense increased $14,000 (5%) from $293,000 in 2004 to $307,000 in 2005 while workover expense jumped $118,000 (136%) from $87,000 in 2004 to $205,000 in 2005. As a result of the increase in equivalent barrel sales, routine lease operating expense per BOE decreased 8% from $10.37 in 2004 to $9.52 in 2005 while workover expense per BOE rose 108% from $3.07 in 2004 to $6.38 in 2005.

As noted in the Capital Expenditures section above, the extensive workover on the Company's PIDCO #2 well in Matagorda County, Texas had a significant impact on the 2005 financial statements. Excluding the $127,000 charge applicable to the PIDCO #2, workover expense was $78,000 in 2005 compared to $87,000 in 2004 and total oil and gas production expense was $385,000 in 2005 compared to $380,000 in 2004. Again excluding the PIDCO #2, workover expense per BOE would have actually dropped 21% from the $3.07 in 2004 to $2.44 per BOE in 2005.

Primarily as a result of the increase in oil and gas sales revenue, production taxes, which are generally a percentage of sales revenue, increased $29,000 (35%) in 2005 over 2004. Production taxes, as a percent of sales revenue actually declined from 8.5 percent in 2004 to 7.3 percent in 2005. This percentage drop can be attributed to a less than 1 percent tax rate on the Halvorsen 31X-1, Basic's dual-lateral, horizontal well in Montana. Montana tax regulations allow for a significant tax incentive during the first year of production after new wells are drilled and completed. The overall lifting cost per BOE was $19.36 in 2005 compared to $16.33 in 2004. Again, excluding the effect of the PIDCO #2, the lifting cost per BOE would have dropped to $15.42 in 2005. Management cautions that this cost per BOE is not indicative of all wells, and that certain high cost wells could be shut in should oil prices drop significantly.

Depreciation and depletion expense increased $144,000 (288%) in 2005 over 2004 as a result of an increase in the full cost pool depletable base from year to year and an $85,000 ceiling limitation charge applicable to the Company's Canadian operations as noted in the Capital Expenditures section above. Excluding the $85,000 impairment charge in 2005, depreciation and depletion expense increased $59,000 (118%) in 2005 over 2004 due to the capital expenditures incurred between June 30, 2004 and June 30, 2005. During this period the Company's full cost pool depletable base increased $2.2 million. With respect to U.S. operations only, depreciation and depletion expense per BOE increased from $1.74 per BOE in 2004 to $3.30 in 2005.

The Company recorded a $14,000 expense for the accretion of its asset retirement obligation in 2005 compared to $13,000 in 2004 and an asset retirement expense of $4,000 in 2005 compared to $9,000 in 2004.

Gross general and administrative (G&A) expense increased $63,000 (48%) while net G&A expense increased $57,000 (71%) in 2005 over 2004. Gross G&A expense differs from net G&A expense in that the Company is allowed to recover an overhead fee on wells that it operates. This fee is applied against, and serves to reduce, gross G&A expense. Approximately $16,000 of the increase in G&A in 2005 is directly related to a unique opportunity the Company had in April with respect to a proposal involving a strategic acquisition. After considerable due diligence, management elected not to proceed with the acquisition over concerns about operational synergy and shareholder dilution. Also contributing to the increase in G&A in 2005 were increases in employee benefits and SEC reporting and audit related costs. The percentage of gross G&A expense that the Company was able to charge out was 37% in 2005 compared to 38% in 2004.

Net G&A expense per BOE increased 51% from $2.83 in 2004 to $4.26 in 2005. However, net G&A expense as a percentage of total revenue increased only slightly from 8.2% in 2004 to 8.9% in 2005.

Critical Accounting Policies and Estimates



The preparation of financial statements in conformity with generally accepted accounting principles requires Company management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances. Although actual results may differ from these estimates under different assumptions or conditions, management believes that its estimates are reasonable and that actual results will not vary significantly from the estimated amounts. The Company believes the following accounting policies and estimates are critical in the preparation of its consolidated financial statements: the carrying value of its oil and gas property, the accounting for oil and gas reserves, the estimate of its asset retirement obligations, and the estimate of the valuation allowance with respect to its deferred tax asset.

