Junior independent Tengasco Inc., which has cited frustration with its primary lender to finance more wells in its core production areas of Tennessee and Kansas, on Monday filed an amended stock offering to its existing shareholders to reduce its debt and build working capital. The Knoxville, TN-based producer’s original offering was made in mid-October.

The rights offering would allow holders of the company’s approximately 12 million outstanding shares of common stock to purchase three shares of common stock at a price of 25 cents a share for each share they hold on the record date. The initial filing in October offered a right to purchase two shares of common stock at an unstated price. The record date has not yet been set, but is expected to be determined within a month, after the offering is approved by the Securities and Exchange Commission.

Tengasco’s core producing field, Swan Creek, which is located in Hancock County, TN, produced 115,683 Mcf in 3Q2003, down from 162,290 Mcf in 3Q2002. “This decrease was due to natural declines in production, which could not be offset, as the company did not have the funds to develop its properties by drilling new wells, due to the ongoing dispute with its primary lender Bank One,” the company said in a statement. “A decrease in pipeline transportation revenues is directly related to the decrease in gas volumes.”

Dr. Richard T. Williams, who took over as CEO earlier this year, said in October that the company was controlling costs to maximize net revenues from existing production, but added, “Our plans to drill additional wells to develop the company’s gas and oil reserves, and to increase pipeline revenues, remain frustrated by our ongoing adversarial relationship with our primary lender, Bank One. We intend to continue working to resolve our dispute with Bank One, but we have not yet been offered terms that make good business sense to the company.”

Tengasco has 22 producing gas wells and six producing oil wells in the Swan Creek, which produce approximately 1.4 MMcf/d and 2,200 bbl/month.

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