HOCKER, LOVELETT, HARGENS & YENNIE, P.C
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors
Double Eagle Petroleum and Mining Company
Casper, Wyoming
The accompanying condensed balance sheet of Double Eagle Petroleum and Mining
Company as of February 29, 1996 and the related statements of operations for the
three and six month periods ended February 29, 1996 and February 28, 1995 and
condensed statements of cash flows for the six month periods ended February 29,
1996 and February 28, 1995 were not audited by us and, accordingly we do not
express an opinion on them.
We have previously audited, in accordance with generally accepted auditing
standards, the balance sheet as of August 31, 1995, and the related statements
of operations and retained earnings and cash flows for the year then ended (not
presented herein); and in our report dated October 19, 1995, we expressed an
unqualified opinion on those financial statements. In our opinion, the
information set forth in the accompanying balance sheet as of August 31, 1995,
is fairly stated in all material respects in relation to the balance sheet from
which it has been derived.
/S/Hocker, Lovelett, Hargens & Yennie, P.C.
Casper, Wyoming
April 2, 1996
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
--------
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended February 29, 1996 Commission File Number 0-6529
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
--------
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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DOUBLE EAGLE PETROLEUM AND MINING CO.
(Exact name of registrant as specified
in its charter)
WYOMING 83-0214692
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
777 Overland Trail, P.O. Box 766
Casper, Wyoming 82602
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 307-237-9330
NOT APPLICABLE
(Former name, former address, and former fiscal year, if changed
since last report)
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
------- -------
Capital stock, 2,712,371 shares having a par value of $.10 per share were
outstanding as of April 2, 1996.
<PAGE>
DOUBLE EAGLE PETROLEUM AND MINING COMPANY
TABLE OF CONTENTS
Page Number
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PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
Condensed Balance Sheets February 29, 1996
(Unaudited) and August 31, 1995 I.
Statements of Operations for the three and
six months ended February 29, 1996 and
February 28, 1995 (Unaudited) II.
Condensed Statements of Cash Flows for
the six months ended February 29, 1996 and
February 28, 1995 (Unaudited) III.
Notes to Condensed Financial Statements
(Unaudited) IV.
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations V. - VI.
PART II. OTHER INFORMATION
Item 4. Submission of matters to a vote
of security holders VII.
Item 6. Exhibits and Reports on Form 8-K VII.
Signatures VIII.
<PAGE>
PART I
FINANCIAL INFORMATION
<PAGE>
<TABLE>
I.
DOUBLE EAGLE PETROLEUM AND MINING COMPANY
CONDENSED BALANCE SHEETS
FEBRUARY 29, 1996 AND AUGUST 31, 1995
<CAPTION>
February August
29,1996 31,1995
(Unaudited) (See Note Below)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 25,916 $ 268,385
Accounts receivable 55,381 41,337
Total 81,297 309,722
OTHER ASSETS
Accounts receivable 82,277 82,277
Investment, at cost 9,000 9,000
Other 11,500 11,500
Total 102,777 102,777
PROPERTY AND EQUIPMENT, at cost, net of
accumulated depreciation and depletion -
and impairment allowance(Successful
Efforts method used for oil and gas
properties) 1,980,932 1,822,721
Total $ 2,165,006 $ 2,235,220
<CAPTION>
LIABILITIES AND STOCKHOLDERS EQUITY
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 49,029 $ 110,432
Accrued production taxes 18,400 25,900
Notes payable 20,000 -
Total 87,429 136,332
DEFERRED TAX LIABILITY, net 152,537 155,733
Total 239,966 292,065
STOCKHOLDERS EQUITY
Common stock, $.10 par value; 5,000,000
shares authorized; 2,712,371 shares
issued and outstanding 271,237 271,237
Capital in excess of par value 886,254 886,254
Retained earnings 767,549 785,664
Total 1,925,040 1,943,155
Total $ 2,165,006 $ 2,235,220
<FN>
Note: The balance sheet at August 31, 1995 has been taken from the audited
financial statements at that date and condensed.
See accompanying notes to condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
II.
