-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, nYzCAkH36nXX+jT/bYIzeBHiOBYkH1q6Vy2pHQW2bpqMMHDZqt9K3uee0Mn3csdo C9kwTgOkjF4AzmhzfwOSaQ== 0000788965-95-000005.txt : 19950609 0000788965-95-000005.hdr.sgml : 19950609 ACCESSION NUMBER: 0000788965-95-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HALLADOR PETROLEUM CO CENTRAL INDEX KEY: 0000788965 STANDARD INDUSTRIAL CLASSIFICATION: 1311 IRS NUMBER: 841014610 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14731 FILM NUMBER: 95538245 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 10-Q 1 FORM 10-QSB FIRST QUARTER United States SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-QSB [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-14731 HALLADOR PETROLEUM COMPANY (Exact name of small business issuer as specified in its charter) COLORADO 84-1014610 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 1660 Lincoln St., Suite 2700, Denver, Colorado 80264 (Address of principal executive offices) (Zip Code) 303-839-5504 FAX 303-832-3013 (Issuer's telephone number, including area code) 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 [ ] As of May 12, 1995 7,661,264 shares of the issuer's common stock were outstanding. This report contains 11 pages. There are no exhibits. HALLADOR PETROLEUM COMPANY FORM 10-QSB INDEX Page PART I. Financial Information: No. Consolidated Balance Sheet - March 31, 1995 and December 31, 1994............................ 3 Consolidated Statement of Operations - three months ended March 31, 1995 and 1994.................... 5 Consolidated Statement of Cash Flows - three months ended March 31, 1995 and 1994.................... 6 Notes to Financial Statements...................... 7 Management's Discussion and Analysis or Plan of Operation........................................ 8 PART II. Other Information: Legal Proceedings.................................. 11 Exhibits and Reports on Form 8-K................... 11 Signature.......................................... 11 2 PART I. FINANCIAL INFORMATION: HALLADOR PETROLEUM COMPANY Consolidated Balance Sheet (in thousands) ASSETS
March 31, December 31, 1995 1994* ------------- ------------ (unaudited) Current assets: Cash and cash equivalents $ 637 $ 438 Accounts receivable- Oil and gas sales 409 504 Well operations 271 251 -------- ------- Total current assets 1,317 1,193 -------- ------- Oil and gas properties (full cost accounting), at cost: Evaluated properties 39,385 39,352 Less - accumulated depreciation, depletion, amortization (31,310) (31,154) -------- -------- 8,075 8,198 -------- -------- Other assets 156 156 -------- -------- $ 9,548 $ 9,547 ======== ========
*Derived from the Form 10-KSB. See accompanying notes. 3 HALLADOR PETROLEUM COMPANY Consolidated Balance Sheet (in thousands, except share data) LIABILITIES AND STOCKHOLDERS' DEFICIT
March 31, December 31, 1995 1994* ----------- ----------- (unaudited) Current liabilities: Accounts payable and accrued liabilities $ 285 $ 262 Oil and gas sales payable 167 114 Convertible debt to related parties including accrued interest of $230 and $154 5,191 5,115 Debt with recourse only to the South Cuyama Field 803 826 ------- ------- Total current liabilities 6,446 6,317 ------- ------- Debt with recourse only to the South Cuyama Field 6,383 6,497 ------- ------- Key Employee Bonus Plan 108 102 ------- ------- Other 65 65 ------- ------- Stockholders' deficit: Common stock, $.01 par value; 100,000,000 shares authorized; 7,661,264 shares issued 77 77 Preferred stock, $.10 par value; 10,000,000 shares authorized; no shares issued Additional paid-in capital 9,995 9,995 Accumulated deficit (13,526) (13,506) ------- ------- (3,454) (3,434) ------- ------- $ 9,548 $ 9,547 ======= =======
*Derived from the Form 10-KSB. See accompanying notes. 4 HALLADOR PETROLEUM COMPANY Consolidated Statement of Operations (in thousands, except per share amounts) (unaudited)
Three months ended March 31, ------------------ 1995 1994 -------- -------- Revenue: Oil $ 884 $ 695 Gas 150 309 NGLs 140 135 Interest and other 8 5 ------- ------- 1,182 1,144 ------- ------- Costs and expenses: Lease operating 721 658 Depreciation, depletion and amortization 156 169 General and administrative 88 96 Interest 237 251 ------- ------- 1,202 1,174 ------- ------- Net (loss) $ (20) $ (30) ======= ======= Net (loss) per share $ (.0026) $ (.0046) ======= ======= Weighted average shares outstanding 7,661 6,488 ======= =======