OIL AND GAS PROPERTY. Basic utilizes the full cost method of accounting for costs related to its oil and gas property. Capitalized costs included in the full cost pool are depleted on an aggregate basis over the estimated lives of the properties using the units-of-production method. These capitalized costs are subject to a ceiling test that limits such pooled costs to the aggregate of the present value of future net revenues attributable to proved oil and gas reserves discounted at 10 percent plus the lower of cost or market value of unproved properties less any associated tax effects. If the full cost pool of capitalized oil and gas property costs exceeds the ceiling, Basic will record a ceiling test write-down to the extent of such excess. This write-down is a non-cash charge to earnings. If required, it reduces earnings and impacts shareholders' equity in the period of occurrence and results in lower depreciation and depletion in future periods. The write-down may not be reversed in future periods, even though higher oil and gas prices may subsequently increase the ceiling.

OIL AND GAS RESERVES. The determination of depreciation and depletion expense as well as ceiling test write-downs related to the recorded value of the Company's oil and gas properties are highly dependent on the estimates of the proved oil and gas reserves attributable to these properties. Oil and gas reserves include proved reserves that represent estimated quantities of crude oil and natural gas which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. There are numerous uncertainties inherent in estimating oil and gas reserves and their values, including many factors beyond Basic's control. Accordingly, reserve estimates are often different from the quantities of oil and gas ultimately recovered and the corresponding lifting costs associated with the recovery of these reserves. Ninety percent of Basic's reported oil and gas reserves at March 31, 2005 and June 30, 2005 are based on estimates prepared by an independent petroleum engineering firm. The remaining ten percent of the Company's oil and gas reserves were prepared in-house.

ASSET RETIREMENT OBLIGATIONS. The Company has significant obligations related to the plugging and abandonment of its oil and gas wells, the removal of equipment and facilities, and returning the land to its original condition. SFAS No. 143, "Accounting for Asset Retirement Obligations" requires that Basic estimate the future cost of this obligation, discount this cost to its present value, and record a corresponding asset and liability in its Consolidated Balance Sheets. The values ultimately derived are based on many significant estimates, including the ultimate expected cost of the obligation, the expected future date of the required cash expenditures, and inflation rates. The nature of these estimates requires management to make judgments based on historical experience and future

expectations related to timing. The Company reviews the estimate of its future asset retirement obligations quarterly. These quarterly reviews may require revisions to these estimates based on such things as changes to cost estimates or the timing of future cash outlays. Any such changes that result in upward or downward revisions in the estimated obligation will result in an adjustment to the related capitalized asset and corresponding liability on a prospective basis.

DEFERRED TAXES. Deferred income taxes have been determined in accordance with Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes." At June 30, 2005 Basic recorded a valuation allowance of $1,040,000 as it was unable to determine that the excess of deferred tax assets over deferred tax liabilities is more likely than not to be realized. This estimate of the valuation allowance is periodically re-evaluated by the Company. If Basic continues to be profitable, it is possible a portion, or all, of the Company's deferred tax asset may be recorded as an asset on the Balance Sheet.


       Liquids and Natural Gas Production Sales Price and Production Cost
       ------------------------------------------------------------------

The following table shows selected financial information for the quarter ended
June 30 in the current and prior year.

                                                        2005          2004
                                                     ----------    ----------
   Sales volume:
       Oil (barrels)                                     25,800        21,300
       Gas (Mcf)                                         38,500        41,700

   Revenue:
       Oil                                           $1,287,000    $  762,000
       Gas                                              238,000       203,000
                                                     ----------    ----------

       Total                                          1,525,000       965,000
   Total production expense(1)                          623,000       462,000
                                                     ----------    ----------

   Gross profit                                      $  902,000    $  503,000
                                                     ==========    ==========

   Depletion expense(4)                              $  107,000    $   49,000

   Average sales price:
       Oil (per barrel)                              $    49.87    $    35.73
       Gas (per Mcf)                                 $     6.19    $     4.87
   Average production expense(1,2,3)                 $    19.36    $    16.33
   Average gross profit(2,3)                         $    27.97    $    17.81
   Average depletion expense(2,3)                    $     3.30    $     1.74
   Average general and administrative expense(2,3)   $     4.26    $     2.83

----------------------------

(1)  Operating costs, including production tax
(2)  Per equivalent barrel (6 Mcf of gas is equivalent to 1 barrel of oil)





(3) Averages calculated based upon non-rounded figures
(4) Excluding impairment expense related to Canadian full cost pool ceiling limitation
Item 3.
Controls and Procedures

The Company maintains a system of disclosure controls and procedures that are designed for the purpose of ensuring that information required to be disclosed in its SEC reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

As of June 30, 2005 Basic carried out an evaluation, under the supervision and with the participation of the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based upon that evaluation, it was concluded that the Company's disclosure controls and procedures are effective for the purposes discussed above.

