1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 2049
FORM 10-QSB
(Mark One)
[xx] Quarterly report under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended: June 30, 2001
[ ] Transition report under Section 13 or 15(d) of the Exchange
Act
For the transition period from ___________ to __________
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 (IRS Employer Identification
Incorporation of Organization) Number)
202 N. THOMAS, SUITE 4 SHREVEPORT, LA 71107-6539
(Address of Principal Executive Offices)
(318) 424-6396
(Issuer's Telephone Number, Including Area Code)
N/A
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
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 TO 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
June 30, December 31,
2001 2000
-------- ------------
ASSETS
------
<s> <c> <c>
Current assets:
Cash and cash equivalents $ 22,821 50,725
Accounts receivable:
Trade 49,372 52,401
Other 9,498 9,498
---------- ----------
58,870 61,899
Inventory 28,856 41,153
Prepaid expenses 12,948 2,890
---------- ----------
Total current assets 123,495 156,667
---------- ----------
Property and equipment, at cost:
Land 7,000 7,000
Developed and undeveloped oil and gas
properties-successful efforts method 4,129,943 4,138,480
Trucks and other operating equipment 357,986 366,560
Furniture and fixtures 33,347 33,133
---------- ----------
4,528,276 4,545,173
Less accumulated depreciation, depletion and
amortization 4,446,341 4,463,596
---------- ----------
81,935 81,577
---------- ----------
Other assets 1,107 1,107
---------- ----------
$ 206,537 239,351
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
Current liabilities:
Accounts payable $ 38,315 39,045
Payable to interest owners 333,213 328,473
Payable to officer, net 859,078 832,252
Note payable 2,000 2,000
Accrued expenses 97,900 92,595
---------- ----------
Total current liabilities 1,330,506 1,294,365
---------- ----------
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 2001 and 2000 159,720 159,720
Accumulated deficit (1,283,689) (1,214,734)
---------- ----------
Total stockholders' deficit (1,123,969) (1,055,014)
---------- ----------
$ 206,537 239,351
========== ==========
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PETROL INDUSTRIES, INC.
Consolidated Statements of Operations
(unaudited)
Quarter Ended Year Ended
June 30, June 30,
-------------------- -------------------
2001 2000 2001 2000
---- ---- ---- ----
<s> <c> <c> <c> <c>
Revenues:
Oil and gas sales $ 147,986 167,609 287,560 372,573
Other operating income 7,722 7,263 16,480 17,007
--------- --------- --------- ---------
155,708 174,872 304,040 389,580
--------- --------- --------- ---------
Expenses:
Lease operating expense 130,089 121,093 259,601 245,572
General and administrative 47,046 76,753 91,386 145,245
Depreciation, depletion
and amortization 2,775 1,740 5,550 3,406
--------- --------- --------- ---------
179,910 199,586 356,537 394,223
--------- --------- --------- ---------
Operating loss $ (24,202) (24,714) (52,497) (4,643)
--------- --------- --------- ---------
Other income and (expense):
Gain on sale of assets 4,000 1,000 4,040 1,000
Interest income 168 463 435 650
Interest expense (10,327) (11,697) (20,933) (22,779)
--------- --------- --------- ---------
(6,159) (10,234) (16,458) (21,129)
--------- --------- --------- ---------
Net loss $ (30,361) (34,948) (68,955) (25,772)
========= ========= ========= =========
Net loss per share $ (0.02) (0.03) (0.04) (.02)
========= ========= ========= =========
Average common shares
outstanding 1,597,196 1,597,196 1,597,196 1,597,196
========= ========= ========= =========
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PETROL INDUSTRIES, INC.
Consolidated Statements of Cash Flows
Six months ended June 30, 2001 and 2000
(unaudited)
2001 2000
---- ----
<s> <c> <c>
Operating activities:
Net loss $ (68,955) (25,772)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Depreciation, depletion and amortization 5,550 3,406
Gain on sale of assets (4,040) (1,000)
Losses on retirements of property and equipment
included in lease operating expenses --- 493
Changes in assets and liabilities:
Decrease (increase) in accounts receivable 3,029 (10,319)
Decrease (increase) in inventory 12,297 (1,037)
Increase in prepaid expenses (10,058) (6,761)
Increase in accounts payable and accrued expenses 4,575 6,471
Increase in payable to officer, net 26,826 82,631
Increase in payable to interest owners 4,740 3,655
-------- --------
Net cash (used) provided by operating activities (26,036) 51,767
Investing activities:
Capital expenditures (5,908) (13,700)
Proceeds from sale of property and equipment 4,040 1,000
-------- --------
Net cash used by investing activities (1,868) (12,700)
Increase (decrease) in cash and cash equivalents (27,904) 39,067
Cash and cash equivalents at beginning of period 50,725 34,138
-------- --------
Cash and cash equivalents at end of period $ 22,821 73,205
======== ========
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PETROL INDUSTRIES, INC.
Consolidated Statements of Changes in Stockholders' Deficit
Six months ended June 30, 2001 and 2000
(unaudited)
2001 2000
---- ----
<s> <c> <c>
Stockholder's deficit at January 1 $ (1,055,014) (1,020,246)
Net loss for the six month period (68,955) (25,772)
---------- ----------
Stockholder's deficit at June 30 $ (1,123,969) (1,046,018)
========== ==========
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PETROL INDUSTRIES, INC.
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 2000 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 2001 or 2000.
3. Net income per share of common stock is computed on the weighted average
number of shares outstanding during the six months ended June 30.
Totaling the number of shares outstanding at the end of each month and
dividing that total by the number of months determined the weighted
average number of shares outstanding.
Total Number of
Shares Outstanding
2000 2001
---- ----
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
4. The expected tax benefit resulting from operating losses for the first
six months of 2001 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 June 30, 2001.
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYISIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Oil and gas sales revenues decreased approximately 11.7% in the second
quarter of 2001, compared to the second quarter of 2000, the result being an
approximate 10.7% decrease in production. The Company's net loss for the
period decreased to $30,361, or ($.02) pr share compared to $34,948 in the
2000 period, or ($.03) per share.
The Company sustained an operating loss of $24,202 in the second
quarter of 2001, compared to an operating loss of $24,714 in the prior
year's second quarter. For the six month period ending June 30, 2001,
the Company's net loss increased approximately 167.6% to $68,955 from the
$25,772 net loss in the prior year's period caused principally by serious
inclement weather conditions that prevailed during the first quarter.
Management has attempted to reduce operating costs over the past
several years in an effort to restore profitability. Profitability is
contingent essentially upon two factors: increasing production from the
Company's mineral leases and increases in world oil prices. Management
continues to explore possible approaches to increasing oil production,
including technological developments or pursuing drilling operations.
Oil prices averaged $23.94 per barrel during the second quarter of
2001, compared to an average of $25.45 per barrel in the 2000 period. For
the six-month period, oil prices averaged $24.87 per barrel in 2001
compared to $25.60 in 2000.
The Company had cash and cash equivalents at June 30, 2001, of
$22,821, compared to $50,725 at the end of the 2000 fiscal year.
Management estimates that it owes $333,213 from the settlement of the
Horne Lease dispute with Oryx to owners of other interests in the Horne
Lease.
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
None.
Item 2. CHANGES IN SECURITIES.
None.
Item 3. DEFAULTS UPON SENIOR SEUCURITIES.
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.
Date: August 14, 2001
PETROL INDUSTRIES, INC.
Joseph M. Rodano
By:_________________________________
Joseph M. Rodano
President and Treasurer