<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ending March 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-29344
INDO-PACIFIC ENERGY LTD.
(Exact name of registrant as specified in its charter)
YUKON TERRITORY, CANADA NOT APPLICABLE
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer
Identification No.)
Suite 1200, 1090 West Pender Street
Vancouver, B. C. Canada V6E 2N7
(Address of principal executive offices)
Registrant's telephone number including area code: 604-682-6496
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common shares without par value
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes No X
The number of the issuer's common shares without par value outstanding on June
15, 1998 was 28,262,398 shares.
Documents incorporated by reference: None
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2
PART 1 FINANCIAL INFORMATION
Item 1 Unaudited Consolidated Financial Statements for the Quarter Ended March
31, 1998
Indo-Pacific Energy Ltd.
Consolidated Balance Sheets
As at March 31, 1998
Unaudited, Prepared by Management
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
- - ---------------------------------------------------------------------------------------
1998 1997
<S> <C> <C>
Assets
Current
Cash and short-term deposits $ 9,928,141 $ 8,893,717
Accounts receivable 74,214 103,212
Due from related parties 193,903 8,263
Goods and services tax receivable 15,390 28,919
Marketable securities 228,905 --
Prepaid expenses 19,432 8,642
- - ---------------------------------------------------------------------------------------
10,459,985 9,042,753
Petroleum and natural gas properties 2,156,657 1,539,955
Property and equipment 117,629 65,997
- - ---------------------------------------------------------------------------------------
Total Assets $ 12,734,271 $ 10,648,705
- - ---------------------------------------------------------------------------------------
Liabilities
Current
Accounts payable and accrued liabilities $ 40,349 $ 24,476
- - ---------------------------------------------------------------------------------------
Total Liabilities 40,349 24,476
- - ---------------------------------------------------------------------------------------
Shareholders' Equity
Share capital 18,178,652 15,603,775
Deficit (5,484,730) (4,979,546)
- - ---------------------------------------------------------------------------------------
Total Shareholders' Equity 12,693,922 10,624,229
- - ---------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $ 12,734,271 $ 10,648,705
- - ---------------------------------------------------------------------------------------
</TABLE>
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3
Indo-Pacific Energy Ltd.
Consolidated Statements of Loss and Deficit
For the Three Month Period Ended March 31, 1998
(Comparative figures are for the three month period ended March 31, 1997)
Unaudited, Prepared by Management
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
1998 1997
- - ------------------------------------------------------------------------------------
<S> <C> <C>
Revenues
Petroleum sales $ 68,499 $ 136,078
Interest 65,127 58,572
- - ------------------------------------------------------------------------------------
133,626 194,650
- - ------------------------------------------------------------------------------------
Cost of sales
Production costs 14,599 5,529
Depletion 18,202 85,743
- - ------------------------------------------------------------------------------------
32,801 91,272
- - ------------------------------------------------------------------------------------
100,825 103,378
- - ------------------------------------------------------------------------------------
Expenses
Accounting and audit 5,575 1,373
Amortization 13,086 3,977
Consulting 19,259 5,520
Corporate relations and development 3,929 11,678
Filing and transfer agent 2,165 2,262
Foreign exchange loss 22,988 59,972
Legal 28,676 6,652
Management fees -- --
Office and miscellaneous 13,373 14,270
Printing 10,681 --
Rent 17,299 4,502
Telephone 11,061 5,810
Travel 25,824 11,106
Wages and benefits 17,599 85,934
- - ------------------------------------------------------------------------------------
191,515 213,056
- - ------------------------------------------------------------------------------------
Net loss for the period (90,690) (109,678)
Deficit - Beginning of period (5,394,040) (4,869,868)
- - ------------------------------------------------------------------------------------
Deficit - End of period $ (5,484,730) $ (4,979,546)
- - ------------------------------------------------------------------------------------
Basic loss per share $ 0.00 $ 0.00
Diluted loss per share $ 0.00 $ 0.00
</TABLE>
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4
Indo-Pacific Energy Ltd.
