<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
___________________
FORM 10-SB
General Form For Registration of Securities
of Small Business Issuers Under Section 12(b) or 12(g) of
the Securities Act of 1934
Oilex, Inc.
- ----------------------------------------------------------------
(Name of Small Business Issuer in Its Charter)
Nevada 33-0194489
- -------------------------------- -----------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
3050 Post Oak Blvd.,Suite 1760
Houston, Texas 77056
- -------------------------------- ------------------------
(Address of Principal Executive (Zip Code)
Offices)
713.629.5998
- --------------------------------
(Issuer's telephone number)
Securities to be registered under Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
---------------------- --------------------------------
Not applicable Not applicable
- ------------------------- --------------------------------
Securities to be registered under Section 12(g) of the Act:
Common Stock, par value $.001 per share
- -----------------------------------------------------------------
(Title of Class)
Page 1 of 64 pages contained in the sequential numbering system.
The Exhibit Index may be found on page 11 of the sequential
numbering system.<PAGE>
<PAGE> 2
TABLE OF CONTENTS
Page
Part I
Item 1. Description of Business ........................ 3
Item 2. Management's Discussion and Analysis
or Plan of Operation ........................... 4
Item 3. Description of Property......................... 6
Item 4. Security Ownership of Certain Beneficial
Owners and Management ..................... 7
Item 5. Directors, Executive Officers, Promoters
and Control Persons ....................... 7
Item 6. Executive Compensation ......................... 8
Item 7. Certain Relationships and Related
Transactions .............................. 9
Item 8. Description of Securities....................... 9
Part II
Item 1. Market Price of and Dividends on the
Registrant's Common Equity and Other
Stockholder Matters ....................... 9
Item 2. Legal Proceedings .............................. 10
Item 3. Changes in and Disagreements With
Accountants ............................... 10
Item 4. Recent Sales of Unregistered Securities ........ 10
Item 5. Indemnification of Directors and Officers ...... 11
Part F/S Financial Statements and Exhibits .......... 12
Part III
Item 1. Index to Exhibits .............................. 13
<PAGE> 3
PART I
Item 1. Description of Business
General
-----------------------
Oilex, Inc. (the "Company")was incorporated under the laws
of the State of Nevada on June 10, 1996 under the name of
"Akteck, Inc." The Company later changed its name to Oilex
International Investments, Inc. on December 31, 1991 and to
Oilex, Inc. on July 3, 1996.
Oilex, Inc is an oil and gas exploration and production
company. Present management acquired controlling interest in
Oilex in November 1994, garnering $5.4 million in TLC (tax loss
carry-forwards) along with minority lease interest in five wells
in Clark and Smith Counties, Mississippi (which are under
contract for sale in 1996). In 1995 management began acquiring
additional assets, and since December 1995 the company has
aggressively added oil, gas and mineral leases and wells in
Texas, Colorado, Utah and West Virginia through acquisitions and
lease purchases.
In December, 1995, the Company acquired the fee mineral
interest in and under 83,751 acres situated in Greenbrier and
Pocahontas Counties, West Virginia. Also in December, 1995, the
Company acquired 35 existing oil and gas wells together with 780
acres of leasehold property on which to conduct future
operations. The company has further acquired 11,535 acres of
leasehold interest under the White River Dome NE Prospect in Rio
Blanco County, Colorado in 1996. Exploration activities are
slated to begin in the fourth quarter, 1996.
The Company acquired approximately 5,885 leasehold acres in
Carbon, San Juan and Uintah Counties, Utah.
The Company recently has acquired an additional 935 acres
with 19 existing oil and gas wells in the Big Foot Field, Frio
County, Texas adjacent to its initial Big Foot Field holdings.
Management intends to continue adding to reserves through
acquisitions while it undertakes drilling programs, the first of
which is slated to begin in June, 1996 in the Big Foot field in
Frio County, Texas.
<PAGE> 4
Products
- --------
The Company intends to conduct exploratory drilling
activities with the aim of producing and selling oil, casinghead
gas (produced in conjunction with oil) and natural gas from its
holding in Texas, Utah and Colorado.
Expansion Strategy
- ------------------
The Company intends to continue its aggressive acquisition
of oil and gas properties and leases in primarily, but not
limited to Texas, Utah and Colorado.
Competition
- -----------
The search for viable oil and gas prospects and leases is
intensely competitive. It is likely that in seeking future
acquisitions, the company will compete with firms which have
substantially grater financial and management resources than the
company.
Employees
- ---------
The Company currently employs four full time people,
including the President, Secretary/Treasurer and support staff.
The President and Secretary/Treasurer of the Company have not
drawn a salary to date and do not intend to do so until the
Company is profitable. None of the Company's employees are
represented by a labor union. The Company has experienced no
work stoppages and believes that its employee relations are good.
Item 2. Plan of Operation
-----------------
Shown below is certain selected consolidated financial data
of the Company for the years ended December 31, 1993, 1994 and
1995. This data should be read in conjunction with the
Company's financial statements and notes included elsewhere
herein.
<PAGE> 5
STATEMENT OF OPERATIONS:
- ------------------------
For the Years Ended
December 31,
-----------------------------
1995 1994 1993
---- ---- ----
Revenue:
Oil and gas sales $41,349 $37,753 15,132
Other -- 140 91,953
------- ------- -------
41,349 37,893 107,085
Expenses:
Lease operating 4,349 8,818 8,271
General and administrative 42,817 241,493 295,812
Depreciation, depletion and
amortization 80,375 71,533 3,423,097
Interest 26,198 41,116 20,590
------ ------ --------
153,739 362,960 3,747,770
------- ------- ---------
Loss before income taxes 112,390 325,067 3,640,685
------- ------- ---------
Provision for income taxes -- -- --
------- ------- --------
Net loss $112,390 $325,067 $3,640,685
-------- -------- ----------
<PAGE 6>
BALANCE SHEET DATA:
LIABILITIES AND STOCKHOLDERS EQUITY
- -----------------------------------
December 31,
-----------------------------
1995 1994 1993
---- ---- ----
Current Liabilities
Bonds payable $ 244,577 $226,014 $239,848
Accounts payable -- -- 125,185
Notes payable to related parties 33,475 26,992 24,900
Total Current Liabilities 278,052 252,906 389,933
Stockholders' Equity
Preferred stock, Series A,
$.001 par value 10% cumulative
convertible;2,500,000 shares
authorized, issued and
outstanding Common stock, $.001 2,500(1)
par value; 25,000,000 shares
authorized 14,327,570, 13,812,570
and 1,144,252 shares issued and
outstanding at December 31, 1995,
1994 and 1993,respectively 14,328 13,813 1,144
Paid-in capital 11,229,414 7,396,445 5,897,676
Accumulated deficit (6,541,062) (6,450,746) (6,125.679
---------- ---------- ----------
Total Stockholders' Equity 4,705,180 959,512 (226,859)
----------- ----------- -----------
Total Liabilities and
Stockholders' Equity $4,983.232 1,212,418 163,074
---------- ---------- ---------
Item 3. Description of Property
-----------------------
The Company's executive offices occupy approximately 2,200
square feet of office space in Houston, Harris County, Texas,
under a multi year lease which provides for rent of approximately
$2,150 per month. These facilities are adequate for the
Company's purposes. In the event additional space is required,
the Company believes it will be readily available.
[FN]
- --------------------
(1) Effective June 1, 1996, the Company and World Interactive
Networks, Inc. entered into an agreement to terminate the Stock
Exchange Agreement dated January 5, 1995 and to return the 149,970
shares of Series C Preferred stock issued pursuant thereto. WIN
will return the 2,500,000 shares of Series A Preferred stock
issued by Oilex. Both parties will release and hold harmless the
other from all future claims and causes of action. See Note 3 -
Stockholders Equity of the Audited Financial Statement.
<PAGE> 7
Item 4. Security Ownership of Certain
Beneficial Owners and Management
--------------------------------
The following table sets forth information as of June 17,
1996, relating to the beneficial ownership of the Company's
Common Stock by (i) each person known by the Company to be the
beneficial owner of more than five percent of the Company's
outstanding Common Stock, (ii) each of the Company's directors,
(iii) the Company's Chief Executive Officer, and (iv) all
officers and directors of the Company as a group.
Name and Address of Amount of Percent of
Beneficial Owner Beneficial Ownership Class
------------------- ----------
Oliver H. Timmins III 1,823,845 9.34%
Cynthia C. Timmins
3050 Post Oak Blvd., Suite 1760
Houston, Texas 77056
Richard G. Clark 50,000 .26%
2 Saddle River Road
Saddle River, New Jersey 07458
Deborah K. Sacrey 50,000 .26%
7035 W. Tidwell, Ste J103
Houston, Texas 77092
All directors and officers 1,923,845 9.86%
as a group (5 people)
Phoenix Reserves, Inc. 8,685,378 44.47%
P. O. Box 460767
Houston, Texas 77056
Brush Prairie Minerals, Inc. 1,256,265 6.43%
P. O. Box 14006
Spokane, Washington 99214
Pioneer Oil and Gas 1,125,000 5.76%
1225 Ft. Union Blvd., Suite 100
Midvale, Utah 84047
Item 5. Directors, Executive Officers,
Promoters and Control Persons
-----------------------------
Name Age Position with the Company
Oliver H. Timmins III 43 President and Director
Richard G. Clark 69 Director
Deborah K. Sacrey 43 Director
Cynthia C. Timmins 36 Secretary/Treasurer and
Director
<PAGE> 8
Oliver H. Timmins III, President & Director - A graduate of St.
Mary s School of Law (Juris Doctor) Mr. Timmins brings a wealth
of oil and gas industry knowledge and experience to the Company.
As a practicing Oil and Gas industry attorney with 16 years of
experience, Mr. Timmins areas of practice include negotiation of
mergers and acquisitions, preparation of securities filings, SEC
filings for reporting and non reporting companies, title
examination, preparation of gas purchase contracts and
preparation of joint operating agreements. In addition, Mr.
Timmins has extensive hands on experience in both exploration and
production, as well as supervising day to day operations of oil
and gas related service companies.
Richard G. Clark, Director - For the past 30 years, Mr. Clark has
been involved in dealer finance Banking, investment banking,
management related to institutional sales, branch management and
national marketing. A graduate of New York University s School
of Business and Finance, Mr. Clark has consulted for numerous
companies. His expertise and experience include corporate under
writings, financing, merger activities relating to retail
facilities, as well as numerous activities related to the oil and
gas industry, mining, rail transportation, computer products,
environmental issues and negotiating the acquisition of a New
York Stock Exchange brokerage house.
