-----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, NQFjxuX9y5gXYY+NnHkjkfujy+sYEmuh5tcjcr//gvjoRAlY0wycq0ePxGcg4WXa 5o0Bf0Yes7O45lZ/fBnlxg== 0000950134-98-008899.txt : 19981116 0000950134-98-008899.hdr.sgml : 19981116 ACCESSION NUMBER: 0000950134-98-008899 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARINE PETROLEUM TRUST CENTRAL INDEX KEY: 0000062362 STANDARD INDUSTRIAL CLASSIFICATION: OIL ROYALTY TRADERS [6792] IRS NUMBER: 756008017 STATE OF INCORPORATION: TX FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-08565 FILM NUMBER: 98748465 BUSINESS ADDRESS: STREET 1: NATIONSBANK OF TEXAS N A STREET 2: P O BOX 831402 CITY: DALLAS STATE: TX ZIP: 75283-1402 BUSINESS PHONE: 2145081796 MAIL ADDRESS: STREET 1: P O BOX 831402 CITY: DALLAS STATE: TX ZIP: 75283-1402 10-Q 1 FORM 10-Q FOR QUARTER ENDING SEPTEMBER 30, 1998 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 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 QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998 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 0-8565 MARINE PETROLEUM TRUST (Exact name of registrant as specified in its charter) TEXAS 75-6008017 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) NATIONSBANK, N.A. 75283-0241 P.O. BOX 830241, DALLAS, TEXAS (Zip Code) (Address of principal executive offices)
Registrant's telephone number, including area code (800) 985-0794 None (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 was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No _____ Indicate number of units of beneficial interest outstanding as of the last practicable date.
Title of Each Class of Units Number of Units of Beneficial Interest of Beneficial Interest September 30, 1998 ---------------------------- -------------------------------------- UNITS OF BENEFICIAL INTEREST 2,000,000
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 MARINE PETROLEUM TRUST INDEX
PAGE NUMBER ------ PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS................................ 2 Condensed Consolidated Balance Sheets September 30, 1998 and June 30, 1998 (Unaudited)................................. 2 Condensed Consolidated Statements of Income and Undistributed Income Three Months Ended September 30, 1998 and 1997 (Unaudited)...................................... 3 Condensed Consolidated Statements of Cash Flows Three Months Ended September 30, 1998 and 1997 (Unaudited)............. 4 Notes to Condensed Consolidated Financial Statements........ 5 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS....................... 6 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK...................................................... 8 PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.................... 8 Signatures.................................................. 9 Exhibit Index............................................... 10
3 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS MARINE PETROLEUM TRUST AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS SEPTEMBER 30, 1998 AND JUNE 30, 1998 (UNAUDITED) ASSETS
SEPTEMBER 30 JUNE 30 1998 1998 ------------ ---------- Current Assets: Cash and cash equivalents................................. $1,826,119 $1,922,336 Oil and gas royalties receivable.......................... 292,031 399,007 Receivable from affiliate................................. 135,885 116,377 ---------- ---------- Total current assets.............................. 2,254,035 2,437,720 ---------- ---------- Investment in affiliate..................................... 224,946 306,670 Office equipment, at cost less accumulated depreciation..... 555 555 Producing oil and gas properties............................ 7 7 ---------- ---------- $2,479,543 $2,744,952 ========== ========== LIABILITIES AND TRUST EQUITY Current Liabilities: Accounts payable.......................................... $ 629,013 $ 926,663 Income taxes payable...................................... 6,821 9,021 ---------- ---------- Total current liabilities......................... 635,834 935,684 Trust Equity: Corpus -- authorized 2,000,000 units of beneficial interest, issued 2,000,000 units at nominal value...... 8 8 Undistributed income...................................... 1,843,701 1,809,260 ---------- ---------- Total trust equity................................ 1,843,709 1,809,268 ---------- ---------- $2,479,543 $2,744,952 ========== ==========
2 4 MARINE PETROLEUM TRUST AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND UNDISTRIBUTED INCOME FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)
