UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-QSB/A
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
ACT OF 1934
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
ACT
FOR THE QUARTER ENDED MARCH 31, 2005
COMMISSION FILE NUMBER: 000-32747
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GULF COAST OIL & GAS, INC.
(FORMERLY OTISH MOUNTAIN DIAMOND COMPANY)
(SMALL BUSINESS ISSUER IN ITS CHARTER)
NEVADA 98-0128688
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
5847 SAN FELIPE
SUITE 1700
HOUSTON, TX 77057
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
ISSUER'S TELEPHONE NUMBER: (713) 525-4530
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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 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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
COMMON STOCK, PAR VALUE $.001
(TITLE OF EACH CLASS)
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Number of shares of the issuer's common stock, par value $0.001, outstanding as
of March 31, 2005: 38,041,811 shares.
DOCUMENTS INCORPORATED BY REFERENCE: none
Transitional Small Business Disclosure Format YES [ ] NO [X]
TABLE OF CONTENTS
Introductory Note
Part I - Financial Information
Item 1 - Consolidated Balance Sheets (unaudited)
As of March 31, 2005
Consolidated Statement of Income (unaudited)
Three months ended March 31, 2005
Consolidated Statement of Cash Flows (unaudited)
Three months ended March 31, 2005
Item 2 - Management's Discussion and analysis of financial condition
and results of operations
Item 3 - Evaluation of disclosure controls and procedures
Part II - Other Information
Signatures
Index to Exhibits
PART I
PART I FINANCIAL INFORMATION
General
The accompanying reviewed financial statements have been prepared in accordance
with the instructions to Form 10-QSB. Therefore, they do not include all
information and footnotes necessary for a complete presentation of financial
position, results of operations, cash flow, and stockholders' equity in
conformity with generally accepted accounting principles. Except as disclosed
herein, there has not been a material change in the information disclosed in the
notes to the financial statements included in the company's annual report on
Form 10-KSB for the year ended December 31, 2004. In the opinion of management,
all adjustments considered necessary for a fair presentation of the results of
operations and financial position have been included and all such adjustments
are of a normal recurring nature. Operating results for the quarter ended March
31, 2005 are not necessarily indicative of the results that can be expected for
the year ended December 31, 2005.
Pollard-Kelley Auditing Services, Inc...........................................
Auditing Services 3250 West Market St, Suite 307, Fairlawn, OH 44333
330-864-2265
Report of Independent Certified Public Accountants
Board of Directors
Gulf Coast Oil & Gas, Inc. and Subsidiary
Formerly Otish Mountain Diamond Company and Subsidiary
We have reviewed the accompanying consolidated balance sheets of Gulf Coast Oil
& Gas, Inc. and Subsidiary, formerly Otish Mountain Diamond Company and
Subsidiary as of March 31, 2005 and the related consolidated statements of
income, stockholders' equity, and cash flows for the three month and six month
and since inception periods then ended. Theses interim financial statements are
the responsibility of the Company's management.
We conducted our review in accordance with the standards of the Public Company
Accounting Oversight Board. A review of interim financial statements consists
principally of applying analytical procedures and making inquires of persons
responsible for financial and accounting matters. It is substantially less in
scope than an audit in accordance with the standards of the Public Company
Accounting Oversight Board, the object of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly, we do not
express such an opinion.
The Company has not generated significant revenues or profits to date. This
factor among others may indicate the Company will be unable to continue as a
going concern. The Company's continuation as a going concern depends upon its
ability to generate sufficient cash flow to conduct its operations and its
ability to obtain additional sources of capital and financing. The accompanying
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles accepted in the United
States of America.
Pollard-Kelley Auditing Services, Inc.
/S/ Pollard-Kelley Auditing Services, Inc.
