<PAGE>
Petroleum
& Resources
Corporation(R)
Annual Report
2000
investing in resources
for the future(R)
<PAGE>
2000 AT A GLANCE
--------------------------------------------------------------------------------
THE COMPANY
. a closed-end equity investment company
emphasizing natural resources stocks
. objectives: preservation of capital
reasonable income
opportunity for capital gain
. internally-managed
. low expense ratio
. low turnover
STOCK DATA
NYSE Symbol............................ PEO
Market Price as of 12/31/00............ $27.31
Discount............................... 16.5%
52-Week Range.......................... $29.50-$20.46*
Shares Outstanding..................... 21,053,644
SUMMARY FINANCIAL INFORMATION
Year Ended December 31
2000 1999
--------------------------------------------------------------------------------
Net asset value per share $ 32.69 $ 26.32*
Total net assets 688,172,867 565,075,001
Unrealized appreciation 365,144,132 230,465,953
Net investment income 7,671,089 9,806,876
Total realized gain 27,333,550 22,803,830
Total return (based on market value) 36.1% 13.3%
Total return (based on net asset value) 33.1% 23.8%
Expense ratio 0.59% 0.43%
--------------------------------------------------------------------------------
2000 DIVIDENDS AND DISTRIBUTIONS
Amount
Paid (per share)* Type
--------------------------------------------------------------------------------
March 1, 2000 $0.08 Long-term capital gain
March 1, 2000 0.05 Investment income
June 1, 2000 0.13 Investment income
September 1, 2000 0.13 Investment income
December 27, 2000 1.25 Long-term capital gain
December 27, 2000 0.02 Short-term capital gain
December 27, 2000 0.08 Investment income
--------------------------------------------------------------------------------
$1.74
================================================================================
* Adjusted to reflect the 3-for-2 stock split effected in October, 2000.
2001 ANNUAL MEETING OF STOCKHOLDERS
Location: The Radisson Hotel at Cross Keys, Baltimore, Maryland
Date: March 27, 2001
Time: 10:00 a.m.
Holders of Record: February 16, 2001
1
<PAGE>
PORTFOLIO REVIEW
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TEN LARGEST PORTFOLIO HOLDINGS (12/31/00)
Market Value % of Net Assets
------------ ---------------
Exxon Mobil Corp. $ 52,791,139 7.7
Enron Corp. $27.30 Conv. Pfd. Ser. J 52,194,188 7.6
Royal Dutch Petroleum Co. 51,478,125 7.5
General Electric Co. 27,324,375 4.0
BP Amoco plc ADR 23,075,750 3.3
Anadarko Petroleum Corp. 21,163,806 3.1
Calpine Corp. 18,385,938 2.7
Schlumberger Ltd. 18,337,663 2.6
Coastal Corp. 17,662,500 2.5
BJ Services Co. 13,775,000 2.0
------------ ----
Total $296,188,484 43.0%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECTOR WEIGHTINGS (12/31/00)
Internationals 29
Domestics 10.2
Producers 9
Distributors 20.3
Services 8.5
Electrical Power 4.2
Basic Materials & Other 6.7
Paper & Forest Products 6.7
Cash & Equivalent 5.6
--------------------------------------------------------------------------------
2
<PAGE>
LETTER TO STOCKHOLDERS
--------------------------------------------------------------------------------
Petroleum & Resources posted an excellent performance over the past year,
significantly exceeding the returns of our benchmark indices. We are pleased to
submit the financial statements for the year ended December 31, 2000. In
addition, there is a schedule of investments provided along with other financial
information and the report of independent accountants.
The Year In Review
The return on net assets, including income and capital gains distributions for
the calendar year was an outstanding 33.1%, exceeding the (9.0%) rate of return
for the Standard & Poor's 500 Stock Index and the 24.2% return of the Dow Jones
Energy Index. Total return based on market value was also excellent, advancing
36.1%.
For the full year, all energy sectors recorded attractive stock market gains in
contrast to the 9% decline of the S&P 500. Natural gas pipeline, mid-sized
exploration companies and oil drilling stocks were the big winners, with
advances exceeding 50%. Oil service and gas utilities followed with gains
approximating 40%. Major international oils were disappointing laggards with
only a 7% gain. A new sector, electrical power generators and energy
distributors, experienced excellent performance. Our diverse holdings in basic
industries recorded mixed results with paper and forest products stocks showing
significant declines while the basic materials sector collectively outperformed
the S&P 500. Cash and short term investments at year-end stood at 4.4% of net
assets compared to 2.1% the prior year.
Benefiting from surging prices for both crude oil and natural gas, the operating
environment for energy companies was positive throughout most of the year.
Energy equities experienced a roller coaster stock market ride, reflecting the
quickly changing investor perceptions of the direction of energy commodity
prices. After an initial two-month, 3% decline, energy stocks staged a dramatic
recovery through Memorial Day as the Dow Jones Energy Index advanced 21.7%. This
rally developed on the basis of increasing investor conviction that OPEC would
sustain its reduced oil production level and tighten the oil market. However,
with oil prices trading in a $29-$31 range during the early summer months,
investor concern switched to a possible slowing of domestic economic activity
and energy demand. As a result, energy stocks declined almost 8% by the end of
July. In the final five months of 2000, energy stocks again became attractive
performers, advancing over 14% versus the 8% decline for the S&P 500 Stock
Index.
Oil Industry
Beginning the year at what was considered a lofty $25 per barrel level, oil
prices moved steadily higher during the first quarter, exceeding $30 in March.
The combination of surprisingly solid OPEC compliance to its oil production
quotas, strong worldwide energy demand growth and the emergence of tight global
inventories pushed prices higher. Concerned about the impact of higher prices on
demand, OPEC in March reversed direction, raised its quota by 1.7 million
barrels per day and established a goal of maintaining prices between $22 and $28
per barrel. With demand continuing to surprise on the upside and the entire
energy delivery system stretched tight, per barrel oil prices stayed above $30
throughout the summer, forcing OPEC to again raise its production quotas in July
and October. Threats from Iraq to reduce its oil output and the early onset of
cold weather pushed prices to a 10-year high of $37 during late November. In
December, oil prices finally declined to end the year at $27 per barrel. The
added volumes from OPEC, the release of 30 million barrels of oil from the
Strategic Petroleum Reserve and a modest slowing of demand growth combined to
build inventories and mitigate consumer concern over shortages.
