-----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, V0fQODi5a5++LrvIGdj/LDDTXt+JI+CNVSjdjXaCrzmtX0CgPoVW65WFASDVGna2 XAr73Dsul36ZMIQ4+woCmw== 0000950168-97-003493.txt : 19971125 0000950168-97-003493.hdr.sgml : 19971125 ACCESSION NUMBER: 0000950168-97-003493 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19971124 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN INTERNATIONAL PETROLEUM CORP /NV/ CENTRAL INDEX KEY: 0000799119 STANDARD INDUSTRIAL CLASSIFICATION: PETROLEUM REFINING [2911] IRS NUMBER: 133130236 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 000-14905 FILM NUMBER: 97727297 BUSINESS ADDRESS: STREET 1: 444 MADISON AVE STE 3203 CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2129563333 MAIL ADDRESS: STREET 1: 444 MADISON AVE STE 3203 CITY: NEW YORK STATE: NY ZIP: 10022 10-Q/A 1 AMERICAN INTERNATIONAL PETROLEUM CORP. 10-Q/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20449 FORM 10-Q/A QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1997 --------------------------------------------- Commission File number No. 0-14905 --------------------------------------------------- AMERICAN INTERNATIONAL PETROLEUM CORPORATION - ------------------------------------------------------------------------------ (Exact name of registrant as specified in its charter) Nevada 13-3130236 - -------------------------------------------------------- ------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 444 MADISON AVENUE, SUITE 3203, NEW YORK, NEW YORK 10022 - ----------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (212) 688-3333 (Registrant's telephone number, including area code) (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 ------------------ ------------------------ The number of shares outstanding of the registrant's common stock, $.08 par value, as of May 12, 1997 is 37,359,872 shares. AMERICAN INTERNATIONAL PETROLEUM CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited)
March 31, December 31, 1997 1996 --------------- ----------------- Assets Current assets: Cash and cash equivalents $ 10,107 $ 11,058 Cash - restricted 25,847 161,022 Marketable Securities 7,015,000 -- Accounts and notes receivable, net 1,566,819 1,073,140 Inventory -- 459,961 Prepaid expenses 312,078 838,104 ------------ ------------ Total current assets 8,929,851 2,543,285 ------------ ------------ Property, plant and equipment: Unevaluated property 751,922 5,648,630 Oil and gas properties -- 32,506,656 Refinery property and equipment 17,796,451 17,235,183 Other 207,308 499,971 ------------ ------------ 18,755,681 55,890,440 Less - accumulated depreciation, depletion, amortization and impairments (3,834,972) (23,959,191) ------------ ------------ Total property, plant and equipment 14,920,709 31,931,249 ------------ ------------ Other long-term assets, net 2,201,027 17,897 ------------ ------------ Total assets $ 26,051,587 $ 34,492,431 ============ ============ Liabilities and Stockholders' Equity Current liabilities: Notes payable $ -- $ 237,162 Current portion of long-term debt 2,390,793 5,968,393 Accounts payable 1,216,807 3,636,765 Accrued liabilities 2,442,995 2,524,194 ------------ ------------ Total current liabilities 6,050,595 12,366,514 Long-term debt 2,520,022 798,199 ------------ ------------ Total liabilities 8,570,617 13,164,713 ------------ ------------ Stockholders' equity: Preferred stock, par value $0.01, 7,000,000 shares authorized, none issued -- -- Common stock, par value $.08, 100,000,000 shares authorized, 36,626,538 shares issued and outstanding at March 31, 1997 and 34,458,921 shares at December 31, 1996 2,930,123 2,756,714 Additional paid-in capital 79,254,901 78,677,265 Stock purchase warrants 1,297,754 1,297,754 Accumulated deficit (66,001,808) (61,404,015) ------------ ------------ Total stockholders' equity 17,480,970 21,327,718 ------------ ------------ Commitments and contingent liabilities (Note 10) -- -- ------------ ------------ Total liabilities and stockholders' equity $ 26,051,587 $ 34,492,431 ============ ============
The accompanying notes are an integral part of these statements. 2 AMERICAN INTERNATIONAL PETROLEUM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, (Unaudited)
1997 1996 ----------------- ------------ (RESTATED) Revenues: Oil and gas production and pipeline fees $ 260,579 $ 304,192 Refinery lease fees 442,714 568,596 Other 35,250 50,818 ------------ ------------ Total revenues 738,543 923,606 ------------ ------------ Expenses: Operating 98,765 112,098 General and administrative 1,648,538 598,505 Depreciation, depletion and amortization 250,743 324,545 Interest 573,041 421,931 Unrealized loss on marketable securities 1,753,750 -- Provision for bad debts 447,832 -- Loss on sale of subsidiaries 563,667 -- ------------ ------------ Total expenses 5,336,336 1,457,079 ------------ ------------ Net loss $ (4,597,793) $ (533,473) ============ ============ Net loss per share of common stock $ (0.13) $ (0.02) ============ ============ Weighted-average number of shares of common stock outstanding 36,281,693 25,961,481 ============ ============
