U.S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-QSB
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
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OF THE SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended November 30, 1996 Commission File Number 0-6529
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
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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 small business issuer 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)
307-237-9330
(Issuer's telephone number)
NOT APPLICABLE
(Former name, former address, and former fiscal year, if changed
since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
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Capital stock, 3,712,371 shares having a par value of $.10 per share were
outstanding as of January 3, 1997.
Tansitional Small Business Disclosure Format (check one);
Yes No X
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DOUBLE EAGLE PETROLEUM AND MINING COMPANY
INDEX
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Page
<S> <C>
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Condensed Balance Sheets November 30, 1996
(Unaudited) and August 31, 1996 I.
Statements of Operations for the three months ended
November 30, 1996 and 1995 (Unaudited) II.
Condensed Statements of Cash Flows for the three months
ended November 30, 1996 and 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 6. Exhibits and Reports on Form 8-K VII.
Signatures VIII.
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PART I
FINANCIAL INFORMATION
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I.
DOUBLE EAGLE PETROLEUM AND MINING COMPANY
CONDENSED BALANCE SHEETS
NOVEMBER 30, 1996 AND AUGUST 31, 1996
<CAPTION>
November 30, August 31,
1996 1996
(Unaudited) (See Note Below)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 6,084 $ 41,232
Accounts receivable 158,638 119,465
Prepaid expense 113,701 41,731
Total 278,423 202,428
OTHER ASSETS
Accounts receivable 82,277 82,277
Investment, at cost 24,530 8,541
Other 25,700 11,500
Total 132,507 102,318
PROPERTY AND EQUIPMENT, at cost, net of
accumulated depreciation and depletion and
impairment allowance - (Successful
efforts method used for oil and gas properties) 2,233,966 2,236,172
Total $ 2,644,896 $ 2,540,918
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 163,930 $ 185,474
Accrued production taxes 35,500 30,633
Note payable 348,981 250,000
Total 548,411 466,107
DEFERRED TAX LIABILITY, net 152,799 152,799
Total 701,210 618,906
STOCKHOLDERS' EQUITY
Common stock, $.10 par value; authorized-
10,000,000 shares; issued and outstanding-
2,712,371 shares 271,237 271,237
Capital in excess of par value 886,254 886,254
Retained earnings 786,195 764,521
Total 1,943,686 1,922,012
Total $ 2,644,896 $ 2,540,918
<FN>
Note: The balance sheet at August 31, 1996 has been taken from the audited
financial statements at that date and condensed.
See accompanying notes to condensed financial statements.
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II.
DOUBLE EAGLE PETROLEUM AND MINING COMPANY
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 1996 AND 1995
(UNAUDITED)
<CAPTION>
1996 1995
<S> <C> <C>
REVENUES
Sales of oil and gas $ 167,462 $ 65,352
Sales of oil and gas properties - -
Other - primarily zeolite revenue 15,056 15,000
Total 182,518 80,352
COSTS AND EXPENSES
Production 15,007 14,396
Production taxes 12,116 1,257
Cost of oil and gas properties sold - -
Exploration 11,009 34,734
Write offs and abandonments 1,750 -
General and administrative 75,676 57,747
Depreciation and depletion 40,550 27,196
Interest 5,120 2,550
Total 161,228 137,880
INCOME (LOSS) FROM OPERATIONS 21,290 (57,528)
OTHER INCOME
Interest income 384 1,911
INCOME (LOSS) BEFORE INCOME TAXES 21,674 (55,617)
INCOME TAX EXPENSE (BENEFIT)
Current - -
Deferred - (3,142)
Total - (3,142)
NET INCOME (LOSS) $ 21,674 $ (52,475)
INCOME (LOSS) PER COMMON SHARE $ .01 $ (.02)
WEIGHTED AVERAGE COMMON STOCK 2,712,371 2,712,371
OUTSTANDING
DIVIDENDS PER SHARE OF COMMON STOCK $ - $ -
<FN>
See accompanying notes to condensed financial statements.
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III.
DOUBLE EAGLE PETROLEUM AND MINING COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 1996 AND 1995
(UNAUDITED)
<CAPTION>
1996 1995
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ 21,674 $ (52,475)
Charges to income not requiring cash:
Depreciation and depletion 40,550 27,196
Abandoned properties 831 18,823
Decrease (increase) in operating assets:
Accounts receivable (39,173) (19,688)
Other assets (14,200) -
Increase (decrease) in operating liabilities:
Accounts payable (53,178) (54,911)
Accrued production taxes 4,867 (14,600)
Deferred tax liability - (3,142)
Net cash (used in) operating activities (38,629) (98,797)
INVESTING ACTIVITIES:
Acquisitions of property and equipment (39,175) (57,206)
Purchase of investment (15,989) -
Net cash (used in) investing activities (55,164) (57,206)
FINANCING ACTIVITIES:
Prepaid stock offering costs (40,336) -
Proceeds from borrowings 98,981 9,853
Net cash provided by financing activities 58,645 9,853
(DECREASE) IN CASH (35,148) (146,150)
CASH AND CASH EQUIVALENTS
Beginning of period 41,232 268,385
End of period $ 6,084 $ 122,235
<FN>
See accompanying notes to condensed financial statements.