Consolidated Statements of Cash Flows
For the Three Month Period Ended March 31, 1998
(Comparative figures are for the three month period ended March 31, 1997)
Unaudited, Prepared by Management
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
1998 1997
- - -------------------------------------------------------------------------------------------
<S> <C> <C>
Cash provided by (used in):
Operating activities
Net loss for the period $ (90,690) $ (109,678)
Adjustments to reconcile net loss to
cash applied to operating activities:
Amortization 13,086 3,977
Depletion 18,202 85,743
Changes in non-cash working capital:
Accounts receivable 60,260 39,623
Goods and services tax receivable (15,390) (28,919)
Prepaid expenses (9,963) 2,830
Marketable securities 4,605 --
Due to/from related parties (41,530) (13,711)
Accounts payable and accrued liabilities (5,355) (56,707)
- - -------------------------------------------------------------------------------------------
Cash used in operating activities (66,775) (76,842)
- - -------------------------------------------------------------------------------------------
Financing activities
Common shares issued for cash -- 74,816
- - -------------------------------------------------------------------------------------------
Cash provided by financing activities -- 74,816
- - -------------------------------------------------------------------------------------------
Investing activities
Petroleum and natural gas properties (245,020) (511,770)
Property and equipment (15,471) (35,041)
- - -------------------------------------------------------------------------------------------
Cash used in investing activities (260,491) (546,811)
- - -------------------------------------------------------------------------------------------
Net decrease in cash during the period (327,266) (548,837)
Cash position - Beginning of period 10,255,407 9,442,554
- - -------------------------------------------------------------------------------------------
Cash position - End of period $ 9,928,141 $ 8,893,717
</TABLE>
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5
Item 2 Management's Discussion and Analysis of Financial Condition and Results
of Operations
General
The business of the Registrant was organized in 1996. The Registrant is in the
exploration and evaluation stage on its oil and gas properties and hence has not
yet achieved profitability or break even cash flow. The Registrant has
experienced losses in each fiscal period reported on. Its main source of capital
currently is the issuance of equity securities, which has a dilutive effect on
the Registrant's shareholders. Total losses incurred from incorporation to
December 31, 1997 were $5,394,040. The loss for the quarter ending March 31,
1998 was $90,690. The level of future operations may be limited by the
availability of capital resources, the sources of which are not predictable. The
results of operations should be largely measured by the success of the extent
and quality of oil and gas discovered as a result of exploration programs. The
sales value of any oil and gas discovered by the Registrant will be largely
dependent on factors beyond the Registrant's control such as the market value of
the hydrocarbons produced.
Operating Revenue
Ngatoro Energy Limited, a subsidiary of the Registrant, owns a five per cent
participating interest and revenue interest in petroleum mining permit PMP
38148, Taranaki Basin, North Island, New Zealand, which has four producing oil
wells and two shut-in gas wells. In the year ended December 31, 1996 the
Registrant received $163,388 from hydrocarbon sales and in the year ended
December 31, 1997, $487,941. In the quarter ending March 31, 1998 the Registrant
received $68,499 from hydrocarbon sales. Production has remained relatively
constant.
Interest Income
Interest income for the year ended December 31, 1997 was $382,118 and for the
year ended December 31, 1996 was $263,044. The increase was due to the receipt
and deposit between January 1, 1996 and December 31, 1997 of $13,184,913 from
the issuance of common shares. Interest income for the quarter ended March 31,
1998 was $ 65,127.
Costs and Expenses
In the year ended December 31, 1997 the Registrant incurred expenses in the
acquisition, exploration and development of petroleum interests of $1,064,976
and in the year ended December 31, 1996, $1,182,655. In the quarter ending March
31, 1998 no new petroleum interests were acquired and the Registrant incurred
exploration and development expenses of $245,020.
Depletion and amortization expense in the year ended December 31, 1997 was
$97,827 and in the year ended December 31, 1996 was $98,252. Depletion and
amortization expense for the quarter ending March 31, 1998 was $31,288.
General and administrative expenses for the year ended December 31, 1997 were
$1,022,554 and for the year ended December 31, 1996 were $1,153,770. For the
quarter ended March 31, 1998 general and administrative expenses were $178,429.
