SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB10-Q
QUARTERLY REPORT UNDER SECTION 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarter Ended December 31, 1996 Commission file number 0-9336
STANDARD ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Utah 87-0338149
(State or other jurisdiction of (I.R.S.Employer Identification No.)
incorporation or organization)
363 Bearcat Drive
Salt Lake City, Utah 84115
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (801) 364-9000
Not Applicable
Former name, former address and former
fiscal year, if changes since last report
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
1933, as amended (the "Act"), 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 registrant's
classes of common stock, as of the latest practicable date.The registrant has
two classes of stock authorized.They are the $0.01 per share par value common
stock and the $0.01 per share par value preferred stock.At February 10, 1997
there were 103,382,974 shares of the $0.01 per share par value common stock
outstanding.At February 10, 1997, there were no preferred shares issued.
STANDARD ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31 March 31
1996 1996
(Unaudited) (Audited)
ASSETS
CURRENT ASSETS
Cash $ 5,953 $ 9,104
Accounts receivable 3,406 3,692
Deposits 0 83,200
TOTAL CURRENT ASSETS 9,359 95,996
INVESTMENT IN OIL AND GAS PRODUCING
PROPERTIES, net of depletion of $92,970
PROPERTY AND EQUIPMENT, net 27,500 30,500
OIL AND GAS LEASEHOLD INTERESTS HELD
OTHER ASSETS
Oil and gas leases held for resale 95,464 95,464
Pledged drilling bonds 35,000 35,000
Cash value of life insurance 19,650 19,650
TOTAL OTHER ASSETS 150,114 150,114
TOTAL ASSETS $ 186,973 $ 276,610
See notes to consolidated financial statements
STANDARD ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31 March 31
1996 1996
(Unaudited) (Audited)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 7,690 $ 0
Notes payable to related parties 0 0
Accounts payable and accrued expenses 40,882 40,092
TOTAL CURRENT LIABILITIES 48,572 40,092
STOCKHOLDERS' EQUITY
Common Stock, par value $.01 per share:
Authorized 200,000,000 shares; issued
and outstanding 103,382,974 shares at
December 31, 1996 1,033,829 1,024,929
Preferred Stock, par value $.01 per share;
Authorized 10,000,000 shares 0 0
Additional paid-in capital 7,154,253 7,145,353
Retained earnings (deficit) (8,049,681) (7,933,764)
TOTAL STOCKHOLDERS EQUITY 138,401 236,518
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 186,973 $ 276,610
See notes to consolidated financial statements
STANDARD ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Nine Months Ended December 31
1996 1995
REVENUES
Oil and gas information services $ 10,051 $ 11,451
Sales of oil and gas leasehold interests 0 0
Oil production 15,926 14,165
Other income 980 4,107
26,957 29,723
COSTS AND EXPENSES
Oil and gas information services 8,520 12,495
Oil and gas leasehold interests 15,918 5,265
Oil production and exploration 0 0
Depreciation, depletion and amortization 3,000 3,000
Interest 1,222 448
General and administrative 114,214 113,926
TOTAL COSTS AND EXPENSES 142,874 135,134
NET INCOME (LOSS) $(115,917) $(105,411)
NET INCOME (LOSS) $ (.00) $ (.00)
See notes to consolidated financial statements
STANDARD ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended December 31
1996 1995
REVENUES
Oil and gas information services $ 3,591 $ 3,507
Sales of oil and gas leasehold interests 0 0
Oil production 5,394 4,358
Other income 318 512
9,303 8,377
COSTS AND EXPENSES
Oil and gas information services 2,170 6,254
Oil and gas leasehold interests 2,521 2,521
Oil production and exploration 0 0
Depreciation, depletion and amortization 1,000 1,000
Interest 433 0
General and administrative 44,457 37,699
TOTAL COSTS AND EXPENSES 50,581 47,474
NET INCOME (LOSS) $ (41,278) $(39,097)
NET INCOME (LOSS) $ (.00) $ (.00)
See notes to consolidated financial statements
STANDARD ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended December 31,
1996 1995
Cash Flows From Operating Activities
Net income (loss) $ (115,917) $ (105,411)
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and depletion 3,000 3,000
Changes in:
Accounts receivable 286 (237)
Accounts payable 790 2,086
Net cash provided by (used in)
operating activities (111,841) (100,562)
Cash Flow From Industry Activities
(Increase) Decrease to Long-term investments $ 83,200 $ (14,998)
(Increase) Decrease O&G leasehold interests 0 (45,540)
Net cash provided by (used in)
investing activities $ 83,200 $(60,538)
Cash Flows From Financing Activities
Increase (decrease) in notes payable $ 7,690 $ 13,000
Proceeds from sale of common stock 17,800 148,540
Net cash provided by (used in)
Financing activities $ 25,490 $ 161,540
Net Increase (Decrease) in Cash $ (3,151) $ 440
Cash at Beginning of Period 9,104 4,444
Cash at End of Period $ 5,953 $ 4,884
See notes to consolidated financial statements.