DOUBLE EAGLE PETROLEUM AND MINING COMPANY
STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
For the Three For the Six
Months Ended Months Ended
February 29, February 28, February 29, February 28,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
REVENUES
Sales of oil and gas $ 76,373 $ 57,473 $ 141,725 $ 108,362
Sales of oil and gas
properties 130,000 27,619 130,000 613,442
Other - 30,000 15,000 30,000
Total 206,373 115,092 286,725 751,804
COSTS AND EXPENSES
Production 19,985 8,978 34,381 25,690
Production taxes 16,486 3,774 17,743 6,183
Cost of oil and gas properties
sold 14,439 2,761 14,439 224,967
Exploration 16,246 99,801 50,980 124,566
General and administrative 74,614 68,806 132,361 117,389
Depreciation and depletion 29,095 15,028 56,291 31,519
Total 170,865 199,148 306,195 530,314
INCOME (LOSS) FROM OPERATIONS 35,508 (84,056 ) (19,470) 221,490
OTHER INCOME (EXPENSE)
Interest expense (2,917) - (5,467) -
Interest income 1,715 6,058 3,626 6,736
(1,202) 6,058 (1,841) 6,736
INCOME (LOSS) BEFORE INCOME TAXES 34,306 (77,998 ) (21,311) 228,226
INCOME TAX EXPENSE (CREDIT)
Current - - - -
Deferred (54) (1,811 ) (3,196) 42,741
Total (54) (1,811 ) (3,196) 42,741
NET INCOME (LOSS) $ 34,360 $ (76,187 ) $ (18,115) $ 185,485
INCOME(LOSS)PER COMMON STOCK AND
COMMON STOCK EQUIVALENT SHARE $ .01 $ (.03 ) $ (.01) $ .08
COMMON STOCK AND COMMON STOCK
EQUIVALENT SHARES OUTSTANDING 2,712,371 2,362,371 2,712,371 2,362,371
DIVIDENDS PER SHARE OF COMMON
STOCK $ - $ - $ - $ -
<FN>
See accompanying notes to condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
III.
DOUBLE EAGLE PETROLEUM AND MINING COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED FEBRUARY 29, 1996 AND FEBRUARY 28, 1995
(UNAUDITED)
<CAPTION>
1996 1995
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ (18,115) $ 185,485
Charges to income not requiring cash:
Depreciation and depletion 56,291 31,519
Abandoned properties 21,474 80,640
Gain on sale of assets (115,561) (388,475)
Deferred tax allowance (3,196) 42,741
Decrease (Increase) in operating assets:
Accounts receivable (14,044) (34,991)
Other - 1,564
Increase (Decrease)in operating liabilities:
Accounts payable (61,403) (3,858)
Accrued production taxes (7,500) (16,200)
Net cash (used in) operating activities (142,054) (101,575)
INVESTMENT ACTIVITIES:
Acquisitions of property and equipment (250,415) (55,872)
Proceeds from sale of property and equipment 130,000 613,442
Net cash provided by (used in) investing
activities (120,415) 557,570
FINANCING ACTIVITIES:
Proceeds from borrowings 162,500 -
Repayment of debt (142,500) -
Net cash provided by financing activities 20,000 -
(DECREASE)INCREASE IN CASH (242,469) 455,995
CASH AND CASH EQUIVALENTS
Beginning of period 268,385 108,460
End of period $ 25,916 $ 564,455
<FN>
See accompanying notes to condensed financial statements.
</TABLE>
<PAGE>
IV.
DOUBLE EAGLE PETROLEUM AND MINING COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. Summary of Significant Accounting Policies
Refer to the Company's annual financial statements for the year ended
August 31, 1995, for a description of the accounting policies which have
been continued without change. Also, refer to the footnotes with those
annual statements for additional details of the Company's financial
condition, results of operations, and cash flows. The details in those
notes have not changed except as a result of normal transactions in the
interim.
2. Management Representation
In Management's opinion, all adjustments necessary for a fair presentation
are reflected in the interim financial statements. Such adjustments are of
a normal recurring nature.
3. Interim Results of Operations
The results of operations for the period ended February 29, 1996, are not
necessarily indicative of the operating results for the full year.
<PAGE>
V.
DOUBLE EAGLE PETROLEUM AND MINING COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
During the six months ended February 29, 1996, the Company s operations resulted
in negative working capital. The $179,500 decrease was due to the fact the
Company purchased a producing property with borrowed funds and then repaid a
majority of the borrowed funds during the current quarter using most of its
cash.
Management believes that the Company's liquidity is sufficient to meet future
cash needs for operations. Management does not anticipate any future material
sales of oil and gas properties solely to raise working capital.
RESULTS OF OPERATIONS
Current Year-to-Date Compared to Corresponding Year-to-Date
The Company has experienced a net loss for the current year of $18,115 compared
to net income for the prior period of $185,485. The change is due mainly to the
sale of several of the Company's nonproducing properties in the first quarter of
the prior year, yielding a profit of $363,600, compared to the sale of
nonproducing properties in the current year yielding a profit of $115,600.
