1
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, 1998
[ ] 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 No.)
Incorporation or 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
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
PETROL INDUSTRIES, INC. & SUBSIDIARIES
Consolidated Balance Sheets
March 31, December 31,
ASSETS 1998 1997
------ --------- ------------
(unaudited)
Current assets:
Cash and cash equivalents $ 133,185 174,809
Accounts receivable:
Trade 54,598 56,499
Other 9,497 9,497
--------- ---------
64,095 66,316
Inventory 36,449 43,643
Prepaid expenses 7,957 2,468
--------- ---------
Total current assets 241,686 287,236
--------- ---------
Property and equipment, at cost:
Land 7,000 7,000
Developed and undeveloped oil and gas
properties-successful efforts method 4,187,958 4,180,055
Trucks and other operating equipment 341,074 349,911
Furniture and fixtures 44,015 44,015
--------- ---------
4,580,047 4,580,981
Less accumulated depreciation, depletion and
amortization 4,519,009 4,521,200
--------- ---------
61,038 59,781
--------- ---------
Cash surrender value of life insurance, net 59,521 56,746
Other assets 1,107 1,107
--------- ---------
$ 363,352 404,870
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
Current liabilities:
Accounts payable $ 42,359 47,611
Payable to interest owners 306,844 303,692
Payable to officer, net 440,080 391,701
Accrued expenses 125,855 112,991
--------- ---------
Total current liabilities 915,138 855,995
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 1998 and 1997 159,720 159,720
Accumulated deficit (711,506) (610,845)
--------- ---------
Total stockholders' deficit (551,786) (451,125)
--------- ---------
$ 363,352 404,870
========= =========
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PETROL INDUSTRIES, INC. & SUBSIDIARIES
Consolidated Statements of Operations
Three months ended March 31, 1998 and 1997
(unaudited)
1998 1997
---- ----
Revenues:
Oil and gas sales $ 137,024 207,555
Other operating income 6,630 4,161
--------- ---------
143,654 211,716
--------- ---------
Expenses:
Lease operating expense 148,616 175,330
General and administrative 86,787 86,014
Depreciation, depletion and amortization 1,800 1,515
--------- ---------
237,203 262,859
--------- ---------
Operating loss (93,549) (51,143)
Other income and (expense):
Loss-sale of assets (408) ---
Interest income 2,194 2,737
Interest expense (8,898) (6,894)
--------- ---------
(7,112) (4,157)
--------- ---------
Net loss $ (100,661) (55,300)
========= =========
Net loss per share (.06) (.04)
========= =========
Average common shares outstanding 1,597,196 1,597,196
========= =========
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PETROL INDUSTRIES, INC. & SUBSIDIARIES
Consolidated Statements of Cash Flows
Three months ended March 31, 1998 and 1997
(unaudited)
1998 1997
---- ----
Operating activities:
Net loss $ (100,661) (55,300)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation, depletion and amortization 1,800 1,515
Loss on sale of assets 408 ---
Losses on retirements of property and
equipment included in lease operating expenses (616) (1,850)
Changes in assets and liabilities:
Cash surrender value of life insurance (2,775) (2,775)
Accounts receivable 2,221 8,150
Inventory 7,194 (4,813)
Prepaid expenses (5,489) (7,077)
Accounts payable and accrued expenses 7,612 6,529
Payable to officer, net 48,379 46,836
Payable to interest owners 3,152 8,049
Net cash (used) provided by operating --------- ---------
activities (38,775) (736)
Investing activities:
Capital expenditures (2,849) (244)
--------- ---------
Net cash used by investing activities (2,849) (244)
Increase (decrease) in cash and cash equivalents (41,624) (980)
Cash and cash equivalents at beginning of period 174,809 218,355
--------- ---------
Cash and cash equivalents at end of period $ 133,213 217,375
========= =========
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PETROL INDUSTRIES, INC. & SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Deficit
Three months ended March 31, 1998 and 1997
(unaudited)
1998 1997
---- ----
Stockholders' deficit at January 1 $ (451,125) (214,929)
Net loss for the three-month period (100,661) (55,300)
--------- ---------
Stockholders' deficit at March 31 (551,786) (270,229)
========= =========
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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 1997 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 1997 or 1996.
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. 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
1998 1997
---- ----
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 1998 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, 1998.
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Even with an increase of 8.9% in production, oil and gas sales revenues
were significantly lower during the first quarter of 1998, caused by a 34.7%
decline in oil prices as compared to the 1997 period. The Company's net loss
increased to $100,661, or ($.06) per share, compared to a net loss of $55,300,
or ($.04) per share in the 1997 period.
The Company sustained an operating loss of $93,549 in the first quarter
of 1998, compared to an operating loss of $51,143 in the first quarter of
1997. Oil prices averaged $13.66 per barrel during the first quarter of 1998,
compared to an average of $20.91 per barrel in the 1997 period.
The Company had cash and cash equivalents at March 31, 1998, of $133,185,
compared to $174,809 at the end of the 1997 fiscal year.
Management estimates that it owes $306,844 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.
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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: May 13, 1998
PETROL INDUSTRIES, INC.
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