-----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, Dlh9tvI539jdWl3moY1zGaNBaGjENvmwq4GgyVzz4eYCdLzqipNX2YGwfhitWWKS le4TjxsGX97MHr/ROsOPtA== 0001050502-98-000075.txt : 19980421 0001050502-98-000075.hdr.sgml : 19980421 ACCESSION NUMBER: 0001050502-98-000075 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980228 FILED AS OF DATE: 19980420 SROS: NASD 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: 98597235 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 February 28, 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 Identification No.) incorporation or organization) 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 April 17, 1998 is as follows: $.001 Par Value Common Stock 9,154,804 --------- PYR ENERGY CORPORATION FORM 10-QSB INDEX PART I. FINANCIAL INFORMATION Item 1. Financial Statements.......................................... 3 Balance Sheet - February 28, 1998 and August 31, 1997......... 3 Statement of Operations - Quarter Ended and Six Months Ended February 28, 1998 and February 28, 1997 ...................... 4 Statement of Cash Flows - Six Months Ended February 28, 1998 and February 28, 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.............................. 12 Signatures............................................................. 12 2 PART I ITEM 1. FINANCIAL STATEMENTS PYR ENERGY CORPORATION (A Development Stage Company) BALANCE SHEETS ASSETS 2/28/98 8/31/97 ----------- ----------- (UNAUDITED) CURRENT ASSETS Cash $ 1,080,963 $ 1,432,281 Accounts receivable -- 10,000 Other receivables 393,047 -- Deposits and prepaid expenses 21,678 4,196 ----------- ----------- Total Current Assets 1,495,688 1,446,477 ----------- ----------- PROPERTY AND EQUIPMENT, at cost Furniture and equipment, net 67,381 28,540 Undeveloped oil and gas prospects 414,051 311,007 ----------- ----------- 481,432 339,547 ----------- ----------- OTHER ASSETS, net 3,642 3,642 ----------- ----------- $ 1,980,762 $ 1,789,666 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 35,209 $ 60,064 Accrued and other liabilities 7,620 10,184 ----------- ----------- Total Current Liabilities 42,829 70,248 ----------- ----------- Capital lease obligation 3,281 -- ----------- ----------- Total Liabilities 46,110 70,248 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Common stock, $.001 par value Authorized 30,000,000 shares Issued and outstanding - 9,154,804 shares 9,155 9,155 Capital in excess of par value 1,768,088 1,768,088 Retained earnings/(accumulated deficit) 157,409 (57,825) ----------- ----------- 1,934,652 1,719,418 ----------- ----------- $ 1,980,762 $ 1,789,666 =========== =========== 3
PYR ENERGY CORPORATION (A Development Stage Company) STATEMENTS OF OPERATIONS (UNAUDITED) Three Three Six Six Months Months Months Months Inception Ended Ended Ended Ended Through 2/28/98 2/28/97 2/28/98 2/28/97 2/28/98 --------- --------- --------- --------- --------- REVENUES Consulting Fees $ -- $ 32,528 $ 10,000 $ 47,528 $ 127,528 Interest 10,806 -- 26,545 -- 32,141 Gain on asset sale 556,197 -- 556,197 -- 556,197 --------- --------- --------- --------- --------- 567,003 32,528 592,742 47,528 715,866 OPERATING EXPENSES General and administrative 173,373 17,740 361,290 28,109 504,969 Interest 217 -- 217 -- 568 Depreciation and amortization 6,427 81 9,760 81 10,811 --------- --------- --------- --------- --------- 180,017 17,821 371,267 28,190 516,348 NET INCOME BEFORE INCOME TAXES 386,986 14,707 221,475 19,338 199,518 Income Taxes 6,240 -- 6,240 -- 6,240 380,746 14,707 215,235 19,338 193,278 INCOME APPLICABLE TO PREDECESSOR LLC -- (14,707) -- (19,338) (35,868) --------- --------- --------- --------- --------- NET INCOME $ 380,746 $ -- $ 215,235 $ -- $ 157,410 ========= ========= ========= ========= ========= NET INCOME PER COMMON SHARE $ .042 $ .004 $ .024 $ .005 $ .028 ========= ========= ========= ========= ========= 4
PYR ENERGY CORPORATION (A Development Stage Company) STATEMENTS OF CASH FLOWS (UNAUDITED) Cumulative Six Months Six Months from Inception Ended 2/28/98 Ended 2/28/97 to 2/28/98 ------------- ------------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 215,235 $ 19,338 $ 193,278 Adjustments to reconcile net income (loss) to net cash provided by operating activities Gain on sale of assets (556,197) (556,197) Depreciation and amortization 9,760 81 10,811 Changes in assets and liabilities (Increase)/decrease in receivables (383,047) -- (393,047) (Increase)/decrease in deposits and prepaids (17,482) (525) (21,678) Increase/(decrease) in accounts payable (24,855) -- 35,209 Increase/(decrease) in accrued and other liabilities (2,564) -- 7,620 Other -- (3,705) (3,750) ----------- ----------- ----------- Net cash provided/(used) by operating activities (759,150) 15,189 (727,754) ----------- ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sale of oil and gas interests 850,078 -- 850,078 Cash paid for furniture and equipment (48,602) (1,450) (78,085) Cash paid for undeveloped oil and gas properties (396,925) -- (707,932) ----------- ----------- ----------- Net cash provided/(used) in investing activities 404,551 (1,450) 64,061 ----------- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Members capital contributions -- 4,000 64,000 Distributions to members -- (12,200) (66,000) Net proceeds from capital lease obligation 3,281 -- 3,281 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 ----------- ----------- ----------- Net cash (used) provided by financing activities 3,281 (8,200) 1,744,656 ----------- ----------- ----------- NET INCREASE/(DECREASE) IN CASH (351,318) 5,539 1,080,963 CASH, BEGINNING OF PERIODS 1,432,281 -- -- ----------- ----------- ----------- CASH, END OF PERIODS $ 1,080,963 $ 5,539 $ 1,080,963 =========== =========== ===========
