<PAGE> 1
======================================================================
__________________________________
SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, D. C. 20549
__________________________________
FORM 10/A-1
General Form for Registration of Securities
File No. 0-21811
Pursuant to Section 12(b) or (g) of
The Securities Exchange Act of 1934
QUINTESSENCE OIL COMPANY
(Exact name of registrant as specific in its charter)
Wyoming 83-0317306
(State of Incorporation) (I.R.S. Employer I.D. No.)
4424 Skylane Avenue
Riverton, Wyoming 92501
(Address of principal executive offices, including zip code)
Telephone number, including area code: (307) 856-0375
Copies to: Conrad C. Lysiak, Esq.
West 601 First Avenue, Suite 503
Spokane, Washington 99204
Securities to be registered pursuant to Section 12(b) of the Act:
NONE
(Title of Class)
Securities to be registered pursuant to Section 12(g) of the Act:
COMMON STOCK
(Title of Class)
Exhibit Index begins on page 28.
======================================================================
<PAGE> 2
ITEM 1. BUSINESS.
The Business
Quintessence Oil Company (the "Company") is a development stage
enterprise formed under the laws of the State of Wyoming on June 26,
1996, for the purpose of purchasing, developing and operating oil and
gas leases.
The Company has acquired one undeveloped oil and gas lease and
intends to initiate drilling operations thereon, prior to acquiring
additional leases.
Current Plans
Because the Company owns only one undeveloped oil and gas lease,
the success of the Company may depend upon successful drilling and
completion of an initial oil or gas well on the subject premises. The
Company intends to initiate drilling operations on the lease upon
raising additional capital through the sale of securities or through
loans with unaffiliated third parties. As of the date hereof, the
Company has not entered into any negotiations with anyone to acquire
additional securities of the Company or to borrow sufficient funds to
commence drilling operations.
In the event that the Company is unable to complete an initial
well, because of a lack of adequate funds or because no oil is
recoverable from the initial well, the Company may have to cease
operations.
In the event that the Company is able to complete a producing oil
or gas well on the subject premises, it intends to acquire additional
leases and initiate drilling programs on the subsequently acquired
leases. The Company intends to finance its subsequent operations
through the sale of working interests in the wells intended to be
drilled. The success of subsequent operations is dependent upon
obtaining suitable investors for each project. The foregoing procedure
will be followed until such time as the Company has adequate revenues
to finance its own drilling operations.
The Company does not anticipate initiating drilling operations on
the subject lease until approximately spring of 1998.
The Company obtained its initial oil and gas lease from Ed Calvert
at an out-of-pocket cost of $2,000. In order to derive significant
income from the lease, the Company will have to drill and successfully
complete a producing oil or gas well on the premises. The Company
believes that if oil is produced from the leased premises, the oil will
be located in the Upper and Lower Fort Union Formation located
approximately 6,500 feet below the surface of the ground. The cost of
drilling a well to that depth is estimated at $160,000 and the cost of
completing a well, in the event oil and or gas is located thereat, will
be approximately $140,000.
<PAGE> 3
Subject to the availability of capital, the Company may attempt to
obtain additional oil and/or gas leases. Lease acquisitions are
predicated upon the initial payment to a lessor for the right to drill.
The costs of acquiring an oil or gas lease can range from zero to
several thousands of dollars, depending upon the location of the lease,
the development of the surrounding areas and the demands of the lessor.
The Company, however, does not intend to initiate subsequent drilling
programs on any subsequently acquired leases until such time as it has
opportunity to evaluate the development of its initial lease. Further,
the Company does not intend to spend significant amounts of money to
acquire oil and gas leases since the Company is in its development
stages and needs the funds to drill a well on its initial lease.
Selection of Target Areas for Acquisition
The Company's subsequent proposed plans call for it to consider
several factors in choosing a region for acquisition of oil and gas
leases. First, the Company considers those regions in which one or
more of its management or other technical personal have field of
experience. The Company anticipates that additional prospects to be
acquired will be located within Wyoming. At the present time the
Company has not targeted any additional oil and gas leases for
acquisition. The Company intends to acquire additional oil and gas
leases from other oil and gas companies.
The Company will determine which leases it is interested in
acquiring based upon the analysis of technical and production data, on
site verification of any well equipment and production capability, and
verification of ownership of lease hold rights. The Company
anticipates that it will take from four to six months to acquire
additional leasehold interests. Further, the Company intends upon
diversifying its production portfolio with respect to both reservoir
production characteristics and to market access. The Company believes
that the overall effect of these two unrelated characteristics is to
significantly lower the overall risk of the Company strategy.
Geological and Geophysical Techniques
The Company may employ detailed geological interpretation combined
with advanced seismic exploration techniques to identify the most
promising leases. Geological interpretation is based upon data
recovered from existing oil and gas wells in an area and other sources.
Such information is either purchased from the company that drilled the
wells or becomes public knowledge through state agencies after a period
of years. Through analysis of rock types, fossils and the electrical
and chemical characteristics of rocks from existing wells, the Company
can construct a picture of rock layers in the area. Further, the
Company will have access to the logs from the existing operating wells
which will allow the Company to extrapolate a decline curve and make an
estimation of the number of recoverable barrels of oil existing beneath
a particular lease. The Company has not purchased, leased, or entered
into any agreements to purchase or lease any of the equipment
necessary to conduct the geological or geophysical testing referred to
herein and will only be able to do so upon raising additional capital
through loans or the sale of equity securities.
<PAGE> 4
Market for Oil and Gas Production
The market for oil and gas production is regulated by both the
state and federal governments. The overall market is mature and with
the exception of gas, all producers in a producing region will receive
the same price. The major oil companies will purchase all crude oil
offered for sale at posted field prices. There are price adjustments
for quality difference from the Bench Mark. Oil sales are normally
contracted with a gatherer who will pick-up the oil at the well site.
