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9
AMENDED
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, 1997
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 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) 623-1963
(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:
516,265 shares, one class only, as of June 30, 1997.
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, 1997 (UNAUDITED).
_________________________________________________________________
PART I. FINANCIAL INFORMATION Page Number
Balance Sheets as of December 31, 1996
and June 30, 1997 3, 4
Statements of Operations for the Three and
Six Months Ended June 30, 1996 and 1997 5
Statements of Cash Flows
for the Six Months
Ended June 30, 1996 and 1997 6
Notes to Financial Statements 7
Management's' 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 Enterprises, Inc. The financial statements for
the six months ended June 30, 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 ENTERPRISES, INC.
BALANCE SHEET
December 31, June
30,
1996 1997
CURRENT ASSETS:
Cash and Cash Equivalents: $184,564
$214,145
Marketable equity securities
10,500 9,750
Accounts receivable:
Oil and gas purchasers 31,764
25,722
Refundable income taxes 4,362
6,362
Other advances 0
0
Total current assets $231,191
$255,979
PROPERTY AND EQUIPMENT, AT COST:
Oil & gas properties, successful
efforts method:
Proved properties $329,700
$348,752
Unproved properties 101,901
101,901
431,601
450,653
Less accumulated depletion and depreciation
(229,621) (241,621)
Net property and equipment 201,980
209,032
Coal Investment 82,533
82,533
Total Assets 515,704
547,544
PART I: FINANCIAL INFORMATION
CROFF ENTERPRISES, INC.
BALANCE SHEET
December 31 June
30,
1996 1997
Current Liabilities:
Accounts payable $ 3,164
$1,476
Accrued liabilities 1,660
3,585
Total current liabilities 4,824
5,061
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 shares
authorized 579,143 shares issued
57,914 57,914
Capital in excess of par value
672,799 672,799
Accumulated deficit
(370,931) (339,078)
593,526
625,379
Less treasury stock at cost, 62,628 shares
in 1996 and 62,878 in 1997
(82,646) (82,896)
Total stockholders' equity 510,880
542,483
$515,704
$547,544
CROFF ENTERPRISES, INC.
Statement of Operations
For the Three And Six Months Ended June 30, 1997
(Unaudited)
For Three Months For Six Months
Ended Ended
6/30/96 6/30/97 6/30/96
6/30/97
Revenue:
Oil and gas sales........ $ 39,984 $47,515 $
87,469 $105,517
Other income (loss)..... 21,699 1,772
22,687 3,994
Total revenue $ 61,683 $49,287 $110,156
$109,511
Costs and expenses:
Lease operating expense.. $ 9,682 8,897
$ 20,311 18,171
Depreciation and depletion 4,500 6,000
12,000 12,000
General and administrative 20,438 21,631
39,813 41,648
Rent Expense - Related Party 2,940 2,940
5,880 5,880
$ 37,560 $39,468 $ 78,004
$77,699
Net income (loss) $ 24,123 $ 9,819 $ 32,152
$31,812
Earnings (Loss) Per Share $ .04 $ .01
$ .06 $ .06
CROFF ENTERPRISES, INC.
Statement of Cash Flows
For the Six
Months Ended
June 30,
1996 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $32,152
$31,812
Adjustments to reconcile net income to net cash
provided by operating activities and depletion:
12,000 12,000
Change in assets and liabilities:
Decrease(Increase) in Receivables 453
4,041
Decrease(Increase) in other assets 4,800
0
Decrease(Increase) in accounts payable (1,932)
1,688
Decrease(Increase) in accrued liabilities
21 (1,409)
(Gains)Losses on Sale of Assets (22,247)
0
Total adjustments $ (6,905) 16,320
Net cash provided by operating activities: 25,247
48,132
CASH FLOWS FROM INVESTING ACTIVITIES:
(Purchase)Sale of oil & gas properties: 118,020
(19,052)
(Purchase)Return of Coal Investment 4,255
0
Sale(Depreciation) of marketable equity securities
5,016 750
127,292 (18,302)
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock 0
(250)
Proceeds from Note Payable (50,000)
0
Increase (decrease) in cash: 102,539
29,580
Cash at beginning of period: $ 37,933
$184,565
Cash at end of period: $140,472
$214,145
CROFF ENTERPRISES, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 1997
BASIS OF PREPARATION
The condensed financial statements for the three and six
month periods ended June 30, 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 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, 1996, which report has been filed with the Securities and
Exchange Commission, and is available from the Company.
