FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1997
Commission File No. 0-10286
General Energy Resources and Technology Corporation
(Exact name of registrant as specified in its charter)
Michigan 38-2266968
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
401 W. Front Street
Traverse City, Michigan 49684
(Address of principal executive offices)
616-946-1473
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for a 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 ( ) No (X).
Applicable only to Corporate Issuers:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date.
Common Stock, Par Value $.10 - 7,991,870 shares, as of June 30,
1997.
GENERAL ENERGY RESOURCES AND TECHNOLOGY CORPORATION
Index to Form 10-Q
PART I - Financial Information Page
Item 1 Balance Sheets. . . . . . . . . . . . . . . . . . .3
Statements of Operations. . . . . . . . . . . . . .5
Statement of Cash Flows . . . . . . . . . . . . . .7
Notes to Financial Statements . . . . . . . . . . .8
Item 2 Management's Discussion and Analysis of Financial
Conditions and Results of Operations. . . . . . .9
PART II - Other Information
Signatures. . . . . . . . . . . . . . . . . . . . .11
PART I - FINANCIAL INFORMATION
General Energy Resources and Technology Corporation
Balance Sheets
Item 1
ASSETS
June 30, December 31,
1997 1996
(Unaudited) (Unaudited)
CURRENT ASSETS:
Cash $ 7,212 $ 8,858
Accounts Receivable Trade, Less
Allowance for Doubtful Accounts
of $8,698 101,264 121,220
Prepaid Expenses 1,179 500
_________ _________
Total Current Assets 109,655 130,578
PROPERTY AND EQUIPMENT, AT COST:
Proved Oil and Gas Properties,
Successful Efforts Method of
Accounting 2,523,934 2,726,399
Unproved Leasehold and Minerals 0 85,106
Drilling Contracts in Progress 11,685 10,070
_________ _________
Total Property and Equipment 2,535,619 2,821,575
Less Accumulated Depreciation,
Depletion, and Amortization 2,357,576 2,536,810
_________ _________
Net Property and Equipment 178,043 284,765
OTHER ASSETS:
Investments (net of unrealized
loss of $288,950) 1,050 1,050
_________ _________
$ 288,748 $ 416,393
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current Installments of
Long-Term Debt $ 3,000 $ 3,000
Accounts Payable Trade 457,934 464,012
Notes Payable 0 21,500
Salaries Payable 53,692 53,692
_________ _________
Total Current Liabilities 514,626 542,204
LONG-TERM DEBT 40,011 47,521
STOCKHOLDERS' EQUITY:
Common Stock ($.10 Par Value,
18,000,000 Shares Authorized,
7,991,870 Shares Issued and
Outstanding) 799,187 799,187
Additional Paid-in Capital 7,435,012 7,435,012
Deficit (8,500,088) (8,407,531)
_________ _________
Total Stockholders' Equity (265,889) (173,332)
$ 288,748 $ 416,393
========= =========
See Accompanying Notes to Financial Statements
General Energy Resources and Technology Corporation
Statements of Operations
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
REVENUES:
Oil and Gas Sales:
Working Interest $ 24,581 $ 19,536 $ 50,406 $ 35,453
Royalty Interest 806 15,936 19,404 31,689
Repromotional Income 0 2,349 0 2,349
Gain/Loss on Sale of Assets (32,146) (4,352) (32,146) (4,352)
Administrative Overhead 4,200 6,200 8,400 10,400
Consulting Fees 0 0 0 577
Write-off of Expired Credits 0 0 0 66,116
Miscellaneous Income 0 2 0 2
_________ _________ _________ _________
Total Revenues (2,559) 39,671 46,064 142,234
COSTS AND EXPENSES:
Lease and Operating Expenses 13,513 4,830 32,457 22,589
Taxes Other Than on Income 1,668 2,248 4,478 4,234
Dry Holes and Abandonments 24 28 (158) 84
Depreciation, Depletion and
Amortization 3,174 3,709 6,178 6,890
General and Administrative 43,845 39,277 92,482 115,435
Interest Expense 2,327 0 3,184 0
_________ _________ _________ _________
Total Costs/Expenses 64,551 50,092 138,621 149,232
_________ _________ _________ _________
NET INCOME (LOSS) $ (67,110) $ (10,421) $ (92,557) $ (6,998)
========= ========= ========= =========
NET INCOME (LOSS) PER WEIGHTED
AVERAGE SHARE OF COMMON STOCK $ (.008) $ (.001) (.01) (.0009)
========= ========= ========= =========
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 7,991,870 7,991,870 7,991,870 7,991,870
========= ========= ========= =========
See Accompanying Notes to Financial Statements
/TABLE
General Energy Resources and Technology Corporation
Statement of Cash Flows
Six Months Ended June 30, (Unaudited)
1997 1996
____ ____
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (92,557) $ (6,998)
Adjustments to Reconcile Net
Earnings to Net Cash Provided by
Operating Activities:
Depreciation, Depletion and
Amortization 6,178 6,890
Abandonments, Expired and
Surrendered Leases 14 0
(Gain)Loss on Sale of Oil and
Gas Properties 32,146 4,353
(Increase)Decrease in Current Assets:
Trade Accounts Receivable 19,956 (51,020)
Prepaid Expenses (679) 375
Increase(Decrease) in Current Liabilities:
Trade Accounts Payable (6,078) 91,718
Notes Payable (21,500) 0
Joint Interest Prepayments 0 (135,371)
Expired Credits - Stock Purchase
Overpayment 0 (25,603)
_________ _________
NET CASH FROM OPERATING
ACTIVITIES (62,520) (115,656)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Property and
Equipment (1,616) (1,908)
Proceeds From Sale of Oil and Gas
Property 70,000 1,973
_________ _________
NET CASH FROM INVESTING
ACTIVITIES 68,384 65
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase(Decrease) in
Long-Term Debt (7,510) 2,345
_________ _________
NET CASH FROM FINANCING
ACTIVITIES (7,510) 2,345
_________ _________
NET INCREASE(DECREASE) IN
CASH (1,646) (113,246)
CASH AT BEGINNING OF PERIOD 8,858 136,108
_________ _________
CASH AT END OF PERIOD $ 7,212 $ 22,862
========= =========
General Energy Resources and Technology Corporation
Notes to Financial Statements
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Property and Equipment
The Company utilizes the successful efforts method of accounting
for it's oil and gas exploration and development program. Under
this method of accounting, costs of drilling and completing
successful wells are capitalized, while costs of dry holes are
charged to expense when incurred. Depletion and amortization of
producing leasehold and mineral interests and related intangible
development costs are provided by the unit-of-production method
based on estimates of recoverable oil and gas reserves prepared
by independent petroleum engineers. Lease and well equipment is
depreciated over its estimated useful life (seven years) by the
straight-line method.
