U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 0-29129
SOURCE ENERGY CORPORATION
(Exact name of small business issuer as specified in its charter)
Utah 87-0370820
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
7412 Rosalind Circle, Salt Lake City, Utah 84121
(Address of principal executive offices)
(801) 943-5490
(Issuer's telephone number)
Not Applicable
(Former name, address and fiscal year, if changed since last
report)
Check whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the issuer
was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ ] No
[ X ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Check whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13, or 15(d) of the
Exchange Act subsequent to the distribution of securities under
a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
329,451 shares of common stock.
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FORM 10-QSB
SOURCE ENERGY CORPORATION
PART I.
Financial Information
Item 1. Financial Statements
Incorporated herein by this reference are the following financial
statements filed under Item 7 of the current report on Form 8-K
of the registrant filed with the Securities and Exchange
Commission on April 17, 2000.
Unaudited Balance Sheet at March 31, 2000
Unaudited Statements of Operations for the Three Months Ended
March 31, 2000 and 1999
Unaudited Statements of Cash Flows for the Three Months Ended
March 31, 2000 and 1999
Item 2. Management's Discussion and Analysis of Financial
Condition or Plan of Operation
Incorporated herein by this reference is the discussion of the
registrant's business and plan of operation under Item 2 of the
current report on Form 8-K of the registrant filed with the
Securities and Exchange Commission on April 17, 2000.
PART II. OTHER INFORMATION
EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS: Attached as Exhibit No. 1 (SEC reference number 99) is
the material incorporated by reference in this report.
REPORTS ON FORM 8-K: None
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SOURCE ENERGY CORPORATION
Date: April 18, 2000 By: /s/ Craig Carpenter, President
2
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Exhibit No. 1
Form 10-QSB
Source Energy Corporation
SEC file No. 0-29129
Item 2. Acquisition or Disposition of Assets
Business
Existing operations and plan of operation
In 1981, Source purchased a working interest in, and became the
operator of, the property known as Bureau of Land Management Federal
Oil and Gas Lease No. U-14654 consisting of 480 acres. Located in
Grand County, Utah, this is Source's only oil and gas property. The
Company has one producing well on this lease. At the present time the
Company maintains a 68.78% working interest in the property.
Source has previously drilled two other dry holes on the lease.
We intend to evaluate the lease for new sites that show a reasonable
chance of success in drilling producing wells. We will also look for
opportunities to acquire additional oil and gas properties for
development in the states of Utah and Wyoming.
We sell all of our oil production to Giant Industries at spot
prices. The spot price on April 10, 2000 was $32 per barrel for the
oil from our well, which is Yellow Wax Crude. Emerging from a two-
year downturn, oil prices reached their highest level since the Gulf
War in 1999 and have continued to rise. The industry forecasts even
higher prices the next two years. Giant Industries will take all of
the oil that we can produce.
Prices for oil and gas are driven strictly by supply and demand.
We can sell our products to any one of five local distributors.
Prices among the five distributors are nearly equal. We decided to
sell to Giant Industries based on quality of service and proximity of
their delivery point to our lease. We do not use commodity futures
contracts or price swaps in marketing our crude oil.
Source has been unable pursue any meaningful business operations
during the past two years because of the litigation resulting form the
transaction with T.R. Kraft and Point. The litigation was resolved by
a judgement entered in March 2000, so Source believes it is now in a
position to pursue more active business operations.
As a result of these circumstances, operations were limited in
the past two years to maintaining production from our one producing
oil well in Grand County. Revenue from oil production in 1999 and
1998 was $26,043 and $20,143, respectively. Revenue for the first
three months of 2000 was $14,605, compared to $4,694 for the same
period in 1999. The increase in revenue from fiscal year 1998 to
fiscal year 1999 and from the first calendar quarter of 1999 to the
first quarter of 2000 is attributable primarily to rising oil prices.
Oil producing expense was $26,523 for the year ended December 31,
1998, as compared to $16,050 for the year ended December 31, 1999.
For the three months ended March 31, 2000, oil producing cost was
$7,155 as compared to $3,761 for the same period in 1999. Oil
producing expense as a percentage of revenue decreased substantially
in the year ended December 31, 1999 and the first calendar quarter of
2000 as a result of lower production costs attributable to the oil
produced and lower depletion cost.
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Source realized income from oil activities of $9,993 for the year
ended December 31, 1999, and a loss from oil activities of $6,375 for
the year ended December 31, 1998. Income from oil activities was
$7,430 for the three months ended March 31, 2000, as compared to $993
for the comparable period in 1999.
General and administrative expense was $5,125 for the year ended
December 31, 1999 and $10,881 for the year ended December 31, 1998.
Consequently, Source realized net income of $4,775 for 1999 as
compared to a net loss of $17,235 for 1998.
For the three months ended March 31, 2000, general and
administrative expense was $320, as compared to $2,573 for the same
period in 1999. However, Source realized and extraordinary judgement
expense of $90,039 in the shareholder derivative lawsuit brought
against T.R. Kraft, Point, and Source. As a result, Source had a net
loss of $82,902 for the first three months of 2000, and a net loss of
$1,638 for the first three months of 1999.
At March 31, 2000, total current assets were $26,852. Current
liabilities at March 31, 2000, were $90,139, which included a
judgement payable to Craig Carpenter, an officer and director, in the
amount of $90,039 resulting form the litigation with T.R. Kraft and
Point. A portion of the liability to Mr. Carpenter in the amount of
$15,039 was settled in April 2000 through the issuance of 200,000
shares of Source Common Stock. Therefore, Source has a working
capital deficit of $48,248. Craig Carpenter has advised the Board of
Directors that he does not intend to take any collection action
against Source on the $75,000 we currently owe to him, while Source
seeks ne capital to pursue expansion of its operations. So long as
Mr. Carpenter forbears, we believe we have sufficient cash resources
and income from oil activities to sustain our current operations over
the next 12 months.