In some instances there may be deductions for transportation from the
well head to the sales point. At this time the majority of crude oil
purchasers do not charge transportation fees, unless the well is
outside their service area. The oil gatherer will usually handle all
check disbursements to both the working interest and royalty owners.
The Company believes that there are a number of oil gathers located in
the area of the Company's initial lease that would be interested in
purchasing oil produced from the lease. There is no assurance that any
gather will purchase any oil from the lease since the Company has not
contacted any gathers and does not anticipate doing so until such time
as the Company completes a producing oil well on the leased premises.
The Company will be a working interest owner. By being a working
interest owner, the Company is responsible for the payment of its
proportionate share of the operating expenses of the well. Royalty
owners and over-riding royalty owners receive a percentage of gross oil
production for the particular lease and are not obligated in any manner
whatsoever to pay for the costs of operating the lease. Therefore, the
Company, in most instances, will be paying the expenses for the oil and
gas revenues paid to the royalty and over-riding royalty interests.
Gas sales are by contract. The gas purchaser will pay the well
operator 100% of the sales proceeds on or about the 25th of each and
every month for the previous months sales. The operator is responsible
for all checks and distributions to the working interest and royalty
owners. There is no standard price for gas. Prices will fluctuate
with the seasons and the general market conditions. It is the
Company's intention to utilize this market when ever possible in order
to maximize revenues. The Company does not anticipate any significant
change in the manner production is purchased, however, no assurance can
be given at this time that such changes will not occur. Gas is
transmitted through a pipeline which connects with larger pipelines.
To the knowledge of the Company, there are no gas transmission lines in
the region where the Company's initial lease is located. Accordingly,
if gas is discovered by the Company, in all likelihood, a gas will be
shut-in and no sales will take place therefrom.
The Company is a new entrant in a mature market. As stated
previously, because of the limited amount of production of either oil
and/or gas by the Company, the Company does not believe that it will be
effected by or effect its competitors. Further, because of the
constant demand for oil, the Company believes that it will have no
difficulty in obtaining the services of a gather to purchase any oil
that is produced from it lease. In connection with gas, the Company
will have to produce sufficient quantities of gas in order to induce a
<PAGE> 5
gather to construct a gas line which would connect to a major gas pipe-
line. The Company does not believe that gas which may be produced from
its initial lease will justify the construction of such a connecting
gas line.
Acquisition of Future Leases
The principal activity for the Company in the future will be the
acquisition of producing oil and gas leases. The acquisition process
may be lengthy because of the amount of investigation which will be
required prior to submitting a bid to a major oil company.
Verification of each property and the overall acquisition process can
be divided into three phases, as follows:
Phase 1. Field identification. In some instances the seller will
have a formal divestiture department that will provide a sales catalog
of leases which will be available for sale. Review of the technical
filings made to the states along with a review of the regional
geological relationships, released well data and the production history
for each lease will be utilized. In addition a review of the
proprietary technical data in the sellers office will be made and
calculation of a bid price for the field.
Phase 2. Submission of the Bid. Each bid will be made subject to
further verification of production capacity, equipment condition and
status, and title.
Phase 3. Closing. Final price negotiation will take place. Cash
transfer and issuance of title opinions. Tank gauging and execution of
transfer orders.
After closing has occurred, the newly acquired property will be
turned over to the Company for possible work-overs or operational
changes which will in the Company's estimation increase each well's
production.
In connection with the acquisition of an oil and gas lease for
work-over operations, the Company is able to assume 100% ownership of
the working-interest and surface production equipment facilities with
only minor expenses. In exchange for an assignment of the lease, the
Company agrees to assume the obligation to plug and abandon the well in
the event the Company determines that reworking operations are either
to expensive or will not result in production in paying quantities.
The cost of plugging a well can run from $500 to $15,000, depending on
the condition of the well. The Company believes that the obligation to
plug an existing well will in no way jeopardize its operations, and in
the long run is economically worth the risk involved compared with the
possibility of acquiring existing production. Utilizing these systems
the Company will be able to acquire oil and gas leases from large and
small oil and gas firms with little costs. The Company also believes
that it may be able to plug the wells in question, at no cost to the
Company, in exchange for the production tubing and casing which will be
removed during the plugging process.
<PAGE> 6
Several major oil companies have recently placed numerous oil and
gas properties out for competitive bidding. The Company currently does
not have sufficient revenues or funds available to it to make a bid for
such properties. The Company intends to raise additional capital
through loans or the sale of equity securities in order to have
sufficient funds to make a bid for such properties. There is no
assurance that the Company will very raise such additional capital and
if the Company is unable to raise such capital, it may have to cease
operations. At the present time, the Company has not identified any
specific oil and gas leases which it intends to acquire and will only
be able to make such determination upon raising said capital.
The Company has not begun any operations connected with the
foregoing plan and is concentrating its current efforts in initiating
drilling operations on its initial lease. Accordingly, there is no
assurance that the Company will ever initiate the program described in
this section.
Net Production
As of the date hereof, the Company has acquired a 100% working
interest, in one non-producing oil and gas lease. See "Item 2.
Description of Properties."
Competition
The oil and gas industry is highly competitive. The Company's
competitors and potential competitors include major oil companies and
independent producers of varying sizes of which are engaged in the
acquisition of producing properties and the exploration and development
of prospects. Most of the Company's competitors have greater
financial, personnel and other resources than does the Company and
therefore have a greater leverage to use in acquiring prospects, hiring
personnel and marketing oil and gas. Accordingly, a high degree of
competition in these areas is expected to continue.