There have been no changes in the Company's internal control over financial reporting that occurred during the Company's first quarter of the current fiscal year that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

[setravis]

It moved on ,but no one liked it.
Support @ 2.62...2.50...2.38
Resistance @ 2.79

Technicals
Last Price Quote is:
9.44%above 13-day EMA
22.16%above 50-day EMA

[setravis]

A Symmetrical Triangle.....
Let us see if we can break out of this pattern to the upside.
Support @ $2.39...2.27...2.10
Resistance @ $2.64....2.79
Stochastic is bullish
On Friday 09/23/2005 had a Bullish engulfing candlestick pattern.

Today's Candlestick Patterns:

White Closing Marubozu
Bullish Engulfing

The last two candlesticks formed a Bullish Engulfing Pattern . This is a bullish reversal pattern that marks a potential change in trend. However, its reliability is not very high and it requires confirmation.

Today a White Closing Marubozu was formed. This shows that the day opened and then prices went lower slightly, however it was followed by a rally that drove the prices over the opening price and the rally continued all day ending with a closing price equal to the high of the day.

Technicals
Close Above the 13-day EMA

Last Price Quote is:
2.10%above 13-day EMA
9.05%above 50-day EMA
RS Rating: N/A 

Fundamentals
Key Data:
Market Cap (M): $40.21 
P/E Ratio: 20.00 
PEG Ratio: N/A 
Next Earnings: N/A
Last Analyst Rating: N/A

[setravis]

 

Basic Earth Named 'Fastest Growing' by Oil & Gas Financial Journal
PR Newswire (Fri, Sep 23) 


DENVER, Sept 23, 2005 /PRNewswire-FirstCall via COMTEX/ -- Basic Earth Science Systems, Inc. (Basic or the Company) (BSIC, Trade) reported today that in its September 2005 issue, the Oil & Gas Financial Journal named Basic Earth the "Fastest Growing" company for the quarter ended March 31, 2005. The Oil & Gas Financial Journal quarterly ranks publicly traded oil and gas companies in its "OGJ200 Quarterly" article. Although primarily ranked in terms of assets, companies are additionally ranked on other benchmarks including Fastest Growing, Return on Assets, Return on Revenue and Return on Shareholder Equity. In addition to fastest growing, Basic was ranked 6th in Return on Assets and 7th in Return on Shareholder Equity.

"Wow! It is indeed nice to be recognized. And, yes, we did have a good quarter," commented, Ray Singleton, President of Basic. "However, our real attention is focused on opportunities that we are currently pursuing in efforts to duplicate these results again next year. Certainly, we expect our Bakken formation acreage in Richland County, Montana to be the foundation of those results. At the same time, other areas still command our attention; North Dakota and Texas among them. We are excited about the significance these opportunities could have on the Company's reserves and future revenues."

Basic is an oil and gas exploration and production company with primary operations in south Texas and in the Williston basin. Basic is traded on the "over-the-counter -- bulletin board" under the symbol BSIC.

Information herein contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which can be identified by words such as "should," "may," "will," "anticipate," "estimate," "intend" or "continue," or comparable words or phrases. In addition, all statements other than statements of historical facts that address activities that Basic intends, expects or anticipates will or may occur in the future are forward-looking statements. Readers are encouraged to read the SEC reports of Basic, particularly the Company's Quarterly Report on Form 10-QSB for the quarter ended June 30, 2005 and the Company's Annual Report on Form 10-KSB for the fiscal year ended March 31, 2005, for meaningful cautionary language disclosing why actual results may vary materially from those anticipated by management.

SOURCE Basic Earth Science Systems, Inc.


Ray Singleton of Basic Earth Science Systems, Inc., +1-303-296-3076 

http://www.prnewswire.com 

Copyright (C) 2005 PR Newswire. All rights reserved.

[catrader]

ok in at 2.75.  gas is a hot sector so hope this takes off.  last earnings think quite good.

[setravis]

Breakout from this Symmetrical Triangle.........I just Love it...
I thought someone would have be in with me before now...I have been lonely on this thread!
Make some bucks catrader!!!!!

[basonista]

I'm in with you guys.   I've been looking for a good OG play and this one looks great.  Now I don't have to continue to watch SWN run away from me!

[setravis]

ok in at 2.75. gas is a hot sector so hope this takes off. last earnings think quite good.

I'm in with you guys. I've been looking for a good OG play and this one looks great. Now I don't have to continue to watch SWN run away from me!

I applaud you guys for joining me on this thread......I was lonely in here!!!!

[setravis]

This little pup is moving on up guys
+13.52%......Volume @ 365,364