U.S. Securities And Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
---------------- ----------------
Commission File No. 0-20879
PYR ENERGY CORPORATION
---------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 95-4580642
----------------------------- -------------------
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1675 Broadway, Suite 1150, Denver, CO 80202
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (303) 825-3748
Check whether the issuer (1) 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 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 REGISTRANTS)
The number of shares outstanding of each of the issuer's classes of common
equity as of January 14, 2000 is as follows:
$.001 Par Value Common Stock 14,579,580
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PYR ENERGY CORPORATION
FORM 10-QSB
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements..................................... 3
Balance Sheet - November 30, 1999 and August 31, 1999.... 3
Statement of Operations - Three Months Ended
November 30, 1999 and November 30, 1998 ................. 4
Statement of Cash Flows - Three Months
Ended November 30, 1999 and November 30, 1998 ........... 5
Notes to Financial Statements............................ 6
Summary of Significant Accounting Policies............... 6
Item 2. Management's Discussion and Analysis or
Plan of Operation......................................... 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings........................................ 12
Item 2. Changes in Securities.................................... 12
Item 3. Defaults Upon Senior Securities.......................... 12
Item 4. Submission of Matters to a Vote of Security Holders...... 12
Item 5. Other Information........................................ 12
Item 6. Exhibits and Reports on Form 8-K......................... 12
Signatures........................................................ 12
2
PART I
ITEM 1. FINANCIAL STATEMENTS
PYR ENERGY CORPORATION
(A Development Stage Company)
BALANCE SHEETS
ASSETS
11/30/99 8/31/99
(UNAUDITED)
CURRENT ASSETS
Cash $ 123,098 $ 117,905
Marketable Securities 3,194,510 5,111,062
Other Receivables 58,278 3,082
Prepaid Expenses 24,447 10,347
------------ ------------
Total Current Assets 3,400,333 5,242,396
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PROPERTY AND EQUIPMENT, at cost
Furniture and equipment, net 39,220 43,777
Undeveloped oil and gas prospects 6,620,968 5,063,070
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6,660,188 5,106,847
------------ ------------
OTHER ASSETS
Reimbursable Property Costs 430,500 410,000
Deposit 3,278 3,278
------------ ------------
$ 10,494,299 $ 10,762,521
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 57,628 $ 179,839
Current portion of capital lease obligation 2,278 1,600
------------ ------------
Total Current Liabilities 59,906 181,439
------------ ------------
Capital lease obligation -- 1,062
------------ ------------
Total Liabilities 59,906 182,501
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred Stock, $.001 par value
Authorized 1,000,000 shares
Issued and outstanding - 21,980 shares at 11/30/99
and 22,979 shares at 8/31/99 "Series A
Preferred Stock" $100 face value, 10% coupon 22 23
Common stock, $.001 par value
Authorized 30,000,000 shares
Issued and outstanding - 14,579,580 shares
at 11/30/99 and 14,408,620 shares at 8/31/99 14,580 14,409
Capital in excess of par value 11,945,367 11,925,537
Retained earnings/(accumulated deficit) (1,525,576) (1,359,949)
------------ ------------
10,434,393 10,580,020
------------ ------------
$ 10,494,299 $ 10,762,521
============ ============
3
PYR ENERGY CORPORATION
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Three
Months Months Inception
Ended Ended Through
11/30/98 11/30/99 11/30/99
REVENUES
Consulting fees $ -- $ -- $ 127,528
Interest 4,525 56,842 215,296
------------ ------------ ------------
4,525 56,842 342,824
------------ ------------ ------------
OPERATING EXPENSES
General and administrative 137,775 217,845 1,779,884
Dry hole, impairment and abandonments -- -- 321,369
Interest 29,832 66 184,161
Depreciation and amortization 6,386 4,558 52,405
------------ ------------ ------------
173,993 222,469 2,337,819
------------ ------------ ------------
OTHER INCOME
Gain on sale of oil and gas prospects -- -- 556,197
------------ ------------ ------------
(169,468) (165,627) (1,438,798)
INCOME APPLICABLE TO
PREDECESSOR LLC (Note 1) -- -- (35,868)
------------ ------------ ------------
NET (LOSS) $ (169,468) $ (165,627) $ (1,474,666)
============ ============ ============
NET (LOSS) PER
COMMON SHARE - BASIC AND DILUTED
$ (.018) $ (.011) $ (.191)
============ ============ ============
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING 9,243,693 14,536,370 7,733,798
