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<SEC-DOCUMENT>0001001614-08-000037.txt : 20090424
<SEC-HEADER>0001001614-08-000037.hdr.sgml : 20090424
<ACCEPTANCE-DATETIME>20080521155120
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001001614-08-000037
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20080521

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>
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        <p style="MARGIN-TOP: 0pt; FONT-SIZE: 12pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.1in" align="center">
        <br>
        &nbsp;<br>
        Tengasco, Inc.<br>
        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: 0.1in" align="left">May 21,
        2008<br>
        &nbsp;<br>
        Mr. Karl Hiller, Branch Chief, Division of Corporation Finance<br>
        U.S. Securities and Exchange Commission<br>
        100 F Street, N.E.<br>
        Washington, D. C. 20549 <b><u>VIA EDGAR FILING</u></b></p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.1in" align="left">Re:
        Tengasco, Inc. Form 10-Q for the Quarter Ended September 30, 2007<br>
        File No. 1-15555<br>
        &nbsp;<br>
        Dear Mr. Hiller:<br>
        &nbsp;<br>
        This letter sets our position as discussed in the recent telephone conversation with you
        and others in your offices concerning the accounting treatment of the September 17, 2007
        transaction between Tengasco, Inc. and Hoactzin Partners, LP consisting of a ten well
        drilling program, net profits interest in methane project, and contingent exchange
        agreement of methane net profits interest for preferred stock. For reference in this
        letter, this will be referred to as the &ldquo;Hoactzin Agreement&rdquo;.<br>
        &nbsp;<br>
        Our position is that we must follow FIN 45 "Guarantor's Accounting and Disclosure
        Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others" with
        regard to the Hoactzin Agreement. Paragraph 7(d) of Financial Interpretation No. 45, carves
        out from liability recognition (but not from disclosure requirements) the Hoactzin
        Agreement. The substance of 7(d) reads as follows: &ldquo;7. The following types of
        guarantees are not subject to the initial recognition and initial measurement provisions of
        this Interpretation but are subject to its disclosure requirements: &hellip; d. A guarantee
        for which the guarantor&rsquo;s obligation would be reported as an equity item (rather than
        a liability) under generally accepted accounting principles (GAAP).&rdquo; We believe there
        can be no disagreement that the &ldquo;guarantee&rdquo; here in the form of (contingently
        issuable) preferred stock (not mandatorily redeemable) would be reported as an equity item
        not a liability.
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.1in" align="left">
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.1in" align="left">The
        Company's position is that the fair value of the &ldquo;guarantee&rdquo; aspect of the
        transaction was immaterial at inception, that the &ldquo;guarantee&rdquo;' provision was
        entered into fairly late in the negotiations, was proffered as a incentive by the Company
        to effectuate the transaction, and according to management's analysis which in this related
        party-transaction was available to all parties would have been of no additional value in
        almost all scenarios considered. The Company proposes to disclose this circumstance, as is
        called for in the disclosure requirements of FIN 45 - which calls for disclosing "(a) the
        nature of the guarantee, including the approximate term of the guarantee, how the guarantee
        arose and the events or circumstances that would require the guarantor to perform under the
        guarantee &hellip; .&rdquo;<br>
        &nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.1in" align="left">In future
        financial statements the Company proposes to include a policy note regarding its policy of
        following FIN 45 relating to guarantees. As we have recently done in our Form 10-Q for the
        period ending March 31, 2008, the Company has clarified our disclosure to conform to these
        requirements . The Company has disclosed the FIN 45 elements of: (a) the nature of the
        guarantee, including the approximate term of the guarantee, how the guarantee arose; (b)
        the maximum potential amount of future payments under the guarantee; (c) the carrying
        amount of the liability, if any, for the guarantor&rsquo;s obligations under the guarantee;
        and (d) the nature and extent of any recourse provisions or available collateral that would
        enable the guarantor to recover the amounts paid under the guarantee. Incidentally, this
        disclosure <u>was also included in our Form 10-K</u> for the year ending December 31, 2007
        in form previously submitted to you in response to your desire to see additional
        disclosure. See Item 13, &ldquo;Certain Relationships and Related Transactions, and
        Director Independence&rdquo;, which expressly incorporates by reference the &ldquo;Certain
        Items&rdquo; in the Company&rsquo;s Proxy Statement for Annual Shareholder&rsquo;s Meeting.
        The incorporated &ldquo;Certain Items&rdquo; section of the Proxy Statement appears at
        pages 23-27 of the Proxy Statement and concludes at page 27 with the statement that
        &ldquo;As a result, the Company believes it is highly unlikely that any obligation to issue
        preferred stock will arise under the terms of this agreement at any time in the
        future.&rdquo; In that our first quarter 2008 10-Q and the 2007 10-K now includes this
        disclosure as indicated in your previous correspondence we believe there is little
        practical utility in amending the 3<sup>rd</sup> quarter 2007 Form 10-Q as has been
        suggested in your recent letters to us.<br>
        &nbsp;<br>
        The Company believes that the Hoactzin Agreement need not be divided into separate parts
        for the purpose of allocating a portion of the amount paid for the drilling program to the
        methane project. Doing so would only allocate from one class of asset to another, and such
        an allocation to the methane project would under any scenario have an immaterial effect on
        the financial presentation.<br>
        &nbsp;<br>
        We believe this fully addresses and properly resolves all matters raised in the recent
        telephone conversation. Should you have any further requirement please let us know and the
        basis for the position taken so that we may properly respond so that these matters may be
        concluded.
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.1in" align="left">
        <font style="FONT-SIZE: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.1in" align="left">Very truly
        yours,</p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.1in" align="left">TENGASCO,
        INC.<br>
        &nbsp;<br>
        BY:</p>

        <p></p>

        <p style="MARGIN-TOP: 0pt; MARGIN-BOTTOM: 0pt; MARGIN-LEFT: 0.1in" align="left">
        <u>s/Jeffrey R. Bailey</u>&nbsp;<br>
        JEFFREY R. BAILEY, Chief Executive Officer</p>
    </body>
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</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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