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6
Interest Expense
The Registrant finances its business primarily from the issuance of common
shares and secondarily from the receipt of petroleum revenues from its interest
in the Ngatoro oil field, New Zealand. The Registrant has not effected any
borrowing and has consequently not incurred any interest expense.
Liquidity
The Registrant has maintained an appropriate liquidity level to fund its
expenditure programs in the past and has no reason to conclude that this will
not continue for fiscal 1998. The Registrant is satisfied with its ability to
access capital markets through private placements, public offerings, and
convertible securities in order to preserve liquidity levels. The Registrant
will utilize joint venture arrangements to reduce its exposure on exploration
and development programs.
As of December 31, 1997 the Registrant had $10,739,529 in working capital as
compared with $9,510,230 as of December 31, 1996. At March 31, 1998 working
capital was $10,419,636.
No securities were issued in the quarter ended March 31, 1998.
Capital Resources
Material capital commitments to December 31, 1998 are described in Item
1-Business-Plan of Operations of the Registrant's Form 10 as at December 31,
1997. These commitments total $4,125,500 which the Registrant has on deposit.
The Registrant has no other anticipated capital expenditures of a material
amount. However, the Registrant intends to acquire additional petroleum
interests which may give rise to further capital expenditures.
The Registrant has no agreements with management, investors, shareholders or
anyone else respecting additional financing at this time. Because of the nature
of the Registrant's business, there are no trends in the nature of its capital
resources which could be considered predictable. To date, the Registrant's
capital resources have consisted solely of the issuance of common shares
pursuant to either public distributions, private placements or the exercise of
convertible securities.
Results of Operations
The Registrant is an exploration company. The Registrant's primary focus is the
investigation and acquisition of oil and gas properties. The Registrant's policy
is to acquire interests and where possible, minimize its risk exposure by
farming out or joint venturing these interests to other industry participants.
Revenues for the quarter ended March 31, 1998 were $133,626 compared with
revenues for the quarter ended March 31, 1997 which were $194,650. The
difference is attributable to one of the Ngatoro oil wells being shut-in for a
workover.
Revenues for the year ended December 31, 1997 were $870,059 compared with
$426,432 for the year ended December 31, 1996. The Registrant's expenses for the
year ended December 31, 1997
<PAGE> 7
7
were $1,394,231 resulting in a per share book loss of $0.02 compared with
$1,328,086 resulting in a per share book loss of $0.01 for the period ended
December 31, 1996.
PART II OTHER INFORMATION
Item 1 Legal Proceedings
There are no material legal proceedings commenced or maintained by or against
the Registrant.
Item 2 Changes in Securities
There has been no change in the rights of the holders of any class of registered
securities and none of the rights evidenced by any class of registered
securities has been materially limited or qualified by the issuance or
modification of any other class of securities.
Item 3 Defaults Upon Senior Securities
The Registrants has no debt securities outstanding.
Item 4 Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of security holders in the quarter ended March
31, 1998.
Item 5 Other Information
The following quarterly report at March 31, 1998 was issued to shareholders in
accordance with applicable Canadian securities laws:
Foreword
Indo-Pacific Energy Ltd. (OTCBB symbol: INDX), one of the IREMCO group of
companies, is an independent oil and gas exploration and production company
focused exclusively in the Asia-Pacific region. The Company has varying
interests in 5,770,000 acres of exploration permits in New Zealand, making it
the largest holder of onshore exploration acreage in New Zealand. The Company
has a 50% interest in a 2,500,000 acre area in China, varying interests in
1,035,000 acres of offshore exploration permits in Australia and a 40% interest
in a 1,200,000 acre exploration permit in Papua New Guinea.
NORTH ISLAND, NEW ZEALAND, ONSHORE EAST COAST BASIN
The most encouraging news from the East Coast Basin is on permit 38329, which
lies between the Company's permits 38330 and 38328. Third parties who own the
permit have made a gas discovery in the Miocene Makaretu sandstones near the
4,000 foot depth. The Kahauroa-1 well flowed on test at a stabilised rate of
11.5 million cubic feet a day with a 2,100 psi flowing tubing pressure after 60
hours of testing. Calculated absolute open flow potential was in excess of 70
million cubic feet a day. To date, the Taranaki Basin on the west coast of the
North Island has been the only producing area in New Zealand. The East Coast
Basin is a lightly explored area that has seen little modern exploration. This
discovery opens up the possibility of a second producing basin on the North
Island and has confirmed the Company's exploration plan for its holdings in the
area.
