1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
[xx] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended: September 30, 2000
Commission File Number: 0-3912
PETROL INDUSTRIES, INC.
(Exact Name of Small Business Issuer as Specified in its Charter)
NEVADA 75-1282449
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation of Organization)
202 N. THOMAS, SUITE 4 SHREVEPORT, LA 71107-6539
(Address of Principal Executive Offices)
(318) 424-6396
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 [XX] NO [ ]
APPLICABLE ONLY TI ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court.
YES [ ] NO [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 1,597,196
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PETROL INDUSTRIES, INC. & SUBSIDIARIES
Consolidated Balance Sheets
September 30, December 31,
ASSETS 2000 1999
------ ------------- ------------
(unaudited)
Current assets:
Cash and cash equivalents $ 72,843 34,138
Accounts receivable:
Trade 73,701 67,542
Other 9,497 9,663
---------- ----------
83,198 77,205
Inventory 41,088 40,406
Prepaid expenses 10,694 6,073
---------- ----------
Total current assets 207,823 157,822
---------- ----------
Property and equipment, at cost:
Land 7,000 7,000
Developed and undeveloped oil and gas
properties-successful efforts method 4,141,509 4,141,705
Trucks and other operating equipment 363,774 367,984
Furniture and fixtures 32,758 46,720
---------- ----------
4,545,041 4,563,409
Less accumulated depreciation, depletion
and amortization 4,471,548 4,504,275
---------- -----------
73,493 59,134
---------- ----------
Other assets 1,107 1,107
---------- ----------
$ 282,423 218,063
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
Current liabilities:
Accounts payable $ 41,040 44,667
Note payable 30,000 50,000
Payable to interest owners 321,369 321,106
Payable to officer, net 818,513 722,194
Accrued expenses 106,363 100,342
---------- ----------
Total current liabilities 1,317,285 1,238 309
---------- ----------
Stockholders' deficit:
Preferred stock-no par value. Authorized
1,000,000 shares; no shares issued or outstanding --- ---
Common stock-$.10 par value. Authorized 10,000,000
shares; issued and outstanding 1,597,196
shares in 2000 and 1999 159,720 159,720
Accumulated deficit (1,194,582) (1,179,966)
---------- ----------
Total stockholders' deficit (1,034,862) (1,020,246)
---------- ----------
$ 282,423 218,063
========== ==========
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PETROL INDUSTRIES, INC. & SUBSIDIARIES
Consolidated Statements of Operations
(unaudited)
Quarter Ended Nine Months Ended
September 30, September 30,
------------- -----------------
2000 1999 2000 1999
---- ---- ---- ----
Revenues:
Oil and gas sales $ 206,530 143,535 579,103 341,645
Other operating income 6,430 14,020 23,437 24,223
--------- --------- --------- ---------
212,960 157,555 602,540 365,868
--------- --------- --------- ---------
Expenses:
Lease operating expense 144,803 110,948 390,375 295,172
General and administrative 43,899 70,672 189,144 210,198
Depreciation, depletion and
amortization 1,740 2,250 5,146 6,750
--------- --------- --------- ---------
190,442 183,870 584,665 512,120
--------- --------- --------- ---------
Operating income/(loss) 22,518 (26,315) 17,875 (146,252)
--------- --------- --------- ---------
Other income and (expense):
Gain on sale of assets --- --- 1,000 ---
Interest income 563 134 1,213 470
Interest expense (11,925) (11,095) (34,704) (27,194)
--------- --------- --------- ---------
(11,362) (10,961) (32,491) (26,724)
--------- --------- --------- ---------
Net income/(loss) $ 11,156 (37,276) (14,616) (172,976)
========= ========= ========= =========
Net income/(loss) per share $ .01 (.03) (.01) (.11)
========= ========= ========= =========
Average common shares
outstanding 1,597,196 1,597,196 1,597,196 1,597,196
========= ========= ========= =========
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PETROL INDUSTRIES, INC. & SUBSIDIARIES
Consolidated Statements of Cash Flows
Nine months ended September 30, 2000 and 1999
(unaudited)
2000 1999
---- ----
Operating activities:
Net loss $ (14,616) (172,976)
Adjustments to reconcile net loss to net cash
(used) provided by operating activities:
Depreciation, depletion and amortization 5,146 6,750
Gain on sale of assets 1,000 ---
Losses on retirements of property and
equipment included in lease operating expenses (505) 724
Changes in assets and liabilities:
Accounts receivable (5,993) (19,077)
Inventory (682) (14,701)
Prepaid expenses (4,621) (6,680)
Accounts payable and accrued expenses 2,394 10,538
Payable to officer, net 96,319 118,799
Payable to interest owners 263 4,852
-------- --------
Net cash provided (used) by operating
activities 78,705 (71,771)
Investing activities:
Capital expenditures (20,000) ---
-------- --------
Net cash used activities (20,000) ---
Financing activities:
Proceeds from gross borrowings --- 50,000
Payments made on gross borrowings (20,000) ---
-------- --------
Net cash (used) provided by financing
activities (20,000) 50,000
Increase/(decrease) in cash and cash equivalents 38,705 (21,771)
Cash and cash equivalents at beginning of period 34,138 56,729
-------- --------
Cash and cash equivalents at end of period $ 72,843 34,958
