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 March 31, 1999
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 (X) No ( ).
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 March 31,
1999.
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 . . . . . . . . . . . . . .6
Notes to Financial Statements . . . . . . . . . . .7
Item 2 Management's Discussion and Analysis of Financial
Conditions and Results of Operations. . . . . . .8
PART II - Other Information
Signatures. . . . . . . . . . . . . . . . . . . . 10
PART I - FINANCIAL INFORMATION
General Energy Resources and Technology Corporation
Balance Sheets
Item 1
ASSETS
March 31, December 31,
1999 1998
(Unaudited) (Unaudited)
CURRENT ASSETS
Cash $ 2,421 $ 2,817
Accounts Receivable Trade 63,392 48,819
Less Allowance for Doubtful
Accounts (13,526) (13,526)
Prepaid Expenses 1,701 1,785
_________ _________
Total Current Assets 53,988 39,895
PROPERTY AND EQUIPMENT, AT COST
Proved Oil and Gas Properties,
Successful Efforts Method of
Accounting 2,358,252 2,358,252
_________ _________
Total Property and Equipment 2,358,252 2,358,252
Less Accumulated Depreciation,
Depletion, and Amortization 2,230,010 2,227,650
_________ _________
Net Property and Equipment 128,242 130,602
OTHER ASSETS
Investments (net of unrealized
loss of $288,950) 1,050 1,050
_________ _________
$ 183,280 $ 171,547
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current Installments of
Long-Term Debt $ 0 $ 0
Accounts Payable Trade 412,044 408,416
Notes Payable 134,900 113,400
Salaries Payable 61,292 57,892
Accrued Interest 9,252 6,240
_________ _________
Total Current Liabilities 617,488 585,948
LONG-TERM DEBT 53,101 52,947
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 (8,721,508) (8,701,547)
_________ _________
Total Stockholders' Equity (487,309) (467,348)
$ 183,280 $ 171,547
========= =========
See Accompanying Notes to Financial Statements
General Energy Resources and Technology Corporation
Statements of Operations
Three Months Ended March 31, (Unaudited)
1999 1998
____ ____
REVENUES
Oil and Gas Sales
Working Interest $ 16,149 $ 18,283
Royalty Interest 215 2,768
Expense Reimbursement 12,000 15,000
Administrative Overhead 4,200 4,200
Gain(Loss) in sale of oil and
gas property 0 900
Oilfield Revenue Distribution 0 420
_________ _________
Total Revenues 32,564 41,571
COSTS AND EXPENSES
Lease and Operating Expenses 12,005 17,352
Taxes Other Than on Income 994 936
Dry Holes and Abandonments 0 11
Depreciation, Depletion and
Amortization 2,361 2,686
General and Administrative 34,153 35,382
Interest Expense 3,012 759
_________ _________
Total Expenses 52,525 57,126
_________ _________
NET INCOME (LOSS) $ (19,961) $ (15,555)
========= =========
NET INCOME (LOSS) PER WEIGHTED
AVERAGE SHARE OF COMMON STOCK $ (.002) $ (.002)
_________ _________
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 7,991,870 7,991,870
_________ _________
See Accompanying Notes to Financial Statements
General Energy Resources and Technology Corporation
Statement of Cash Flows
Three Months Ended March 31, (Unaudited)
1999 1998
____ ____
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ (19,961) $ (15,555)
Adjustments to Reconcile Net
Earnings to Net Cash Provided by
Operating Activities
Depreciation, Depletion and
Amortization 2,361 2,686
Abandonments, Expired and
Surrendered Leases 0 0
(Gain)Loss on Sale of Oil and
Gas Properties 0 0
(Increase)Decrease in Current Assets:
Trade Accounts Receivable (14,573) (89)
Prepaid Expenses 84 (114)
Increase(Decrease) in Current Liabilities:
Trade Accounts Payable 7,027 859
Notes Payable 21,500 17,000
Accrued Interest 3,012 0
_________ _________
NET CASH FROM OPERATING
ACTIVITIES (550) 4,787
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of Property and
Equipment 0 0
_________ _________
NET CASH FROM INVESTING
ACTIVITIES 0 0
CASH FLOWS FROM FINANCING ACTIVITIES
Increase(Decrease) in Long-Term Debt 154 0
_________ _________
NET CASH FROM FINANCING
ACTIVITIES 154 0
_________ _________
NET INCREASE(DECREASE) IN
CASH (396) 4,787
CASH AT BEGINNING OF PERIOD 2,817 294
_________ _________
CASH AT END OF PERIOD $ 2,421 $ 5,081
========= =========
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 1999 and 1998.
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 March 31, Dec. 31,
cash transactions during the 1999 1998
periods ending March 31, 1999
and December 31, 1998
Write-off of Accounts Payable -0- 12,019
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 does not
expect to reduce this loan within the current year.
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 March 31, 1999 and December 31, 1998, and the
results of operations for the three months ended March 31, 1999
and 1998. All adjustments are of a normal recurring nature.
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 quarter ended March
31, 1999 totaled $32,564. This represents a decrease of ($9,007)
from the same quarter in 1998 and is largely the result of a
reduction in oil and gas income.
Total expenses decreased ($4,601) from $57,126 at March 31, 1998
to $52,525 at March 31, 1999.
The Company's net loss for the three months ended March 31, 1999
increased $4,406 from ($15,555) at March 31, 1998 to ($19,961) at
March 31, 1999.
Liquidity/Capital Resources
Net cash from operating activities decreased $5,337 to ($550) at
March 31, 1999 compared to $4,787 at March 31, 1998.
Management has developed plans to provide services in an Antrim
gas project located in the State of Michigan and anticipates
consulting fees.
As part of this project, the Company anticipates purchasing new
computer hardware and software which will be Year 2000 compliant.
In view of it's currently limited activity, the Company has
determined that the potential consequences of Year 2000 issues
would not have a material effect on business, results of
operations, or financial conditions.
Management feels that cash flows generated in 1999 from
consulting fees and from additional loan advances will be
sufficient to pay current operating liabilities.
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 19th day of May, 1999.
GENERAL ENERGY RESOURCES AND
TECHNOLOGY CORPORATION
By: H. TERRY SNOWDAY, JR.
_______________________________
H. Terry Snowday, Jr.
President and Director
(Principal Executive Officer)