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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 and
Exchange Act of 1934 For the period ended September 30, 2003
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: 100 ------------ ------------
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CROFF ENTERPRISES, INC.
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(Exact name of registrant as specified in its charter)
Utah 87-0233535
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
621 17th St., Suite 830, Denver, Colorado 80293
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(Address of principal executive offices) (Zip Code)
(303) 383-1555
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(Registrant's telephone number, including area code)
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(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
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Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes X No
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There were 566,060 shares of common stock outstanding on November 6, 2003,
exclusive of 63,083 common shares held in treasury stock.
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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, 2003 (UNAUDITED).
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Page Number
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PART I. UNAUDITED FINANCIAL INFORMATION
Item 1. Unaudited financial statements 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Item 3. Controls and Procedures 11
PART II. OTHER INFORMATION 11
Item 5 Other Information 11
Item 6 Exhibits and reports on Form 8-K 11
Signatures 11
Certifications 12
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Forward-Looking Statements
Certain information included in this report, other materials filed or to
be filed by the Company with the Securities and Exchange Commission ("SEC"), as
well as information included in oral statements or other written statements made
or to be made by the Company contain or incorporate by reference certain
statements (other than statements of historical or present fact) that constitute
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
All statements, other than statements of historical or present facts, that
address activities, events, outcomes or developments that the Company plans,
expects, believes, assumes, budgets, predicts, forecasts, estimates, projects,
intends or anticipates (and other similar expressions) will or may occur in the
future are forward-looking statements. These forward-looking statements are
based on management's current belief, based on currently available information,
as to the outcome and timing of future events. When considering forward-looking
statements, you should keep in mind the cautionary statements in this Form 10-Q
and the Company's Annual Report on Form 10-K for the year ended December 31,
2002. Such forward-looking statements appear in a number of places and include
statements with respect to, among other things, such matters as: future capital,
development and exploration expenditures (including the amount and nature
thereof), drilling, deepening or refracing of wells, oil and gas reserve
estimates (including estimates of future net revenues associated with such
reserves and the present value of such future net revenues), estimates of future
production of oil and natural gas, business strategies, expansion and growth of
the Company's operations, cash flow and anticipated liquidity, grassroots
prospects and development and property acquisitions, obtaining financial or
industry partners for prospect or program development, or marketing of oil and
natural gas. We caution you that these forward-looking statements are subject
to risks and uncertainties. These risks include but are not limited to:
general economic conditions, the Company's ability to finance acquisitions and
drilling, the market price of oil and natural gas, the risks associated with
exploration, the Company's ability to find, acquire, market, develop and
produce new properties, operating hazards attendant to the oil and gas
business, uncertainties in the estimation of proved reserves and in the
projection of future rates of production and timing of development
expenditures, the strength and financial resources of the Company's competitors,
the Company's ability to find and retain skilled personnel, climatic conditions,
labor relations, availability and cost of material and equipment, environmental
risks, the results of financing efforts, regulatory developments and the other
risks described in the Company's Annual Report on Form 10-K for the year ended
December 31, 2002.
Should one or more of the risks or uncertainties described above or
elsewhere in this Form 10-Q or presented in the Company's Annual Report
on Form 10-K for the year ended December 31, 2002 occur, or should underlying
assumptions prove incorrect, our actual results and plans could differ
materially from those expressed in any forward-looking statements. We
specifically disclaim all responsibility to publicly update any information
contained in a forward-looking statement or any forward-looking statement in
its entirety and therefore disclaim any resulting liability for potentially
related damages.
All forward-looking statements attributable to us are expressly qualified
in their entirety by this cautionary statement.
PART I. UNAUDITED FINANCIAL INFORMATION
ITEM 1. UNAUDITED FINANCIAL STATEMENTS
The financial statements included herein have been prepared in conformity
with generally accepted accounting principles. The statements are unaudited but
reflect all adjustments, which, in the opinion of management, are necessary to
fairly present the Company's financial position and results of operations. All
such adjustments are of a normal recurring nature.
CROFF ENTERPRISES, INC.
