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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10QSB
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
COMMISSION FILE NUMBER 0-30847
OIL AND GAS SEEKERS, INC.
(Exact name of registrant as specified in its charter)
NEVADA 88-0420501
(State of other jurisdiction (IRS Employer Identification
of incorporation or organization) Number)
2810 South Madison
Spokane, Washington 99203-1361
(Address of principal executive offices)
(509) 455-5681
(Registrant's telephone number, including area code)
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 [ x ] No [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of September 30, 2000: 38,362,000
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Board of Directors
Oil and Gas Seekers, Inc.
Spokane, Washington
ACCOUNTANT'S REVIEW REPORT
We have reviewed the accompanying balance sheet of Oil and Gas
Seekers, Inc. (an exploration stage company) as of September 30, 2000
and the related statements of operations, stockholders' equity and
cash flows for the nine months ended September 30, 2000, from March
19, 1999 (inception) to September 30, 1999 and for the period from
March 19, 1999 (inception) to September 30, 2000. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review of
interim financial information consists principally of applying
analytical procedures to financial data and making inquiries of
persons responsible for financial and accounting matters. It is
substantially less in scope than an audit in accordance with
generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the accompanying financial statements in order
for them to be in conformity with generally accepted accounting
principles.
The financial statements for the period ended December 31, 1999 were
audited by us and we expressed an unqualified opinion on them in our
report dated March 30, 2000 (except for Note 2 as to which the date
is September 5, 2000), but we have not performed any auditing
procedures since that date.
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in
Note 2, the Company has been in the exploration stage since its
inception on March 19, 1999. Realization of a major portion of the
assets is dependent upon the company's ability to meet its future
financing requirements, and the success of future operations. These
factors raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans regarding those
matters also are described in Note 2. The financial statements do
not include any adjustments that might result from the outcome of
this uncertainty.
/s/ Williams & Webster, P.S.
Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
November 7, 2000
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OIL & GAS SEEKERS, INC.
(AN EXPLORATION STAGE ENTERPRISE)
BALANCE SHEETS
September 30, December 31,
2000 1999
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 66,019 $ 105,619
------------ ------------
Total Current Assets 66,019 105,619
------------ ------------
PROPERTY, PLANT AND EQUIPMENT
Oil and gas properties using successful
efforts accounting:
Unproved properties, oil and gas lease 15,000 -
------------ ------------
Total Property Plant and Equipment 15,000 -
------------ ------------
TOTAL ASSETS $ 81,019 $ 105,619
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 2,409 $ -
Rent payable to related party 500 1,000
------------ ------------
Total Current Liabilities 2,909 1,000
------------ ------------
COMMITMENTS AND CONTINGENCIES - -
------------ ------------
STOCKHOLDERS' EQUITY
Common stock, $0.00001 par value;
100,000,000 shares authorized,
38,362,000 shares issued and outstanding 384 384
Additional paid-in capital 108,016 108,016
Deficit accumulated during
exploration stage (30,290) (3,781)
------------ ------------
Total Stockholders' Equity 78,110 104,619
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 81,019 $ 105,619
============ ============
See accompanying notes and accountant's review report.
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OIL & GAS SEEKERS, INC.
(AN EXPLORATION STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
03/19/00 03/19/00
Nine Months (Inception) (Inception)
Quarter Ended September 30, Ended to to
2000 1999 09/30/00 09/30/99 09/30/00
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
REVENUES $ - $ - $ - $ - $ -
---------- ---------- ---------- ----------- -----------
GENERAL AND
ADMINISTRATIVE
EXPENSES
Rent 250 250 750 750 1,750
Taxes and licenses - - 200 85 285
Accounting expense 3,947 - 9,189 - 9,189
Legal fees - - 15,000 1,916 16,916
Transfer agent fees - - 285 - 1,030
Miscellaneous 1,015 - 1,085 17 1,120
---------- ---------- ---------- --------- ------------
Total Expenses 5,212 250 26,509 2,768 30,290
---------- ---------- ---------- --------- ------------
LOSS BEFORE
INCOME TAXES (5,212) (250) (26,509) (2,768) (30,290)
INCOME TAXES - - - - -
---------- ---------- ---------- --------- ------------
NET LOSS $ (5,212) $ (250) $ (26,509) $ (2,768) $ (30,290)
========== =========== ========== ========== ============
BASIC AND DILUTED
NET LOSS PER
COMMON SHARE $ nil $ nil $ nil $ nil $ nil
========== =========== ========== ========== ============
WEIGHTED AVERAGE
NUMBER OF BASIC AND
DILUTED COMMON SHARES
OUTSTANDING 38,362,000 38,362,000 38,362,000 38,289,114 38,337,528
========== =========== ========== ========== ==========
See accompanying notes and accountant's review report.