Natural Gas Industry
Domestic natural gas prices advanced over 15% during the first quarter despite
the warmest winter weather on record. Incremental consumption by gas-fired
electric generators offset the lack of heating demand. At the same time, gas
production continued to be restricted by the two-year fall off in drilling
activity. Over the summer, gas prices escalated another 50%, as supply was not
able to meet the continued growth in demand and the need to rebuild storage. The
late Fall onset of cold winter weather put significant upward pressure on gas
prices and heightened daily volatility. Natural gas prices soared to record
highs, more than doubling the level of a year ago.
Investment Results
Net assets of the Corporation on December 31, 2000 were $688,172,867 or $32.69
per share on 21,053,644 shares outstanding as compared with $565,075,001 or
$26.32 per share on 21,471,270 shares outstanding a year earlier.
Net investment income for 2000 was $7,671,089 compared to $9,806,876 for 1999.
These earnings are equivalent to $0.37 and $0.48 per common share, respectively,
on the average number of shares outstanding throughout each year. It has been
increasingly difficult to generate income in the portfolio as both the
percentage of stocks paying dividends and the percentage of dividend increases
have declined markedly in the past several years. Through the use of convertible
securities and other actions, we continue to seek ways to generate additional
income without impacting performance. In 2000, our 0.59% expense ratio (expenses
to net assets) was once again at a very low level compared to the industry.
Net realized gains amounted to $27,333,550 during the year, while the unrealized
appreciation on investments increased from $230,465,953 at December 31, 1999 to
$365,144,132 at year end.
Dividends And Distributions
Total dividends and distributions paid in 2000 were $1.74 per share compared to
$1.55 in 1999. As announced on November 9, 2000, a year-end distribution
consisting of investment income of $0.08 and capital gains of $1.27 was made on
December 27, 2000, both realized and taxable in 2000. On January 11, 2001, an
additional distribution of $0.13 per share was
3
<PAGE>
LETTER TO STOCKHOLDERS
--------------------------------------------------------------------------------
declared payable March 1, 2001, representing the balance of undistributed net
investment income and capital gains earned in 2000 and an initial distribution
from 2001 net investment income, all taxable to shareholders in 2001.
In September 2000, your Board of Directors declared a 3-for-2 stock split that
was paid on October 19, 2000. All per share amounts in this report have been
adjusted to reflect the stock split.
Outlook For 2001
Crude Oil
The prospects for energy equities will be significantly influenced by OPEC's
ability to remain united and engineer a soft landing of crude oil prices. With
inventories returning to a more balanced position and crude supplies now deemed
adequate, oil prices have declined approximately $8 per barrel over the past
month. This dramatic drop has already prompted several cartel members to
publicly state their intention to defend the $25 per barrel price goal. The
normal second quarter seasonal falloff in oil consumption requires that OPEC
reduce its production to control excess inventory building and to attain its
crude oil price target. Current supply/demand forecasts suggest that OPEC will
need to lower output by 1.5 million barrels per day during the first half of
this year. The cartel's unity will be tested in late January when it must
establish the new lower oil production levels.
Slowing economic activity and high energy prices are beginning to have an impact
on oil demand. However, the recent aggressive interest rate cut by the Federal
Reserve should stimulate moderate domestic economic growth and forestall a
worldwide recession. This action, coupled with reduced oil prices, will generate
oil consumption growth in excess of one million barrels per day and enable
demand to modestly outpace the additions to non-OPEC supply. In this balanced
oil market environment, our expectation is that OPEC will be able to maintain a
reasonable degree of unity, keep production discipline and stabilize crude oil
prices near $25 per barrel over the coming year.
Natural Gas
While declining from the unprecedented current levels, domestic natural gas
prices are forecast to average approximately 10% higher this year. Surging
demand and limited new supply will sustain a very tight market. Persistent cold
winter weather has already significantly depleted storage and the concern over
shortages will keep natural gas prices volatile over the near term. A
substantial amount of new gas-fired power generation capacity and the rebuilding
of storage will produce a favorable pricing environment over the latter half of
this year.
Electric Power
During the past year, we increased our participation in the rapidly growing
Independent Power Producer (IPP) sector. This newly formed industry developed in
response to the ongoing deregulation of electric utilities and to regional
shortages of power. Benefiting from several years of strong economic activity
and surging usage by computer and high technology users, power demand escalated
significantly, providing growth opportunities for IPP companies. Last year,
several traditional electric utilities monetized a portion of their power
generation assets by spinning out power companies. The independent power
industry will continue to evolve to meet the expected strong growth in megawatt
consumption and the shifting deregulation requirements. The need for reliable
electric power and high electricity prices are contributing to the aggressive
search for alternative energy sources. Onsite generation solutions such as micro
turbines and fuel cells may provide emerging investment opportunities.
Despite the strong market performance last year, valuations for energy stocks
remain attractive. Investors are concerned about a possible severe price
collapse for both crude oil and natural gas. Once the pricing environment
stabilizes near the levels we forecast, investor attention should refocus on the
favorable energy industry fundamentals.
Share Repurchase Program
On December 14, 2000, the Board of Directors authorized the repurchase by
management of an additional 5% of the outstanding shares of the Corporation over
the ensuing year. The repurchase program is subject to the same restriction as
in the past, namely that shares can only be repurchased as long as the discount
of the market price of the shares from the net asset value is greater than 8%.
The repurchase program initiated in 1999 appears to have served its intended
purpose by increasing liquidity and reducing dilution caused by the issuance of
shares in lieu of cash for the year-end capital gain distribution. Furthermore,
there was a narrowing of the discount during the year, which may indirectly be
attributed to the share repurchase program.
As of January 11, 2001 a total of 913,250 shares have been repurchased at a
total cost of $31,671,469 and a weighted average discount from net asset value
of 16.4%.
The proxy statement for the Annual Meeting of Stockholders to be held in
Baltimore, Maryland on March 27, 2001, will be mailed on or about February 19,
2001 to holders of record on February 16, 2001.