THREE MONTHS ------------------------ 1998 1997 ---------- ---------- Income: Oil and gas royalties..................................... $ 669,234 $ 608,210 Equity in earnings of affiliate........................... 48,442 116,947 Interest income........................................... 26,486 25,293 ---------- ---------- 744,162 750,450 ---------- ---------- Expenses -- General and administrative.................... 58,382 35,705 ---------- ---------- Income before federal income taxes..................... 685,780 714,745 Federal income taxes of subsidiary........................ -- 2,400 Net income........................................ 685,780 712,345 Undistributed income at beginning of period................. 1,809,260 2,044,795 ---------- ---------- 2,495,040 2,757,140 Distributions to unitholders................................ 651,339 873,658 ---------- ---------- Undistributed income at end of period....................... $1,843,701 $1,883,482 ========== ========== Net income per unit......................................... $ 0.34 $ 0.36 ========== ========== Distributions per unit...................................... $ 0.33 $ 0.44 ========== ==========
3 5 MARINE PETROLEUM TRUST AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)
1998 1997 ---------- ---------- Cash flows from operating activities: Net income................................................ $ 685,780 $ 712,345 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation........................................... -- 731 Equity in undistributed earnings of affiliate.......... 81,724 (77,405) Change in assets and liabilities: Oil and gas royalties receivable..................... 106,976 267,509 Receivables from affiliate........................... (19,508) 12,736 Accounts payable..................................... (297,650) -- Income taxes payable................................. (2,200) (600) ---------- ---------- Net cash provided by operating activities......... 555,122 915,316 ---------- ---------- Cash flows used in investing activities -- Purchase of office equipment......................... -- (2,219)> Cash flows from financing activities -- distributions to unitholders............................................... (651,339) (873,658) ---------- ---------- Net increase (decrease) in cash and cash equivalents..................................... (96,217) 39,439 ---------- ---------- Cash and cash equivalents at beginning of period............ 1,922,336 1,759,718 ---------- ---------- Cash and cash equivalents at end of period.................. $1,826,119 $1,799,157 ========== ==========
4 6 MARINE PETROLEUM TRUST AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1998 (UNAUDITED) ACCOUNTING POLICIES The financial statements include the financial statements of Marine Petroleum Trust (the "Trust") and its wholly-owned subsidiary, are condensed, and should be read in conjunction with the annual report for the fiscal year ended June 30, 1998. The financial statements included herein are unaudited, but in the opinion of management include all adjustments necessary for a fair presentation of the results of operations for the periods indicated. UNDISTRIBUTED INCOME Undistributed income on September 30, 1998 includes $1,105,407 applicable to the Trust and $738,294 applicable to Marine Petroleum Corporation, the Trust's wholly-owned subsidiary. Distributions to unitholders are dependent on the volume and price of oil and gas sold by others and will fluctuate from quarter to quarter. ACCOUNTS PAYABLE Marine Petroleum Corporation has provided an account payable of $628,250 to cover possible refunds that may be required upon redetermination of gas prices for royalty payments in prior periods. During the current quarter, Marine Petroleum Corporation determined that $130,000 of the previously established account payable was no longer required. Accordingly accounts payable was reduced and oil and gas royalties was increased by $130,000. 5 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL CONDITION -- LIQUIDITY AND CAPITAL RESOURCES The Trust is a "royalty trust" with overriding royalty interests in oil and gas leases in the Gulf of Mexico. The Trust's indenture (and the charter and by-laws of its subsidiary) expressly prohibit the operation of any kind of trade or business. All royalties received by the Trust, less administrative expenses, are distributed quarterly to unitholders. Since the Trust's sole purpose is to collect and distribute cash collected from royalties, there are no requirements for capital. GENERAL Net income for the three months ended September 30, 1998 amounted to $.34 per unit which was down approximately 6% from the $.36 realized for the three months ended September 30, 1997. Income from royalties increased approximately 10%, including the additional income referred to in the "Notes to Condensed Consolidated Financial Statements." The Trust's equity in the income of Tidelands Royalty Trust B decreased approximately 59% for the current three months as compared to the comparable period a year ago. Distributions fluctuate from quarter to quarter. The amount of each distribution is determined by the amount of cash available for distribution on the date the distribution is determined. The amount of each distribution is determined 10 days before the applicable record date. The following table presents the net production quantities of oil and gas and net income and distributions per unit for the last five quarters.