5 PYR ENERGY CORPORATION (A Development Stage Company) Notes to Financial Statements February 28, 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, 1997. 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 February 28, 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 February 28, 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 inclu ded 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 six months and quarter ended February 28, 1998, the Company incurred approximately $397,000 and $258,000, respectively for acquisition of acreage and related direct costs with respect to its identified exploration and exploitation projects. The Company undertook no drilling and had no revenues from oil and gas production during this period. The Company currently anticipates that it will participate in the drilling of one to four 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 su ch wells will be drilled and if drilled that any of these wells will be successful. The Company currently has three active projects in the Southern San Joaquin Basin of California: East Lost Hills - The Company has signed a joint operating agreement with seven established US and Canadian oil and gas exploration companies to participate in the drilling of a deep wildcat well to evaluate the Company's Mastiff prospect at East Lost Hills. The Mastiff well is e xpected to spud early in the second calendar quarter of 1998 and is projected to take three to four months to drill to its target depth of 18,500 feet. As part of the agreement, the industry partners have paid the Company a cash consideration and the Company will retain a carried 6.5% working interest through the tanks in this initial well. The Company currently owns an additional 3.8% working interest for which its share of drilling costs is expected to be approximately $156,000. The Company may elect to sell additional portions of its working interest or may elect to add to its current working interest in the future. School Road - The Company expects to commence drilling its first exploratory well on its School Road project in the second quarter of calendar 1998. The total 100% dry hole cost of this well is projected to be about $850,000. Completion costs are projected at an additional $500 ,000. It is anticipated that this well will take approximately 45 to 60 days to drill. The Company currently holds a 100% working interest and is presenting this project to potential industry partners in order to sell a significant portion of its working interest and thereby limit its financial expenditures for the cost of the well. The Company may drill a second exploratory well on this project late in calendar 1998. The costs for the second well are anticipated to be similar to the first exp loratory well. 8 Southeast Maricopa - The Company has commenced acquisition of 3-D seismic data in its Southeast Maricopa project. Cash commitments of as much as $1,700,000 will be required to fund the 3-D seismic permitting, data acquisition and location damages. The Company also currently holds a 100% working interest in this project and is presenting this project to potential industry partners in order to sell a significant portion of its working interest and thereby limit or eliminate its financial expenditures for the cost of the 3-D seismic project. The Company intends to drill an initial exploratory test well here in late calendar 1998. The Company has other projects identified in the Denver Basin of Colorado and Nebraska and in the Big Horn Basin of Wyoming and Montana. There is currently no plan for drilling activity in these projects during the next 12 months. In addition, the Company continues to identify and evalua te acquisition opportunities for exploration and exploitation opportunities. In connection with the implementation of its exploration, exploitation and potential development program, the Company may use a portion of its existing cash resources to expand its technical and support staff. As a result, the Company anticipates that its general and administrative expenses may increase during the next 12 months. Further, the Company anticipates incurring additional legal, administrative and accounting costs in future periods as a result of being a public company. The Company's cash balance at February 28, 1998 was $1,080,963. The Company has outstanding warrants to issue 2,047,500 shares of its common stock at $1.75 per share. These Warrants were to expire on April 15, 1998. The Company has elected to extend the expiration date of these Warrants to June 30, 1998. To the extent that these warrants expire without being exercised, the Company may be limited in its ability to continue to fund its exploration and exploitation activities until additional financing is available. The Company continues to seek additional sources of capital. To the extent sufficient funding is available and depending on the level of industry partner participation in the Company=s exploration projects, capital expenditures for the next 12 months could be as much as $5,750,000. The Company currently has no committed sources for funding of these capital expenditures. The Company has no outstanding long-term debt and although it has no current plan to do so, it may incur long-term debt in the future in order to fund development of oil and gas producing properties. 