-----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, NuGBB7II7WsGvbYarktjBolNVqojZr4mMpos31sydc2JI97lACEBktEq1uaTLm4g mxtTSuEn3kqzHtAC03wK7Q== 0000077864-98-000004.txt : 19980812 0000077864-98-000004.hdr.sgml : 19980812 ACCESSION NUMBER: 0000077864-98-000004 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980811 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PETROL INDUSTRIES INC CENTRAL INDEX KEY: 0000077864 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 751282449 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-03912 FILM NUMBER: 98682003 BUSINESS ADDRESS: STREET 1: P O BOX 7941 CITY: SHREVEPORT STATE: LA ZIP: 71137-7941 BUSINESS PHONE: 3814246396 MAIL ADDRESS: STREET 1: P.O. BOX 7941 CITY: SHREVEPORT STATE: LA ZIP: 71137-7941 10QSB 1 PETROL INDUSTRIES, INC. FORM 10QSB, 06/30/98 1 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-QSB OMB Approval OMB Number: xxxx-xxxx Expires: Approval Pending Estimated Average Burden Hours Per Response: 1.0 (Mark One) [X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended: June 30, 1998 [ ] Transition report under Section 13 or 15(d) of the Exchange Act For the transition period from __________ to __________ Commission File Number: 0-3912 PETROL INDUSTRIES, INC. (Exact Name of Small Business Issuer as Specified in its Charter) NEVADA 75-1282449 (State or Other Jurisdiction of (I.R.S. Employer Identification No.) Incorporation of Organization) 202 N. THOMAS, SUITE 4 SHREVEPORT, LA 71107-6539 (Address of Principal Executive Offices) (318) 424-6396 (Issuer's Telephone Number, Including Area Code) N/A (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report) 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 [XX] NO [ ] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. YES [ ] NO [ ] APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 1,597,196 2 PART I - FINANCIAL INFORMATION Item 1. Financial Statements. PETROL INDUSTRIES, INC. & SUBSIDIARIES Consolidated Balance Sheets June 30, December 31, 1998 1997 ASSETS ----------- ------------ ------ (unaudited) Current assets: Cash and cash equivalents $ 94,672 174,809 Accounts receivable: Trade 39,590 56,499 Other 9,497 9,817 --------- --------- 49,087 66,316 Inventory 23,388 43,643 Prepaid expenses 9,441 2,468 --------- --------- Total current assets 176,588 287,236 --------- --------- Property and equipment, at cost: Land 7,000 7,000 Developed and undeveloped oil and gas properties-successful efforts method 4,189,540 4,180,055 Trucks and other operating equipment 360,074 349,911 Furniture and fixtures 44,015 44,015 --------- --------- 4,600,629 4,580,981 Less accumulated depreciation, depletion and amortization 4,521,409 4,521,200 --------- --------- 79,220 59,781 --------- --------- Cash surrender value of life insurance, net 62,296 56,746 Other assets 1,107 1,107 --------- --------- $ 319,211 404,870 ========= ========= LIABILITIES AND STOCKHOLDERS' DEFICIT ------------------------------------- Current liabilities: Accounts payable $ 37,929 47,611 Payable to interest owners 309,240 303,692 Payable to officer, net 485,165 391,701 Accrued expenses 136,430 112,991 --------- --------- Total current liabilities 968,764 855,995 Stockholders' deficit: Preferred stock-no par value. Authorized 1,000,000 shares; no shares issued or outstanding --- --- Common stock-$.10 par value. Authorized 10,000,000 shares; issued and outstanding 1,597,196 shares in 1998 and 1997 159,720 159,720 Accumulated deficit (809,273) (610,845) --------- --------- Total stockholders' deficit (649,553) (451,125) --------- --------- $ 319,211 404,870 ========= =========