May 15, 2005
Fairlawn, Ohio
ITEM 1 GULF COAST OIL & GAS, INC. AND SUBDISIARY
(Formerly OTISH MOUNTAIN DIAMOND COMPANY AND SUBSIDIARY)
(An Exploration Stage Company)
BALANCE SHEETS
March December
31, 31,
March 31, 2005 and December 31, 2004 2005 2004
----- ----
ASSETS
Current Assets
Cash in banks $ 88,280 $ 1,912
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Total Current Assets 88,280 1,912
Fixed Assets
Vehicles - -
Office equipment 2,475 2,475
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2,475 2,475
Less accumulated depreciation (1,901) (1,544)
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574 931
Other Assets
Website costs less accumulated
amortization of $125 and $0 1,375 -
Mineral rights - -
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1,375 -
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Total Assets $ 90,229 $ 2,843
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 74,238 $ 76,997
Accrued expenses 129,731 105,582
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Total Current Liabilities 203,969 182,579
Stockholders' Equity
Series A Preferred stock, 1,000,000 shares
authorized, 0 shares outstanding,
par value $.001 per share - -
Common stock, 600,000,000 shares
authorized, 38,041,861 shares outstanding,
par value $.001 per share 38,042 38,042
Additional contributed capital 5,658,869 5,658,869
Deficit accumulated during exploration stage (5,910,616) (5,876,647)
Stock subscription advances 99,965 -
----------- -----------
(113,740) (179,736)
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Total Liabilities and Stockholders' Equity $ 90,229 $ 2,843
=========== ===========
See accompanying notes to financial statements.
GULF COAST OIL & GAS, INC. AND SUBSIDIARY
(Formerly OTISH MOUNTAIN DIAMOND COMPANY AND SUBSIDIARY)
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 2005
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
HISTORY
Otish Mountain Diamond Company (formerly First Cypress, Inc.) a Nevada
corporation, was organized on September 14, 1999. From inception to September
31, 2003, the Company has not generated any revenues and is considered a
development stage enterprise, as defined in Financial Accounting Standards Board
No. 7. The Company was in the process of developing an internet computer
software program known as EngineMax. Essentially, software development was
suspended in November 2002 due to cash flow constraints. In October 2002, the
Company acquired certain items constituting the "Money Club Financial" business
concept and business plan. Due to the Company's inability to raise the necessary
equity capital to further the Money Club Financial business concept, no monies
were spent furthering the business concept from the date of acquisition to
September 30, 2003. The company discontinued its involvement in these operations
in the third quarter of 2003.
On November 30, 2003, the Company successfully acquired 100% of Otish Mountain
Diamond Corp. ("Otish Corp."). The business activities of Otish Corp. became the
business activities of the Company. In connection with the merger the
capitalization of the Company was amended to reflect a 220:1 reverse stock split
and to increase the authorized capital to 600,000,000 shares, consisting of
500,000,000 common shares with a par value of $0.001, and 100,000,000 preferred
shares with a par value of $0.001. Also, 1,000,000 shares of a Serial A
Preferred were issued for services rendered. Finally, the then president of the
Company entered into two agreements with the Company; one, assumed all the known
liabilities of the Company, and the second, agreed to convert debt owed the
president of $236,000 into 236,000 shares of Company common stock.
The Company's income state at the date of merger was as follows:
Revenues $ -0-
Expenses:
Exploration costs 36,293
Administrative 136,284
Net Loss $172,577
Otish Mountain Diamond Corp. was incorporated in the State of Nevada on August
4, 2003. The Company is in the mining and exploration business and has mineral
rights in the Otish Mountain and Superior Craton regions of Canada. The
Company's business plan includes the expansion of its mineral rights and the
mining of diamonds.
In August and November 2003, the Company issued 3,000,000 shares of its common
stock and paid $77,745 for mineral rights in the Otish Mountain and Superior
Craton regions of Quebec, Canada.
In the first quarter of 2004 the Company issued 20,300,050 shares of common
stock for services valued at $5,180,053. Valuation was based on the approximate
trading value of the Company's shares on the date issued.
During the third quarter of 2004 the Company issued 2,634,000 shares of common
stock to liquidate $263,400 of advances.
On January 13, 2005, the Company changed its name to Gulf Coast Oil & Gas, Inc.
FINANCIAL STATEMENT PRESENTATION
The Company was a shell at the time of the acquisition having only $192 in
assets; the acquisition was treated as a reverse merger whereby the acquired
company is treated as the acquiring company for accounting purposes. Since Otish
Corp., the acquired company was incorporated in August 2003; no comparative
financial statements are presented.
