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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 September 30, 1996
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.)
1675 Broadway, Suite 1030, Denver, CO 80202
(Address of principal executive offices) (Zip Code)
(303) 628-1963
(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: 516,515 shares, one
class only, as of September 30, 1996.
INDEX
INDEX TO INFORMATION INCLUDED IN THE QUARTERLY REPORT (FORM 10-Q)
TO THE SECURITIES AND EXCHANGE COMMISSION FOR THE THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 1996 (UNAUDITED).
_________________________________________________________________
PART I. FINANCIAL INFORMATION Page Number
Balance Sheets as of December 31, 1995
and September 30, 1996 3, 4
Statements of Operations for the Three and
Nine Months Ended September 30, 1996 and 1995 5
Statements of Cash Flows
for the Three and Nine Months
Ended September 30, 1996 and 1995 6
Notes to Financial Statements 7
Managements' Discussion and Analysis of Financial
Condition and Results of Operations 7, 8
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, 1996 and 1995 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,
1995 1996
CURRENT ASSETS:
Cash and Cash Equivalents: $ 37,933 $ 160,163
Marketable equity securities 15,500 8,250
Accounts receivable:
Oil and gas purchasers 28,425 22,641
Refundable income taxes 4,290 7,489
Note receivable, collateralized 4,800 0
Total current assets $ 90,948 $ 198,543
PROPERTY AND EQUIPMENT, AT COST:
Oil & gas properties, successful
efforts method:
Proved properties 457,874 323,565
Unproved properties 110,051 110,051
567,925 433,616
Less accumulated depletion and
depreciation (249,154) (225,861)
Furniture, fixtures & equipment 0 0
Less accumulated depreciation 0 0
-- --
Net property and equipment $ 318,771 $ 207,755
Coal Investment 95,299 86,788
$ 505,018 $ 493,086
============= ==============
PART I: FINANCIAL INFORMATION
CROFF OIL COMPANY
BALANCE SHEET
Dec 31, Sept 30,
1995 1996
Current Liabilities:
Accounts payable $ 10,829 $ 8,396
Accrued liabilities 3,662 3,707
Bank Note to finance coal investment 50,000 0
Total current liabilities 64,491 12,103
Commitments (Note 3)
Stockholders' equity (Note 4):
Common stock, $.10 par value
20,000,000 share authorized
579,143 shares issued
57,914 57,914
Capital in excess of par value 909,983 909,983
Accumulated deficit (444,724) (404,268)
523,173 563,629
Less treasury stock at cost,
62,628 shares in 1995 and 62,628
in 1996 (82,646) (82,646)
Total stockholders' equity 440,527 480,983
$ 505,018 $ 493,086
============= ==============
CROFF OIL COMPANY
Statement of Operations
For the Three and Nine Months Ended September 30, 1996
(Unaudited)
For Nine Months For Three Months
Ended Ended
9/30/95 9/30/96 9/30/95 9/30/96
Revenue:
Oil and gas sales........ $135,113 $ 133,784 $42,150 $46,315
Other income (loss)...... 12,137 23,298 5,815 611
Total revenue $147,250 $157,082 $47,965 $46,926
Costs and expenses:
Lease operating expense.. $ 29,209 $29,636 $ 8,857 $9,324
Depreciation and depletion 22,500 16,500 7,500 4,500
General and administrative 55,946 61,447 18,020 21,857
Interest 2,771 223 1,381 0
Rent Expense - Related Party 8,820 8,820 2,940 2,940
$119,246 $116,626 $38,698 $38,621
Net income (loss) $ 28,004 $ 40,456 $ 9,267 $ 8,305
======== ========= ======= =======
Earnings (Loss) Per Share $ .05 $ .08 $ .02 $ .02
========= ========= ======== ========
CROFF OIL COMPANY
Statement of Cash Flows
For the Nine
Months Ended
September 30,
1995 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 28,004 $ 40,456
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and depletion 22,500 16,500
Change in assets and liabilities:
Decrease in accounts receivable 6,800 2,585
Decrease in other assets 0 4,800
Increase in accounts payable 3,297 (2,433)
(Gain)/Loss sale of producing leases (20,966)
(Decrease) Increase in
in accrued liabilities 2,654 45
Total adjustments 35,251 531
Net cash provided by
operating activities: 63,255 40,987
-------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale of Securities 19,540 4,557
Sale of producing leases 0 118,020
(Purchase)/Return of coal investment (100,000) 8,511
Purchase of producing leases (3,954) (12,675)
--------- ---------
(84,414) 131,243
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of Treasury Stock (4,000) 0
Proceeds/(Payoff) of Note for Coal Purchase 50,000 (50,000)
--------- ---------
46,000 (50,000)
Increase (decrease) in cash: 24,841 122,230
Cash at beginning of period: $ 19,385 37,933
========= =========
Cash at end of period: $ 44,226 $160,163
========= =========
CROFF OIL COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 1996
BASIS OF PREPARATION.
