-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DYxD2jelgQgOZ6ryfmrVa6ID28WnxvW2k8hBoYLkbC8N8JGgnul7gpEo/+8DvSs+ SyAH6jgtGw+Gza5rucPTsQ== 0001000096-99-000024.txt : 19990115 0001000096-99-000024.hdr.sgml : 19990115 ACCESSION NUMBER: 0001000096-99-000024 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981130 FILED AS OF DATE: 19990114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PYR ENERGY CORP CENTRAL INDEX KEY: 0001016289 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 954580642 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-20879 FILM NUMBER: 99506530 BUSINESS ADDRESS: STREET 1: 1675 BROADWAY STREET 2: STE 1150 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3038253748 MAIL ADDRESS: STREET 1: 17337 VENTURA BOULEVARD STREET 2: SUITE 224 CITY: ENCINO STATE: CA ZIP: 91316 FORMER COMPANY: FORMER CONFORMED NAME: MAR VENTURES INC DATE OF NAME CHANGE: 19960606 10QSB 1 FORM 10-QSB U.S. Securities And Exchange Commission Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 30, 1998 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ---------------- ----------------- Commission File No. 0-20879 PYR ENERGY CORPORATION ---------------------- (Exact name of small business issuer as specified in its charter) Delaware 95-4580642 -------- ---------- (State or jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1675 Broadway, Suite 1150, Denver, CO 80202 ------------------------------------- ----- (Address of principal executive offices) (Zip Code) Issuer's telephone number, including area code (303) 825-3748 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- (APPLICABLE ONLY TO CORPORATE REGISTRANTS) The number of shares outstanding of each of the issuer's classes of common equity as of January 14, 1999 is as follows: $.001 Par Value Common Stock 9,421,470 --------- PYR ENERGY CORPORATION FORM 10-QSB INDEX PART I. FINANCIAL INFORMATION Item 1. Financial Statements ........................................ 3 Balance Sheet B November 30, 1998 and August 31, 1998........ 3 Statement of Operations B Quarters Ended November 30, 1998 and November 30, 1997 ....................................... 4 Statement of Cash Flows B Quarters Ended November 30, 1998 and November 30, 1997 ....................................... 5 Notes to Financial Statements ............................... 6 Summary of Significant Accounting Policies .................. 6 Item 2. Management's Discussion and Analysis or Plan of Operation.... 8 PART II. OTHER INFORMATION Item 1. Legal Proceedings ........................................... 12 Item 2. Changes in Securities ....................................... 12 Item 3. Defaults Upon Senior Securities ............................. 12 Item 4. Submission of Matters to a Vote of Security Holders ......... 12 Item 5. Other Information ........................................... 12 Item 6. Exhibits and Reports on Form 8-K ............................ 13 Signatures ........................................................... 13 2 PART I ITEM 1. FINANCIAL STATEMENTS
PYR ENERGY CORPORATION (A Development Stage Company) BALANCE SHEETS ASSETS 11/30/98 8/31/98 (UNAUDITED) CURRENT ASSETS Cash $ 1,140,326 $ 373,100 Deposits and prepaid expenses 42,516 16,897 ----------- ----------- Total Current Assets 1,182,842 389,997 ----------- ----------- PROPERTY AND EQUIPMENT, at cost Furniture and equipment, net 50,169 54,821 Undeveloped oil and gas prospects 2,935,023 2,491,238 ----------- ----------- 2,985,192 2,546,059 OTHER ASSETS, net 77,893 3,546 ----------- ----------- $ 4,245,927 $ 2,939,602 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 80,070 $ 44,389 Accrued and other liabilities -- 1,282,500 Interest payable 22,959 -- Current portion of capital lease obligation 1,492 1,441 Convertible debentures 2,500,000 -- ----------- ----------- Total Current Liabilities 2,604,521 1,328,330 ----------- ----------- Capital lease obligation 2,265 2,661 ----------- ----------- Total Liabilities 2,606,786 1,330,991 STOCKHOLDERS' EQUITY Common stock, $.001 par value Authorized 30,000,000 shares Issued and outstanding B 9,421,470 shares at 11/30/98 and 9,154,804 shares at 8/31/98 9,421 9,155 Capital in excess of par value 1,967,821 1,768,088 Deficit accumulated during the development stage (338,101) (168,632) ----------- ----------- 1,639,141 1,608,611 ----------- ----------- $ 4,245,927 $ 2,939,602 =========== =========== 3
PYR ENERGY CORPORATION (A Development Stage Company) STATEMENTS OF OPERATIONS (UNAUDITED) Cumulative from Inception - Three Months Three Months 5/31/96 to Ended 11/30/98 Ended 11/30/97 11/30/98 -------------- -------------- ----------- REVENUES Consulting fees $ -- $ 10,000 $ 127,528 Interest 4,525 15,739 46,266 ----------- ----------- ----------- 4,525 25,739 173,794 ----------- ----------- ----------- OPERATING EXPENSES General and administrative 137,775 187,917 956,699 Dry hole impairment -- -- 15,000 Interest 29,832 -- 30,671 Depreciation and amortization 6,386 3,333 29,853 ----------- ----------- ----------- 173,993 191,250 1,032,223 ----------- ----------- ----------- OTHER INCOME Gain on sale of oil and gas properties -- -- 556,197 ----------- ----------- ----------- (169,468) (165,511) (302,232) INCOME APPLICABLE TO PREDECESSOR LLC -- -- (35,868) ----------- ----------- ----------- NET (LOSS) $ (169,468) $ (165,511) $ (338,100) =========== =========== =========== NET INCOME (LOSS) PER COMMON SHARE B BASIC AND DILUTED $ (.018) $ (.018) $ (.050) =========== =========== =========== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 9,243,693 9,154,804 6,718,846 =========== =========== =========== 4