============ ============ ============
4
PYR ENERGY CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Cumulative
Three Months Ended Amounts from
11/30/98 11/30/99 Inception
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) $ (169,468) $ (165,627) $ (1,438,798)
Adjustments to reconcile net (loss) to
net cash provided by operating activities
Depreciation and amortization 6,386 4,558 52,405
Contributed services -- -- 36,000
Gain on sale of oil and gas prospects -- -- (556,197)
Dry hole, impairment and abandonments -- -- 321,369
Common stock issued for interest on debt -- -- 116,822
Common stock issued for consulting fees -- 20,000 20,000
Amortization of financing costs -- -- 26,939
Amortization of marketable securities -- -- (20,263)
Changes in assets and liabilities
Decrease (increase) in accounts and other receivables -- (55,196) (58,278)
(Increase) in prepaids (25,619) (14,100) (32,842)
(Decrease) increase in accounts payable 58,640 (122,211) 43,194
Other (91) -- 6,249
------------ ------------ ------------
Net cash (used) by operating activities (130,152) (332,576) (1,483,400)
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for furniture and equipment (1,734) -- (85,955)
Cash paid for undeveloped oil and gas properties (1,526,197) (1,557,898) (6,785,658)
Proceeds from sale of oil and gas properties -- -- 1,050,078
Cash paid for marketable securities -- -- (5,090,799)
Proceeds received from marketable securities -- 1,916,552 1,916,552
Cash paid for reimbursable property costs (20,500) (430,500)
------------ ------------ ------------
------------
Net cash (used) in investing activities (1,527,931) 338,154 (9,426,282)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Members capital contributions -- -- 28,000
Distributions to members -- -- (66,000)
Cash from short-term borrowings -- -- 285,000
Repayment of short-term borrowings -- -- (285,000)
Proceeds from sale of common stock -- -- 9,023,750
Proceeds from sale of convertible debt 2,500,001 -- 2,500,001
Proceeds from exercise of warrants -- -- 7,812
Cash paid for offering costs (74,346) -- (407,291)
Cash received upon recapitalization and merger -- -- 336
Payments on capital lease (346) (385) (2,918)
Preferred dividends paid -- -- (50,910)
------------ ------------ ------------
Net cash (used) provided by financing activities 2,425,309 (385) 11,032,780
------------ ------------ ------------
NET (DECREASE) INCREASE IN CASH 767,226 5,193 123,098
CASH, BEGINNING OF PERIODS 373,100 117,905 --
------------ ------------ ------------
CASH, END OF PERIODS $ 1,140,326 $ 123,098 $ 123,098
============ ============ ============
5
PYR ENERGY CORPORATION
(A Development Stage Company)
Notes to Financial Statements
November 30, 1999
The accompanying interim financial statements of PYR Energy Corporation (the
"Company") are unaudited. In the opinion of management, the interim data
includes all adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation of the results for the interim period.
The financial statements included herein have been prepared by the Company
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosure normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations.
Management believes the disclosures made are adequate to make the information
not misleading and recommends that these condensed financial statements be read
in conjunction with the financial statements and notes included in the Company's
Form 10-KSB as of August 31, 1999.
PYR Energy Corporation (formerly known as Mar Ventures Inc. ("Mar")) was
incorporated under the laws of the State of Delaware on March 27, 1996. Mar had
been a public company which had no significant operations as of July 31, 1997.
On August 6, 1997 Mar acquired all the interests in PYR Energy LLC ("PYR LLC")
(a Colorado Limited Liability Company organized on May 31, 1996), a development
stage company as defined by Statement of Financial Accounting Standards (SFAS)
No. 7. PYR LLC, an independent oil and gas exploration company, had been engaged
in the acquisition of undeveloped oil and gas interests for exploration and
exploitation in the Rocky Mountain region and California. As of August 6, 1997
PYR LLC had acquired only non-producing leases and acreage and no exploration
had been commenced on the properties. Upon completion of the acquisition of PYR
LLC by Mar, PYR LLC ceased to exist as a separate entity. Mar remained as the
legal surviving entity and, effective November 12, 1997, Mar changed its name to
PYR Energy Corporation.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
CASH EQUIVALENTS - For purposes of reporting cash flows, the Company
considers as cash equivalents all highly liquid investments with a maturity
of three months or less at the time of purchase. At November 30, 1999,
there were no cash equivalents.
