6-K 1 for033102.txt FOR MARCH 31, 2002 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the month of: March 31, 2002 Commission File Number 0-18939 BERKLEY RESOURCES INC. (Registrant's name) 455 Granville Street, Suite 400 Vancouver, British Columbia, Canada V6C 1T1 (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F [X] Form 40-F [ ] Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes [ ] No [ ] If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): All reference to dollar or $ is in Canadian dollars unless otherwise stated. British Columbia Securities Commission QUARTERLY REPORT FORM 51-901F ISSUER DETAILS: NAME OF ISSUER FOR QUARTER ENDED DATE OF REPORT BERKLEY RESOURCES INC. March 31, 2002 May 29, 2002 -------------------------------------------------------------------------------- ISSUER ADDRESS: Suite 400, 455 Granville Street, Vancouver, BC V6C 1T1 -------------------------------------------------------------------------------- CITY PROVINCE POSTAL CODE ISSUER FAX NO. ISSUER TELEPHONE NO Vancouver, B.C. V6C 1T1 (604) 682-3600 (604) 682-3701 -------------------------------------------------------------------------------- CONTACT PERSON CONTACT'S POSITION CONTACT TELEPHONE NO. J. Calvert Accountant (604) 682-3701 E-MAIL ADDRESS: WEB SITE ADDRESS N/A N/A CERTIFICATE The three schedules required to complete this Quarterly Report are attached and the disclosure contained therein has been approved by the Board of Directors. A copy of this Quarterly Report will be provided to any shareholder who requests it. -------------------------------------------------------------------------------- DIRECTOR'S SIGNATURE DATE SIGNED Signed: YY/MM/DD "ERNEST CALVERT" 02/05/29 -------------------------------------------------------------------------------- DIRECTOR'S SIGNATURE DATE SIGNED Signed: YY/MM/DD "LOUIS WOLFIN" 02/05/29 -------------------------------------------------------------------------------- BERKLEY RESOURCES INC. INTERIM BALANCE SHEET As at March 31, 2002 (Unaudited-Prepared by Management) ASSETS
March 31 December 31 2002 2001 ------------------------- ---------------------- $ $ CURRENT ASSETS Cash 1,136,972 1,070,023 Accounts Receivable 152,976 133,726 ------------------------- ---------------------- 1,289,948 1,203,749 Oil and gas properties and equipment (Note 1) 541,674 542,193 Rental Property 2,103,986 2,103,986 Other capital assets (Note 2) 5,399 5,969 ------------------------- ---------------------- 3,941,007 3,855,897 ------------------------- ---------------------- LIABILITIES CURRENT LIABILITIES Accounts payable and accrued liabilities 109,477 126,094 Bank loan (Note 3) 755,027 782,923 Future removal and site restoration 53,300 53,300 ------------------------- ---------------------- 917,804 962,317 ------------------------- ---------------------- SHAREHOLDERS' EQUITY Capital Stock (Note 4) 3,124,326 2,999,326 Contributed Surplus 75,000 75,000 Retained earnings (176,123) (180,746) 3,023,203 2,893,580 ------------------------- ---------------------- 3,941,007 3,855,897 ------------------------- ----------------------
On Behalf of the Board "Ernest Calvert" , Director --------------------------- "Louis Wolfin" , Director --------------------------- BERKLEY RESOURCES INC. STATEMENT OF OPERATIONS AND RETAINED EARNINGS (Unaudited - Prepared by Management)
3 Months ended March 31 2002 2001 ------------------------- ---------------------- $ $ OIL AND GAS REVENUE 60,556 157,767 Interest income 5,518 12,207 Rental income (1,633) 482 ------------------------- ---------------------- 64,441 170,456 ------------------------- ---------------------- ADMINISTRATIVE EXPENSES Accounting, administration and expenses 15,216 6,115 Amortization 569 795 Consulting and management fees 18,000 18,000 Office and general 4,303 8,304 Professional fees 5,625 4,800 Transfer agent fees 804 810 Wages 15,300 15,312 ------------------------- ---------------------- 59,817 54,136 ------------------------- ---------------------- NET INCOME (LOSS) FOR THE PERIOD 4,624 116,320 RETIANED EARNINGS, BEGINNING OF PERIOD (180,747) (111,830) ------------------------- ---------------------- RETAINED EARNINGS, END OF PERIOD (176,123) (228,150) ------------------------- ---------------------- (2.80) (4.00)