PYR ENERGY CORPORATION (A Development Stage Company) STATEMENTS OF CASH FLOWS (UNAUDITED) Cumulative Three Months Three Months from Inception Ended 11/30/98 Ended 11/30/97 to 11/30/98 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ (169,468) $ (165,511) $ (302,232) Adjustments to reconcile net income (loss) to net cash provided by operating activities Gain on sale of assets -- -- (556,197) Depreciation and amortization 6,386 3,333 29,853 Contributed services -- -- 36,000 Dry hole impairment -- -- 15,000 Changes in assets and liabilities (Increase)/decrease in receivables -- 10,000 -- (Increase)/decrease in deposits and prepaids (25,619) (12,432) (40,910) Increase/(decrease) in accounts payable 35,681 (8,232) 65,636 Increase/(decrease) in accrued and other liabilities 22,959 (5,684) 22,959 Other (91) -- (3,842) ----------- ----------- ----------- Net cash provided/(used) by operating activities (130,152) (178,526) (733,733) ----------- ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of oil and gas interests -- -- 1,050,078 Cash paid for furniture and equipment (1,734) (11,935) (74,622) Cash paid for undeveloped oil and gas assets (1,526,197) (139,024) (3,230,988) ----------- ----------- ----------- Net cash provided/(used) in investing activities (1,527,931) (150,959) (2,255,532) ----------- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Members capital contributions -- -- 28,000 Distributions to members -- -- (66,000) Cash from short-term borrowings -- -- 285,000 Repayments of short-term borrowings -- -- (285,000) Proceeds from sale of common stock -- -- 2,023,750 Cash paid for offering costs -- -- (280,711) Cash received upon recapitalization and merger -- -- 336 Increase/(decrease) in convertible debentures 2,500,000 -- 2,500,000 Cash paid for deferred financing costs (74,346) -- (74,346) Payments on capital lease (345) -- (1,438) ----------- ----------- ----------- Net cash (used) provided by financing activities 2,425,309 -- 4,129,591 ----------- ----------- ----------- NET INCREASE/(DECREASE) IN CASH 767,226 (329,485) 1,140,326 CASH, BEGINNING OF PERIODS 373,100 1,432,281 -- ----------- ----------- ----------- CASH, END OF PERIODS $ 1,140,326 $ 1,102,796 $ 1,140,326 =========== =========== =========== 5
PYR ENERGY CORPORATION (A Development Stage Company) Notes to Financial Statements November 30, 1998 The accompanying interim financial statements of PYR Energy Corporation (the "Company") are unaudited. In the opinion of management, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim period. The financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. Management believes the disclosures made are adequate to make the information not misleading and recommends that these condensed financial statements be read in conjunction with the financial statements and notes included in the Company's Form 10-KSB as of August 31, 1998. PYR Energy Corporation (formerly known as Mar Ventures Inc. ("Mar")) was incorporated under the laws of the State of Delaware on March 27, 1996. Mar had been a public company which had no significant operations as of July 31, 1997. On August 6, 1997 Mar acquired all the interests in PYR Energy LLC ("PYR LLC") (a Colorado Limited Liability Company organized on May 31, 1996), a development stage company as defined by Statement of Financial Accounting Standards (SFAS) No. 7. PYR LLC, an independent oil and gas exploration company, had been engaged in the acquisition of oil and gas properties for exploration and exploitation in the Rocky Mountain region and California. As of August 6, 1997 PYR LLC had acquired only non-producing leases and acreage and no exploration had been commenced on the properties. Upon completion of the acquisition of PYR LLC by Mar, PYR LLC ceased to exist as a separate entity. Mar remained as the legal surviving entity and, effective November 12, 1997, Mar changed its name to PYR Energy Corporation. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES USE OF ESTIMATES - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. CASH EQUIVALENTS - For purposes of reporting cash flows, the Company considers as cash equivalents all highly liquid investments with a maturity of three months or less at the time of purchase. At November 30, 1998, there were no cash equivalents. 