Governmental Regulation
The production and sale of oil and gas is subject to regulation by
state, federal and local authorities. In most areas there are
statutory provisions regulating the production of oil and natural gas
under which administrative agencies may set allowable rates of
production and promulgate rules in connection with the operation and
production of such wells, ascertain and determine the reasonable market
demand of oil and gas, and adjust allowable rates with respect thereto.
The sale of liquid hydrocarbons was subject to federal regulation
under the Energy Policy and Conservation Act of 1975 which amended
various acts, including the Emergency Petroleum Allocation Act of 1973.
These regulations and controls included mandatory restrictions upon the
prices at which most domestic crude oil and various petroleum products
could be sold. All price controls and restrictions on the sale of
crude oil at the wellhead have been withdrawn. It is possible,
<PAGE> 7
however, that such controls may be reimposed in the future but when, if
ever, such reimposition might occur and the effect thereof on the
Company cannot be predicted.
The sale of certain categories of natural gas in interstate
commerce is subject to regulation under the Natural Gas Act and the
Natural Gas Policy Act of 1978 ("NGPA"). Under the NGPA, a
comprehensive set of statutory ceiling prices applies to all first
sales of natural gas unless the gas is specifically exempt from
regulation (i.e., unless the gas is "deregulated"). Administration and
enforcement of the NGPA ceiling prices are delegated to the FERC. In
June 1986, the FERC issued Order No. 451, which, in general, is
designed to provide a higher NGPA ceiling price for certain vintages of
old gas. It is possible, though unlikely, that the Company may in the
future acquire significant amounts of natural gas subject to NGPA price
regulations and/or FERC Order No. 451.
Company's Office
The Company's offices are located at 4424 Skylane Avenue,
Riverton, Wyoming 82501. The Company leases the space from Nucor,
Inc., as well as, equipment including computers, office computer
programs, fax machines, small copy machines, a scanner, telephones,
desks, files and fixtures. The lease payment is at the rate of $400.00
per month, plus out-of-pocket expenses, on a month-to-month basis.
Nucor, Inc. is a corporation owned and operated by Nick Bebout, the
Company's President. The transaction with Nucor is no less favorable
to the Company than can be obtained from independent third parties.
Employees
The Company is a development stage company and currently has no
employees other than its Officers and Directors.
ITEM 2. FINANCIAL INFORMATION.
SELECTED CONSOLIDATED FINANCIAL DATA
The selected financial data presented below has been derived from
the financial statements of the Company, which financial statements
have been examined by Hocker, Lovelett, Hargens & Yennie, P.C., C.P.A.,
independent certified public accountants, as indicated in their report
included elsewhere herein.
The following table summarized certain financial information and
should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the
Financial Statements and related notes included elsewhere in this
Prospectus. For the reasons set forth in this Form 10 registration
statement the information shown below may not be indicative of the
Company's future results of operations.
<PAGE> 8
Statement of Loss and Accumulate Deficit Data from inception (June
26, 1996) through September 30, 1996:
<TABLE>
<S> <C>
Income $ -0-
Operating Expenses $ 1,698
Net Loss $ (1,698)
Net Loss per Share $ 0.00
Balance Sheet Data:
Working Capital $ 42,302
Total Assets $ 49,802
Short-term Debt $ 9,000
Stockholders' equity $ 40,802
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITIONS
Results of Operations
The Company is considered to be in the development stage as
defined in Statement of Financial Accounting Standards No. 7. There
have been limited operations to date consisting of raising capital and
the acquisition of one oil and gas lease.
Liquidity and Capital Resources
The Company sold 1,000,000 shares of its Common Stock pursuant to
Reg. 504 of the Securities Act of 1933 (the "Act") to officers,
directors and others, and raised $50,000. The foregoing funds were
used for organizational matters and to acquire one oil and gas lease.
The Company has $42,302 in cash as of November 25, 1996.
ITEM 3. DESCRIPTION OF PROPERTIES.
The Company owns one undeveloped oil and gas lease, more
particularly described as the S 1/2, SW 1/4, SW 1/4 of Section 24 and
the N 1/2, NE 1/4 and the NE 1/4, NW 1/4 of Section 33 all located in
Township 37 North, Range 91 West, 6th Prime Meridian containing 140
acres more or less. The foregoing lease has never produced oil or gas.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth as of November 25, 1996, the Common
Stock ownership of each person known by the Company to be the
beneficial owner of five percent or more of the Company's Common Stock,
each director individually and all officers and directors of the
Company as a group. Each person has sole voting and investment power
with respect to the shares of Common Stock shown, and all ownership is
of record and beneficial.
<PAGE> 9
<TABLE>
<CAPTION>
Name and address Number of Percent
of owner Shares Position of Class
- -----------------------------------------------------------------------
<S> <C> <C> <C>
Nick Bebout 218,750 President, Treasurer 21.88%
1606 Major Avenue and a member of the
Riverton, Wyoming 82501 Board of Directors
Tom Kerr 0 Vice President and a 0.00%
P. O. Box 3973 member of the Board
Spokane, Washington 99220 of Directors
Tom Swanson 175,000 Secretary and a member 17.50%
P. O. Box 3215 of the Board of Directors
Casper, Wyoming 82601
All officers and 393,750 39.38%
directors as a
group (3 persons)
Eli Bebout 118,750 11.88%
112 Big Bend
Riverton, Wyoming 82501
Bebout Family
Trust [1] 37,500 3.75%
112 Big Bend
Riverton, Wyoming 82501
Bebout Land &
Livestock, Co. [2] 37,500 3.75%
112 Big Bend
Riverton, Wyoming 82501
John E. Orr and Linda
E. Erkkila 175,000 17.50%
200 Columbine Drive
Casper, Wyoming 82604
Michael D. Zwickl 195,000 19.50%
137 North Beech
Casper, Wyoming 82601
</TABLE>
[1] Eli Bebout, the brother of Nick Bebout, is the Trustee of the
Bebout Family Trust.
