U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT of 1934
For the transition period from _____ to _____
Commission File No. 2-72232
GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION
(Exact name of small business issuer as specified in its charter)
COMMONWEALTH OF VIRGINIA 54-1082057
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
5990 Greenwood Plaza Blvd., Suite 127
Greenwood Village, Colorado 80111-4708
(Address of principal executive offices)
Issuer's telephone number: (303) 773-6016
NONE
_______________________________________________________________
(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 __X__ No _____
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
Common Stock, $.10 par value 18,844,245
_______________________________________________________________
Class Outstanding at July 31, 1995
Transitional Small Business Disclosure Format: Yes ___ No _X_
GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION AND SUBSIDIARIES
INDEX
Page
Number
PART I. Financial Information
Item 1. - Financial statements
Consolidated Balance Sheet....................... 3
Consolidated Statement of Operations............. 4
Consolidated Statement of Cash Flows............. 6
Notes to Consolidated Financial Statements....... 7
Item 2. - Management's Discussion and Analysis of
Financial Condition and Result of
Operations................................ 8
PART II. Other Information............................ 10
Signature.................................... 11
GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
June 30,
1995 December 31,
(Unaudited) 1994
ASSETS (In thousands)
CURRENT ASSETS
Cash......................................... $ 52 $ 272
Certificates of deposit...................... 307 307
Receivables, net of allowance for doubtful
accounts of $236,000 in 1995 and 1994....... 341 268
Prepaid expenses and other current assets.... 62 22
______ ______
Total current assets..................... 762 869
______ ______
OIL AND GAS PROPERTIES, at cost (accounted
for using the successful efforts method)
Proved oil and gas properties............... 9,572 9,512
Undeveloped leaseholds...................... 135 135
Pipeline equipment.......................... 1,303 1,246
Equipment inventory......................... 41 23
Properties held under installment sales..... 2,263 2,259
______ ______
13,314 13,175
Less accumulated depreciation, depletion,
amortization and impairment................ (10,464) (10,225)
______ ______
2,850 2,950
______ ______
OTHER ASSETS.................................. 272 285
______ ______
$3,884 $4,104
====== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable................................ $ 16 $ 18
Accounts payable and accrued expenses........ 96 103
______ ______
Total current liabilities................ 112 121
______ ______
NOTES PAYABLE................................. 46 46
______ ______
COMMITMENTS AND CONTINGENT LIABILITIES
SHAREHOLDERS' EQUITY
Preferred stock, $10.00 par value, 4,000,000
shares authorized, none issued or outstanding
Common stock, $.10 par value, 40,000,000
shares authorized, 18,844,245 shares issued
and outstanding............................. 1,884 1,884
Additional paid-in capital................... 29,242 29,242
Accumulated deficit.......................... (27,355) (27,144)
Notes receivable - officers.................. (45) (45)
______ ______
3,726 3,937
______ ______
$3,884 $4,104
====== ======
<FN>
The accompanying notes are an integral part
of the consolidated financial statements.
GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Three Months
Ended June 30,
1995 1994
(In thousands, except
per share amounts)
REVENUES
Oil and gas sales........................ $ 157 $ 180
Gas transmission sales................... 237 363
Installment sales income, net............ 10 36
Interest and other income................ 25 (3)
______ ______
429 576
______ ______
EXPENSES
Production costs......................... 68 84
Cost of gas transmission................. 254 316
Depletion, depreciation and amortization. 52 52
General and administrative............... 119 155
______ ______
493 607
______ ______
NET INCOME (LOSS)......................... $ (64) $ (31)
====== ======
NET INCOME (LOSS) PER SHARE............... $ (.00) $ (.00)
====== ======
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING.............................. 18,844 18,844
====== ======
<FN>
The accompanying notes are an integral part
of the consolidated financial statements.
GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
Six Months
Ended June 30,
1995 1994
(In thousands, except
per share amounts)
REVENUES
Oil and gas sales........................ $ 304 $ 311
Gas transmission sales................... 473 786
Installment sales income, net............ 38 139
Interest and other income................ 30 (1)
______ ______
845 1,235
______ ______
EXPENSES
Production costs......................... 129 157
Cost of gas transmission................. 526 644
Depletion, depreciation and amortization. 101 105
General and administrative............... 299 320
______ ______
1,055 1,226
______ ______
NET INCOME (LOSS)......................... $ (210) $ 9
====== ======
NET INCOME (LOSS) PER SHARE............... $ (.01) $ .00
====== ======
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING.............................. 18,844 18,844
====== ======
<FN>
The acompanying notes are an integral part
of the consolidated financial statements.
GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Six Months
Ended June 30,
1995 1994
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)........................... $ (210) $ 9
Adjustments to reconcile net income (loss)
to net cash provided by (used for) operating
activities:
Decrease (Increase) in accounts receivable. (73) 14
(Increase) decrease in prepaid expenses
amd other current assets.................. (38) (12)
Depletion, depreciation and amortization... 101 105
Depletion, depreciation and amortization
charges against installment sales income.. 152 178
Increase (decrease) in accounts payable
and accrued expenses...................... (7) (3)
______ ______
Net cash provided by (used for)
operating activities.................... (75) 291
______ ______
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to oil and gas properties.......... (61) (155)
Increase in other assets..................... (84) (14)
Gain on Sale of Assets....................... 3
______ ______
Net cash used for investing activities... (142) (169)
______ ______
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of debt........................... (3) (3)
______ ______
DECREASE IN CASH.............................. (220) 119
CASH AT BEGINNING OF PERIOD................... 272 83
______ ______
CASH AT END OF PERIOD.........................$ 52 $ 202
====== ======
<FN>
The accompanying notes are an integral part
of the consolidated financial statements.
GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The interim financial data are unaudited; however, in the
opinion of Great Eastern Energy and Development Corporation and
Subsidiaries ("Great Eastern" or the "Company"), the interim data
include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair statement of the results for the
interim periods. These financial statements should be read in
conjunction with Great Eastern's December 31, 1994 audited
consolidated financial statements and notes thereto included in
Form 10-KSB.
The consolidated financial statements include the accounts of
Great Eastern and its wholly-owned subsidiaries, Patton Oil Co.,
Zoandra Petroleum, Inc. and Sycamore Valley Gathering, Ltd. All
significant intercompany balances and transactions have been
eliminated in consolidation.
GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Second Quarter 1995 Compared to Second Quarter 1994. The
Company's second quarter of fiscal 1995 operations reflected a net
loss of $64,000 as compared to net loss of $31,000 for the
corresponding quarter of fiscal 1994. Profits from oil and gas
operations decreased slightly in the second quarter of fiscal 1995
to $89,000 as compared to $96,000 for the corresponding quarter of
fiscal 1994.
A decrease in production volumes from coalbed methane gas
wells coupled with a decrease in product prices have contributed to
a decline in gas transmission sales. Consequently, the volume and
price decreases have resulted in a loss of $17,000 from natural gas
transmission operations for the second quarter of fiscal 1995 as
compared to a profit of $91,000 for the corresponding quarter of
fiscal 1994.
Installment sales income of $10,000, net of depreciation,
depletion and amortization of $75,000, is reflected in the second
quarter of fiscal 1995 consolidated statement of operations as
compared to installment sales income of $36,000, net of
depreciation, depletion and amortization of $78,000 for the
corresponding quarter of fiscal 1994. The decrease in installment
sales income resulted from a decrease in production volumes from
coalbed methane gas wells.
First Half 1995 Compared to First Half 1994. The Company's
first half of fiscal 1995 operations reflected a loss of $210,000
as compared to net income of $9,000 for the corresponding half of
fiscal 1994. Decreased costs of production has resulted in
increased profits from oil and gas operations to $175,000 in the
first half of fiscal 1995 as compared to $154,000 for the corresponding
half of fiscal 1994.
Declining production volumes coupled with declining product
prices have contributed to decreased gas transmission sales. The
volume and price decreases have contributed to a loss of $53,000
from natural gas transmission operations for the first half of
fiscal 1995 as compared to a profit of $142,000 for the corresponding
half of fiscal 1994.
Depreciation, depletion and amortization decreased slightly to
$101,000 for the first half of fiscal 1995 as compared to $105,000
during the corresponding half of fiscal 1994.
Depreciation, depletion and amortization of properties, held
under installment sales decreased to $152,000 for the first half of
fiscal 1995 as compared to $178,000 for the corresponding half of
fiscal 1994. The decrease is a result of lesser amounts received
from installment sales, $190,000 in the first half of fiscal 1995
as compared to $317,000 received in the first half of fiscal 1994.
The depreciation for properties held under installment sale is charged
against the related revenue.
Current Operations
Since January 1, 1995, the Company has installed a second
waterflood in the SW Wil Field, Edwards County, Kansas and drilled
a salt water disposal well in southeastern Kansas.
Liquidity and Capital Resources
Working Capital. The Company had working capital of $650,000
and $748,000 at June 30, 1995 and December 31, 1994, respectively.
The Company has no bank debt and no oil and gas properties are
pledged as collateral. Management believes that the Company's
liquidity is adequate to meet operating activities for fiscal 1995.
Oil and gas development activities will be funded solely from
excess cash generated from operations and from proceeds generated
from the installment sale of certain southeastern Kansas coalbed
methane gas properties.
Future Operations. Some selected developmental drilling for
gas may be conducted in Kansas. No exploratory wells are scheduled
to be drilled in 1995.
SFAS 121. The Financial Accounting Standards Board has issued
SFAS 121, Impairment of Long Lived Assets. The effective date for
implementation is for year-ends beginning after December 15, 1996.
The Company has not yet evaluated the impact, if any, of this new
pronouncement on the Company's financial statements.
Other. On September 26, 1994, the Company retained the
services of Kirkpatrick Energy Associates, Inc. ("Kirkpatrick"), an
investment banking firm, to evaluate options available to the
Company to maximize shareholder value, including a possible sale of
the Company. To date, Kirkpatrick has not presented any
recommendations to the Company and its Board of Directors. There
is no assurance that any action or a possible sale will occur.
PART II - OTHER INFORMATION
Item 4 - The Annual Meeting of the Stockholders of the Company was
held on May 31, 1995 at the offices of the Company in
Greenwood Village, Colorado. The following persons were
elected to continue as Directors of the Company and do in
fact constitute the entire Board of Directors.
Edward S. Barr
Alex G. Campbell, Jr.
John I. Crews, Jr.
Donald G. Jumper
Sidney Buford Scott
William T. Young, Jr.
The appointment of Price Waterhouse as independent
accountants of the Company was ratified.
Items 1, 2, 3, 5 and 6 are not applicable.
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GREAT EASTERN ENERGY AND
DEVELOPMENT CORPORATION
(Registrant)
Date: August 11, 1995 By: /s/DONALD G. JUMPER
Donald G. Jumper
Chief Executive Officer, Presi-
dent, Chief Financial and Ac
counting Officer and Director