Revenue from oil and gas sales increased by approximately $33,400 in the current
period compared to the same period one year ago. This increase can be attributed
to the purchase of producing properties in the current year.
Production costs and taxes increased by approximately $20,300 coinciding with
the increase in oil and gas sales revenue.
Exploration costs decreased considerably when compared to the same period one
year ago. The $73,600 decrease is mainly attributable to not as many of the
Company's nonproducing leases being abandoned or expiring and less rental
payments being made due to the abandonments in the prior year.
Overall costs and expenses decreased by approximately $218,600 when compared to
the prior year, due mainly to a decrease in the cost of properties sold and the
aforementioned decrease in exploration costs.
Interest income decreased by approximately $3,100 due to a decrease in funds
being available for investments, as they were used to purchase producing
properties in the current year.
Current Quarter Compared to Previous Quarter
Revenues from oil and gas sales increased by approximately $11,000 compared to
the previous quarter. This increase was due to the sale of more gas during the
current quarter and increased income generated from recently acquired producing
properties.
Production costs, including taxes, increased by approximately $20,800 during the
current quarter when compared to the previous quarter. The increase can be
attributed to repairs being made on one of the Company's producing properties
during the current quarter.
Exploration costs decreased when compared to the previous quarter by $18,500.
This decrease is attributed to more of the Company's nonproducing leases
expiring in the previous quarter than in the current quarter.
General and administrative costs increased by approximately $16,900 compared to
the quarter ending November 30, 1995. This increase was due to the cost
attributable to the Company's annual meeting.
Interest income and depreciation and depletion expense remained fairly stable
between the two quarters.
<PAGE>
VI.
DOUBLE EAGLE PETROLEUM AND MINING COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
Current Quarter Compared to Previous Quarter (Continued)
Operations in the current quarter resulted in a $34,400 net profit for the
quarter compared to a net loss of $52,500 for the previous quarter. The
aforementioned sale of nonproducing properties resulted in the majority of the
change.
Current Quarter Compared to Corresponding Quarter
Oil and gas revenues increased by $18,900 compared to the same quarter in 1995
due mainly to better prices and production from newly acquired producing
properties.
Sales of and cost of sales of oil and gas properties increased drastically when
compared to the corresponding quarter due to the sale on a large nonproducing
property in the current quarter.
Production costs, including production taxes, increased by $23,700 compared to
the same quarter one year ago. This increase coincides with the increase in
revenue and the increase in operating expenses for repairs to one of the
Company's producing properties in the current quarter.
Exploration costs decreased by $83,600 when compared to the corresponding
quarter in 1995. This decrease is mainly attributed to the abandonment of
nonproducing leases during the corresponding quarter.
General and administrative expenses increased by $5,800 when compared to the
same quarter a year ago. The main reason for the increase was due to increased
travel to show interested individuals a prospective developmental property.
Depreciation and depletion expense increased by $14,100 when compared to the
corresponding quarter. This increase is due to the addition of a producing
property in the previous quarter along with better production from some of the
Company's older producing properties.
The change in net income (loss) of $110,500 can be attributed to the
aforementioned sale in the current quarter.
<PAGE>
VII.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the annual stockholders' meeting on January 22, 1996 the following
directors were elected:
Richard B. Laudon
William N. Heiss
Tom R. Creager
Stephen H. Hollis
John R. Kerns
Hocker, Lovelett, Hargens & Yennie, P.C. was approved as auditor for the year
ending August 31, 1996, with 2,247,389 votes for, 590 votes against, and 3,356
abstaining.
ITEM 6. EXHIBITS AND REPORT ON FORM 8-K
Form 8-K was not required to be filed during the period covered by this report.
<PAGE>
VIII.
SIGNATURES
Pursuant to the requirements 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.
DOUBLE EAGLE PETROLEUM AND MINING COMPANY
(Registrant)
/s/ Richard B. Laudon
Richard B. Laudon
Treasurer and Chief Financial Officer
Date: April 11, 1996
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-END> FEB-29-1996
<CASH> 25,916
<SECURITIES> 0
<RECEIVABLES> 55,381
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 81,297
<PP&E> 3,435,905
<DEPRECIATION> 1,454,973
<TOTAL-ASSETS> 2,165,006
<CURRENT-LIABILITIES> 87,429
<BONDS> 0
0
0
<COMMON> 271,237
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 2,165,006
<SALES> 271,725
<TOTAL-REVENUES> 286,725
<CGS> 0
<TOTAL-COSTS> 306,195
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,467
<INCOME-PRETAX> (21,311)
<INCOME-TAX> (3,196)
<INCOME-CONTINUING> (18,115)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (18,115)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
