10QSB

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2004

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from              to             

Commission file Number 0-9669

CALCASIEU REAL ESTATE & OIL CO., INC.

(Exact name of small business issuer as specified in its charter)

Louisiana	72-0144530
(state or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
One Lakeside Plaza, Lake Charles, Louisiana	70601
(Address of principal executive offices)	(Zip Code)

Issuer’s telephone number 337-494-4256

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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  ¨

The number of shares outstanding of the issuer’s No Par Value common stock as of June 30, 2004 was 1,942,495.

Transitional Small Business Disclosure Format.    Yes  ¨    No  x

Calcasieu Real Estate & Oil Co., Inc.

Form 10-QSB

For the Quarter Ended June 30, 2004

INDEX

				Page
Part I.	Financial Information
	Item 1.	Financial Statements
		a.	Balance Sheet as of June 30, 2004	1-2
		b.	Income Statements for the six months ended June 30, 2003 and 2004	3
		c.	Cash Flow Statements for the six months ended June 30, 2003 and 2004	4
		d.	Stockholder’s Equity Statement for the six months ended June 30, 2004	5
		e.	Notes to Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		7
	Item 4.	Controls and Procedures		8
Part II.	Other Information
	Item 6.	Exhibits and Reports on Form 8-K		8
Signatures				9

Part I. Financial Information

Item 1. Financial Statements

Calcasieu Real Estate & Oil Co., Inc.

Balance Sheet

June 30, 2004

Assets

Current Assets
Cash and cash equivalents	$	1,415,665
Accounts receivables		367,868
Total Current Assets		1,783,533
Securities Available for Sale		1,193,266
Property and Equipment (less accumulated depreciation of $69,137)		10,767
Timber (less accumulated depletion of $347,141)		504,817
Land		3,887,776
		4,403,360
	$	7,380,159

See accompanying notes

1

Calcasieu Real Estate & Oil Co., Inc.

Balance Sheet

June 30, 2004

Liabilities & Stockholders’ Equity

Current Liabilities
Trade payables and accrued expenses	$	4,202
Income taxes payable:
Current		34,427
Deferred		28,208
Total Current Liabilities		66,837
Stockholders’ Equity
Common stock, no par value: 3,000,000 shares authorized; 2,100,000 shares issued	$	72,256
Retained earnings		7,597,167
Accumulated other comprehensive income		19,415
		7,688,838
Less cost of treasury stock (157,505 shares)		375,516
		7,313,322
	$	7,380,159

See accompanying notes

2

Calcasieu Real Estate & Oil Co., Inc.

Statements of Income

	Quarter Ended June 30, 2004		Quarter Ended June 30, 2003		Six Months Ended June 30, 2004		Six Months Ended June 30, 2003
Revenues	$	615,085	$	363,087	$	1,142,822	$	813,293
Costs and expenses:
Oil and gas production		32,562		16,276		67,421		35,621
Agriculture		1,016		1,001		2,548		3,837
Timber		6,914		4,549		8,613		12,356
General and administrative		76,641		63,535		182,551		130,810
Depreciation and depletion		3,755		2,330		5,596		4,376
		120,888		87,691		266,729		187,000
Income from operations		494,197		275,396		876,093		626,293
Other income(expense):
Gain-Sale of land						1,426
Interest income		19,944		3,879		24,009		8,486
Dividends on stock		5,371		7,916		13,319		15,833
Gain-Sale of Securities		86,458				86,458
		111,773		11,795		125,212		24,319
Income before income taxes		605,970		287,191		1,001,305		650,612
Federal and state income taxes:
Current		193,877		88,508		314,167		200,152
Deferred
		193,877		88,508		314,167		200,152
Net Income	$	412,093	$	198,683	$	687,138	$	450,460
Per common stock (2004; 1,942,495 shares; 2003; 1,952,294 shares)	$	.21	$	.10	$	.35	$	.23
Dividends per share	$	.07	$	.10	$	.14	$	.15

See accompanying notes

3

Calcasieu Real Estate & Oil Co., Inc.