MARKETABLE SECURITIES - At November 30, 1999, the Company held investments
in marketable securities which were classified as held-to-maturity.
Securities classified as held-to-maturity consisted of securities with a
maturity date within one year, and are classified as Marketable Securities
as a part of Current Assets. These securities are stated at amortized cost.
PROPERTY AND EQUIPMENT - Furniture and equipment is recorded at cost.
Depreciation is provided by use of the straight-line method over the
estimated useful lives of the related assets of three to five years.
Expenditures for replacements, renewals, and betterments are
capitalized. Maintenance and repairs are charged to operations as incurred.
6
OIL AND GAS PROPERTIES - The Company follows the full cost method to
account for its oil and gas exploration and development activities. Under
the full cost method, all costs incurred which are directly related to oil
and gas exploration and development are capitalized and subjected to
depreciation and depletion. Depletable costs also include estimates of
future development costs of proved reserves. Costs related to undeveloped
oil and gas properties may be excluded from depletable costs until such
properties are evaluated as either proved or unproved. The net capitalized
costs are subject to a ceiling limitation. Gains or losses upon disposition
of oil and gas properties are treated as adjustments to capitalized costs,
unless the disposition represents a significant portion of the Company's
proved reserves. A separate cost center is maintained for expenditures
applicable to each country in which the Company conducts exploration and/or
production activities.
Undeveloped oil and gas properties consists primarily of leases and
acreage acquired by the Company for its exploration and development
activities. The cost of these non-producing leases is recorded at the lower
of cost or fair market value.
The Company has adopted SFAS No. 121 "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed of" which
requires that long-lived assets to be held and used be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. During the fiscal year
ended August 31, 1999, the Company recorded an impairment loss of
approximately $285,000.
INCOME TAXES - The Company has adopted the provisions of SFAS No. 109,
"Accounting for Income Taxes". SFAS 109 requires recognition of deferred
tax liabilities and assets for the expected future tax consequences of
events that have been included in the financial statements or tax returns.
Under this method, deferred tax liabilities and assets are determined based
on the difference between the financial statement and tax basis of assets
and liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company is an independent oil and gas exploration company whose
strategic focus is the application of advanced seismic imaging and
computer-aided exploration technologies in the systematic search for commercial
hydrocarbon reserves, primarily in the onshore western United States. The
Company attempts to leverage its technical experience and expertise with seismic
to identify exploration and exploitation projects with significant potential
economic return. The Company intends to participate in selected exploration
projects as a non-operating, working interest owner, sharing both risk and
rewards with its partners. The Company has and will continue to pursue
exploration opportunities in regions where the Company believes significant
opportunity for discovery of oil and gas exists. By reducing drilling risk
through seismic technology, the Company seeks to improve the expected return on
investment in its oil and gas exploration projects.
During the three months ended November 30, 1999 and November 30, 1998 the
Company paid approximately $1,558,000 and $1,526,000 respectively, for
acquisition of acreage, direct geological and geophysical costs, drilling costs
and other related direct costs with respect to its identified exploration and
exploitation projects. The Company has had no revenues from oil and gas
production.
The Company currently anticipates that it will participate in the drilling
of at least two exploratory wells during the next twelve months, although the
number of wells may increase as additional projects are added to the Company's
portfolio. However, there can be no assurance that any such wells will be
drilled and if drilled that any of these wells will be successful.
7
It is anticipated that the future development of the Company's business
will require additional (and possibly substantial) capital expenditures.
Depending upon the extent of success of the Company's ability to sell additional
prospects for cash, the level of industry participation in the Company's
exploration projects, the continuing results at East Lost Hills, the Deep
Temblor exploration program and the Company's other exploration projects, the
Company may require from $2,000,000 to over $10,000,000 for capital expenditures
relating to exploration and potential development of its projects during the
following 12 month period. The Company intends to attempt to limit capital
expenditures by forming industry alliances and exchanging an appropriate portion
of its interest for cash and/or a carried interest in its exploration projects.