By order of the Board of Directors,
/s/ Douglas G. Ober,
Douglas G. Ober,
Chairman and Chief Executive Officer
/s/ Richard F. Koloski,
Richard F. Koloski,
President
January 19, 2001
4
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
--------------------------------------------------------------------------------
December 31, 2000
<TABLE>
<S> <C> <C>
Assets
Investments* at value:
Common stocks and convertible securities
(cost $293,400,720) $ 658,482,081
Short-term investments (cost $30,226,621) 30,226,621 $ 688,708,702
---------------------------------------------------------------------------------------------
Cash 45,008
Securities lending collateral 82,406,085
Dividends and interest receivable 580,377
Prepaid expenses and other assets 1,964,311
-----------------------------------------------------------------------------------------------------------------
Total Assets 773,704,483
-----------------------------------------------------------------------------------------------------------------
Liabilities
Open written option contracts at value (proceeds $127,146) 64,375
Obligations to return securities lending collateral 82,406,085
Accrued expenses and other liabilities 3,061,156
-----------------------------------------------------------------------------------------------------------------
Total Liabilities 85,531,616
-----------------------------------------------------------------------------------------------------------------
Net Assets $ 688,172,867
=================================================================================================================
Net Assets
Common Stock at par value $1.00 per share, authorized
50,000,000 shares; issued and outstanding 21,053,644 shares $ 21,053,644
Additional capital surplus 300,369,614
Undistributed net investment income 3,835
Undistributed net realized gain on investments 1,601,642
Unrealized appreciation on investments 365,144,132
-----------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Stock $ 688,172,867
=================================================================================================================
Net Asset Value Per Share of Common Stock $ 32.69
=================================================================================================================
</TABLE>
* See schedule of investments on pages 12 through 14.
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
Year Ended December 31, 2000
<TABLE>
<S> <C>
Investment Income
Income:
Dividends $ 9,917,664
Interest 1,375,681
-------------------------------------------------------------------------------------------------------------------
Total income 11,293,345
-------------------------------------------------------------------------------------------------------------------
Expenses:
Investment research 1,893,197
Administration and operations 752,822
Directors' fees 189,250
Reports and stockholder communications 232,476
Transfer agent, registrar and custodian expenses 215,275
Auditing and accounting services 68,354
Legal services 50,180
Occupancy and other office expenses 77,390
Travel, telephone and postage 59,153
Other 84,159
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Total expenses 3,622,256
-------------------------------------------------------------------------------------------------------------------
Net Investment Income 7,671,089
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Realized Gain and Change in Unrealized Appreciation on Investments
Net realized gain on security transactions 27,333,550
Change in unrealized appreciation on investments 134,678,179
-------------------------------------------------------------------------------------------------------------------
Net Gain on Investments 162,011,729
-------------------------------------------------------------------------------------------------------------------
Change in Net Assets Resulting from Operations $169,682,818
===================================================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended
------------------------------------
Dec. 31, 2000 Dec. 31, 1999
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
From Operations:
Net investment income $ 7,671,089 $ 9,806,876
Net realized gain on investments 27,333,550 22,803,830
Change in unrealized appreciation on investments 134,678,179 75,425,708
------------------------------------------------------------------------------------------------------------------
Increase in net assets resulting from operations 169,682,818 108,036,414
------------------------------------------------------------------------------------------------------------------
Distributions to Stockholders From:
Net investment income (8,104,080) (9,965,792)
Net realized gain from investment transactions (27,598,975) (22,284,614)
------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions (35,703,055) (32,250,406)
------------------------------------------------------------------------------------------------------------------
From Capital Share Transactions:
Value of shares issued in payment of distributions 18,901,062 15,851,054
Cash in lieu of fractional shares issued in payment of 3-for-2 stock split (68,568) --
Cost of shares purchased (note 4) (29,714,391) (1,383,179)
------------------------------------------------------------------------------------------------------------------
Change in net assets from capital share transactions (10,881,897) 14,467,875
------------------------------------------------------------------------------------------------------------------
Total Increase in Net Assets 123,097,866 90,253,883
Net Assets:
Beginning of year 565,075,001 474,821,118
------------------------------------------------------------------------------------------------------------------
End of year (including undistributed net investment
income of $3,835 and $460,925, respectively) $ 688,172,867 $565,075,001
==================================================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Petroleum & Resources Corporation (the Corporation) is registered under the
Investment Company Act of 1940 as a diversified investment company. The
Corporation's investment objectives as well as the nature and risk of its
investment transactions are set forth in the Corporation's registration
statement.
Security Valuation -- Investments in securities traded on national securities
exchanges are valued at the last reported sale price on the day of valuation.
Over-the-counter and listed securities for which a sale price is not available
are valued at the last quoted bid price. Short-term investments are valued at
amortized cost. Written options are valued at the last quoted asked price.
Security Transactions And Investment Income -- Investment transactions are
accounted for on the trade date. Gain or loss on sales of securities and options
is determined on the basis of identified cost. Dividend income and distributions
to shareholders are recognized on the ex-dividend date, and interest income is
recognized on the accrual basis.
2. FEDERAL INCOME TAXES
The Corporation's policy is to distribute all of its taxable income to its
shareholders in compliance with the requirements of the Internal Revenue Code
applicable to regulated investment companies. Therefore, no federal income tax
provision is required. For federal income tax purposes, the identified cost of
securities, including options, at December 31, 2000 was $323,661,891, and net
unrealized appreciation aggregated $365,173,957, of which the related gross
unrealized appreciation and depreciation were $371,520,835 and $6,346,878,
respectively.
Distributions are determined in accordance with income tax regulations which may
differ from generally accepted accounting principles. Accordingly, periodic
reclassifications are made within the Corporation's capital accounts to reflect
income and gains available for distribution under income tax regulations.
3. INVESTMENT TRANSACTIONS
Purchases and sales of portfolio securities, other than options and short-term
investments, during the year ended December 31, 2000 were $46,134,544 and
$102,125,738, respectively. The Corporation, as writer of an option, bears the
market risk of an unfavorable change in the price of the security underlying the
written option. Option transactions comprised an insignificant portion of
operations during the year ended December 31, 2000. All investment decisions are
made by a committee, and no one person is primarily responsible for making
recommendations to that committee.
4. CAPITAL STOCK
On March 28, 2000, stockholders approved an increase in the number of authorized
shares of Common Stock from 25,000,000 to 50,000,000. In addition, the
Corporation has 5,000,000 authorized and unissued preferred shares without par
value.
On October 19, 2000, the Corporation effected a 3-for-2 stock split. All
references to the number of outstanding shares and per share amounts have been
adjusted retroactively to reflect the stock split.