See accompanying notes. 5 HALLADOR PETROLEUM COMPANY Consolidated Statement Of Cash Flows (in thousands) (unaudited)
Three months ended March 31, 1995 1994 ---------- --------- Cash flows from operating activities $ 369 $ 94 ------- ------- Cash flows from investing activities: Additions oil and gas properties (33) (93) ------- ------- Cash flows from financing activities: Repayments of debt (137) (115) ------- ------- Net increase (decrease) in cash and cash equivalents 199 (114) Cash and cash equivalents, beginning of period 438 369 ------- ------- Cash and cash equivalents, end of period $ 637 $ 255 ======= =======
See accompanying notes. 6 HALLADOR PETROLEUM COMPANY NOTES TO FINANCIAL STATEMENTS (unaudited) 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 December 31, 1994 Form 10-KSB. This quarterly report should be read in conjunction with such annual report. 2. As previously reported in 1992, the Company was named a defendant in an action styled Kenneth Eugene Hahn, et al. v. Love Process Engineering, Inc., et al (Case Number SM074020) filed in the Santa Barbara Superior Court, North County Santa Maria Branch, Santa Maria, California. This matter has been settled with no material monetary affect to the Company. 7 HALLADOR PETROLEUM COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION LIQUIDITY AND CAPITAL RESOURCES Convertible Debt to Related Parties ----------------------------------- During third quarter 1992, the Company reached an agreement to restructure the debt with its majority shareholder, the Robert C. Hardie family, and other investors in the original bridge loan. The Company exchanged debt due September 30, 1992, bearing interest at 9%, for new convertible notes totalling $4,982,000 (including capitalized interest of $237,000) due September 30, 1994, bearing interest at 6% and subsequently extended until December 16, 1994. The new notes are collateralized (second to TCW, see below) by the Company's interest in its California property and are convertible into company common stock at a price of $.20 per share, which approximated fair market value at the time of the agreement. Interest is payable, at the option of the Company, either in cash or in common stock using a fixed price of $.20 per share. In addition, the Company issued to the noteholders four-year warrants to purchase 5,000,000 shares of common stock at an exercise price of $.25 in exchange for outstanding warrants to purchase 3,400,000 shares at various prices ranging from $.22 to $1.08. Approximately 26,000,000 new common shares would be issued assuming total conversion of the bridge loan plus interest through May 12, 1995. As the debt is currently due, substantial doubt exists regarding the Company's ability to continue as a going concern if the debt is not restructured. Management believes the debt will be extended or restructured within the next six months. TCW Debt -------- The South Cuyama Field (the "Field"), the Company's primary asset which accounts for approximately 92% of the Company's revenue and 96% of reserves, is pledged by non-recourse debt to Trust Company of the West (TCW). The Company owns 92% of Santa Barbara Partners (SBP), an Oklahoma general partnership, which in turn owns an 84% working interest (69% net revenue interest) in the Field subject to an 18% net profits interest. Eighty-five percent of SBP's cash flow from the property is used to service the TCW debt. Interest at 9%is paid monthly. The other 15% of SBP's cash flow from the Field is distributed to SBP's partners. 8 RESULTS OF OPERATIONS Revenue increased slightly due primarily to higher prices for oil and NGLs offset by declining gas production and declining gas prices. As reported in the Company's 1994 Form 10-KSB, gas reserves were reduced by approximately 40%. Currently, gas production is less than expected and it is possible that a further gas reserve reduction in the 10% range would be required sometime during the remainder of 1995. Average product prices and volumes are set forth in the following table:
