FORM 10-Q/QUARTERLY10-Q.--QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended JuneSeptember 30, 1995
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _______________ to _____________________
Commission File Number: 1-100
CROFF OIL COMPANY
(Exact name of registrant as specified in its charter)
Utah 87-0233535
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1433 Seventeenth Street, Suite 220, Denver, CO 80202
(Address of principal executive offices) (Zip Code)
(303) 297-3383
(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 has required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
X Yes ______ No
APPLICABLE ONLY TO ISSUERS INVOLVED
IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS:
Indicate by check mark whether the Registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
_______ Yes ______ No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: 526,345522,350 shares, one
class only, as of JuneSeptember 30, 1995.
INDEX
INDEX TO INFORMATION INCLUDED IN THE QUARTERLY REPORT (FORM 10-Q)
TO THE SECURITIES AND EXCHANGE COMMISSION FOR THE THREE AND SIX
MONTHS
ENDED JUNESEPTEMBER 30, 1995 (UNAUDITED).
_________________________________________________________________
PART I. FINANCIAL INFORMATION Page Number
Balance Sheets as of December 31, 1994
and JuneSeptember 30, 1995 3, 4
Statements of Operations for the Three and
SixNine Months Ended JuneSeptember 30, 19941995 and 19951994 5
Statements of Cash Flows
for the SixThree and Nine Months
Ended JuneSeptember 30, 19941995 and 19951994 6
Notes to Financial Statements 7
Managements' Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. OTHER INFORMATION
Reports on Form 8-KSignatures. 9
Signatures. 10
_________________________________________________________________
The condensed financial statements included herein are for the
Registrant, Croff Oil Company. The financial statements for the
sixthree and nine months ended JuneSeptember 30, 1995 and 1994 are
unaudited; however, they reflect all adjustments which, in the
opinion of management, are necessary to present fairly the results
of the interim periods. All adjustments necessary to a fair
representation of the financial statements are of a normal
recurring nature.
PART I: FINANCIAL INFORMATION
CROFF OIL COMPANY
BALANCE SHEET
DecemberDec 31, JuneSept 30,
1994 1995
CURRENT ASSETS:
Cash and Cash Equivalents: $ 19,385 $ 16,93044,226
Marketable equity securities 24,250 17,00016,000
Accounts receivable:
Oil and gas purchasers 26,684 25,84823,648
Refundable income taxes 10,053 6,5823,130
Note receivable, secured by interests
in oil and gas properties, includ-
ing accrued interestcollateralized 5,500 5,500
Interest receivable on investment 3,159
Total current assets $ 85,872 $ 71,86095,663
PROPERTY AND EQUIPMENT, AT COST:
Oil & gas properties, successful
efforts method:
Proved properties 457,198 457,198445,043
Unproved properties 110,051 110,051
Coal Investment 100,000
567,249 667,249555,094
Less accumulated depletion and
depreciation (222,794) (237,794)(240,474)
Furniture, fixtures & equipment 4,536 4,536
Less accumulated depreciation (4,536) (4,536)
-- --
Net property and equipment $ 344,455 $ 429,455314,620
Coal Investment 100,000
$ 430,327 $ 501,315510,283
============= ==========================
PART I: FINANCIAL INFORMATION
CROFF OIL COMPANY
BALANCE SHEET
DecemberDec 31, JuneSept 30,
1994 1995
Current Liabilities:
Accounts payable $ 10,934 $ 13,23114,231
Accrued liabilities 537 4923,191
Bank Note Payable -0-to finance coal investment 0 50,000
Total current liabilities 11,471 63,72367,422
Commitments (Note 3)
Stockholders' equity (Note 4):
Common stock, $.10 par value
20,000,000 share authorized
579,143 shares issued (579,124
in 1991) 57,914 57,914
Capital in excess of par value 909,983 909,982909,983
Accumulated deficit (476,235) (457,498)(448,230)
491,662 510,398519,667
Less treasury stock at cost,
52,68852,788 shares in 19921994 and 52,78856,788
in 19931995 (72,806) (72,806)(76,806)
Total stockholders' equity 418,856 437,592442,861
$ 430,327 $ 501,315510,283
============= ==============
CROFF OIL COMPANY
Statement of Operations
For the Three And Sixand Nine Months Ended JuneSeptember 30, 1995
(Unaudited)
For ThreeNine Months For SixThree Months
Ended Ended
6/9/30/94 6/9/30/95 6/9/30/94 6/9/30/95
Revenue:
Oil and gas sales........ $ 52,963 $ 47,886 $102,979 $ 92,963$158,372 $135,113 $55,393 $42,150
Other income (loss)..... 1,186 2,602 3,078 6,322...... 3,290 12,137 212 5,815
Total revenue $ 54,149 $ 50,488 $106,057 $ 99,285$161,662 $147,250 $55,605 $47,965
