SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
DECEMBER 31, 1996 OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 OR THE TRANSITION PERIOD FROM
__________ TO __________
Commission file number 0-8874
Amber Resources Company
(Exact name of registrant as specified in its charter)
Delaware 84-0750506
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
555 17th Street, Suite 3310
Denver, Colorado 80202
(Address of principal (Zip Code)
executive offices)
(303) 293-9133
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes No X
4,666,185 shares of common stock $.0625 par value were
outstanding as of February 10, 1997.
Form 10-QSB
2nd Qtr.
FY 1997
INDEX
PART I FINANCIAL INFORMATION
PAGE NO.
ITEM 1 FINANCIAL STATEMENTS
Balance Sheets
December 31, 1996 and
June 30, 1996....................... 1
Statements of Operations and
Accumulated Deficit for the
Three and Six Months Ended
December 31, 1996 and 1995.......... 2
Statements of Cash Flows:
For the Six Months
Ended December 31, 1996 and 1995.... 4
Notes to Financial Statements............ 5
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATIONS....................... 6
PART II OTHER INFORMATION
Item 1. Legal Proceedings........................ 10
Item 2. Changes in Securities.................... 10
Item 3. Defaults upon Senior Securities.......... 10
Item 4. Submission of Matters to a Vote of
Security Holders......................... 10
Item 5. Other Information........................ 10
Item 6. Exhibits and Reports on Form 8-K......... 10
PART I - FINANCIAL INFORMATION
AMBER RESOURCES COMPANY
(A Subsidiary of Delta Petroleum Corporation)
BALANCE SHEETS (UNAUDITED)
ITEM 1. FINANCIAL STATEMENTS
December 31, June 30,
1996 1996
Assets
Current assets:
Cash $9,718 36,137
Accounts receiveable 168,207 114,560
Other current assets - 2,000
Total current assets 177,925 152,697
Oil and gas properties, successful efforts
method of accounting (Note 2):
Undeveloped offshore California properties 5,006,276 5,006,276
Developed onshore domestic properties 1,446,949 1,429,967
6,453,225 6,436,243
Accumulated depletion (809,676) (726,684)
Net oil and gas properties 5,643,549 5,709,559
5,821,474 5,862,256
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable:
Trade 15,010 8,225
Affiliate 782,841 710,229
Royalties payable 523,069 595,956
Total current liabilities 1,320,920 1,314,410
Stockholders' equity
Preferred stock, $1.00 par value;
authorized 5,000,000 shares of Class A
convertible preferred stock, none issued - -
Common stock, $.0625 par value;
authorized 25,000,000 shares, 4,666,185
shares issued and outstanding 291,637 291,637
Additional paid-in capital 5,755,232 5,755,232
Accumulated deficit (1,546,315) (1,499,023)
Total stockholders' equity 4,500,554 4,547,846
5,821,474 5,862,256
See accompanying notes to unaudited financial statements.
PART I - FINANCIAL INFORMATION
AMBER RESOURCES COMPANY
(A Subsidiary of Delta Petroleum Corporation)
Statements of Operations and Accumulated Deficit
(Unaudited)
Three Months Ended
December 31,
1996 1995
Revenue:
Oil and gas sales $229,328 131,757
Other income 36,466 47
Total revenue 265,794 131,804
Expenses:
Lease operating expenses 44,491 46,829
Depletion 41,196 23,867
Exploration expenses 1,078 4,880
General and administrative 111,073 289,222
Total expenses 197,838 364,798
Net income (loss), net of taxes 67,956 (232,994)
Accumulated deficit at beginning of period (1,614,271) (1,509,050)
Accumulated deficit at end of period ($1,546,315) (1,742,044)
Net income (loss) per common share $0.01 (0.05)
Weighted average number of common
shares outstanding 4,666,185 4,666,185
See accompanying notes to unaudited financial statements.
PART I - FINANCIAL INFORMATION
AMBER RESOURCES COMPANY
(A Subsidiary of Delta Petroleum Corporation)
Statements of Operations and Accumulated Deficit
(Unaudited)
Six Months Ended
December 31,
1996 1995
Revenue:
Oil and gas sales $403,753 229,562
Other income 72,978 102
Total revenue 476,731 229,664
Expenses:
Lease operating expenses 86,658 93,456
Depletion 82,992 55,766
Exploration expenses 4,302 4,880
General and administrative 350,071 468,121
Total expenses 524,023 622,223
Net loss (47,292) (392,559)
Accumulated deficit at beginning of period (1,499,023) (1,349,485)
Accumulated deficit at end of report ($1,546,315) (1,742,044)
Net loss per common share ($0.01) (0.08)
Weighted average number of common
shares outstanding 4,666,185 4,666,185
See accompanying notes to unaudited financial statements.