[2] Eli Bebout, the brother of Nick Bebout, is the President of Bebout
Land & Livestock, Co.
<PAGE> 10
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
Officers and Directors.
The officers and directors of the Company are as follows:
Name Age Position
Nick Bebout 44 President, Treasurer and a
member of the Board of
Directors
Tom Kerr 64 Vice President and a member of
the Board of Directors
Tom Swanson 44 Secretary and a member of the
Board of Directors
All directors hold office until the next annual meeting of
shareholders or until their successors have been elected and qualified.
The Company's officers are elected by the Board of Directors at the
annual meeting after each annual meeting of the Company's shareholders
and hold office until their death, or until they resign or have been
removed from office.
Nick Bebout - President, Treasurer and a member of the Board of
Directors
Mr. Bebout is a founder, President, Treasurer and a Directors of
the Company. Since 1988, Mr. Bebout has been a member of the Board of
Directors of U.S. Energy, Inc., a NASDAQ traded public company engaged
in the oil and gas industry. From January 1988 to August 1995, Mr.
Bebout was President, Treasurer and a member of the Board of Directors
of S.W. Financial Corp., a Washington blank check corporation. Since
June 1984, Mr. Bebout has been President of Nucor, Inc., an oil, gas
and mineral exploration and development corporation. From January 1979
to December 1983, Mr. Bebout was Vice President of Corkill Drilling, a
corporation which specialized in oil, gas and mineral exploration.
Thomas K. Kerr - Vice President and a member of the Board of Directors
Mr. Kerr is a founder, Vice President and a member of the Board of
Directors of the Company. From January 1988 to August 1995, Mr. Kerr
was Vice President, Secretary and a member of the Board of Directors of
S.W. Financial Corp., a Washington blank check corporation. From
August 1958 to January 1988, Mr. Kerr was a sales representative with
Massachusetts Mutual Life Insurance Company, Mr. Kerr was also a
District Manager, From January 1988 to June 1988, Mr. Kerr was employed
with Independent Insurance Agents & Brokers of Spokane and Walla Walla.
Since June 1988, Mr. Kerr has been a sales representative with Guardian
Life Insurance Company of America.
<PAGE> 11
Tom Swanson - Secretary and a member of the Board of Directors
Mr. Swanson is a founder, Secretary and a member of the Board of
Directors of the Company. From July 1985 to the present, Mr. Swanson
has been exploration manager for Farleigh Oil Properties, an
independent oil company based in Casper, Wyoming. Farleigh Oil
Properties is a privately held company involved in oil field
acquisition and exploration in seven Rocky Mountain states and Texas.
From November 1991 to the present, Mr. Swanson has been the business
manager for Paradigm Technologies, LLC, located in Casper, Wyoming.
Paradigm Technologies is a research and development company that
develops downhole sensory instrumentation for oil well drilling
applications. From December 1990 to July 1995, Mr. Swanson was Vice
President of Scientific Geochemical Services, LLC, an oil field service
company specializing in exploration and environmental geochemistry.
Scientific Geochemical Service was located in Casper, Wyoming until it
was sold in mid-1995.
Executive Remuneration
The Company anticipates entering into employment agreements with
its officers in the future, the terms of which are undecided at the
present time. Directors do not receive compensation for their services
as directors and are not reimbursed for expenses incurred in attending
board meetings. The Company has not paid any salaries in 1996 and will
not initiate the payment of salaries until it becomes profitable to do
so.
ITEM 6. EXECUTIVE COMPENSATION.
The Company anticipates entering into employment agreements with
its officers in the near future, the terms of which are undecided at
the present time. Directors do not receive compensation for their
services as directors and are not reimbursed for expenses incurred in
attending board meetings. The Company has not paid any salaries in
1996 and will not initiate the payment of salaries until it becomes
profitable to do so.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On July 2, 1996, the Company issued 900,000 shares of Common Stock
to the following individuals and corporations in consideration of the
payment of $0.02 per share in cash.
<PAGE> 12
<TABLE>
<CAPTION>
Name Total Consideration Shares Acquired
<S> <C> <C>
Eli Bebout $ 2,000.00 100,000
112 Big Bend
Riverton, Wyoming 82501
Bebout Family Trust $ 750.00 37,500
112 Big Bend
Riverton, Wyoming 82501
Bebout Land & Livestock Co. $ 750.00 37,500
112 Big Bend
Riverton, Wyoming 82501
John E. Orr and
Linda E. Erkkila $ 3,500.00 175,000
200 Columbine Drive
Casper, Wyoming 82604
Tom Swanson $ 3,500.00 175,000
P. O. Box 3215
Casper, Wyoming 82601
Michael D. Zwickl $ 3,500.00 175,000
137 North Beech
Casper, Wyoming 82601
Nick Bebout $ 4,000.00 200,000
1606 Major Avenue
Riverton, Wyoming 82501
TOTAL $ 18,000.00 900,000
</TABLE>
On October 9, 1996, the Company issued 100,000 shares of Common
Stock to the following individuals and corporations in consideration of
the payment of $0.32 per share in cash.
