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<SEC-DOCUMENT>0001001614-08-000023.txt : 20090424
<SEC-HEADER>0001001614-08-000023.hdr.sgml : 20090424
<ACCEPTANCE-DATETIME>20080410160612
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001001614-08-000023
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20080410

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TENGASCO INC
		CENTRAL INDEX KEY:			0001001614
		STANDARD INDUSTRIAL CLASSIFICATION:	CRUDE PETROLEUM & NATURAL GAS [1311]
		IRS NUMBER:				870267438
		STATE OF INCORPORATION:			TN
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		10215 TECHNOLOGY DRIVE
		STREET 2:		SUITE 301
		CITY:			KNOXVILLE
		STATE:			TN
		ZIP:			37932
		BUSINESS PHONE:		865-675-1554

	MAIL ADDRESS:	
		STREET 1:		10215 TECHNOLOGY DRIVE
		STREET 2:		SUITE 301
		CITY:			KNOXVILLE
		STATE:			TN
		ZIP:			37932
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
<html>
    <head>
        <title></title>
    </head>

    <body style="FONT-SIZE: 12pt; FONT-FAMILY: 'TIMES NEW ROMAN'">
        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">
        Tengasco, Inc.</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="center">
        10215 Technology Drive, Suite 301<br>
        Knoxville, TN 37932-4307<br>
        865.675.1554<br>
        865.675.1621 (facsimile)</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left">
        April 10, 2008</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left">
        Mr. Karl Hiller</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left">
        Branch Chief, Division of Corporation Finance<br>
        U.S. Securities and Exchange Commission<br>
        100 F Street, N.E.<br>
        Washington, D. C. 20549<br>
        &nbsp;<br>
        VIA EDGAR FILING<br>
        &nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left">
        Re: Tengasco, Inc.<br>
        Form 10-K for the Fiscal Year Ended December 31, 2006 Filed March 30, 2007</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left">
        Form 10-Q for the Quarter Ended September 30, 2007</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left">
        File No. 1-15555</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left">
        Dear Mr. Hiller:<br>
        &nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tengasco, Inc. hereby responds as follows to each of the two
        numbered items in your letter dated March 27, 2008. The March 27 Letter refers to certain
        &ldquo;PRIOR COMMENTS&rdquo; contained in a letter dated February 12, 2008 and our written
        responses.</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 36px" align="justify">
        We believe that disclosure needed for sound investment decisions was in fact made in our
        original filings of our Form 10-K for the year ending December 31, 2006 and Form 10-Q for
        the Quarter ended September 30, 2007. However, in order to enhance the disclosure made in
        our original filings, we remain willing to amend our Form 10-K and Form 10-Q as set out
        below and as may be further suggested following your consideration of our responses and the
        receipt of any additional comments you may have.</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 36px" align="justify">
        For your convenience, we include the text of each of <u>your comments</u> <u>underlined</u>
        for reference, together with our corresponding responses, below:</p>

        <p></p>

        <p style="MARGIN: 16.2pt 2.1in 0pt 0in; TEXT-INDENT: 0px" align="justify">
        <u><font style="FONT-SIZE: 11pt">Form 10-K for the Fiscal Year Ended December 31,
        2006</font></u> <u><font style="FONT-SIZE: 11pt">General<br>
        <br>
        </font></u></p>

        <table>
            <tr>
                <td width="24">
                </td>

                <td valign="top">
                    <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt">
                    <font style="FONT-FAMILY: 'TIMES NEW ROMAN'">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
                </td>

                <td valign="top">
                    <p style="MARGIN: 9pt 0in 0pt" align="justify">
                    <u><font style="FONT-SIZE: 11pt">We are continuing to review your response
                    material dated February 29, 2008 and</font></u>
                    <u><font style="FONT-SIZE: 11pt">require further information. Please address
                    the following points:</font></u></p>
                </td>
            </tr>
        </table>
        <br>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.7in; TEXT-INDENT: -14px" align="justify">
        <u><font style="FONT-SIZE: 11pt">a) Provide us with copies of all agreements with Hoactzin
        related to the ten-well drilling program, methane project, and conversion option dated
        September 17, 2007. Also, submit them as exhibits in an amendment to your Form 8-K dated
        September 21, 2007 to comply with Item 601(b)(l0) of Regulation S-K.</font></u></p>