Deborah K. Sacrey, Director - Ms. Sacrey is President of a full
service geological, drafting, geotechnical support facility with
in-house Diazo (printing and mylars), autocad with Terra Sciences
capabilities. Geological consulting areas include southern
Louisiana, Texas Gulf Coast, Mississippi, Arkansas and West
Virginia. Mrs. Sacrey has a Bachelor of Science degree in
Geology and Geophysics.
Cynthia C. Timmins, Secretary/Treasurer & Director - Mrs. Timmins
is an elementary school assistant teacher and has assisted Oliver
Timmins in numerous corporation business over the past 14 years.
Mrs. Timmins attended the University of Texas at Austin.
Item 6. Executive Compensation
----------------------
None of the executive officers or directors of the Company
receives a salary or other compensation from the Company. Mr.
Timmins, the President of the Company, does not intend to request
any compensation unless and until the Company is profitable. In
the future, the Company intends to pay fees and grant stock
options to its non-employee directors.
The Company does not currently have any stock option plans
or long term incentive compensation plans. In addition, the
Company does not award stock appreciation rights, restricted
stock awards or long term incentive plan pay-outs.<PAGE>
<PAGE> 9
Item 7. Certain Relationships and
Related Transactions
-------------------------
None.
Item 8. Description of Securities
-------------------------
The Company's authorized capital stock consists of
50,000,000 shares of Common Stock (as of July 3, 1996), par value
$.001 per share, of which 19,531,835 are presently issued and
outstanding. Each share of Common Stock is entitled to one vote
on all matters to be voted on by stockholders, including the
election of directors. At each election for directors, every
stockholder entitled to vote at such election shall have the
right to vote, in person or by proxy, the number of shares owned
by them for as many persons as there are directors to be elected
and for whose election they have a right to vote.
Common Stock
- ------------
Subject to preferential rights with respect to any
outstanding Preferred Stock, holders of Common Stock are entitled
to receive ratably such dividends as may be declared by the Board
of Directors out of funds legally available therefor. In the
event of a liquidation, dissolution or winding up of the Company,
holders of Common Stock are entitled to share ratably in all
assets remaining after payment of liabilities and satisfaction of
preferential rights and have no rights to convert their Common
Stock into any other securities. All shares of Common Stock have
equal, noncumulative voting rights, and have no preference,
exchange, preemptive or redemption rights. The outstanding
shares of Common Stock are fully paid and nonassessable.
PART II
Item 1. Market Price of and Dividends
on the Registrant's Common Equity
and Related Stockholder Matters
---------------------------------
The Company's common stock is listed on the OTC Bulletin
Board of the NASD under the symbol "OLEX". No assurance can be
given that the present market for the Company's common stock will
continue.
The high and low bid quotations per share published by the
National Quotation Bureau Inc. for the quarterly periods indicated
are set forth below:
<PAGE> 10
Fiscal Year High Low
- ----------- ------- -------
1993
- ----
First Quarter $.0625 $.0625
Second Quarter .0625 .0625
Third Quarter 1.00 .05
Fourth Quarter .25 .25
1994
- ----
First Quarter .25 .125
Second Quarter .125 .03125
Third Quarter .03125 .03125
Fourth Quarter 2.875 .03125
1995
- ----
First Quarter 1.75 .375
Second Quarter .5625 .125
Third Quarter .8125 .09375
Fourth Quarter .75 .20
The over the counter market quotations set forth in the
foregoing table reflect inter dealer prices, without retail
markup, markdown or commission, and may not necessarily represent
actual transactions.
As of June 17, 1996, the Company had 121 holders of record
of its shares of Common Stock.
The Company has not paid any cash dividends and does not
anticipate that it will pay any cash dividends on its Common
Stock in the foreseeable future. Payment of dividends is within
the discretion of the Company's Board of Directors and will
depend, among other factors, upon the Company's earnings,
financial condition and capital requirements.
Item 2. Legal Proceedings
-----------------
The Company is not a party to any legal proceedings which
could have a material adverse effect on its business.
Item 3. Changes in and Disagreements With
Accountants on Accounting and
Financial Disclosure
----------------------------------
None.
Item 4. Recent Sales of Unregistered Securities
---------------------------------------
None
<PAGE> 11
Item 5. Indemnification of Directors and Officers
-----------------------------------------
Section 78.751(l) of the Nevada Revised Statutes ("NRS")
authorizes a Nevada corporation to indemnify any director,
officer, employee, or corporate agent "who was or is a party or
is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, except an action by or in the
right of the corporation" due to his corporate role. Section
78.751(1) extends this protection "against expenses, including
attorneys' fees, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with the
action, suit or proceeding if he acted in good faith and in a
manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful."
Section 78.751(2) of the NRS also authorizes indemnification
of the reasonable defense or settlement expenses of a corporate
director, officer, employee or agent who is sued, or is
threatened with a suit, by or in the right of the corporation.
The party must have been acting in good faith and with the
reasonable belief that his actions were not opposed to the
corporation's best interests. Unless the court rules that the
party is reasonably entitled to indemnification, the party
seeking indemnification must not have been found liable to the
corporation.
To the extent that a corporate director, officer, employee,
or agent is successful on the merits or otherwise in defending
any action or proceeding referred to in Section 78.751 (1) or
78.751(2), Section 78.751(3) of the NRS requires that he be
indemnified "against expenses, including attorneys' fees,
actually and reasonably incurred by him in connection with the
defense."
Section 78.751(4) of the NRS limits indemnification under
Sections 78.751(1) and 78.751(2) to situations in which either
(1) the stockholders, (2) the majority of a disinterested quorum
of directors, or (3) independent legal counsel determine that
indemnification is proper under the circumstances.
Pursuant to Section 78.751(5) of the NRS, the corporation
may advance an officer's or director's expenses incurred in
defending any action or proceeding upon receipt of an
undertaking. Section 78.751(6)(a) provides that the rights to
indemnification and advancement of expenses shall not be deemed
exclusive of any other rights under any bylaw, agreement,
stockholder vote or vote of disinterested directors. Section
78.751(6)(b) extends the rights to indemnification and
advancement of expenses to former directors, officers, employees
and agents, as well as their heirs, executors, and
administrators.
<PAGE> 12
PART F/S
Index to Audited Financial Statements
Financial Statements Sequential
- -------------------- Page No.
----------
(I) Financial Statements December 31,
1195, 1994, 1993 (Audited)
---------------------------------
Independent Auditor's Report 15
Balance Sheets, December 31, 1995,
1994, 1993 17
Statement of Operations, December 31,
1995, 1994, 1993 19
Statement of Changes in Stockholder's
Equity, January 1, 1993 through
December 31, 1995 20
Statement of Cash Flows, December 31,
1995, 1994, 1993 21
Notes to Financial Statements 22
<PAGE> 13
PART III
Item 1. Index to Exhibits
-----------------
The following Exhibits are filed as a part of this
Registration Statement:
Exhibit Sequential
Number Description* Page No.
- ------ ------------ ----------
3.1 Initial Articles of Incorporation
filed June 6, 1986 31
3.2 Articles of Amendment filed January
23, 1992 reflecting a name change
to Oilex International Investments,
Inc. 33
3.3 Articles of Amendment filed June 25,
1996 reflecting a name change to Oilex,
Inc. and an increase in the number of
authorized shares to 50,000,000 35
3.4 Bylaws of Oilex, Inc. 37
99 Guide 2: Disclosure of Oil and Gas
Operations 57
* Summaries of all exhibits contained
within this Registration Statement
are modified in their entirety by
reference to these Exhibits
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Oilex, Inc.
By:/s/Oliver H. Timmins III
------------------------
Oliver H. Timmins III,
President
Dated: July 26, 1996
<PAGE> 14
OILEX INTERNATIONAL INVESTMENTS, INC.
FINANCIAL STATEMENTS
December 31, 1995, 1994, 1993
<PAGE>
SIMONTON, KUTAC
& BARNIDGE, L.L.P.
CERTIFIED PUBLIC ACCOUNTANTS
909 Fannin, Suite 2050
Houston, Texas 77010-1007
Telephone:(713) 658-9755 Facsimile: (713) 658-0298
- -----------------------------------------------------------------
Independent Auditors' Report
March 1, 1996
Board of Directors and Stockholders
Oilex International Investments, Inc.
Houston, Texas
We have audited the accompanying balance sheet of Oilex
International Investments, Inc. as of December 31, 1995, 1994 and
1993, and the related statements of operations, stockholders'
equity, and cash flows for the years then ended. 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 Oilex International Investments, Inc. at December 31, 1995,
1994 and 1993, and the results of its operations and its cash
flows for the years then ended, in conformity with generally
accepted accounting principles.
<PAGE>
As discussed in Note 6 to these financial statements, the Company
has incurred net losses since its inception and has negative
working capital balances in each of the three years being
reported on herein. The Company is in technical default of the
payment terms of its convertible subordinated bonds. The
Company's continuation of its operations is contingent upon
management's ability to infuse an adequate amount of working
capital funds into the Company. The accompanying financial
statements have been prepared assuming that the Company will
continue as a going concern and do not include any adjustments
that might be necessary should the Company be unable to continue
as a going concern.
/s/ Simonton, Kutac & Barnidge, L.L.P.
- --------------------------------------
<PAGE>
<TABLE>
<CAPTION>
OILEX INTERNATIONAL INVESTMENTS, INC.
BALANCE SHEET
ASSETS
December 31,
-------------------------------------------
1995 1994 1993
-------------------------------------------
<S> <C> <C> <C>
Current Assets:
Cash $15,272 $1,764 $5,802
Oil and gas receivables -- -- 1,349
------------ ------------ -----------
Total Current Assets 15,272 1,764 7,151
------------ ------------ -----------
Property and Equipment:
Oil and gas properties - full cost method
Subject to amortization 7,969,529 6,688,264 5,598,012
Accumulated depreciation, depletion
and amortization (5,567,407) (5,55.0,034) (5,521,099)
------------ ------------ -----------
2,402,122 1,138,230 76,913
------------ ------------ -----------
Investment in marketable securities 2,500,000 -- --
Organization costs, net of amortization 65,838 72,424 79,010
------------ ------------ -----------
Total Assets $4,983,232 $1,212,418 $163,074
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
OILEX INTERNATIONAL INVESTMENTS, INC.
BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31,
-------------------------------------------
1995 1994 1993
-------------------------------------------
<S> <C> <C> <C>
Current Liabilities
Bonds payable $244,577 $226,014 $239,848
Accounts payable -- -- 125,185
Notes payable to related parties 33,475 26,892 24,900
------------ ------------ -----------
Total Current Liabilities 278,052 252,906 389,933
------------ ------------ -----------
Stockholders' Equity
Preferred stock, Series A, $.001 par value
10% cumulative convertible; 2,500,000
shares authorized, issued and outstanding 2,500 -- --
Common stock, $.001 par value; 25,000,000
shares authorized 14,327,570, 13,812,570
and 1, 144,252 shares issued and outstanding
at December 31, 1995, 1994 and 1993,
respectively 14,328 13,813 1,144
Paid-in captal 11,229,414 7,396,445 5,897,676
Accumulated deficit (6,541,062) (6,540,746) (6,125,679)
------------ ------------ -----------
Total Stockholders' Equity 4,705,180 959,512 (226,859)
------------ ------------ -----------
Total Liabilities and Stockholders' Equity $4,983,232 $1,212,418 $163,074
------------ ------------ -----------
</TABLE>
The accompanying notes are an integral part of these financial statement.
<PAGE>
<TABLE>
<CAPTION>
OILEX INTERNATIONAL INVESTMENTS, INC.
STATEMENT OF OPERATIONS
For the Years Ended
December 31,
-------------------------------------------
1995 1994 1993
-------------------------------------------
<S> <C> <C> <C>
Revenue:
Oil and gas sales $41.349 $37,753 $15,132
-- 140 91,953
------------ ------------ -----------
41,349 37,893 107,085
------------ ------------ -----------
Expenses:
Lease operating 4,349 8,818 8,271
General and administrative 42,817 241,493 295,812
Depreciation,depletion and
amortization 80,375 71,533 3,423,097
Interest 26,198 41,116 20,590
------------ ------------ -----------
153,739 362,960 3,747,770
------------ ------------ -----------
Loss before income taxes 112,390 325,067 3,640,685
------------ ------------ -----------
Provision for income taxes -- -- --
------------ ------------ -----------
Net loss $112,390 $325,067 $3,640,685
------------ ------------ -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
OILEX INTERNATIONAL INVESTMENTS, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIT)
Preferred Stock Common Stock
------------------- ------------------- Paid-In Accumulated
Shares Amount Shares Amount Capital Deficit Total
--------- ------- ---------- ------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance
January 1, 1993 -- $ -- 1,059,002 $1,059 $5,745,611 $(2,484,942 $3,261,728
Issuance of common stock -- -- 85,250 85 152,065 -- 152,150
Net loss -- -- -- -- -- (3,640,685) (3,640,685)
--------- ------ ---------- ------- ----------- ----------- ----------
Balance,
December 31, 1993 -- -- 1,144,252 1,144 5,897,676 (6,125,679) (226,859)
Issuance of common stock
in exchange for oil and
gas properties -- -- 12,668,318 12,669 1,498,769 -- 1,511,438
Net loss -- -- -- -- -- (325,067) (325,067)
--------- ------ ---------- ------- ----------- ----------- ----------
Balance,
December 31, 1994 -- -- 13,812,570 13,813 7,396,445 (6,450,746) 959,512
Issuance of Series A
Preferred Stock 2,500,000 $2,500 -- -- 2,497,500 -- 2,500,000
Issuance of common stock
in exchange for oil and
gas properties -- -- 515,000 515 1,335,459 -- 1,358,058
Net loss -- -- -- -- -- (112,390) (112,390)
--------- ------ ---------- ------- ----------- ----------- ----------
Balance,
December 31, 1995 2,500,000 $2,500 14,327,570 $14,328 $11,229,414 $(6,541,062) $4,705,180
--------- ------ ---------- ------- ----------- ----------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
OILEX INTERNATIONAL INVESTMENTS, INC.
STATEMENT OF CASH FLOWS
For the Years Ended
December 31,
-------------------------------------------
1995 1994 1993
-------------------------------------------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net loss $(112,390) $(325,067) $(3,640,685)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Depreciation, depletion and amortization 86,961 78,119 3,429,683
Decrease in oil and gas receivables -- 1,349 1,590
Decrease in accounts payable -- (125,185) (13,300)
Increase (decrease) in bonds payable 18,563 (13,834) 118,750
Increase in notes payable to related parties 6,583 1,992 1,400
------------ ------------ -----------
Net cash (used) by operating activities (283) (385,324) (102,562)
------------ ------------ -----------
Cash Flows Used in Investing Activities:
Acquisition of oil and gas properties 1,281,265 1,090,252 --
Investment in marketable securities 2,500,000 -- --
Other 63,002 39,900 45,887
------------ ------------ -----------
Net cash provided (used) by
investing activities (3,844,267) (1,130,152) (45,887)
------------ ------------ -----------
Cash Flows from Financing Activities:
Issuance of common stock 1,358,058 1,511,438 152,150
Issuance of preferred stock 2,500,000 -- --
------------ ------------ -----------
Net Cash Provided (Used) by
Financing Activities 3,858,058 1,511,438 152,150
------------ ------------ -----------
Net Change in Cash and Cash Equivalents 13,508 (4,038) 3,701
Cash and cash equivalents, beginning of year 1,764 5,802 1,381
------------ ------------ -----------
Cash and cash equivalents, end of year $15,272 $1,764 $5,082
------------ ------------ -----------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
OILEX INTERNATIONAL INVESTMENTS, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1995, 1994 and 1993
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPALS
Organization --- Oilex International Investments, Inc. ("Company") was
incorporated under the laws of the State of Nevada on June 10, 1986 under the
name of "Akteck, Inc." The Company later changed its name on December 31,
1991.
Description of the Business --- The primary business activities of Oilex
International Investments, Inc. is oil and gas exploration, development and
acquisitions. The Company currently owns oil and gas leaseholds in Texas,
Louisiana, Mississippi, West Virginia and Utah.
Oil and Gas Properties --- The Company follows the full cost method of
accounting whereby all costs, including direct general and administrative
expenses, associated with property acquisition, exploration and development
activities are capitalized. Cost associated with proved reserves are
amortized by the unit-of-production method using independent engineers'
estimates of unrecovered proved oil and gas reserves. The costs of unproved
properties are excluded from amortization until the properties are evaluated.
Interest is capitalized on oil and gas properties not subject to amortization
and in the process of development. Proceeds from the sale of properties are
accounted for as reductions to capitalized costs unless such sales involve a
significant change in the relationship between costs and the estimated value
of proved reserves or the underlying value of unproved properties in which
case, a gain or loss is recognized. Unaniortized costs of proved properties
are subject to a ceiling which limits such costs to the estimated present
value of oil and gas reserves reduced by future operating expenses,
development expenditures and income taxes.
Income Taxes --- The Company has incurred operating losses in each of the last
five years. As the utilization of such losses can not be anticipated, a
corresponding benefit has not been recorded.
<PAGE>
<TABLE>
<CAPTION>
OILEX INTERNATIONAL INVESTMENTS, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1995, 1994 and 1993
NOTE 2 - BONDS PAYABLE
Bonds payable consists of the following:
December 31,
-------------------------------------------
1995 1994 1993
-------------------------------------------
<S> <C> <C> <C>
10.0% bonds payable, secured by
certain of the Company's oil and
gas properties; due on demand and
convertible into common stock
at $2.00 per share. $154,848 $143,598 $132,848
9.75% bonds payable to an insurance
company; secured by certain of the
Company's oil and gas properties;
due on demand and convertible in
common stock at $2.00 per share. 89,521 82,416 --
10.0% bonds payable, secured by certain of
the Company's oil and gas properties;
due April, 1994 and convertible into
common stock at $2.00 per share. -- -- 107,500
------------ ------------ -----------
$244,577 $226,014 $239,848
------------ ------------ -----------
</TABLE>
NOTE 3 - STOCKHOLDERS' EQUITY
On October 31, 1994, the Company issued 10,919,220 shares of common stock in
exchange for oil and gas leases in Jefferson County, Texas. This acquisition
effectively transferred control of the Company to Phoenix Reserves, Inc.
("Phoenix"). This transaction made Phoenix the largest stockholder of Oilex
with 63.1% and 64.6% ownership of the outstanding common stock at December 31,
1995 and 1994, respectively.
On December 21, 1995, Oilex exchanged 1,256,265 shares of its common stock in
exchange for 100% mineral rights in 83,751 acres located in Pocahontas and
Greenbrier Counties, West Virginia. Oilex has retained the voting rights to
these common shares.
On December 16, 1995, Oilex issued 500,000 shares of common stock in exchange
for oil and gas leaseholds and equipment located in the Big Foot Field areas
of Frio County, Texas. Oilex has retained the voting fights to these common
shares.
<PAGE>
OILEX INTERNATIONAL INVESTMENTS, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1995, 1994 and 1993
NOTE 3 - STOCKHOLDERS' EQUITY (Continued)
In December, 1994, the Company issued 2,500,000 shares of its
Series A, 10% Cumulative Convertible Preferred Stock to World
Interactive Networks, Inc. ("WIN') in exchange for 149,200 shares
of WIN's Series A Cumulative Convertible Preferred Stock valued
at $16.67 per share. The Oilex preferred stock has a liquidation
preference of $2.00 per share.
NOTE 4 - COMMITMENTS AND CONTINGENCIES
The Company is currently in dispute with a corporation owned by
certain stockholders of the Company. These stockholders were
formerly part of the management team of Oilex. They contend that
Oilex owes the Corporation approximately $141,000 on a demand
note. The Company has recorded a $33,475 note payable to it at
December 31, 1995. The amount in dispute is related to certain
general and administrative expense reimbursements. Although no
lawsuit has been filed, the management of Oilex intends to
vigorously defend its position in this matter should a lawsuit be
instituted. It believes that the amounts recorded in its
financial statements at December 31, 1995 for this note payable
is correct and accurate. Accordingly, no provision has been made
for the disputed difference herein.
NOTE 5 - SIGNIFICANT SUBSEQUENT EVENTS
On March 26, 1996, the Company acquired 5,840 acres of oil and gas
leases in Carbon County and the Uintah Basin area of Utah.
Effective May 1, 1996, the Company has acquired a 70% working interest in
certain oil and gas leases located in the Tin Cup Mesa Field, Utah. The
Company will exchange 1,000,000 shares of common stock for this interest.
Additionally, the Seller will be required to sign an agreement whereby these
shares will be voted accordance with current management.