Currently, there are no commitments for additional funding and the Company may
need to raise additional funds to cover capital expenditures.
The following provides a summary and status of the Company's exploration
areas and significant projects. While actively pursuing specific exploration
activities in each of the following areas, the Company is continually reviewing
additional opportunities in these core areas and in other areas that meet
certain exploration and exploitation criteria. There is no assurance that
drilling opportunities will continue to be identified in the current project
portfolio or will be successful if drilled. The Company's primary focus area is
the San Joaquin Basin of California.
The San Joaquin Basin of California has proven to be one of the most
productive hydrocarbon producing basins in the continental United States. To
date, the approximately 14,000 square mile basin has produced in excess of 13
billion barrels of oil equivalent, and contains 25 fields classified as giant,
with cumulative production of more than 100 million barrels of oil equivalent
("MMBoe"). In calculating barrels of oil equivalent, the Company uses the ratio
of six thousand cubic feet ("Mcf") of gas for one barrel of oil.
The San Joaquin Basin contains six of the 25 largest oil fields in the U.S.
All six of these fields were discovered between 1890 and 1911, a full decade
prior to the discovery of the first giant Texas oil field. The basin accounts
for 34 percent of California's actively producing fields, yet produces more than
75 percent of the state's total oil and gas production. Most of the production
within the basin is located along the western and southern end of Kern County.
San Joaquin Basin production totals for 1998 reported by the California
Department of Oil and Gas for all producers in the aggregate indicate total
production of 254.62 MMBoe. Of this figure, Kern County accounts for over 90
percent of the oil production from the San Joaquin Basin.
Exploration Opportunity. For the 100 plus years of its productive life, the
San Joaquin Basin has been dominated by major oil companies and large fee
acreage holdings. As a result of these conditions, the basin has generally been
under-explored by independent exploration and production companies, groups that
usually bring advanced technologies to their exploration efforts. The large
fields in the basin were all discovered on surface anticlines and produce mostly
heavy oil from depths of less than 5,000 feet. As a consequence, basin operators
have employed only those advanced engineering technologies related to enhanced
production practices including steam floods and, most recently, horizontal
drilling.
With limited exploration in the San Joaquin Basin since the "boom" days of
the early 1980s, the Company believes that multiple exploration opportunities
are available. Deep basin targets, both structural and stratigraphic in nature,
remain largely untested. In addition, retrenchment of the majors in the basin
has caused many of them to rethink their policies regarding their large fee
acreage positions. For the first time in history, many of these companies are
opening up these fee acreage positions to outside exploration by aggressive
independent companies.
8
East Lost Hills. During 1997, the Company identified and undertook
technical analysis of a deep, large untested structure in the footwall of the
Lost Hills thrust. This prospect lies directly east of and structurally below
the existing Lost Hills field, which has produced in excess of 350 MMBoe from
shallow pay zones in a large thrusted anticlinal feature.
This unconventional deep prospect had significant structural and reservoir
risk, but the potential for large reserves made it an attractive play. In a
joint effort with Denver based Armstrong Resources LLC ("Armstrong"), the
Company has analyzed and interpreted over 350 miles of high-resolution 2-D
seismic data to help refine the structural mapping of the prospect. Advanced
pre-stack depth migration and interpretation clearly defines a deep sub-thrust
structure. Two wells drilled to the east of the prospect, in the mid-1970s,
proved the productivity potential of free oil (42 degree API) and gas at depths
below 17,000 feet. Ongoing source rock and maturation modeling suggests that the
oil generation window exists at depths between 15,000 and 17,000 feet, and that
early migration of hydrocarbons should preserve reservoir quality at East Lost
Hills.
In early 1998, the Company and Armstrong entered into an exploration
agreement with a number of established Canadian joint interest partners to
participate in the drilling of an initial exploratory well to fully evaluate the
feature. PYR received cash consideration for its share of acreage in this play
and a carried 6.475% working interest through the tanks in the initial
exploration well. PYR owns an additional 4.1% working interest for a total
working interest of 10.575%.
On May 15, 1998, an initial exploration well, the Bellevue Resources et al.