<TABLE>
<CAPTION>
Name Total Consideration Shares Acquired
<S> <C> <C>
Eli Bebout $ 6,000.00 18,750
112 Big Bend
Riverton, Wyoming 82501
Nick Bebout $ 6,000.00 18,750
1606 Major Avenue
Riverton, Wyoming 82501
Bill Farleigh $ 6,400.00 20,000
P. O. Box 3215
Casper, Wyoming 82602
<PAGE> 13
Ken Freemole $ 6,400.00 20,000
4831 Dexter
Casper, Wyoming 82609
Hayden Investments $ 800.00 2,500
675 Fairview Drive
Suite 246
Carson City, Nevada 89701
Michael D. Zwickl $ 6,400.00 20,000
137 North Beech
Casper, Wyoming
TOTAL $ 32,000.00 100,000
</TABLE>
On November 6, 1996, the Company acquired, by assignment, a 100%
working interest from Edward Calvert in and to an undeveloped oil and
gas lease between the United States of America and Edward D. Calvert
covering the following described real property:
S 1/2, SW 1/4, SW 1/4 of Section 24 and the N 1/2, NE 1/4 and
the NE 1/4, NW 1/4 of Section 33 all located in Township 37
North, Range 91 West, 6th Prime Meridian containing 140 acres
more or less.
The consideration for the assignment of the foregoing lease was $2,000
which has been paid and a 5% overriding royalty. The foregoing lease
has never produced oil and/or gas and there is no assurance that the
lease will ever produce oil and/or gas or that the Company will ever
explore for oil and/or gas on the foregoing lease. Mr. Calvert is not
affiliated with the Company or any of its officers and directors.
ITEM 8. LEGAL PROCEEDINGS.
The Company is not a party to any litigation and to its knowledge,
no action, suit or proceedings against it has been threatened by any
person.
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE COMPANY'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS.
No market exists for the Company's securities and there is no
assurance that a regular trading market will develop, or if developed,
that it will be sustained. A shareholder in all likelihood, therefore,
will be unable to resell the securities referred to herein should he or
she desire to do so. Furthermore, it is unlikely that a lending
institution will accept the Company's securities as pledged collateral
for loans unless a regular trading market develops.
<PAGE> 14
There are no plans, proposals, arrangements or understandings with
any person with regard to the development of a trading market in any of
the Company's securities.
As of November 25, 1996, the Company has 11 holders of record of
its Common Stock.
The Company has not paid any dividends since it is inception and
does not anticipate paying any dividends on its Common Stock in the
foreseeable future.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
On July 2, 1996, the Company issued 900,000 shares of Common Stock
to the following individuals and corporations in consideration of the
payment of $0.02 per share in cash.
<TABLE>
<CAPTION>
Name Total Consideration Shares Acquired
<S> <C> <C>
Eli Bebout $ 2,000.00 100,000
112 Big Bend
Riverton, Wyoming 82501
Bebout Family Trust $ 750.00 37,500
112 Big Bend
Riverton, Wyoming 82501
Bebout Land & Livestock Co. $ 750.00 37,500
112 Big Bend
Riverton, Wyoming 82501
John E. Orr and
Linda E. Erkkila $ 3,500.00 175,000
200 Columbine Drive
Casper, Wyoming 82604
Tom Swanson $ 3,500.00 175,000
P. O. Box 3215
Casper, Wyoming 82601
Michael D. Zwickl $ 3,500.00 175,000
137 North Beech
Casper, Wyoming 82601
Nick Bebout $ 4,000.00 200,000
1606 Major Avenue
Riverton, Wyoming 82501
TOTAL $ 18,000.00 900,000
</TABLE>
On October 9, 1996, the Company issued 100,000 shares of Common
Stock to the following individuals and corporations in consideration of
the payment of $0.32 per share in cash.
<PAGE> 15
<TABLE>
<CAPTION>
Name Total Consideration Shares Acquired
<S> <C> <C>
Eli Bebout $ 6,000.00 18,750
112 Big Bend
Riverton, Wyoming 82501
Nick Bebout $ 6,000.00 18,750
1606 Major Avenue
Riverton, Wyoming 82501
Bill Farleigh $ 6,400.00 20,000
P. O. Box 3215
Casper, Wyoming 82602
Ken Freemole $ 6,400.00 20,000
4831 Dexter
Casper, Wyoming 82609
Hayden Investments $ 800.00 2,500
675 Fairview Drive
Suite 246
Carson City, Nevada 89701
Michael D. Zwickl $ 6,400.00 20,000
137 North Beech
Casper, Wyoming
TOTAL $ 32,000.00 100,000
</TABLE>
All of the foregoing sales were made pursuant to the exemption
from registration as set forth in Reg. 504 of the Securities Act of
1933. Reg. 504 provides that all shares issued by the Company were
issued pursuant to the exemption from registration set forth in Reg.
504 of the Securities Act of 1933 (the "Act") in that the Company was
not subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") at the time of the
sales; is not an investment company; or, is not a development stage
company that has no specific business plan or purpose or indicated that
its business plan is to engage in a merger or acquisition with an
unidentified company or companies or other entity or person.
Further, the Company has satisfied the terms and conditions of
Reg. 501 and 502(a) of the Act and the aggregate offering price for all
securities sold within the twelve months before the state of and during
the offering of all securities did not exceed $1,000,000.
Further, the Company filed two Form D's with the Securities and
Exchange Commission (the "Commission") reflecting the foregoing
transactions. The first was filed with the Commission on July 9, 1997
and the second was filed with the Commission on July 26, 1997.
<PAGE> 16
ITEM 11. DESCRIPTION OF THE COMPANY'S SECURITIES TO BE
REGISTERED.
The authorized capital stock of the Company consists of 50,000,000
shares of Common Stock, $0.00001 par value per share.
Common Stock
The authorized Common Stock of the Company consists of 50,000,000
shares of $0.00001 par value Common Stock. As of November 25, 1996,
1,000,000 shares are issued and outstanding, all of re freely
tradeable, but 957,500 are subject to the limitations of Reg. 144
promulgated under the Securities Act of 1933 (the "Act"), with the
exception of the two year holding period contained therein.