On April 17, 1996, Oilex entered into an agreement to acquired 100% of the
working interest in the White River Dome Prospect located in Rio Blanco
County, Colorado. This prospect consists of 11,535 acres. Oilex,"ill
exchange 1,500,00 shares of its common stock along with $25,000 cash for these
leaseholds. Additionally, the Seller will be required to sign an agreement
whereby these shares will be voted accordance with current management.
NOTE 6 - GOING CONCERN
The Company has incurred net losses since its inception. For the three years
ended December 3 1, 1995, it has a negative working capital balance in each of
those years. Additionally, the Company is in technical default of the payment
terms of its convertible subordinated bond agreements.
<PAGE>
OILEX INTERNATIONAL INVESTMENTS, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1995, 1994 and 1993
NOTE 6 - GOING CONCERN (Continued)
These factors raise substantial doubt about the Company's ability to continue
as going concern. Management intends to infuse additional working capital
into the Company so that it can exploit and develop its newly acquired oil and
gas properties, thereby generating a positive cash flow. Management is also
in negotiations with the bondholders to amend their payment terms.
The accompanying financial statements have been prepared on a going concern
basis, which contemplates continuity of operations, realization of assets and
liquidation of liabilities in the ordinary course of business, and therefore
do not include any adjustments that might be necessary should the Company be
unable to continue as a going concern.
NOTE 7 - OIL AND GAS PROPERTIES
Capitalized Costs --- The following table presents the aggregate capitalized
cost subject to amortization relating to the Company's oil and gas
acquisition, exploration and development activities, and the aggregate related
accumulated depreciation, depletion and amortization ("DD&A").
<TABLE>
<CAPTION>
For the Year Ended
December 31,
-------------------------------------------
1995 1994 1993
-------------------------------------------
<S> <C> <C> <C>
Proved properties $7,969,529 $6,688,264 $5,598,012
Accumulated DD&A (5,567,407) (5,550,034) (2,138,930)
Full-cost ceiling write down -- -- (3,382,169)
------------ ------------ -----------
Net capitalized costs $2,402 122 $1,138,230 $76,913
</TABLE>
In 1993, the Company made a significant downward revision to its oil and gas
property accounts. The resulting balances reflected the effective net
production of the remaining hydrocarbons to be realized by Oilex. These
leaseholds are currently being marketing for sale by the Company.
<PAGE>
OILEX INTERNATIONAL INVESTMENTS, INC
NOTES TO FINANCIAL STATEMENTS
December 31, 1995, 1994 and 1993
NOTE 7 - OIL AND GAS PROPERTIES (Continued)
Cost Incurred --- The Company's oil and gas acquisition, exploration and
development activities are conducted in Mississippi, Texas and the Gulf
Coast regions. The following table summarizes the costs incurred in
connection therewith.
<TABLE>
<CAPTION>
For the Year Ended
December 31,
-------------------------------------------
1995 1994 1993
-------------------------------------------
<S> <C> <C> <C>
Property acquisition costs:
Unproved properties $ -- $ -- $ --
Proved properties 1,281,265 1,090,252 --
Exploration costs -- -- --
Development costs -- -- --
---------- ---------- ---------
$1,281,265 $1,090,252 $ --
---------- ---------- ---------
</TABLE>
Cost Not Subject to Amortization --- The Company had $1,000,000 of
acquisition cost not subject to amortization at December 31, 1992 and
1991. Unproved properties not subject to amortization consists main!y
of lease costs and seismic data related to Unproved areas. The Company
will continue to evaluate these properties over the lease term; however,
the timing of the ultimate evaluation and disposition of a significant
portion of properties has not been determined. Costs associated with
seismic data and all other costs will become subject to amortization
as the prospects to which they relate are evaluated.
NOTE 8 - SUPPLEMENTAL RESERVE INFORMATION (Unaudited)
The following information summarized the Company's net proved reserves
of oil (including condensate and natural gas liquids) and gas and the
present values thereof for the years ended December 31, 1995, 1994 and
1993. The reserve estimates are based upon reports of Ultra
Engineering, Inc., an independent oil and gas reserve engineering firm.
The estimates are in accordance with regulations prescribed by the
Securities and Exchange Commission. Future net revenue is estimated by
the independent petroleum engineers using oil and gas prices in effect
as of the end of each respective year. Price escalations are permitted
only for those properties which have contracts allowing for specific
increases. Future operation costs are based upon the average level of
expenses during each year.
<PAGE>
OILEX INTERNATIONAL INVESTMENTS, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1995, 1994 and 1993
NOTE 8 - SUPPLEMENTAL RESERVE INFORMATION (Unaudited) (Continued)
The reliability of any reserve estimate is function of the
quality of available information and of engineering
interpretation and judgment. In management's opinion, the
reserve estimates presented herein, in accordance with generally
accepted engineering and evaluation principles consistently
applied, are believed to be reasonable. These reserves should be
accepted with the understanding that drilling activities or
additional information subsequent to the date of this report
might require their revision. Moreover, certain quantities of
the reserves included in this study were estimated using the
volumetric method, and such estimates are particularly
susceptible to revision as a result of subsequent drilling
activities or production information.
Estimated Quantities of Oil and Gas Reserves (unaudited) --- The
following table sets forth certain data pertaining to the
Company's proved and proved developed reserves for the years
ended December 31, 1995, 1994 and 1993.
<PAGE>
OILEX INTERNATIONAL INVESTMENTS, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1995, 1994 and 1993
NOTE 8 - SUPPLEMENTAL RESERVE INFORMATATION (Unaudited) (Continued)
<TABLE>
<CAPTION>
December 31,
------------------------------------------------------------------
1995 1994 1993
------------------------------------------------------------------
Gas Oil Gas Oil Gas Oil
(Mcf) (Bbl) (Mcf) (Bbl) (Mcf) (Bbl)
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Proved Reserves:
- ------------------
Beginning balance 27,930,944 1,208,804 -- 4,514 308,217 203,678
Purchase of reserves
in place 8,144,498 2,775,433 27,930,994 1,206,298 -- --
Production -- (2,506) -- (2,008) -- (1,515)
Revisions -- -- -- -- (308,217) (197,649)
---------- --------- ---------- --------- -------- --------
Ending balance 36,075,492 3,981,731 27,930,994 1,208,804 -- 4,514
---------- --------- ---------- --------- -------- --------
</TABLE>
<TABLE>
<CAPTION>
December 31,
-----------------------------------------------------------------
1995 1994 1993
-----------------------------------------------------------------
Gas Oil Gas Oil Gas Oil
(Mcf) (Bbl) (Mcf) (Bbl) (Mcf) (Bbl)
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Proved Developed
Reserves:
- ------------------
Beginning balance 5,565,696 595,582 -- 4,514 33,511 25,061
Purchase of reserves
in place 2,045,000 766,816 5,565,696 593,076 -- --
Production -- (2,506) -- (2,008) -- (1,515)
Revisions -- -- -- -- (33,511) (19,032)
---------- --------- ---------- --------- ------- -------
Ending balance 7,610,696 1,359,952 5,565,696 595,582 -- 4,514
---------- --------- ---------- --------- ------- -------
</TABLE>
<PAGE>
OILEX INTERNATIONAL INVESTMENTS, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1995, 1994 and 1993
NOTE 8 - SUPPLEMENTAL RESERVE INFORMATION (Unaudited) (Continued)
Standard Measure of Discounted Future Net Cash Flows (unaudited) --- The
standardized measure of discounted future net cash flows relating to
proved oil and gas reserves at is presented below:
<TABLE>
<CAPTION>
December 31,
-------------------------------------------
1995 1994 1993
-------------------------------------------
<S> <C> <C> <C>
Future cash inflows $134,803,769 $73,045,272 $90,280
Future development costs (15,279,040) (5,729,040) --
Future production costs (25,902,840) (9,596,785) (21,438)
Future income tax expense (32,000,000) (20,000,000) (23,000)
------------ ------------ -----------
Future net cash flows 61,621,889 37,719,447 45,852
Discounted at 10% per year (23,786,049) (19,387,795) (17,699)
------------ ------------ -----------
Standardized measure of discounted
future net cash flows $37,855,840 $18,331,652 $28,153
------------ ------------ -----------
</TABLE>
The "standardized measure" does not purport to represent
and is generally unrelated to the fair market value of
the Company's oil and gas reserves.
The principle sources of changes in the standardized
measure of future net cash flows are as follows:
<TABLE>
<CAPTION>
December 31,
-------------------------------------------
1995 1994 1993
-------------------------------------------
<S> <C> <C> <C>
Balance, beginning of year $2,178,648 $(588,565) $1,649,508
Sales, net of production costs (37,000) (28,935) (6,861)
Purchase of reserves in-place 26,616,225 41,540,244 --
Revisions of previous estimates -- -- (3,382,169)
Accretion of discount (4,398,245) (19,370,096) --
Net change in income taxes (12,000,000) (19,977,000) 1,150,957
------------ ------------ -----------
Balance, end of year $12,359,612 $2,178,648 $(588,565)
------------ ------------ -----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
OILEX INTERNATIONAL INVESTMENTS, INC.
BREAK-UP VALUATION
December 31, 1995
<S> <C>
Oil and Gas Properties:
Discounted future net cash flows $37,835,840
less: reduction for proved undeveloped (15%) (5,675,376)
------------
32,160,464
Fair market value of production equipment 200,000
------------
Total Oil and Gas Properties 32,360,464
Net working capital deficit (262,780)
Marketable securities, discounted 10% 2,250,000
------------
Subtotal 34,347,684
less: Preferred Stock liquidation preference $5,000,000
------------
Net Breakup Value $29,347,684
------------
Common shares outstanding 14,327,570
Net Breakup Value per common share $ 2.05
------------
</TABLE>
<PAGE>
ARTICLES OF INCORPORATION
OF
AKTECH, INC.
ARTICLE I
The name of this corporation is AKTECH, INC.
ARTICLE II
This corporation shall have perpetual existence.
ARTICLE III
The purpose of this corporation is to engage in 'any lawful
activity permitted under the laws of the State of Nevada.
ARTICLE IV
The aggregate number of shares which this corporation shall have
authority to issue is 25,000,000 shares of a par value of $0.001 per
share. Fully paid stock of this corporation shall not be liable to
any further call or assessment.
ARTICLE V
The authorized and treasury stock of this corporation may be issued
at such time, upon such terms and conditions. and for such consideration
as the Board of Directors shall determine. Shareholders, shall not have
preemptive' rights to acquire unissued shares of the stock of this
corporation and cumulative voting is denied.