The accompanying notes are an integral part of these statements. 3 AMERICAN INTERNATIONAL PETROLEUM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, (Unaudited)
1997 1996 ---------------- ----------------- Cash flows from operating activities: Net loss $(4,597,793) $ (533,473) Adjustments to reconcile net loss to net cash provided (used) by operating activities: Depreciation, depletion and amortization 586,247 563,447 Unrealized loss on marketable securities 1,753,750 -- Provision for bad debts 447,832 -- Loss on sale of subsidiaries 563,667 -- Changes in assets and liabilities: Accounts and notes receivable (125,808) 246,956 Inventory 56,974 15,450 Prepaid and other 56,155 6,157 Accounts payable and accrued liabilities 99,665 (708,323) ----------- ----------- Net cash provided by (used in) operating activities (1,159,311) (409,786) ----------- ----------- Cash flows from investing activities: Additions to oil and gas properties (331,349) (649,254) Additions to refinery property and equipment (561,268) -- Other (101,098) (263,647) ----------- ----------- Net cash used in investing activities (993,715) (912,901) ----------- ----------- Cash flows from financing activities: Cash - restricted, loan collateral 9,414 226,223 Net increase (decrease) in notes payable (237,162) (23,511) Proceeds from long-term debt 1,746,820 1,350,000 Repayments of long-term debt (1,536,614) (740,607) Proceeds from issuance of common stock and warrants, net 439,770 779,089 Proceeds from exercise of stock warrants and options 560 -- Proceeds from sale of subsidiaries 1,729,287 -- ----------- ----------- Net cash provided by financing activities 2,152,075 1,591,194 ----------- ----------- Net increase (decrease) in cash and cash equivalents (951) 268,507 Cash and cash equivalents at beginning of year 11,058 162,218 ----------- ----------- Cash and cash equivalents at end of year $ 10,107 $ 430,725 =========== ===========
The accompanying notes are an integral part of these statements. 4 AMERICAN INTERNATIONAL PETROLEUM CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited)
Additional Stock Common stock paid-in purchase Accumulated Shares Amount capital warrants deficit Total ----------- ------------- -------------- ------------- ----------------- ------- Balance, December 31, 1996 34,458,921 $ 2,756,714 $ 78,677,265 $ 1,297,754 $(61,404,015) $ 21,327,718 Conversions of Debentures-REGULATION S 231,884 18,551 56,449 -- -- 75,000 Issuance of stock for interest in oil & gas properties-REGULATION S 300,000 24,000 126,000 -- -- 150,000 Exercise of warrants 140 11 549 -- -- 560 Issuance of common stock-REGULATION S 1,635,593 130,847 308,923 -- -- 439,770 Imputed interest on debentures convertible at a discount to market -- -- 85,715 -- -- 85,715 Net loss for the period -- -- -- -- (4,597,793) (4,597,793) ------------ ------------ ------------ ------------ ------------ ------------ Balance, March 31, 1997 36,626,538 $ 2,930,123 $ 79,254,901 $ 1,297,754 $(66,001,808) $ 17,480,970 ============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of this statement. 5 AMERICAN INTERNATIONAL PETROLEUM CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1997 1. STATEMENT OF INFORMATION FURNISHED The accompanying unaudited consolidated financial statements of American International Petroleum Corporation and Subsidiaries (the "Company") have been prepared in accordance with Form 10-Q instructions and in the opinion of management contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of March 31, 1997, the results of operations for the three month periods ended March 31, 1997 and 1996 and cash flows for the three months ended March 31, 1997 and 1996. These results have been determined on the basis of generally accepted accounting principles and practices applied consistently with those used in the preparation of the Company's 1996 Annual Report on Form 10-K. Certain information and footnote disclosures normally included in financial statements presented in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that the accompanying unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's 1996 Annual Report on Form 10-K. 2. MARKETABLE SECURITIES Marketable Securities held by the Company are "available-for-sale securities" and were valued by the Company in the MIP Transaction (See discussion below)at a basis of $2.00 per share. They had a market value of $1.60 per share at March 31, 1997, resulting in an unrealized loss of $1,754,000 for the period. These securities were acquired with the intent to trade for short-term profit (trading securities), accordingly, unrealized gains or losses are charged to earnings as incurred. 3. OTHER LONG TERM ASSETS Notes totaling $4,400,000 acquired by the Company have been discounted and recorded as $3,600,000, less current portion of $1,500,000. 