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OIL & GAS SEEKERS, INC.
(AN EXPLORATION STAGE ENTERPRISE)
STATEMENTS OF STOCKHOLDERS' EQUITY
Deficit
Accumulated
Common Stock Additional During
Number Paid-in Exploration
of Shares Amount Capital Stage Total
Stock issued in March 1999
for an average of $0.003 per
share 38,362,000 $ 384 $108,016 $ - $108,400
Net loss for the period
from inception to
December 31, 1999 - - - (3,781) (3,781)
---------- ----- -------- --------- --------
Balances at
December 31, 1999 38,362,000 384 108,016 (3,781) 104,619
Net loss for the nine
months ended
September 30, 2000 - - - (26,509) (26,509)
---------- ----- -------- --------- --------
Balances at
September 30, 2000
(Unaudited) 38,362,000 $ 384 $108,016 $ (30,290)$ 78,110
========== ===== ======== ========= ========
See accompanying notes and accountant's review report.
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OIL & GAS SEEKERS, INC.
(AN EXPLORATION STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
09/19/99 09/19/99
Nine Months (Inception) (Inception)
Ended to to
September 30 September 30 September 30
2000 1999 2000
(Unaudited) (Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (26,509) $ (2,768) $ (30,290)
Adjustments to reconcile
net loss to net cash used
by operating activities:
Increase in accounts payable 2,409 - 2,409
Increase (decrease) in related
parties payable (500) 750 500
------------ ------------ ------------
Net cash used by
operating activities (24,600) (2,018) (27,381)
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of oil and
gas lease (15,000) - (15,000)
------------ ------------ ------------
Net cash used by investing
activities (15,000) - (15,000)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sales of
common stock - 108,400 108,400
------------ ------------ ------------
Net cash provided by
financing activities - 108,400 108,400
------------ ------------ ------------
Net increase (decrease)
in cash (39,600) 106,382 66,019
Cash beginning of period 105,619 - -
------------ ------------ ------------
Cash at end of period $ 66,019 $ 106,382 $ 66,019
============ ============ ============
Supplemental cash flow disclosures:
Income taxes paid $ - $ - $ -
============ ============ ============
Interest paid $ - $ - $ -
============ ============ ============
See accompanying notes and accountant's review report.
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OIL AND GAS SEEKERS, INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2000
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Oil and Gas Seekers, Inc. (hereinafter "the Company") was
incorporated on March 19, 1999 under the laws of the State of Nevada
for the purpose of acquiring, exploring and developing natural
resource properties. The Company had no activity, other than common
stock sales, prior to April 1, 1999 (See Note 3). The Company
maintains an office in Spokane, Washington. The Company's fiscal
year-end is December 31.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies is presented to
assist in understanding the Company's financial statements. The
financial statements and notes are representations of the Company's
management which is responsible for their integrity and objectivity.
These accounting policies conform to generally accepted accounting
principles and have been consistently applied in the preparation of
the financial statements.
Interim Financial Statements
The interim financial statements as of September 30, 2000 and for the
nine months ended September 30, 2000, included herein, have been
prepared for the Company without audit. They reflect all
adjustments, which are, in the opinion of management, necessary to
present fairly the results of operations for these periods. All such
adjustments are normal recurring adjustments. The results of
operations for the periods presented are not necessarily indicative
of the results to be expected for the full fiscal year.
Use of Estimates
The process of preparing financial statements in conformity with
generally accepted accounting principles requires the use of
estimates and assumptions regarding certain types of assets,
liabilities, revenues, and expenses. Accordingly, upon settlement,
actual results may differ from estimated amounts.
Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting.
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OIL AND GAS SEEKERS, INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Exploration Stage Activities
The Company has been in the exploration stage since its formation in
March 1999 and has not yet realized any revenues from its planned
operations. It is primarily engaged in the acquisition, exploration
and development of natural resource properties. Upon location of a
commercial reserve, the Company expects to actively prepare the site
for extraction and enter a development stage.