3 PETROL INDUSTRIES, INC. & SUBSIDIARIES Consolidated Statements of Operations (unaudited) Quarter Ended Six Months Ended June 30, June 30, ------------- ---------------- 1998 1997 1998 1997 ---- ---- ---- ---- Revenues: Oil and gas sales $ 114,398 186,169 251,422 393,725 Other operating income 7,863 3,858 14,493 8,019 --------- --------- --------- --------- 122,261 190,027 265,915 401,744 --------- --------- --------- --------- Expenses: Lease operating expense 132,295 167,535 280,911 342,863 General and administrative 77,680 80,529 164,466 166,543 Depreciation, depletion and amortization 2,400 915 4,200 2,430 --------- --------- --------- --------- 212,375 248,979 449,577 511,836 --------- --------- --------- --------- Operating loss $ (90,114) (58,952) (183,662) (110,092) --------- --------- --------- --------- Other income and (expense): Loss on sale of assets --- --- (408) --- Interest income 1,849 2,932 4,043 5,669 Interest expense (9,503) (7,478) (18,401) (14,373) --------- --------- --------- --------- (7,654) (4,546) (14,766) (8,704) --------- --------- --------- --------- Net loss $ (97,768) (63,498) (198,428) (118,796) ========= ========= ========= ========= Net loss per share $ (.06) (.04) (.12) (.07) ========= ========= ========= ========= Average common shares outstanding 1,597,196 1,597,196 1,597,196 1,597,196 ========= ========= ========= =========
4 PETROL INDUSTRIES, INC. & SUBSIDIARIES Consolidated Statements of Cash Flows Six months ended June 30, 1998 and 1997 (unaudited) 1998 1997 ---- ---- Operating activities: Net loss $ (198,428) (118,796) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation, depletion and amortization 4,200 2,430 Loss on sale of assets 408 --- Losses on retirements of property and equipment included in lease operating expenses (857) 3,132 Changes in assets and liabilities: Cash surrender value of life insurance (5,550) (5,550) Accounts receivable 17,229 10,412 Inventory 20,255 8,262 Prepaid expenses (6,973) (3,752) Accounts payable and accrued expenses 13,757 17,535 Payable to officer, net 93,464 78,392 Payable to interest owners 5,548 15,666 --------- --------- Net cash (used) provided by operating activities (56,947) 7,731 Investing activities: Capital expenditures (23,190) (12,289) --------- --------- Net cash used by investing activities (23,190) (12,289) Decrease in cash and cash equivalents (80,137) (4,558) Cash and cash equivalents at beginning of period 174,809 218,355 --------- --------- Cash and cash equivalents at end of period $ 94,672 213,797 ========= =========
5 PETROL INDUSTRIES, INC. & SUBSIDIARIES Consolidated Statements of Changes in Stockholders' Deficit Six months ended June 30, 1998 and 1997 (unaudited) 1998 1997 ---- ---- Stockholders' deficit at January 1 $ (451,125) (214,929) Net loss for the six-month period (198,428) (118,796) --------- --------- Stockholders' deficit at June 30 $ (649,553) (333,725) ========= =========
6 PETROL INDUSTRIES, INC. & SUBSIDIARIES Notes to Consolidated Financial Statements (unaudited) 1. The accompanying unaudited consolidated financial statements have been prepared by the Registrant in accordance with generally accepted accounting principles, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements have been condensed or omitted pursuant to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, the accompanying financial statements contain all adjustments necessary for a fair statement of the results for the interim periods presented. It is suggested that these consolidated financial statements be used in conjunction with the consolidated financial statements and the notes thereto included in the Registrant's 1997 Annual Report on Form 10-KSB. 2. The consolidated financial statements included herein are consolidated with the accounts of Petrolind Drilling Funds, Inc. and Realco, Inc., both wholly owned subsidiaries of the Registrant, neither of which was active during 1998 or 1997. 3. Net income per share of common stock is computed on the weighted average number of shares outstanding during the six months ended June 30. The weighted average number of shares outstanding was determined by totaling the number of shares outstanding at the end of each month and dividing that total by the number of months. Total Number of Shares Outstanding 1998 1997 ---- ---- January 31 1,597,196 1,597,196 February 28 1,597,196 1,597,196 March 31 1,597,196 1,597,196 April 30 1,597,196 1,597,196 May 31 1,597,196 1,597,196 June 30 1,597,196 1,597,196 4. The expected tax benefit resulting from operating losses for the first six months of 1998 has not been recorded because it is not expected to be realizable. Additionally, there were no significant changes in the temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at June 30, 1998. 