6 PROPERTY AND EQUIPMENT - Furniture and equipment is recorded at cost. Depreciation is provided by use of the straight-line method over the estimated useful lives of the related assets of three to five years. Expenditures for replacements, renewals, and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. OIL AND GAS PROPERTIES - The Company follows the full cost method to account for its oil and gas exploration and development activities. Under the full cost method, all costs incurred which are directly related to oil and gas exploration and development are capitalized and subjected to depreciation and depletion. Depletable costs also include estimates of future development costs of proved reserves. Costs related to undeveloped oil and gas properties may be excluded from depletable costs until such properties are evaluated as either proved or unproved. The net capitalized costs are subject to a ceiling limitation. Gains or losses upon disposition of oil and gas properties are treated as adjustments to capitalized costs, unless the disposition represents a significant portion of the Company's proved reserves. A separate cost center is maintained for expenditures applicable to each country in which the Company conducts exploration and/or production activities. Undeveloped oil and gas properties consists primarily of leases and acreage acquired by the Company for its exploration and development activities. The cost of these non-producing leases is recorded at the lower of cost or fair market value. The Company has adopted SFAS No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed of" which requires that long-lived assets to be held and used be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The adoption of SFAS 121 has not had an impact on the Company's financial statements, as the Company has determined that no impairment loss through November 30, 1998 need to be recognized for applicable assets of continuing operations. ORGANIZATION COSTS - Costs related to the organization of the Company have been capitalized and are being amortized over a period of five years. INCOME TAXES - The Company has adopted the provisions of SFAS No. 109, "Accounting for Income Taxes". SFAS 109 requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Company is an independent oil and gas exploration company whose strategic focus is the application of advanced seismic imaging and computer-aided exploration technologies in the systematic search for commercial hydrocarbon reserves, primarily in the onshore western United States. The Company attempts to leverage its technical experience and expertise with 3-D seismic to identify exploration and exploitation projects with significant potential economic return. The Company intends to participate in selected exploration projects as a non-operating, working interest owner, sharing both risk and rewards with its partners. The Company has and will continue to pursue exploration opportunities in regions where the Company believes significant opportunity for discovery of oil and gas exists. By reducing drilling risk through 3-D seismic technology, the Company seeks to improve the expected return on investment in its oil and gas exploration projects. During the quarter ended November 30, 1998, the Company completed the sale of convertible promissory notes (the "Notes") in the total amount of $2,500,000 in a private placement transaction pursuant to exemptions from federal and state registration requirements. The Notes will automatically convert into shares of Series A Preferred Stock (the "Series A Preferred") at the rate of one share for each $100 principal amount of Notes if the Series A Preferred is approved by stockholders prior to April 23, 1999. The Series A Preferred is convertible into Common Stock at the rate of one share of Common Stock for each $.60 of the purchase amount of the Series A Preferred. If the Series A Preferred is not issued by April 23, 1999 (which requires stockholder approval to authorize a class of preferred stock), the Note holders have the right to require that Notes and accrued interest be paid on demand or to convert the Notes into Common Stock at the rate of one share of Common Stock for each $.30 of principal amount of Notes rather than the conversion rate of one share of Common Stock for each $.60 of face amount of the Series A Preferred. The full principal amount of the Notes and accrued interest at the rate of 10 percent per year is due on October 26, 1999 if the Notes have not been converted into Series A Preferred or Common Stock prior to that time. The Company is required to make semi-annual interest payments on the Notes commencing on the date that is six months from the date of the Notes until the Notes are repaid. The Company has the right in its discretion to pay the interest portion of the Notes with Common Stock at a rate based on the weighted average trading price of the Common Stock for 45 days prior to the interest payment date. During the quarters ended November 30, 1998 and 1997, the Company incurred approximately $244,000 and $139,000 respectively, for acquisition of acreage, direct geological and geophysical costs, drilling costs and other related direct costs with respect to its identified exploration and exploitation projects. The Company has had no revenues from oil and gas production. The Company currently anticipates that it will participate in the drilling of two to four additional exploratory wells during the next twelve months, although the number of wells may increase as additional projects are added to the Company's portfolio. However, there can be no assurance that any such wells will be drilled and if drilled that any of these wells will be successful. 