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 MARCH 31, 1998 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 May 10, 1998.
Form 10-QSB
3rd Qtr.
FY 1998
INDEX
PART I FINANCIAL INFORMATION
PAGE NO.
ITEM 1 FINANCIAL STATEMENTS
Balance Sheets
March 31, 1998 and
June 30, 1997...................... 1
Statements of Operations and
Accumulated Deficit for the
Three and Nine Months Ended
March 31, 1998 and 1997.......... 2
Statements of Cash Flows:
For the Nine Months
Ended March 31, 1998 and 1997.... 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
March 31, June 30,
1998 1997
Assets
Current assets:
Cash $1,355 6,440
Accounts receiveable 64,353 111,728
Total current assets 65,708 118,168
Oil and gas properties, successful efforts
method of accounting:
Undeveloped offshore California properties 5,006,276 5,006,276
Developed onshore domestic properties 1,264,134 1,405,645
6,270,410 6,411,921
Accumulated depletion (827,668) (846,755)
Net oil and gas properties 5,442,742 5,565,166
$5,508,450 5,683,334
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable:
Trade $18,056 16,281
Affiliate 191,976 635,139
Royalties payable 274,690 419,808
Total current liabilities 484,722 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 (1,023,141) (1,434,763)
Total stockholders' equity 5,023,728 4,612,106
$5,508,450 5,683,334
PART I - FINANCIAL INFORMATION
AMBER RESOURCES COMPANY
(A Subsidiary of Delta Petroleum Corporation)
Statements of Operations and Accumulated Deficit
(Unaudited)
Three Months Ended
March 31,
1998 1997
Revenue:
Oil and gas sales $135,816 294,750
Other income 41,907 51,648
Total revenue 177,723 346,398
Expenses:
Lease operating expenses 43,704 65,696
Depletion 19,600 24,277
Exploration expenses - 577
General and administrative 97,306 148,014
Total expenses 160,610 238,564
Net income 17,113 107,834
Accumulated deficit at beginning of period (1,040,254) (1,546,315)
Accumulated deficit at end of period ($1,023,141) (1,438,481)
Basic earings per common share * 0.02
Weighted average number of common
shares outstanding 4,666,185 4,666,185
* less than $.01 per common share
PART I - FINANCIAL INFORMATION
AMBER RESOURCES COMPANY
(A Subsidiary of Delta Petroleum Corporation)
Statements of Operations and Accumulated Deficit
(Unaudited)
Nine Months Ended
March 31,
1998 1997
Revenue:
Oil and gas sales $570,387 698,503
Gain on sale of oil and gas properties 283,993 -
Other income 145,267 124,626
Total revenue 999,647 823,129
Expenses:
Lease operating expenses 135,077 152,354
Depletion 69,672 107,269
Exploration expenses - 4,879
General and administrative 383,276 498,085
Total expenses 588,025 762,587
Net income 411,622 60,542
Accumulated deficit at beginning of period (1,434,763) (1,499,023)
Accumulated deficit at end of period ($1,023,141) (1,438,481)
Basic earnings per common share $0.09 0.01
Weighted average number of common
shares outstanding 4,666,185 4,666,185
PART I - FINANCIAL INFORMATION
AMBER RESOURCES COMPANY
(A Subsidiary of Delta Petroleum Corporation)
Statements of Cashflows
(Unaudited)
Nine Months Ended
March 31,
1998 1997
Net cash provided by (used in)
operating activities $101,333 48,178
Cash flows from investing activities:
Additions to oil and gas properties (1,318)
Proceeds from the sale of oil and gas properties 338,063 (17,661)
Net cash provided by (used in)
investing activities 336,745 (17,661)
Cash flows from financing activities:
Decrease in accounts payable to affiliate (443,163) (61,633)
Net cash used in financing activities (443,163) (61,633)
Net decrease in cash (5,085) (31,116)
Cash at beginning of the period 6,440 36,137
Cash at end of the period $1,355 5,021
See accompanying notes to unaudited financial statements.
AMBER RESOURCES COMPANY
(A Subsidiary of Delta Petroleum Corporation)
Notes to Financial Statements
Nine Months Ended March 31, 1998 and 1997
(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.