BALANCE SHEETS
(Unaudited)
December 31, September 30,
2002 2003
----------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 316,473 $ 263,099
Marketable equity securities, available for sale 61,540 43,140
Natural gas "put" contracts, at fair value - 30,864
Accounts receivable 48,948 68,097
Notes receivable, related parties 9,318 -
---------- ----------
436,279 405,200
---------- ----------
Oil and gas properties, at cost,
successful efforts method: 737,857 903,330
Accumulated depletion and depreciation (420,924) (450,924)
---------- ----------
316,933 452,406
---------- ----------
Total assets $ 753,212 $ 857,606
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 15,481 $ 19,155
Accrued liabilities 1,323 7,156
---------- ----------
16,804 26,311
---------- ----------
Stockholders' equity:
Class A Preferred stock, no par value
5,000,000 shares authorized, none issued - -
Class B Preferred stock, no par value; 1,000,000
shares authorized, 540,659 shares issued and
outstanding 470,910 529,747
Common stock, $.10 par value; 20,000,000 shares
authorized, 629,143 shares issued and outstanding 62,914 62,914
Capital in excess of common stock par value 456,246 397,409
Treasury stock, at cost, 63,083 shares issued and
outstanding (83,151) (83,151)
Accumulated other comprehensive loss (65,205) (46,540)
Accumulated deficit (94,706) (29,084)
Note receivable from directors (10,600) -
---------- ----------
736,408 831,295
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Total liabilities and stockholders' equity $ 753,212 $ 857,606
========== ==========
See accompanying notes to unaudited condensed financial statements.
4
CROFF ENTERPRISES, INC.
STATEMENTS OF INCOME
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
------------------ ------------------
2002 2003 2002 2003
-------- -------- -------- --------
Revenues
Oil and gas sales $ 74,662 $ 90,612 $189,520 $315,289
Gain (loss) on natural gas
"put" contracts - 4,644 - (27,177)
Gain on sale of marketable
equity securities - 19,450 23,026 19,450
Other income 6,679 705 10,035 3,679
-------- -------- -------- --------
81,341 115,411 222,581 311,241
-------- -------- -------- --------
Expenses
Lease operating expense including
production taxes 20,997 30,619 49,582 97,337
Proposed drilling fund - 2,814 - 13,787
General and administrative 22,928 21,752 68,142 80,495
Overhead expense, related party 6,000 6,000 18,000 18,000
Depreciation and depletion 8,000 10,000 24,000 30,000
-------- -------- -------- --------
57,925 71,185 159,724 239,619
-------- -------- -------- --------
Pretax income 23,416 44,226 62,857 71,622
Provision for income taxes - 2,000 - 6,000
-------- -------- -------- --------
Net income $ 23,416 $ 42,226 $ 62,857 $ 65,622
======== ======== ======== ========
Net income applicable to
preferred B shares 22,841 36,460 38,170 58,837
-------- -------- -------- --------
Net income applicable to
Common shares $ 575 $ 5,766 $ 24,687 $ 6,785
======== ======== ======== ========
Basic and diluted net income
per common share $ * $ .01 $ .04 $ .01
======== ======== ======== ========
Weighted average common shares
outstanding 566,060 566,060 566,060 566,060
======== ======== ======== ========
* Less than $0.01 per share
See accompanying notes to unaudited condensed financial statements.
5
CROFF ENTERPRISES, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
For the year ended December 31, 2002 and
the nine months ended September 30, 2003
(Unaudited)
Accumulated
Preferred B stock Common stock Capital in other
------------------ ------------------ excess of Treasury comprehensive Accumulated
Shares Amount Shares Amount par value stock loss deficit
-------- -------- -------- -------- ---------- -------- ------------- -----------
Balance at December 31, 2001 540,659 $397,085 629,143 $ 62,914 $ 530,071 $(83,151) $ (1,150) $ (193,618)
Net unrealized loss on marketable
equity securities - - - - - - (64,055) -
Net income for the year ended
December 31, 2001 - - - - - - - 98,912
Preferred stock allocation - 73,825 - - (73,825) - - -
-------- -------- -------- -------- ---------- -------- ------------- -----------
Balance at December 31, 2002 540,659 $470,910 629,143 $ 62,914 $ 456,246 $(83,151) $ (65,205) $ (94,706)
-------- -------- -------- -------- ---------- -------- ------------- -----------
Net unrealized gain on marketable
equity securities - - - - - - 18,665 -
Net income for the nine months
ended September 30, 2002 - - - - - - - 65,622
Preferred stock allocation - 58,837 - - (58,837) - - -
-------- -------- -------- -------- ---------- -------- ------------- -----------
Balance at September 30, 2003 540,659 $529,747 629,143 $ 62,914 $ 397,409 $(83,151) $ (46,540) $ (29,084)
======== ======== ======== ======== ========== ======== ============= ===========
See accompanying notes to unaudited condensed financial statements.
6
CROFF ENTERPRISES, INC.
STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 2002 and 2003
(Unaudited)
2002 2003
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Cash flows from operating activities:
Net income $ 62,857 $ 65,622
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depletion and depreciation 24,000 30,000
Realized gain on marketable
equity securities (23,026) (19,450)
Loss on natural gas "put" contracts - 27,177
Changes in operating assets and
liabilities:
Accounts receivable 2,375 (19,149)
Accrued interest on notes receivable (2,750) (704)
Accounts payable (1,687) 3,674
Accrued liabilities (3,033) 5,833
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Net cash provided by operating
activities 58,736 93,003
---------- ----------
Cash flows from investing activities:
Purchase of natural gas contracts - (58,041)
Acquistion of property leases and improvements - (135,473)
Purchase of working interest in proved properties (49,585) (30,000)
Purchase of marketable equity securities (269,475) -
Proceeds from sale of marketable equity
securities 188,528 56,515
---------- ----------
Net cash used in investing activities (130,532) (166,999)
---------- ----------
Cash flows from financing activities:
Payment on note receivable from a director - 10,600
Payment on note receivable from related party - 10,022
---------- ----------
Net Cash provided by financing activities - 20,622
---------- ----------
Net decrease in cash and
cash equivalents (71,796) (53,374)
Cash and cash equivalents
at beginning of period 338,870 316,473
---------- ----------
Cash and cash equivalents
at end of period $ 267,074 $ 263,099
========== ==========
Supplemental disclosure of non-cash investing and financing activities:
During the nine month periods ended September 30, 2002 and 2003, the Company
had unrealized gains/(losses) on available for sale securities in the amount of
$(49,062) and $18,665, respectively. During the nine month period ended
September 30, 2003, the Company had losses on natural gas contracts of $27,177.
See accompanying notes to unaudited condensed financial statements.
7
CROFF ENTERPRISES, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
1. Basis of preparation
The condensed financial statements for the three and nine month periods
ended September 30, 2003 and 2002 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 the 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 accounting
principles generally accepted in the United States of America 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, 2002, which
report has been filed with the Securities and Exchange Commission, and is
available from the Company or at www.Croff.com.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Critical Accounting Policies and Estimates
The Company's discussion and analysis of its financial condition and
results of operation are based upon financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements
requires the Company to make estimates and judgments that affect the
reported amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the year. The Company
analyzes its estimates, including those related to oil and gas revenues,
oil and gas properties, marketable securities, income taxes and contingencies.
The Company bases its estimates on historical experience and various other
assumptions that are believed to be reasonable under the circumstances. Actual
results may differ from these estimates under different assumptions or
conditions. The Company believes the following critical accounting policies
affect its more significant judgments and estimates used in the preparation of
its financial statements and the uncertainties that it could impact our results
of operations, financial condition and cash flows. The Company accounts for
its oil and gas properties under the successful efforts method of accounting.
Depletion, depreciation and amortization of oil and gas properties and the
periodic assessments for impairment are based on underlying oil and gas reserve
estimates and future cash flows using then current oil and gas prices combined
with operating and capital development costs. There are numerous uncertainties
inherent in estimating quantities of proved oil and gas reserves and in
projecting future rates of production and timing of development expenditures.
The Company has designated its marketable equity securities as "securities
available for sale". The Company follows SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities," as amended, which establishes
accounting and reporting standards requiring that every derivative instrument
(including certain derivative instruments embedded in other contracts) be
recorded on the balance sheet as either an asset or liability measured at
its fair value. It also requires that changes in the derivatives' fair value
be recognized currently in earnings unless specific hedge accounting criteria
are met. Historically, oil and gas prices have experienced significant
fluctuations and have been particularly volatile in recent years. Price
fluctuations can result from variations in weather, levels of regional or
national production and demand, availability of transportation capacity to
other regions of the country and various other factors. Increases or decreases
in oil and gas prices received could have a significant impact on future
results.
Liquidity and Capital Resources
At September 30, 2003, the Company had assets of $857,606 and current
assets totaled $405,200 compared to current liabilities of $26,311. Working
capital at September 30, 2003 totaled $378,889, a decrease of 10% compared to
$419,475 at December 31, 2002. The Company had a current ratio at
September 30, 2003 of approximately 15:1. The market value of the Company's
marketable equity securities was $46,540 below cost at September 30, 2003.
During the nine month period ended September 30, 2003, net cash provided by
operations totaled $93,003, as compared to $58,736 for the same period in 2002.
The Company's cash flow from operations is highly dependent on oil and gas
prices. The Company had no short-term or long-term debt outstanding at
September 30, 2003.