8 The Company currently has four active projects in the Southern San Joaquin Basin of California: East Lost Hills - The Company has identified and has undertaken technical analysis of a deep, large untested structure in the footwall of the Lost Hills thrust. This prospect lies directly east of and structurally below the existing Lost Hills field, which has produced in excess of 350 MMBoe from shallow pay zones in a large thrusted anticlinal feature. In early 1998, the Company entered into an exploration agreement with a number of established Canadian oil and gas companies to participate in the drilling of an initial exploratory well to fully evaluate the feature. PYR received cash consideration for a portion of its share of the acreage in this play and a carried 6.475% working interest through the tanks. PYR owns an additional 4.1% working interest for a total working interest of 10.575%. The Bellevue Resources et al #1-17 East Lost Hills well, located in SE1/4. Sec 17, T26S, R21E, Kern County, California, commenced drilling on May 15, 1998. The well is designed to test prospective Miocene sandstone reservoirs in the Temblor Formation. During September 1998, the well was sidetracked in an attempt to gain better structural position and delineate potential uphole pay. On November 23, 1998, the well was drilling at 17,600 feet toward a total depth of 19,000 feet when it blew out and ignited. No personal injuries resulted, and an expert well control team was engaged to contain the fire. Currently, the well is under control. Surface containment facilities consisting of separators and storage tanks have been installed and are collecting and separating hydrocarbons and water from the well. Natural gas is being flared while liquid hydrocarbons and water are being collected in the burn pits and in above ground storage tanks for trucking to processing and disposal facilities. A snubbing unit is being deployed to attempt a surface control kill of this well. A relief well, the Bellevue #1R commenced drilling on December 18, 1998 and it is expected that this relief well will intersect the wellbore of the Bellevue #1 sometime in late January of 1999, at which time the Bellevue #1 will be plugged. Should the operator be successful in using the snubbing unit to plug the Bellevue #1, the Bellevue #1R is expected to be drilled directly into the Temblor Formation as a replacement well. Although the Company believes that its insurance coverage is adequate to cover expenses associated with the blowout, there is no assurance that all of the costs will be covered. The Company and the other working interest owners jointly control approximately 23,000 gross acres of leasehold over the prospect. Southeast Maricopa - During 1998, the Company completed acquisition of approximately 52 square miles of 3-D seismic data over its Southeast Maricopa exploration project. Western Geophysical Company acted as the Company's seismic contractor for the data acquisition. The processed data was delivered to the Company in late October, 1998 and the Company is currently in the process of interpreting the data in order to identify drillable prospects. It is anticipated that the interpretation will be complete in February of 1999. At that time, the Company intends to take this project to potential industry partners for participation. The Company intends to sell an appropriate portion of its interest in this project in order to receive a cash consideration and/or a carried interest in the drilling of one or more exploration wells. The Company intends to drill an exploration well on this prospect during the second quarter of calendar 1999. No drilling commitments have been made or received. 9 San Emidio. In November 1998, as part of its $2,500,000 private placement, the Company exchanged 266,666 shares of its common stock for 39 square miles of 3-D seismic data and oil and gas leases covering approximately 5,400 acres adjacent to the Company's Southeast Maricopa exploration project. The Company intends to incorporate this 3-D seismic data with the newly acquired data at its Southeast Maricopa acreage in order to further understand the complex stratigraphic geometries and trapping mechanisms. After interpretation and evaluation, there have been two prospective areas identified within the acreage position. The Company may present this project to potential industry partners in conjunction with its Southeast Maricopa project or may create an independent project for presentation. The Company's approach will be to obtain industry participation in order to receive a carried interest in the drilling of one or more exploration wells. The Company expects to drill an exploration well here in the second quarter of calendar year 1999. No drilling commitments have been made or received. School Road - On June 