STANDARD ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996
(Unaudited)
NOTE A - Basis of Presentation
The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles
for complete financial statements.
In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the nine
month period ended December 31, 1996 are not necessarily
indicative of the results that may be expected for the entire
fiscal year ending March 31, 1997.For further information, refer
to the consolidated financial statements and footnotes thereto
included in the Company's Annual Report on Form 10-K for the year
ended March 31, 1996.
STANDARD ENERGY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of the First Nine-Months of Operations
Revenues
The Company realized revenues of approximately $27,000
during the first nine months of the 1997 fiscal period, ended
December 31, 1996, compared with approximately $30,000 for the
corresponding 1996 fiscal period and approximately $142,000 for
the 1995 fiscal period.Cash requirements during the fiscal 1997
period were obtained from a combination of internally generated
cash flow from operations, asset sales, and private sales of
Common Stock.
Revenue from the sale of oil and gas leasehold interests
during the first nine months of the 1997 fiscal period, ended
December 31, 1996, were zero, also compared to zero for the
comparative 1996 fiscal period, and zero for the entire 1995
fiscal period. Traditionally, the Company's largest revenue
source has been oil and gas leasehold sales, which have
positively affected the Company's operations for more than
ten years, excluding the past two fiscal years. This sign of a
downturn in the domestic oil and gas industry is apparent from
the zero leasehold sales during fiscal 1996 and 1995, and from
limited interest in future lease offerings, the result of which
could be another downturn in oil and gas exploration activities
in the U.S.This and prior reduced exploration activities has
caused the Company to write-off or write-down most of its prior
leaseholds held for resale.
The Company does not expect to realize significant cash
flows from the sale of leaseholds during fiscal 1997, as the
domestic oil industry continues to shrink from low worldwide
crude oil prices, and what appears to be a domestic oil industry
in full flight to foreign exploration caused by negative
U.S.Government environmental policies toward oil and gas
exploration and production in the U.S.
The Bureau of Land Management ("BLM") leasing program
requires advance deposits covering the first year rental for
leases applied for, but the Company and its affiliates have only
limited funds to participate in the BLM leasing program.In order
to participate, the Company has entered into agreements with
unrelated third-parties in which third-party entities provide
capital to jointly participate in the BLM leasing program, while
the Company provides the raw data and services to identify
potential leaseholds.
New leasehold acquisitions, together with existing
leaseholds, have caused the Company's leasehold inventory to be
reduced to approximately 50,000 net acres into fiscal 1997,
including third-party acquisitions. Frontier area exploration
continues to be the focus of the Company's leasing activities,
although leasehold sales have not yet materialized to justify
that effort. The Company's financial statements do not reflect
the acquisition of newly acquired leaseholds, because the Company
has no financial basis in such new leaseholds.As third-party
leasehold sales take place, revenue is recorded under line item
"sales of oil and gas leasehold interest".
Revenues from the sale of the Company's geologic information
services were approximately $10,000 for the first nine months of
the 1997 fiscal period, ended December 31, 1996, compared with
approximately $11,000 for the corresponding 1996 fiscal period
and approximately $10,000 for the 1995 fiscal period.Revenues
from the Company's geologic information services have declined
steadily from the 1986 collapse of world crude oil prices,
resulting in sever cash flow difficulties for the Company.