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Petroleum Exploration Permit PEP 38330 (34%)
The 1997 seismic survey defined structures beneath the Pauariki and Matanui
surface anticlines. A 30 mile seismic survey is to be done in June, 1998 which
will detail several other structures, including the Arataha Dome, originally
mapped in the early part of the century by Mobil (then Vacuum Oil) and others.
Subject to interpretation of these new data, drilling is planned on this million
acre permit for late 1998.
Petroleum Prospecting Licence PPL 38312
The licence expired in November, 1997. Indo-Pacific and associated IREMCO
company, Trans-Orient Petroleum Ltd., have filed an application for a new permit
over the area. If the new permit is granted, a seismic program will be carried
out in June to locate a new drilling location, most probably on either the
Waitaria or Kaiponi structures.
Petroleum Exploration Permits PEP 38328 (40%) and PEP 38332 (42.5%)
After the drilling of the Kereru-l exploration well, a 120 mile seismic survey
was completed in 1997 which identified a number of new prospects and leads.
These include a large thrust fault anticline in the north of PEP 38328 (the
Petane Lead), spectacular anticlinal features in the coastal area south of
Napier (the Awanga and Haumoana Leads), and several features around the boundary
between the two permits (the Rosearl Leads). Indo-Pacific and the other
participants in PEP 38328 and PEP 38332 commenced an 100 mile seismic survey
over these and several other features in early May to identify targets for
drilling later in the year. Early results from this survey have identified
another interesting prospect.
NORTH ISLAND, NEW ZEALAND, ONSHORE TARANAKI BASIN
Petroleum Mining Permit PMP 38148 (5%)
Gross first quarter revenues from this permit were US$68,499 (Cdn$97,981). A gas
sales contract was signed in February, 1998 and sales are expected to begin in
June, 1998. A workover of the Ngatoro-2 oil producer was suspended in May, 1998,
and the well is being brought back into temporary production, with the intention
of carrying out a complete rehabilitation of the well after completion of the
Ngatoro-9 well. Ngatoro-9 is planned to be drilled in June, 1998 as a deviated
well from the Ngatoro-2 well site. If successful, it will be completed as a
producer in the Ngatoro-2 oil pool. In the event of good success in Ngatoro-9, a
further well into this pool is probable. In addition, an exploration well is
planned for later in the year on a separate prospect defined by 3D seismic
within the Ngatoro permit area PMP 38148.
Petroleum Prospecting Licence PPL 38706 (7.75%)
The Tariki-2C well, to which Indo-Pacific is making a fixed dollar contribution,
was spudded in March, 1998 and in May, 1998 reached its target depth along hole
of about 9,500 feet. Electric logging is being completed over about an 1,800
foot interval of horizontal hole drilled in the Tikorangi Formation limestones.
Significant mud losses and gas peaks within this interval indicate that there
may be producible, oil filled fractures within the Tikorangi limestones. Flow
testing of the interval is planned after completion of logging.
<PAGE> 9
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Tariki-2C is located within PML 38138, in which the Company does not hold an
interest, but tests a prospect which extends into the adjacent 40,000 acre PPL
38706. If Tariki-2C flows oil, the discovery area could extend a considerable
distance into PPL 38706, and Indo-Pacific would drill a well within PPL 38706
before November, 1998.
Petroleum Exploration Permit PEP 38716 (24.8%)
A drilling location on this 67,000 acre permit has been defined on the Crown
Prospect, and preparation for drilling the Huinga-1 well has commenced. Farmout
agreements are being finalized with Australia Worldwide Exploration N.L. and
Antrim Energy Ltd. of Calgary and have reduced Indo-Pacific's exposure to about
10% of well cost, while maintaining an equity of about 20%. The Huinga-1 well is
scheduled to be drilled in September, 1998 to test to 13,000 feet a thrust
structure similar to the adjacent Waihapa/Ngaere oil field, where individual
wells have flowed in excess of 10,000 barrels of oil per day from fractured
Tikorangi limestones. The Huinga-1 well will test Tikorangi Formation fractured
limestones, Tariki Formation sandstones and Kapuni Formation sandstones within
the Crown structure, as well as intersecting Mt. Messenger sandstones at
shallower depth.