ARTICLE VI
The principal place of business of this corporation in the State
of Nevada is One East First Street, Reno, Nevada 89501.
<PAGE>
ARTICLE VII
The number of Directors constituting the initial Board of
Directors of this corporation. is three (3) . The names and addresses
of persons who are to serve as Directors until the first annual
meeting of stockholders, or until their successors are elected and
qualified are:
NAME ADDRESS
- --------------------------------- -------------------------------
Mark Kallenberger 180 Newport Center Drive
Suite 180
Newport Beach, California 92660
James R. Lewis 14772 Plaza Drive
Tustin, California 92681
John W. Crane 10 Cresthaven
Irvine, California 92714
The Board of Directors shall be limited in number to no less than
three (3) nor more than nine (9).
ARTICLE VIII
The name and address of the initial Incorporator is as follows:
James R. Lewis, 14772 Plaza Drive, Tustin, California 92681.
IN WITNESS WHEREOF, the undersigned Incorporator has executed
these Articles of Incorporation as indicated below.
Dated: June 6, 1986 /s/original signed by James R. Lewis
------------------------------------
James R. Lewis
STATE OF CALIFORNIA)
) ss.
COUNTY OF ORANGE )
On June 6, 1986, personally appeared before me, a notary public, who
acknowledged that James R. Lewis executed the above instrument.
/s/original signed by Betty R. Slipp
------------------------------------
Signature of Notary
<PAGE>
CERTIFICATE OF AMENDMENT TO ARTICLES OF INCORPORATION OF
AKTECK, INC.
We the undersigned, Ron F. Bearden, President and Gwen S.
Stallworth, Secretary of Akteck, Inc. do hereby certify:
That the Board of Directors of said corporation at a meeting
duly convened, held on the 16th day of December, 1991, adopted a
resolution to amend the original articles as follows:
Article I is hereby amended to read as follows:
The name of the corporation hereafter is
OILEX INTERNATIONAL INVESTMENTS, INC.
The number of shares of the corporation outstanding and
entitled to vote on an amendment to the Article of Incorporation
is 1,075,000; that said change and amendment have been consented
to and approved by a majority vote of the stockholders holding a
majority of each class of stock outstanding and entitled to vote
thereon.
/s/original signed by Ron F. Bearden
----------------------------------------
Ron F. Bearden, President
/s/original signed by Gwen C. Stallworth
----------------------------------------
Gwen C. Stallworth, Secretary
STATE OF TEXAS )
) ss.
COUNTY OF HARRIS )
This Instrument was acknowledged before me by Ron F.
Bearden, President of Oilex International Investments, Inc.
/s/Signature of Notary illegible
---------------------------------------
Notary Public, State of Texas
My Commission expires:
STATE OF TEXAS )
COUNTY OF HARRIS )
On December 20, 1991, personally appeared before me, a
Notary Public Gwen Stallworth, who acknowledged that they
executed the above instrument.
/s/original signed by Rebecca Bearden
---------------------------------------
Notary Public, State of Texas
My commission expires: 6/28/93
<PAGE>
CERTIFICATE OF AMENDMENT TO ARTICLES OF INCORPORATION OF
OILEX INTERNATIONAL INVESTMENTS, INC.
We the undersigned, Oliver H. Timmins,III, President and
Cynthia C. Timmins, Secretary of Oilex International Investments,
Inc. do hereby certify:
That the Board of Directors of said corporation at a meeting
duly convened, held on the 5th day of June, 1996, adopted a
resolution to amend the original articles as follows:
Article I is hereby amended to read as follows:
The name of this corporation is Oilex, Inc.
Article IV is hereby amended to read as follows:
The aggregate number of shares which this
corporation shall have the authority to issue is
50,000,000 shares of a par value of $0.001 per
share. Fully paid stock of the corporation shall
not be liable to any further call or assessment.
The Board of Directors of the corporation is
expressly authorized to determine by resolution
classes, series and numbers of each class or
series of the stock of the corporation.
The number of shares of the corporation outstanding and
entitled to vote on an amendment to the Article of Incorporation
is 19,531,835; that said change and amendment have been consented
to and approved by a majority vote of the stockholders holding a
majority of each class of stock outstanding and entitled to vote
thereon.
/s/original signed by Oliver H. Timmins III
-------------------------------------------
Oliver H. Timmins III, President
/s/original signed by Cynthia C. Timmins
-------------------------------------------
Cynthia C. Timmins, Secretary
STATE OF TEXAS )
)
COUNTY OF BEXAR )
This Instrument was acknowledged before me on this 3rd day
of July, 1996, by Oliver H. Timmins III, President of Oilex
International Investments, Inc.
/s/original signed by Dolores Railsback
---------------------------------------
Notary Public, State of Texas
My Commission expires:
<PAGE>
STATE OF TEXAS )
)
COUNTY OF BEXAR )
This Instrument was acknowledged before me on this 3rd day
of July, 1996, by Cynthia C. Timmins, Secretary of Oilex
International Investments, Inc.
/s/original signed by Dolores Railsback
---------------------------------------
Notary Public, State of Texas
My Commission expires:
<PAGE>
AKTECH, INC.
Bylaws
ARTICLE I
OFFICES
Section 1. The corporation shall maintain a principal
office in the State of Nevada as set forth in the articles of
incorporation or determined from time to time by the board of
directors
Section 2. The corporation may also have offices at such
other places both within and without the State of Nevada as the
board of directors may f rom time to time determine or the
business of the corporation may require either inside or outside
the State of Nevada.
ARTICLE II
ANNUAL MEETINGS OF SHAREHOLDERS
Section 1. All meetings of shareholders for the election
of directors shall be held at such place as may be fixed from
time to time by the board of directors.
Section 2. Annual meetings of shareholders, commencing
with the year 1987, shall be held on the second Monday of June if
not a legal holiday, and if a legal holiday, then on the next
secular day following, at 1:00 p.m., at which they shall elect by
a plurality vote a board of directors, and transact such other
business as may
<PAGE>
properly be brought before the meeting.
Section 3. Written or printed notice of a the annual
meeting stating the place, day and hour of the meeting shall be
delivered not less than ten nor more than sixty days before the
date of the meeting, either personally or by mail, by or at the
direction of the president, the secretary, or the officer or
persons calling the meeting, to each shareholder of record
entitled to vote at such meeting.
ARTICLE III
SPECIAL MEETING OF SHAREHOLDERS
Section 1. Special meetings of shareholders for any
purpose other than the election of directors may be held at such
time and place within or without the State of Nevada as shall be
stated in the notice of the meeting or in a duly executed waiver
of notice thereof.
Section 2. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by statute or by
the articles of incorporation, may be called by the president,
the board of directors, or the holders of not less than one-tenth
of all the shares entitled to vote at the meeting.
Section 3. Written or printed notice of a special
meeting stating the place, day and hour of the meeting and the
purpose or purposes for which the meeting is called, shall be
delivered not less than ten nor more than sixty days before the
date of the meeting, either personally or
-2-
<PAGE>
by mail, by or at the direction of the president, the secretary,
or the officer or persons calling the meeting, to each
shareholder of record entitled to vote at such meeting.
Section 4. The business transacted at any special
meeting of shareholders shall be limited to the purposes stated
in the notice.
ARTICLE IV
QUORUM AND VOTING STOCK
Section 1. The holders of one-third of the shares of
stock issued and outstanding and entitled to vote, represented in
person or by proxy, shall constitute a quorum at all meetings of
the shareholders for the transaction of business except as
otherwise provided by statute or by the articles of
incorporation. If, however, such quorum shall not be present or
represented at any meeting of the shareholders, the shareholders
present in person or represented by proxy shall have power to
adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which. a quorum shall
be present or represented any business may be transacted which
might have been transacted at the meeting as originally notified.
Section 2. If a quorum is present, the affirmative vote
of a majority of the shares of stock represented at the meeting
shall be the act of the shareholders unless
-3-
<PAGE>
the vote of a greater number of shares of stock is required by
law or the articles of incorporation.
Section 3 . Each outstanding share of stock, having
voting power, shall be entitled to one vote on each matter
submitted to a vote at a meeting of shareholders. A shareholder
may vote either in person or by proxy executed in writing by the
shareholder or by his duly authorized attorney-in-fact.
In all elections for directors every shareholder,
entitled to vote, shall have the right to vote, in person or
by proxy, the number of shares of stock owned by him, for as
many persons as there are directors to be elected.
Section 4. Any action required to be taken at a meeting
of the shareholders may be taken without a meeting if a consent
in writing, setting forth the action so taken, shall be signed by
all of the shareholders entitled to vote with respect to the
subject matter thereof.
ARTICLE V
DIRECTORS
Section 1. The number of directors shall be three.
Directors need not be residents of the State of Nevada nor
shareholders of the corporation. The directors, other than the
first board of directors, shall be elected at the annual meeting
of the shareholders, and each director elected shall serve until
the next succeeding annual meeting and until his successor shall
have been elected and qualified. The first board of directors
shall hold office
-4-
<PAGE>
until the first annual meeting of shareholders.
Section 2. Any vacancy occurring in the board of
directors may be filled by the affirmative vote of a majority of
the remaining directors though less than a quorum of the board of
directors. A director elected to fill a vacancy shall be elected
for the unexpired portion of the term of his predecessor in
office.
Any directorship to be filled by reason of an increase
in the number of directors shall be filled by election at an
annual meeting or at a special meeting of shareholders called for
that purpose. A director elected to fill a newly created
directorship shall serve until the next succeeding annual meeting
of shareholders and until his successor shall have been elected
and qualified.
Section 3. The business affairs of the corporation shall
be managed by its board of directors which may exercise all such
powers of the corporation and do all such lawful acts and things
as are not by, statute or by the articles of incorporation or by
these bylaws directed or required to be exercised or done by the
shareholders.
Section 4. The directors may keep the books of the
corporation, except such as are required by law to be kept within
the state, outside of the State of Nevada, at such place or
places as they may from time to time determine.
Section 5. The board of directors, by the affirmative
vote of a majority of the directors then in office,
-5-<PAGE>
<PAGE>
and irrespective of any personal interest of any of its members,
shall have authority to establish reasonable compensation of all
directors for services to the corporation as directors, officers
or otherwise.
ARTICLE VI
MEETINGS OF THE BOARD OF DIRECTORS
Section 1. Meetings of the board of directors, regular
or special, may be held inside or outside the State of Nevada.