Revenues from oil exploration and production activities were
approximately $16,000 for the first nine months of the 1997
fiscal period, ended December 31, 1996, compared to approximately
$14,000 for the corresponding 1996 fiscal period and
approximately $18,000 for the 1995 fiscal period.Oil production
revenues reflect the acquisition of an oil and gas royalty
interest in fiscal 1992. This acquisition is expected to generate
average net income of approximately $2,000 per month over the
next several years, and has brought more certainty to production
from the Company's oil producing properties.
Expenses
Expenses related to the Company's oil and gas leasehold
sales were approximately $16,000 for the first nine months of the
1997 fiscal period, ended December 31, 1996, compared to
approximately $5,000 for the comparable fiscal 1996 period and
approximately ($3,000) for the 1995 fiscal period. Expenses
associated with the Company's geologic information services were
approximately $9,000 for the first nine months of the 1997 fiscal
period, ended December 31, 1996, compared to approximately
$12,000 for the comparable fiscal 1996 period and approximately
$12,000 for the 1995 fiscal period.There were no oil production
and exploration costs during the first nine months of the 1997,
nor for the comparable fiscal 1996 period, nor for the 1995
fiscal period, ended December 31, 1995.General and
administrative expenses for the first nine months of the 1997
fiscal period, ended December 31, 1996, were approximately
$114,000, compared to approximately $114,000 for the comparable
1996 fiscal period and approximately $202,000 for the 1995 fiscal
period ended December 31, 1995.
The crude oil price collapse in 1986, tax law changes
effective in 1987, and another crude oil price collapse in 1993,
have resulted in a sharp decline in domestic oil and gas
exploration activities.Although its leasing activities were
reduced substantially during the past 10-year period, due to a
sharp decline in domestic exploration activity, the Company
believes it can continue its present lines of business, including
the purchase and resale of oil and gas leaseholds.
Net Operating Loss for Federal Income Tax Purposes
The Company adopted Statement of Financial Accounting
Standards No. 109 "Accounting for Income Taxes" [FASB 109] during
the year ended December 31, 1994. FASB 109 requires the Company
to provided a net deferred tax asset or liability equal to the
expected future tax benefit or expense of temporary reporting
differences between book and tax accounting and any available
operating loss or tax credit carry forwards. At March 31, 1995
and 1994, the total of the deferred tax assets were $1,800,064
and 1,821,124 and the total of all deferred tax liabilities were
$0 and $1,789. The amount of and ultimate realization of the
benefits from the deferred tax assets for income tax purposes is
dependent, in part, upon the tax laws in effect, the Company's
future earnings, and other future events, the effects of which
cannot be determined. Because of the uncertainty surrounding the
realization of the deferred tax assets, the Company has
established a valuation allowance of $1,800,064 and $1,819,335 as
of March 31, 1995 and 1994, which has been offset against the
deferred tax assets. The net change in the valuation allowance
during the year ended December 31, 1994 was $(19,271). The
cumulative effect of the change in accounting for income taxes
for prior years was not material to the statement of income for
the year ended December 31, 1994. The financial statements for
prior years have not been restated.
The Company has available at March 31, 1996, unused tax
operating loss carry forwards of approximately $4,320,000, which
may be applied against future taxable income and expire in
various years beginning in 1997 through 2009. (See Consolidated
Financial Statements)
Liquidity and Capital Resources
The Company's primary oil and gas business, brokerage of
leasehold interests, has not increased during the first nine
months of the 1997 fiscal period, ended December 31, 1996, due to
decreased activity in the domestic oil and gas exploration
industry.
Revenue reduction in the Company's overall oil and gas
business is related to effects of the 1986 and 1993 worldwide
collapse of crude oil price and the corresponding reduced oil and
gas brokerage activity of the Company.Due to this reduced
activity in its oil and gas business, along with the Company's
investment in the Biomass Technology, without any intervening
revenues, have resulted in the Company incurring losses in its
Biomass investment aggregating approximately $4.1 million from
fiscal 1981 through March 31, 1995.Because of these
circumstances the Company is currently experiencing cash flow
difficulties.In order to continue in existence the Company is in
need of additional financing from outside sources or from
internal operations. (See Consolidated Financial Statement)
Management is seeking additional financing from equity or
debt financing(s), or from sales related to its oil and gas
business, or from the sale of its holdings in Biomass common
stock.However, management can give no assurances that it will be
successful in its endeavors to resolve its cash flow difficulties
or that it will be able to retain and ultimately recover its
costs in oil and gas leaseholds held for resale and from its
Biomass investment.The financial statements do not include any
adjustments relating to the amounts and classification of assets,
liabilities, income or expenses that might be necessary should
the Company be unable to successfully resolve these uncertainties
and continue in existence.
