-----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, Wi3gt16kemLuZoP2VYGx7u57JX7u2hb9yatbRESU/38ED9r/WtUn8ZWi/lQStMGV 84MQiF2exRjQM+4Se6qx2g== 0000025743-97-000011.txt : 19970918 0000025743-97-000011.hdr.sgml : 19970918 ACCESSION NUMBER: 0000025743-97-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970915 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CROFF ENTERPRISES INC CENTRAL INDEX KEY: 0000025743 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 870233535 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-16731 FILM NUMBER: 97680373 BUSINESS ADDRESS: STREET 1: 1675 BROADWAY STREET 2: STE 1030 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3036281963 MAIL ADDRESS: STREET 1: 1675 BROADWAY STREET 2: SUITE 1030 CITY: DENVER STATE: CO ZIP: 80202 FORMER COMPANY: FORMER CONFORMED NAME: CROFF OIL CO DATE OF NAME CHANGE: 19920703 10-Q 1 9 AMENDED FORM 10-Q/QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended June 30, 1997 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _______________ to _____________________ Commission File Number: 1-100 CROFF ENTERPRISES, INC. (Exact name of registrant as specified in its charter) Utah 87-0233535 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1675 Broadway, Suite 1030, Denver, CO 80202 (Address of principal executive offices) (Zip Code) (303) 623-1963 (Registrant's telephone number, including area code) _________________________________________________________________ ______ (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the Registrant (1) has 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 has required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. X Yes ______ No APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the Registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. _____ Yes ______ No APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 516,265 shares, one class only, as of June 30, 1997. INDEX INDEX TO INFORMATION INCLUDED IN THE QUARTERLY REPORT (FORM 10-Q) TO THE SECURITIES AND EXCHANGE COMMISSION FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED). _________________________________________________________________ PART I. FINANCIAL INFORMATION Page Number Balance Sheets as of December 31, 1996 and June 30, 1997 3, 4 Statements of Operations for the Three and Six Months Ended June 30, 1996 and 1997 5 Statements of Cash Flows for the Six Months Ended June 30, 1996 and 1997 6 Notes to Financial Statements 7 Management's' Discussion and Analysis of Financial Condition and Results of Operations 7 PART II. OTHER INFORMATION Reports on Form 8-K 9 Signatures. 10 _________________________________________________________________ The condensed financial statements included herein are for the Registrant, Croff Enterprises, Inc. The financial statements for the six months ended June 30, 1997 and 1996 are unaudited; however, they reflect all adjustments which, in the opinion of management, are necessary to present fairly the results of the interim periods. All adjustments necessary to a fair representation of the financial statements are of a normal recurring nature. PART I: FINANCIAL INFORMATION CROFF ENTERPRISES, INC. BALANCE SHEET December 31, June 30, 1996 1997 CURRENT ASSETS: Cash and Cash Equivalents: $184,564 $214,145 Marketable equity securities 10,500 9,750 Accounts receivable: Oil and gas purchasers 31,764 25,722 Refundable income taxes 4,362 6,362 Other advances 0 0 Total current assets $231,191 $255,979 PROPERTY AND EQUIPMENT, AT COST: Oil & gas properties, successful efforts method: Proved properties $329,700 $348,752 Unproved properties 101,901 101,901 431,601 450,653 Less accumulated depletion and depreciation (229,621) (241,621) Net property and equipment 201,980 209,032 Coal Investment 82,533 82,533 Total Assets 515,704 547,544 PART I: FINANCIAL INFORMATION CROFF ENTERPRISES, INC. BALANCE SHEET December 31 June 30, 1996 1997 Current Liabilities: Accounts payable $ 3,164 $1,476 Accrued liabilities 1,660 3,585 Total current liabilities 4,824 5,061 Stockholders' equity: Class A Preferred, none issued Class B Preferred stock, no par value; 520,000 authorized, 516,506 shares issued 233,744 233,744 Common stock, $.10 par value 20,000,000 shares authorized 579,143 shares issued 57,914 57,914 Capital in excess of par value 672,799 672,799 Accumulated deficit (370,931) (339,078) 593,526 625,379 Less treasury stock at cost, 62,628 shares in 1996 and 62,878 in 1997 (82,646) (82,896) Total stockholders' equity 510,880 542,483 $515,704 $547,544 CROFF ENTERPRISES, INC. Statement of Operations For the Three And Six Months Ended June 30, 1997 (Unaudited) For Three Months For Six Months Ended Ended 6/30/96 6/30/97 6/30/96 6/30/97 Revenue: Oil and gas sales........ $ 39,984 $47,515 $ 87,469 $105,517 Other income (loss)..... 21,699 1,772 22,687 3,994 Total revenue $ 61,683 $49,287 $110,156 $109,511 Costs and expenses: Lease operating expense.. $ 9,682 8,897 $ 20,311 18,171 Depreciation and depletion 4,500 6,000 12,000 12,000 General and administrative 20,438 21,631 39,813 41,648 Rent Expense - Related Party 2,940 2,940 5,880 5,880 $ 37,560 $39,468 $ 78,004 $77,699 Net income (loss) $ 24,123 $ 9,819 $ 32,152 $31,812 Earnings (Loss) Per Share $ .04 $ .01 $ .06 $ .06 CROFF ENTERPRISES, INC. Statement of Cash Flows For the Six Months Ended June 30, 1996 1997 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $32,152 $31,812 Adjustments to reconcile net income to net cash provided by operating activities and depletion: 12,000 12,000 Change in assets and liabilities: Decrease(Increase) in Receivables 453 4,041 Decrease(Increase) in other assets 4,800 0 Decrease(Increase) in accounts payable (1,932) 1,688 Decrease(Increase) in accrued liabilities 21 (1,409) (Gains)Losses on Sale of Assets (22,247) 0 Total adjustments $ (6,905) 16,320 Net cash