Costs of nonproducing leasehold and mineral interests are not
amortized but are charged to operations when such properties are
abandoned, surrendered, determined to be worthless or transferred
to producing properties and depleted when successfully developed.
Maintenance and repairs are charged to expense when incurred.
Renewals and betterments are capitalized. When assets are sold,
retired or otherwise disposed of, applicable costs and
accumulated depreciation and depletion are removed from the
accounts and the resulting gain or loss is recognized.
Interest Capitalization
Interest costs applicable to the drilling and equipment of in-
progress and shut-in oil and gas wells are capitalized until such
time as the wells begin producing. There were no entries for
interest capitalization during 1997 and 1996.
Earnings Per Share
Earnings per share is based on the weighted average number of
shares outstanding.
NOTE 2
NON CASH TRANSACTIONS
The Company had the following non June 30, Dec. 31,
cash transactions during the 1997 1996
periods ending June 30, 1997
and December 31, 1996 -0- -0-
NOTE 3
LONG-TERM DEBT
On June 1, 1990, the Company signed a $292,814 promissory note
with Mosbacher Energy Company (MEC) for the amount owed MEC by
General Energy Corporation for well operations as of May 7, 1990.
The note is secured by the Company's interest in eleven producing
properties operated by MEC and bears interest at 7 1/4 percent
per annum. Additional terms of the agreement call for monthly
payments of the lesser of $20,000 or the month's production to
MEC. Based on current production estimates, management expects to
reduce this loan by approximately $250 per month.
NOTE 4
INTERIM STATEMENTS
The Company believes that the accompanying unaudited financial
statements contain all adjustments (including appropriate
provision for depreciation, depletion and amortization normally
determined at year end) necessary to present fairly the financial
position as of June 30, 1997 and December 31, 1996, and the
results of operations for the six months ended June 30, 1997 and
1996. All adjustments are of a normal recurring nature, except as
follows:
June 30, Dec. 31,
1997 1996
____ ____
Loss on Sale of Assets $ 32,146
Write-offs of Expired Credits $ 66,116
Interim financials should not necessarily be considered to be
indicative of the results of operations for the entire year.
NOTE 5
CONTINGENCIES
The prices of the Company's natural gas production are subject to
the regulations of the Federal Energy Regulatory Commission
(FERC). The Company believes it has substantially complied with
regulations as issued.
Item 2 - Management's Discussion and Analysis of Financial
Conditions and Results of Operations
Results of Operations
The Company's total earned revenue for the six months ended June
30, 1997 totaled $46,064. This represents a decrease of ($96,170)
from the same period in 1996 and is largely the result of a loss
in the six months ended June 30, 1997 in the amount of ($32,146)
from the sale of the Company's mineral interest and income in the
six months ended June 30, 1996 from the write-off of expired
credits in the amount of $66,116.
Total expenses decreased ($10,611) from $149,232 at June 30, 1996
to $138,621 at June 30, 1997.
The Company's net profit for the six months ended June 30, 1997
decreased ($85,559) from $6,998 at June 30, 1996 to ($92,557) at
June 30, 1997.
Liquidity/Capital Resources
Net cash from operating activities increased $53,136 to ($62,520)
at June 30, 1997 compared to ($115,656) at June 30, 1996.
Management feels that cash flows will be sufficient to pay
current operating liabilities and to amortize the remaining
current portion of it's long-term debt.
Management has developed contingency plans to obtain additional
capital by the issuance of debt or sale of equities to the extent
that these actions become necessary in the future.
PART II - OTHER INFORMATION
General Energy Resources and Technology Corporation
Signatures
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, on
the 18th day of November, 1997.
GENERAL ENERGY RESOURCES AND
TECHNOLOGY CORPORATION
By: H. TERRY SNOWDAY, JR.
_______________________________
H. Terry Snowday, Jr.
President and Director
(Principal Executive Officer)