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 September 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: 522,350 shares, one class only, as of September 30, 1995. INDEX INDEX TO INFORMATION INCLUDED IN THE QUARTERLY REPORT (FORM 10-Q) TO THE SECURITIES AND EXCHANGE COMMISSION FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995 (UNAUDITED). _________________________________________________________________
PART I. FINANCIAL INFORMATION Page Number Balance Sheets as of December 31, 1994 and September 30, 1995 3, 4 Statements of Operations for the Three and Nine Months Ended September 30, 1995 and 1994 5 Statements of Cash Flows for the Three and Nine Months Ended September 30, 1995 and 1994 6 Notes to Financial Statements 7 Managements' Discussion and Analysis of Financial Condition and Results of Operations 7 PART II. OTHER INFORMATION Signatures. 9 _________________________________________________________________ The condensed financial statements included herein are for the Registrant, Croff Oil Company. The financial statements for the three and nine months ended September 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 Dec 31, Sept 30, 1994 1995 CURRENT ASSETS: Cash and Cash Equivalents: $ 19,385 $ 44,226 Marketable equity securities 24,250 16,000 Accounts receivable: Oil and gas purchasers 26,684 23,648 Refundable income taxes 10,053 3,130 Note receivable, collateralized 5,500 5,500 Interest receivable on investment 3,159 Total current assets $ 85,872 $ 95,663 PROPERTY AND EQUIPMENT, AT COST: Oil & gas properties, successful efforts method: Proved properties 457,198 445,043 Unproved properties 110,051 110,051 567,249 555,094 Less accumulated depletion and depreciation (222,794) (240,474) Furniture, fixtures & equipment 4,536 4,536 Less accumulated depreciation (4,536) (4,536) -- -- Net property and equipment $ 344,455 $ 314,620 Coal Investment 100,000 $ 430,327 $ 510,283 ============= ==============
PART I: FINANCIAL INFORMATION CROFF OIL COMPANY BALANCE SHEET Dec 31, Sept 30, 1994 1995 Current Liabilities: Accounts payable $ 10,934 $ 14,231 Accrued liabilities 537 3,191 Bank Note to finance coal investment 0 50,000 Total current liabilities 11,471 67,422 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 909,983 909,983 Accumulated deficit (476,235) (448,230) 491,662 519,667 Less treasury stock at cost, 52,788 shares in 1994 and 56,788 in 1995 (72,806) (76,806) Total stockholders' equity 418,856 442,861 $ 430,327 $ 510,283 ============= ==============
<PAGE> CROFF OIL COMPANY Statement of Operations For the Three and Nine Months Ended September 30, 1995 (Unaudited) For Nine Months For Three Months Ended Ended 9/30/94 9/30/95 9/30/94 9/30/95 Revenue: Oil and gas sales........ $158,372 $135,113 $55,393 $42,150 Other income (loss)...... 3,290 12,137 212 5,815 Total revenue $161,662 $147,250 $55,605 $47,965 Costs and expenses: Lease operating expense.. $ 49,424 $ 29,209 $16,643 $ 8,857 Depreciation and depletion 22,500 22,500 7,500 7,500 General and administrative 52,998 55,946 14,298 18,020 Interest 0 2,771 0 1,381 Rent Expense - Related Party 8,820 8,820 2,940 2,940 $133,742 $119,246 $41,381 $38,698 Net income (loss) $ 27,920 $ 28,004 $14,224 $ 9,267 ======== ========= ======= ======== Earnings (Loss) Per Share $ .05 $ .05 $ .03 $ .02 ========= ========= ======== ======== CROFF OIL COMPANY Statement of Cash Flows For the Nine Months Ended September 30, 1994 1995 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 27,920 $ 28,004 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and depletion 22,500 22,500 Change in assets and liabilities: Decrease in accounts receivable 1,461 6,800 Decrease in other assets 0 0 Increase in accounts payable 3,178 3,297 (Decrease) Increase in in accrued liabilities (1,208) 2,654 Total adjustments 25,931 35,251 Net cash provided by operating activities: 53,851 63,255 -------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: (Purchase)/Sale of Securities 0 19,540 (Purchase)/Sale of oil & gas properties: (70,576) 3,955 Purchase of coal investment 0 100,000 --------- --------- (70,576) 84,414 CASH FLOWS FROM FINANCING ACTIVITIES: Purchase of Treasury Stock 0 (4,000) Note payable for Coal Purchase 0 50,000 --------- --------- ( 0) 46,000 Increase (decrease) in cash: (16,725) 24,841 Cash at beginning of period: $ 20,880 $ 19,385 ========= ========= Cash at end of period: $ 4,155 $ 44,226 ========= ========= CROFF OIL COMPANY
