UNITED STATES
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 March 31, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-14731
HALLADOR PETROLEUM COMPANY
(Exact name of registrant as specified in its charter)
Colorado 84-1014610
(State of incorporation) (I.R.S. Employer Identification No.)
1660 Lincoln Street, Suite 2700, Denver, Colorado 80264-2701
(Address of principal executive offices)
303-839-5504 FAX: 303-832-3013
(Issuer's telephone numbers)
Check whether the issuer (1) filed all reports required by Section 13 or 15(d)
of the Securities Exchange Act during the past 12 months, and (2) has been
subject to such filing requirements for the past 90 days: Yes [x] No [ ]
Shares outstanding as of May 14, 2002: 7,093,150
PART I. FINANCIAL INFORMATION
Consolidated Balance Sheet
(in thousands)
March 31, December 31,
2002 2001*
------- -------
ASSETS
Current assets:
Cash and cash equivalents $ 1,857 $ 2,078
Accounts receivable-
Oil and gas sales 861 706
Well operations 167 174
------ ------
Total current assets 2,885 2,958
------ ------
Oil and gas properties at cost (successful efforts):
Unproved properties 251 204
Proved properties 24,756 24,687
Less - accumulated depreciation,
depletion, amortization and impairment (17,109) (16,497)
------ ------
7,898 8,394
------ ------
Oil and gas operator bonds 329 366
Investment in Catalytic Solutions 175 175
Other assets 40 44
------ ------
$11,327 $11,937
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 418 $ 833
Oil and gas sales payable 333 180
------ ------
Total current liabilities 751 1,013
------ ------
Key employee bonus plan 341 335
------ ------
Future site restoration-South Cuyama Field 420 344
------ ------
Minority interest 5,387 5,516
------ ------
Stockholders' equity:
Preferred stock, $.10 par value; 10,000,000
shares authorized; none issued
Common stock, $.01 par value; 100,000,000
shares authorized; 7,093,150 shares issued 71 71
Additional paid-in capital 18,061 18,061
Accumulated deficit (13,704) (13,403)
------ ------
4,428 4,729
------ ------
$11,327 $11,937
====== ======
- ------------------------------
*Derived from the Form 10-KSB.
See accompanying notes.
Consolidated Statement of Operations
(in thousands, except per share amounts)
Three months ended March 31,
2002 2001
------ ------
Revenue:
Oil $1,275 $1,287
Gas 257 485
NGLs 47 128
Interest and other 8 43
----- -----
1,587 1,943
----- -----
Costs and expenses:
Lease operating 1,075 1,120
Delay rentals 19 18
Depreciation, depletion and amortization 692 214
General and administrative 225 247
Purchase of employee stock options 300
Interest 6 14
----- -----
2,017 1,913
----- -----
(Loss) income before minority interest (430) 30
Minority interest 129 (9)
----- -----
Net (loss) income $ (301) $ 21
===== =====
Basic and diluted (loss) income per share $ (.04) $ *
===== =====
Weighted average shares outstanding-basic 7,093 7,093
===== =====
Weighted average shares outstanding-diluted 7,093 7,438
===== =====
- -----------------------------------------
*Not meaningful, less than $.01 per share.
See accompanying notes.
Consolidated Statement of Cash Flows
(in thousands)
Three months ended March 31,
2002 2001
------ ------
Net cash provided by operating activities $ 121 $ 545
----- -----
Cash flows from investing activities:
Properties (379) (373)
Other assets 37
----- -----
Net cash used in investing activities (342) (373)
----- -----
Net (decrease) increase in cash
and cash equivalents (221) 172
Cash and cash equivalents, beginning of year 2,078 2,489
----- -----
Cash and cash equivalents, end of period $1,857 $2,661
===== =====
</Table>
1. The interim financial data is unaudited; however, in our opinion, it
includes all adjustments, consisting only of normal recurring adjustments
necessary for a fair statement of the results for the interim periods.
