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, 2000 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 6, 2000.
Form 10-QSB
1st Qtr.
FY 2001
INDEX
PART I FINANCIAL INFORMATION
PAGE NO.
ITEM 1 FINANCIAL STATEMENTS
Balance Sheets
September 30, 2000 and
June 30, 2000 (unaudited)............... 1
Statements of Operations and
Accumulated Deficit for the Three
Months Ended September 30, 2000
and 1999 (unaudited)............. 2
Statements of Cash Flows:
For the Three Months Ended September 30,
2000 and 1999 (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................................. 9
Item 2. Changes in Securities............................. 9
Item 3. Defaults upon Senior Securities.................. 9
Item 4. Submission of Matters to a Vote of
Security Holders................................ 9
Item 5. Other Information................................ 9
Item 6. Exhibits and Reports on Form 8-K............... 9
The terms "Amber", "Company", "we", "our", and "us" refer to
Amber Resources Company unless the context suggests otherwise.
AMBER RESOURCES COMPANY
(A Subsidiary of Delta Petroleum Corporation)
BALANCE SHEETS
Unaudited
September 30, June 30,
2000 2000
ASSETS
Current assets:
Cash $ 7,051 5,422
Accounts receivable 3,000 3,000
Total current assets 10,051 8,422
Oil and gas properties, successful efforts
method of accounting:
Undeveloped offshore California
properties 5,006,276 5,006,276
Developed onshore domestic properties 195,531 195,531
5,201,807 5,201,807
Accumulated depletion (162,896) (159,360)
Net oil and gas properties 5,038,911 5,042,447
$ 5,048,962 5,050,869
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable: $ 12,195 12,898
Royalties payable 38,751 51,667
Total current liabilities 50,946 64,565
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 (568,224) (554,936)
Advances to parent (480,629) (505,629)
Total stockholders' equity 4,998,016 4,986,304
$ 5,048,962 5,050,869
AMBER RESOURCES COMPANY
(A Subsidiary of Delta Petroleum Corporation)
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
Unaudited
Three Months Ended
September 30, September 30,
2000 1999
Revenue:
Oil and gas sales $ 12,718 5,792
Other income 12,927 17,400
Total revenue 25,645 23,192
Expenses:
Lease operating expenses 4,397 3,441
Depletion 3,536 657
Exploration expenses 5,435 2,869
General and administrative,
including $25,000 in 2000
and 1999 to parent 25,565 40,748
Total expenses 38,933 47,715
Net loss (13,288) (24,523)
Accumulated deficit at beginning
of the period (554,936) (487,442)
Accumulated deficit at end of the period $ (568,224) (511,965)
Basic loss per share * (0.01)
Weighted average number of common
shares outstanding 4,666,185 4,666,185
* less than $.01 per common share outstanding
AMBER RESOURCES COMPANY
(A Subsidiary of Delta Petroleum Corporation)
Statements of Cash Flows
Unaudited
<TABLE>
Three Months Ended
September 30, September 30,
2000 1999
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (13,288) (24,523)
Adjustments to reconcile net income to cash
provided by (used in) operating activities:
Write-off of royalties payable (12,916) (17,397)
Depletion 3,536 657
Net changes in current assets and
current liabilities
Increase in accounts receivable - (1,000)
Increase (decrease) in accounts payable (703) 12,679
Net cash used in operating activities (23,371) (29,584)
Cash flows from financing activities-
Changes in acccounts receivable from and
accounts payable to parent 25,000 30,378
Net increase in cash 1,629 794
Cash at beginning of the year 5,422 961
Cash at end of the year $ 7,051 1,755
</TABLE>
See accompanying notes to financial statements.
AMBER RESOURCES COMPANY
(A Subsidiary of Delta Petroleum Corporation)
Notes to Financial Statements
Three Months Ended September 30, 2000 and 1999
(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.
Liquidity
The Company has incurred losses from operations over the past
several years coupled with significant deficiencies in cash flow
from operations for the same period. As of September 30, 2000, the
Company had a working capital deficit of $40,895. These factors,
among others, may indicate that without increased cash flow from
operations, sale of oil and gas properties or additional financing
the Company may not be able to meet its obligations in a timely
manner.
The Company is taking steps to reduce losses and generate cash
flow from operations which management believes will generate
sufficient cash flow to meet its obligations in a timely manner.
Should the Company be unable to achieve its projected cash flow
from operations additional financing or sale of oil and gas
properties could be necessary. The Company believes that it could
sell oil and gas properties or obtain additional financing,
however, there can be no assurance that such financing would be
available on a timely basis or acceptable terms.