4. LONG-TERM DEBT The effective interest rate as stated for each of the debt instruments below does not necessarily reflect the actual cash cost to the Company 6 for that specific debt instrument. the effective interest rate reflects presumed incremental yield the holder of the debt instrument my derive from the discounted conversion rate of such instrument issued by the Company. the convertible debentures are convertible into the Company's stock based on calculations ranging from the average closing bid price of the Company's common stock for the five (5) business days immediately preceding the conversion dates, to discounts of 35%. the presumed incremental yield (imputed interest expense) for the three months ended march 31, 1997 amounted to approximately $205,000. MARCH 31, 1997 ------------------- 10% - $391,629 CONVERTIBLE DEBENTURES - DUE APRIL 1, 1998, EFFECTIVE INTEREST RATE - 34.7% $352,355 12.5% - 426,000 CONVERTIBLE DEBENTURES - DUE JANUARY 2, 1998, EFFECTIVE INTEREST RATE - 49.2% TO 51.7% $426,000 SENIOR CONVERTIBLE SUBORDINATED DEBENTURES - DUE FEBRUARY 1, 1997, INTEREST RANGES FROM 8.5%-10.5% PER ANNUM, PAYABLE QUARTERLY, CONVERTIBLE INTO COMMON SHARES AT $50.00 PER SHARE. $250,000 9% - $200,000 CONVERTIBLE DEBENTURE - DUE JANUARY 9, 2000, EFFECTIVE INTEREST RATE - 51.86% $200,000 7% - $2,000,000 CONVERTIBLE DEBENTURE - DUE FEBRUARY 1, 1999, EFFECTIVE INTEREST RATE - 29.74% $1,541,667 ---------- 10% - $32,400 SUBORDINATED DEBENTURE - DUE SEPTEMBER 24, 1997, EFFECTIVE INTEREST RATE - 17.4% $ 32,400 ------ ------- NOTE PAYABLE TO MG TRADE FINANCE CORPORATION $2,108,393 - - --------------- $4,910,815 'LESS - CURRENT PORTION $2,390,793 --------------- LONG-TERM DEBT $2,520,022 ===============
During the first quarter of 1997, the Company received net proceeds of $1,747,000 from the sale of Convertible Redeemable Subordinated Debentures, issued in accordance with Regulation S as promulgated by the Securities and Exchange Commission. (See Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations.) Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources During the last three years, the Company has had difficulty generating sufficient cash flow to fund its operations, capital expenditures and required principal payments. As a result, the Company has from time to time operated with limited liquidity or negative working capital. In order to continue operations under such circumstances, the Company has historically relied on outside sources of capital. However, on February 25, 1997, the Company sold all of the issued and outstanding 7 shares of common stock of two of its wholly-owned subsidiaries, American International Petroleum Corporation of Colombia ("AIPCC") and Pan American International Petroleum Corporation ("PAIPC") (the "Purchased Shares") in an arms length transaction (the "MIP Transaction") to Mercantile International Petroleum, Inc. ("MIP"), improving its working capital position from a net working capital deficit of $9.8 million at December 31, 1996, to a positive working capital of $2.9 million at March 31, 1997. During the quarter ended March 31, 1997, the Company utilized $4,598,000 for operations, which reflects approximately $3,351,000 in non-cash provisions, including depreciation, depletion an amortization of $586,000, loss on write-down of marketable securities acquired in the MIP Transaction of $1,754,000, provision for bad debts of $448,000, and loss on sale of subsidiaries of $564,000. Approximately $13,000 was used during the period to increase current assets other than cash, and $100,000 was provided by an increase in accounts payable and accrued liabilities. Cash for operations was provided, in part, by the issuance of Common Stock and net increase in long-term debt in an aggregate amount of $651,000, and from the sale of subsidiaries of $1,729,000. The assets of AIPCC and PAIPC consisted of oil and gas properties and equipment in South America with an aggregate net book value of approximately $17.9 million. The total aggregate purchase price payable by MIP for the Purchased Shares was valued, giving account to the contingent portion thereof, which was not recorded by the Company pursuant to GAAP, at up to approximately $20.2 million, determined as follows: (a) Cash payments of approximately $3.9 million, of which approximately $2.2 million was paid simultaneously with the closing to retire the Company's 12% Secured Debentures due December 3, 1997, which were secured by the Company's shares of AIPCC. (b) Assumption of AIPCC and PAIPC debt in an aggregate amount of $534,000. (c) 4,384,375 shares of MIP Common Stock (the "MIP Shares") with a trading price of approximately $2.00 on the date the parties agreed in principle to the sale. (d) A two-year $3 million 5% exchangeable subordinated debenture of AIPCC (the "Exchangeable Debenture"), exchangeable into shares of common stock of MIP on the basis of $3 principal amount of such debenture for one share of MIP on or after February 25, 1998; or Registrant may demand payment on that date of $1.5 million of the principal balance thereof. 