BERKLEY RESOURCES INC. INTERIM STATEMENT OF CASH FLOWS (Unaudited - Prepared by Management)
3 Months ended March 31 2002 2001 ------------------------- ---------------------- $ $ CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES: Income for the period 4,624 116,320 Add: depreciation 569 24,795 ------------------------- ---------------------- 5,193 141,115 CHANGES IN NON-CASH WORKING CAPITAL ITEMS (35,868) 58,411 ------------------------- ---------------------- FINANCING ACTIVITIES: Expenditures on oil and gas properties 520 (13,537) Repayment of loan (27,896) (15,632) ------------------------- ---------------------- (27,376) (29,169) INCREASE (DECREASE) IN CASH 66,949 370,357 CASH, BEGINNING OF PERIOD 1,070,023 1,210,219 ------------------------- ---------------------- CASH, END OF PERIOD 1,136,972 1,580,576 ------------------------- ----------------------
BERKLEY RESOURCES INC. NOTES TO THE FINANCIAL STATEMENTS March 31, 2002
1. Oil and Gas Properties and Equipment March 31, December 31, 2002 2001 ------------------------- ---------------------- $ $ Oil and gas properties and equipment 3,353,100 3,353,620 Less: Accumulated amortization and Depletion 2,811,427 2,811,427 ------------------------- ---------------------- 541,673 542,193 ========================= ======================
2. Other Capital Assets Cost Accumulated March 31, December 31, amortization 2002 2001 Net Net $ $ $ $ Computer equipment 12,836 11,582 1,254 1,503 Furniture, fixtures 5,585 5,052 533 561 Truck 39,040 35,428 3,612 3,905 -------------- ------------------ ------------- -------------------- 57,461 52,062 5,399 5,969 ============== ================== ============= ====================
3. Bank Loan The Bank Loan is payable to the Canadian Imperial Bank of Commerce, bears interest at prime plus 0.50% per annum, is due on demand, however, the bank has agreed to accept monthly payments of $11,900 principal and interest, and is secured by a first mortgage over the rental property and an assignment of rents. Balance, December 31, 2001 782,923 Loan Payments 27,896 ------- Balance, March 31, 2002 755,027 ------- 4. Share Capital Authorized 20,000,000 common shares, without par value Number of Shares Amount ------------------------------ Balance, December 31, 2001 5,795,934 2,999,326 Issued in the period for cash 500,000 125,000 ------------------------------ 6,295,934 3,124,326 ============================== During the period the Company received $125,000 from Lisa Wolfin for exercising 500,000 warrants at $.25 per common share. The 500,000 warrants at $.25 issued to Ernest Calvert are still outstanding 5. Related Party Transactions In addition to amounts disclosed elsewhere in the financial statements, the financial statements include the following transaction with related parties. Accounting, administrative and premises includes $10,764 paid to a private company managed by a Director and consulting and management expense includes $9,000 paid to companies controlled by Directors. British Columbia Securities Commission QUARTERLY REPORT FORM 51-901F ISSUER DETAILS: NAME OF ISSUER FOR QUARTER ENDED DATE OF REPORT BERKLEY RESOURCES INC. March 31, 2002 May 29, 2002 -------------------------------------------------------------------------------- ISSUER ADDRESS: Suite 400, 455 Granville Street, Vancouver, BC V6C 1T1 -------------------------------------------------------------------------------- CITY PROVINCE POSTAL ISSUER FAX NO. ISSUER TELEPHONE NO CODE Vancouver, British Columbia V6C 1T1 (604) 682-3600 (604) 682-3701 -------------------------------------------------------------------------------- CONTACT PERSON CONTACT'S POSITION CONTACT TELEPHONE NO. J.Calvert Accountant (604) 682-3701 E-MAIL ADDRESS: WEB SITE ADDRESS N/A N/A CERTIFICATE The three schedules required to complete this Quarterly Report are attached and the disclosure contained