1995 1994 Sales Volume Average Price Sales Volume Average Price ------------ ------------- ------------ ------------- Oil - barrels 56,505 $15.64 60,075 $11.56 Gas - MCF 102,271 1.46 150,860 2.05 NGLs- barrels 11,270 12.43 12,900 10.43
Lease operating expenses increased due to fractionation costs of approximately $50,000 for two wells during the quarter and severe weather conditions requiring electrical repairs. The Company is accounting for fractionation costs similar to well workover expense as opposed to capitalizing such fractionation costs. 9 OUTLOOK FOR REMAINDER OF 1995 Fractionation Project --------------------- The Company initiated a study to fractionate(frac) certain wells in the Field as reported in the 1994 Form 10-KSB. Through May 12, 1995 five wells have been fractionated. Although the results from the first frac job were encouraging; the results from the additional four frac jobs have not been as encouraging. Consequently, the Company is evaluating their results before making decisions regarding future fractionations. Hedging ------- Currently, California oil prices are in line with gravity adjusted West Texas Intermediate oil prices. Therefore, management is investigating if hedging strategies would prove beneficial to the Company. As of May 12, 1995, the Company is receiving $17.35 per barrel for its California production as compared to an average price of $15.62 during the first quarter of 1995. Currently, the Company is receiving approximately $1.20/MCF for its California production which is less than the average price received of $1.46 during the first quarter 1995. Management does not plan to implement any hedging strategies for its gas production. Liquidity and Capital Resources ------------------------------- Cash from operations is expected to enable the Company to meet its obligations as they become due through 1995 other than the debt to related parties discussed above. Because of the uncertainty surrounding the restructuring of the related party debt, substantial doubt exists regarding the Company's ability to continue as a going concern. Management believes the debt will be extended or restructured within the next six months. Cash from operations is expected to fund the fractionation project. Results of Operations --------------------- Assuming product prices do not decline, a small loss is expected for the second quarter due to the costs incurred for the fractionation of three wells during the second quarter. As stated earlier, the Company is evaluating the status of the fractionation project; if additional frac jobs are incurred during the second quarter, the result would be a larger loss for the quarter. The outcome for the remaining six months of 1995 will also depend on the fractionation project and future product prices. If, as discussed earlier, the gas reserves are reduced, DD&A expense would increase. 10 PART II. OTHER INFORMATION Item 1. Legal Proceedings ----------------- As previously reported in 1992, the Company was named a defendant in an action styled Kenneth Eugene Hahn, et al. v. Love Process Engineering, Inc., et al (Case Number SM074020) filed in the Santa Barbara Superior Court, North County Santa Maria Branch, Santa Maria, California. This matter has been settled with no material monetary affect to the Company. Item 6. Exhibits and Reports on Form 8-K -------------------------------- No reports on Form 8-K were filed by the Company during the quarter ended March 31, 1995. There are no exhibits to this report. 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 (REGISTRANT) HALLADOR PETROLEUM COMPANY BY (SIGNATURE) \S\ Victor P. Stabio (NAME AND TITLE) Victor P. Stabio, Chief Executive Officer and Chief Financial Officer Signing on behalf of the registrant and as principal financial and accounting officer. (DATE) May 12, 1995
11 EX-27 2 ART. 5 FDS FOR 1ST QUARTER 10-QSB
5 1000 3-MOS DEC-31-1995 MAR-31-1995 637 0 680 0 0 1317 39385 (31310) 9548 6446 6383 77 0 0 0 9548 1174 1182 0 1202 0 0 237 0 0 0 0 0 0 (20) (.003) (.003)
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