9 Results of Operations The six months ended February 28, 1998 compared with the six months ended February 28, 1997 Operations during the six months ended February 28, 1998 resulted in a net income of $215,435 compared to net income of $19,338 for the six months ended February 28, 1997. Partial Sale of Undeveloped Oil and Gas Property. During the six months ended February 28, 1998, the Company sold a portion of its East Lost Hills project to industry partners for a total of $850,078 resulting in a net gain from the sale of $556,197. The Company has retained a working in terest in this project. 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 six months ended February 28, 1998 or 1997. The Company has not owned any proved reserves and had no oil or gas production. The Company recorded nominal depreciation e xpense associated with capitalized office furniture and equipment during the quarters ended February 28, 1998 and 1997. General and Administrative Expense. The Company incurred $361,290 and $28,109 in general and administrative expenses during the six months ended February 28, 1998 and 1997, respectively. The increase results from incurring costs associated with the hiring of technical personnel, leasing of office space, legal and accounting costs relating to the Company's transition to a public company and other costs associated with administering and pursuing the development of the Company's exploration and exploitation plan. Consulting Fee Revenue. The Company generated $10,000 and $47,428 from consulting fees during the six months ended February 28, 1998 and 1997, respectively. These revenues are considered to be ancillary to the Company=s focus of generating revenues from oil and gas production. These revenues have ceased and are not expected to occur in the future. The quarter ended February 28, 1998 compared with the quarter ended February 28, 1997 Operations during the quarter ended February 28, 1998 resulted in a net income of $380,746 compared to net income of $14,707 for the quarter ended February 28, 1997. Partial Sale of Oil and Gas Property. During the quarter ended February 28, 1998, the Company sold a portion of its East Lost Hills project to industry partners for a total of $850,078 resulting in a net gain from the sale of $556,197. The Company has retained a working interest in this project. 10 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 February 28, 1998 or 1997. The Company has not owned any proved reserves and had no oil or gas production. The Company recorded nominal depreciation exp ense associated with capitalized office furniture and equipment during the quarters ended February 28, 1998 and 1997. General and Administrative Expense. The Company incurred $173,373 and $17,740 in general and administrative expenses during the quarters ended February 28, 1998 and 1997, respectively. The increase results from incurring costs associated with the hiring of technical personnel, leasing of office space, and legal and accounting costs relating to the Company's transition to a public company and other costs associated with administering and pursuing the development of the Company's exploration and exploitation plan. Consulting Fee Revenue. The Company generated $0 and $32,528 from consulting fees during the quarters ended February 28, 1998 and 1997, respectively. These revenues are considered to be ancillary to the Company's focus of generating revenues from oil and gas production. These revenues h ave ceased and are not expected to occur in the future. (Intentionally left blank) 11 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 The Company has extended its Class "B" $1.75 Warrants from April 15, 1998 to June 30, 1998 Item 6. Exhibits and Reports on Form 8-K During the quarter ended February 28, 1998, the Registrant filed three reports on Form 8-K reporting events occurring on January 19, 1998, January 21, 1998 and January 30, 1998. 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 April 20, 1998 - -------------------------- and Chairman Of The Board D. Scott Singdahlsen /s/ Andrew P. Calerich Chief Financial Officer April 20, 1998 - -------------------------- Andrew P. Calerich 12 EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS 6-MOS AUG-31-1998 AUG-31-1998 DEC-01-1997 SEP-01-1997 FEB-28-1998 FEB-28-1998 1,080,963 1,080,963 0 0 393,047 393,047 0 0 0 0 1,495,688 1,495,688 481,432 481,432 0 0 1,980,762 1,980,762 42,829 42,829 0 0 0 0 0 0 9,155 9,155 1,925,497 1,925,497 1,980,762 1,980,762 0 0 567,003 592,742 0 0 0 0 180,017 371,267 0 0 0 0 386,986 221,475 6,240 6,240 380,746 215,235 0 0 0 0 0 0 380,746 215,235 .042 .024 .042 .024
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