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: June 30, 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
June 30, December 31,
2002 2001
-------- ------------
<s> <c> <c>
ASSETS
------
Current assets:
Cash and cash equivalents $ 54,421 55,986
Accounts receivable:
Trade 33,250 25,950
Other 9,498 9,498
---------- ----------
42,748 35,448
Inventory 32,355 21,228
Prepaid expenses 11,462 4,247
---------- ----------
Total current assets 140,986 116,909
---------- ----------
Property and equipment, at cost:
Land 7,000 7,000
Developed and undeveloped oil and gas
properties-successful efforts method 3,730,449 4,131,447
Trucks and other operating equipment 344,002 357,773
Furniture and fixtures 33,986 33,722
---------- ----------
4,115,437 4,529,942
Less accumulated depreciation, depletion
and amortization 4,019,062 4,450,985
---------- ----------
96,375 78,957
---------- ----------
Other assets 1,107 1,107
---------- ----------
$ 238,468 196,973
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
Current liabilities:
Accounts payable $ 56,373 39,143
Payable to interest owners 335,047 335,427
Payable to officer, net 914,524 886,898
Notes payable 216,193 106,856
Accrued expenses 91,129 89,335
---------- ----------
Total current liabilities 1,613,266 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 (1,534,518) (1,420,406)
---------- ----------
Total stockholders' deficit (1,374,798) (1,260,686)
---------- ----------
$ 238,468 196,973
========== ==========
PETROL INDUSTRIES, INC.
Consolidated Statements of Operations
(unaudited)
Quarter Ended Year Ended
June 30, June 30,
-------------------- --------------------
2002 2001 2002 2001
-------------------- --------------------
<s> <c> <c> <c> <c>
Revenues:
Oil and gas sales $ 107,228 147,986 194,208 287,560
Other operating income 4,231 7,722 8,959 16,480
--------- --------- --------- ---------
111,459 155,708 203,167 304,040
--------- --------- --------- ---------
Expenses:
Lease operating expense 111,091 130,089 242,627 259,601
General and administrative 45,180 47,046 77,545 91,386
Depreciation, depletion
and amortization 2,775 2,775 5,550 5,550
--------- --------- --------- ---------
159,046 179,910 325,722 356,537
--------- --------- --------- ---------
Operating loss $ (47,587) (24,202) (122,555) (52,497)
--------- --------- --------- ---------
Other income and (expense):
Gain on sale of assets 38,057 4,000 38,057 4,040
Interest income 50 168 54 435
Interest expense (15,473) (10,327) (29,668) (20,933)
--------- --------- --------- ---------
22,634 (6,159) 8,443 (16,458)
--------- --------- --------- ---------
Net loss $ (24,953) (30,361) (114,112) (68,955)
========= ========= ========= =========
Net loss per share $ (0.02) (0.02) (0.08) (.04)
========= ========= ========= =========
Average common shares
outstanding 1,597,196 1,597,196 1,597,196 1,597,196
========= ========= ========= =========
PETROL INDUSTRIES, INC.
Consolidated Statements of Cash Flows
Six months ended June 30, 2002 and 2001
(unaudited)
2002 2001
---- ----
<s> <c> <c>
Operating activities:
Net loss $ (114,112) (68,955)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Depreciation, depletion and amortization 5,550 5,550
Gain on sale of assets (38,057) (4,040)
Losses on retirements of property and equipment
included in lease operating expenses --- ---
Changes in assets and liabilities:
Decrease (increase) in accounts receivable (7,300) 3,029
Decrease (increase) in inventory (11,127) 12,297
Increase in prepaid expenses (7,215) (10,058)
Increase in accounts payable and accrued
expenses 19,024 4,575
Increase in payable to officer, net 27,626 26,826
Increase (decrease) in payable to interest
owners (380) 4,740
-------- -------
Net cash (used) provided by operating
activities (125,991) (26,036)
Investing activities:
Capital expenditures (25,229) (5,908)
Proceeds from sale of property and equipment 40,318 4,040
-------- -------
Net cash provided (used) by investing
activities 15,089 (1,868)
Financing activities:
Proceeds from gross borrowings 128,900 ---
Repayments of gross borrowings (19,563) ---
-------- -------
Net cash provided by financing activities 109,337 ---
Increase (decrease) in cash and cash equivalents (1,565) (27,904)
Cash and cash equivalents at beginning of period 55,986 50,725
-------- -------
Cash and cash equivalents at end of period $ 54,421 22,821
======== =======
PETROL INDUSTRIES, INC.
Consolidated Statements of Changes in Stockholders' Deficit
Six months ended June 30, 2002 and 2001
(unaudited)
2002 2001
Stockholder's deficit at January 1 $ (1,260,686) (1,055,014)
Net loss for the six-month period (114,112) (68,955)
---------- ----------
Stockholder's deficit at June 30 $ (1,374,798) (1,123,969)
========== ==========
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 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
------------------
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
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 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 June 30, 2002.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYISIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
Oil and gas sales revenues decreased approximately 27.6% in the
second quarter of 2002, compared to the second quarter of 2001, the
result being an approximate 23.3% decrease in production. The
Company's net loss for the period decreased to $24,953, or ($.02) per
share compared to $30,361 in the 2001 period, or ($.02) per share.
The Company sustained an operating loss of $47,587 in the second
quarter of 2002, compared to an operating loss of $24,202 in the prior
year's second quarter. For the six-month period ending June 30, 2002,
the Company's net loss increased approximately 65.5% to $114,112 from
the $68,956 net loss in the prior year's period.
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 $22.14 per barrel during the second quarter of
2002, compared to an average of $23.94 per barrel in the 2001 period.
For the six-month period, oil prices averaged $20.23 per barrel in
2001 compared to $24.87 in 2001.
The Company obtained a note payable from an individual in the
amount of $24,000, currently $17,000 as of June 30, 2002. The note
bears interest at 0.00% and is repayable in 48 monthly installments of
$500, beginning June 1, 2002 and on the first day of each month
thereafter until paid. The note is secured by oil, gas and mineral
interest leases.
The Company had cash and cash equivalents at June 30, 2002, of
$54,421, compared to $55,986 at the end of the 2001 fiscal year.
Management estimates that it owes $335,047 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: August 14, 2002
PETROL INDUSTRIES, INC.
By: s/Joseph M. Rodano
---------------------------
Joseph M. Rodano
President and Treasurer