On March 21, 2003, the Company purchased a single natural gas "put"
contract for each month beginning June 2003 and ending May 2004. Each
contract is for 10,000 MMBTU (roughly equivalent to 10,000 Mcf) of natural
gas at the strike price of $4.75. The Company paid $58,041 for these twelve
contracts and the Company's maximum financial exposure is limited to the
premium paid for these contracts of $58,041. The estimated fair value of the
Company's contracts if sold on September 30, 2003 was $30,864. The value of
these contracts changes daily. These natural gas contracts are not accounted
for as a hedge in part because the natural gas volume per the series of
contracts exceeds the Company's current volume of natural gas production.
At September 30, 2003, there were no significant commitments for capital
expenditures. During the nine month period ended September 30, 2003, the
Company purchased a 10% working interest in a producing lease in Harding
County, Texas for $30,000. During this period the Company also acquired
non-producing oil, gas and mineral leases in DeWitt County, Texas totaling
$128,046 and the Company incurred $7,427 in general land improvements
associated with these leases. These De Witt County leases were acquired to
be used in the Company's proposed drilling fund. The Company is uncertain at
this time as to the size and extent of its 2004 capital budget. The Company
plans to finance its ongoing development, acquisition and exploration
expenditures and possible equity repurchases using internal cash flow. In
addition, proceeds from asset sales and bank borrowings may be utilized as
well as possible joint ventures or future public and private offerings of
debt or equity securities. However, future cash flows are subject to a
number of variables, including the level of production and oil and gas
prices, and there can be no assurance that operations and other capital
resources will provide cash in sufficient amounts to maintain planned levels
of capital expenditures or that increased capital expenditures will not be
undertaken.
The Company believes that projected operating cash flows and cash on
hand will be sufficient to cover its working capital requirements for the
next 12 months. In connection with consummating any significant capital
expenditures or development activities, additional debt or equity financing
will be required, which may or may not be available on terms that are
acceptable to the Company.
While certain costs are affected by the general level of inflation,
factors unique to the oil and gas industry result in independent price
fluctuations. Over the past five years, significant fluctuations have
occurred in oil and gas prices. Although it is particularly difficult to
estimate future prices of oil and gas, price fluctuations have had, and will
continue to have, a material effect on the Company. Overall, it is management's
belief that inflation is generally favorable to the Company since it does not
have significant operating expenses.
Results of Operations
Three months ended September 30, 2003 compared to three months ended
September 30, 2002.
Revenues for the third quarter of 2003 totaled $115,411, a 42% increase
from the prior year period. Net income for the third quarter of 2003 totaled
$42,226, an increase of 80% compared to the third quarter of 2002. Oil and gas
sales for the third quarter of 2003 totaled $90,612, a 21% increase from the
prior year period. A combination of increased sales prices and slight
increases in oil and natural gas production levels during the third quarter of
2003 were major factors causing this increase in oil and gas sales compared to
the prior year period. The Company's average sale price of oil in the third
quarter of 2003 was approximately $27.46 per barrel compared to $24.58 per
barrel for the same period in 2002. The Company's average sale price of
natural gas in the third quarter of 2003 was approximately $4.45 per Mcf
(Mcf equates to one thousand cubic feet), compared to $2.25 per Mcf for the
same period in 2002. Production of oil primarily increased due to the
acquisition of new wells in Michigan. The Company had a $19,450 realized gain
from the sale of marketable equity securities, which was a significant factor
for the increased net income during the third quarter of 2003 compared to the
third quarter of 2002.
Lease operation expense, which includes all production related taxes for
the third quarter of 2003, totaled $30,619 compared to $20,997 for the third
quarter of 2002. This increase was primarily attributable to additional
operating expenses associated with the Michigan leases which were acquired in
2002 as well as higher production related taxes compared to the third quarter
of 2002.
Depreciation and depletion expense for the third quarter of 2003 totaled
$10,000, a 25% increase from $8,000 for the prior year period. This increase
is attributable to depletion on new oil and gas properties.
During the third quarter of 2003, the Company has incurred $2,814 in costs
associated with the Company's proposed drilling fund.
General and administrative expense, including rent for the third quarter of
2003, totaled $27,752, which is comparable to $28,928 for the third quarter of
2002.
Nine months ended September 30, 2003 compared to nine months ended
September 30, 2002.