8 (e) A $1.4 million "performance earn-out" from future production in Colombia, plus interest at 8% per annum. (f) Up to $2.5 million (reduced proportionately to the extent the Net Operating Loss and Deferred Cost Deductions accrued by AIPCC through December 31, 1996 ("Accrued Tax Benefit Deductions") is less than $50 million but more than $20 million) payable from 25% of AIPCC's future tax savings related to Accrued Tax Benefit Deductions available to AIPCC on future tax filings in Colombia. As a result of the MIP Transaction, the Company owns approximately 11% of MIP's outstanding share capital on a fully-diluted basis. MIP is traded in U.S. dollars on the Toronto Stock Exchange under the symbol MPT.U. Since the MIP Shares were restricted from sale by the Company for 40 days from the date of closing of the MIP Transaction, they were not immediately marginable. In addition, the lessee at the Company's Lake Charles, Louisiana refinery (the "Refinery"), Gold Line Refining, Ltd. ("Gold Line"), did not make any lease payments to the Company in 1997 and has been evicted from the Refinery. Consequently, in order to redeem certain outstanding convertible debentures prior to their conversion by the holders thereof into the Company's common stock, and to continue the expansion of its Refinery, in April 1997, the Company sold an aggregate of $750,000 of 8%, two-year Redeemable Convertible Debentures pursuant to Regulation S (the "8% Debentures") to provide the required cash flows the Company needs until it is able to margin or sell the MIP Shares as required and to utilize the proceeds therefrom to redeem all or a portion of the 8% Debentures, and certain other outstanding convertible debentures of the Company as well, prior to their conversion into shares of the Company's common stock. However, to the extent it can, the Company intends to retain the MIP Shares until the Company's capital requirements dictate that they be sold. The Company's 12% Secured Debentures (the "Debentures"), which had a principal and interest balance at December 31, 1996 of an aggregate of $3,720,000, were paid in full during the first quarter of 1997, mostly from proceeds received from the MIP Transaction. The Company has borrowed funds from MG Trade Finance Corp. ("MGTF"). As part of the MIP Transaction, the Company agreed to change the maturity date for payment of the unpaid balance due to MGTF (currently $2,108,000) to September 30, 1997 from March 31, 1998. In addition, the Company pledged 1,000,000 shares of its MIP common stock to further secure the Loan Agreement with MGTF. The Company expects to pay the balance due on the Loan Agreement by the revised due date by margining or selling some of its MIP shares, or with other conventional financing. 9 Because of non-payment of lease fees and other items of default under the terms of its lease agreement with the Company, Gold Line was evicted from the Refinery premises on March 20, 1997. The Company has filed suit against Gold Line to recover unpaid lease fees and other items totaling approximately $1.8 million. All past amounts due from Gold Line have been previously reserved, including a charge to the reserve for bad debts during the first quarter of 1997 for $443,000 representing the unpaid processing fees for that period. A trial has been scheduled for May 15, 1997 to hear the case. The Company believes that it will prevail in all, or substantially all, of its claims against Gold Line, although no assurance of this can be given. However, even if the Company does obtain a favorable judgment, no assurance can be given that the Company will be able to collect on any such judgment. The Company believes that it has sufficient capital, or access thereto, to complete the expansion of the Refinery to enable the implementation of its asphalt operations and to make any preliminary oil and gas related expenditures. The asphalt and other operations at the Refinery are expected to provide the Company with the future capital necessary to fund its oil and gas operations, or place the Company in a position where it is able to access conventional financing for such projects. During the next twelve months, the Company plans to expand up to $2 million for the Refinery expansion, which it expects to fund in part by internally-generated cash flow from refinery operations, and/or by the margin or sale of the MIP Shares and interest payments received from the Exchangeable Debenture. The Company is also having discussions with other financing entities who have expressed interest in financing further expansion of the Refinery and future operations at the Refinery. The Company is currently having discussions with various companies who have expressed an interest in utilizing the Refinery's crude unit, previously leased to Gold Line, on terms which could provide the Company with similar or better operating income than that formerly provided by the lease with Gold Line. In addition, the Company plans to implement terminalling operations