SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the financial period ended
September 30, 2007
Commission file number: 2-99518-D
State of incorporation: Colorado
I.R.S. employer identification number: 74-2446999
GOLD HILL CORPORATION
2233 West Lindsey
Suite 117
Norman, Oklahoma 73069
Registrant's telephone number, including area code:
(405) 321-8371
Securities registered pursuant to Section 12 (B) of the Act:
Title of each class: None
Name of each exchange
on which registered: None
Securities registered pursuant to Section 12 (G) of the Act:
Common Stock, $0.002 Par Value
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 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
The number of shares of the common stock of the registrant outstanding as of September 30, 2007
5,835,822 shares
PART I
ITEM 1. BUSINESS
Results of Operations.
Earnings and Cash Flows from Operating Activities.
For the current quarter, Gold Hill Corporation ("the Company") realized a small net gain which is detailed in the financial section of this report. The increase in earnings and cash flows reported for the period was due primarily to oil and gas income from the Wanette project.
Mineral Exploration.
During the quarter, the Company continued to evaluate its North Goldfield gold prospect located 10-15 miles north of the town of Goldfield, Nevada, where it holds 156 unpatented lode mining claims encompassing over 3,000 acres in a contiguous block.
Additional drill holes are planned on the prospect northerly of previously drilled holes which contained evidence of an epithermal vein system. The proposed drill holes have been approved by the BLM, but due to inflation, additional reclamation bonding is required before we can actually move a drill rig in. The process has taken several months because of the workload of the BLM. However, the additional bonding has been completed and we are now waiting on a letter of bond acceptance before going forward towards getting a drill rig. We are hoping that a drill rig will free up so that we can complete our drilling program before year end.
Since the price of gold is now above $750 per ounce, there is increased exploration activity throughout Nevada. The heightened interest in gold exploration not only causes drill rig shortages, but also higher drilling costs. Further, there continues to be a shortage of qualified drillers.
The Company continues to be optimistic about the potential of finding a major gold deposit on Company claims. The area is in an excellent geological setting where rich gold-silver deposits were discovered in the past, including Goldfield, Tonopah, and others.
ITEM 2: PROPERTIES
Oil and Gas Properties.
The Company is also continuing to focus efforts toward oil and gas exploration. The Company is currently in search of oil and gas prospects in east-central and northern Oklahoma where several prospects have been identified. The prospects are considered wildcat plays with significant potential, but as wildcats these prospects should be considered high-risk.
The prospects currently under study have potential of 1 to 5 million barrels each, which if successful could favorably impact the share value of Gold Hill stock.
All of our prospects are generated in-house. Currently, the Company has been focusing on an oil prospect located in Grant County, northern Oklahoma. The objective formations are the Red Fork, Mississippi Chat, and Misener. Drilling depths range from 4,500 to 5,500 feet. Leasing has already commenced.
Although crude oil prices are presently over $90 per barrel, they have fluctuated considerably during the reporting period, due to instability in the Middle East. Such volatility has stimulated exploration efforts, resulting in higher costs and drill rig shortages. High costs and shortages are further exacerbated by a shale gas boom presently in progress over large areas of the state.
With the high price of crude oil, the Company is searching for a joint venture partner to develop oil reserves still remaining in the Layton oil sand at our Wanette oil unit. An estimate of recoverable reserves are up to 3 million barrels. The Company owns a 75% interest in the property with West Star as the operator owning a 25% interest.
The proposal to drill downdip from our West Star 1-6 gas well has been shelved at this time due to negotiations with a possible purchaser or our downdip acreage. The gas well is currently shut in due to line repairs by the gas purchaser, Enerfin.
ITEM 3: OPERATIONS
General Operations.
Gold Hill will continue its conservative policy of avoiding debt and maintaining very low overhead costs. No salaries will be paid or allowed to accrue at this time. Gold Hill will not be charged for the use of office space currently provided by its principals.
Private Placement.
Gold Hill is continuing to make a private placement of its common stock in order to finance a portion of the costs of the projects described above.
Competition and Risks.
The business environment is very competitive and there are a number of significant risks associated with oil and gas, and mineral exploration and production, including operations as well as exploration. Gold Hill Corporation intends to seek high-risk, high-potential prospects as well as lower-risk, lower-potential development ones. However, the major effort will be towards wildcat oil prospects with potential of 1,000,000 bbls or greater, and gold prospects with potential greater than 1,000,000 oz.
Regulation.
The domestic exploration for mineral, including oil and gas is subject to various state and federal environmental laws, rules, and regulations. Operators in the industry are subject to the Clean Water Act and damages which could arise out of environmental pollution.
Corporate History.
Gold Hill Corporation is an exploration company focused on large wildcat oil and gas and gold prospects, which if successful will significantly impact upon the value of Company stock. In addition to the Nevada Gold prospects, Gold Hill is active in oil and gas exploration. Although Gold Hill is a public company, it is considered to be a developing company and its stock does not presently trade. Management's policy is to withhold stock trading until an important discovery is made. Gold Hill's management is comprised of experienced and successful explorationists who are qualified to carry forth the goals and aspirations of the company. The primary goal of the Company is to discover a major deposit while avoiding debt. At the same time, the company is focusing on retaining a large interest in each prospect so that a discovery will have a dramatic impact on stock value to the benefit of the shareholders.
Gold Hill's executive and operations offices are located in Oklahoma at 2233 West Lindsey, Suite 117, Norman, Oklahoma 73069 (telephone 405-321-8371). Unless the context otherwise requires, the term Gold Hill as used herein refers to Gold Hill Corporation.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements, together with the report thereon of Ron Kirkpatrick, C.P.A., are contained within this report.
The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q as prescribed by the Securities and Exchange Commission. All material adjustments which, in the opinion of Management, were necessary for a fair presentation of the results for the interim periods have been reflected.
Gold Hill Corporation
Balance Sheet
September 30, 2007
Current Assets
BANK OF OKLAHOMA $ 569,393.52
BANK OF OKLAHOMA $ 7,022.69
ARVEST MONEY MARKET $ 116,630.30
A/R - Stockholders $ 1,839.66
North Goldfield BLM Bond $ 1,983.00
Treasury Fund Account $112,845.38
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Total Current Assets $ 809,714.55
Fixed Assets
Grant County Well Advance $ 25,000.00
FURNITURE AND FIXTURES $ 588.46
TANGIBLE EQUIPMENT $ 31,952.75
ACCUMULATED DEPRECIATION ($32,091.21)
WEST-STAR1-6 $ 140,000.00
Total Fixed Assets: $ 165,450.00
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Total Assets $ 975,164.55
Current Liabilities: none
Equity
COMMON STOCK $ 1,593,900.00
RETAINED EARNINGS ( 889,037.18)
PAID-IN CAPITAL 247,904.00
Current Income (Loss) 22,397.73
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Total Equity $ 975,164.55
Total Liabilities and Equity $ 975,164.55
INCOME STATEMENT
3 Months Ended September 30, 2007
Revenue
INTEREST INCOME 8,713.08
OIL AND GAS REVENUE 45,014.12
Total Revenue 53,727.20
Cost of Sales 19,500.00
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Gross Profit 34,227.20
Operating Expenses 11,829.47
NET INCOME 22,397.73
SIGNATURES
Pursuant to the requirements of Sections 13 and 14 (D) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf of Undersigned, there unto duly authorized.
GOLD HILL CORPORATION
