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
SEPTEMBER 30, 1997 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 X No
4,666,185 shares of common stock $.0625 par value were
outstanding as of November 12, 1997.
Form 10-QSB
1st Qt.
FY 1998
INDEX
PART I FINANCIAL INFORMATION
PAGE NO.
ITEM 1 FINANCIAL STATEMENTS
Balance Sheets
September 30, 1997 and
June 30, 1997 (unaudited)........... 1
Statements of Operations and
Accumulated Deficit for
the Three Months Ended
September 30, 1997 and
1996 (unaudited)..................... 2
Statements of Cash Flows:
For the Three Months Ended
September 30, 1997 and 1996
(unaudited)......................... 3
Notes to Financial Statements (unaudited). 4
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATIONS........................ 5
PART II OTHER INFORMATION
Item 1. Legal Proceedings......................... 8
Item 2. Changes in Securities..................... 8
Item 3. Defaults upon Senior Securities........... 8
Item 4. Submission of Matters to a Vote of
Security Holders.......................... 8
Item 5. Other Information......................... 8
Item 6. Exhibits and Reports on Form 8-K.......... 8
PART I - FINANCIAL INFORMATION
AMBER RESOURCES COMPANY
(A Subsidiary of Delta Petroleum Corporation)
Balance Sheets
(Unaudited)
ITEM 1. FINANCIAL STATEMENTS
September 30, June 30,
1997 1997
Assets
Current assets:
Cash $8,219 6,440
Accounts receiveable 225,066 111,728
Total current assets 233,285 118,168
Oil and gas properties, successful efforts
method of accounting):
Undeveloped offshore California properties 5,006,276 5,006,276
Developed onshore domestic properties 1,352,273 1,405,645
6,358,549 6,411,921
Accumulated depletion (853,090) (846,755)
Net oil and gas properties 5,505,459 5,565,166
5,738,744 5,683,334
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable:
Trade 43,646 16,281
Affiliate 624,236 635,139
Royalties payable 368,178 419,808
Total current liabilities 1,036,060 1,071,228
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 (1,344,185) (1,434,763)
Total stockholders' equity 4,702,684 4,612,106
5,738,744 5,683,334
Statements of Operations and Accumulated Deficit
(Unaudited)
Three Months Ended
September 30,
1997 1996
Revenue:
Oil and gas sales $183,977 174,425
Gain on sale of oil and gas properties 87,225 -
Other income 51,663 36,512
Total revenue 322,865 210,937
Expenses:
Lease operating expenses 53,043 42,167
Depletion 29,993 41,796
Exploration expense - 3,224
General and administrative 149,251 238,998
Total expenses 232,287 326,185
Net income (loss) 90,578 (115,248)
Accumulated deficit at beginning of period (1,434,763) (1,499,023)
Accumulated deficit at end of period ($1,344,185) (1,614,271)
Net income (loss) per common share $0.02 (0.02)
Weighted average number of common
shares outstanding 4,666,185 4,666,185
Statements of Cash Flows
(Unaudited)
Three Months Ended
September 30,
1997 1996
Net cash provided by (used in) operating activities $(104,257) (78,235)
Cash flows from investing activities:
Additions to oil and gas properties - (11,248)
Proceeds from the sale of oil and gas
properties 116,939 -
Net cash provided by (used in) investing activities 116,939 (11,248)
Cash flows from financing activities:
(Decrease) increase in accounts payable -
affiliate (10,903) 66,347
Net cash (used in) provided by financing
activities (10,903) 66,347
Net increase (decrease) in cash 1,779 (23,136)
Cash at beginning of the period 6,440 36,137
Cash at end of the period $8,219 13,001
See accompanying notes to unaudited financial statements.
AMBER RESOURCES COMPANY
(A Subsidiary of Delta Petroleum Corporation)
Notes to Financial Statements
Three Months Ended September 30, 1997 and 1996
(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. For a
more complete understanding of the Company's operations and
financial position, reference is made to the consolidated financial
statements of the Company, and related notes thereto, filed with
the Company's annual report on Form 10-KSB for the year ended June
30, 1997, previously filed with the Securities and Exchange
Commission.
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.
Liquidity and Capital Resources.
The financial statements have been prepared on a going concern
basis which contemplates the realization of assets and the
satisfaction of liabilities and commitments in the normal course of
business. Certain factors, described below, raise substantial
doubt about the ability of the Company to continue as a going
concern.
At September 30, 1997, the Company had a working capital
deficit of $802,775 compared to a working capital deficit of
$953,060 at June 30, 1997. The Company's current liabilities
include royalties payable of $368,178 at September 30, 1997 which
represent the Company's estimate of royalties payable on production
attributable to it's interest in certain wells in Oklahoma. 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 adequate 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 statute of limitation 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 in suspense or
for recoupment royalties payable would be made at one time. 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.
After evaluation of the considerations described above the
Company believes that its cash flow from its existing producing
properties, proceeds from the sale of producing properties, and
other sources of funds will be adequate to fund its operating
expenses and satisfy its other current liabilities over the next
year or longer.
Results of Operations
Net Earnings (Loss). The Company's net income for the three
months ended September 30, 1997 was $90,578 compared to a net loss
of $115,248 for the three months ended September 30, 1996.
Revenue. Total revenue for the three months ended September
30, 1997 were $322,865 compared to $210,937 for the three months
ended September 30, 1996. Total revenue for the three months ended
September 30, 1997 included a gain on sale of oil and gas
properties of $87,225. Oil and gas sales for the three months
ended September 30, 1997 were $183,977 compared to $174,425 for the
three months ended September 30, 1996. The Company's oil and gas
sales were impacted by the slight increase in oil and gas prices
and the increase in gas production.
Production volumes and average prices received for the three
months ended September 30, 1997 and 1996 are as follows:
Three Months Ended
September 30,
1997 1996
Production:
Oil (barrels) 46 219
Gas (Mcf) 89,038 83,732
Average Price:
Oil (per barrel) $19.63 $21.01
Gas (per Mcf) $2.06 $2.03
Lease Operating Expenses. Lease operating expenses for
the three month period ended September 30, 1997 was $53,043
compared to $42,167 for the three months ended September 30, 1996.
On an Mcf equivalent basis, production expenses and taxes were $.59
per Mcf equivalent during the three month period ended September
30, 1997 compared to $.50 per Mcf equivalent for the same period in
1996.
Depletion Expense. Depletion expense for the three months
ended September 30, 1997 was $29,993 compared to $41,796 for the
three months ended September 30, 1996. On an Mcf equivalent basis,
depreciation and depletion expense were $.33 per Mcf equivalent
during the three month period ended September 30, 1997 compared to
$.49 per Mcf equivalent for the same period in 1996.
General and Administrative Expenses. General and
administrative expense for the three months ended September 30,
1997 was $149,251 compared to $238,998 for the three months ended
September 30, 1996. General and Administrative expenses decreased
from the prior year as a result of a decrease in salaries.
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.
Exhibit:
27. Financial Data Schedule.
Form 8-K.
None.
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)
s/Aleron H. Larson, Jr.
Aleron H. Larson, Jr.
Chairman\C.E.O.
s/Kevin K. Nanke
Kevin K. Nanke
Controller and Principal Accounting
Officer
Date: November 13, 1997
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. Filed herewith electronically.
(99) Additional Exhibits.
Not applicable.
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