PART I - FINANCIAL INFORMATION
AMBER RESOURCES COMPANY
(A Subsidiary of Delta Petroleum Corporation)
Statements of Cashflows
(Unaudited)
Six Months Ended
December 31,
1995 1995
Net cash used in operating activities ($82,049) (359,831)
Cash flows from investing activities:
Additions to oil and gas properties (16,982) (44,910)
Net cash used in
investing activities (16,982) (44,910)
Cash flows from financing activities:
Increase in accounts payable -
affiliate 72,612 406,579
Net cash provided by financing
activities 72,612 406,579
Net increase in cash (26,419) 1,838
Cash at beginning of the period 36,137 3,751
Cash at end of the period $9,718 5,589
See accompanying notes to unaudited financial statements.
AMBER RESOURCES COMPANY
(A Subsidiary of Delta Petroleum Corporation)
Notes to Financial Statements
Six Months Ended December 31, 1996 and 1995
(Unaudited)
(1) Basis of Presentation
The accompanying unaudited financial statements have been
prepared in accordance with the instructions to Form 10-QSB and, in
accordance with those rules, do not include all the information and
notes required by generally accepted accounting principles for
complete financial statements. As a result, these unaudited
financial statements should be read in conjunction with Amber
Resources Company's (the Company) audited financial statements and
notes thereto filed with the Company's most recent annual report on
Form 10-KSB. In the opinion of management, all adjustments,
consisting only of normal recurring accruals, considered necessary
for a fair presentation of the financial position of the Company
and the results of its operations have been included. Operating
results for interim periods are not necessarily indicative of the
results that may be expected for the complete fiscal year.
(2) Contingencies
The Company has an investment in certain undeveloped offshore
California properties of $5,006,276 at December 31, 1996. The
Company's ability to ultimately develop the properties is subject
to a number of uncertainties, including the operator's ability to
obtain the necessary permits and authorizations relating to the
development activities. The Company's ability to realize its
investment in the offshore California properties is dependent on
its ability to develop the properties or to sell some or all of its
interests in the properties. Accordingly, the financial statements
do not include any adjustments that would result if the Company
could not realize its investment.
ITEM 2. MANAGEMENT'S ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Background
Amber Resources Company ("the Company") was incorporated
in January, 1978, and is principally engaged in acquiring,
exploring, developing, and producing oil and gas properties. The
Company owns interest in undeveloped oil and gas properties
offshore California, near Santa Barbara and developed oil and gas
properties in Western Oklahoma.
From August 20, 1991 through December 31, 1991,
Underwriters Financial Group, Inc. ("UFG") acquired 80.08% of the
outstanding common stock of the Company (3,736,775 shares). The
shares of the Company were acquired in exchange for shares of
common stock of UFG, shares of convertible preferred stock of UFG,
and a note payable secured by a portion of the shares acquired. On
April 30, 1992, UFG acquired an additional 373,885 shares of the
Company's common stock in exchange for shares of its common stock,
thereby increasing its ownership of the Company to 88.09%. In
October 1992, UFG concluded a series of agreements with Delta
Petroleum Corporation ("Delta"), then a subsidiary of UFG, to
participate in a plan to reorganize and recapitalize Delta (the
"Plan of Reorganization"). Under the terms of the Plan of
Reorganization, UFG transferred the 4,110,660 shares of the Company
it owned to Delta. Also in connection with the Plan of
Reorganization, Delta issued 1,030,000 shares of its common stock
to Messrs. Burdette A. Ogle and Ronald Heck (collectively "Ogle"),
shareholders of Delta, in exchange for their working interests in
two federal offshore California oil and gas units and 167,317
shares of common stock of the Company. As a result of these
transactions, at December 31, 1996, Delta owns 4,227,377 shares, or
91.68% of the outstanding common stock of the Company. As of that
date, 3,357,003 shares of common stock of the Company owned by
Delta are pledged to secure a note payable by UFG to Snyder Oil
Corporation in the original amount of $2,091,761 including accrued
interest. The note is currently in default.