whereby it will charge a processing fee for providing its refinery facilities as a terminal to store and process its customers' asphalt for distribution to local markets. The phase one construction of the Refinery expansion, necessary to implement the operations referred to above, should be completed this month. The Company hopes to have contracts in place to begin asphalt terminalling operations sometime in June or July 1997, although there is no assurance that it will obtain such contracts. The Company recently signed an agreement with a German-based company, MED Shipping & Trading S.A. ("MED") for the purchase of a 70% working 10 interest in a 4.7 million acre oil and gas concession (the "License") in the Usturt Basin of Western Kazakhstan. The License is in the process of being transferred to MED Shipping Usturt Petroleum Company Limited ("MSUP"), a joint venture limited liability company, which has been formed to manage the License operations. Although the Company is not aware of any potential problems with the transfer of the License, no assurance can be given as to whether or when the Kazakhstan government will approve the transfer of the License. The Company owns 70% of MSUP through its newly-formed and wholly-owned subsidiary American International Petroleum Kazakhstan ("AIPK"), which will handle all of the Company's operations in Kazakhstan. Because of the confidential nature of the Agreement and the total consideration the Company is paying for the purchase, public release of such information is being deferred until the transfer of the License is completed. The License area is located in western Kazakhstan approximately 125 miles southeast of Chevron's multi-billion barrel Tengiz Oil Field and the Caspian Sea. The area is bordered to the south by Elf Acquitain's license and to the west by both Oryx/Exxon and Amoco licenses. Preliminary evaluation by the Company's independent petroleum engineer indicates the presence of potential recoverable reserves on six structures, located in the western half of the License. Additional structures have been identified in the License area, but have not been evaluated. Regional seismic data on the eastern half of the License area indicates additional structures, the largest of which measures approximately 50 kilometers in length. This structure, whose reserves are not yet estimated, could provide the largest potential deposits in the License area. The Company plans to continue its evaluation of the area and expects to expand its evaluation program as additional data is released to the Company by the government. The Usturt area provides various commercial options for oil or gas production, since there are several oil and gas pipelines which cross the area. The existing infrastructure permits rapid development and marketing of production and flexibility in securing acceptable markets for same. Production can be sold north to Russia, Finland and the Atyrau Refinery, and/or south through the Caspian Sea at Aktau for export abroad. As previously reported, the Company paid $100,000 in cash and 300,000 shares of its common stock, issued pursuant to Regulation S, to MED in return for the option to acquire a 40% working interest in the License. Further negotiations resulted in an increase in the working interest to 70%. MED will receive a monthly consulting fee of $23,000 to be used to establish contracts for the development and marketing of production, administrative and other activities related to the enhancement of the License and for AIPK operations in Kazakhstan. 11 The Company will be responsible for operating the License operations and to fund all obligations therefor. The License requires aggregate minimum capital expenditures of $14.75 million during the initial five year exploration period, of which $6.3 million must be expended during the first three years for seismic and drilling. The Company is currently having discussions with various major and other oil companies, who have expressed a preliminary interest in joining the Company to develop the areas included therein. There is no assurance of success of any financing efforts the Company may pursue or the timing or success of its Refinery/VDU projects and/or its other potential projects. In the event that the Company is not able to fund its projects on its own in a timely manner, management believes it will be able to obtain partners for certain projects, however, such projects could be delayed or curtailed. As a result of the sale of two of its subsidiaries and the eviction of Gold Line, the Company has no current operating cash flows. Therefore, until the implementation of new operations at its Refinery or elsewhere, and absent any new financing it may obtain, the Company must rely on the potential margin or sale of the MIP Shares to sustain its business operations. 