AN EXPLORATION STAGE COMPANY
The Company is an Exploration Stage Company since it is engaged in the search
for mineral deposits, which are not in the development or productions stage. As
an exploration stage company the Company will present, since inception, results
on its statements of operations, stockholders' equity and cash flows.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers all
short-term debt securities purchased with a maturity of three months or less to
be cash equivalents. There was not cash paid during the periods for interest or
taxes.
PROPERTY AND EQUIPMENT
Property and equipment are carried at cost. Maintenance, repairs and renewals
are expensed as incurred. Depreciation of property and equipment is provided for
over their estimated useful lives, which range from three to five years, using
the straight-lined method.
WEBSITE DEVELOPMENT COSTS
The Company has expended $1,500 in Website Development Costs through March 1,
2005, for internal use software. These costs are being amortized over a three
year estimated life and were written off at December 31, 2004 as part of the
cost of mineral rights abandoned.
MINERAL RIGHTS
The Company uses the "full cost method" of accounting for its mineral reserves.
Under this method of accounting, properties are divided into cost centers. The
Company presently has two cost centers. All acquisition, exploration, and
development costs for properties within each cost center are capitalized when
incurred. The Company intends to deplete these costs equally over the estimated
units to be recovered from the properties. These costs were written off at
December 31, 2004 as part of the cost of mineral rights abandoned.
USE OF ESTIMATES
The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
NOTE 2 - MINERAL RIGHTS
Otish Mountain Diamond Corporation
On August 19, 2003 the Company purchased the mineral rights for 60,933 acres in
the Otish Mountain and Superior Craton regions of Quebec, Canada. The claims
were purchased for $42,506 and 1,250,000 shares of common stock. The Company is
required to spend a minimum of $135 CDN per mining claim on exploration before
the expiration date of each claim. The Company is required to spend $105 CDN per
claim maintenance/renewal fee to the appropriate governmental authority before
the expiration date of the mining claim. If the Company fails to meet its
obligations under this agreement the seller has the option to make the
expenditures and to reassume title to the mining claims.
On November 4, 2003 the Company purchased the mineral rights for 775 acres in
the Otish Mountain region of Quebec, Canada. The claims were purchased for
$1,855 and 250,000 shares of common stock. The Company is required to pay a 2%
royalty of the net smelter returns and a 2% royalty on the gross
overriding royalty as defined in the agreement. The Company shall also pay to
the seller $5,000 CDN minimum annual advance royalty beginning on November 1,
2004 and each year thereafter. The Company is also required to keep the property
in good standing for 1 year or the seller shall be entitled to reacquire the
claims.
On November 4, 2003 the Company entered into a joint venture agreement for the
mineral rights for 15,361 acres in the Otish Mountain region of Quebec, Canada.
The investment was $33,383 and 1,500,000 shares of common stock. The Company has
paid the required claim tax/renewal fee of $12,495 CDN by the due date of
November 27, 2003. The Company is required to make a minimum advance royalty
payment of $15,000 CDN once mining stage begins. Royalties are subject to
underlying royalties of 2% of the net smelter returns and 2% of the gross
overriding royalty as defined in the agreement. The Company total outlay for the
joint venture shall not exceed $375,000 CDN. The Company owns 45% of the joint
venture.
At present the Company has no proven properties.
At December 31, 2004 the Company decided to abandon the above mineral rights.
The balance of the rights and the net book value of the website development
costs were expensed. The total amount written off was $193,226.
NOTE 3 - ADVANCES
The advances are funds raised by management for the Company. It is the Company's
intention to convert these funds into shares of common stock. On July 15, 2004
the Company entered into subscription agreements at $0.10 per share to complete
this conversion effort. There was $263,400 of advances converted to common stock
in this transaction. In addition, an additional $34,470 was advanced to the
Company at March 31, 2005 and December 31, 2004.
NOTE 4 - SERIES A PREFERRED STOCK
Each share of preferred, has 15 votes compared to each share of common, which
has only one vote. In the second quarter 2004 all outstanding shares of
Preferred Stock were redeemed for $1,000.
NOTE 5 - RELATED PARTIES
The Company owes the President and shareholder of the Company $95,477 and
$71,113 for compensation and expense reimbursement at March 31, 2005 and
December 31, 2004 respectively.