        <p></p>

        <table>
            <tr>
                <td width="48">
                </td>

                <td valign="top" width="24">
                    <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; COLOR: #000000">
                    <font style="FONT-FAMILY: 'TIMES NEW ROMAN'">b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
                </td>

                <td valign="top">
                    <p style="MARGIN: 0pt 0in" align="justify">
                    <u><font style="FONT-SIZE: 11pt">Tell us if you have established reserves on
                    the properties associated with the</font></u>
                    <u><font style="FONT-SIZE: 11pt">ten-well drilling program and, if so, the
                    date(s) on which these estimates were</font></u>
                    <u><font style="FONT-SIZE: 11pt">made, and of any subsequent
                    revisions.</font></u></p>
                </td>
            </tr>
        </table>
        <br>

        <p></p>

        <table>
            <tr>
                <td width="48">
                </td>

                <td valign="top" width="24">
                    <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; COLOR: #000000">
                    <font style="FONT-FAMILY: 'TIMES NEW ROMAN'">c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
                </td>

                <td valign="top">
                    <p style="MARGIN: 0pt 0in" align="justify"><u><font style="FONT-SIZE: 11pt">If
                    you have established estimated reserves with respect to the ten-well
                    drilling</font></u> <u><font style="FONT-SIZE: 11pt">program, tell us what
                    percentage of your total reserves these represent, which</font></u>
                    <u><font style="FONT-SIZE: 11pt">would be sold once the contingent conversion
                    rights expire.</font></u></p>
                </td>
            </tr>
        </table>
        <br>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">
        OUR RESPONSE:<br>
        &nbsp;</p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">
        (a) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The referenced documents have been included as exhibits
        to our Form 10-K for the year ended December 31, 2007 filed on March 31, 2008. The Exhibit
        numbers are 10.15 (Drilling Program); 10.16 (Conveyance of net profits interest in methane
        project); and 10.17 (Agreement for option to exchange of methane net profits interest for
        preferred stock). For your ease in reference we are forwarding you a hard copy by separate
        mailing because attachments cannot be made to EDGAR correspondence.</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">
        (b). &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have not established, and our reserve reports do not
        include any volumetric reserves of any oil from these program wells because for the
        productive life of the well the ownership of the working interest is Hoactzin&rsquo;s. In
        addition, no PUD reserves had been established as to these properties in any prior
        year&rsquo;s reserve reports.</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">
        (c). &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Technically the answer to this inquiry is zero in view
        of our response to (b) above. We do not understand the conclusory supposition included your
        final phrase &ldquo;&hellip;, which would be sold once the contingent conversion rights
        expire&rdquo; as no sale of any oil well rights is a part of the program either before or
        after any occasion might arise for Hoactzin to elect its option to convert any portion of
        its methane project net profits interest (not any working interest in the program wells as
        no such rights exist) for preferred stock.<br>
        &nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 36px" align="justify">
        It should also be noted that our reserve valuation is calculated by including a <i>dollar
        value</i> (but, again, not <i>barrels</i> of oil) for the Company&rsquo;s very real
        economic interest in the productive program wells, i.e. the right to receive payment, after
        operating expenses, of a percentage of the revenues from Hoactzin&rsquo;s working interest
        in the nature of a net profits interest. This economic value for this interest in the
        program wells is determined by the same parameters as the &ldquo;standardized method of
        estimate of future cash flows&rdquo; from the Company&rsquo;s volumetric reserves is
        calculated. In substance, the Company&rsquo;s 25% BPO revenues after expenses, as well as
        the Company&rsquo;s 85% APO revenues after expenses are forecast and discounted to present
        value. For the purposes of placing your general inquiry into perspective, the economic
        value of the Company&rsquo;s revenue interest in the nine productive program wells included
        in our proved reserve valuation constitutes about 2.8% of the economic value in dollars of
        our total of $53,627,086 in &ldquo;standardized method of estimated future cash
        flows&rdquo; from all the Company&rsquo;s proved reserves as reported in our Form 10-K for
        the year ended December 31, 2007.</p>

        <p></p>

        <p style="MARGIN: 0pt 0.1in 0pt 0.5in; TEXT-INDENT: -36px" align="justify">
        <font style="FONT-SIZE: 11pt">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>
        <u><font style="FONT-SIZE: 11pt">We note your disclosure stating that, on June 29, 2006,
        you exercised your option</font></u> <u><font style="FONT-SIZE: 11pt">to repurchase from
        Hoact</font></u><u><font style="FONT-SIZE: 11pt">zin your obligation to drill the final six
        wells of your then 12-well Kansas drilling program for $1.393 million. Please provide us
        with copies of the original and buyout agreements for this drilling program, and address
        the following points.</font></u></p>