#1-17 East Lost Hills well, located in SE1/4. Sec 17, T26S, R21E, Kern County,
California, commenced drilling. The well was designed to test prospective
Miocene sandstone reservoirs in the Temblor Formation below 17,000 feet. During
September 1998, the well was sidetracked in an attempt to gain better structural
position and delineate potential uphole pay. On November 23, 1998, the well was
drilling at 17,600 feet toward a total depth of 19,000 feet when it blew out and
ignited. No personal injuries resulted, and an expert well control team was
engaged to contain the fire. Surface containment facilities were installed and
liquid and gas production were contained and were transported to processing and
disposal facilities. A snubbing unit was deployed to attempt a surface control
kill of the Bellevue #1-17, but, after eight kill attempts, was not successful.
A majority of the costs associated with the blow out have been covered by
insurance policies in effect when the blow out occurred. A portion of the claims
have not yet been reimbursed through one of the insurance policies. The Company
has advanced $430,500 for its proportionate share of the claims in order that
these claims be paid directly to the claimants. The Company believes that most,
if not all of these claims will ultimately be reimbursed through insurance
proceeds. The Company currently carries the advanced funds as Reimbursable
Property Costs on its November 30, 1999 Balance Sheet.
On December 18, 1998, a relief well, the Bellevue #1-17R, began drilling.
This well was initially expected to intersect the wellbore of the Bellevue #1-17
at a depth of about 13,500 feet. However, as drilling continued and the
characteristics of the blowout were examined, it was determined that it would be
necessary to intersect the wellbore below 16,000 feet. The relief well was
drilled to 16,668 feet, where it intersected the original well bore. On May 29,
1999, the Bellevue #1-17 well was killed by pumping heavy mud and cement into
the well bore. This Bellevue #1-17 well bore has been plugged and abandoned and
the Bellevue #1-17R relief well has been used to sidetrack a replacement well
into the targeted Temblor Zone. The operator of the well is currently continuing
the process of production testing and evaluating this replacement well.
On August 26, 1999, the participants in this prospect commenced drilling a
second well at East Lost Hills to further explore the Temblor Formation. This
well is approximately two miles to the northwest of the original well. In order
to have a better chance to reach total depth, a drilling rig capable of drilling
to 30,000 feet was brought in to drill this well. As of January 4, 2000, this
well has been drilled to a depth of 17,320 feet, approximately 270 feet into the
Temblor formation. This well is currently drilling toward its total depth of
20,000 feet.
9
At the present time, the participants may drill one or more additional
wells in this prospect during the next twelve months.
Deep Temblor Exploration Program - Cal Canal, Lucky Dog and Pyramid Power.
In April 1999, the Company purchased a working interest in three additional deep
exploration projects in the San Joaquin basin of California. These three
projects are in addition to the exploration program initiated by the recent deep
drilling at East Lost Hills, and all three lay outside the East Lost Hills joint
venture area. Pursuant to the agreement, the Company purchased working
interests, ranging from 3.00% to 3.75%, in each of the three exploration
prospect areas. The Company's interest will be carried (non-cost bearing)
"through the tanks" in the initial test well in each of the three separate
exploration prospects.
The three exploration prospects in this program, targeting the Temblor
Formation at depths ranging from 15,000 to 19,000 feet, are expected to be
drilled in sequence with the same rig. Berkley will operate the other
exploration projects in the Deep Temblor Exploration Program as well as the
future operations at East Lost Hills.
The first exploration well in the program (Cal Canal) began drilling on
June 15, 1999 and is operated by Berkley. This well has reached total depth of
18,100 feet and a production liner has been installed. Production testing is
expected to commence by late January of 2000.
Wedge Prospect and Bull Dog Prospect. PYR has created these exploration
opportunities and is in the process of presenting these prospects to potential
industry partners. These prospects will target the Temblor Formation in the San
Joaquin basin, similar to the East Lost Hills and Deep Temblor Exploration
Program. PYR currently controls 100% of the gross acreage in these areas and
intends to sell a portion of its interest to industry partners for a cash
consideration while retaining a working interest in the exploration wells and
adjoining acreage. PYR controls approximately 25,000 acres in these prospects
and expects to drill 1 or 2 exploration wells during calendar 2000.