The Company has entered into an executive employment agreement with this
individual. The agreement is for the term of 1 year and calls for compensation
of $5,000 per month, four weeks of vacation, and $3,000 a month housing
allowance, and an automobile.
NOTE 6 - GOING CONCERN
The Company has not generated significant revenues or profits to date. This
factor among others may indicate the Company will be unable to continue as a
going concern. The Company's continuation as a going concern depends upon its
ability to generate sufficient cash flow to conduct its operations and its
ability to obtain additional sources of capital and financing. The accompanying
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Management's Discussion and Analysis Of Financial Condition and Results of
Operations.
THE FOLLOWING DISCUSSION OF THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF
GULF COAST OIL & GAS, INC. SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL
STATEMENTS AND NOTES THERETO INCLUDED ELSEWHERE IN THIS REPORT.
THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES, GULF COAST OIL & GAS, INC.`S ACTUAL RESULTS MAY DIFFER MATERIALLY
FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF
CERTAIN FACTORS, INCLUDING, BUT NOT LIMITED TO COMPETITION AND OVERALL MARKET
CONDITIONS.
DESCRIPTION OF BUSINESS
The Company.
BUSINESS DEVELOPMENT
Otish Mountain Diamond Company was originally incorporated in Nevada under the
name First Cypress Technologies, Inc. ("First Cypress") on September 14,1999.
The Company was in the process of developing an internet computer software
program known as EngineMax, which was suspended in November 2002. The Company is
currently engaged in diamond exploration activities in the Otish Mountain area
of Northern Quebec, Canada. The Company is in its exploration state as it is
engaged in the search for mineral deposits.
Prior to the Acquisition, discussed below, the Company had been in the process
of developing an internet computer software program that was suspended in
November 2002. In October 2002, the Company acquired certain items constituting
the "Money Club Financial" business concept and business plan (the "Money
Club"). Due to the Company's inability to raise the necessary equity capital to
further the Money Club Financial business concept, no monies were spent
furthering the business concept from the date of acquisition to September 30,
2003. The Company discontinued its involvement in these operations in the third
quarter of 2003. The Company owned an option to purchase a 100% undivided
interest in the Cahill Mineral Claims in the Osoyoos Mining Division in British
Columbia, Canada, which the Company chose to let expire. The Company also owned
an option to purchase a 70% undivided interest in the Eddy Mineral Claims in the
Fort Steele Mining District of British Columbia, Canada. The Company acquired a
50% interest in the Temagami Claim in the Sudbury Mining Division in Ontario,
Canada, which it has abandoned. The Company intends to also allow its option on
the Eddy Mineral Claims to expire when the exploration expenditures on the claim
become due during 2004. At December 31, 2004 the Company decided to abandon its
mineral rights.
In July 2003, the Company changed its name to First Cypress, Inc. The Company
subsequently changed its name to Otish Mountain Diamond Company in October 2003,
in anticipation of the acquisition of Otish Mountain Diamond Corp., a Nevada
corporation (hereinafter "Otish Corp."), discussed below.
In October 2003, the Company issued 1,000,000 shares of Series A Preferred
Stock, that are entitled to fifteen (15) votes per shares (or an aggregate of
15,000,000 votes) to Philipp Buschmann. Control of the Company shifted to Mr.
Buschmann at that time. In November 2003, First Cypress, Otish Corp. and the
former Otish Corp. shareholders entered into an Exchange Agreement (the
"Exchange" or "Acquisition") whereby the Company acquired 100% of the issued and
outstanding shares of Otish Corp. in exchange for 15,000,000 shares of the
Company's common stock.
Otish Mountain Diamond Company, a Nevada corporation, herein being referred to
as the "Company" owns one hundred percent (100%) of Otish Mountain Diamond
Corp., a Nevada corporation herein being referred to as Otish Corp. A reference
herein to the Company includes a reference to Otish Corp. and vice-versa unless
otherwise provided.