In general, under Reg. 144, an affiliate of the Company (officers,
directors, and owners of more than ten percent (10%) of the outstanding
shares of Common Stock are affiliates of the Company) may sell in
ordinary market transactions through a broker or with a market maker,
within any three (3) month period a number of shares which does not
exceed the greater of one percent (1%) of the number of outstanding
shares of Common Stock or the average of the weekly trading volume of
the Common Stock during the four calendar weeks prior to such sale.
Sales under Reg. 144 require the filing of Form 144 with the Securities
and Exchange Commission. If the shares of Common Stock have been held
for more than three (3) years by a person who is not an affiliate,
there is no limitation on the manner of sale or the volume of shares
that may be sold and no Form 144 is required. Sales under Reg. 144 may
have a depressive effect on the market price of the Company's Common
Stock.
Further, a person may be considered a presumptive underwriter in
that it acquired more than 10% of the total shares distributed by the
Company in its two offerings pursuant to Reg. 504 of the Securities Act
of 1933, as amended.
All shares have equal voting rights and are not assessable.
Voting rights are not cumulative and, therefore, the holders of more
than 50% of the Common Stock could, if they chose to do so, elect all
of the directors of the Company.
Upon liquidation, dissolution or winding up of the Company, the
assets of the Company, after the payment of liabilities, will be
distributed pro rata to the holders of the Common Stock. The holders
of the Common Stock do not have preemptive rights to subscribe for any
securities of the Company and have no right to require the Company to
redeem or purchase their shares. The shares of Common Stock presently
outstanding are fully paid and non-assessable.
<PAGE> 17
Dividends
Holders of the Common Stock are entitled to share equally in
dividends when, as and if declared by the Board of Directors of the
Company, out of funds legally available therefore. No dividend has
been paid on the Common Stock since inception, and none is contemplated
in the foreseeable future.
Transfer Agent
The Company's transfer agent for its shares of Common Stock is:
Transecurities International, Inc.
2510 North Pines Road
Suite 202
Spokane, Washington 99206
(509) 927-1255
Trading
There is currently no public market for the Company's Common Stock
and there is no assurance that a public market will ever develop.
Rights of Shareholders
Shareholders of the Company have no preemptive rights to acquire
additional shares of Common Stock or other securities. The Common
Stock is not subject to redemption and carries no subscription or
conversion rights. In the event of liquidation of the Company, the
shares of Common Stock are entitled to share equally in corporate
assets after satisfaction of all liabilities. The shares of Common
Stock, when issued, will be fully paid and non-assessable.
There are no outstanding options, warrants or rights to purchase
shares of the Company's Common Stock, other than as offered herein.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 42:01 et al. of the Wyoming Revised Statutes and certain
provisions of the Company's Articles of Incorporation under certain
circumstances provide for indemnification of the Company's Officers,
Directors and controlling persons against liabilities which they may
incur in such capacities. A summary of the circumstances in which such
indemnification is provided for is contained herein, but this
description is qualified in its entirety by reference to the Company's
Articles of Incorporation and to the statutory provisions.
In general, any Officer, Director, employee or agent may be
indemnified against expenses, fines, settlements or judgments arising
in connection with a legal proceeding to which such person is a party,
if that person's actions
were in good faith, were believed to the be in the Company's best
interest, and were not unlawful. Unless such person is successful upon
<PAGE> 18
the merits in such an action, indemnification may be awarded only after
a determination by independent decision of the Board of Directors, by
legal counsel, or by a vote of the shareholders, that the applicable
standard of conduct was met by the person to be indemnified.
The circumstances under which indemnification is granted in
connection with an action brought on behalf of the Company is generally
the same as those set forth above; however, with respect to such
actions, indemnification is granted only with respect to expenses
actually incurred in connection with the defense or settlement of the
action. In such actions, the person to be indemnified must have acted
in good faith and in a manner believed to have been in the Company's
best interest, and have not been adjudged liable for negligence or
misconduct.
Indemnification may also be granted pursuant to the terms of
agreements which may be entered in the future or pursuant to a vote of
shareholders or Directors. The statutory provision cited above and the
Company's Articles of Incorporation also grant the power to the Company
to purchase and maintain insurance which protects its Officers and
Directors against any liabilities incurred in connection with their
service in such a position, and such a policy may be obtained by the
Company.
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements are included on Pages F-1 through F-7
herein.
ITEM 14. DISAGREEMENTS WITH ACCOUNTANTS, AND ACCOUNTING AND
FINANCIAL DISCLOSURE.
There have been no disagreements on accounting and financial
disclosures from the inception of the Company through the date of this
Registration Statement.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
Financial Statements begin on following page.
<PAGE> 19
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors
Quintessence Oil Company, a Wyoming Corporation
Riverton, Wyoming
We have audited the balance sheet of Quintessence Oil Company, a
Wyoming Corporation, (A Development Stage Company) as of September 30,
1996 and the related statements of operations, changes in stockholders'
equity and cash flows from the date of inception (June 26, 1996)
through September 30, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Quintessence Oil Company, a Wyoming Corporation, (A Development Stage
Company) at September 30, 1996 and the results of its operations,
changes in stockholders' equity and changes in its cash flows from the
date of inception (June 26, 1996) through September 30, 1996 in
conformity with generally accepted accounting principles.
Hocker, Lovelett, Hargens & Yennie, P.C.