MANAGEMENT'S' DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Three-Month Period Ended June 30, 1997,
as Compared to the Three-Month Period Ended June 30, 1996.
OIL AND GAS OPERATIONS
Oil and gas income, primarily from royalties, for the three
months ended June 30, 1997 was $47,515 compared to $39,984 for
the quarter ending June 30, 1996. This increase was due to
increased production of oil and natural gas primarily from new
purchases and increased natural gas production on existing
leases. Prices for oil decreased from approximately $20 per
barrel in this quarter in 1996, to slightly over $18 per barrel,
this year. Natural gas prices were approximately even. Third
party drilling activity in 1996 added to the Company's production
in 1997, which more than offset the decrease in prices.
Production costs, which include lease operating expenses and
all production related taxes, for the three months ended June 30,
1997, were stable, $8,897 in 1997, compared to $9,682 during the
same time period of the prior year. The low operating expenses
are due to the large amount of royalty income. Depletion
increased due to the purchase of new wells.
OTHER INCOME
During the three month period ended June 30, 1997, the
Company had other income of $1,772. The other income figure was
$21,699 for the quarter ending June 30, 1996. This was due to a
gain from the sale of producing leases during this quarter last
year, while the current year reflects primarily interest income.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses for the quarter ending
June 30, 1997, were $21,631 plus rent expense of $2,940 for a
total of $24,571 compared to $20,438, plus rent expense of
$2,940, for a total of $23,378 in the same period in 1996. The
Company expects general and administrative costs to remain stable
this year.
Six Month Period Ended June 30, 1997,
as Compared to the Six Month Period Ended June 30, 1996.
OIL AND GAS OPERATIONS
Oil and gas income, primarily from royalties, for the six
months ending June 30, 1997, was $105,517 compared to $87,469 for
the six months ended June 30, 1996. This increase was caused by
higher oil and natural gas production, primarily increased
natural gas from coal seam methane wells, and new well purchases.
This was offset by lower oil prices compared to one year ago.
Production costs, which include lease operating expenses and
all production related taxes, for the six months ended June 30,
1997, were $18,171 in 1997, a decrease from $20,311 during the
six months ended June 30, 1996. There was no significant
difference in operating costs from 1996 to 1997.
OTHER INCOME.
During the six month period ended June 30, 1997, the Company
had other income of $3,994, primarily from interest and dividend
earnings. During the first six months of 1996, the Company had
other income of $22,687, primarily from the sale of oil and gas
leases in addition to interest income. The Company also received
a small bonus from leasing acreage during the fist six months of
1997.
GENERAL AND ADMINISTRATIVE.
General and administrative expenses for the period ending
June 30, 1997, were $41,648 compared to $39,813 for the six month
period ending June 30, 1996. The difference was due to
additional expenses for listing the Company's financials in
Moody's Financial Services.
FINANCIAL CONDITION
As of June 30, 1997, the Company's current assets of
$255,979 exceeded current liabilities of $5,061 by $250,918. As
of December 31, 1996, the Company's current assets were $231,191,
and current liabilities were $4,824 for an increase in the
Company's working capital position of approximately $29,612.
This increase was due to the Company accumulating cash flow, most
of which it has spent on acquiring an oil and gas lease in July,
1997. The Company intends to maintain cash while it seeks an
acquisition or more producing leases. The Company expects to
continue to operate at a positive cash flow for the calendar
year.
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, 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
ENTERPRISES, INC.
By____________
_____________________
Gerald L. Jensen
Chief Executive Officer and
Chief Financial Officer
By_________________________________
Beverly Licholat
Chief Accounting Officer
Date:___________________, 1997