The financial statements included herein have been prepared pursuant to
the SEC's rules and regulations; accordingly, certain information and
footnote disclosures normally included in GAAP financial statements have
been condensed or omitted.
2. Our organization and business, the accounting policies we follow and other
information are contained in the notes to our financial statements filed
as part of our 2001 Form 10-KSB. This quarterly report should be read in
conjunction with that annual report.
HALLADOR PETROLEUM COMPANY
Management's Discussion and Analysis or Plan of Operation
RESULTS OF OPERATIONS
YEAR-TO-DATE COMPARISON
- -----------------------
The table below (in thousands) provides sales data and average prices for the
period.
2002 2001
Sales Average Sales Average
Volume Price Revenue Volume Price Revenue
------- ------- ------ ------ ----- -------
Oil - barrels
South Cuyama field 53 $18.61 $986 53 $24.13 $1,279
Cox #41-5 (1) 14 18.36 257
South Texas-Bonus 1.3 20.00 26
Other * * 6 * * 8
Gas - mcf
South Cuyama field 4 2.50 10 14 7.00 98
Cox #41-5 (1) 23 2.40 55
South Texas - Bonus 56 2.47 138
San Juan-New Mexico 13 1.47 19 16 7.31 117
Merlin Prospect(2) 6 1.84 11 18 11.67 210
Other 11 2.19 24 9 6.67 60
NGLs - barrels
South Cuyama field 3.3 11.22 37 3.7 27.30 101
San Juan-New Mexico 1.1 9.10 10 1.2 21.67 26
Other * * 1
- ------------------------
* Not meaningful
(1) This well is part of the South Cuyama field, due to its significance we
present it separately.
(2) This field located in northern California is near the end of its
economic life.
Current prices for (i) the South Cuyama field are about $26.03 for oil and
$3.44 for gas (ii) South Texas-Bonus are about $28.00 for oil and $3.70 for
gas and (iii) San Juan gas is about $3.00.
The table below (in thousands) shows lease operating expenses (LOE) for our
primary fields.
2002 2001
---- ----
South Cuyama field:
LOE excluding electricity $ 688 $ 832
Electricity 319 234
----- -----
1,007 1,066
South Texas - Bonus 14
San Juan - New Mexico 16 29
Other 38 25
----- -----
Total $1,075 $1,120
===== =====
Gas and NGL revenue is down compared to last year due to lower prices.
DD&A increased due to the downward revision in our oil reserves during
the fourth quarter of 2001.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Cash and cash flow from operations are expected to enable us to meet
our obligations as they become due during the next several years.
Bank Debt
----------
The SC Field, our principal asset, is pledged to U. S. Bank National
Association under a $2,200,000 revolving line of credit which was renewed on
March 31, 2002. Presently, we owe $31,000 under this line.
THE FOLLOWING DISCUSSION UPDATES THE MD&A CONTAINED IN ITEM 6 OF THE 2001
FORM 10-KSB AND THE TWO DISCUSSIONS SHOULD BE READ TOGETHER.
PROSPECT DEVELOPMENT AND EXPLORATION ACTIVITY
- ---------------------------------------------
South Cuyama Field
------------------
The production from the Cox #41-5 well is declining. During March 2002 the
well was producing 500 mcf per day and 275 barrels per day; currently the gas
production is 250 mcf per day and the oil production is 120 barrels per day.
We are monitoring this decline and if necessary will reduce the reserves
assigned to this well in the second quarter.
There are no other significant changes or developments to report from what we
disclosed in the 2001 Form 10-KSB.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Second Amendment of Credit Agreement by and among Santa Barbara
Partners, Hallador Petroleum, LLP and U. S. Bank Revolving Credit
Agreement.
(b) No reports on Form 8-K were filed during the quarter.
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
HALLADOR PETROLEUM COMPANY
Dated: May 14, 2002 By: /s/VICTOR P. STABIO
Chief Executive Officer and
Chief Financial Officer
Signing on behalf of registrant
and as principal financial officer.