Section 2. The first meeting of each newly elected board
of directors shall be held at such time and place as shall be
fixed by the vote of the shareholders at the annual meeting and
no notice of such meeting shall be necessary to the newly elected
directors in order legally to constitute the meeting, provided a
quorum shall be present, or it may convene at such place and time
as shall be fixed by the consent in writing of all the directors.
Section 3. Regular meetings of the board of directors
may be held upon such notice, or without notice, and at such time
and at such place as shall from time to time be determined by the
board.
Section 4. Special meetings of the board of directors
may be called by the president on three days' notice to each
director, either personally or by mail or by telegram; special
meetings shall be called by the president or secretary in like
manner and on like notice on the written request of two
directors.
-6-
<PAGE>
Section 5. Attendance of a director at any meeting shall
constitute a waiver of notice of such meeting, except where a
director attends for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully
called or convened. Neither the business to be transacted at,
nor the purpose of, any regular or special meeting of the board
of directors need be specified in the notice or waiver of notice
of such meeting.
Section 6. A majority of the directors shall constitute
a quorum for the transaction of business unless a greater number
is required by law or by the articles of incorporation. The act
of a majority of the directors present at any meeting at which a
quorum is present shall be the act of the board of directors,
unless the act of a greater number is required by statute or by
the articles of incorporation. If a quorum shall not be present
at any meeting of directors, the directors present thereat may
adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
Section 7. Any action required or permitted to be taken
by the board of directors may be taken without a meeting if all
members of the board consent in writing to the action and the
consents are filed with the minutes.
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<PAGE>
ARTICLE VII
EXECUTIVE COMMITTEE
Section 1. The board of directors, by resolution adopted
by a majority of the number of directors fixed by the bylaws or
otherwise, may designate two or more directors to constitute an
executive committee, which committee, to the extent provided in
such resolution, shall have and exercise all of the authority of
'the board of directors in the management of the corporation,
except as otherwise required by law. Vacancies in the membership
of the committee shall befilled by the board of directors at
aregular or specialmeeting of the board of directors.
Theexecutive committee shall keep regular minutes of its
proceedings and report the same to the board when required.
ARTICLE VIII
NOTICES
Section 1. Whenever, under the provisions of the
statutes or of the articles of incorporation or of these bylaws,
notice is required to be given to any director or shareholder, it
shall not be construed to mean personal notice, but such notice
may be given in writing, by mail, addressed to such director or
shareholder, at this address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall
be deemed to be given at the time when the same shall be
deposited in the United States mail. Notice to directors may
also be
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<PAGE>
given by telegram.
Section 2. Whenever any notice whatever is required to
be given under the provisions of the statutes or under the
provisions of the articles of incorporation or these bylaws, a
waiver thereof in writing signed by the person or persons
entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice.
ARTICLE IX
OFFICERS
Section 1. The officers of the corporation shall be
chosen by the board of directors and shall be a president, a
vice-president, a secretary and a treasurer. The board of
directors may also choose additional vice-presidents, and one or
more assistant secretaries and assistant treasurers.
Section 2. The board of directors at its first meeting
after each annual meeting of' shareholders shall choose a
president, one or more vice-presidents, a secretary and a
treasurer, none of whom need be a member of the board.
Section 3. The board of directors may appoint such other
officers and agents as it shall deem necessary who shall hold
their offices for such terms and shall exercise such powers and
perform such duties as shall be determined from time to time by
the board of directors.
Section 4. The salaries of all officers and
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<PAGE>
agents of the corporation shall be fixed by the board of
directors.
Section 5. The officers of the corporation shall hold
office until their successors are chosen and qualify. Any
officer elected or appointed by the board of directors may be
removed at any time by the affirmative vote of a majority of the
board of directors. Any vacancy occurring in any office of the
corporation shall be filled by the board of directors.
THE PRESIDENT
Section 6. The president shall be the chief executive
officer of the corporation, shall preside at all meetings of the
shareholders and the board of directors, shall have general and
active management of the business of the corporation and shall
see that all orders and resolutions of the board of directors are
carried into effect.
Section 7. He shall execute bonds, mortgages and other
contracts requiring a seal, under the seal of the corporation,
except where required or permitted by law to be otherwise signed
and executed and except where the signing and execution thereof
shall be expressly delegated by the board of directors to some
other officer or agent I of the corporation.
THE VICE-PRESIDENTS
Section 8. The vice-president, or if there shall be more than
one, the vice-presidents in the order de-
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<PAGE>
termined by the board of directors, shall, in the absence or
disability of the president, perform the duties and exercise the
powers of the president and shall perform such other duties and
have such other powers as the board of directors may from time to
time prescribe.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 9. The secretary shall attend all meetings of
the board of directors and all meetings of the shareholders and
record all the proceedings of the meetings of the corporation and
of the board of directors in a book to be kept for that purpose
and shall perform like duties for the standing committees when
required. He shall give, or cause to be given, notice of all
meetings of the shareholders and special meetings of the board of
directors, and shall perform such other duties as may be
prescribed by the board of directors or president, under whose
supervision he shall be. He shall have custody of the corporate
seal of the corporation and he, or an assistant secretary, shall
have authority to affix the same to any instrument requiring it
and when so affixed, it may be attested by his signature or by
the signature of such assistant secretary. The board of
directors may give general authority to any other office to affix
the seal of the corporation and to attest the affixing by his
signature.
Section 10. The assistant secretary, or if there be
more than one, the assistant secretaries in the order determined
by the board of directors, shall, in the absence
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<PAGE>
or disability of the secretary, perform the duties and exercise
the powers of the secretary and shall perform such other duties
and have such other powers as the board of directors may from
time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 11. The treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
corporation and shall deposit all moneys and other valuable
effects in the name and to the credit of the corporation in such
depositories as may be designated by the board of directors.
Section 12. He shall disburse the funds of the
corporation as may be ordered by the board of directors, taking
proper vouchers for such disbursements, and shall render to the
president and the board of directors, at its regular meetings, or
when the' board of directors so requires, an account of all his
transactions as treasurer and of the financial condition of the
corporation.
Section 13. If required by the board of directors, he
shall give the corporation a bond in such sum and with such
surety or sureties as shall be satisfactory to the board of
directors for the faithful performance of the duties of his
office and for the restoration to the corporation, in case of his
death, resignation, retirement or removal from office, of all
books, papers, vouchers, money and other property of whatever
kind in his possession or
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<PAGE>
under his control belonging to the corporation.
Section 14. The assistant treasurer, or, if there shall
be more than one, the assistant treasurers in the order
determined by the board of directors, shall, in the absence or
disability of the treasurer, perform the duties and exercise the
powers of the treasurer and shall perform such other duties and
have such other powers as the board of directors may from time to
time prescribe.
ARTICLE X
CERTIFICATES FOR SHARES
Section 1. The shares of the corporation shall be
represented by certificates signed by the president or a vice-
president and the secretary or an assistant secretary of the
corporation, and may be sealed with the seal of the corporation
or a facsimile thereof.
When the corporation is authorized to issue shares of
more than one class there shall be set forth upon the face or
back of the certificate, or tire certificate shall have a
statement that the corporation will furnish to any shareholder
upon request and without charge, a full or summary statement of
the designations, preferences, limitations, and relative rights
of the shares of each class authorized to be issued and, if the
corporation is authorized to issue any preferred or special class
in series, the variations in the relative rights and preferences
between the shares of each such series so far as the same have
been fixed and determined and the authority of the
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<PAGE>
board of directors to fix and determine the relative rights and
preferences of subsequent series.
Section 2. The signatures of the officers of the
corporation upon a certificate may be facsimiles if the
certificate is countersigned by a transfer agent, or registered
by a registrar, other than the corporation itself or an employee
of the corporation. In case any officer who has signed or whose
facsimile signature has been placed upon such certificate shall
have ceased to be such officer before such certificate is issued,
it may be issued by the corporation with the same effect as if he
were such officer at the date of its issue.
LOST CERTIFICATES
Section 3. The board of directors may direct a new
certificate to be issued in place of any certificate theretofore
issued by the corporation alleged to have been lost or destroyed.
When authorizing such issue of a new certificate, the board of
directors, in its discretion and as a condition precedent to the
issuance thereof, may prescribe such terms and conditions as it
deems expedient, and may require such indemnities as it deems
adequate, to: protect the corporation : from any claim that may
be made against it with respect to any such certificate alleged
to have been lost or destroyed.
TRANSFERS OF SHARES
Section 4. Upon surrender to the corporation or
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<PAGE>
the transfer agent of the corporation of a certificate
representing shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, a
new certificate shall be issued to the person entitled thereto,
and the old certificate canceled and the transaction recorded
upon the books of the corporation.
CLOSING OF TRANSFER BOOKS
Section 5. For the purpose of determining shareholders
entitle d to notice of or to vote at any meeting of shareholders,
or any adjournment thereof or entitled to receive payment of any
dividend, or in order to make a determination of shareholders for
any other proper purpose, the board of directors may provide that
the stock transfer books shall be closed for a stated period but
not to exceed, in any case, sixty days. If the stock transfer
books shall be closed for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of shareholders,
such books shall be closed for at least ten days immediately
preceding such meeting. In lieu of closing the stock transfer
books, the board of directors may fix in advance a date as the
record date for any such, determination of shareholders, such
date in any case to be not more than sixty days and, in case of a
meeting of shareholders, not less than ten days prior to the date
on which the particular action, requiring such determination of
shareholders, is to be taken. If the stock transfer books ate
not closed and no record date is fixed for the
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<PAGE>
determination of shareholders entitled to notice of or to vote at
a meeting of shareholders, or shareholders entitled to receive
payment of a dividend, the date on which notice of the meeting is
mailed or the date on which the resolution of the board of
directors declaring such dividend is adopted, as the case may be,
shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this
section, such determination shall apply to any adjournment
thereof.
REGISTERED SHAREHOLDERS
Section 6. The corporation shall be entitled to
recognize the exclusive right of a person registered on its books
as the owner of shares to receive dividends, and to vote as such
owner, and to hold liable for calls and assessments a person
registered on its books as the owner of shares, and shall not be
bound to recognize any equitable or other claim to or interest in
such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as
otherwise, provided by the laws of Nevada.