The Company adjusted the basis of its assets and
liabilities in 1991 to reflect the new basis of accounting
resulting from the acquisition for more than 80% of its common
shares by UFG. The Company's net assets were adjusted to reflect
UFG's acquisition costs of the shares of $5,406,408. The minority
shareholders' interest in the Company was not reflected in this
adjustment as accumulated losses had exceeded their original
investment at that date. The subsequent acquisition of additional
shares of the Company by UFG in 1992 was accounted for as an
increase in oil and gas properties and an increase in additional
paid-in capital of $595,461, representing the estimated fair value
of the UFG shares issued in exchange for the additional shares.
The acquisition by Delta of additional shares from Ogle was also
accounted for in 1992 as an increase in oil and gas properties and
an increase in additional paid-in capital of $45,000, representing
Ogle's predecessor cost of the shares of the Company. The
additional shares acquired from Ogle by Delta were accounted for at
predecessor cost due to the related party nature of the
transaction.
Liquidity and Capital Resources.
At December 31, 1996, the Company had a working capital
deficit of $1,142,995 compared to a working capital deficit of
$1,161,713 at June 30, 1996. The Company's current liabilites
included royalties payable of $523,069 at December 31, 1996 which
represents the Company's estimate of royalties payable on
production attributable to its interest in certain wells in
Oklahoma. The Company is attempting to identify the royalty owners
and calculate the amounts owed to each owner, which it expects will
require some time. To date, no significant claims have been
asserted against the Company by royalty owners for amounts due for
prior production. The Company believes that the operators of the
affected wells have paid some of the royalties on behalf of the
Company and have withheld such amounts from revenues attributable
to the Company's interest in the wells. The Company has contacted
the operators of the wells in an attempt to determine what amounts
the operators have paid on behalf of the Company over the past five
years, which amounts would reduce the amounts owed by the Company.
To date the Company has not received information sufficient to
allow it to determine the amounts paid by the operators. The
Company has been informed by its legal counsel that the applicable
Statue of Limitations period for actions on written contracts
arising in the state of Oklahoma is five years. The Statue of
Limitations has expired for royalty owners to make a claim for a
portion of the estimated royalties that had previously been
accrued. Accordingly, these amounts have been written off and
recorded as other income.
The Company believes that it is unlikely that all claims
that might be made for payment of royalties payable. The Company
believes, although there can be no assurance, that it may
ultimately be able to settle with potential claimants for less than
the amounts recorded for royalties payable.
The Company does not currently have a credit facility
with any bank and it has not determined the amount, if any, that it
could borrow against its existing properties. The Company will
continue to explore additional sources of both short-term and long-
term liquidity to fund its working capital deficit and its capital
requirements for development of its properties including
establishing a credit facility, sale of equity or debt securities
and sale of non-strategic properties. Many of the factors which
may affect the Company's future operating performance and liquidity
are beyond the Company's control, including oil and natural gas
prices and the availability of financing.
Results of Operations
Net Earnings (Loss). The Company reported net income of
$67,956 and a net loss of $47,292 for the three and six months
ended December 31, 1996 compared to a net loss of $232,994 and
$392,559 for the same periods in 1995.
Revenue. Total revenues for the three and six months
ended December 31, 1996 were $265,794 and $476,731 compared to
$131,804 and $229,664 for the same periods in 1995. Oil and gas
sales for the three and six months ended December 31, 1996 were
$229,328 and $403,753 compared to $131,757 and $229,562 for the
same periods in 1995. The Company's oil and gas sales were
impacted by the increase in oil and gas prices.
Production volumes and average prices received for the
three and six months ended December 31, 1996 and 1995 are as
follows:
Three Months Ended Six Months Ended
December 31, December 31,
1996 1995 1996 1995
Production:
Oil (Bbls) 222 277 441 347
Gas (Mcfs) 89,970 72,403 173,702 141,829
Average Price:
Oil (per Bbls) $20.98 $16.95 $21.00 $16.65
Gas (per Mcf) $ 2.50 $1.75 $2.27 $1.58
Lease Operating Expenses. Lease operating expenses
were $44,491 and $86,658 for the three and six months ended
December 31, 1996 compared to $46,829 and $93,456 for the same
periods in 1995. On a MCF equivalent basis, lease operating
expenses were $.49 and $.49 respectively, per Mcf equivalent during
the three and six month periods ended December 31, 1996 compared to
$.63 and $.65, respectively, per Mcf equivalent for the same
periods in 1995.
Depreciation and Depletion Expense. Depletion
expense for the three and six months ended December 31, 1996 were
$41,196 and $82,992 compared to $23,867 and $55,766 for the same
periods in 1995. On a MCF equivalent basis, depletion expense were
$.49 and $.47, respectively, per Mcf equivalent during the three
and six month periods ended December 31, 1996 compared to $.32 and
$.39, respectively, per Mcf equivalent for the same periods in
1995.