On December 27, 2000, the Corporation reissued 760,799 shares of its Common
Stock, that were previously repurchased by the Corporation, at a price of
$24.8437 per share (the market price on December 11, 2000), to stockholders of
record November 20, 2000 who elected to take stock in payment of the
distribution from 2000 capital gain and investment income.
The Corporation may purchase shares of its Common Stock from time to time at
such prices and amounts as the Board of Directors may deem advisable.
Transactions in Common Stock for 2000 and 1999 were as follows:
<TABLE>
<CAPTION>
Shares Amount
------------------------- --------------------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Shares issued in payment
of dividends 760,799 516,005 $ 18,901,062 $15,851,054
Shares issued for
3-for-2 stock split 6,827,415 --
Cash in lieu of fractional
shares issued in payment
of 3-for-2 stock split (68,568)
---------------------------------------------------------------------------------------------------------------
Total increase 7,588,214 516,005 18,832,494 15,851,054
---------------------------------------------------------------------------------------------------------------
Shares purchased
(at an average discount
from net asset value of
16.5% and 17.8%,
respectively) (848,750) (43,200) (29,714,391) (1,383,179)
---------------------------------------------------------------------------------------------------------------
Total decrease (848,750) (43,200) (29,714,391) (1,383,179)
---------------------------------------------------------------------------------------------------------------
Net change 6,739,464 472,805 $(10,881,897) $14,467,875
===============================================================================================================
</TABLE>
The cost of the 192,736 shares of Common Stock held by the Corporation at
December 31, 2000 amounted to $4,329,674.
The Corporation has an employee incentive stock option and stock appreciation
rights plan which provides for the issuance of options and stock appreciation
rights for the purchase of up to 895,522 shares of the Corporation's Common
Stock at 100% of the fair market value at date of grant. Options are exercisable
beginning not less than one year after the date of grant and extend and vest
over ten years from the date of grant. Stock appreciation rights are exercisable
beginning not less than two years after the date of grant and extend over the
period during which the option is exercisable. The stock appreciation rights
allow the holders to
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
surrender their rights to exercise their options and receive cash or shares in
an amount equal to the difference between the option price and the fair market
value of the common stock at the date of surrender.
Under the plan, the exercise price of the options and related stock appreciation
rights is reduced by the per share amount of capital gain paid by the
Corporation during subsequent years. At the beginning of 2000, there were
223,374 options outstanding at a weighted average exercise price of $14.9593 per
share. During 2000, the Corporation granted options, including stock
appreciation rights, for 22,832 shares of common stock with an exercise price of
$22.3333 per share. During the year stock appreciation rights relating to 33,512
stock option shares were exercised at a weighted average market price of
$26.7901 per share and the stock options relating to these rights which had a
weighted average exercise price of $12.7532 per share were cancelled. At
December 31, 2000, there were 76,256 outstanding exercisable options to purchase
common shares at $8.9267-$21.1467 per share (weighted average price of $11.6330)
and unexercisable options to purchase 136,438 common shares at $10.8717-$21.1467
per share (weighted average price of $16.4583). The weighted average remaining
contractual life of outstanding exercisable and unexercisable options was 3.9184
years and 6.5816 years, respectively. The total compensation expense recognized
in 2000 for the stock option and stock appreciation rights plan was $1,473,217.
At December 31, 2000, there were 319,362 shares available for future option
grants.
5. RETIREMENT PLANS
The Corporation provides retirement benefits for its employees under a
non-contributory qualified defined benefit pension plan. The benefits are based
on years of service and compensation during the last 36 months of employment.
The Corporation's current funding policy is to contribute annually to the plan
only those amounts that can be deducted for federal income tax purposes. The
plan assets consist primarily of investments in individual stocks, bonds and
mutual funds.
The actuarially computed net pension cost credit for the year ended December 31,
2000 was $148,824, and consisted of service cost of $87,032, interest cost of
$195,497, expected return on plan assets of $357,194, and net amortization
credit of $74,159.
In determining the actuarial present value of the projected benefit obligation,
the interest rate used for the weighted average discount rate was 8.0%, the
expected rate of annual salary increases was 7.0%, and the expected long-term
rate of return on plan assets was 8.0%.
On January 1, 2000, the projected benefit obligation for service rendered to
date was $2,480,710. During 2000, the projected benefit obligation increased due
to service cost and interest cost of $87,032 and $195,497, respectively, and
decreased due to benefits paid in the amount of $73,994. The projected benefit
obligation at December 31, 2000 was $2,689,245.
On January 1, 2000, the fair value of plan assets was $4,501,921. During 2000,
the fair value of plan assets increased due to the expected return on plan
assets of $357,194 and decreased due to benefits paid in the amount of $73,994.
At December 31, 2000, the fair value of plan assets amounted to $4,785,121,
which resulted in excess plan assets of $2,095,876. The remaining components of
prepaid pension cost at December 31, 2000 included $700,567 in unrecognized
gain, $286,577 in unrecognized prior service cost and $37,098 is the remaining
portion of the unrecognized net asset existing at January 1, 1987, which is
being amortized over 15 years. Prepaid pension cost included in other assets at
December 31, 2000 was $1,644,788.
In addition, the Corporation has a nonqualified benefit plan which provides
employees with defined retirement benefits to supplement the qualified plan. The
Corporation does not provide postretirement medical benefits.
6. EXPENSES
The cumulative amount of accrued expenses at December 31, 2000 for employees and
former employees of the Corporation was $2,921,406. Aggregate remuneration paid
or accrued during the year ended December 31, 2000 to officers and directors
amounted to $2,598,057.
Research, accounting and other office services provided by and reimbursed to The
Adams Express Company, an investment company which owned 9.1% of the
Corporation's common stock, amounted to $125,083 for the year ended December 31,
2000.
7. PORTFOLIO SECURITIES LOANED
The Corporation makes loans of securities to brokers, secured by cash deposits,
U.S. Government securities, or bank letters of credit. The Corporation accounts
for securities lending transactions as secured financing and receives
compensation in the form of fees or retains a portion of interest on the
investment of any cash received as collateral. The Corporation also continues to
receive interest or dividends on the securities loaned. The loans are secured by
collateral of at least 102%, at all times, of the fair value of the securities
loaned plus accrued interest. Gain or loss in the fair value of securities
loaned that may occur during the term of the loan will be for the account of the
Corporation. At December 31, 2000, the Corporation had securities on loan of
$76,671,728 and held cash collateral of $82,406,085.