1, 1998, the Company executed a participation agreement with Houston based Seneca Resources for the Company's School Road acreage. The drill to earn agreement provided PYR with a prospect fee and a carried through-the-tanks working interest in an initial exploration well. PYR would ultimately retain a 40% working interest in the School Road acreage. Drilling operations on the Federal #67X-30 located in SE1/4, SEC 30, T32S, R25E were commenced on July 28, 1998. The well was drilled to a total depth of 12,508 feet and although hydrocarbons were encountered, detailed log analysis of the well indicated that the reservoir was tight and incapable of sustaining commercial production. The well was plugged and abandoned on September 18, 1998. PYR continues to evaluate the results of the well and is incorporating the new well control into the seismic model in order to determine any potential future exploration opportunities at its School Road acreage. The Company has other projects identified in the Denver Basin of Colorado and Nebraska, the Williston Basin of North Dakota and in the Big Horn Basin of Wyoming and Montana. In addition, the Company continues to identify and evaluate acquisition opportunities for exploration and exploitation opportunities. At November 30, 1998, the Company had a negative working capital amount of ($1,422,000). During the quarter ended November 30, 1998, the Company completed a private placement which provided a total of $2,500,000 to the Company. The private placement securities issued are 10% convertible notes that will automatically convert to 10% convertible preferred stock at the time, if any, that PYR has obtained stockholder approval for, and issued, the convertible preferred shares. The preferred stock is ultimately convertible into common stock at a conversion price of $.60 per common share. The Company incurred costs of approximately $75,000 in connection with this issuance of the notes. To date, the Company has funded its oil and gas exploration activities principally through cash provided by the sale of its securities. The Company had no outstanding long-term debt at November 30, 1998 other than a capital lease obligation and has not entered into any commodity swap arrangements or hedging transactions. Although it has no current plans to do so, it may enter into commodity swap and/or hedging transactions in the future in conjunction with oil and gas production. Nevertheless, there can be no assurance that the Company will ever have oil and gas production. 10 It is anticipated that the future development of the Company's business will require additional capital expenditures. The Company is currently in the process of interpreting and evaluating 3-D seismic data on two of its California exploration projects and is in the process of drilling and evaluating an exploration well at East Lost Hills. Depending upon the extent of industry participation in the two seismic generated exploration projects and the ultimate results at East Lost Hills, the Company may require as much as $4,800,000 for capital expenditures during the next 12 months. The Company intends to limit capital expenditures by forming industry alliances and exchanging an appropriate portion of its interest for cash and/or a carried interest in its exploration projects. Although currently there are no commitments for additional funding, the Company may need to raise additional funds to cover capital expenditures. In addition, the exploratory well at East Lost Hills experienced a blowout on November 23, 1998. Although the Company currently believes that costs related to the blowout and the release of potential pollutants into the atmosphere are covered by insurance, there is no assurance that all of the costs will be covered. Results of Operations The quarter ended November 30, 1998 ("1998") compared with the quarter ended November 30, 1997 ("1997"). Operations during the quarter ended November 30, 1998 resulted in a net loss of ($169,468) compared to a net loss of ($165,511) for the quarter ended November 30, 1997. Oil and Gas Revenues and Expenses. The Company has not owned any producing or proved oil and gas properties. Accordingly, no oil and gas revenues or expenses have been recorded by the Company. Depreciation, Depletion and Amortization. The Company recorded no depletion expense from oil and gas properties for the quarters ended November 30, 1998 or 1997. The Company has not owned any proved reserves and had no oil or gas production. The Company recorded $6,386 and $3,333 in depreciation expense associated with capitalized office furniture and equipment during the quarters ended November 30, 1998 and 1997, respectively. General and Administrative Expense. The Company incurred $137,775 and $187,917 in general and administrative expenses during the quarters ended November 30, 1998 and 1997, respectively. The decrease results from lower amounts incurred for legal fees, accounting fees, employee salaries and promotional expenses. Interest Expense. The Company recorded $29,832 in interest expense for the quarter ended November 30, 1998 associated with the Company's convertible debentures. Consulting Fee Revenue. The Company generated $10,000 from consulting fees during the quarter ended November 30, 1997. These revenues have ceased and are not expected to occur in the future. 