12 RESULTS OF OPERATIONS For the Three Months Ended March 31, 1997 as compared to the Three Months Ended March 31, 1996 The following table highlights the Company's results of operations for the three months ended March 31, 1997 and 1996. For The Three Months Ended March 31, 1997 1996 ------- ---------- Exploration and Production Activity: Colombian Properties:(1) - ---------------------------- Revenues - Oil Sales (OOO's) $ 261 $ 304 Lease Operating Expenses (OOO's) $ 99 $ 111 Production Volume - Bbls 18,625 36,766 Average Price per Bbl $ 14.01 $ 8.27 Production Cost per Bbl $ 5.31 $ 3.01 DD&A per Bbl $ 3.77 $ 3.77 Peru Properties: (2) (2) - ---------------------------- Refinery Operations:(3) Refinery Lease Fees (OOO's) $ 443 $ 569 Average Daily Throughput 9,838 12,635 Average Throughput $ 0.50 $ 0.50 - -------------------------------------------------------- -- -------------------- (1) Reflects oil and gas activity through February 25, 1997. (2) Information for 1997 and 1996 is not available due to dispute with the Company's former partner. (3) Reflects refinery activities through March 20, 1997. Oil and Gas Operations: The results of operations for Colombia and Peru for 1997 reflect results for the period through February 25, 1997, the date of the sale of the Colombia and Peru subsidiaries, compared to three full months of operations reflected in 1996. Refinery Operations: The results of operations for the Refinery for 1997 reflect results for the period through March 20, 1997, the date that the Company evicted its lessee, compared to three full months of operations reflected in 1996. 13 Other Revenue Other Revenue decreased approximately $16,000 or 43%, during the current quarter compared to the first quarter of 1996. The decrease is primarily due to a decrease in other revenue from the sale of the Colombia operations as previously discussed. General and Administrative General and Administrative ("G&A") expenses increased approximately $1,050,000 compared to the same period during 1996. A decrease of $186,000 in capitalized and reimbursable G&A expenses during the current period compared to the same period in 1996 was attributable to the Colombia operations. A decrease in these areas resulted in more G&A expenses being absorbed by the Company. This decrease was primarily due to a decrease in capital expenditures during the current period and an adjustment to reflect a decrease in reimbursable G&A expenses from Ecopetrol, the Colombia government oil company. Non-recurring legal fees of approximately $125,000 incurred during the current period were attributable to the sale of the Company's wholly owned subsidiaries at February 25, 1997, and to the Company's legal proceedings against Gold Line, as previously discussed above. A charge of $695,000 was incurred to partialy compensate key employees whose salaries have remained unchanged for the past five years. Depreciation, Depletion and Amortization Depreciation, Depletion and Amortization decreased approximately $73,832 during the current period compared to the same period last year due to the decrease in oil production from Colombia during the current quarter. Interest Expense Interest expense increased approximately $151,000, during the first quarter of 1997 compared to the first quarter of 1996. An increase of approximately $66,000 is due primarily to imputed interest calculated on the Company's outstanding convertible debt instruments. Additional interest expense of approximately $100,000 in the Colombia operation was incurred to finance outstanding payables. Unrealized Loss on Marketable Securities Marketable securities of MIP, (4,384,375 shares), held by the Company were valued at $2.00 per share when acquired. At March 31, 1997 the current market price was $1.60 per share, resulting in a net unrealized loss of $1,754,000. Loss on Sale of Assets 14 The Company recorded an aggregate $564,000 to reflect the current discounted fair value of the Exchangeable Debenture and the $1.4 million performance earn-out received in the MIP Transaction. PART II. OTHER INFORMATION ITEM 5. OTHER INFORMATION See Part I, Item 2, above. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K *(a) Exhibits 27.1 Financial Data Schedule. * Submitted with the original Form 10Q filed on May 15, 1997. - ------------------------------------------------------------- (b) Reports on Form 8-K. 1. A Form 8-K dated January 10, 1997 was filed in connection with the sales of securities pursuant to Regulation S. 2. A Form 8-K dated January 28, 1997 was filed in connection with the sales of securities pursuant to Regulation S. 3. A Form 8-K dated March 12, 1997 was filed in connection with the sale of the Registrant's wholly-owned subsidiaries, American International Petroleum Corporation of Colombia and Pan American International Petroleum Corporation. 15 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: November 19, 1997 AMERICAN INTERNATIONAL PETROLEUM CORPORATION By/s/ Denis J. Fitzpatrick Denis J. Fitzpatrick Chief Financial Officer 16 EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION 27.1 Financial Data Schedule. 17 -----END PRIVACY-ENHANCED MESSAGE-----