The condensed financial statements for the three and nine month
periods ended September 30, 1996 and 1995 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,
1995, 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, 1996,
as Compared to the Three-Month Period Ended September 30, 1995.
OIL AND GAS OPERATIONS
Oil and gas income, primarily from royalties, for the three months
ended September 30, 1996 was $46,315 compared to $42,150 for the same
time period of the prior year. This increase was due primarily to
higher oil and natural gas prices, offset somewhat by lower production
due to the sale of the leases in Texas.
Production costs, which include lease operating expenses and
production related taxes, for the three months ended September 30, 1996,
increased when compared to the same time period of the prior year,
$9,324 in 1996 compared to $8,856 in 1995. This decrease was
insignificant. The sale of the Taylor Ina wells, with their carved out
production payment which creates no expenses with the purchase of
additional working interests should cause a small increase in the lease
operating expenses.
Nine Month Period Ended September 30, 1996,
as Compared to the Nine Month Period Ended September 30, 1995.
OIL AND GAS OPERATIONS
Oil and gas income, primarily from royalties, for the nine months
ending September 30, 1996, was $133,784 compared to $135,113 for the
same time period of the prior year. This slight decrease was due
primarily to the sale of the Texas leases, which was partially offset by
higher prices for oil and natural gas.
Production costs, which include lease operating expenses and all
production related taxes, for the nine months ended September 30, 1996,
increased when compared to the same time period of the prior year,
$29,636 in 1996 compared to $29,209 in 1995. This difference was
insignificant.
OTHER INCOME.
During the nine month period ended September 30, 1996, the Company
had other income of $23,298 from interest earned, dividend payments, a
lease bonus, and gain from the sale of producing properties. During the
same nine month period in 1995, the Company had other income of $12,137,
primarily from dividends. The Company's other income was higher due
primarily to the sale of producing leases. The Company is crediting all
cash flow from the coal investment against its cost basis.
GENERAL AND ADMINISTRATIVE.
General and administrative expenses for the nine month period
ending September 30, 1996, were $61,447 compared to $55,946 for the nine
month period ending September 30, 1995. This difference was due to
moving costs when the Company moved its offices in Denver. During the
nine month period ended September 30, the Company's total expenses
decreased from $119,246 in 1995 to $116,626 in 1996. The decrease was
due to lower depreciation after the sale of the Texas leases. 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.
FINANCIAL CONDITION
As of September 30, 1996, the Company's current assets exceeded
current liabilities by $186,440, compared to working capital of $26,457
at December 31, 1995. This increase of $159,983 in the Company's
working capital position during the nine month period ending September
30, 1996 was due to the sale of leases in North Dakota and Texas, and
the retirement of the Bank note from cash flow. The Company's ratio of
current assets to current liabilities was approximately 3 to 2 on
December 31, 1995 and 15 to 1 on September 30, 1996.
The Company is continuing its program to invest its cash in small
non-operated oil and gas assets, and retaining cash to assist in
expenses of any acquisition.
PART II. OTHER INFORMATION
ITEM 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_________________________________
M. Ward Smith
Chief Accounting Officer
Date: November 12, 1996