Certified Public Accountants
Riverton, Wyoming
October 16, 1996
F-1
<PAGE> 20
QUINTESSENCE OIL COMPANY
A Wyoming Corporation
(A Development Stage Company)
BALANCE SHEET
September 30, 1996
ASSETS
<TABLE>
<S> <C>
CURRENT ASSETS
Cash $ 42,302
OTHER ASSETS (Note 1)
Organization costs - net 7,500
--------
Total Assets $ 49,802
========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 9,000
STOCKHOLDERS' EQUITY (Notes 1 and 2)
Common Stock - $.00001 par value,
50,000,000 shares authorized, 1,000,000
shares issued and outstanding 10
Additional paid in capital 42,490
Retained earnings (deficit) (1,698)
---------
Total Liabilities and
Stockholders' equity $ 49,802
=========
</TABLE>
See accompanying notes to financial statements.
F-2
<PAGE> 21
QUINTESSENCE OIL COMPANY
A Wyoming Corporation
(A Development Stage Company)
STATEMENT OF OPERATIONS
for the period from inception (June 26, 1996)
through September 30, 1996
<TABLE>
<S> <C>
INCOME
None $ -
OPERATING EXPENSES
General and Administrative Expenses 1,698
NET INCOME (LOSS) $ (1,698)
========
NET INCOME (LOSS) PER SHARE $ (.0017)
========
</TABLE>
The company is in the development stage and has not commenced
operations.
See accompanying notes to financial statements.
F-3
<PAGE> 22
QUINTESSENCE OIL COMPANY
A Wyoming Corporation
(A Development Stage Company)
STATEMENT OF CASH FLOW
for the period from inception (June 26, 1996)
through September 30, 1996
<TABLE>
<S> <C>
CASH FLOWS PROVIDED (USED)
IN OPERATIONS
Net loss $ (1,698)
Increase in Accounts Payable 9,000
--------
7,302
--------
CASH FLOWS PROVIDED (USED)
IN INVESTING ACTIVITIES
Organization Costs (7,500)
--------
CASH FLOWS PROVIDED (USED)
IN FINANCING ACTIVITIES
Proceeds from sale of stock 50,000
Payment made for legal fees
on registration costs (7,500)
--------
42,500
--------
NET INCREASE IN CASH 40,302
CASH BEGINNING OF PERIOD --
--------
CASH END OF PERIOD $ 42,302
========
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE> 23
QUINTESSENCE OIL COMPANY
A Wyoming Corporation
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
June 26, 1996 (Inception) through September 30, 1996
<TABLE>
<CAPTION>
Common Stock Additional Retained
Paid-in Earnings
Shares Amount Capital (Deficit)
<S> <C> <C> <C> <C>
BALANCE
(Inception) 06/26/96 -- $ -- $ -- $ --
ADD:
Sale of 900,000 shares
of common stock for
$18,000 cash 900,000 9 17,991 --
Sale of 100,000 shares
of common stock for
$32,000 cash less
$7,500 Registration
Costs 100,000 1 24,449
Net (Loss) for
the period (1,698)
--------- ------ --------- --------
BALANCE, 09/30/96 1,000,000 $ 10 $ 42,490 $ (1,698)
========= ====== ========= ========
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE> 24
QUINTESSENCE OIL COMPANY
A Wyoming Corporation
(A Development Stage Company)
Notes to Financial Statements
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICES:
Organization:
Quintessence Oil Company was incorporated on June 26, 1996, under the
laws of the State of Wyoming. The Company has adopted a year ending of
December 31.
The Company was organized to engage in the development, production and
sale of oil and gas. Since its inception, the Company has been largely
inactive and has conducted no significant operations The Company does
not own any oil and gas leases.
Because of the speculative nature of the Company, there are significant
risks which are summarized as follows:
Newly formed company with no operating history and minimal
assets.
Limited funds available for exploration and development.
Conflict-of-interest, as all employees have other part-time or
full-time employment.
The Company is considered to be in the development stage as defined in
Statement of Financial Accounting Standards No. 7. There have been no
operations since incorporation.
Summary of Significant Accounting Principles:
Registration costs will include fee payments for legal expenses
relating to the public stock offering. The offering was successful,
and $7,500 of legal fees were charged to additional paid-capital. The
Company amortizes registration costs over 60 months using the straight
line method.
F-6
<PAGE> 25
QUINTESSENCE OIL COMPANY
A Wyoming Company
(A Development Stage Company)
Notes to Financial Statements
NOTE 2 - STOCKHOLDERS' EQUITY
Public Stock Offering:
The Common Stock is being offered and sold pursuant to an exemption
from registration contained in Reg. 504 of the Securities Act of 1993,
as amended, (the "Act"). Reg. 504 provides that the Company can sell
securities with an aggregate offering price not exceeding $1,000,000
within a twelve (12) month period without registration with the
Securities and Exchange Commission.
The shares so issued will be without restriction and may be resold in
compliance with the Act. Applicable state laws, however, may impose
restrictions on sales and resales. Pursuant to Reg. 504, the Company
is not required to furnish any information to purchasers.
NOTE - 3 OFFICES AND EMPLOYEES
The Company's office will be located at 4424 Skylane Avenue, Riverton,
Wyoming.
The Company currently has no employees other than certain of its
officers and directors and does not anticipate a need to engage any
full-time employees so long as it is seeking and evaluating business
opportunities. The company has no retirement, pension, profit sharing
or insurance plans covering its officers and directors.
F-7
<PAGE> 26
EXHIBITS
Exhibit No. Description
The following documents are incorporated herein by reference from
the Registrant's Form 10 Registration Statement filed with the
Commission on December 3, 1996:
3.1 Articles of Incorporation.
3.2 Bylaws of the Company.
27 Financial Data Schedule
The following documents are included as exhibits hereto:
10.1 Assignment of Lease
<PAGE> 27
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this Form 10
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized. Dated this 22nd day of September, 1997.