therein has been approved by the Board of Directors. A copy of this Quarterly Report will be provided to any shareholder who requests it. -------------------------------------------------------------------------------- DIRECTOR'S SIGNATURE DATE SIGNED Signed: "ERNEST CALVERT" 02/05/29 -------------------------------------------------------------------------------- DIRECTOR'S SIGNATURE DATE SIGNED Signed: "LOUIS WOLFIN" 02/05/29 -------------------------------------------------------------------------------- BERKLEY RESOURCES INC. SCHEDULE "B" SUPPLEMENTARY INFORMATION 1. Analysis of expenses a) General and administrative costs Administration and accounting $ 15,216 Consulting and management 18,000 Wages 15,300 Office and general 11,301 $13,010 was paid to the office in Calgary for administration, accounting and office expenses. 2. Options Outstanding 457,500 @ $.34 expiry April 25, 2005 Ernest Calvert Director & Insider 195,000 Louis Wolfin Director & Insider 195,000 George Scott Director & Insider 20,000 Jim O'Bryne Employee 20,000 Andrea Regnier Employee 10,000 Sandra Roy Director 5,000 David Wolfin Employee 5,000 Jim Baylis Employee 5,000 Freddie Chappel Employee 2,500 3. Shares in Escrow Nil 4. List of Directors and Officers Ernest Calvert Director & President Louis Wolfin Director & Chief Executive Officer Sandra Roy Director & Secretary Lee Ann MacKenzie Director George Scott Director BERKLEY RESOURCES INC. SCHEDULE "C" MANAGEMENT'S DISCUSSION AND ANALYSIS For the period ended March 31, 2002 Description of Business The Company is in the business of participating in approximately 50 oil and gas wells in Alberta with interests ranging from 0.03 of 1% to 50%. The Company owns a 100% interest in office space in Vancouver, B.C. in which two Directors pay office rent to the Company. Results of Oil and Gas Operations The oil and gas industry experienced a steady first quarter 2002 as oil prices returned to U.S. $26.30 per barrel for West Texas Intermediate (WTI) on March 31, 2002 which was the same price recorded on the same date one year earlier. This recovery was persistent and steady from a mid-November 2001 low of U.S $17.40/barrel following the events of September 11, 2001. Industry has taken comfort in this steady rebound as more and more producers and consumers seem to accept U.S. $25.00/barrel as the long-term benchmark price for WTI. The benchmark price of U.S.$25.00/barrel for WTI oil will on average translate into natural gas prices between Cdn. $4.00 and %5.00 per thousand cubic feet (mcf) based on generally accepted energy equivalent factors. This is reflected in the March 31, 2002 natural gas price of Cdn. $4.40/mcf after recovering from a fourth quarter 2001 low of Cdn. $2.30/mcf. Environmental considerations will continue to support strong natural gas prices; however, security of supply is expected to remain at or near the benchmark price of U.S. $25.00/barrel as Canada continues to increase its supply of U.S. oil imports. The demand for good oil prospects produced a ready market for the farmout of the Company's 50-50 owned Economy Creek prospect located in west central Alberta. Two farmees jointly drilled this Triassic oil prospect during the first quarter 2002 free to Berkley and its partner. Unfortunately, the test well was not successful and it was abandoned. The surrounding acreage will be evaluated over the next several months; however, no additional prospects are evident at this time. The sudden slowdown in economic momentum experienced by Industry after September 11, 2001 resulted in the Company and its partners being unable to arrange a timely farmout in the Sturgeon Lake Leduc (D-3) oil prospect located in central Alberta at township 70 range 23 W5M. This prospect is in a winter only drilling area. The well has been licensed and is projected for drilling after October 1, 2002. Farmount arrangements are being pursued. The oil and gas industry has operated in a steady but tough environment during the first quarter 2002. World events have influenced decisions relating to larger