LIST OF SHAREHOLDERS
Section 7. The officer or agent having charge of the
transfer books for shares shall make, at least ten days before
each meeting of shareholders, a complete list of the
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<PAGE>
shareholders entitled to vote at such meeting, arranged in
alphabetical order, with the address of each and the number of
shares held by each, which list, for a period of ten days prior
to such meeting, shall be kept on file at the registered office
of the corporation and shall be subject to inspection by any
shareholder at any time during usual business hours. Such list
shall also be produced and kept open at the time and place of the
meeting and shall be subject to the inspection of any shareholder
during the whole time of the meeting. The original share ledger
or transfer book, or a duplicate thereof, shall be prima facie
evidence as to who are the shareholders entitled to examine such
list or share ledger or transfer book or to vote at any meeting
of the shareholders.
ARTICLE XI
GENERAL PROVISIONS
DIVIDENDS
Section 1. Subject to the provisions of the articles of
incorporation relating thereto, if any, dividends may be declared
by the board of directors at any regular or special meeting,
pursuant to law. Dividends may be paid in cash, in property or
in shares of the capital stock, subject to any provisions of the
articles of incorporation.
Section 2. Before payment of any dividend, there may be
set aside out of any funds of the corporation available for
dividends such sum or sum s as the directors
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<PAGE>
from time to time, in their absolute discretion, think proper as
a reserve fund to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the
corporation, or for such other purpose as the directors shall
think conducive to the interest of the corporation, and the
directors may modify or abolish any such reserve in the manner in
which it was created.
CHECKS
Section 3. All checks or demands for money and notes of
the corporation shall be signed by such officer or officers or
such other person or persons as the board of directors may from
time to time designate.
FISCAL YEAR
Section 4. The fiscal year of the corporation shall be
fixed by resolution of the board of directors.
SEAL
Section 5. The corporate seal shall have inscribed
thereon the name of the corporation, the year of its organization
and the words "Corporate Seal, Nevada". The seal may be used by
causing it or a facsimile thereof to be impressed or affix6d or
in any manner reproduced.
ARTICLE XII
AMENDMENTS
Section 1. These by-laws may be altered, amended,or repealed or
new by-laws may be adopted by the affirma-
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<PAGE>
tive vote of a majority of the board of directors at any regular
or special meeting of the board.
CERTIFICATION
I hereby certify that the foregoing is the original or a true
copy of the bylaws adopted by Aktech, Inc., pursuant to the
organizational action of its directors.
Dated: June 20, 1986
/s/James R. Lewis
-----------------------------
James R. Lewis, Secretary
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<PAGE>
SIGNATURE
This Offering Statement has been signed in the City of Newport
Beach, California, on August _____, 1986.
AKTECH, INC.
By: /s/Mark Kallenberger
-------------------------------
Mark Kallenberger
President
<PAGE>
Exhibit 99: Disclosure of Oil and Gas Operations
Item 1: N/A (deleted)
Item 2: RESERVES REPORTED TO OTHER AGENCIES
None.
Item 3: PRODUCTION
None. The producing properties which produced the
production reflected in the Audited Financial Statements
attached hereto on Page F____ have been sold effective
June 1, 1996. As of the date of this filing, the company
has no current oil or gas production.
Item 4: PRODUCTIVE WELLS AND ACREAGE
None. See Item 3: Production, above.
Item 5: UNDEVELOPED ACREAGE
Colorado Leases
Rio Blanco County
A One Hundred Percent (100%) Gross Working Interest and
an Eighty Percent (80%) Net Revenue Interest in and to
the following Oil, Gas And Mineral Leases:
1. United States Department of the Interior Lease Number
C-49415, effective January 1, 1989, covering T2N-R96W,
6th P.M., Sec. 33: S/2SE/4, Sec 34: S/2NE/4, SW/4,
Surface to the Base of the Mesa Verde;
2. United States Department of the Interior Lease Number
C-42236, effective February 1, 1986, covering T2N-R96W,
6th P.M., Sec. 17: NE /4, Sec 22: N/2NW/4, SE/4NW/4, N/2
SE/4, Surface to the Base of the Mesa Verde;
3. United States Department of the Interior Lease Number
C-50981, effective February 1, 1990, covering T2N-R95W,
6th P.M., Sec. 7: Lots 1 through 4,5,7, W/2E/2, E/2W/2,
Surface to the Base of the Mesa Verde;
4. United States Department of the Interior Lease Number
C-50983, effective February 1, 1990, covering T2N-R95W,
6th P.M., Sec. 18: Lots 1 through 4, E/2W/2, Surface to
the Base of the Mesa Verde;
5. United States Department of the Interior Lease Number
C-50984, effective February 1, 1990, covering T2N-R95W,
6th P.M., Sec. 19: Lots 1 and 2, E/2NW/4,
Surface to the Base of the Mesa Verde;
<PAGE>
6. United States Department of the Interior Lease Number
C-50987, effective February 1, 1990, covering T2N-R95W,
6th P.M., Sec. 30: Lots 1 through 4, E/2NW/4, NE/4SW/4,
Surface to the Base of the Mesa Verde;
7. United States Department of the Interior Lease Number
C-38050, effective March 1, 1984, covering T2N-R96W, 6th
P.M., Sec. 1: Lots 15 and 26, E/2SE/4, Sec. 3: Lots 5
through 8,15, SE/4NE/4, SW/4NW/4, SE/4Sw/4, Se/4, Sec: 4:
Lots 5 through 8, S/2N/2, S/2, Sec. 5: Lots 5 through 8,
S/2N/2, S/2, Sec. 6: Lots 8 through 12, S/2NE/4,
SE/4NW/4, SE/4, Sec. 9: NE/4, W/2, W/2SE/4, SE/4SE/4,
Sec. 10: E/2, E/2W/2, SW/4SW/4, Sec. 12: Lots 1,4,10
NE/4NE/4, S/2NE/4, S/2, Sec. 13: N/2, SE/4, Sec. 14:
NE/4, Sec. 15: S/2, Sec. 16: SW/4NE/4, Surface to the
Base of the Mesa Verde;
8. United States Department of the Interior Lease Number
C-46794, effective March 1, 1988, covering T2N-R96W, 6th
P.M., Sec. 22: N/2NE/4, Surface to the Base of the Mesa
Verde;
9. United States Department of the Interior Lease Number
C-56261, effective March 1, 1988, covering T2N-R96W, 6th
P.M., Sec. 34: SE, Surface to the Base of the Mesa
Verde;
10. United States Department of the Interior Lease Number
C-37308, effective July 1, 1987, covering T2N-R96W, 6th
P.M., Sec. 1: Lots 5 through 8,11,14,20,21,23, SE/4NE/4,
SW/4NW/4, NW/4SW/4, Sec. 2: Lots 5 through 8, S/2N/2,
S/2, Sec. 22: All, Sec. 25: SE/4, Surface to the Base of
the Mesa Verde;
11. United States Department of the Interior Lease Number
C-50227, effective August 1, 1989, covering T2N-R96W, 6th
P.M., Sec. 23: E/2, NW/4, E/2SW/4, SW/4SW/4, Sec. 24:
W/2, Sec. 26: NE/4, N/2SE/4, SW/4SE/4, Surface to the
Base of the Mesa Verde;
12. United States Department of the Interior Lease Number
C-48855, effective November 1, 1988, covering T2N-R96W,
6th P.M., Sec. 14: W/2, Sec. 16: N/2N/2, SE/4NE/4, Sec.
22: S/2NE/4, Surface to the Base of the Mesa Verde;
13. United States Department of the Interior Lease Number
C-56910, effective October 1, 1994, covering T2N-R96W,
6th P.M., Sec. 24: E/2, Sec. 25: N/2, SW/4, Sec. 26:
SE/4SE/4, Surface to the Base of the Mesa Verde;
<PAGE>
Texas Leases
Jefferson County
A One Hundred Percent (100%) Gross Working Interest and
an Eighty Percent (72%) Net Revenue Interest in and to
the acreage covered by the following Oil, Gas And Mineral
Leases:
1. Oil, Gas and Mineral Lease dated August 5, 1994,
executed by Reginald Wilson, as Lessor, in favor of
Clifford Budd, as Lessee, covering 151.20 acres of land,
more or less, situated in the J. S. Gallier Survey, A-
751, Jefferson County, Texas, and being the same land
described in that certain Warranty Deed dated September
15, 1906, executed by Jefferson County Rice Company, as
Grantor, in favor of H. C. Smith, as Grantee, recorded in
Volume 94, page 134, Deed Records, Jefferson County,
Texas, recorded under File Number , Deed Records of
Jefferson County, Texas.
2. Oil, Gas and Mineral Lease dated August 5, 1994,
executed by Elaine Wilson Dixon, as Lessor, in favor of
Clifford Budd, as Lessee, covering 151.20 acres of land,
more or less, situated in the J. S. Gallier Survey, A-
751, Jefferson County, Texas, and being the same land
described in that certain Warranty Deed dated September
15, 1906, executed by Jefferson County Rice Company, as
Grantor, in favor of H. C. Smith, as Grantee, recorded in
Volume 94, page 134, Deed Records, Jefferson County,
Texas, recorded under File Number , Deed Records of
Jefferson County, Texas.
3. Oil, Gas and Mineral Lease dated August 5, 1994,
executed by Robert Chaffin, as Lessor, in favor of
Clifford Budd, as Lessee, covering 151.20 acres of land,
more or less, situated in the J. S. Gallier Survey, A-
751, Jefferson County, Texas, and being the same land
described in that certain Warranty Deed dated September
15, 1906, executed by Jefferson County Rice Company, as
Grantor, in favor of H. C. Smith, as Grantee, recorded in
Volume 94, page 134, Deed Records, Jefferson County,
Texas, recorded under File Number , Deed Records of
Jefferson County, Texas.
4. Oil, Gas and Mineral Lease dated August 5, 1994,
executed by Larry Wilson, as Lessor, in favor of Clifford
Budd, as Lessee, covering 151.20 acres of land, more or
less, situated in the J. S. Gallier Survey, A-751,
Jefferson County, Texas, and being the same land
described in that certain Warranty Deed dated September
15, 1906, executed by Jefferson County Rice Company, as
Grantor, in favor of H. C. Smith, as Grantee, recorded in
Volume 94, page 134, Deed Records, Jefferson County,
<PAGE>
Texas, recorded under File Number , Deed Records of
Jefferson County, Texas.
5. Oil, Gas and Mineral Lease dated August 5, 1994,
executed by Randall Wilson, as Lessor, in favor of
Clifford Budd, as Lessee, covering 151.20 acres of land,
more or less, situated in the J. S. Gallier Survey, A-
751, Jefferson County, Texas, and being the same land
described in that certain Warranty Deed dated September
15, 1906, executed by Jefferson County Rice Company, as
Grantor, in favor of H. C. Smith, as Grantee, recorded in
Volume 94, page 134, Deed Records, Jefferson County,
Texas, recorded under File Number , Deed Records of
Jefferson County, Texas.