QUINTESSENCE OIL COMPANY
BY: /s/ Nick Bebout, President
<PAGE> 28
EXHIBIT INDEX
Exhibit No. Description
The following documents are incorporated herein by reference from
the Registrant's Form 10 Registration Statement filed with the
Commission on December 3, 1996:
3.1 Articles of Incorporation.
3.2 Bylaws of the Company.
27 Financial Data Schedule
The following documents are included as exhibits hereto:
10.1 Assignment of Lease
<PAGE> 1
Department of the Interior
Bureau of Land Management
97 MAR 20 AM 9:00
RECEIVED
CHEYENNE, WYOMING
UNITED STATES
DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT
ASSIGNMENT OF RECORD TITLE INTEREST IN A
LEASE FOR OIL AND GAS OR GEOTHERMAL RESOURCES
Lease Serial No. WYW 136958
Lease Effective Date 7/1/95
Mineral Leasing Act of 1920 (30 U.S.C. 181 et seq.)
Act of Acquired Lands of 1947 (30 U.S.C. 351-359)
Geothermal Steam Act of 1970 (30 U.S.C. 1001-1025)
Department of Interior Appropriations Act,
Fiscal Year 1981 (42 U.S.C. 6508)
PART A: ASSIGNMENT
1. Assignee QUINTESSENCE OIL COMPANY
Street P. O. BOX 112
City, State, ZIP Code RIVERTON, WYOMING 82501
* If more than one assignee, check here [ ] and list the
name(s) and address(es) of all additional assignees on
the reverse of this form or on a separate attached
sheet of paper.
This record title assignment is for: (Check one)
[ x ] Oil and Gas Lease [ ] Geothermal Lease
Interest conveyed: (Check one or both, as appropriate)
[ x ] Record title, [ ] Overriding Royalty,
payment out of
production or other
similar interest or
payment
<PAGE> 2
2. This assignment conveys the following interest:
Percent of
Percent of Overriding Royalty or
Land Description Interest or Similar Interest
- ------------------------------------------------------------------------------
Owned Conveyed Retained Reserved Previously
Reserved or
Conveyed
- ------------------------------------------------------------------------------
a b c d e f
Township
37 North, 100.0% 100.0% -0- 5.00% -0-
Range 91 West,
6th P.M.
Sec. 24: S1/2SW1/4SW1/4
Sec. 33: N1/2NE1/4, NE1/4NW1/4
containing 140.00 acres, more or less
- ------------------------------------------------------------------------------
United States of America
This assignment is approved solely for administrative purposes.
Approval does not warrant that either party to this assignment
holds legal or equitable title to this lease.
[ x ] Assignment approved for above described lands;
Assignment approved effective: APR 01 1997
[ ] Assignment approved for attached land description
[ ] Assignment approved for land description indicated on
reverse of this form.
BY: /s/ Theresa M. Stevens Land Law Examiner MAY 28 1997
(Authorized Officer) (Title/Date)
<PAGE> 3
UNITED STATES
DEPARTMENT OF THE INTERIOR
BUREAU OF LAND MANAGEMENT
OFFER TO LEASE AND LEASE FOR OIL AND GAS
=================================================================
The undersigned (reserve) offers to lease all or any of the lands
in Item 2 that are available for lease pursuant to the Mineral
Leasing Act of 1920, as amended and supplemented (30 U.S.C. 181
et seq.), the Mineral Leasing Act for Acquired Lands of 1947, as
amended (30 U.S.C. 351-359), the Attorney General's Opinion of
April 2, 1941 (40 Op. Atty. Gen. 41)
1. Edward D. Calvert Future rental payments must be made
P. O. Box 1458 on or before the anniversary date to:
Riverton, WY 82501 Minerals Management Service
Royalty Management Program
P. O. Box 5640
Denver, Colorado 80217
- -----------------------------------------------------------------
2. This application/offer/lease is for (Check only one):
[ x ] Public Domain Lands [ ] Acquired Lands
Surface managing agency is other than BLM: ________________
Unit/Project ______________________________________________
Legal description of land requested:
Parcel No.: WY-9506-171
Sale Date: 06/06/95
* SEE ITEM 2 IN INSTRUCTIONS BELOW PRIOR TO COMPLETING
PARCEL NUMBER AND SALE DATE.
T. R. Meridian State County
Blank
Total acres applied for: _____________
Amount remitted: Filing fee $_________
Rental Fee: $_________________________
Total $_______________________________
DO NOT WRITE BELOW THIS LINE
- -----------------------------------------------------------------
<PAGE> 4
3. Land included in lease
T. R. Meridian State County
See Range-Township map not included herein.
Total acres in lease: _________________
Rental retained: $_____________________
=================================================================
This lease is issued granting the exclusive right to drill for,
mine, extract, remove and dispose of all the oil and gas (except
helium) in the lands described in Item 3 together with the right
to . . . and maintain necessary improvements thereupon for the
term indicated below, subject to renewal or extension in
accordance with the appropriate leasing authority, Rights granted
are subject . . . applicable laws, the terms, conditions, and
attached stipulations of this lease, the Secretary of Interior's
regulations and formal orders in effect as of lease issuance, and
to regulations and . . . Orders hereafter promulgated when not
inconsistent with lease rights granted or specific provisions of
this lease.
Type and primary term of lease:
[ x ] Noncompetitive lease (ten years)
[ ] Competitive lease (five years)
[ ] Other __________________________
THE UNITED STATES OF AMERICA
BY: Jean Mackay, Signing Officer
LAND LAW EXAMINER June 21, 1995
Effective Date of Lease: July 1, 1995
