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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 March 31, 1997
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Operations For the transition period from _______________ to ________________
Commission File Number: 1-100
CROFF ENTERPRISES, INC.
(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) 623-3383
(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: 516,265 shares, one class
only.
INDEX
INDEX TO INFORMATION INCLUDED IN THE QUARTERLY REPORT (FORM 10-Q) TO THE
SECURITIES AND EXCHANGE COMMISSION FOR THE THREE MONTHS ENDED MARCH 31, 1997
(UNAUDITED).
_________________________________________________________________
PART I. FINANCIAL INFORMATION Page Number
Balance Sheets as of December 31, 1996
and March 31, 1997 3
Statements of Operations for
the Three Months Ended March 31, 1997 and 1996 5
Statements of Cash Flows
for the Three Months
Ended March 31, 1997 and 1996 6
Notes to Financial Statements 7
Management's' Discussion and Analysis of Financial
Condition and Results of 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 three months ended March
31, 1997 and 1996 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, March 31,
1996 1997
CURRENT ASSETS:
Cash and Cash Equivalents: $ 184,565 $ 201,122
Marketable equity securities 10,500 10,000
Accounts receivable:
Oil and gas purchasers 31,764 24,609
Refundable income taxes 4,362 5,362
Other advances 0 368
Total current assets $ 231,191 $ 241,461
PROPERTY AND EQUIPMENT, AT COST:
Oil & gas properties, successful
efforts method:
Proved properties 329,700 346,275
Unproved properties 101,901 101,901
431,601 448,176
Less accumulated depletion and
depreciation (229,621) (235,620)
Net Property Value 201,980 212,556
Furniture, fixtures & equipment 0 0
Less accumulated depreciation 0 0
-- --
Net property and equipment 201,980 212,556
Coal investment 82,533 82,533
Total Assets $ 515,704 $536,550
PART I: FINANCIAL INFORMATION
CROFF OIL COMPANY
BALANCE SHEET
Dec 31, March 31,
1996 1997
Current Liabilities:
Accounts payable $ 3,164 $ 2,268
Accrued liabilities 1,660 1,659
------------- -------------
Total current liabilities 4,824 3,927
Stockholders' equity :
Class A Preferred, none issued
Class B Preferred stock, no par
value; 520,000 authorized,
516,506 shares issued 233,744 233,744
Common stock, $.10 par value
20,000,000 share authorized
579,143 shares issued 57,914 57,914
Capital in excess of par value 672,799 672,799
Accumulated deficit (370,931) (348,938)
-------------- --------------
593,526 615,519
Less treasury stock at cost,
62,628 shares in 1996 and 62,878
in 1997 (82,646) (82,896)
Total stockholders' equity 510,880 532,623
Total Liabilities & Stockholder's Equity $ 515,704 $536,550
CROFF OIL COMPANY
Statement of Operations
For the Three Months Ended March 31
1996 1997
Revenue:
Oil and gas sales.............. $ 47,485 $ 58,002
Other income (loss)............ 988 1,222
Total revenue 48,473 59,224
Costs and expenses:
Lease operating expense........ $ 10,629 $ 9,274
Depreciation and depletion..... 7,500 6,000
General and administrative..... 19,152 19,017
Rent Expense - Related Party... 2,940 2,940
------------ ----------
40,444 37,231
Net income (loss) $ 8,029 $21,993
Earnings (Loss) Per Share $ .02 $ .04
CROFF OIL COMPANY
Statement of Cash Flows
For the Three
Months Ended
March 31,
1996 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 8,029 $ 21,993
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and depletion 7,500 6,000
Change in assets and liabilities:
Decrease in accounts receivable 500 6,155
Decrease/(increase) in other assets 0 (368)
Increase/(decrease) in accounts payable (605) (898)
Increase/(decrease) in accrued liabilities (17) 0
Total adjustments 7,378 10,889
Net cash provided by --------- --------
operating activities: 15,407 32,882
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale/Depreciation of
marketable equity securities 6,981 500
Sale/Purchase)of Producing properties 0 (16,575)
-------- ---------
6,981 (16,075)
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of Treasury Stock 0 (250)
Note payable (50,000) 0
--------- ---------
(50,000) (250)
Increase (decrease) in cash: (27,613) 16,557
Cash at beginning of period: $ 37,933 184,565
Cash at end of period: $ 10,321 $201,122
CROFF OIL COMPANY
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTH PERIOD ENDED MARCH 31, 1997
1. BASIS OF PREPARATION.
The condensed financial statements for the three month periods ended March 31,
1997 and 1996 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 1997 presentation. Certain
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, 1996, 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 March 31, 1997,
as Compared to the Three-Month Period Ended March 31, 1996.
OIL AND GAS OPERATIONS
Oil and gas revenue, primarily from royalties, for the three months ended March
31, 1997 was $58,002 compared to $47,485 for the quarter ending March 31,
1996. This increase was due primarily to higher oil and natural gas prices
which peaked during the first quarter. Oil production was down slightly from
1996, but natural gas production increased.
Production costs, which include lease operating expenses and all production
related taxes, for the three months ended March 31, 1997, decreased slightly
when compared to the production costs incurred during the quarter ended March
31, 1996, $9,274 during 1997 and $10,629 during 1996. This slight decrease
was due to more natural gas production which has lower operating costs and
less expenses.
OTHER INCOME
During the three month period ended March 31, 1997, the Company had other
income of $1,222 from interest, capital gains, dividends, and lease payments.
This was an increase from $988 in the same period in 1996. The increase was
due to more interest income based on higher cash balances in 1997.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses for the quarter ending March 31, 1997,
were $19,017 plus rent expense of $2,940 for a total of $21,957 compared to
$19,152 plus $2,940 for a total of $22,092 in the same period in 1996. The
Company expects general and administrative costs to remain stable this year.
FINANCIAL CONDITION
As of March 31, 1997, the Company's current assets exceeded current liabilities
by $237,535. As of December 31, 1996, the Company's current assets exceeded
current liabilities by $231,191. The Company's current ratio is
approximately 60:1. The Company intends to accumulate cash temporarily,
while it seeks to find an acquisition company and/or oil and natural gas
leases that it can buy at prudent prices.
The Company expects to continue to operate at a positive cash flow for the
calendar year. The Company intends to purchase oil and gas properties, out
of current assets.
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 March
31, 1997.
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:__________MAY 15___, 1997