Cash and Cash Equivalents
For purposes of its statement of cash flows, the Company considers
all short-term debt securities purchased with a maturity of three
months or less to be cash equivalents.
Fair Value of Financial Instruments
The carrying amounts for cash, accounts payable, and accrued
liabilities approximate their fair value.
Derivative Instruments
In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities." This
standard establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments
embedded in other contracts, and for hedging activities. It requires
that an entity recognize all derivatives as either assets or
liabilities in the balance sheets and measure those instruments at
fair value.
At September 30, 2000, the Company has not engaged in any transactions
that would be considered derivative instruments or hedging activities.
Inventories
At the point the Company obtains inventories, they will be valued at
the lower of cost or market. The cost of inventories of crude oil and
petroleum products will be determined on the last-in, first-out (LIFO)
method.
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OIL AND GAS SEEKERS, INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Oil and Gas Properties
The Company uses the successful efforts method of accounting for oil
and gas producing activities. Costs to acquire mineral interests in
oil and gas properties, to drill and equip exploratory wells that
find proved reserves, and to drill and equip development wells are
capitalized. Costs to drill exploratory wells that do not find
proved reserves, geological and geophysical costs, and costs of
carrying and retaining unproved properties are expensed.
Unproved oil and gas properties that are individually significant are
periodically assessed for impairment of value, and a loss is
recognized at the time of impairment by providing an impairment
allowance. Other unproved properties are amortized based on the
Company's experience of successful drilling and average holding
period. Capitalized costs of producing oil and gas properties, after
considering estimated dismantlement and abandonment costs and
estimated salvage values, are depreciated and depleted by the unit-
of-production method. Support equipment and other property and
equipment are depreciated over their estimated useful lives.
On the sale or retirement of a complete unit of a proved property,
the cost and related accumulated depreciation, depletion, and
amortization are eliminated from the property accounts, and the
resultant gain or loss is recognized. On the retirement or sale of a
partial unit of proved property, the cost is charged to accumulated
depreciation, depletion, and amortization with a resulting gain or
loss recognized in income.
On the sale of an entire interest in an unproved property for cash or
cash equivalent, gain or loss on the sale is recognized, taking into
consideration the amount of any recorded impairment if the property
had been assessed individually. If a partial interest in an unproved
property is sold, the amount received is treated as a reduction of
the cost of the interest retained.
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OIL AND GAS SEEKERS, INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Impaired Asset Policy
In March 1995, the Financial Accounting Standards Board issued a
statement titled "Accounting for Impairment of Long-lived Assets."
In complying with this standard, the Company will review its long-
lived assets quarterly to determine if any events or changes in
circumstances have transpired which indicate that the carrying value
of its assets may not be recoverable. The Company will determine
impairment by comparing the undiscounted future cash flows estimated
to be generated by its assets to their respective carrying amounts.
The Company does not believe any adjustments are needed to the
carrying value of its assets at September 30, 2000.
Revenues
As noted in its statement of operations, Oil and Gas Seekers, Inc.
has not produced any revenue in the period ended December 31, 1999 or
in the nine months ended September 30, 2000. When the Company does
produce revenue, sales will be recognized at the point of passage of
title specified in the contract.
Exploration Costs
In accordance with generally accepted accounting principles, the
Company will expense exploration costs as incurred.
Compensated Absences
Currently, the Company has no employees; therefore, no policy
regarding compensated absences has been established. The Company
will establish a policy to recognize the costs of compensated
absences at the point in time that it has employees.
Provision for Taxes
At September 30, 2000, the Company had accumulated net operating loss
of approximately $30,000, which may be applied to taxable income
through the year 2019. No provision for taxes or tax benefit has
been reported in the financial statements, as there is not a
measurable means of assessing future profits or losses.
Loss Per Share
Loss per share was computed by dividing the net loss by the weighted
average number of shares outstanding during the period. The weighted
average number of shares was calculated by taking the number of
shares outstanding and weighting them by the amount of time that they
were outstanding. Basic and diluted loss per share is the same, as
there were no common stock equivalents outstanding.