Costs and expenses:
Lease operating expense.. $ 17,87949,424 $ 9,821 $32,78129,209 $16,643 $ 20,3528,857
Depreciation and depletion 22,500 22,500 7,500 7,500 15,000 15,000
General and administrative 20,652 20,180 38,700 39,31752,998 55,946 14,298 18,020
Interest 0 2,771 0 1,381
Rent Expense - Related Party 8,820 8,820 2,940 2,940
5,880 5,880
$ 48,971 $ 40,441 $92,361 $ 80,549$133,742 $119,246 $41,381 $38,698
Net income (loss) $ 5,17827,920 $ 10,047 $13,69628,004 $14,224 $ 18,7369,267
======== ========= ======= ======== ======== =======
Earnings (Loss) Per Share $ .01.05 $ .02.05 $ .03 $ .04.02
========= ========= ======== ===============
CROFF OIL COMPANY
Statement of Cash Flows
For the SixNine
Months Ended
JuneSeptember 30,
1994 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 13,697 $18,73627,920 $ 28,004
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and depletion 15,000 15,00022,500 22,500
Change in assets and liabilities:
Decrease in accounts receivable 2,270 4,3061,461 6,800
Decrease in other assets 500 (500)
Decrease0 0
Increase in accounts payable (972) 2,297
Decrease3,178 3,297
(Decrease) Increase in
in accrued liabilities (51) (44)(1,208) 2,654
Total adjustments $ 16,747 $ 21,05925,931 35,251
Net cash provided by
operating activities: 30,444 39,795
---------53,851 63,255
-------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase(Purchase)/Sale of Securities 0 19,540
(Purchase)/Sale of oil & gas properties: (63,524)(70,576) 3,955
Purchase of Coal Investment (100,000)
Sale of Marketable Equity Securities 7,750coal investment 0 100,000
--------- ---------
(63,524) (92,250)(70,576) 84,414
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds fromPurchase of Treasury Stock 0 (4,000)
Note Payable 45,000payable for Coal Purchase 0 50,000
--------- ---------
( 0) 46,000
Increase (decrease) in cash: 11,920 (2,455)(16,725) 24,841
Cash at beginning of period: $ 20,87920,880 $ 19,385
========= =================
Cash at end of period: $ 32,799 $16,9304,155 $ 44,226
========= =================
CROFF OIL COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE AND SIXNINE MONTH PERIODS ENDED JUNESEPTEMBER 30, 19941995
BASIS OF PREPARATION.
The condensed financial statements for the three and sixnine
month periods ended JuneSeptember 30, 1995 and 1994 in this report have
been prepared by the Company without audit pursuant to the rules
and regulations of the Securities and Exchange Commission and
reflect, in the opinion of management, all adjustments necessary
to present fairly the results of the operations of the interim
periods presented herein. Certain reclassifications have been made to the
prior years' financial statements to conform to the 1995
presentation. Certain information in footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
omitted pursuant to such rules and regulations, although the
Company believes the disclosures presented herein are adequate to
make the information presented not misleading. It is suggested
that these condensed financial statements be read in conjunction
with the financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended December
31, 1994, which report has been filed with the Securities and
Exchange Commission, and is available from the Company.
MANAGEMENTS' DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS.
Three-Month Period Ended JuneSeptember 30, 1995,
as Compared to the Three-Month Period Ended JuneSeptember 30, 1994.
OIL AND GAS OPERATIONS
Oil and gas income, primarily from royalties, for the three
months ended JuneSeptember 30, 1995 was $47,886$42,150 compared to $52,963$55,393 for the
quarter ending June 30, 1994. This decrease was caused by several
wells being shut in, and by lower prices for natural gas. Prices
generally decreased over the prices one year ago. The lack of any
significant drilling in the Bluebell - Altamont field in Utah is
decreasing revenue to Croff as older wells decline, and revenues
are not replaced with new production.
Production costs, which include lease operating expenses and
all production related taxes, for the three months ended June 30,
1995, were lower, $9,821 in 1995, compared to $17,879 during
the same time period of the prior year. This decrease was due
primarily to less
workoverlower oil and natural gas prices and the plugging or
sale of wells with high revenue and high expenses.
Production costs, which include lease operating expenses this year and
lowerproduction related taxes, based on lower prices.
Depreciation and depletion were constant.