Statement of Changes in Cash Flows

	Six Months Ended June 30, 2004			Six Months Ended June 30, 2003
Cash Flows From Operating Activities
Net Income	$	687,138		$	450,460
Noncash (income) expenses included in net income:
Depreciation and depletion		5,596			4,376
(Gain) on sale of assets		(87,884	)
(Increase) decrease in current assets		(96,718	)		21,115
Increase (decrease) in current liabilities		(135,158	)		6,446
Net cash provided by operating activities		372,974			482,397
Cash Flows From Investing Activities
Proceeds from sale of land		5,454
Purchase of available for sale securities		(1,060,770	)		(798,905	)
Sale of available for sale securities		1,840,342			701,657
Purchase of property and equipment		(9,719	)		(20,265	)
Net cash provided by (used in) investing activities		775,307			(117,513	)
Cash Flows From Financing Activities
Dividends paid net of refunds		(259,835	)		(489,019	)
Purchase of treasury stock					(26,380	)
Net cash (used in) investing activities		(259,835	)		(515,399	)
Net increase (decrease) in cash and cash equivalents		888,446			(150,515	)
Cash and cash equivalents:
Beginning		527,219			583,327
Ending	$	1,415,665		$	432,812

See accompanying notes

4

Calcasieu Real Estate & Oil Co., Inc.

Statement of Changes in Stockholders’ Equity

Six Months Ended June 30, 2004

	Comprehensive Income			Retained Earnings			Accumulated Other Comprehensive Income			Capital Stock Issued		Treasury Stock
Balance, December 2003				$	7,169,864		$	55,905		$	72,256	$	375,516
Comprehensive income:
Net income first quarter	$	275,045			275,045
Other comprehensive income:
Unrealized gains of securities available for sale:
Unrealized holdings gains occurring during quarter net of taxes of $619		1,027						1,027
Total comprehensive income	$	276,072
Dividends					(123,861	)
Balance, March 31, 2004				$	7,321,048		$	56,932		$	72,256	$	375,516
Comprehensive income:
Net income second quarter	$	412,093			412,093
Other comprehensive income:
Realized gains on securities sold
Net of taxes of $30,535		(55,923	)					(55,923	)
Unrealized holdings gains occurring during quarter net of taxes of $12,271		18,406						18,406
Total comprehensive income	$	374,576
Dividends					(135,974	)
Balance, June 30, 2004				$	7,597,167		$	19,415		$	72,256	$	375,516

See accompanying notes

5

Calcasieu Real Estate & Oil Co., Inc.

Notes to Financial Statements

June 30, 2004

(Unaudited)

Note 1. Basis of Presentation

In the opinion of management, the accompanying balance sheet and related interim statements of income, cash flows, and stockholders’ equity include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in accordance with generally accepted accounting principles of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-QSB should be read in conjunction with Management’s Discussion and Analysis and financial statements and notes thereto included in the Calcasieu Real Estate & Oil Co., Inc. 2003 Form 10-K.

Note 2. Earnings Per Share

Net income per share of common stock for the interim periods is based on the weighted average number of shares outstanding for each period.

Note 3. Contingencies

There are no material contingencies known to management. The Company does not participate in off balance sheet arrangements.

6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Revenue

Revenue for the six months ended June 30, 2004, was $1,142,822, an increase of $329,529 or 40.5% over the first six months of 2003. Revenue for the quarter ended June 30, 2004, was $615,085, an increase of $251,998 or 69.4% over the second quarter of 2003. Virtually all of this increased revenue was from oil and gas income. Both agriculture income and timber income which together totaled $148,192 were up for the six months ended June 30, 2004, a total of $13,642, or 10.1%, over the six months ended June 30, 2004. New production for 2004 from the Castor Creek field produced revenue of $352,301 for the quarter ended June 30, 2004, and $391,622 for the six months ended June 30, 2004. This accounted for more than the total increase in oil and gas revenues for 2004 over 2003. The income from the North Gordon field was up 9.5% due to higher oil prices. Oil and gas revenue from the Castor Creek field and the North Gordon field represented 67.4% of all revenues for the six months ended June 30, 2004. Other oil and gas production decreased in the current year compared to the prior year while average prices increased.