However, these resources are not sufficient to embark on new drilling
activity on our existing lease or to acquire and develop any other oil
and gas properties. Consequently, we intend to seek additional debt
or equity financing over the next year to fund expansion of our
operations. However, there can be no assurance that additional
funding will be available or, if available, that it will be available
on acceptable terms or in required amounts. If we do find financing,
there is no assurance that we will succeed in expanding our operations
or remain profitable.
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Item 7. Financial Statements and Exhibits
SOURCE ENERGY CORPORATION
Formerly known as Parker Energy Technology, Inc.
Unaudited Financial Statements
March 31, 1999 and 1998
TABLE OF CONTENTS
Balance Sheet -- March 31, 2000
Statements of Operations for the Three
Months Ended March 31, 2000 and 1999.
Statements of Cash Flows for the Three
Months Ended March 31, 2000 and 1999.
Notes to Financial Statements
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SOURCE ENERGY CORPORATION
Formerly known as Parker Energy Technology, Inc.
Condensed Balance Sheet
March 31, 2000
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 12,247
Accounts receivable 14,605
Total Current Assets 26,852
Property and Equipment
Equipment 5,476
Proved oil and gas properties 597,353
Total Property and Equipment 602,829
Less: Accumulated Depreciation and Depletion (514,700)
Net Property and Equipment 88,129
Total Assets $ 114,981
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Current Liabilities
Judgement payable - related party $ 90,039
Taxes Payable 100
Total Current Liabilities 90,139
Total Liabilities 90,139
Stockholders' Equity
Capital Stock -- 200,000,000 shares
authorized having a
par value of $.00025 per share;
4,088,981 shares issued and outstanding 1,022
Additional Paid-in Capital 1,226,929
Accumulated Deficit (1,203,109)
Total Stockholders' Equity 24,842
Total Liabilities and Stockholders' Equity $ 114,981
See accompanying notes to financial statements.
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SOURCE ENERGY CORPORATION
Formerly known as Parker Energy Technology, Inc.
Condensed Statements of Operations
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
For Three For Three
Months Months
Ended Ended
March 31, March 31,
2000 1999
Revenues from Oil and Gas Activities $ 14,605 $ 4,694
Oil and Gas Producing Expense:
Production costs 3,237 2,193
Depletion (Note 2) 3,918 1,568
Total Oil and Gas Producing Expense 7,155 3,761
Income/(Loss) from Oil and Gas
Activities 7,450 933
Other Income/(Expense):
General and administrative expense (320) (2,573)
Judgement expense (90,039) --
Interest 7 2
Total Other Income/(Expense) (90,352) (1,638)
Net loss before income tax (89,902) (1,638)
Provision for income tax (Notes 1 & 4) -0- -0-
Net Loss $ (89,902) $ (1,638)
Profit/(Loss) per Share $ (.02) $ (.01)
Weighted Average Shares Outstanding 4,088,981 4,088,981
See accompanying notes to financial statements.
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SOURCE ENERGY CORPORATION
Formerly known as Parker Energy Technology, Inc.
Statements of Cash Flows
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
For Three For Three
Months Months
Ended Ended
March 31, March 31,
2000 1999
Cash Flows Provided by/(Used for)
Operating Activities
Net loss $ (82,902) $ (1,638)
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and depletion 3,918 1,568
(Increase)/decrease in accounts
receivable (9,521) -0-
Increase/(decrease) in current
liabilities 90,039 -0-
Net Cash Used for Operating Activities 1,534 (70)
Cash Flows Provided by/(Used for)
Financing Activities
Proceeds from issuance of shares -0- -0-
Net Cash Provided by Financing Activities -0- -0-
Net Increase/(Decrease) in Cash 1,534 (70)
Beginning Cash Balance 10,713 2,190
Ending Cash Balance $ 12,247 $ 2,120
Supplemental Disclosure of Cash
Flow Information:
Cash paid during the year for
income taxes $ -0- $ -0-
See accompanying notes to financial statements.
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SOURCE ENERGY CORPORATION
Formerly known as Parker Energy Technology, Inc.
Notes to Financial Statements
March 31, 2000
Note 1 PRELIMINARY NOTE
The accompanying condensed consolidated financial
statements have been prepared without audit, pursuant
to the rules and regulations of the Securities and
Exchange Commission. Certain information and
disclosures normally included in financial statements
prepared in accordance with generally accepted
accounting principles have been condensed or omitted.
It is suggested that these condensed financial
statements be read in conjunction with the financial
statements and notes thereto included in the Company's
Annual Audit for the year ended December 31, 1999.
Note 2 ORGANIZATION
The Company was originally incorporated under the name
Exit, Inc. in accordance with the laws of the State of
Utah on January 30, 1981. In April of 1984, the
Company changed its name to Parker Energy Technology,
Inc. From its inception until May 20, 1997, the
Company had been in the business of oil and gas
exploration and production activities. Currently, the
Company has one producing well, located in Grand
County, Utah. On May 20, 1997, the Company effected a
reverse split of its outstanding shares from 81,637,100
to 1,632,742. Simultaneous thereto, the Company
entered into an agreement with an individual to engage
in the business of distillate fuel systems process
plants and changed its name to Source Energy
Corporation. On March 10, 2000 a U.S. district court
judge rescinded the May 20, 1997 agreement and ordered
that the Company be returned, as nearly as possible, to
its status prior to consummation of said agreement.
This included cancelling 12,305,800 shares of common
stock issued in the transaction.
On April 10, 2000, the Company effected a 1 for 40
reverse split.
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