U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 2049
FORM 10-QSB
OMB Approval
OMB Number: xxxx-xxxx
Expires: Approval Pending
Estimated Average Burden Hours per Response: 1.0
(Mark One)
[xx] Quarterly report under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended: March 31, 2002
____ 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 Number)
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)
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
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
PETROL INDUSTRIES, INC. & SUBSIDIARIES
Consolidated Balance Sheets
March 31, December 31,
2002 2001
--------- ------------
ASSETS
------
<s> <c> <c>
Current assets:
Cash and cash equivalents $ 40,778 55,986
Accounts receivable:
Trade 34,098 25,950
Other 9,498 9,498
---------- ----------
43,596 35,448
Inventory 26,607 21,228
Prepaid expenses 11,156 4,247
---------- ----------
Total current assets 122,137 116,909
---------- ----------
Property and equipment, at cost:
Land 7,000 7,000
Developed and undeveloped oil and gas
properties-successful efforts method 4,131,042 4,131,447
Trucks and other operating equipment 359,019 357,773
Furniture and fixtures 33,986 33,722
---------- ----------
4,531,047 4,522,942
Less accumulated depreciation, depletion and
amortization 4,453,760 4,450,985
---------- ----------
77,287 78,957
Other assets 1,107 1,107
---------- ----------
$ 200,531 196,973
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
Current liabilities:
Accounts payable $ 47,984 39,143
Payable to interest owners 335,427 335,427
Payable to officer, net 900,627 886,898
Note payable 169,356 106,856
Accrued expenses 97,391 89,335
---------- ----------
Total current liabilities 1,550,785 1,457,659
---------- ----------
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 2002 and 2001 159,720 159,720
Accumulated deficit (1,509,974) (1,420,406)
---------- ----------
Total stockholders' deficit (1,350,254) (1,260,686)
---------- ----------
$ 200,531 196,973
========== ==========
PETROL INDUSTRIES, INC.
Consolidated Statements of Operations
Three Months Ended March 31, 2002 and 2001
(unaudited)
2002 2001
---- ----
<s> <c> <c>
Revenues:
Oil and gas sales $ 86,557 139,575
Other operating income 4,727 8,758
--------- ---------
91,284 148,333
--------- ---------
Expenses:
Lease operating expense 131,523 129,511
General and administrative 32,365 44,342
Depreciation, depletion
and amortization 2,775 2,775
--------- ---------
166,663 176,628
--------- ---------
Operating loss (75,379) (28,295)
--------- ---------
Other income and (expense):
Gain on sale of assets --- 40
Interest income 5 267
Interest expense (14,194) (10,605)
--------- ---------
(14,189) (10,298)
--------- ---------
Net loss $ (89,568) (38,593)
========= =========
Net loss per share $ (0.06) (0.03)
========= =========
Average common shares
outstanding 1,597,196 1,597,196
========= =========
PETROL INDUSTRIES, INC.
Consolidated Statements of Cash Flows
Three Months Ended March 31, 2002 and 2001
(unaudited)
2002 2001
---- ----
<s> <c> <c>
Operating activities:
Net loss $ (89,568) (38,593)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Depreciation, depletion and amortization 2,775 2,775
Gain on sale of assets --- 40
Losses on retirements of property and equipment
included in lease operating expenses --- ---
Changes in assets and liabilities:
Decrease (increase) in accounts receivable (8,148) 8,294
Decrease (increase) in inventory (5,379) 16,373
Increase in prepaid expenses (6,909) (7,531)
Increase in accounts payable and accrued expenses 16,897 283
Increase in payable to officer, net 13,729 13,552
Increase in payable to interest owners --- 2,461
------- -------
Net cash (used) provided by operating
activities (76,603) (2,426)
Investing activities:
Capital expenditures (1,105) (5,190)
Proceeds from sale of property and equipment --- 40
------- -------
Net cash used by investing activities (1,105) (5,150)
Financing activities:
Proceeds from gross borrowings 64,000 ---
Repayments of gross borrowings (1,500) ---
------- -------
Net cash provided by financing activities 62,500 ---
Increase (decrease) in cash and cash equivalents (15,208) (7,576)
Cash and cash equivalents at beginning of period 55,986 50,725
------- -------
Cash and cash equivalents at end of period $ 40,778 43,149
======= =======
PETROL INDUSTRIES, INC.
Consolidated Statements of Changes in Stockholders' Deficit
Three Months Ended March 31, 2002 and 2001
(unaudited)
2002 2001
---- ----
<s> <c> <c>
Stockholder's deficit at January 1 $ (1,260,686) (1,055,014)
Net loss for the three-month period (89,568) (38,593)
---------- ----------
Stockholder's deficit at March 31 $ (1,350,254) (1,093,607)
========== ==========
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 2001 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 2002 or 2001.
3. Net income per share of common stock is computed on the weighted
average number of shares outstanding during the three months ended March
31. 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
2002 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
4. The expected tax benefit resulting from operating losses for the first
three months of 2002 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 March 31, 2002.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYISIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
With a decrease of approximately 26.1% in production and a
decrease of approximately 29.4% decrease in average oil prices, oil
and gas sales revenues decreased significantly during the first
quarter of 2002, as compared to the 2001 period. The Company
sustained a net loss of $89,568, or ($.06) per share, compared to a
net loss of $38,593, or ($.03) per share, in the 2001 period.
The Company sustained an operating loss of $75,379 in the first
quarter of 2002, compared to an operating loss of $28,295 in the prior
year's first quarter. Oil prices averaged $18.25 per barrel during
the first quarter of 2002, compared to an average of $25.80 per barrel
in the 2001 period.
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.
The Company had cash and cash equivalents at March 31, 2002, of
$40,778, compared to $55,986 at the end of the 2001 fiscal year.
Management estimates that it owes $335,427 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 Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
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: March 15, 2002
PETROL INDUSTRIES, INC.
By: S/Joseph M. Rodano
------------------------
Joseph M. Rodano
President and Treasurer