On November 30, 2003, the Company successfully acquired 100% of Otish Mountain
Diamond corp. ("Otish Corp."). The business activities of Otish Corp. became the
business activities of the Company. In connection with the merger the
capitalization of the Company was amended to reflect a 220:1 reverse stock split
and to increase the authorized capital to 600,000,000 shares, consisting of
500,000,000 common shares with a par value of $0.001, and 100,000,000 preferred
shares with a par value of $0.001. Also, 1,000,000 shares of a Serial A
Preferred were issued for services rendered. Finally, the then president of the
Company entered into two agreements with the Company; one, assumed all the known
liabilities of the Company, and the second, agreed to convert debt owed the
president of $236,000 into 236,000 shares of Company stock.
In October 2002, the Company completed a 5:1 forward stock split of its issued
and outstanding common stock. In October, 2003, the Company completed a 1:200
reverse stock split of its issued and outstanding common stock. The effects of
both stock splits have been retroactively reflected in this report on Form
10-KSB unless otherwise stated.
ON DECEMBER 31, 2004 THE COMPANY DECIDED TO ABANDON ITS MINERAL RIGHTS AND
THEREBY ELIMINATE ANY FURTHER EXPENSE.
THE COMPANY IS NO LONGER ENGAGED IN DIAMOND EXPLORATION ACTIVITIES.
ON JANUARY 13, 2005, THE COMPANY CHANGED ITS NAME TO GULF COAST OIL & GAS, INC.
PLAN OF OPERATION
Gulf Coast Oil & Gas, Inc. is an exploration and production company solely
dedicated to oil and gas exploration projects located in the United States with
offices in Houston, Texas.
Gulf Coast Oil & Gas, Inc. plans to selectively acquire an interest in
technically sound drilling deals that are ready to drill in order to have a
better handle on costs and profitability. The Company will take a larger
percentage of lower risk opportunities that have potential for significant
reserves and quick payout. However, the Company will consider a lesser
percentage in technically sound but higher risk plays that have large reserve
potential capable of developing into a major field.
Gulf Coast Oil & Gas, Inc. will also consider acquiring an interest (working
and/or royalty) in proven (based upon offset production and geology reports)
undeveloped drilling locations. Various factors such as cost estimates, current
pricing, reserve potential, projected payout, spacing requirements, etc. must
always be taken into account.
INDUSTRY, MARKET OVERVIEW AND COMPETITIVE BUSINESS CONDITIONS
Gulf Coast Oil & Gas, Inc. will compete with other companies that are in the
same or similar business, many of which are of greater size and have far greater
financial resources than the Company.
EMPLOYEES
The Company has two (2) employees and contemplates using a varying number of
subcontractors. The number of subcontractors that the Company uses will vary
depending on the type and amount of work that is required.
RECENT EVENTS
DESCRIPTION OF PROPERTY
The Company is currently evaluating the following prospects:
WEBB PROSPECT - JASPER COUNTY, TEXAS
Location: 12 miles Northeast of Silsbee, Texas. 4 miles
Northwest of the town of Buna in Jasper county, Texas
Depth: 10,500 Normal Pressure Upper Wilcox Sands
Objective: 1st, 2nd, 3rd, 5th Wilcox sands and the Geronimo sand
package
Trap: 800 acre high side fault closure defined by 6 lines
of recent CDP seismic data.
Flow Rates: 1.5 MMCFGD + 250 BOPD (actual rates)
Field Reserve
Potential: 3,040,000 BO and 16 BCFG
Wells to Develop: 4 to 5 wells
EBNENEZER AREA - COLUMBIA COUNTY, ARKANSAS
GENERAL: Two prospects northeast of Village field (Smackover 1938) were defined
with well control, 2D and 3D seismic data. The prospects offer moderate risk
structural and stratigraphic potential in the prolific Smackover limestone trend
of southwest Arkansas.
EXPLORATION HISTORY: The Smackover trend of southwest Arkansas was discovered in
the 1930's using surface geology (shepherd's anticline). The large structures
were salt-supported anticlines that are shown in light blue on the map above.
Many exploration companies acquired grids of 2D seismic data over the area in
1950-1990. The 2D data helped locate structures, and a few "accidental"
stratigraphic fields were found. In the late 1980's general industry thinking
was that "all of the significant Smackover fields had been found using the
existing 2D seismic data. However, in 1993 Grayson field (Smackover) was
discovered using 2D seismic data. Grayson field is a large field discovered in a
mature basin.