9
<PAGE>
PETROLEUM & RESOURCES CORPORATION
--------------------------------------------------------------------------------
ILLUSTRATION OF AN ASSUMED
15 YEAR INVESTMENT OF $10,000
(unaudited)
Investment income dividends and capital gains distri-butions are taken in
additional shares. This chart covers the years 1986-2000. These results should
not be considered representative of the dividend income or capital gain or loss
which may be realized in the future. No adjustment has been made for any income
taxes payable by stockholders on income dividends or on capital gains
distributions.
------------------------------------------------------------------------
Calendar Market Cumulative Cumulative Total Total net
Years value market value market value market asset
of of capital of income value value
original gains dividends
shares distributions taken in
taken in shares
shares
------------------------------------------------------------------------
1986 $10,554 $ 1,245 $ 591 $12,390 $11,709
1987 7,551 1,781 971 10,303 12,064
1988 7,644 2,366 1,386 11,396 13,480
1989 9,828 3,787 2,477 16,092 18,530
1990 9,146 4,186 2,916 16,248 18,488
1991 9,462 5,154 3,580 18,196 19,649
1992 9,189 5,877 3,968 19,034 20,856
1993 10,008 7,373 4,890 22,271 24,008
1994 9,189 7,719 5,156 22,064 23,458
1995 10,281 9,733 6,517 26,531 29,599
1996 12,651 13,250 8,831 34,732 37,065
1997 13,284 15,438 10,012 38,734 44,003
1998 11,149 14,585 9,143 34,877 39,057
1999 11,739 17,306 10,408 39,453 48,297
2000 13,650 22,571 12,854 49,075 54,964
------------------------------------------------------------------------
B C D E
10,000 10,000 10,000 10,323
86 10,554 11,799 12,390 11,709
87 7,551 9,332 10,303 12,064
88 7,644 10,010 11,396 13,480
89 9,828 13,615 16,092 18,530
90 9,146 13,332 16,248 18,488
91 9,462 14,616 18,196 19,649
92 9,189 15,066 19,034 20,856
93 10,008 17,381 22,271 24,008
94 9,189 16,908 22,064 23,458
95 10,281 20,014 26,531 29,599
96 12,651 25,901 34,732 37,065
97 13,284 28,722 38,734 44,003
98 11,149 25,734 34,877 39,057
99 11,739 29,045 39,453 48,297
2000 13,650 36,221 49,075 54,964
10
<PAGE>
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31
----------------------------------------------------------
2000 1999 1998 1997 1996
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance*
-----------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year $ 26.32 $ 22.87 $ 27.64 $ 24.73 $ 21.01
-----------------------------------------------------------------------------------------------------------------------
Net investment income 0.37 0.48 0.55 0.51 0.53
Net realized gains and change in unrealized
appreciation and other changes 7.46 4.51 (3.79) 3.95 4.62
-----------------------------------------------------------------------------------------------------------------------
Total from investment operations 7.83 4.99 (3.24) 4.46 5.15
-----------------------------------------------------------------------------------------------------------------------
Capital share repurchases 0.28 0.01 -- -- --
-----------------------------------------------------------------------------------------------------------------------
Less distributions
Dividends from net investment income (0.39) (0.48) (0.52) (0.51) (0.55)
Distributions from net realized gains (1.35) (1.07) (1.01) (1.04) (0.88)
-----------------------------------------------------------------------------------------------------------------------
Total distributions (1.74) (1.55) (1.53) (1.55) (1.43)
-----------------------------------------------------------------------------------------------------------------------
Net asset value, end of year $ 32.69 $ 26.32 $ 22.87 $ 27.64 $ 24.73
=======================================================================================================================
Per share market price, end of year $ 27.31 $ 21.50 $ 20.42 $ 24.33 $ 23.17
-----------------------------------------------------------------------------------------------------------------------
Total Investment Return
Based on market price 36.1% 13.3% (10.0%) 11.7% 31.2%
Based on net asset value 33.1% 23.8% (11.1%) 18.9% 25.5%
Ratios/Supplemental Data
Net assets, end of year (in 000's) $688,173 $565,075 $474,821 $556,453 $484,589
Ratio of expenses to average net assets 0.59% 0.43% 0.31% 0.47% 0.63%
Ratio of net investment income to average net assets 1.24% 1.86% 2.13% 1.91% 2.31%
Portfolio turnover 7.68% 11.89% 12.70% 13.09% 15.50%
Number of shares outstanding at end of year
(in 000's)* 21,054 21,471 20,762 20,134 19,599
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
*Adjusted to reflect the 3-for-2 stock split effected in October, 2000.