OTHER INCOME
Duringfor the three month periodmonths ended JuneSeptember 30,
1995, decreased when compared to the Company
had other incomesame time period of $2602. The other income figure was $1,186 for
the quarter ending June 30,prior
year, $8,856 in 1995 compared to $16,643 in 1994. This decrease
was due to fewer workovers incurred, the plugging of some wells and
some property dispositions. Production taxes, (these taxes are
levied as a losspercentage of value
on marketable securities more than offset with interest income on
the Coal investment.
GENERAL AND ADMINISTRATIVE EXPENSES
Generalsales price of oil and administrative expenses for the quarter ending
June 30, 1995, were $20,180 plus rent expense of $2940 for a total
of $23,120 compared to $20,652, plus rent expense of $2,940 in the
same period in 1994. The Company expects general and
administrative costs to remain stable this year.
Sixgas
production), also decreased.
Nine Month Period Ended JuneSeptember 30, 1995,
as Compared to the SixNine Month Period Ended JuneSeptember 30, 1994.
OIL AND GAS OPERATIONS
Oil and gas income, primarily from royalties, for the sixnine
months ending JuneSeptember 30, 1995, was $92,963$135,113 compared to $102,979$158,372
for the six months ended June 30, 1994.same time period of the prior year. This decrease was caused bydue
primarily to lower oil and natural gas prices duringand lower volumes
particularly on the first six monthsgas side of the current
year, lower oil prices, less flush production following workovers,
and normal decline.production.
Production costs, which include lease operating expenses and
all production related taxes, for the sixnine months ended JuneSeptember
30, 1995, were $20,352decreased when compared to the same time period of the
prior year, $29,208 in 1995 compared to $49,424 in 1994. These
lower production costs were primarily the result of less workovers
on wells in a decrease from $32,871 during the six
months ended June 30, 1994. The factors which caused this decrease
were lowerweaker oil market, and gas production taxes, less workover costs,plugging and a few shut insale of marginal
wells.
OTHER INCOME.
During the sixnine month period ended JuneSeptember 30, 1995, the
Company had other income of $6,322, primarily$12,137 from interest earned, dividend
payments, a lease bonus, and dividend
earnings, including the interest earned from Carbon Opportunities,
L.L.C. and gain on marketable securities.sale of producing properties. During
the same sixnine month period in 1994, the Company had other income
of $3,078,$3,290, primarily from dividends. The Company's interest and dividend earnings.income
was higher due to the interest payments from the Buck Creek Coal
Mine investment.
GENERAL AND ADMINISTRATIVE.
General and administrative expenses for the nine month period
ending JuneSeptember 30, 1995, were $39,317$55,946 compared to $38,700$52,998 for the
sixnine month period ending JuneSeptember 30, 1994. TheThis difference was
insignificant.due to timing of legal and accounting fees and printing costs.
During the nine month period ended September 30, the Company's
total expenses decreased from $133,742 in 1994 to $119,246 in 1995.
The decrease was due to lower production expenses, and taxes.
General and administrative expenses will likely remain at
approximately this level. The Company is currently operating with
two part time officers and employees, and is contracting for its
accounting services, office space and supplies.
FINANCIAL CONDITION
As of JuneSeptember 30, 1995, the Company's current assets
exceeded current liabilities by $8,037. As$28,241, compared to working
capital of $74,401 at December 31, 1994, the
Company's current assets were $85,872, and current liabilities were
$11,471 for a1994. This decrease of $46,160
in the Company's working capital position of approximately $36,364. This decreaseduring the nine month
period ending September 30, 1995 was due to the purchase of Carbon Opportunities L.L.C. in March of 1995, for
$100,000 of the Buck Creek Coal investment, of which $50,000 was
cashpaid out of cash in current assets. This decreased the
Company's current asset position. The Company expects to continue
to operate at a positive cash flow foralso sold three
small working interests in wells during the calendar year.
Management intends to pay off the Bank debt this year, which will
lower the amountquarter. The Company's
ratio of cash and current assets to current liabilities was approximately
6.5 to 1 on December 31, 1994 and also lower current
liabilities.1.4 to 1 on September 30, 1995.
The Company is continuing its program to invest its cash in
small non-operated oil and gas assets, and paying off its Bank
note.
PART II. OTHER INFORMATION
ITEM 6(b). REPORTS ON FORM 8-K.
The registrant has filed no reports on Form 8-K for the period
ending June 30, 1995.
NONE.
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of
1934, Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
REGISTRANT: CROFF OIL COMPANY
By_________________________________
Gerald L. Jensen
Chief Executive Officer
and
Chief Financial Officer
By_________________________________
M.
Ward Smith
Chief Accounting Officer
Date:___________________,__________________, 1995