11 Year 2000 Compliance Year 2000 compliance is the ability of computer hardware and software to respond to the problems posed by the fact that computer programs traditionally have used two digits rather than four digits to define an applicable year. As a consequence, any of the Company's computer programs that have date-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in a system failure or miscalculations causing interruption of operations, including temporary inability to perform 3-D seismic analysis and to perform accounting functions and delays in the receipt of payments from purchasers of oil and gas production, if any. The Company currently is reviewing the Company's computers and software as well as other equipment that utilizes imbedded computer chips, such as facsimile machines and telephone systems. The Company believes that its review will be completed prior to June 30, 1999. The Company has confirmed with the maker of its accounting software that it is Year 2000 compliant. Until the Company's Year 2000 review has been completed, the Company has no estimate of the cost to correct any potential deficiency in Year 2000 compliance for its computers and equipment. Upon the completion of the Company's Year 2000 review, the Company intends to develop a contingency plan to address potential Year 2000 problems. PART II. OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities None Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information Pursuant to Rule 14a-4(c) under the Securities Exchange Act of 1934, as amended, the Company hereby notifies its stockholders that the proxies solicited by the Company in connection with the Company's annual meeting to be held in 1999 will confer discretionary authority to vote on matters raised by stockholders for which the Company did not have notice a reasonable time before the Company mails its proxy materials for the 1999 annual meeting. The Company believes that it will mail those proxy materials on or about February 15, 1999. In addition, if the Company receives notice a reasonable time before it mails its proxy materials of a matter that a stockholder intends to raise at the annual meeting of stockholders to be held in 1999, the proxies solicited by the Company may exercise discretion to vote on each such matter if the Company includes in its proxy statement advice on the nature of the matter raised and how the Company intends to exercise its discretion to vote on each such matter. However, the Company may not exercise discretionary voting authority on a particular proposal if the proponent of that proposal provides the Company with a written statement, a reasonable time before the Company mails its proxy materials, that the proponent intends to deliver a proxy statement and form of proxy to holders of at least the percentage of the Company's voting shares required under applicable law to carry the proposal (the "Required Percentage"), which would be a majority of the Company's outstanding Common Stock or a majority of the shares of Common Stock represented at the meeting, depending on the nature of the proposal, if the proponent includes the same statement in its proxy materials filed under Rule 14a-6, and if the proponent, immediately after 12 soliciting the holders of the Required Percentage, provides the Company with a statement from any solicitor or any other person with knowledge that the necessary steps have been taken to deliver a proxy statement and form of proxy to the holders of the Required Percentage. Item 6. Exhibits and Reports on Form 8-K During the quarter ended November 30, 1998, the Registrant filed a total of four reports on Form 8-K: A Form 8K was filed on 9/22/98 reporting a press release dated 9/18/98, A Form 8K was filed on 10/28/98 reporting a press release dated 10/27/98, A Form 8K was filed on 11/24/98 reporting a press release dated 11/24/98 and A Form 8K was filed on 12/7/98 reporting a press release dated 12/7/98. SIGNATURES ---------- In accordance with the requirements of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PYR ENERGY CORPORATION Signatures Title Date ---------- ----- ---- /s/ D. Scott Singdahlsen Chief Executive Officer; - ------------------------ President and Chairman January 14, 1999 D. Scott Singdahlsen /s/ Andrew P. Calerich Chief Financial Officer January 14, 1999 - ----------------------- Andrew P. Calerich 13 EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS 3-MOS AUG-31-1999 AUG-31-1998 NOV-30-1998 NOV-30-1997 1,140,326 373,100 0 0 0 0 0 0 0 0 1,182,842 389,997 2,985,192 2,546,059 0 0 4,245,927 2,939,602 2,604,521 1,328,330 0 0 0 0 0 0 9,421 9,155 1,629,720 1,599,456 4,245,927 2,939,602 0 0 4,525 25,739 0 0 173,993 191,250 0 0 0 0 29,832 0 (169,468) (165,511) 0 0 (169,468) (165,511) 0 0 0 0 0 0 (169,468) (165,511) (.018) (.018) (.018) (.018)
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