provided by operating activities: 25,247 48,132 CASH FLOWS FROM INVESTING ACTIVITIES: (Purchase)Sale of oil & gas properties: 118,020 (19,052) (Purchase)Return of Coal Investment 4,255 0 Sale(Depreciation) of marketable equity securities 5,016 750 127,292 (18,302) CASH FLOWS FROM FINANCING ACTIVITIES: Purchase of treasury stock 0 (250) Proceeds from Note Payable (50,000) 0 Increase (decrease) in cash: 102,539 29,580 Cash at beginning of period: $ 37,933 $184,565 Cash at end of period: $140,472 $214,145 CROFF ENTERPRISES, INC. NOTES TO FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 1997 BASIS OF PREPARATION The condensed financial statements for the three and six month periods ended June 30, 1997 and 1996 in this report have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission and reflect, in the opinion of management, all adjustments necessary to present fairly the results of the operations of the interim periods presented herein. Certain reclassifications have been made to the prior years' financial statements to conform to the 1997 presentation. Certain information in footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations, although the Company believes the disclosures presented herein are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1996, which report has been filed with the Securities and Exchange Commission, and is available from the Company. MANAGEMENT'S' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Three-Month Period Ended June 30, 1997, as Compared to the Three-Month Period Ended June 30, 1996. OIL AND GAS OPERATIONS Oil and gas income, primarily from royalties, for the three months ended June 30, 1997 was $47,515 compared to $39,984 for the quarter ending June 30, 1996. This increase was due to increased production of oil and natural gas primarily from new purchases and increased natural gas production on existing leases. Prices for oil decreased from approximately $20 per barrel in this quarter in 1996, to slightly over $18 per barrel, this year. Natural gas prices were approximately even. Third party drilling activity in 1996 added to the Company's production in 1997, which more than offset the decrease in prices. Production costs, which include lease operating expenses and all production related taxes, for the three months ended June 30, 1997, were stable, $8,897 in 1997, compared to $9,682 during the same time period of the prior year. The low operating expenses are due to the large amount of royalty income. Depletion increased due to the purchase of new wells. OTHER INCOME During the three month period ended June 30, 1997, the Company had other income of $1,772. The other income figure was $21,699 for the quarter ending June 30, 1996. This was due to a gain from the sale of producing leases during this quarter last year, while the current year reflects primarily interest income. GENERAL AND ADMINISTRATIVE EXPENSES General and administrative expenses for the quarter ending June 30, 1997, were $21,631 plus rent expense of $2,940 for a total of $24,571 compared to $20,438, plus rent expense of $2,940, for a total of $23,378 in the same period in 1996. The Company expects general and administrative costs to remain stable this year. Six Month Period Ended June 30, 1997, as Compared to the Six Month Period Ended June 30, 1996. OIL AND GAS OPERATIONS Oil and gas income, primarily from royalties, for the six months ending June 30, 1997, was $105,517 compared to $87,469 for the six months ended June 30, 1996. This increase was caused by higher oil and natural gas production, primarily increased natural gas from coal seam methane wells, and new well purchases. This was offset by lower oil prices compared to one year ago. Production costs, which include lease operating expenses and all production related taxes, for the six months ended June 30, 1997, were $18,171 in 1997, a decrease from $20,311 during the six months ended June 30, 1996. There was no significant difference in operating costs from 1996 to 1997. OTHER INCOME. During the six month period ended June 30, 1997, the Company had other income of $3,994, primarily from interest and dividend earnings. During the first six months of 1996, the Company had other income of $22,687, primarily from the sale of oil and gas leases in addition to interest income. The Company also received a small bonus from leasing acreage during the fist six months of 1997. GENERAL AND ADMINISTRATIVE. General and administrative expenses for the period ending June 30, 1997, were $41,648 compared to $39,813 for the six month period ending June 30, 1996. The difference was due to additional expenses for listing the Company's financials in Moody's Financial Services. FINANCIAL CONDITION As of June 30, 1997, the Company's current assets of $255,979 exceeded current liabilities of $5,061 by $250,918. As of December 31, 1996, the Company's current assets were $231,191, and current liabilities were $4,824 for an increase in the Company's working capital position of approximately $29,612. This increase was due to the Company accumulating cash flow, most of which it has spent on acquiring an oil and gas lease in July, 1997. The Company intends to maintain cash while it seeks an acquisition or more producing leases. The Company expects to continue to operate at a positive cash flow for the calendar year. PART II. OTHER INFORMATION ITEM 6(b). REPORTS ON FORM 8-K. The registrant has filed no reports on Form 8-K for the period ending June 30, 1997. S I G N A T U R E S Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. REGISTRANT: CROFF ENTERPRISES, INC. By____________ _____________________ Gerald L. Jensen Chief Executive Officer and Chief Financial Officer By_________________________________ Beverly Licholat Chief Accounting Officer Date:___________________, 1997 -----END PRIVACY-ENHANCED MESSAGE-----