Rectang Force Prospect. PYR owns 30% of approximately 3,800 acres in this
San Joaquin basin prospect. This is another prospect that targets the Temblor
Formation. PYR may elect to participate in the drilling of an initial
exploration well here at the current 30% ownership, or may elect to sell down
its interest for cash and/or a carried working interest in the initial well.
This prospect is still in the development stage and no drilling plans are
currently in place.
Southeast Maricopa. PYR holds a 100% working interest in this acreage.
During 1998, PYR acquired new 3-D seismic data over approximately 56 square
miles using Western Geophysical Company as the seismic contractor. PYR is
currently presenting this prospect to potential industry participants and
intends to generate an up front cash consideration and a carried working
interest in an initial exploration well here. Through lease and option, PYR has
a 100% working interest in approximately 14,000 gross acres in this project.
Rocky Mountain Areas. The Company is in the process of developing
exploration plays in three separate high potential prospect areas. PYR intends
to replicate the approach taken with the California projects by controlling the
pre-drill exploration phase including developing the geological background,
identifying potential oil and/or gas reservoirs via seismic imaging, and
controlling the land position. After these tasks are complete, the Company
intends to take each prospect to potential industry partners in order to
10
generate up front cash and drilling activity. The Company currently controls,
through lease or option, approximately 175,000 gross and 122,000 net acres in
these projects. The Company expects these projects will be ready for
presentation around mid-year of calendar year 2000.
At November 30, 1999, the Company had a working capital amount of
approximately $3,340,000. The Company had no outstanding long-term debt at
November 30, 1999 and has not entered into any commodity swap arrangements or
hedging transactions. Although it has no current plans to do so, it may enter
into commodity swap and/or hedging transactions in the future in conjunction
with oil and gas production. Nevertheless, there can be no assurance that the
Company will ever have oil and gas production.
Results of Operations
The quarter ended November 30, 1999 compared with the quarter ended
November 30, 1998.
Operations during the quarter ended November 30, 1999 resulted in a net
loss of ($165,627) compared to a net loss of ($169,468) for the quarter ended
November 30, 1998.
Oil and Gas Revenues and Expenses. The Company has not owned any producing
or proved oil and gas properties. Accordingly, no oil and gas revenues or
expenses have been recorded by the Company.
Interest Income. The Company recorded $56,841 and $4,525 in interest income
for the quarters ended November 30, 1999 and 1998, respectively. The increase is
attributable to additional cash on hand from the Private Placement completed in
May of 1999.
Depreciation, Depletion and Amortization. The Company recorded no depletion
expense from oil and gas properties for the quarters ended November 30, 1999 or
1998. The Company has not owned any proved reserves and had no oil or gas
production. The Company recorded $4,558 and $6,386 in depreciation expense
associated with capitalized office furniture and equipment during the quarters
ended November 30, 1999 and 1998, respectively.
General and Administrative Expense. The Company incurred $217,845 and
$137,775 in general and administrative expenses during the quarters ended
November 30, 1999 and 1998, respectively. The difference is primarily
attributable to an increase in personnel to enable the Company to continue to
pursue its exploration activities.
Interest Expense. The Company recorded nominal interest expense for the
quarter ended November 30, 1999. The Company incurred $29,832 in interest
expense for the quarter ended November 30, 1998, primarily associated with the
Company's then outstanding convertible debentures. These were converted into
Series A Convertible Preferred Stock on April 16, 1999. The Company is obligated
to pay a 10 percent dividend on this outstanding preferred stock.
Year 2000 Compliance
Year 2000 compliance is the ability of computer hardware and software to
respond to the problems posed by the fact that computer programs traditionally
have used two digits rather than four digits to define an applicable year. As a
consequence, any of the Company's computer programs that have date-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. As of the date of this report, the Company has not experienced any
significant year 2000 problems. However, as part of the Company's continuing
contingency plan, other vendors have been identified in the event that a
significant vendor is disrupted by a Year 2000 failure.
11
PART II.
OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
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
None
SIGNATURES
----------
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.
PYR ENERGY CORPORATION
Signatures Title Date
---------- ----- ----
/s/ D. Scott Singdahlsen Chief Executive Officer; January 14, 2000
- ------------------------ President and Chairman Of
D. Scott Singdahlsen The Board
/s/ Andrew P. Calerich Chief Financial Officer January 14, 2000
- ----------------------- and Vice-President
Andrew P. Calerich
12