U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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, 2003
[ ] 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,
2003 2002
--------- ------------
ASSETS
------
Current assets:
Cash and cash equivalents $ 42,395 47,405
Accounts receivable:
Trade 60,841 33,246
Other 9,498 9,498
---------- ----------
70,339 42,744
Inventory 32,550 31,427
Prepaid expenses 11,139 6,463
---------- ----------
Total current assets 156,423 128,039
---------- ----------
Property and equipment, at cost:
Land 7,000 7,000
Developed and undeveloped oil and gas
properties-successful efforts method 3,581,902 3,711,155
Trucks and other operating equipment 350,753 365,104
Furniture and fixtures 35,681 35,681
---------- ----------
3,975,336 4,118,940
Less accumulated depreciation, depletion and
amortization 3,878,155 4,022,765
---------- ----------
97,181 96,175
Other assets 1,107 1,107
---------- ----------
$ 254,711 225,321
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
Current liabilities:
Accounts payable $ 49,490 89,068
Payable to interest owners 300,233 341,789
Payable to officer, net 957,071 942,705
Note payable 279,693 258,193
Accrued expenses 90,630 92,650
---------- ----------
Total current liabilities 1,677,117 1,724,405
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 (1,582,126) (1,658,804)
---------- ----------
Total stockholders' deficit (1,422,406) (1,499,084)
---------- ----------
$ 254,711 225,321
========== ==========
PETROL INDUSTRIES, INC.
Consolidated Statements of Operations
Three Months Ended March 31, 2003 and 2002
(unaudited)
2003 2002
---- ----
Revenues:
Oil and gas sales $ 199,785 86,557
Other operating income 6,036 4,727
--------- --------
205,821 91,284
--------- --------
Expenses:
Lease operating expense 135,069 131,523
General and administrative 35,501 32,365
Depreciation, depletion
and amortization 3,330 2,775
--------- ---------
173,900 166,663
--------- ---------
Operating income/(loss) 31,921 (75,379)
--------- ---------
Other income and (expense):
Gain on sale of assets 61,500 ---
Interest income 2 5
Interest expense (16,745) (14,195)
--------- ---------
44,757 (14,189)
--------- ---------
Net income/(loss) $ 76,678 (89,568)
========= =========
Net income/(loss) per share $ 0.05 (0.06)
========= =========
Average common shares
outstanding 1,597,196 1,597,196
========= =========
PETROL INDUSTRIES, INC.
Consolidated Statements of Cash Flows
Three Months Ended March 31, 2003 and 2002
(unaudited)
2003 2002
---- ----
Operating activities:
Net loss $ 76,678 (89,568)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Depreciation, depletion and amortization 3,330 2,775
Gain on sale of assets (61,500) ---
Losses on retirements of property and
equipment included in lease operating
expenses --- ---
Changes in assets and liabilities:
Increase in accounts receivable (27,595) (8,148)
Increase in inventory (1,123) (5,379)
Increase in prepaid expenses (4,676) (6,909)
(Decrease) increase in accounts payable
and accrued expenses (41,598) 16,897
Increase in payable to officer, net 14,366 13,729
(Decrease) increase in payable to interest
owners (41,556) ---
------- -------
Net cash (used) by operating activities (83,674) (76,603)
Investing activities:
Capital expenditures (4,337) (1,105)
Proceeds from sale of property and equipment 61,500 ---
------- -------
Net cash used by investing activities 57,163 (1,105)
Financing activities:
Proceeds from gross borrowings 25,000 64,000
Repayments of gross borrowings (3,500) (1,500)
------- -------
Net cash provided by financing activities 21,500 62,500
Increase (decrease) in cash and cash equivalents (5,011) (15,208)
Cash and cash equivalents at beginning of period 47,405 55,986
------- -------
Cash and cash equivalents at end of period $ 42,394 40,778
======= =======
PETROL INDUSTRIES, INC.
Consolidated Statements of Changes in Stockholders' Deficit
Three Months Ended March 31, 2003 and 2002
(unaudited)
2003 2002
---- ----
Stockholder's deficit at January 1 $ (1,499,084) (1,260,686)
Net loss for the three month period 76,678 (89,568)
---------- ----------
Stockholder's deficit at March 31 $ (1,422,406) (1,350,254)
========== ==========
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 2002 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 2003 or 2002.
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
2003 2002
---- ----
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 operations for the first
three months of 2003 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, 2003.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYISIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
With an increase of approximately 43.5% in production and an
increase of approximately 28.1% increase in average oil prices, oil and
gas sales revenues increased significantly during the first quarter of
2003, as compared to the 2002 period. The Company realized a net income
of $76,678, or $.05 per share, as compared to a net loss of $89,568, or
($.06) per share, in the 2002 period.
The Company realized an operating income of $21,921 in the first
quarter of 2003, compared to an operating loss of $75,379 in the prior
year's first quarter. Oil prices averaged $25.40 per barrel during the
first quarter of 2003, compared to an average of $18.25 per barrel in the
2002 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, 2003, of
$42,395, compared to $47,405 at the end of the 2002 fiscal year.
Management estimates that it owes $300,233 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.
Item 5. Other Information.
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.
Dated: March 31, 2003 PETROL INDUSTRIES, INC.
S/Joseph M. Rodano
By:__________________________________
Joseph M. Rodano
President & Treasurer
CERTIFICATION
-------------
I, Joseph M. Rodano, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Petrol
Industries, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this Quarterly Report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for the periods presented in
this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
c) presented this quarterly report our conclusions about the about the
effectiveness of the disclosure controls and procedures based on
our Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses
in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
Date: March 15, 2003
S/Joseph M. Rodano
_________________________
Joseph M. Rodano
President & Treasurer
CERTIFICATION
-------------
I, Arlys C. Milan, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Petrol
Industries, Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this Quarterly Report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for the periods presented in
this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing
date of this quarterly report (the "Evaluation Date"); and
c) presented this quarterly report our conclusions about the about the
effectiveness of the disclosure controls and procedures based on our
Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses
in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
Date: March 15, 2003
s/Arlys C. Milan
_________________________
Arlys C. Milan
Vice President & Secretary