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FORM 10-Q/QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended June 30, 1995
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _______________ to _____________________
Commission File Number: 1-100
CROFF OIL COMPANY
(Exact name of registrant as specified in its charter)
Utah 87-0233535
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1433 Seventeenth Street, Suite 220, Denver, CO 80202
(Address of principal executive offices) (Zip Code)
(303) 297-3383
(Registrant's telephone number, including area code)
_______________________________________________________________________
(Former name, former address and former fiscal year, if changed since
last report.)
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 such shorter period
that the Registrant has required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
X Yes ______ No
APPLICABLE ONLY TO ISSUERS INVOLVED
IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS:
Indicate by check mark whether the Registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
_______ Yes ______ 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: 526,345 shares, one
class only, as of June 30, 1995.
INDEX
INDEX TO INFORMATION INCLUDED IN THE QUARTERLY REPORT (FORM 10-Q)
TO THE SECURITIES AND EXCHANGE COMMISSION FOR THE THREE AND SIX
MONTHS ENDED JUNE 30, 1995 (UNAUDITED).
_________________________________________________________________
PART I. FINANCIAL INFORMATION Page Number
Balance Sheets as of December 31, 1994
and June 30, 1995 3, 4
Statements of Operations for the Three and
Six Months Ended June 30, 1994 and 1995 5
Statements of Cash Flows
for the Six Months
Ended June 30, 1994 and 1995 6
Notes to Financial Statements 7
Managements' Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II. OTHER INFORMATION
Reports on Form 8-K 9
Signatures. 10
_________________________________________________________________
The condensed financial statements included herein are for the
Registrant, Croff Oil Company. The financial statements for the
six months ended June 30, 1995 and 1994 are unaudited; however,
they reflect all adjustments which, in the opinion of management,
are necessary to present fairly the results of the interim periods.
All adjustments necessary to a fair representation of the financial
statements are of a normal recurring nature.
PART I: FINANCIAL INFORMATION
CROFF OIL COMPANY
BALANCE SHEET
December 31, June 30,
1994 1995
CURRENT ASSETS:
Cash and Cash Equivalents: $ 19,385 $ 16,930
Marketable equity securities 24,250 17,000
Accounts receivable:
Oil and gas purchasers 26,684 25,848
Refundable income taxes 10,053 6,582
Note receivable, secured by interests
in oil and gas properties, includ-
ing accrued interest 5,500 5,500
Total current assets $ 85,872 $ 71,860
PROPERTY AND EQUIPMENT, AT COST:
Oil & gas properties, successful
efforts method:
Proved properties 457,198 457,198
Unproved properties 110,051 110,051
Coal Investment 100,000
567,249 667,249
Less accumulated depletion and
depreciation (222,794) (237,794)
Furniture, fixtures & equipment 4,536 4,536
Less accumulated depreciation (4,536) (4,536)
-- --
Net property and equipment $ 344,455 $ 429,455
$ 430,327 $ 501,315
============= ============
PART I: FINANCIAL INFORMATION
CROFF OIL COMPANY
BALANCE SHEET
December 31 June 30,
1994 1995
Current Liabilities:
Accounts payable $ 10,934 $ 13,231
Accrued liabilities 537 492
Note Payable -0- 50,000
Total current liabilities 11,471 63,723
Commitments (Note 3)
Stockholders' equity (Note 4):
Common stock, $.10 par value
20,000,000 share authorized
579,143 shares issued (579,124
in 1991) 57,914 57,914
Capital in excess of par value 909,983 909,982
Accumulated deficit (476,235) (457,498)
491,662 510,398
Less treasury stock at cost,
52,688 shares in 1992 and 52,788
in 1993 (72,806) (72,806)
Total stockholders' equity 418,856 437,592
$ 430,327 $ 501,315
============= ==============
CROFF OIL COMPANY
Statement of Operations
For the Three And Six Months Ended June 30, 1995
(Unaudited)
For Three Months For Six Months
Ended Ended
6/30/94 6/30/95 6/30/94 6/30/95
Revenue:
Oil and gas sales........ $ 52,963 $ 47,886 $102,979 $ 92,963
Other income (loss)..... 1,186 2,602 3,078 6,322
Total revenue $ 54,149 $ 50,488 $106,057 $ 99,285
Costs and expenses:
Lease operating expense.. $ 17,879 $ 9,821 $32,781 $ 20,352
Depreciation and depletion 7,500 7,500 15,000 15,000
General and administrative 20,652 20,180 38,700 39,317
Rent Expense - Related Party 2,940 2,940 5,880 5,880
$ 48,971 $ 40,441 $92,361 $ 80,549
Net income (loss) $ 5,178 $ 10,047 $13,696 $ 18,736
======== ======== ======== =======
Earnings (Loss) Per Share $ .01 $ .02 $ .03 $ .04
========= ========= ======== =======
CROFF OIL COMPANY
Statement of Cash Flows
For the Six
Months Ended
June 30,
1994 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 13,697 $18,736
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and depletion 15,000 15,000
Change in assets and liabilities:
Decrease in accounts receivable 2,270 4,306
Decrease in other assets 500 (500)
Decrease in accounts payable (972) 2,297
Decrease in accrued liabilities (51) (44)
Total adjustments $ 16,747 $ 21,059
Net cash provided by
operating activities: 30,444 39,795
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of oil & gas properties: (63,524)
Purchase of Coal Investment (100,000)
Sale of Marketable Equity Securities 7,750
--------- ---------
(63,524) (92,250)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Note Payable 45,000 50,000
Increase (decrease) in cash: 11,920 (2,455)
Cash at beginning of period: $ 20,879 $ 19,385
========= ========
Cash at end of period: $ 32,799 $16,930
========= ========
CROFF OIL COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 1994
BASIS OF PREPARATION.
