-----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, Feb/cdKmcvbio/ZN0fimz5apjR4Bng5Q+VlIHChODi3IG2FF7AR5EQL7zshGcCOd e+OLPV3VhzZGC7XP2/8FGw== 0000277952-96-000002.txt : 19961018 0000277952-96-000002.hdr.sgml : 19961018 ACCESSION NUMBER: 0000277952-96-000002 CONFORMED SUBMISSION TYPE: 10-Q CONFIRMING COPY: PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960531 FILED AS OF DATE: 19961017 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: OIL CITY PETROLEUM INC CENTRAL INDEX KEY: 0000277952 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE OPERATORS (NO DEVELOPERS) & LESSORS [6510] IRS NUMBER: 751614001 STATE OF INCORPORATION: TX FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-09098 FILM NUMBER: 00000000 BUSINESS ADDRESS: STREET 1: 5579 S LEWIS CITY: TULSA STATE: OK ZIP: 74105 BUSINESS PHONE: 9187490483 MAIL ADDRESS: STREET 1: 5579 S LEWIS CITY: TULSA STATE: OK ZIP: 74105 10-Q 1 FORM-10Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Quarter Ended May 31, 1996 Commission File Number 0-9098 OIL CITY PETROLEUM, INC. (Exact name of Registrant as specified in its Charter) Texas 75-1614001 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 5579 South Lewis, Tulsa, Oklahoma 74105 (Address of principal executive offices) (Zip Code) (918) 749-0483 (Registrant's telephone number, including area code) Indicate by check mark whether the Registrant (1) has filed all reports re- quired to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days. Yes X No The Registrant had 14,912,492 shares of common stock, no par value outstanding as of the close of the period covered by this report. OIL CITY PETROLEUM, INC. INDEX Page PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Statement of Operations - Nine Months Ended May 31, 1996 and 1995 3 Balance Sheet - May 31, 1996 and August 31, 1995 4 Statement of Cash Flows - Nine Months Ended May 31, 1996 and 1995 6 Notes to Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 9 SIGNATURES 10 PART I. FINANCIAL INFORMATION Item 1. Financial Statements OIL CITY PETROLEUM, INC. STATEMENT OF OPERATIONS (UNAUDITED) Three Months Ended Nine Months Ended May 31, May 31, 1996 1995 1996 1995 Revenues: Oil and Gas Sales $ 8,758 $ 13,355 $ 32,525 $ 35,273 Rental Income 9,035 8,327 27,673 20,033 Interest and Other Income 329 371 1,061 991 Gain (Loss) on Sale of Assets -0- 50 (175) 525 18,122 22,103 61,084 56,822 Costs and Expenses: Oil & Gas Operating Expenses 18,814 11,057 41,005 36,960 Rental Expenses 6,578 3,959 22,476 18,439 Depreciation, Depletion & Amort. 5,274 6,075 16,041 18,225 Administrative and General 18,309 32,839 77,332 82,078 Interest Expense- Non-Affiliates 4,312 4,598 13,160 13,964 Interest Expense- Affiliates 21,345 19,352 62,620 56,030 74,632 77,880 232,634 225,696 Net Income or (Loss) $ (56,510) $ (55,777) $(171,550) $(168,874) Net Income or (Loss) Per Share $ (.01) $ (.01) $ (.01) $ (.01) Average Number of Shares Outstanding 14,912,492 14,912,492 14,912,492 14,912,492 SEE NOTES TO FINANCIAL STATEMENTS OIL CITY PETROLEUM, INC. BALANCE SHEET (UNAUDITED) May 31, Aug. 31, ASSETS 1996 1995 Current Assets: Cash $ 2,264 $ 3,964 Short-term Investments 25,000 25,000 Accounts Receivable 11,714 12,693 Crude Oil Inventory 3,315 3,315 Other Current Assets 2,221 3,957 Total Current Assets 44,514 48,929 Property and Equipment, at Cost: Oil and Gas Properties, Successful Efforts Method 1,091,042 1,088,142 Field Equipment 7,945 7,945 Building, Land and Office Equipment 256,831 306,393 Total Property and Equipment, at Cost 1,355,818 1,402,480 Less Accumulated Depreciation, Depletion, and Amortization (708,245) (736,500) Net Property and Equipment 647,573 665,980 Other Assets -- -- Total Assets $ 692,087 $ 714,909 SEE NOTES TO FINANCIAL STATEMENTS OIL CITY PETROLEUM, INC. BALANCE SHEET (UNAUDITED) May 31, Aug. 31, LIABILITIES AND SHAREHOLDERS' EQUITY 1996 1995 Current Liabilities: Accounts Payable and Accrued Expenses $ 16,188 $ 24,171 Current Portion of Long-Term Debt 10,963 10,963 Note and Accrued Interest Payable to Affiliate 1,410,385 1,245,561 Total Current Liabilities 1,437,536 1,280,695 Long-Term Debt Less Current Portion 151,447 159,560 Shareholders' Equity: Common Stock, No Par Value - Authorized 30,000,000 Shares, Issued and Outstanding 14,912,492 Shares 5,692,571 5,692,571 Additional Paid-in Capital 1,567,243 1,567,243 Accumulated Deficit (8,156,710) (7,985,160) Total Shareholders' Equity (Deficit) (896,896) (725,346) Total Liabilities and Shareholders' Equity $ 692,087 $ 714,909 SEE NOTES TO FINANCIAL STATEMENTS OIL CITY PETROLEUM, INC. STATEMENT OF CASH FLOWS (UNAUDITED) Nine Months Ended May 31, 1996 1995 Cash Flows from Operating Activities: Net Loss $(171,550) $(168,874) Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation, Depletion, and Amortization 16,041 18,225 Interest Expense - Affiliates 62,620 56,030 Net (Gain) Loss on Sale of Assets 175 (525) Change in Assets and Liabilities: (Increase) Decrease in Receivables 979 (6,342) (Increase) Decrease in Inventory -- -- (Increase) Decrease in Other Current Assets 1,736 1,489 Increase (Decrease) in Accounts Payable and Accrued Expenses (7,983) (12,619) Total Adjustments 73,568 56,258 Net Cash Used in Operating Activities (97,982) (112,616) Cash Flows from Investing Activities: Decrease (Increase) in Capital Expenditures (2,900) (6,270) Proceeds from Sale of Assets 5,090 525 Net Cash Provided (Used) by Investing Activities 2,190 (5,745) Cash Flows from Financing Activities: Increase in Borrowings from Affiliate 102,205 143,503 Principal Payments on Long-term Debt (8,113) (7,309) Net Cash Provided by Financing Activities 94,092 136,194 Net Increase (Decrease) (1,700) 17,833 Cash at Beginning of Year 3,964 911 Cash at End of Period $ 2,264 $ 18,744 SEE NOTES TO FINANCIAL STATEMENTS NOTES TO FINANCIAL STATEMENTS (UNAUDITED) BASIS OF PRESENTATION The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of the management, all adjustments considered necessary for a fair presentation have been included. Operating results for the nine-month period ended May 31, 1996 are not necessarily indicative of the results that may be expected for the year ended August 31, 1996. For further information, refer to the financial statements and notes thereto included in the Registrant's annual report on Form 10-K for the year ended August 31, 1995. NET LOSS PER SHARE Loss per share is computed based on the net loss for the period, divided by the weighted average number of common shares outstanding during each period. Common equivalent shares are not included in the computation because of their anti-dilutive effect. LONG-TERM DEBT Since 1987, cash advances have been made to the Registrant by National Oil & Gas, Inc., an affiliated entity, in order to finance working capital deficits. The terms of the notes representing such cash advances are 6% to 9% interest with all principal and accrued interest due on demand. Outstanding principal and accrued interest of $1,410,385 at May 31, 1996 are classified on the balance sheet as a current liability as these notes are payable on demand. National Oil & Gas, Inc. is an affiliated company controlled by Mr. William G. Moser, Chairman of the Board of the Registrant. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations FINANCIAL CONDITION In view of the continuing volatile conditions in the oil and gas industry and the significant sales of oil and gas properties in recent years, the Registrant anticipates that cash flow from operations will not be sufficient to provide for the payment of its indebtedness, necessitating the renewal or refinancing of such indebtedness at maturity. No assurance can be given that the Registrant will be able to renew or refinance such indebtedness or that additional cash infusions will be available. RESULTS OF OPERATIONS Three Months Ended May 31, 1996 and 1995 Oil and gas sales of $8,758 for the period ended May 31, 1996 decreased $4,597 from the same quarter of the prior year. This increase is primarily due to prairie grass fires which damaged plastic flow lines, shutting down production for several weeks. Rental income of $9,035 increased $708 from the same quarter of the prior year due to a higher occupancy rate in the current year. Oil & Gas operating expenses of $18,814 increased $7,757 from $11,057 experienced in the same quarter of the prior year, due to the grass fires combined with some well workovers to stimulate production. Rental expenses of $6,578 increased $2,619 from the same quarter of the prior year, due to higher utility bills combined with new carpeting for a previously vacant office suite. Depreciation and depletion expense of $5,274 decreased $801 from $6,075 experienced during the same quarter of the prior year due to lower depletion rates on oil leases, and due to the sale of a depreciating storage building in Louisiana. Administrative and general expense of $18,309 decreased $14,530 from that experienced during the same period of the prior year, due to lower fees from accountants, and due to the fact that no legal fees were incurred as they were in the same period of the prior year. Interest expense to affiliates increased $1,993 from that experienced in the same period of the prior year because the Registrant's debt to affiliates has increased $110,475 since that time. Nine Months Ended May 31, 1996 and 1995 Oil and gas sales of $32,525 for the period ended May 31, 1996 decreased $2,748 from $35,273 experienced during the same period of the prior year. The decrease is primarily due to prairie grass fires which shut down production for several weeks, offset by increased production from well workovers and equipment upgrades made in the previous year. Rental income of $27,673 increased $7,640 from the same period of the prior year due to the rental of 1,200 square feet of previously vacant office space. Oil & gas operating expenses of $41,005 increased $4,045 from $36,960 experienced during the same period of the prior year, mostly due to the grass fires combined with some well workovers to stimulate production. Rental expenses of $22,476 increased $4,037 from $18,439 experienced during the same period of the prior year, due to higher utility bills, combined with new carpeting for a previously vacant office suite. Depreciation and depletion expense of $16,041 decreased $2,184 from $18,225 experienced during the same period of the prior year due to lower depletion rates on oil leases, and due to the sale of a depreciating storage building in Louisiana. Administrative and general expense of $77,332 decreased $4,746 from $82,078 experienced during the same period of the prior year, due to the fact that no legal fees were incurred this year, partially offset by higher fees from consultants. Interest expense to affiliates increased $6,590 from that experienced in the same period of the prior year because the Registrant's debt to affiliates has increased $110,475 since that time. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits required by Item 601 of Regulation S-X: None. (b) Reports on Form 8-K during the three months ended May 31, 1996: None. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. OIL CITY PETROLEUM, INC. Date: July 12, 1996 Herman E. Nichols, Jr. Herman E. Nichols, Jr. President -----END PRIVACY-ENHANCED MESSAGE-----