In the first nine months of the 1997 fiscal period, ended
December 31, 1996, the Company had no additional research and
development expense in Biomass and Biomass' technology for
converting cellulosic waste material into base sugars, and the
base sugars into ethanol fuel, and the Company expects to make no
further investments in Biomass in the foreseeable future.
The Company's most significant assets are (1) oil and gas
leaseholds held for resale, approximating 80,000 net acres at
March 31, 1996, including leaseholds acquired under its unrelated
third-party agreements, (2) 5,252,556 shares of Biomass common
stock (carried at zero value on the financial statements),
representing approximately 15% of Biomass common shares
outstand-ing at December 31, 1996, which shares were bid $0.02 and
asked
$0.05 as of November 12, 1996, and (3) exclusive license rights
to the Biomass Technology in the States of Louisiana, Ohio,
Pennsylvania and Indiana. Sales of its leasehold interests,
together with the private sale of a portion of the investment in
Biomass common stock, have been the Company's primary source of
cash flow over the past nine years. The Biomass shares are being
held for investment purposes but can, as of March 2, 1992, be
publicly sold and redistributed under Rule 144 of the Act. The
sale of a portion of its Biomass shares may be made periodically
by the Company to raise working capital.
On January 17, 1996, the Company submitted proxy material to
security holders of the Company through the solicitation of
proxies, resulting in a shareholders meeting held on February 5,
1996 at Little America Hotel in Salt Lake City, Utah. The former
board of directors, consisting of Dean W. Rowell, Pamela K.
Nelson and Michael M. Cannon, were re-elected for the 1996 fiscal
year. The audit firm of Peterson, Siler and Stevenson were also
confirmed as the Company's auditors for the same period, and an
increase in the capital stock of the Company was approved from
100,000,000 shares to 200,000,000 shares. All of the above items
were approved pursuant to proxy material mailed to shareholders
on January 17, 1996.
The Company is now authorized to issue two classes of stock
divided into 10,000,000 shares of $.01 par value preferred
shares, of which none are issued, and 200,000,000 shares of $.01
par value common shares of which 102,492,974 shares were issued
as of November 12, 1996.
On June 5, 1996, Peterson, Siler and Stevenson was
terminated as Company auditors. The termination was due to a
lower bid price for the Company's audit business for the annual
period ended March 31, 1996, and did not involve a dispute with
the Company over accounting policies or practices. Simultaneous
with the termination of Peterson, Siler and Stevenson, the
Company retained the audit services of Jones, Jensen & Company of
Salt Lake City, Utah whom have completed a certified audit of the
Company's books and records for fiscal period ended March 31,
1996.
On February 10, 1997, due to the Company's continued cash
flow difficulties, the Company issued 890,000 newly issued shares
of the Company's common stock investment shares at $0.02 per
share to Trachyte in exchange for $17,800 in debt settlement of
cash loaned to the Company through December 31, 1996.
Trachyte received the above investment shares at $0.02 per
share based upon a price per share that was established in
previous transactions between Trachyte and the Company in
exchange for debt settlement, and not based upon the traditional
50% discount from the closing market bid price per share on the
day of the transaction. On February 10, 1997 the Company's shares
were quoted on the OTC:BB at bid $0.15 and asked $0.18 per share,
a market value not consistent with previous market values in
transactions with Trachyte. Since Trachyte is the only source of
funds and other marketable assets the Company can rely on for
additional operating capital and asset trades, Company management
deemed it advisable to accept the offered common stock exchange
transactions with Trachyte. Another benefit the Company receives
from the Trachyte transactions is an exchange of debt for equity
swap, which swap dramatically improves the Company's financial
statements.