The condensed financial statements for the three and six month
periods ended June 30, 1995 and 1994 in this report have been
prepared by the Company without audit pursuant to the rules and
regulations of the Securities and Exchange Commission and reflect,
in the opinion of management, all adjustments necessary to present
fairly the results of the operations of the interim periods
presented herein. Certain reclassifications have been made to the
prior years' financial statements to conform to the 1995
presentation. Certain information in footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been omitted pursuant
to such rules and regulations, although the Company believes the
disclosures presented herein are adequate to make the information
presented not misleading. It is suggested that these condensed
financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1994, which
report has been filed with the Securities and Exchange Commission,
and is available from the Company.
MANAGEMENTS' DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS.
Three-Month Period Ended June 30, 1995,
as Compared to the Three-Month Period Ended June 30, 1994.
OIL AND GAS OPERATIONS
Oil and gas income, primarily from royalties, for the three
months ended June 30, 1995 was $47,886 compared to $52,963 for the
quarter ending June 30, 1994. This decrease was caused by several
wells being shut in, and by lower prices for natural gas. Prices
generally decreased over the prices one year ago. The lack of any
significant drilling in the Bluebell - Altamont field in Utah is
decreasing revenue to Croff as older wells decline, and revenues
are not replaced with new production.
Production costs, which include lease operating expenses and
all production related taxes, for the three months ended June 30,
1995, were lower, $9,821 in 1995, compared to $17,879 during the
same time period of the prior year. This was due primarily to less
workover expenses this year and lower taxes based on lower prices.
Depreciation and depletion were constant.
OTHER INCOME
During the three month period ended June 30, 1995, the Company
had other income of $2602. The other income figure was $1,186 for
the quarter ending June 30, 1994. This was due to a loss of value
on marketable securities more than offset with interest income on
the Coal investment.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses for the quarter ending
June 30, 1995, were $20,180 plus rent expense of $2940 for a total
of $23,120 compared to $20,652, plus rent expense of $2,940 in the
same period in 1994. The Company expects general and
administrative costs to remain stable this year.
Six Month Period Ended June 30, 1995,
as Compared to the Six Month Period Ended June 30, 1994.
OIL AND GAS OPERATIONS
Oil and gas income, primarily from royalties, for the six
months ending June 30, 1995, was $92,963 compared to $102,979 for
the six months ended June 30, 1994. This decrease was caused by
lower natural gas prices during the first six months of the current
year, lower oil prices, less flush production following workovers,
and normal decline.
Production costs, which include lease operating expenses and
all production related taxes, for the six months ended June 30,
1995, were $20,352 in 1995, a decrease from $32,871 during the six
months ended June 30, 1994. The factors which caused this decrease
were lower oil and gas production taxes, less workover costs, and
a few shut in wells.
OTHER INCOME.
During the six month period ended June 30, 1995, the Company
had other income of $6,322, primarily from interest and dividend
earnings, including the interest earned from Carbon Opportunities,
L.L.C. and gain on marketable securities. During the same six
month period in 1994, the Company had other income of $3,078,
primarily from interest and dividend earnings.
GENERAL AND ADMINISTRATIVE.
General and administrative expenses for the period ending June
30, 1995, were $39,317 compared to $38,700 for the six month period
ending June 30, 1994. The difference was insignificant.
FINANCIAL CONDITION
As of June 30, 1995, the Company's current assets exceeded
current liabilities by $8,037. As of December 31, 1994, the
Company's current assets were $85,872, and current liabilities were
$11,471 for a decrease in the Company's working capital position
of approximately $36,364. This decrease was due to the purchase
of Carbon Opportunities L.L.C. in March of 1995, for $100,000, of
which $50,000 was cash out of current assets. This decreased the
Company's current asset position. The Company expects to continue
to operate at a positive cash flow for the calendar year.
Management intends to pay off the Bank debt this year, which will
lower the amount of cash and current assets, and also lower current
liabilities.
PART II. OTHER INFORMATION
ITEM 6(b). REPORTS ON FORM 8-K.
The registrant has filed no reports on Form 8-K for the period
ending June 30, 1995.
S I G N A T U R E S
Pursuant to the requirements of the Securities Exchange Act of
1934, Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
REGISTRANT: CROFF OIL COMPANY
By_________________________________
Gerald L. Jensen
Chief Executive Officer and
Chief Financial Officer
By_________________________________
M. Ward Smith
Chief Accounting Officer
Date:___________________, 1995