11
<PAGE>
SCHEDULE OF INVESTMENTS
--------------------------------------------------------------------------------
December 31, 2000
Shares Value (A)
-------------------------------------------------------------------------------
Stocks and Convertible Securities -- 95.7%
Energy -- 86.6%
Internationals -- 24.9%
BPAmoco plc ADR.................................. 482,000 $ 23,075,750
Chevron Corp..................................... 150,000 12,665,625
Exxon Mobil Corp................................. 607,231 52,791,139
Petrobras ADS (B)................................ 120,000 3,030,000
Royal Dutch Petroleum Co......................... 850,000 51,478,125
"Shell" Transport and Trading Co., plc ADR....... 240,000 11,850,000
Texaco Inc....................................... 120,000 7,455,000
TotalFina Elf ADR................................ 125,000 9,085,938
------------
171,431,577
------------
Domestics -- 8.5%
Amerada Hess Corp................................ 100,000 7,306,250
Conoco Inc. Class B.............................. 300,000 8,681,250
Kerr McGee Corp.................................. 181,253 12,132,623
Murphy Oil Corp.................................. 110,000 6,648,125
Tesoro Petroleum Corp. (B)....................... 300,000 3,487,500
Tosco Corp....................................... 185,200 6,285,225
Unocal Capital Trust $3.125 Conv. Pfd............ 72,540 3,726,743
Unocal Corp...................................... 150,000 5,803,125
Valero Energy Corp............................... 125,000 4,648,438
------------
58,719,279
------------
Producers -- 11.1%
Anadarko Petroleum Corp.......................... 296,746 21,163,806
Apache Corp...................................... 130,000 9,108,125
Devon Energy Corp................................ 122,500 7,468,825
EOG Resources, Inc............................... 225,000 12,304,688
Noble Affiliates Inc............................. 125,000 5,750,000
Occidental Petroleum Corp........................ 175,000 4,243,750
Ocean Energy, Inc. (B)........................... 550,000 9,556,250
Stone Energy Corp. (B)........................... 104,300 6,732,565
------------
76,328,009
------------
Distributors --13.8%
Atmos Energy Corp................................ 225,000 5,484,375
Coastal Corp..................................... 200,000 17,662,500
El Paso Energy Corp.............................. 110,000 7,878,750
Energen Corp..................................... 250,000 8,046,875
Equitable Resources Inc.......................... 180,500 12,048,375
Kinder Morgan, Inc. 8.25% PEPS Units due 2001.... 130,000 8,710,000
National Fuel Gas Co............................. 100,000 6,293,750
New Jersey Resources, Inc........................ 185,000 8,001,250
Northwestern Corp................................ 200,000 4,625,000
Questar Corp..................................... 268,000 8,056,750
Williams Companies, Inc.......................... 200,000 7,987,500
------------
94,795,125
------------
12
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
December 31, 2000
Shares Value (A)
--------------------------------------------------------------------------------
Services -- 14.5%
BJ Services Co. (B)................................. 200,000 $ 13,775,000
Core Laboratories (B)............................... 209,400 5,719,238
Diamond Offshore Drilling, Inc...................... 96,800 3,872,000
ENSCOInternational, Inc............................. 120,000 4,087,500
Global Industries Ltd. (B).......................... 200,000 2,737,500
Grant Prideco Inc. (B).............................. 225,000 4,935,938
Halliburton Co...................................... 150,000 5,437,500
Nabors Industries, Inc. (B)......................... 200,000 11,830,000
Petroleum Geo-Services ASA ADR (B).................. 250,000 3,328,125
Santa Fe International Corp......................... 180,000 5,771,250
Schlumberger Ltd.................................... 229,400 18,337,663
Transocean Sedco Forex Inc.......................... 230,000 10,580,000
Weatherford International, Inc. (B)................. 190,000 8,977,500
------------
99,389,214
------------
Electrical Power -- 13.8%
Calpine Capital Trust 5.75% Conv. Pfd. High Tides... 87,500 13,879,688
Calpine Corp. (B)................................... 100,000 4,506,250
Duke Energy Corp.................................... 88,000 7,502,000
Dynegy, Inc. Class A................................ 165,000 9,250,313
Enron Corp. $27.30 Conv. Pfd. Ser. J................ 23,000 52,194,188
Orion Power Holdings, Inc........................... 130,000 3,201,250
SEI Trust 6.25% Conv. Pfd........................... 8,000 496,000
Southern Energy Co.................................. 149,000 4,218,563
------------
95,248,252
------------
Basic Industries -- 9.1%
Basic Materials & Other -- 6.2%
Dover Corp.......................................... 140,000 5,678,750
Engelhard Corp...................................... 300,000 6,112,500
General Electric Co................................. 570,000 27,324,375
Newpark Resources, Inc.............................. 370,000 3,538,125
------------
42,653,750
------------
Paper and Forest Products -- 2.9%
Boise Cascade Corp.................................. 205,000 6,893,125
Mead Corp........................................... 210,000 6,588,750
Temple-Inland, Inc.................................. 120,000 6,435,000
------------
19,916,875
------------
Total Stocks and Convertible Securities
(Cost $293,400,720) (C)................................. 658,482,081
------------
13
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
--------------------------------------------------------------------------------
December 31, 2000
<TABLE>
<CAPTION>
Prin. Amt. Value (A)
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Short-Term Investments -- 4.4%
U.S. Government Obligations -- 1.0%
U.S. Treasury Bills, 6.18%, due 2/22/01 ...................................... $7,000,000 $ 6,937,554
Certificates of Deposit -- 0.7% ------------
Old Kent Bank & Trust, 6.48%, due 1/25/01 ..................................... 5,000,000 5,000,000
Commercial Paper -- 2.7% ------------
Chevron USA, 6.47%, due 1/8/01 ............................................... 5,000,000 4,993,710
Ford Motor Credit Corp., 6.53-6.59%, due 1/2/01-1/4/01 ........................ 5,000,000 4,998,362
GE Capital Corp., 6.48%, due 1/11/01 .......................................... 4,775,000 4,766,405
Texaco Inc., 6.38%, due 1/16/01 ............................................... 3,540,000 3,530,590
------------
18,289,067
------------
Total Short-Term Investments
(Cost $30,226,621) ............................................................... 30,226,621
------------
Total Investments
(Cost $323,627,341) .............................................................. 688,708,702
Cash, receivables and other assets, less liabilities .......................... (535,835)
------------
Net Assets-- 100% ................................................................... $688,172,867
=======================================================================================================================
</TABLE>
Notes:
(A) See note 1 to financial statements. Securities are listed on the New York
Stock Exchange, the American Stock Exchange, or the NASDAQ.
(B) Presently non-dividend paying.
(C) The aggregate market value of stocks held in escrow at December 31, 2000
covering open call option contracts written was $2,345,000. In addition, the
required aggregate market value of securities segregated by the custodian to
collaterize open put option contracts written was $1,400,000.
14
<PAGE>
PRINCIPAL CHANGES IN PORTFOLIO SECURITIES
--------------------------------------------------------------------------------
During the Three Months Ended December 31, 2000
(unaudited)
<TABLE>
<CAPTION>
Shares
-------------------------------------------
Held
Additions Reductions Dec. 31, 2000
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Calpine Corp. .................................... 60,000/(1)/ 20,000 100,000
Grant Prideco Inc. ............................... 86,000 225,000
Orion Power Holdings, Inc. ....................... 130,000 130,000
Westport Resources Corp. ......................... 90,000 90,000 --
Coastal Corp. .................................... 20,000 200,000
Dynegy, Inc. Class A ............................. 35,000 165,000
EOG Resources Inc. ............................... 30,000 225,000
Energen Corp. .................................... 25,000 250,000
Fort James Corp. ................................. 205,600 --
Freeport McMoRan Copper & Gold Inc. Ser. A ....... 127,603 --
Nabors Industries, Inc. .......................... 25,000 200,000
Phillips Petroleum Co. ........................... 60,000 --
Southdown, Inc. .................................. 75,000 --
Texaco Inc. ...................................... 66,775 120,000
Transocean Sedco Forex Inc. ...................... 30,000 230,000
</TABLE>
---------
(1) By stock split.