ITEM 2. MANAGEMENT'S ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
Forward Looking Statements
The statements contained in this report which are not
historical fact are "forward looking statements" that involve
various important risks, uncertainties and other factors which
could cause the Company's actual results to differ materially from
those expressed in such forward looking statements. These factors
include, without limitation, the risks and factors set forth below
as well as other risks previously disclosed in the Company's annual
report on Form 10-KSB.
Background
Amber Resources Company ("Amber", "the Company") was
incorporated in January, 1978, and is principally engaged in
acquiring, exploring, developing, and producing oil and gas
properties. We own interests 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 September 30, 2000, we had a working capital deficit of
$40,895 compared to a working capital deficit of $56,143 at June
30, 2000. Our current liabilities include royalties payable of
$38,751 at September 30, 2000 which represents our estimate of
royalties payable on production attributable to certain wells in
Oklahoma. We believe that the operators of the affected wells have
paid some of the royalties on our behalf and have withheld such
amounts from revenues attributable to our interest in the wells.
We have been in contact with the operators of the wells in an
attempt to determine what amounts the operators have paid on our
behalf over the past five years, which amounts would reduce the
amounts we owe. To date, we have not received information
sufficient to allow us to determine the amounts paid by the
operators. We have been informed by our 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.
We believe that it is unlikely that all claims that might be
made for payment of royalties payable would be made at one time.
We believe, although there can be no assurance, that we may
ultimately be able to settle with potential claimants for less than
the amounts recorded for royalties payable.
We do not currently have a credit facility with any bank and
we h ave not determined the amount, if any, that we could borrow
against our existing properties. We will continue to explore
additional sources of both short-term and long-term liquidity to
fund our working capital deficit and our capital requirements for
development of our properties including establishing a credit
facility, sale of equity, debt securities and sale of non-strategic
properties or advances from shareholders. Many of the factors
which may affect our future operating performance and liquidity are
beyond our control, including oil and natural gas prices and the
availability of financing.
After evaluation of the considerations described above, we
believe that our cash flow from our existing producing properties,
proceeds from the sale of producing properties, the repayment of
advances from parent, and other sources of funds will be adequate
to fund our operating expenses and satisfy our other current
liabilities over the next year or longer.
Results of Operations
Earnings (loss). We reported a net loss of $13,288 for the
three months ended September 30, 2000 compared to a net loss of
$24,523 for the same period in 1999.
Revenue. Total revenues for the three months ended
September 30, 2000 were $25,645 compared to $23,192 for the same
period in 1999. Oil and gas sales for the three months ended
September 30, 2000 were $12,718 compared to $5,792 for the same
period in 1999. Our total revenues were impacted by the increase
in oil and gas prices compared to the prior year.
Production volumes and average prices received for the three
months ended September 30, 2000 and 1999 are as follows:
Three Months Ended
September 30,
2000 1999
Production:
Oil (Bbls) 96 92
Gas (Mcfs) 3,592 1,677
Average Price:
Oil (per Bbls) $29.39 16.43
Gas (per Mcf) $2.76 2.55
Lease Operating Expenses. Lease operating expenses were
$4,397 for the three months ended September 30, 2000 compared to
$3,441 for the same period in 1999.
Depletion Expense. Depletion expense for the three months
ended September 30, 2000 were $3,536 compared to $657 for the same
period in 1999.
General and Administrative Expenses. General and
administrative expenses for the three months ended September 30,
2000 were $25,565 compared to $40,748 for the same period as in
1999. Effective October 1, 1998, we entered into an agreement
with our parent whereby we paid our parent an administration fee of
$25,000 per quarter. Currently, we do not incur significant costs
that are not administered by our parent.
Future Operations
Our offshore California undeveloped properties represent
interests ranging from .87% to 6.97% in three federal units located
offshore California near Santa Barbara.
The ownership group's development plan for the offshore
properties currently provides for 22 wells from one platform set in
a water depth of approximately 328 feet for the Gato Canyon Unit;
63 wells from one platform set in a water depth of approximately
1,300 feet for the Sword Unit; and 183 wells from two platforms for
the Lion Rock Unit. On the Lion Rock Unit, platform A would be
set in a water depth of approximately 507 feet, and Platform B
would be set in a water depth of approximately 484 feet. The reach
of the deviated wells from each platform required to drain each
unit falls within the reach limits now considered to be "state-of-
the-art."
Current Status.