======== ========
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PETROL INDUSTRIES, INC. & SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Deficit
Nine months ended September 30, 2000 and 1999
(unaudited)
2000 1999
---- ----
Stockholders' deficit at January 1 $ (1,020,246) (835,115)
Net loss for the nine-month period (14,616) (172,976)
---------- ----------
Stockholders' deficit at September 30 $ (1,034,862) (1,008,091)
========== ==========
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PETROL INDUSTRIES, INC. & SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
1. The accompanying unaudited consolidated financial statements have been
prepared by the Registrant in accordance with generally accepted accounting
principles, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements have been condensed or omitted pursuant to
such rules and regulations, although management believes that the disclosures
are adequate to make the information presented not misleading. In the opinion
of management, the accompanying financial statements contain all adjustments
necessary for a fair statement of the results for the interim periods
presented. It is suggested that these consolidated financial statements be
used in conjunction with the consolidated financial statements and the notes
thereto included in the Registrant's 1999 Annual Report on Form 10-KSB.
2. The consolidated financial statements included herein are consolidated
with the accounts of Petrolind Drilling Funds, Inc. and Realco, Inc., both
wholly owned subsidiaries of the Registrant, neither of which was active
during 2000 or 1999.
3. Net income per share of common stock is computed on the weighted average
number of shares outstanding during the nine months ended September 30. The
weighted average number of shares outstanding was determined by totaling the
number of shares outstanding at the end of each month and dividing that total
by the number of months.
Total Number of
Shares Outstanding
2000 1999
---- ----
January 31 1,597,196 1,597,196
February 28 1,597,196 1,597,196
March 31 1,597,196 1,597,196
April 30 1,597,196 1,597,196
May 31 1,597,196 1,597,196
June 30 1,597,196 1,597,196
July 31 1,597,196 1,597,196
August 31 1,597,196 1,597,196
September 30 1,597,196 1,597,196
4. The expected tax benefit resulting from operating losses for the first
nine months of 2000 has not been recorded because it is not expected to be
realizable. Additionally, there were no significant changes in the temporary
differences that give rise to significant portions of the deferred tax assets
and deferred tax liabilities at September 30, 2000.
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Oil and gas sales revenues increased approximately 43.9% in the third
quarter of 2000, compared to the third quarter of 1999, the result being an
approximate 53.2% increase in average oil prices of approximately $9.96 per
barrel. The Company realized a net income for the period of $11,156, or $.01
per share, compared to a net loss of $37,276, or ($.03) per share, in the
1999 period.
The Company realized an operating income of $22,518 in the third quarter
of 2000, compared to an operating loss of $26,315 in the third quarter of
1999. For the nine-month period ended September 30, 2000, the Company's net
loss decreased approximately 91.6% to $14,616 from the $172,976 net loss in
the prior year's period. For the same period, the Company realized an
operating income of $17,875 compared to an operating loss of $146,252 in the
1999 period.
Oil prices averaged $28.69 per barrel during the third quarter of 2000,
compared to an average of $18.73 per barrel in the 1999 period. For the nine
month period, oil prices averaged $26.63 in 2000 compared to $14.82 in 1999.
The Company had cash and cash equivalents at September 30, 2000, of
$72,843 compared to $34,958 at the end of the 1999 fiscal year. Management
estimates that it owes $321,369 from the settlement of the Horne Lease dispute
with Oryx to owners of other interests in the Horne Lease.
Effective July 1, 2000, the annual salary of Joseph M. Rodano, President
and Treasurer of Petrol Industries, Inc., was reduced from $125,000 to
$12,000.
In September 2000, Joseph M. Rodano, President and Treasurer of Petrol
Industries, Inc., as well as a member of its Board of Directors, purchased a
total of 2,000 Shares Common Stock, $.10 par value per share, of Petrol
Industries, Inc. The purchase was made in an open-market transaction, and
all of the shares purchased by Mr. Rodano were purchased with his personal
funds. As of September 30, 2000, Mr. Rodano owns an aggregate of 556,325
Shares, comprising approximately 35% of the outstanding shares.
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None.
Item 2. CHANGES IN SECURITIES
None.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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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 13, 2000
PETROL INDUSTRIES, INC.
s/Joseph M. Rodano
By:_____________________________________
Joseph M. Rodano
President and Treasurer
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EXHIBIT INDEX
Exhibit
No. Description
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27 Financial Data Schedule