___________________________
FORWARD-LOOKING STATEMENTS
This report contains "forward-looking statements" within the meaning of the
Securities Act of 1933 and the Securities and Exchange Act of 1934. By their
nature, all forward-looking statements involve risks and uncertainties, and
actual results could differ materially from those contemplated by the
forward-looking statements. Several factors that could materially affect the
Corporation's actual results are the performance of the portfolio of stocks held
by the Corporation, the conditions in the U.S. and international financial,
petroleum and other markets, the price at which shares of the Corporation will
trade in the public markets, and other factors discussed in the Corporation's
periodic filings with the Securities and Exchange Commission.
--------------------------------------------------------------------------------
This report, including the financial statements herein, is transmitted to
the stockholders of Petroleum & Resources Corporation for their
information. It is not a prospectus, circular or representation intended
for use in the purchase or sale of shares of the Corporation or of any
securities mentioned in the report. The rates of return will vary and the
principal value of an investment will fluctuate. Shares, if sold, may be
worth more or less than their original cost. Past performance is not
indicative of future investment results.
--------------------------------------------------------------------------------
15
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
--------------------------------------------------------------------------------
To the Board of Directors and Stockholders of Petroleum & Resources Corporation:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Petroleum & Resources Corporation
(hereafter referred to as the "Corporation") at December 31, 2000, and the
results of its operations, the changes in its net assets and the financial
highlights for each of the fiscal periods presented, in conformity with
accounting principles generally accepted in the United States of America. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Corporation's management;
our responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 2000 by
correspondence with the custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Baltimore, Maryland
January 9, 2001
____________________________
Common Stock
Listed on the New York Stock Exchange
and the Pacific Exchange
Petroleum & Resources Corporation
Seven St. Paul Street, Suite 1140, Baltimore, MD 21202
Website: www.peteres.com
E-mail: [email protected]
Telephone: (410)752-5900 or (800)638-2479
Counsel: Chadbourne & Parke L.L.P.
Independent Accountants: PricewaterhouseCoopers LLP
Transfer Agent, Registrar & Custodian of Securities
The Bank of New York
101 Barclay Street
New York, NY 10007
The Bank's Shareholder Relations Department: (800)432-8224
E-Mail: [email protected]
16
<PAGE>
SHAREHOLDER INFORMATION AND SERVICES
--------------------------------------------------------------------------------
WE ARE OFTEN ASKED --
How do I invest in Petroleum & Resources?
Petroleum & Resources Common Stock is listed on the New York Stock Exchange and
Pacific Exchange. The stock's ticker symbol is "PEO" and may be bought and sold
through registered investment security dealers. Your broker will be able to
assist you in this regard. In addition, stock may be purchased through the Bank
of New York's BuyDIRECT Purchase and Sale Plan (see page 18).
Where do I get information on the stock's price, trading and/or net asset value?
The daily net asset value (NAV) per share and closing market price may be
obtained from our website at www.peteres.com. The daily NAV is also available on
the NASDAQ Mutual Fund Quotation System under the symbol XPEOX. The week-ending
NAV is published on Saturdays in various newspapers and on Mondays in The Wall
Street Journal in a table titled "Closed-End Funds." The table compares the net
asset value at the close of the week's last business day to the market price of
the shares, and shows the amount of the discount or premium.
Petroleum's daily trading is shown in the stock tables of most daily newspapers,
usually with the abbreviated form "PetRs." Local newspapers determine, usually
by volume of traded shares, which securities to list. If your paper does not
carry our listing, please telephone the Corporation at (800)638-2479 or visit
our website.
How do I replace a lost certificate(s) or how do I correct a spelling error on
my certificate?
Your Petroleum stock certificates are valuable documents and should be kept in a
safe place. For tax purposes, keep a record of each certificate, including the
cost or market value of the shares it covers at the time acquired. If a
certificate is lost, destroyed or stolen, notify the Transfer Agent immediately
so a "stop transfer" order can be placed on the records to prevent an
unauthorized transfer of your certificate. The necessary forms and requirements
to permit the issuance of a replacement certificate will then be sent to you. A
certificate can be replaced only after the receipt of an affidavit regarding the
loss accompanied by an open penalty bond, for which a small premium is paid by
the stockholder.
In the event a certificate is issued with the holder's name incorrectly spelled,
a correction can only be made if the certificate is returned to the Transfer
Agent with instructions for correcting the error. Transferring shares to another
name also requires that the certificate be forwarded to the Transfer Agent with
the appropriate assignment forms completed and the signature of the registered
owner Medallion guaranteed by a bank or member firm of The New York Stock
Exchange, Inc.
Can you send my dividend checks directly to my bank?
Yes, provide the Transfer Agent with your bank's name, your branch's mailing
address and your account number at your bank. (Sorry, electronic transfer of
funds is not offered at this time.)
Who do I notify of a change of address?
The Transfer Agent.
We go to Florida (Arizona) every winter. How do we get our mail from Petroleum &
Resources?
The Transfer Agent can program a seasonal address into its system; simply send
the temporary address and the dates you plan to be there to The Bank of New
York.
I want to give shares to my children, grandchildren, etc. as a gift. How do I go
about it?
Giving shares of Petroleum is simple and is handled through our Transfer Agent.
The stock transfer rules, designed to protect you, the investor, are clear and
precise for most forms of transfer. They will vary slightly depending on each
transfer, so write to the Transfer Agent stating the exact intent of your gift
plans and the Agent will send you the instructions and forms necessary to effect
your transfer.
17
<PAGE>
SHAREHOLDER INFORMATION AND SERVICES (CONTINUED)
--------------------------------------------------------------------------------
DIVIDEND PAYMENT SCHEDULE
The Corporation presently pays dividends four times a year, as follows: (a)
three interim distributions on or about March 1, June 1, and September 1 and (b)
a "year-end" distribution, payable in late December, consisting of the estimated
balance of the net investment income for the year and the net realized capital
gain earned through October 31. Stockholders may elect to receive the year-end
distribution in stock or cash. In connection with this distribution, all
stockholders of record are sent a dividend announcement notice and an election
card in mid-November.
