-----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, SuXASgFJkg0bz8r0VpEXTQ0I3hhpGBF2fGNvJbm8VXeW/jWbHHVUMSPbiU9auXgS wFbsdq4W2+fzzdRL8vtAQw== 0000788965-98-000004.txt : 19980518 0000788965-98-000004.hdr.sgml : 19980518 ACCESSION NUMBER: 0000788965-98-000004 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HALLADOR PETROLEUM CO CENTRAL INDEX KEY: 0000788965 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 841014610 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-14731 FILM NUMBER: 98626579 BUSINESS ADDRESS: STREET 1: 1660 LINCOLN ST STE 2700 CITY: DENVER STATE: CO ZIP: 80264 BUSINESS PHONE: 3038395505 MAIL ADDRESS: STREET 1: 1660 LINCOLN STREET STREET 2: SUITE 2700 CITY: DENVER STATE: CO ZIP: 80264 FORMER COMPANY: FORMER CONFORMED NAME: KIMBARK OIL & GAS CO /CO/ DATE OF NAME CHANGE: 19900102 FORMER COMPANY: FORMER CONFORMED NAME: KIMBARK INC DATE OF NAME CHANGE: 19860624 10QSB 1 FIRST QUARTER FORM 10QSB U.S. 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 March 31, 1998 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT Commission File Number 0-14731 HALLADOR PETROLEUM COMPANY (Exact name of small business issuer as specified in its charter) COLORADO 84-1014610 (State of incorporation) (IRS Employer Identification No.) 1660 Lincoln Street, Suite 2700, Denver, Colorado 80264 (Address of principal executive offices) 303-839-5504 FAX: 303-832-3013 (Issuer's telephone numbers) 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, and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [ ] Shares outstanding as of May 15, 1998: 7,093,150 This report contains eight pages. 1 PART I. FINANCIAL INFORMATION HALLADOR PETROLEUM COMPANY Consolidated Balance Sheet (in thousands)
March 31, December 31, 1998 1997* ----------- ----------- ASSETS Current assets: Cash and cash equivalents $ 8,064 $ 6,047 Short-term investments 1,800 Accounts receivable- Oil and gas sales 302 331 Well operations 211 336 ------ ------ Total current assets 8,577 8,514 ------ ------ Oil and gas properties (successful efforts), at cost: Unproved properties 159 378 Proved properties 18,626 18,366 Less - accumulated depreciation depletion, amortization and impairment (13,139) (13,039) ------- ------ 5,646 5,705 ------- ------ Other assets 272 266 ------- ------ $ 14,495 $ 14,485 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 281 $ 360 Oil and gas sales payable 125 211 Debt to TCW 2,478 2,492 ------- ------- Total current liabilities 2,884 3,063 ------- ------- Debt to TCW 2,845 2,831 ------- ------- Deferred bonus plan 207 205 ------- ------- Other 105 105 ------- ------- Minority interest 4,978 4,926 ------- ------- Stockholders' equity: Preferred stock, $.10 par value; 10,000,000 shares authorized; no shares issued Common stock, $.01 par value; 100,000,000 shares authorized; 7,093,150 shares issued 71 71 Additional paid-in capital 18,061 18,061 Accumulated deficit (14,656) (14,777) ------- ------- 3,476 3,355 ------- ------- $ 14,495 $ 14,485 ======= =======
*Derived from the Form 10-KSB. See accompanying notes. 2 HALLADOR PETROLEUM COMPANY Consolidated Statement of Operations (in thousands,except per share amounts)
Three months ended March 31, 1998 1997 ------ ------ (restated) Revenue: Oil $ 673 $1,079 Gas 99 93 NGLs 85 130 Gain on sale of prospects 320 7 Interest and other 109 43 ----- ----- 1,286 1,352 ----- ----- Costs and expenses: Lease operating 680 630 General and administrative 140 107 Geological and geophysical 73 395 Interest 120 129 Depreciation, depletion and amortization 100 102 ----- ----- 1,113 1,363 ----- ----- Income (loss) before minority interest 173 (11) Minority interest (52) ----- ----- Net income (loss) $ 121 $ (11) ===== ===== Basic and diluted earnings (loss) per share $ .02 $(.001) ===== ===== Weighted average number of shares outstanding 7,094 7,094
See accompanying notes. 3 HALLADOR PETROLEUM COMPANY Consolidated Statement of Cash Flows (in thousands)
Three months ended March 31, 1998 1997 ------ ------ (restated) Net cash provided by operating activities $ 343 $ 382 ----- ----- Cash flows provided by (used in) investing activities: Short-term investments 1,800 Additions to properties (126) (576) ----- ----- 1,674 (576) ----- ----- Cash flows used in financing activities: Repayments of debt (381) ----- Net increase (decrease) in cash and cash equivalents 2,017 (575) Cash and cash equivalents, beginning of period 6,047 2,898 ----- ----- Cash and cash equivalents, end of period $8,064 $2,323 ===== =====
See accompanying notes. 4 HALLADOR PETROLEUM COMPANY Notes to Financial Statements 1. The interim financial data is unaudited; however, in the opinion of management, the interim data includes all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the results for the interim periods. The financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principals have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures included herein are adequate to make the information presented not misleading. The organization and business of the Company, accounting policies followed by the Company and other information are contained in the notes to the Company's financial statements filed as part of the Company's 1997 Form 10-KSB. This quarterly report should be read in conjunction with such annual report. 2. During the fourth quarter of 1997, the Company changed from the full cost method to the successful efforts method of accounting for its oil and operations. 5 HALLADOR PETROLEUM COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION RESULTS OF OPERATIONS YEAR-TO-DATE COMPARISON - ----------------------- The table below provides sales data and average prices for the period.