7 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Oil and gas sales revenues decreased approximately 38.6% in the second quarter of 1998, compared to the second quarter of 1997, the result being an 31.9% decrease in average oil prices of approximately $5.72 per barrel. The Company's net loss for the period increased to $97,768, or ($.06) per share, compared to $63,498 in the 1997 period, or ($.04) per share. The Company sustained an operating loss of $90,114 in the second quarter of 1998, compared to an operating loss of $58,952 in the prior year's second quarter. For the six month period ended June 30, 1998, the Company's net loss increased approximately 67.0% to $198,428 from the $118,796 net loss in the prior year's period. Management has attempted to reduce operating costs over the past several years in an effort to restore profitability in the face of current oil prices. Profitability is contingent essentially upon two factors: increasing production from the Company's mineral leases and increases in world oil prices. Management continues to explore possible approaches to increasing oil production, including technological developments or pursuing drilling operations. Oil prices averaged $12.21 per barrel during the second quarter of 1998, compared to an average of $17.93 per barrel in the 1997 period. For the six month period, oil prices averaged $12.94 per barrel in 1998 compared to $19.30 in 1997. The Company had cash and cash equivalents at June 30, 1998, of $94,672, compared to $174,809 at the end of the 1997 fiscal year. Management estimates that it owes $309,240 from the settlement of the Horne Lease dispute with Oryx to owners of other interests in the Horne Lease. In May, 1998, Joseph M. Rodano, President and Treasurer of Petrol Industries, Inc., as well as a member of its Board of Directors, purchased a total of 5,000 Shares Common Stock, $.10 par value per share, of Petrol Industries, Inc. The purchase was made in an open-market transaction, and all of the shares purchased by Mr. Rodano were purchased with his personal funds. As of June 30, 1998, Mr. Rodano owns an aggregate of 534,325 Shares, comprising approximately 34% of the outstanding shares. The Company is working to resolve the potential impact of the year 2000 on the ability of the Company's computerized information systems to accurately process information that may be date-sensitive. Any of the Company's programs that recognize a date using "00" as the year 1900 rather than the year 2000 could result in errors or system failures. The Company utilizes a limited number of computer programs across its entire operation. The Company has not completed its assessment, but currently believes that costs of addressing this issue will not have a material adverse impact on the Company's financial position, as its computer programs will be updated by third party vendors. However, if the Company and third parties upon which it relies are unable to address this issue in a timely manner, it could result in a material financial risk to the Company. In order to assure that this does not occur, the Company plans to devote all resources required to resolve any significant year 2000 issues in a timely manner. 8 PART II - OTHER INFORMATION Item 1. LEGAL PROCEEDINGS. None. Item 1. CHANGES IN SECURITIES. None. Item 3. DEFAULTS UPON SENIOR SECURITIES. None. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None. 9 SIGNATURE --------- Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: August 11, 1998 PETROL INDUSTRIES, INC. By: Joseph M. Rodano ----------------------- Joseph M. Rodano President and Treasurer 10 EXHIBIT INDEX Exhibit Description No. ----------- ------- 27 Financial Data Schedule EX-27 2 ARTICLE 5 FIN. DATA SCHEDULE FOR 2ND QTR. 10QSB
5 1 6-MOS DEC-31-1997 JAN-01-1998 JUN-30-1998 94,672 0 49,087 0 23,388 176,588 4,600,629 4,521,409 319,211 968,764 0 159,720 0 0 (809,273) 319,211 251,422 265,915 280,911 280,911 168,666 0 18,401 (198,428) 0 (198,428) 0 0 0 (198,428) (.12) (.12)
-----END PRIVACY-ENHANCED MESSAGE-----