Stockholders holding shares in "street" or brokerage accounts may make their
elections by notifying their brokerage house representative.
BuyDIRECT(SM)*
BuyDIRECT is a direct purchase and sale plan, as well as a dividend reinvestment
plan, sponsored and administered by our transfer agent, The Bank of New York.
The plan provides registered stockholders and interested first time investors an
affordable alternative for buying, selling, and reinvesting in Petroleum &
Resources shares. Direct purchase plans are growing in popularity and Petroleum
& Resources is pleased to participate in such a plan.
The costs to participants in administrative service fees and brokerage
commissions for each type of transaction are listed below. Please note that the
fees for the reinvestment of dividends as well as the $0.05 per share commission
for each share purchased under the Plan have not increased since 1973.
Initial Enrollment $7.50
A one-time fee for new accounts who are not currently registered holders.
Optional Cash Investments
Service Fee $2.50 per investment
Brokerage Commission $0.05 per share
Reinvestment of Dividends**
Service Fee 10% of amount invested
(maximum of $2.50 per investment)
Brokerage Commission $0.05 per share
Sale of Shares
Service Fee $10.00
Brokerage Commission $0.05 per share
Deposit of Certificates for safekeeping Included
Book to Book Transfers Included
To transfer shares to another participant or to a new participant
Fees are subject to change at any time.
Minimum and Maximum Cash Investments
Initial minimum investment (non-holders) $500.00
Minimum optional investment (existing holders) $50.00
Electronic Funds Transfer (monthly minimum) $50.00
Maximum per transaction $25,000.00
Maximum per year NONE
A brochure which further details the benefits and features of BuyDirect as well
as an enrollment form may be obtained by contacting The Bank of New York.
For Non-Registered Shareholders
For shareholders whose stock is held by a broker in "street" name, The Bank of
New York's Automatic Dividend Reinvestment Plan remains available through many
registered investment security dealers. If your shares are currently held in a
"street" name or brokerage account, please contact your broker for details about
how you can participate in this Plan or contact The Bank of New York about the
BuyDirect Plan.
_______________
The Corporation The Transfer Agent
Petroleum & Resources Corporation The Bank of New York
Lawrence L. Hooper, Jr., Shareholder Relations Dept.-8W
Vice President, Secretary P.O. Box 11258
and General Counsel Church Street Station
Seven St. Paul Street, New York, NY 10286
Suite 1140 (800) 432-8224
Baltimore, MD 21202 Website: http://stock.bankofny.com
(800) 638-2479 Email:[email protected]
Website:www.peteres.com
E-mail:[email protected]
*BuyDirect is a service mark of The Bank of New York.
**The year-end dividend and capital gain distribution may be made in newly
issued shares of common stock in which event there would be no fees or
commissions in connection with this dividend and capital gain distribution.
18
<PAGE>
HISTORICAL FINANCIAL STATISTICS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Dividends Distributions
From Net From Net
Net Asset Investment Realized
Value of Shares Value Income Gains
Dec. 31 Net Assets Outstanding* Per Share* Per Share* Per Share*
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1986 $246,071,990 13,469,967 $18.91 $ .92 $1.56
1987 234,062,235 14,454,459 18.27 .97 1.93
1988 248,370,688 14,996,376 16.19 1.11 1.54
1989 322,866,019 15,576,900 16.56 .61 .80
1990 308,599,851 16,189,934 19.06 .73 .83
1991 314,024,187 16,778,358 18.71 .61 .82
1992 320,241,282 17,369,255 18.44 .51 .82
1993 355,836,592 18,010,007 19.76 .55 .87
1994 332,279,398 18,570,450 17.89 .61 .79
1995 401,404,971 19,109,075 21.01 .58 .81
1996 484,588,990 19,598,729 24.73 .55 .88
1997 556,452,549 20,134,181 27.64 .51 1.04
1998 474,821,118 20,762,063 22.87 .52 1.01
1999 565,075,001 21,471,270 26.32 .48 1.07
2000 688,172,867 21,053,644 32.69 .39 1.35
</TABLE>
------------
*Adjusted for 3-for-2 stock split effected in October, 2000.
-----------------
Stock Data
-----------------
Price (12/31/00) $27.31
Net Asset Value (12/31/00) $32.69
Discount: 16.5%
New York Stock Exchange and Pacific Exchange ticker symbol:PEO
NASDAQ Mutual Fund Quotation Symbol: XPEOX
Newspaper stock listings are generally under the abbreviation:PetRs
19
<PAGE>
PETROLEUM & RESOURCES CORPORATION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Board Of Directors (with their principal affiliations) Officers
<S> <C> <C>
Enrique R. Arzac/1,4/ Douglas G. Ober/1/ Douglas G. Ober
Professor of Finance Chairman of the Corporation Chairman and
and Economics Chief Executive Officer
Columbia University Landon Peters/2,4/
Private Investor Richard F. Koloski
Daniel E. Emerson/2,4/ President
Retired Executive Vice President John J. Roberts/1,4/
NYNEX Corporation Senior Advisor, American Joseph M. Truta
International Group, Inc. Executive Vice President
Thomas H. Lenagh/2,3/
Financial Advisor Susan C. Schwab/1,3/ Nancy J.F. Prue
Dean of the School of Vice President -- Research
W.D. MacCallan/1,3/ Public Affairs
Retired Chairman of the University of Maryland Lawrence L. Hooper, Jr.
Corporation and The Adams Vice President, Secretary and General Counsel
Express Company Robert J.M. Wilson/3,4/
Retired President of the Maureen A. Jones
W. Perry Neff/1,2/ Corporation and The Adams Vice President and Treasurer
Retired Executive Vice President Express Company
Chase Bank Christine M. Sloan
Assistant Treasurer
Geraldine H. Stegner
Assistant Secretary
</TABLE>
1.Member of Executive Committee
2.Member of Audit Committee
3.Member of Compensation Committee
4.Member of Retirement Benefits Committee
20
<PAGE>
Petroleum & Resources Corporation
Seven St. Paul Street, Suite 1140
Baltimore, MD 21202
(410) 752-5900 or (800) 638-2479
Contact us on the Web at:
www.peteres.com
[LOGO OF PEO Listed NYSE]