6. Oil, Gas and Mineral Lease dated August 5, 1994,
executed by Patricia M. Davis, as Lessor, in favor of
Clifford Budd, as Lessee, covering 151.20 acres of land,
more or less, situated in the J. S. Gallier Survey, A-
751, Jefferson County, Texas, and being the same land
described in that certain Warranty Deed dated September
15, 1906, executed by Jefferson County Rice Company, as
Grantor, in favor of H. C. Smith, as Grantee, recorded in
Volume 94, page 134, Deed Records, Jefferson County,
Texas, recorded under File Number , Deed Records of
Jefferson County, Texas.
Jackson County
A One Hundred Percent (100%) Gross Working Interest and
an Eighty Percent (72%) Net Revenue Interest in and to an
undivided Fifty Percent (50%) of the acreage covered by
the following Oil, Gas And Mineral Lease:
1. Oil, Gas and Mineral Lease dated August 11, 1995,
executed by Allen N. Burditt, Brenda L. Burditt Miller,
B. R. Burditt Taylor and Allen L. Burditt, II, as
Lessors, in favor of Phoenix Reserves, Inc., As Lessee,
covering Lessor's undivided one-half interest in and to
534.55 acres, being out of the John Brown League,
Abstract No. 10, Jackson County, Texas, the said 574.55
acres being more particularly described in a Deed from
Mrs. Mary Dulaney, et al to Allen L. Burditt, dated
January 14, 1944, recorded in Volume 150, Page 269, Deed
Records of Jackson County, Texas.
Frio County
A One Hundred Percent (100%) Gross Working Interest and a
Seventy Percent (70%) Net Revenue Interest in and to the
oil rights down to 3,330 feet and all rights below 3,300
feet in and under the acreage covered by the following
Oil, Gas and Mineral Leases 1 through 5 and all rights in
and under the acreage covered by the following Oil, Gas
<PAGE>
and Mineral Leases 6 through 10:
1. Oil, Gas and Mineral Lease dated December 1, 1995,
executed by Carol Thompson Crouch, as Lessor, in favor of
Oilex International Investments, Inc., as Lessee,
covering 150 acres of land, a Memorandum of which is
recorded in Volume ______, Page ______, Deed Records
of Frio County, Texas.
2. Oil, Gas and Mineral Lease dated December 1, 1995,
executed by Carol Thompson Crouch, as Lessor, in favor of
Oilex International Investments, Inc., as Lessee,
covering 310.68 acres of land, a Memorandum of which is
recorded in Volume ______, Page ______, Deed Records
of Frio County, Texas.
3. Oil, Gas and Mineral Lease dated December 1, 1995,
executed by Carol Thompson Crouch, as Lessor, in favor of
Oilex International Investments, Inc., as Lessee,
covering 80 acres of land, a Memorandum of which is
recorded in Volume ______, Page ________, Deed Records
of Frio County, Texas.
4. Oil, Gas and Mineral Lease dated December 1, 1995,
executed by Carol Thompson Crouch, as Lessor, in favor of
Oilex International Investments, Inc., as Lessee,
covering 160 acres of land, a Memorandum of which is
recorded in Volume _______, Page ________, Deed Records
of Frio County, Texas.
5. Oil, Gas and Mineral Lease dated December 1, 1995,
executed by Carol Thompson Crouch, as Lessor, in favor of
Oilex International Investments, Inc., as Lessee,
covering 77.65 acres of land, a Memorandum of which is
recorded in Volume _______, Page ________, Deed Records
of Frio County, Texas.
6. Oil, Gas and Mineral Lease dated February 14, 1996,
executed by Jim Biediger, as Lessor, in favor of Oilex
International Investments, Inc., as Lessee, covering
965.3 acres of land, a Memorandum of which is recorded in
Volume _______, Page ________, Deed Records of Frio
County, Texas.
7. Oil, Gas and Mineral Lease dated June 8, 1996,
executed by Fay Brown, as Lessors, in favor of Oilex
International Investments, Inc., as Lessee, covering
965.3 acres of land, a Memorandum of which is recorded in
Volume _______, Page ________, Deed Records of Frio
County, Texas.
8. Oil, Gas and Mineral Lease dated June 8, 1996,
executed by Theresa Biediger, as Lessor, in favor of
Oilex International Investments, Inc., as Lessee,
<PAGE>
covering 965.3 acres of land, a Memorandum of which is
recorded in Volume _______, Page ________, Deed Records
of Frio County, Texas.
9. Oil, Gas and Mineral Lease dated June 8, 1996,
executed by Helen Branham, as Lessor, in favor of Oilex
International Investments, Inc., as Lessee, covering
965.3 acres of land, a Memorandum of which is recorded in
Volume _______, Page ________, Deed Records of Frio
County, Texas.
10. Oil, Gas and Mineral Lease dated June 8, 1996,
executed by Connie Bradley, as Lessor, in favor of Oilex
International Investments, Inc., as Lessee, covering
965.3 acres of land, a Memorandum of which is recorded in
Volume _______, Page ________, Deed Records of Frio
County, Texas.
Utah Leases
Carbon County
A One Hundred Percent (100%) Gross Working Interest and
an Eighty Five Percent (85%) Net Revenue Interest in and
to the following Oil, Gas And Mineral Leases:
1. Utah State Mineral Lease dated December 26, 1983, in
favor of Anchor Resources, Inc., Mineral Lease Number ML-
46477, covering 1939.42 acres of land described as
Township 13 South, Range 7 East, SLB&M, Sec. 1: Lots
3,4,5,6,S/2N/2, S/2 (All), Sec. 2: Lots 1,2,3,4,5,6,7,
S/2NE/4, SE/4NW/4, E/2SW/4, SW/4 (All), Sec. 3: Lots
1,2,5, SW/4NE/4, Sec. 22: NE/4SE/4, Sec. 23: SW/4NE/4,
Sec. 24: S/2E/4, Sec. 26: E/2NW/4, NW/4SW/4, SE/4SW/4,
Sec. 34: SE/4NE/4, Sec. 35: NW/4NW/4
San Juan County
A One Hundred Percent (100%) Gross Working Interest and
an Eighty Six and One Half Percent (86.5%) Net Revenue
Interest in and to the following Oil, Gas And Mineral
Leases:
1. United States Department of the Interior Lease Number
UTU 69084 effective January 1, 1992 covering TOWNSHIP 27
SOUTH, RANGE 22 EAST, SLM being 776.00 acres, more or
less, in San Juan County, Utah being described as Sec. 3,
lot 1, SENE (excluding Wilderness Study Area); Sec. 9,
SWNE, N/2NW, SENW, N/2SE, SWSE (excluding Wilderness
Study Area); Sec. 10, SWSW (excluding Wilderness Study
Area); Sec. 11, NE (excluding Wilderness Study Area);
Sec. 12, W/2SW, SESW (excluding Wilderness Study Area);
Sec. 13, , W/2NE, SENE, NENW, SE (excluding Wilderness
Study Area); Sec. 14, W/2NW, (excluding Wilderness Study
<PAGE>
Area); Sec. 15, SWNE, N/2NW (excluding Wilderness Study
Area), SENW; Sec. 24, lot 1, SENE, SENW (excluding
Wilderness Study Area).
2. United States Department of the Interior Lease Number
UTU 69085 effective January 1, 1992 covering TOWNSHIP 35
SOUTH, RANGE 22 EAST, SLM being 789.59 acres, more or
less, in San Juan County, Utah being described as Sec.
19, lots 1,2, NE, E/2NW, Sec. 20: NENE, W/2E/2, SESE,
Sec. 21: NW, E/2SW
Uintah County
A One Hundred Percent (100%) Gross Working Interest and
an Eighty Six and One Half Percent (86.5%) Net Revenue
Interest in and to the following Oil, Gas And Mineral
Leases:
1. United States Department of the Interior Lease Number
UTU 68645 effective October 1, 1991 covering TOWNSHIP 6
SOUTH, RANGE 22 EAST, SLM being 720 acres, more or less,
situated in Uintah County, Utah, described as Sec. 21:
all, Sec. 22: W/2SW/4.
2. United States Department of the Interior Lease Number
UTU 68707 effective October 1, 1991 covering TOWNSHIP 4
SOUTH, RANGE 22 EAST, SLM being 640 acres, more or less,
situated in Uintah County, Utah, described as Sec. 21:
SESW, W/2SE, SESE, Sec. 22: N/2NE, NENW, Sec. 28: W/2NE,
NW, N/2SW, NWSE.
3. United States Department of the Interior Lease Number
UTU 69083 effective January 1, 1992, covering TOWNSHIP 4
SOUTH, RANGE 22 EAST, SLM being 159.57 acres, more or
less, situated in Uintah County, Utah, described as Sec.
26: Lots 4 and 5, N/2SW.
4. United States Department of the Interior Lease Number
UTU 68703 effective October 1, 1991 covering TOWNSHIP 4
SOUTH, RANGE 21 EAST, SLM being 235.5 acres, more or
less, situated in Uintah County, Utah, described as Sec.
18: lots 2 through 4, E/2NW, NESW.
5. United States Department of the Interior Lease Number
UTU 68647 effective October 1, 1991 covering TOWNSHIP 8
SOUTH, RANGE 22 EAST, SLM being 585.25 acres, more or
less, situated in Uintah County, Utah, described as Sec.
5: lots 1 through 3, 6 through 8, ten through 14, S/2NE,
SENW, NESW, N/2SE.
6. United States Department of the Interior Lease Number
UTU 45465 effective October 1, 1991 covering TOWNSHIP 3
SOUTH, RANGE 1 WEST, USB&M being 40 acres, more of less,
situated in Uintah County, Utah, described as Sec. 26:
<PAGE>
SW/4NE/4.
Item 6: Drilling Activity
None.
Item 7: Present Activities
Frio County, Texas
As of the date of July 1, 1996, the company was preparing
to commence operations in its Big Foot Field holdings in
Frio County, Texas. The Company plans to initially re-
enter 55 existing wells and place them back into
production.. Once the initial phase of operations is
completed, the Company plans to initiate a drilling
program to fully develop the 3,100 foot Olmos "B" sand
underlying its Frio County, acreage.
Rio Blanco County, Colorado
The Company is planning a re-entry on a wellbore situated
on its Rio Blanco acreage prior to October 31, 1996.
Item 8: Delivery Commitments
None.