Revenues for the nine months ended September 30, 2003 totaled $311,241, a
40% increase from the prior year period. Net income for the nine months ended
September 30, 2003 and 2002 totaled $65,622 and $62,857, respectively. Oil and
gas sales for the nine months ended September 30, 2003 totaled $315,289, a 66%
increase compared to $189,520 for the prior year period. A combination of
increased sales prices and increases in oil and natural gas production levels
during first nine months of 2003 were major factors causing this increase in oil
and gas sales compared to the prior year period. Production of oil increased
primarily due to the acquisition of working interests in eleven wells located in
Michigan, Montana, Oklahoma and Texas during the second half of 2002. Net
income for the nine months ended September 30, 2003 increased only 4% from the
prior year period primarily due to a $27,177 write down of the fair market value
of the Company's "put" contracts and the fact that the Company incurred $13,797
associated with its proposed drilling fund. In addition, the Company has
projected income taxes of $6,000 associated with its operation for first nine
months of 2003.
Lease operation expense, which includes all production related taxes for
the nine months ended September 30, 2003, totaled $97,337 compared to $49,582
for the prior year period. This increase was attributable to the increased
operating expenses due to additional oil and gas working interest acquisitions
and higher production related taxes.
Depreciation and depletion expense for the nine months ended September 30,
2003 totaled $30,000, a 25% increase compared to $24,000 for the prior year
period. This increase is attributable to depletion on new oil and gas
properties.
During the first nine months of 2003, the Company incurred $13,787 in
costs associated with the Company's proposed drilling fund.
General and administrative expense, including rent for the nine months
ended September 30, 2003, totaled $98,495 which is $12,353 higher than the
same period for 2002 which totaled $86,142. This increase was primarily
attributable to additional costs incurred related to the preparation of the
Company's Annual Report and compliance with the Sarbanes-Oxley Act of 2002.
ITEM 3. CONTROLS AND PROCEDURES
Croff's principal executive officer and principal financial officer have
evaluated the effectiveness of Croff's "disclosure controls and procedures," as
such term is defined in Rule 13a-14(c) and 15d-14(c) of the Securities Exchange
Act of 1934, as amended, within 90 days of the filing date of this Quarterly
Report on Form 10-Q. Based upon their evaluation, the principal executive
officer and principal financial officer concluded that the Company's disclosure
controls and procedures are effective. There were no significant changes in the
Company's internal controls or in other factors that could significantly affect
these controls, since the date the controls were evaluated.
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
On June 15, 2001, the Company loaned $15,000 to Reef Energy Corporation,
a company in which Croff's President owned approximately a one-fourth interest.
In September 2003, Reef Energy paid off the remaining outstanding portion of
this note including accrued interest.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
The registrant has filed no exhibits or reports on Form 8-K for the
quarter ended September 30, 2003.
SIGNATURES
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.
Date: November 13, 2003 By: /S/Gerald L. Jensen
------------------ ------------------------------
Gerald L. Jensen, President,
Chief Executive Officer
Date: November 13, 2003 By: /s/Stuart D. Kroonenberg
------------------ ------------------------------
Stuart D. Kroonenberg,
Chief Financial Officer
Exhibit 31.1
CERTIFICATIONS
I, Gerald L. Jensen, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Croff
Enterprises, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case
of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over
financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors:
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
Date: November 13, 2003 By: /S/Gerald L. Jensen
------------------ ------------------------------
Gerald L. Jensen, President,
Chief Executive Officer
Exhibit 31.2
CERTIFICATIONS
I, Stuart D. Kroonenberg, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Croff
Enterprises, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of
the period covered by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case
of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over
financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors:
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
Date: November 13, 2003 By: /s/Stuart D. Kroonenberg
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Stuart D. Kroonenberg,
Chief Financial Officer
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the Quarterly Report of Croff Enterprises, Inc. (the
"Company") on Form 10-Q for the period ending September 30, 2003 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Gerald L. Jensen, Chief Executive Officer of the Company, certify, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
(2) I further certify to the best of my knowledge that the information
contained in the Report fairly presents, in all material respects, the financial
condition and result of operations of the Company.
Date: November 13, 2003 By: /S/Gerald L. Jensen
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Gerald L. Jensen, President,
Chief Executive Officer
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the Quarterly Report of Croff Enterprises, Inc. (the
"Company") on Form 10-Q for the period ending September 30, 2003 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Stuart D. Kroonenberg, Chief Financial Officer of the Company, certify, pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
(2) I further certify to the best of my knowledge that the information
contained in the Report fairly presents, in all material respects, the financial
condition and result of operations of the Company.
Date: November 13, 2003 By: /s/Stuart D. Kroonenberg
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Stuart D. Kroonenberg,
Chief Financial Officer