Seismic has also detailed the shallower Oru Prospect to the south of the Crown
Prospect. On the adjacent property, the Waihapa-8 well touched the edge of the
Oru Prospect and flowed at 750 barrels of oil a day from Mt. Messenger
sandstones. The Oru Prospect has the potential to be a larger discovery than the
Ngatoro Field, and may be drilled in the near future.
Petroleum Exploration Permit PEP 38720 (50%)
Indo-Pacific has identified the Waitoriki Prospect in this 6,300 acre permit as
a sizable gas-condensate drilling target extending over an area of about 2,000
acres within the Kapuni Formation at a depth of about 13,000 feet. The prospect
is very similar to the adjacent Mangahewa structure, on which the Mangahewa-2
well was drilled last year as a gas-condensate discovery. Following fracturing
of the Kapuni Formation in that well, flow rates in excess of 17.5 million cubic
feet of gas per day have been sustained, with a reported gross gas column of
2,800 feet and a net 1,600 feet of gas bearing Kapuni sandstones. The Mangahewa
field may extend over an area of more than 15,000 acres, and potential reserves
estimates have been quoted in the order of two trillion cubic feet of gas. While
Indo-Pacific's Waitoriki Prospect is considerably smaller in area, it also has
the potential to be a large gas-condensate field, and is planned to be drilled
in late 1998 to early 1999. PEP 38720 also has good potential for Mt. Messenger
oil discoveries at depths of five to 6,000 feet, and a Mt. Messenger well may be
a drilling alternative if a deep drilling unit is not available to drill the
Waitoriki Prospect.
Petroleum Exploration Permit 38723 (40%)
Indo-Pacific is the operator of this 19,783 acre permit. The permit lies
immediately to the north of PEP 38716 and abuts four producing fields.
Indo-Pacific is reprocessing existing seismic data from the area. Further
seismic may be collected later in 1998 to aid in definition of new drilling
targets in the Mt. Messenger sandstones and the deeper Tikorangi limestones.
SOUTH ISLAND, NEW ZEALAND, CANTERBURY BASIN
Petroleum Exploration Permit PEP 38256 (50%)
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This 2,760,120 acre permit was granted in August, 1997, with the condition that
50% of the area must be relinquished at the end of the third year. Indo-Pacific
has computer scanned the 1960's vintage seismic acquired by the BP-Shell-Todd
consortium, and collected further gravity data crossing the prominent gravity
'lows' which probably indicate unidentified sedimentary basins beneath the
Canterbury Plains. Modelling of these gravity data confirms that there could be
sufficient rock thickness for oil and gas to be generated at depth beneath the
Plains. Indo-Pacific is planning a 120 mile seismic survey later in 1998. This
will define the sedimentary basins, and identify structural leads within, and
adjacent to, the basins, which could be targets for future drilling. The survey
will also link in two old wells. Some leads are already identified in the
Rangiora Basin. The low relief, open nature of the Plains, together with the
very extensive road network, makes exploration cheap and easy, and there is
potential to establish a new hydrocarbon province.
OFFSHORE AUSTRALIA
Timor Sea, Offshore Exploration Permit WA-199-P (5.0%)
The Kittiwake-1 well was spudded in March, 1998 and reached a depth of about
9,400 feet in May, 1998. The Plover Sands, which were the main target of the
well, were encountered at a depth near 8,800 feet, and were present down to the
9,400 foot level. Electric log evaluation showed there are no significant
hydrocarbons in the reservoir. Accordingly, the decision was taken to plug and
abandon the Kittiwake-1 well. The participants will meet in June, 1998 to
discuss further exploration plans in this large permit area, and will consider
the next prospect to be drilled later in 1998.