        <p></p>

        <table>
            <tr>
                <td width="48">
                </td>

                <td valign="top" width="24">
                    <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; COLOR: #000000">
                    <font style="FONT-FAMILY: 'TIMES NEW ROMAN'">a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
                </td>

                <td valign="top">
                    <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in" align="justify">
                    <u><font style="FONT-SIZE: 11pt">Tell us the accounting methodology you applied
                    with respect to this program clarifying your treatment of initial proceeds,
                    expenditures, and revision of</font></u>
                    <u><font style="FONT-SIZE: 11pt">terms. The extent to which your accounting
                    entries coincided with each event,</font></u>
                    <u><font style="FONT-SIZE: 11pt">action, or other change should be
                    clear.</font></u></p>
                </td>
            </tr>
        </table>
        <br>

        <p></p>

        <table>
            <tr>
                <td width="48">
                </td>

                <td valign="top" width="24">
                    <p style="MARGIN-TOP: 0pt; FONT-SIZE: 11pt; MARGIN-BOTTOM: 0pt; COLOR: #000000">
                    <font style="FONT-FAMILY: 'TIMES NEW ROMAN'">b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>
                </td>

                <td valign="top">
                    <p style="MARGIN: 0pt 0in" align="justify">
                    <u><font style="FONT-SIZE: 11pt">Contrast the terms and circumstances
                    surrounding these earlier agreements with those of your more recent
                    program</font></u></p>
                </td>
            </tr>
        </table>
        <br>

        <p></p>

        <p style="MARGIN: 0pt 0.3in 0pt 0in; TEXT-INDENT: 0px" align="justify">
        <font style="FONT-SIZE: 11pt">OUR RESPONSE:</font></p>

        <p></p>

        <p style="MARGIN: 0pt 0.3in 0pt 0in; TEXT-INDENT: 0px" align="justify">
        <font style="FONT-SIZE: 11pt">(a</font>) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are forwarding
        you a hard copy of the requested documents by separate mailing because attachments cannot
        be made to EDGAR correspondence The accounting methodology applied to this 12 well/6 well
        program was to treat the proceeds received by the Company for the participant&rsquo;s
        interest in the wells as an offset to oil and gas properties. See (b) below for additional
        information.</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="justify">
        (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The terms and circumstances of the Company&rsquo;s two
        earlier drilling programs revolved around the existence of the Company&rsquo;s preferred
        stock. The first of those (the 8 well program) was offered only to Series A preferred
        holders, who directly exchanged their preferred stock for interests in the drilling
        program. Accordingly, the participants&rsquo; interests exchanged for interests in the
        program wells were removed from preferred stock category and treated as an offset to oil
        and gas properties as each well was drilled.<br>
        &nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 36px" align="justify">
        The second program (12 well program, reduced to 6) was offered to the participant in
        exchange for surrender to the Company of notes payable by the Company in approximate amount
        of $2.6 million. This amount of $2.6 million was received by the Company upon issuance of
        the notes and had been used by the Company to fund the previously-occurring exchange of the
        Company&rsquo;s preferred stock for cash. Because the Company&rsquo;s obligation under this
        program was only to drill the required number of wells, as each well was drilled,
        one-twelfth of the $2.6 million note exchanged for the program was removed from liability
        category and treated as an offset to oil and gas properties. Upon the repurchase of the
        final six wells from funds borrowed from the Company&rsquo;s senior lender CitiBank, the
        necessity for the well by well procedure no longer existed and the remaining $1.3 million
        liability to Hoactzin was removed from the books.</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 36px" align="justify">
        The treatment of the recent ten well program is the same as the earlier programs. There was
        no liability on the books as in the two earlier programs (preferred stock or notes); rather
        the participant paid on a well by well basis, and the payments were treated as an offset to
        oil and gas properties as received.</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left">
        Very truly yours,<br>
        &nbsp;<br>
        Tengasco, Inc.<br>
        &nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left">
        BY: <u>s/ Jeffrey R. Bailey</u></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0in; TEXT-INDENT: 0px" align="left">
        JEFFREY R. BAILEY, Chief Executive Officer</p>
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