Grayson field will produce over 25 million barrels of oil from fourteen wells.
Immediately upon discovery, the owners of Grayson field contracted Hill
Geophysical Consulting to acquire the 1st 3D seismic program in Arkansas. The
Grayson 3D seismic data clearly showed the structure and stratigraphy of the
Smackover limestone. Detailed petrophysical work was done and applied to the 3D
data to place the wells in the best locations within the reservoir.
The 2D seismic grid that Grayson was located on became a valuable asset in 1993.
Hill Geophysical Consulting purchased a license and used the entire 2D seismic
grid to locate any Grayson look-a-likes. Follow-up work was done with 3D seismic
acquisition on strong leads. Unfortunately, none of the leads developed into
Grayson-sized prospects. The prospects that were found at that time were deemed
uneconomic due to the price of oil. These prospects now have been reworked with
current economics and are quite viable.
The prospects at Ebenezer were first identified with 2D seismic data and well
control on the northeast flank of the large Village field structure. A 3D
seismic program confirmed the prospects. Current oil pricing makes these
prospects very attractive. Three-year leases have been acquired in the past year
on 100% of the acreage covering the prospects. The leases are the same as those
taken immediately after the 3D seismic program was completed in the 1990's. The
prospects are ready to drill. Gross reserves are calculated using 25' of pay and
300 bbl/acft recovery, and flow rates are an average of Smackover production in
the area.
PROSPECT #1
- - Exploration method: seismically defined prospect with nearby well control
- - Trap type: combination structural - stratigraphic trap (northern limit is
pinch-out of thick Smackover wedge trending East/West draped across NE/SW
plunging structural nose)
- - Target: Smackover limestone
- - Target depth: 7,900 feet
- - 313 acres of potential stratigraphic/structural closure
- - Potential reserves of 2,350,000 barrels of oil
- - Expected flow rate 250-350 barrels of oil per day
- - Located 5 miles northeast of Village Field (Smackover)
- - Number of wells needed to recover reserves: up to 3
Pogo Producing drilled a well on the southwest flank of Prospect #1 (blue
circle) using 2D seismic data. The well found a very thick Buckner section on
top of the Smackover formation. The Buckner formation is thicker in this well
than any other well in the area. Thick Buckner is a clear indicator of the well
being down-thrown on a fault. The 2D seismic data had a seismic anomaly that was
incorrectly interpreted as Smackover porosity. The new seismic data clearly
showed the well to be down-thrown. A large prospective area is found up-thrown
on the (green) fault. No other wells have been drilled close to this prospect.
The seismic data shows a Smackover wedge that appears to pinch-out on the
northeast side of the structure setting up a strong stratigraphic trap with a
good structural component. This pinch-out is a regional feature that has
stratigraphic/structural traps east and west of this prospect. The prospective
area covers approximately 313 acres that may have over 2.35 million barrels of
oil trapped. Three wells would be needed to produce the potential reserves.
PROSPECT #3
- - Exploration method: seismically defined prospect with nearby well control
- - Trap type: combination structural - stratigraphic trap (northern limit is
pinch-out of thick Smackover wedge trending East/West draped across NE/SW
plunging structural nose that has a 20 acre closure)
- - Target: Smackover limestone
- - Target depth: 7,800 feet
- - 98 acres of potential stratigraphic/structural closure
- - Potential reserves of 735,000 barrels of oil
- - Expected flow rate 250-350 barrels of oil per day
- - Located 5 miles northeast of Village Field (Smackover)
- - Number of wells needed to recover reserves: 2
Prospect #3 is a small potential stratigraphic trap draped across a strong nose
that was seen on the seismic data. The prospect covers 98 acres and could have
over .7 million barrels of oil. Only one well would be needed to produce the
oil. Isochronal mapping (thickness) of the Smackover interval showed that the
structure was in place at the time of hydrocarbon migration. This prospect
should be drilled after Prospect #1.
The prospects fall in an area with excellent Smackover reservoir quality rock.