During the six year period since fiscal 1991, Trachyte has
helped financially support the Company largely due to
Mr. Rowell's efforts to secure loans from Trachyte for the
Company during periodic cash flow difficulties. Since the Company
has been unable to repay most of the loans from Trachyte during
the past two fiscal periods, Trachyte has exchanged the loans for
common stock investment shares in the Company without any
intervening cash compensation to Trachyte, including interest
payments on the amounts owed.
The Company foresees a need for additional equity financing
in order to continue in existence, and may, in the future, seek
to raise additional funds through bank and/or other loans, debt
or equity offerings.Any such equity offerings may either be
private or public and may result in substantial dilution to the
then existing shareholders of the Company.Because of
uncertainties existing in the domestic oil and gas industry, and
with Biomass, the Company is not in a position to forecast future
earnings or cash flow.The Company's future is very fluid and
largely dependent on factors outside its control.
General
As the worldwide price of oil is set by changing political
realities, so is the search for oil in the United States, now set
by the reality of political environmentalism. In 1992, in the
name of environmental protection, the best oil prospects to drill
in the U.S., mostly in the Rocky Mountain frontier areas, and
offshore waters of the U.S.,were declared off limits to the oil
industry by the U.S. Congress. This large area set-aside was
instituted despite the fact that by the year 2000 the U.S.may be
importing fully 75% of its crude oil requirements.
Management's Conflicts of Interest
Material conflicts of interest exist and will continue to
exist between the Company, Biomass and Trachyte Oil Company
("Trachyte").Dean W.Rowell, the President and Chief Executive
Officer and a director of the Company, is also the vice President
and the treasurer of Biomass, a publicly-held Utah corporation,
whose current major activities are to support the commercial
development of the Biomass Technology.The Company holds an
exclusive license from Biomass in the States of Louisiana, Ohio,
Pennsylvania and Indiana to build, use, sell, sublicense or
otherwise develop for its own advantage and gain the Biomass
Technology totally free (including royalty free) from
Biomass.Mr.Rowell is also the President of Trachyte, a
privately-held Utah corporation, whose current major activities
are the exploration and production of oil and gas resources.
The Company's policy is to offer any new oil and gas
property purchase first to the Company and then to Trachyte if
the Company is unable to accept the financial obligation of any
transaction. In addition, Mr.Rowell owns beneficially
approximately 51.6% of the common stock of the Company as of
November
12, 1996.
Mr.Rowell owes a duty of due care and fair dealing to all
three companies, and the resolution of duties and conflicts in
favor of one company over the other may impair his duties to each
company.It is likely that any conflict of interest between the
Company, Biomass and Trachyte requiring a determination may have
to be settled in favor of the Company to the detriment of both
Biomass and Trachyte, as well as to the detriment of the current
and future shareholders of Trachyte and Biomass.
Biomass - Liquidity and Capital Resources
Biomass, in which the Company has made a substantial
investment, had little working capital at fiscal year end.It has
expended all of the funds invested by the Company and others on
research and development relating to the Biomass Technology and
in general and administrative expenses.At March 31, 1996,
Biomass had approximately $2 million of liabilities and a
deficiency in assets of approximately $1.8 million.As of
February 10, 1997, Biomass had cash on hand of approximately
$500.
PART II
Item 1. Legal Proceedings.
There has been no significant changes in litigation
matters previously disclosed.
Item 2. Changes in Securities.
There has been no changes in the Company's securities.
Item 3. Defaults Upon Senior Securities.
The Company has not defaulted on any senior
indebtedness.
Item 4. Submission of Matters to a Vote of Security Holders.
As of February 10, 1997, there were no matters brought
before the shareholders since the last shareholders
meeting on February 5, 1996.
Item 5. Other Information.
Biomass - Information Update
In March 1990, construction on the Demo Module began at the
Weber County, Utah Landfill site in an existing County owned
building. On of June 24, 1992, the Demo Module was shut-down due
to lack of funds to operate it, and before Biomass received an
independent consulting engineer's report ("Engineer's Report")
from such plant asserting the commercial feasibility of the
Biomass Technology. Although Biomass anticipates receiving an
Engineer's Report, there can be no assurances that a favorable
report will be issued if and when the Demo Module is operated
again.