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IV.
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, 1996, 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 November 30, 1996, are not
necessarily indicative of the operating results for the full year.
4. Subsequent Event
Subsequent to the quarter ended November 30, 1996, the Company had a public
offering of units of its common stock and common stock purchase warrants.
1,000,000 units, each consisting of one share of common stock and one
warrant, were sold at $1.50 per share. The company received $1,300,000 in net
proceeds from the sale.
5. Statement of Cash Flows Supplemental Information
Interest and income taxes paid:
During the quarter ended November 30, 1996 and 1995, the Company paid $5,120
and $2,550, respectfully, in interest expense and no income taxes.
Noncash financing activities:
The Company had $31,634 in prepaid offering costs included in accounts
payable at November 30, 1996.
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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 three months ended November 30, 1996, the Company's operations
resulted in a negative working capital, a $6,300 decrease from the August 31,
1996 amount. This decrease was due to the debt incurred to prepay expenses
related to a stock offering. See note 4 to these financial statements for more
detail.
In December 1996, the Company completed a public offering of units, each
consisting of one share of common stock and one common stock purchase warrant.
The Company sold 1,000,000 units at $1.50 per unit and received net proceeds of
$1,300,000. The net proceeds will be used for the Company's oil and gas
activities.
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
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Current Quarter Compared to Previous Quarter
- --------------------------------------------
Revenues from oil and gas sales increased by approximately $20,700 compared to
the previous quarter. Oil and gas revenues for the quarter ended November 30,
1996, were $167,500 and for the quarter ended August 31, 1996, $146,000. This
increase was due to the sale of more gas during the fall quarter and revenue
generated from recently acquired producing properties.
Production costs, including taxes, decreased by approximately $18,100 during the
current quarter when compared to the previous quarter. The decrease can be
attributed to more costs being incurred in the prior quarter for summer
activities on the Company's properties.
Exploration costs decreased by $71,600 when compared to the previous quarter.
This decrease is attributed to the Company having incurred $22,600 in dry hole
costs along with the abandonment of $24,900 more of nonproducing properties in
the previous quarter than in the current quarter.
General and administrative costs increased by $23,900 when compared to the
previous quarter. This increase is due to an increase in shareholder relation
costs and professional fees paid.
Interest income remained fairly stable over the two quarters.
Operations in the current quarter resulted in a $21,700 net income compared to a
net loss of $1,600 for the previous quarter. The aforementioned increase in
sales revenues combined with the decrease in exploration costs lead to the
$23,300 change in net income (loss) between the quarters.
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VI.
DOUBLE EAGLE PETROLEUM AND MINING COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Current Quarter Compared to Corresponding Quarter
- -------------------------------------------------
Oil and gas revenues increased by $102,100 compared to the same quarter in 1995
due mainly to higher prices and higher production. This is a 156% increase over
the prior year's sales revenue.
Production costs, including production taxes, increased $11,500 to coincide with
the increased revenue generated.
Exploration costs decreased by $22,000 when compared to the corresponding
quarter in 1995. This decrease is mainly attributed to the lower expiration of
nonproducing leases during the current quarter.
General and administrative expenses increased by $17,900 when compared to the
same quarter a year ago. The reasons for the increase were due to expenses
incurred to promote interest in a prospective developmental property, increased
professional fees and raises given to employees.
Depreciation and depletion expense increased by $13,400 when compared to the
corresponding quarter. This increase is due to the addition of a producing
property in the previous year along with higher production from some of the
Company's older producing properties.
The change in net income (loss) of $77,291 can be attributed to the
significantly higher sales of oil and gas in the current quarter.
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VII.
PART II. OTHER INFORMATION
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.
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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
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Richard B. Laudon
Treasurer and Principal Financial Officer
Date: January 13, 1997
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> NOV-30-1996
<CASH> 6,084
<SECURITIES> 0
<RECEIVABLES> 158,638
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 278,423
<PP&E> 3,780,482
<DEPRECIATION> 1,546,516
<TOTAL-ASSETS> 2,644,896
<CURRENT-LIABILITIES> 548,411
<BONDS> 0
0
0
<COMMON> 271,237
<OTHER-SE> 1,672,449
<TOTAL-LIABILITY-AND-EQUITY> 2,644,896
<SALES> 182,518
<TOTAL-REVENUES> 182,902
<CGS> 0
<TOTAL-COSTS> 156,108
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,120
<INCOME-PRETAX> 21,674
<INCOME-TAX> 0
<INCOME-CONTINUING> 21,674
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21,674
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