Porosities of 12-18 percent and permeabilities in excess of 500 md are seen in
nearby wells. The Smackover limestone reservoir has a strong water drive, and
average flow rates of up to 350 barrels of oil per day can be expected. The
proposed wells are near state highways and county roads with plenty of
infrastructure support in the way of pipelines and easy surface access.
CONCLUSION:
The Ebenezer area offers good Smackover limestone prospects that were defined by
modern 2D and 3D seismic data. The prospects are moderate risk and offer a high
return on investment with a successful well. The prospects have similar
structural and stratigraphic character to other productive Smackover fields in
the area. Significant reserve potential can be tested at a relatively low
drilling cost.
COMPANY OFFICE:
The Company currently has an office suite consisting of 250 sq. ft. located at
5847 San Felipe, Suite 1700, Houston, Texas 77057. The current lease commitment
is $600.00 per month.
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH
31, 2005
At the present time the Company has no proven properties and on December 31,
2004 the Company abandoned its mineral rights.
The Company is in its exploration stage as it is engaged in the search for
mineral deposits.
The Company has not generated any revenues since its inception, August 4, 2003.
LIQUIDITY AND CAPITAL RESOURCES.
As of March 31, 2005, the Company had cash of $88,280. The Company had negative
cash flow from operations of $12,098 during the period ended March 31, 2005.
The Company raised $100,000 from North Field Oil & Gas, Inc. The funds were
received on March 15, 2005 consistent with a subscription agreement that
provided in part, for the purchase of 555,555 shares of restricted common stock
at a price of $0.18 per share for an aggregate consideration of $100,000.
The Company intends to raise additional funds while primarily focusing its
efforts on oil & gas exploration activities in the states of Texas and
Louisiana.
ABILITY TO CONTINUE AS A GOING CONCERN
The Company's Auditors have expressed substantial doubt about the Company's
ability to continue as a going concern. Pollard-Kelley Auditing Services, Inc.,
in their "Report of Independent Certified Public Accountants," have expressed
substantial doubt as to the Company's ability to continue as a going concern
based on operating losses it has incurred since inception. The Company's
financial statements do not include any adjustments that might result from the
outcome of that uncertainty. THE GOING CONCERN QUALIFICATION IS ALSO DESCRIBED
IN NOTE 6 OF THE NOTES TO FINANCIAL STATEMENTS.
ITEM 3. EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
As of the end of the period covered by this report, the Company had not carried
out an evaluation of the effectiveness of the design and operation of its
disclosure controls and procedures pursuant to Exchange Act Rule 13a-14. This
evaluation has not been done which is to be under the supervision and with the
participation of the Company's Principal Executive Officer and Principal
Financial Officer. Based upon no evaluation, the Principal Executive Officer and
Principal Financial Officer cannot conclude that the Company's disclosure
controls and procedures are effective in gathering, analyzing and disclosing
information needed to satisfy the Company's disclosure obligations under the
Exchange Act.
CHANGES IN INTERNAL CONTROLS
There were no significant changes in the Company's internal controls or in other
factors that could significantly affect those controls since the most recent
evaluation of such controls.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits:
31.1 Certification of Chief Executive Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act.
31.2 Certification of Principal Financial and Accounting Officer Pursuant
to Section 302 of the Sarbanes-Oxley Act.
32.1 Certification of Chief Executive Officer Pursuant to Section 906 of
the Sarbanes-Oxley Act.
32.2 Certification of Principal Financial and Accounting Officer Pursuant
to Section 906 of the Sarbanes-Oxley Act.
B. Reports of Form 8-K.
No other reports on Form 8-K were filed during the quarter ended March 31,
2005, for which this report is filed.
GULF COAST OIL & GAS, INC.
In accordance with the requirements of the Exchange Act of 1934, the Registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
SIGNATURE
May 24, 2005 /s/ Massimiliano Pozzoni
------------------------------------
Massimiliano Pozzoni
Chief Executive Officer
(PRINCIPAL EXECUTIVE OFFICER)
May 24, 2005 /s/ Massimiliano Pozzoni
------------------------------------
Massimiliano Pozzoni
Chief Accounting Officer
(PRINCIPAL ACCOUNTING OFFICER)
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.
31.2 Certification of Principal Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.
32.1 Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.
32.2 Certification of Principal Financial and Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.