In February 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 128,
Earnings per Share (Statement No. 128) effective for periods
ending after December 15, 1997. Statement No. 128 changes the
computation, presentation and disclosure requirements for
earnings per share for entities with publicly held common stock
or potential common stock. Under such requirements the Company
is required to present both basic earnings per share and diluted
earnings per share. Basic earnings per share is computed by
dividing income available to common stockholders by the
weighted-average number of common shares outstanding during the
period. Diluted earnings per share is computed by dividing
income available to common stockholders by all dilative potential
common shares outstanding during the period. The Company adopted
the provisions of Statement No. 128 as of December 31, 1997. The
application of Statement No. 128 did not have an effect on the
presentation of basic earnings per common share for any prior
periods.
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.
At March 31, 1998, the Company had a working capital
deficit of $419,014 compared to a working capital deficit of
$953,060 at June 30, 1997. The Company's current liabilities
include royalties payable of $274,690 at March 31, 1998 which
represents the Company's estimate of royalties payable on
production attributable to its 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 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 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 consideration 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. The Company reported net income of
$17,113 and $411,622 for the three and nine months ended March
31, 1998 compared to a net income of $107,834 and $60,542 for the
same periods in 1997.
Revenue. Total revenues for the three and nine months
ended March 31, 1998 were $177,723 and $999,647 compared to
$346,398 and $823,129 for the same periods in 1997. Oil and gas
sales for the three and nine months ended March 31, 1998 were
$135,816 and $570,387 compared to $294,750 and $698,503 for the
same periods in 1997. The Company's oil and gas sales were
impacted by the decrease in oil and gas prices and the sale of
certain oil and gas properties.
Production volumes and average prices received for the
three and nine months ended March 31, 1998 and 1997 are as
follows:
Three Months Ended Nine Months Ended
March 31, March 31,
1998 1997 1998 1997
Production:
Oil (Bbls) 120 259 429 700
Gas (Mcfs) 61,143 96,745 232,328 270,447
Average Price:
Oil (per Bbls) $17.32 $23.01 $18.66 $21.74
Gas (per Mcf) $2.19 $2.89 $2.42 $2.49
Lease Operating Expenses. Lease operating
expenses were $43,704 and $135,077 for the three and nine months
ended March 31, 1998 compared to $65,696 and $152,354 for the
same periods in 1997. On a MCF equivalent basis, lease operating
expenses were $.70 and $.58, respectively, per Mcf equivalent
during the three and nine months ended March 31, 1998 compared to
$.67 and $.55, respectively, per Mcf equivalent for the same
periods in 1997.
Depletion Expense. Depletion expense for the
three and nine months ended March 31, 1998 were $19,600 and
$69,672 compared to $24,277 and $107,269 for the same periods in
1997. On a MCF equivalent basis, depletion expense were $.32 and
$.30, respectively, per Mcf equivalent during the three and nine
months ended March 31, 1998 compared to $.25 and $.39,
respectively, per Mcf equivalent for the same periods in 1997.
General and Administrative Expenses. General and
administrative expenses for the three and nine months ended March
31, 1998 were $97,306 and $383,276 compared to $148,014 and
$498,085 for the same periods as in 1997. General and
administrative expenses for the nine months ended March 31, 1998
decreased from 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.
Reports on 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)
Date: May 13, 1998 /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. Filed herewith electronically.
(99) Additional Exhibits.
Not applicable.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> MAR-31-1998
<CASH> 1355
<SECURITIES> 0
<RECEIVABLES> 64,353
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 65,708
<PP&E> 6,270,410
<DEPRECIATION> 827,668
<TOTAL-ASSETS> 5,508,450
<CURRENT-LIABILITIES> 484,722
<BONDS> 0
0
0
<COMMON> 291,637
<OTHER-SE> 4,732,091
<TOTAL-LIABILITY-AND-EQUITY> 5,508,450
<SALES> 570,387
<TOTAL-REVENUES> 999,647
<CGS> 0
<TOTAL-COSTS> 588,025
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 411,622
<INCOME-TAX> 0
<INCOME-CONTINUING> 411,622
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 411,622
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
</TABLE>