General and Administrative Expenses. General and
administrative expenses for the three and six months ended December
31, 1996 were $111,073 and $350,071 compared to $289,222 and
$468,121 for the same periods as in 1995.
Future Operations
The Company's offshore California proved undeveloped
reserves are attributable to its interests in three federal units
located offshore California near Santa Barbara. While these
interests represent ownership of substantial oil and gas reserves
classified as proved undeveloped, the cost to develop the reserves
will be very substantial. The Company may be required to farm out
all or a portion of its interests in these properties if it cannot
fund its share of the development costs. There can be no assurance
that the Company can farm out its interests on acceptable terms.
If the Company were to farm out its interests in these properties,
its share of the proved reserves attributable to the properties
would be decreased substantially. The Company may also incur
substantial dilution of its interests in the properties if it
elects to use other methods of financing the development costs.
These units have been formally approved and are regulated
by the Minerals Management Service of the Federal Government.
However, due to a history of opposition to offshore drilling and
production in California by some individuals and groups, the
process of obtaining all of the necessary permits and
authorizations to develop the properties will be lengthy and even
after all required approvals are obtained, lawsuits may possibly be
filed to attempt to further delay the development of the
properties. While the Federal Government has recently attempted to
expedite this process, there can be no assurance that it will be
successful in doing so. The Company does not have a controlling
interest in and does not act as the operator of any of the offshore
California properties and consequently will not control the timing
of either the development of the properties or the expenditures for
development. Management and its independent engineering consultant
have considered the effect of these factors relating to timing of
the development of the reserves in the preparation of the reserve
information relating to these properties. As additional
information becomes available in the future, the Company's
estimates of the proved undeveloped reserves attributable to these
properties could change, and such changes could be substantial.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. None
Item 2. Changes in Securities. None.
Item 3. Defaults Upon Senior Securities. None.
Item 4. Submission of Matters to a Vote of Security Holders. None
Item 5. Other Information. None
Item 6. Exhibits and Reports on Form 8-K.
Form 8-K dated December 4, 1996; Item 5. Other Events
and Item 7. Financial Statements and Exhibits.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
AMBER RESOURCES COMPANY
(Registrant)
Date: February 11, 1997 /s/Aleron H. Larson, Jr.
Aleron H. Larson, Jr.
Chairman\CEO
/s/Kevin K. Nanke
Kevin K. Nanke, Controller and
Principal Accounting Officer
INDEX
(2) Plan of Acquisition, Reorganization, Arrangement,
Liquidation or Succession. Not applicable.
(4) Instruments Defining the Rights of Security Holders,
Including Indentures. Not applicable.
(9) Voting Trust Agreement. Not applicable.
(10) Material Contracts. Not applicable.
(11) Statement Regarding Computation of Per Share Earnings.
Not applicable.
(12) Statement regarding Computation of Ratios. Not applicable
(13) Annual Report to Security Holders, Form 10-Q or Quarterly
Report to Security Holders. Not applicable.
(15) Letter Regarding Unaudited Interim Information.
Not applicable.
(16) Letter re: Change in Certifying Accountants. Not
applicable.
(17) Letter re: Director Resignation. Not applicable.
(18) Letter Regarding Changes in Accounting Principals.
Not applicable.
(19) Previously Unfiled Documents.
Not applicable.
(20) Report Furnished to Security Holders.
Not applicable.
(22) Published Report Regarding Matters Submitted to Vote of
Security Holders. Not applicable.
(23) Consents of Experts and Counsel. Not applicable.
(24) Power of Attorney.
Not applicable.
(27) Financial Data Schedule.
(99) Additional Exhibits.
Not applicable.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 9,718
<SECURITIES> 0
<RECEIVABLES> 168,207
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 177,925
<PP&E> 6,453,225
<DEPRECIATION> 809,676
<TOTAL-ASSETS> 5,821,474
<CURRENT-LIABILITIES> 1,320,920
<BONDS> 0
0
0
<COMMON> 291,637
<OTHER-SE> 5,529,837
<TOTAL-LIABILITY-AND-EQUITY> 4,208,917
<SALES> 403,753
<TOTAL-REVENUES> 476,731
<CGS> 0
<TOTAL-COSTS> 524,023
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (47,292)
<INCOME-TAX> 0
<INCOME-CONTINUING> (47,272)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (47,272)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> 0
</TABLE>