projects such as the Alaska/Mackenzie valley gas pipelines and certain Athabasca heavy oil projects; however, smaller and more conventional projects have continued at a measured pace. Industry continues to buy and sell assets but at a less aggressive level than one year ago; however, mergers-of-equals seems to be finding increased favor among small and large public companies. The Company will continue to seek out and develop good prospects for both oil and gas. Recent mergers have freed up skilled professionals who continue to develop drilling prospects. Berkley will attempt to develop strategic alliances with several such individuals on a mutually beneficial basis in order that the Company can participate in attractive prospects at a ground floor level. Results of Financial Operations The Company's balance sheet as at March 31, 2002 as compared to December 31, 2001 reflects its expenditures on oil and gas properties and equipment for the period ended March 31, 2002 and the results from its operations for the period ended March 31, 2002. Overall, total assets increased by $85,110 and total liabilities decreased by $44,513. The Company's working capital increased from $294,732 at December 31, 2001 to $425,444 at March 31, 2002. Revenues Net oil and gas revenues decreased by approximately $90,000 from March 31, 2001 figure of $157,767 to March 31, 2001 of $60,556. Of the total revenues of $94,917 the Company received more than 90% of its income from five major properties (i) $28,171 from the John Lake leases ($149,232 March 31, 2001); (ii) $22,052 from the Skiff leases ($40,687 March 31, 2001); (iii) $7,360 from Zama/Virgo leases ($9,402 March 31, 2001); (iv) $10,867 from, the Carbon leases ($34,047 March 31, 2001) and (v) $22,835 from the Halkirk leases ($23, 992 March 31, 2001). Oil revenues decreased by approximately $26,000 from March 31, 2001 to March 31, 2002 and natural gas decreased by approximately $145,000 from March 31, 2001 to March 31, 2002. The price of oil at March 31, 2002 was U.S. $26.30/barrel unchanged from same figure at March 31, 2001 and natural gas decreased at March 31, 2002 to Cdn $4.40 compared to $7.65 at March 31, 2001. The decrease in revenue for the period ended March 31, 2002, was due to a decrease in gas prices and a decrease in oil and gas production. Interest income decreased from $12,207 at March 31, 2001 to $5,518 at March 31, 2002 due to lower interest rates. Rental income less rental operation expenses showed a loss of $1,633 for the period ended March 31, 2002. Although the building remains 100% occupied, tenants are becoming slower than usual in paying their monthly rent and operating costs including both 3 separate HVAC system repairs and 3 separate plumbing repairs totaling $3,224 reduced the net earnings for the first quarter. An estimated cash call of $25,000 for 2002 final property taxes and working capital purposes is anticipated to be made in June 2002. The Company made payments of $27,896 for the period to the bank loan payable on the building. Expenses The Company's administrative expenses as at March 31, 2002 of $59,817 shows an increase of $5,681 from March 31, 2001. The increase in administrative expenses arose from an increase of $9,101 on accounting and administration and a decrease of $4,001 due to general office expense. Accounts receivable increased by approximately $19,000 from December 31, 2001 figure of $133,726 to March 31, 2002 figure of $152,976. Accounts receivable fluctuate depending on the timing of production receipts from operators and amounts due from participants in oil and gas activities. Accounts payable decreased $16,617 from $126,094 at December 31, 2001 to $109,477 at March 31, 2002. The Company has made no material changes to its financial position and has sufficient funds on hand to continue its operations for 2002. 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. BERKLEY RESOURCES INC. (Registrant) Date: June 30, 2003 /S/ Matt Wayrynen ---------------- -------------------------------------- Matt Wayrynen, President