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OIL AND GAS SEEKERS, INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2000
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Environmental Expenditures
The Company will accrue for environmental remediation liabilities
when it is probable that such liability exists, based on past events
or known conditions, and the amount of such loss can be reasonably
estimated. If the Company can only estimate a range of probable
liabilities, the minimum, undiscounted expenditure necessary to
satisfy the Company's future obligation will be accrued. Due to the
fact that the Company has not started any production activities,
there are no known liabilities at September 30, 2000.
Going Concern
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern.
As shown in the accompanying financial statements, the Company has an
accumulated deficit of $30,290. The Company has been in exploration
stage since inception and has generated no revenues. The future of
the Company is dependent upon its ability to obtain financing and
sale of securities. The financial statements do not include any
adjustments relating to the recoverability and classification of
recorded assets, or the amounts and classification of liabilities
that might be necessary in the event the Company cannot continue in
existence.
NOTE 3 - COMMON STOCK
The Company has the authority to issue 100,000,000 shares of common
stock, having a par value of $0.0001 per share. In March 1999,
38,362,000 shares of common stock were issued for cash at an average
price of $0.003 per share.
NOTE 4 - RELATED PARTY TRANSACTIONS AND RENT EXPENSE
The Company occupies office space provided by Mr. Harold Kaufman Jr.,
the secretary of the Company, at a rate of $1,000 per year. For the
nine months ended September 30, 2000, rent expense was $750.
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OIL AND GAS SEEKERS, INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2000
NOTE 5 - YEAR 2000 ISSUES
Like other companies, Oil and Gas Seekers, Inc. could be adversely
affected if the computer systems the Company, its suppliers or
customers use do not properly process and calculate date-related
information and data from the period surrounding and including
January 1, 2000. This is commonly known as the "Year 2000" issue.
Additionally, this issue could impact non-computer systems and
devices such as production equipment and elevators, etc. Any costs
associated with Year 2000 compliance are expensed when incurred. At
this time, there have been no known adverse conditions caused by the
year 2000 issue.
NOTE 6 - OIL AND GAS LEASE
On March 31, 2000, the Company acquired for $15,000 a 100% leasehold
interest and a 78% net revenue interest in a lease containing oil and
gas rights in Stephens County, Texas. The lease is limited to two
years and can be extended under certain circumstances in the event of
actual drilling or production.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
The Company intends to spend its existing cash on drilling
operations on its existing oil and gas lease. The Company does not
intend to acquire any additional oil and gas leases until it completes
drilling operations on its existing lease. The Company intends to
initiate its drilling operations within the next twelve months and
believes that it will complete its drilling operations within the next
eighteen months. The Company does not believe it will need additional
capital to commence its drilling operations, but will need additional
capital to complete its well.
The Company's positive cash flow last year came solely from new
financings rather than income. The Company intends to reduce its
dependence on new financings by completing its initial drilling
operation. Income from the sale of oil or gas will then be applied to
the Company's plan to acquire additional leases. There is no
assurance, however, the Company's initial drilling operation will prove
successful. It does not prove successful, the Company will have to
rely upon future new finances in order to continue its operations.
The Company has inadequate cash to maintain operations during the
next twelve months. In order to meet its cash requirements the Company
will have to raise additional capital through the sale of securities or
loans. As of the date hereof, the Company has not made sales of
additional securities and there is no assurance that it will be able to
raise additional capital through the sale of securities in the future.
Further, the Company has not initiated any negotiations for loans to
the Company and there is no assurance that the Company will be able to
raise additional capital in the future through loans. In the event
that the Company is unable to raise additional capital, it may have to
suspend or cease operations.
The Company does not intend to conduct any research or development
during the next twelve months other than as described herein.
The Company does not intend to purchase a plant or significant
equipment. The Company will hire employees on an as needed basis,
however, the Company does not expect any significant changes in the
number of employees.
The Company does not expect to earn revenues until it begins
recovering oil and/or gas.
PART II.
ITEM 6. EXHIBITS
Exhibit No. Description
27 Financial Data Schedule
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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 thereunto duly authorized on this 15th day of
November, 2000
OIL AND GAS SEEKERS, INC.
(Registrant)
By: /s/ Harold Kaufman
Harold Kaufman, Secretary,
Treasurer, Chief Financial Officer
and a member of the Board of
Directors