1998 1997 Sales Volume Average Price Sales Volume Average Price ------------ ------------- ------------ ------------- Oil- barrels 53,509 $12.58 51,635 $20.90 Gas - MCF 43,950 2.24 30,313 3.08 NGLs- barrels 6,518 13.10 7,388 17.60
Significantly lower oil prices caused the reduction in oil revenues. Gas production increased 14,500 MCF due to the new gas well in the Merlin Prospect, offset by slightly lower production in the South Cuyama field. LIQUIDITY AND CAPITAL RESOURCE - ------------------------------ Cash, short-term investments and cash to be provided from operations are expected to enable the Company to meet its obligations as they come due and fund current planned activities. The following discussion updates the MD&A contained in Item 6 of the 1997 Form 10-KSB and should be read in conjunction therewith. PROSPECT DEVELOPMENT AND EXPLORATION ACTIVITY - --------------------------------------------- THE MERLIN PROSPECT OF THE SAC BASIN - NORTHERN CALIFORNIA ----------------------------------------------------------- The fifth well spud on May 10, 1998; the results should be known on or before May 20, 1998. BIG HORN BASIN - WYOMING ------------------------ In January 1998, the Company sold a half interest in four of the nine prospects it is developing for $597,000 to MCNIC Oil and Gas Corporation, a large public utility headquartered in Detroit, Michigan resulting in a gain of $320,000. In June 1998, the Company intends to spend $50,000 in seismic cost ($25,000 net to the Company), and depending on the results, plans to drill a horizontal well. The Company will be the operator and the well is estimated to cost $500,000 ($250,000 net to the Company). In late April, the joint venture with Blackstone Energy was terminated; the Company continues to remain active in the area. 6 SOUTH TEXAS ----------- On May 4, 1998, the Company entered into a joint venture with Indexgeo & Associates of Houston, Texas to acquire options in Colorado County, Texas (75 miles west of Houston). The budget for the seismic options to Hallador's 90% JV interest is $200,000. It is the intent of the JV to turn the options to a third party to shoot 3-D seismic. 3-D seismic has been successful in this area in identifying economic drilling locations in the Yegua and Wilcox formations. The Company also entered into an agreement to take a 15% working interest in a 7300 foot, Wilcox exploratory well from Indexgeo in Lavaca County, Texas (which adjoins Colorado County). The Company's turnkey cost through logging or plugging and abandonment is $46,000. The Company's completion cost if the well is successful would be approximately $24,000. SOUTH CUYAMA FIELD - CATALYTIC CONVERTER INVESTMENT --------------------------------------------------- On April 21, 1998, Hallador paid $20,000 for a six-month option to acquire a 5% ownership position in Catalytic Solutions, Inc. (Catalytic) located in Oxnard, California (a Los Angeles suburb). Catalytic is a private company founded in January 1996 to exploit the capabilities of a unique family of metal-oxide materials developed by the company's co-founder, Dr. Steve Golden. The company is developing a new generation of catalytic materials that are not based on precious metals such as platinum, palladium, and rhodium. The worldwide market for catalytic materials is $6 billion annually, and Catalytic believes their product cost will be a fraction of the cost of competing technologies. A catalytic converter is currently being tested in the South Cuyama field. Initial results are encouraging. TCW DEBT - -------- The South Cuyama field, the Company's principal asset, is pledged to TCW. On April 9, 1998, the debt was restructured. In return for (i) a cash payment of $1.8 million on May 1, 1998, (ii) monthly payments of $92,000 beginning June 1, 1998, (iii) a balloon payment approximating $3 million due on June 1, 1999, and (iv) an increase in the interest rate from 9% to 12% TCW agreed to relinquish its 18% net profits interest in the field effective May 1, 1998. 1998 OUTLOOK - ------------ If the low oil price environment continues, the Company anticipates a loss for the year. Pursuant to FAS 121, Impairment of Long-lived Assets, management periodically assesses the recoverability of the Company's investment in oil and gas properties. Management believes that the low oil price environment will not continue in the near term and that the Company will ultimately recover its investment in the South Cuyama field from future cash flows. Accordingly, no write-down is expected during 1998. 7 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 27 -- Financial Data Schedule; EDGAR filing only SIGNATURE In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. HALLADOR PETROLEUM COMPANY Date: May 15, 1998 By: /s/ Victor P. Stabio -------------------- Victor P. Stabio Chief Executive Officer and Chief Financial Officer Signing on behalf of the registrant and as principal financial officer. 8 EX-27 2 FINANCIAL DATA SCHEDULE 1
5 1000 3-MOS DEC-31-1998 MAR-31-1998 8,064 0 513 0 0 8,577 18,785 13,139 14,495 2,884 2,845 0 0 71 0 14,495 0 1,286 0 853 140 0 120 121 0 121 0 0 0 121 .02 .02
EX-27 3 FINANCIAL DATA SCHEDULE 2
5 This schedule contains summary financial information for the first quarter 1997. 1000 3-MOS DEC-31-1997 MAR-31-1997 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1,352 0 1,127 107 0 129 (11) 0 (11) 0 0 0 (11) .001 .001
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