On October 15, 1992 the MMS directed a Suspension of
Operations (SOO), effective January 1, 1993, for the POCS
undeveloped leases and units, pursuant to 30 CFR 250.110. The SOO
was directed for the purpose of preparing what became known as the
COOGER Study. Two-thirds of the cost of the Study was funded by the
participating companies in lieu of the payment of rentals on the
leases. Additionally, all operations were suspended on the leases
during this period. On November 12, 1999, as the COOGER Study drew
to a conclusion, the MMS approved requests made by the operating
companies for a Suspension of Production (SOP) status for the POCS
leases and units. During the period of a SOP the lease rentals
resume and each operator is required to perform exploration and
development activities in order to meet certain milestones set out
by the MMS. Progress toward the milestones is monitored by the
operator in quarterly reports submitted to the MMS. In February
2000 all operators completed and timely submitted to the MMS a
preliminary "Description of the Proposed Project". This was the
first milestone required under the SOP. Quarterly reports were
also prepared and submitted for the last quarter of 1999, and the
first and second quarters of 2000.
In order to continue to carry out the requirements of the
MMS, all operators of the units in which we own non-operating
interests are currently engaged in studies and project planning to
meet the next milestone leading to development of the leases. Where
additional drilling is needed the operators will bring a mobile
drilling unit to the POCS to further delineate the undeveloped oil
and gas fields.
Cost to Develop Offshore California Properties.
The cost to develop all of the offshore California
properties in which we own an interest, including delineation
wells, environmental mitigation, development wells, fixed
platforms, fixed platform facilities, pipelines and power cables,
onshore facilities and platform removal over the life of the
properties (assumed to be 38 years), is estimated to be slightly in
excess of $3 billion. Our share of such costs based on our
ownership interest over the life of the properties is currently
estimated to be approximately $30 million.
To the extent that we do not have sufficient cash available
to pay our share of expenses if and when they become payable under
the respective operating agreements, it will be necessary for us to
seek funding from outside sources. Likely potential sources for
such funding are currently anticipated to include (a) public and
private sales of our Common Stock (which may result in substantial
ownership dilution to existing shareholders), (b) bank debt from
one or more commercial oil and gas lenders, (c) the sale of debt
instruments to investors, (d) entering into farm-out arrangements
with respect to one or more of our interests in the properties
whereby the recipient of the farm-out would pay the full amount of
our share of expenses and we would retain a carried ownership
interest (which would result in a substantial diminution of our
ownership interest in the farmed-out properties), (e) entering into
one or more joint venture relationships with industry partners, (f)
entering into financing relationships with one or more industry
partners, and (g) the sale of some or all of our interests in the
properties.
It is unlikely that any one potential source of funding
would be utilized exclusively. Rather, it is more likely that we
will pursue a combination of different funding sources when the
need arises. Regardless of the type of financing techniques that
are ultimately utilized, however, it currently appears likely that
because of our small size in relation to the magnitude of the
capital requirements that will be associated with the development
of the subject properties, we will be forced in the future to issue
significant amounts of additional shares, pay significant amounts
of interest on debt that presumably would be collateralized by all
of our assets (including its offshore California properties),
reduce its ownership interest in the properties through sales of
interests in the property or as the result of farm-outs, industry
financing arrangements or other partnership or joint venture
relationships, or to enter into various transactions which will
result in some combination of the foregoing. In the event that we
are not able to pay our share of expenses as a working interest
owner as required by the respective operating agreements, it is
possible that we might lose some portion of its ownership interest
in the properties under some circumstances, or that we might be
subject to penalties which would result in the forfeiture of
substantial revenues from the properties.
While the cost to develop the offshore California properties
in which we own an interest are anticipated to be substantial in
relation to our small size, management believes that the
opportunities for Amber to increase its asset base and ultimately
improve its cash flow are also substantial in relation to its size.
Although there are several factors to be considered in connection
with Amber 's plans to obtain funding from outside sources as
necessary to pay its proportionate share of the costs associated
with developing its offshore properties (not the least of which is
the possibility that prices for petroleum products could decline in
the future to a point at which development of the properties is no
longer economically feasible), management believes that the timing
and rate of development in the future will in large part be
motivated by the prices paid for petroleum products.
To the extent that prices for petroleum products decline
from their current levels, it is likely that development efforts
will proceed at a slower pace to the end that costs will be
incurred over a more extended period of time. In the event that
petroleum prices increase, however, management believes that
development efforts will intensify. Our ability to successfully
negotiate financing to pay its share of development costs on
favorable terms will be inextricably linked to the prices that are
paid for petroleum products during the time period in which
development is actually occurring on each of the subject
properties.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
There is no litigation pending or threatened by or against
us or any of our properties as of September 30, 2000.
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: November 10, 2000 s/Aleron H. Larson, Jr.
Aleron H. Larson, Jr.
Chairman\CEO
s/Kevin K. Nanke
Kevin K. Nanke, Chief Financial
Officer 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.