PRODUCTION ---------------------- NET CASH QUARTER OIL(bbls) GAS(mcf) INCOME DISTRIBUTION - ------- ---------- --------- ------ ------------ September 30, 1997...................................... 17,919 183,059 $.36 $.44 December 31, 1997....................................... 18,946 241,932 .47 .35 March 31, 1998.......................................... 10,301 175,595 .34 .51 June 30, 1998........................................... 15,422 153,557 .32 .31 September 30, 1998...................................... 12,844 223,920 .34 .33
The Trust's current fiscal year began on July 1, 1998. Since that date, operators have completed five new development wells on leases in which the Trust has an interest. One of the wells was not successful while four were completed as either oil or gas producers. At the present time operators have nine development wells in process and have identified five locations for development wells to be drilled in the future. In addition to drilling operations on new wells, the operators work over old wells by re-completing them in other producing formations. Because operators do not report their drilling operations to the Trust, the Trust must rely on public records for information regarding drilling operations. The Trust's revenues are derived from the oil and gas production activities of unrelated parties. The Trust's revenues and distributions fluctuate from period to period based upon factors beyond the Trust's control, including without limitation the number of productive wells drilled and maintained on leases subject 6 8 to the Trust's interest, the level of production over time from such wells and the prices at which the oil and gas from such wells is sold. The Trust believes that it will continue to have revenues sufficient to permit distributions to be made to unitholders for the foreseeable future, although no assurance can be made regarding the amounts thereof. The foregoing sentence is a forward-looking statement. Factors that might cause actual results to differ from expected results include reductions in prices or demand for oil and gas, which might then lead to decreased production; reductions in production due to depletion of existing wells or disruptions in service, including as the result of storm damage to production facilities, blowouts or other production accidents, and geological changes such as cratering of productive formations; expiration or release of leases subject to the Trust's interests; and the discontinuation by parties subject to the contract dated April 30, 1951 between Tidelands' predecessors and Gulf Oil Corporation of their efforts to obtain leases in the area that is subject to Tidelands' interests. Important aspects of the Trust's operations are conducted by third parties. These include the production and sale of oil and gas and the calculation and payment of royalties to the Trust, which are conducted by oil and gas companies that lease tracts subject to the Trust's interests. Similarly, the Trust's distributions are processed and paid by the Bank of New York. Any disruption of the Trust's operations that results from Year 2000 problems of these third parties could have a material adverse effect of the Trust. The Trust does not have access to information that would permit it to determine the status on these third parties' efforts to analyze and address Year 2000 issues. The Trust intends to monitor these parties' public announcements and disclosure regarding Year 2000 issues, and to seek direct assurances where appropriate, in an effort to ensure that these parties address Year 2000 issues that could adversely affect the Trust. RESULTS OF OPERATIONS -- THREE MONTHS ENDED SEPTEMBER 30, 1998 Net income for the quarter ended September 30, 1998 amounted to $685,780, which was approximately 4% less than the $712,345 realized in the comparable period of 1997. The volume of oil sold decreased approximately 28% over the comparable period last year, and the average price per barrel of oil decreased to $13.95 per barrel from $17.64 a year ago. Natural gas volumes sold increased approximately 22% in the current period from the comparable period last year. Natural gas volumes amounted to 223,920 mcf this period and were 183,059 mcf for the comparable period last year. The average price realized increased $.21 to $2.47 from $2.26 a year ago. The increase in the average price realized for natural gas resulted from an increase in gas revenue due to the $130,000 reduction in the reserve created for possible overpayment of royalties on gas in prior periods. Without this adjustment the average price realized for natural gas during this quarter would have been $1.89. There were no comparable adjustments in the prior year. Income from the equity interest in Tidelands decreased approximately 59% in the current period over the comparable period last year. Tidelands reported a 44% decline in oil production and a 66% decline in natural gas production during the quarter ended September 30, 1998. Marine Petroleum Corporation has entered into an agreement with NationsBank to provide collection, accounting and reporting services with respect to its overriding royalty properties. During the current quarter general and administrative expense was increased by a one time set up fee of $19,000. This item accounts for most of the increase in general and administrative expense in the current quarter. 7 9 The quantities of oil and gas sold and the average prices realized (including the equity in Tidelands) for the three months ended September 30, 1998, and those realized in the comparable 1997 quarter, are presented in the following table:
1998 1997 -------- ------- OIL Barrels sold.............................................. 12,844 17,919 Average price............................................. $ 13.95 $ 17.64 NATURAL GAS Mcf sold.................................................. 223,920 183,059 Average price............................................. $ 2.47 $ 2.26
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Not applicable. PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) The following exhibits are included herein:
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT ------- ---------------------- 27 -- Financial Data Schedule
(b) Current Reports on Form 8-K: None 8 10 SIGNATURES 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. MARINE PETROLEUM TRUST NationsBank, N.A., Trustee November 12, 1998 By: /s/ JANE J. SHEA ---------------------------------- Jane J. Shea Vice President November 12, 1998 /s/ R. RAY BELL ------------------------------------ Principal Accounting Officer 9 11 INDEX TO EXHIBITS
EXHIBIT NO. ITEM - ------- ---- 27 Financial Data Schedule
EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS JUN-30-1999 JUL-01-1998 SEP-30-1998 1,826,119 0 292,031 0 0 2,254,035 562 0 2,479,543 635,834 0 0 0 8 1,843,701 2,479,543 669,234 744,162 0 0 58,382 0 0 685,780 0 685,780 0 0 0 685,780 0.34 0.34
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