Operating Expenses

Total operating expenses increased $79,729, or 42.6% for the six months ended June 30, 2004, over the six months ended June 30, 2003. Of this amount $31,800 represented higher oil and gas severance taxes due to greater oil and gas production. General and administrative expenses increased $51,741 in 2004 over 2003. The largest increases represented in this amount were the American Stock Exchange annual fee of $15,000, an increase in insurance of $12,590 and an increase in directors expenses of $8,575. All of the increase in general and administrative expenses for the second quarter of 2004 over the second quarter of 2003 is due to the American Stock Exchange annual fee.

Financial Condition

Current assets plus securities available for sale totaled $2,976,799 on June 30, 2004, compared to $2,128,341 on June 30, 2003. During June, 2004, $1,000,000 of U.S. Securities matured and this amount was not reinvested in U.S. Securities until July, 2004. Current liabilities, which were also total liabilities were $66,837 on June 30, 2004, compared to $44,996 on June 30, 2003.

During the quarter ended June 30, 2004, the Company sold preferred stocks from securities available for sale yielding proceeds of $366,194. These securities were sold because their dividends did not qualify for the federal income tax exclusion and because they would be more adversely affected by interest rate increases. The Company replaced them with common stocks costing $512,974 whose dividends qualified for the exclusion.

7

Management believes existing cash and short-term investments together with funds generated from operations should be sufficient to meet operating requirements and provide funds for strategic acquisitions.

Issues and Uncertainties

This Quarterly Report contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of issues and uncertainties such as those listed below, which, among others, should be considered in evaluating the Company’s financial outlook.

Revenues from oil and gas provide most of the Company’s income. All of these revenues come from wells operated by other companies from property belonging to Calcasieu Real Estate & Oil Co., Inc. Consequently, these revenues fluctuate due to changes in oil and gas prices and changes in the operations of the other companies.

Item 4. Controls and Procedures

Under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, the Company has evaluated the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rule 13a -14(c) within 90 days of the filing date of this quarterly report. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective. There were no significant changes in the Company’s internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation.

Part II. Other Information

Item 6. Exhibits and Reports on Form 8-K

(A) Exhibits

31.1 Certifications

31.2 Certifications

32.1 Certification Pursuant to 18 U.S.C. Section 1850 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification Pursuant to 18 U.S.C. Section 1850 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(B) Report of Form 8-K

None filed.

Items 1, 2, 3, 4 and 5 are not applicable and have been omitted.

8

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.

	Calcasieu Real Estate & Oil Co., Inc.
Date: July 26, 2004	/s/ William D. Blake
	William D. Blake
	Vice-President and Treasurer
	Chief Financial Officer
	/s/ Arthur Hollins, III
	Arthur Hollins, III
	President and
	Chief Executive Officer

9

EX-31.1

Exhibit 31.1

Certifications

I, Arthur Hollins, III, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Calcasieu Real Estate & Oil Co., Inc.;

2 Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4. The small business issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5. The small business issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of small business issuer’s board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

Dated: July 26, 2004

/s/ Arthur Hollins, III

Arthur Hollins, III

Chief Executive Officer

EX-31.2

Exhibit 31.2

Certifications

I, William D. Blake, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Calcasieu Real Estate & Oil Co., Inc.;

2 Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4. The small business issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5. The small business issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of small business issuer’s board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

Dated: July 26, 2004

/s/ William D. Blake

William D. Blake

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2003

(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of Calcasieu Real Estate & Oil Co., Inc., a Louisiana corporation (the “Company”), on Form 10-QSB for the six months ended June 30, 2004 as filed with the Securities and Exchange Commission (the “Report”), I, Arthur Hollins, III, Chief Executive Officer of the Company, certify, pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350), that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Arthur Hollins, III

Chief Executive Officer

July 26, 2004

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2003

(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of Calcasieu Real Estate & Oil Co., Inc., a Louisiana corporation (the “Company”), on Form 10-QSB for the six months ended June 30, 2004 as filed with the Securities and Exchange Commission (the “Report”), I, William D. Blake, Chief Financial Officer of the Company, certify, pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350), that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ William D. Blake

Chief Financial Officer

July 26, 2004