Design of the commercial Demo Module was the accumulation
of eight years of experience gained by Biomass scientists who
developed the Biomass Technology at its former Research Center
facility and at the Demo Module. The research Center was designed
to process approximately 50 tons of "as-received" municipal solid
waste ("MSW") during an eight hour period and operated
continuously at about that rate for approximately six months
prior to its closure on August 20, 1986. The Demo Module was
designed to process approximately 150 tons of as-received MSW
during a 48 hour period and operated continuously at that rate
for approximately three months prior to its closure on June 24,
1992.
Standard Energy's Exploitation of License
Instead of waiting for the Engineers Report from Biomass,
the Company believes that a viable business opportunity exists in
its licensed area of the States of Louisiana, Indiana, Ohio, and
Pennsylvania, where the Biomass Technology could be utilized in
conjunction with an existing shut-down MSW processing plant and
with an existing shut-down ethanol plant to process cellulosic
materials ("Celmat") into base sugars, mostly glucose, recovered
from MSW, then ferment the Celmat-glucose into fuel grade ethanol
upon restarting the existing ethanol plant.
The Company is currently pursuing a project loan (the
"Loan") with unrelated parties and a lender (the "Lender") to
raise up to $130,000,000 in an effort to commercialize the
Biomass Technology. This effort began when the Company learned
that at least five ethanol plant located in the Midwest U.S. had
shut-down, or were available on good terms, due to high grain
prices and low ethanol prices. The Company is presently in
contact with the plant owners to negotiate for a possible sale to
the Company for approximately $80,000,000 (the "Midwest Plant").
The Company has also located an MSW processing plant, located at
Philadelphia, Pennsylvania where the United States bankruptcy
court there is in possession of the shut-down Orfa MSW recycle
Plant ("Orfa"), also for sale for approximately $3,000,000. The
planned purchase of these two plants have created the Company's
"Midwest Project".
The $130,000,000 Loan, if obtained, would be used to finance
the purchase, refit, and initial operations of both the Midwest
and Orfa plants as a single economic unit in two locations. It is
the Company's belief that combined, and operated as one economic
unit, the two plants have better overall economic strengths than
each plant would have if operated as separate integrated Biomass
recycle/ethanol plants. The principal reason for such conclusion
is that no new building erection would be required at either
plant site.
The Company, providing it is successful in receiving the
$130,000,000 Loan, for which there is no assurance, anticipates
refitting the Orfa Plant to operate only as a MSW sorting plant
which could recycle approximately 2200 tons/day of MSW into,
principally, 900 tons/day of metals, glass and other inorganic
products, together with approximately 1300 tons/day of Celmat.
The inorganic's would be sold, or landfilled, in the
Philadelphia/New York area. The organic Celmat would be baled and
shipped to the Midwest ethanol plant for processing into
Celmat-glucose and other sugar products, while the glucose would
be fermented into ethanol fuel. The MSW would be supplied to the
Orfa plant by present haulers of MSW located in the northeast
U.S.
The Company, providing it is successful in receiving the
$130,000,000 Loan, would also refit the Midwest Plant to operate
only as a glucose and other sugar product extraction and ethanol
production plant, that would process the baled Celmat from the
Orfa plant through six Biomass Processing units to be installed
in an existing 40,000 square foot building located on the Midwest
Plant site. The glucose recovered from the Celmat would then be
used as normal glucose feedstock material for the existing
Midwest fuel-grade ethanol plant.
The Company is pursuing the $130,000,000 Loan and other
financing ideas through its wholly-owned subsidiary Standard
EnviroSystems, Inc., a Utah corporation. Final plans and final
financial arrangements with unrelated third-parties and the
Lender on the Midwest Project Loan had not been finalized or
completed as of February 10, 1997.
Item 6. Exhibits and Reports on Form 8-K, filed during the
quarter ended December 31, 1996.
The Company filed a Report on Form 8-K for an event
dated June 21, 1996, with regard to the appointment of Jones,
Jensen & Company of Salt Lake City, Utah as outside auditors for
the Company for the fiscal period ended March 31, 1996.
SIGNATURE
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.
STANDARD ENERGY CORPORATION
(Registrant)
By:
Dean W.Rowell, President and
Chief Financial Officer
Date:February 12, 1997.