Timor Sea, Offshore Exploration Permit AC/P19 (65% to earn 61.75%)
Indo-Pacific operates this 364,500 acre permit which encompasses the southern
part of the Cartier Trough and parts of the Ashmore Platform to the west. The
existence in the area of fan sandstones, with the potential to be reservoirs,
has been demonstrated by the drilling last year by Cultus Petroleum of the 7,500
barrel a day Tenacious-1 discovery well immediately south of the permit. A large
3D seismic survey is in progress in the area and will be extended over much of
AC/P19 later in 1998.
Bass Strait, Offshore Exploration Permit VIC/P39 (33 1/3% to earn 31 2/3%)
Previous explorers of this area have had difficulty in defining structural traps
at the top of the Latrobe Formation, the oil producer in the Basin, due to the
distorting effect on seismic data of large buried channels and canyons in the
rock section between the sea floor and the Latrobe Formation. Indo-Pacific is
applying several new computer processing techniques to the existing data to
identify and map prospects. Subject to success of this work, farm-in
participants will be sought to fund an exploration well to be drilled in 1999.
PAPUA NEW GUINEA, Onshore Petroleum Prospecting Licence PPL 192 (40%)
As operator of this 1,200,000 acre licence, Indo-Pacific has designed a seismic
feasibility study which is to be implemented in late 1998 over the Mamboi and
Kamu prospects. Exploration drilling in adjacent offset acreage to the northwest
and the southeast during 1998 could substantially upgrade the value of PPL 192.
Several major oil discoveries have been made ion the highlands to the northeast,
including the Kutubu fields which, in a few years, have produced well
<PAGE> 11
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over 100 million barrels of oil, and the 1997 Moran oil discovery with well flow
rates up to 10,000 barrels a day and potential reserves of several hundred
million barrels.
Indo-Pacific is also the operator of a consortium which has applied for a large
acreage tract called PPL 195 in the highlands northeast of the Moran discovery.
If this permit is awarded, exploration will commence in 1998.
Technical Study Area, Nanling and Wuwei Basins, Anhui Province, China (50%)
In 1997, working under a Joint Technical Study Agreement with China National Oil
and Gas Exploration and Development Corporation, an initial technical review of
this 2,500,000 acre area was completed with the identification of the Hongzhuang
prospect in the Nanling basin, the Longtangwan prospect in the Wuwei basin and
several other prospects and leads of geological types similar to those which
have provided oil and gas discoveries elsewhere in China. Negotiations are
underway for a new contract over the basins. After execution of this contract,
further seismic surveys will be completed in 1998 in both basins to confirm
prospects for drilling in 1999.
Corporate and Financial
Indo-Pacific ended the first quarter with working capital of US$10.42 million
(Cdn$14.79 million). Share prices during the quarter weakened along with most of
the oil and gas sector, but liquidity has remained high. Indo-Pacific has
applied to become a registrant under the Securities & Exchange Act of 1934
(U.S.) and anticipates its registration statement to become effective June 7,
1998.
The annual general meeting of the Company is to be held on June 24, 1998 in
Vancouver, British Columbia.
Item 6 Exhibits and Reports on Form 8-K
(a) There are no exhibits filed with this Form 10-Q.
(b) The Registrant became a registrant under the Securities & Exchange Act of
1934 on June 7, 1998. There were no reports on Form 8-K filed in the quarter
ended March 31, 1998.
SIGNATURES
Pursuant to the requirements of the Securities & Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
INDO-PACIFIC ENERGY LTD.
By: /s/ Alex Guidi, Chairman June 17, 1998
By: /s/ Mark Katsumata, Secretary June 17, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 9,928,141
<SECURITIES> 228,905
<RECEIVABLES> 74,214
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 10,459,985
<PP&E> 2,502,623
<DEPRECIATION> (228,337)
<TOTAL-ASSETS> 12,734,271
<CURRENT-LIABILITIES> 40,349
<BONDS> 0
0
0
<COMMON> 18,178,652
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 12,734,271
<SALES> 68,499
<TOTAL-REVENUES> 133,626
<CGS> 32,801
<TOTAL-COSTS> 32,801
<OTHER-EXPENSES> 191,515
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (90,690)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (90,690)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