NOTES TO FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 1995 BASIS OF PREPARATION. The condensed financial statements for the three and nine month periods ended September 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 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 September 30, 1995, as Compared to the Three-Month Period Ended September 30, 1994. OIL AND GAS OPERATIONS Oil and gas income, primarily from royalties, for the three months ended September 30, 1995 was $42,150 compared to $55,393 for the same time period of the prior year. This decrease was due primarily to lower oil and natural gas prices and the plugging or sale of wells with high revenue and high expenses. Production costs, which include lease operating expenses and production related taxes, for the three months ended September 30, 1995, decreased when compared to the same time period of the prior year, $8,856 in 1995 compared to $16,643 in 1994. This decrease was due to fewer workovers incurred, the plugging of some wells and some property dispositions. Production taxes, (these taxes are levied as a percentage of the sales price of oil and gas production), also decreased. Nine Month Period Ended September 30, 1995, as Compared to the Nine Month Period Ended September 30, 1994. OIL AND GAS OPERATIONS Oil and gas income, primarily from royalties, for the nine months ending September 30, 1995, was $135,113 compared to $158,372 for the same time period of the prior year. This decrease was due primarily to lower oil and natural gas prices and lower volumes particularly on the gas side of production. Production costs, which include lease operating expenses and all production related taxes, for the nine months ended September 30, 1995, decreased when compared to the same time period of the prior year, $29,208 in 1995 compared to $49,424 in 1994. These lower production costs were primarily the result of less workovers on wells in a weaker oil market, and plugging and sale of marginal wells. OTHER INCOME. During the nine month period ended September 30, 1995, the Company had other income of $12,137 from interest earned, dividend payments, a lease bonus, and sale of producing properties. During the same nine month period in 1994, the Company had other income of $3,290, primarily from dividends. The Company's interest income was higher due to the interest payments from the Buck Creek Coal Mine investment. GENERAL AND ADMINISTRATIVE. General and administrative expenses for the nine month period ending September 30, 1995, were $55,946 compared to $52,998 for the nine month period ending September 30, 1994. This difference was due to timing of legal and accounting fees and printing costs. During the nine month period ended September 30, the Company's total expenses decreased from $133,742 in 1994 to $119,246 in 1995. The decrease was due to lower production expenses, and taxes. General and administrative expenses will likely remain at approximately this level. The Company is currently operating with two part time officers and employees, and is contracting for its accounting services, office space and supplies.
<PAGE> FINANCIAL CONDITION As of September 30, 1995, the Company's current assets exceeded current liabilities by $28,241, compared to working capital of $74,401 at December 31, 1994. This decrease of $46,160 in the Company's working capital position during the nine month period ending September 30, 1995 was due to the purchase for $100,000 of the Buck Creek Coal investment, of which $50,000 was paid out of cash in current assets. The Company also sold three small working interests in wells during the quarter. The Company's ratio of current assets to current liabilities was approximately 6.5 to 1 on December 31, 1994 and 1.4 to 1 on September 30, 1995. The Company is continuing its program to invest its cash in small non-operated oil and gas assets, and paying off its Bank note.
PART II. OTHER INFORMATION I
TEM 6(b). NONE. 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 By_________________________________ Ward Smith Chief Accounting Officer Date:__________________, 1995
<TABLE> <S> <C> <ARTICLE> 5 <S> <C> <PERIOD-TYPE> 9-MOS <FISCAL-YEAR-END> DEC-31-1995 <PERIOD-END> SEP-30-1995 <CASH> 44,226 <SECURITIES> 16,000 <RECEIVABLES> 35,537 <ALLOWANCES> 0 <INVENTORY> 0 <CURRENT-ASSETS> 95,663 <PP&E> 555,094 <DEPRECIATION> (240,747) <TOTAL-ASSETS> 510,283 <CURRENT-LIABILITIES> 67,722 <BONDS> 0 <COMMON> 57,914 <PREFERRED-MANDATORY> 0 <PREFERRED> 0 <OTHER-SE> 384,947 <TOTAL-LIABILITY-AND-EQUITY> 510,283 <SALES> 135,113 <TOTAL-REVENUES> 147,250 <CGS> 0 <TOTAL-COSTS> 51,709 <OTHER-EXPENSES> 64,837 <LOSS-PROVISION> 0 <INTEREST-EXPENSE> 2,771 <INCOME-PRETAX> 28,004 <INCOME-TAX> 0 <INCOME-CONTINUING> 28,004 <DISCONTINUED> 0 <EXTRAORDINARY> 0 <CHANGES> 0 <NET-INCOME> 28,004 <EPS-PRIMARY> .05 <EPS-DILUTED> .05 </TABLE>