SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 of 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 12, 1999
FORTUNE NATURAL RESOURCES CORPORATION
-------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 1-12334 95-4114732
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
515 W. Greens Road, Suite 720, Houston, Texas 77067
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (281) 872-1170
Registrant's telecopier number, including area code: (281) 872-1213
N/A
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(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS
Fortune's press release of August 12, 1999 follows:
AUGUST 12, 1999 - HOUSTON, TEXAS - FORTUNE NATURAL RESOURCES CORPORATION
(OTC BB: FPXA) announced today its financial results for the quarter ended June
30, 1999.
Second quarter 1999 vs. 1998
----------------------------
Fortune incurred a net loss for the second quarter of 1999 of $393,000, or
$0.03 per share, compared to a net loss of $725,000, or $0.06 per share, for the
second quarter of 1998. The lower 1999 loss is due to a combination of higher
oil and gas prices, increased natural gas production volumes and a reduction in
most costs as a result of our cost reduction plan implemented in January 1999.
Fortune's second quarter 1999 loss of $393,000 is also an improvement over its
$553,000 loss reported during the first quarter of 1999.
Fortune's oil and gas revenues are now being improved by higher oil and
gas prices and successful drilling results. New production from two successful
year-end 1998 drilling projects, at South Timbalier Block 86 and Espiritu Santo
Bay, began contributing revenues during the quarter ended June 30, 1999.
Increases in oil and gas prices and natural gas production offset lower oil
production. Consequently, Fortune's revenues from sales of oil and gas for the
second quarter ended June 30, 1999 ($421,000) were higher than both the second
quarter ended June 30, 1998 ($417,000) and the first quarter ended March 31,
1999 ($255,000).
In addition to increased oil and gas revenues, Fortune experienced
decreases in production and operating expense of 14%; depreciation, depletion
and amortization of 12%; and interest expense of 37% for the second quarter of
1999 versus 1998. Furthermore, Fortune did not incur an impairment to oil and
gas properties in 1999 compared to a $260,000 impairment in the second quarter
of 1998.
Year-to-date 1999 vs. 1998
--------------------------
Fortune incurred a net loss for the first six months of 1999 of $944,000,
or $0.08 per share, compared to a net loss of $1,464,000, or $0.12 per share,
for the first six months of 1998.
Primarily as a result of Fortune's sale of its East Bayou Sorrel field on
March 31, 1998 for $4.7 million and lower gas prices, oil and gas revenues for
the first six months of 1999 decreased 40% to $676,000, compared to $1,123,000
reported for the first six months of 1998. Oil prices increased 4% while gas
prices declined 10% for the first six months of 1999 versus 1998. The sale of
East Bayou Sorrel was the primary contributor to the decrease in oil production
of 73% and gas production of 14% for the first six months of 1999 versus 1998.
Offsetting the decreased oil and gas revenues were decreases in production and
operating expense of 44%; depreciation, depletion and amortization of 47%;
general and administrative expense of 20%; and interest expense of 27% for the
first six months of 1999 versus 1998.
FORTUNE NATURAL RESOURCES CORPORATION is an independent oil and gas
exploration and production company with its principal properties located onshore
and offshore Louisiana and Texas.
************
Company Contact: J. Michael Urban
Vice President and CFO
(281) 872-1170
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FORTUNE NATURAL RESOURCES CORPORATION
Consolidated Statements of Operations
($ in thousands, except per share figures)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
1999 1998 1999 1998
-------- -------- -------- --------
(Unaudited)
REVENUES
Sales of oil and gas, net of royalties ......... $ 421 $ 417 $ 676 $ 1,123
Other income ................................... 9 59 24 76
-------- -------- -------- --------
Total Revenues .............................. 430 476 700 1,199
-------- -------- -------- --------
COSTS AND EXPENSES
Production and operating ....................... 113 132 202 359
Provision for depletion,
depreciation and amortization ................ 230 260 440 830
Impairment to oil and gas properties ........... - 260 - 260
General and administrative ..................... 357 354 648 813
Note restructuring cost ........................ - - 61 -
Interest paid in cash .......................... 97 99 194 209
Interest - amortization of
deferred financing cost ...................... 26 96 99 192
-------- -------- -------- --------
823 1,201 1,644 2,663
-------- -------- -------- --------
Loss before income taxes .......................... (393) (725) (944) (1,464)
Provision for income taxes ........................ - - - -
-------- -------- -------- --------
Net loss .......................................... $ (393) $ (725) $ (944) $ (1,464)
======== ======== ======== ========
Weighted average common shares
outstanding (thousands) ......................... 12,194 12,133 12,166 12,128
-------- -------- -------- --------
Net loss per common share ......................... $ (0.03) $ (0.06) $ (0.08) $ (0.12)
======== ======== ======== ========
Net cash used in operating activities ............. $ (506) $ (498)
======== ========
Net cash provided by (used in) investing activities $ (309) $ 3,001
======== ========
Net cash used in financing activities ............. $ - $ (640)
======== ========
SUMMARY OF BALANCE SHEETS
June 30, 1999 December 31, 1998
------------- -----------------
Total current assets................ $ 967 $ 1,887
Current liabilities................. 255 563
Long-term debt...................... 3,225 3,225
Total net stockholders' equity...... 3,863 4,704
PRODUCTION DATA
Six Months Ended
June 30,
-------------------
1999 1998
-------- --------
Net production:
Crude oil (BBL) ............................................. 7,500 28,100
Natural gas (MCF) ........................................... 275,400 319,800
Average sales prices for period:
Crude oil (BBL) ............................................. $ 14.30 $ 13.82
Natural gas (MCF) ........................................... 2.07 2.30
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
None.
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SIGNATURE
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.
FORTUNE NATURAL RESOURCES CORPORATION
By: /s/ Dean W. Drulias
-------------------------------------------
Dean W. Drulias
Executive Vice President and General Counsel
Date: August 12, 1999
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