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 Commission File
November 30, 1997 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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Common stock, 3,880,651 shares having a par value of $.10 per share, were
outstanding as of December 19, 1997.
Transitional Small Business Disclosure format (check one);
Yes No X
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DOUBLE EAGLE PETROLEUM AND MINING COMPANY
INDEX
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PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Balance Sheets November 30, 1997
and August 31, 1997 I.
Statements of Operations for the three months
ended November 30, 1997 and 1996 II.
Statements of Cash Flows for the three months
ended November 30, 1997 and 1996 III.
Notes to Financial Statements IV.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations V.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K VI.
Signatures VII.
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PART I
FINANCIAL INFORMATION
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I.
DOUBLE EAGLE PETROLEUM AND MINING COMPANY
BALANCE SHEETS
NOVEMBER 30, 1997 AND AUGUST 31, 1997
<CAPTION>
November 30, August 31,
1997 1997
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 460,748 $ 868,313
Accounts receivable 241,213 177,431
Lease application deposits 88,630 -
Total Current Assets 790,591 1,045,744
OTHER ASSETS
Gas balancing arrangement 82,277 82,277
Investment 125 125
Other 11,500 11,500
Total Other Assets 93,902 93,902
PROPERTY AND EQUIPMENT
Undeveloped properties 526,843 528,481
Developed properties 3,903,671 3,528,257
Corporate and other 240,125 239,387
4,670,639 4,296,125
Less accumulated depreciation, depletion and amortization 1,674,145 1,640,260
Net properties and equipment 2,996,494 2,655,865
Total Assets $ 3,880,987 $ 3,795,511
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 229,024 $ 147,396
Accrued production taxes 17,565 29,301
Total Current Liabilities 246,589 176,697
DEFERRED INCOME TAXES 47,631 45,294
Total Liabilities 294,220 221,991
STOCKHOLDERS' EQUITY
Common stock, $.10 par value; - 10,000,000 shares, authorized
3,880,651 shares issued and outstanding 388,062 388,062
Capital in excess of par value 2,122,450 2,122,450
Retained earnings 1,076,255 1,063,008
Total Stockholders' Equity 3,586,767 3,573,520
Total Liabilities and Stockholders' Equity $ 3,880,987 $ 3,795,511
<FN>
See accompanying notes to financial statements.
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II.
DOUBLE EAGLE PETROLEUM AND MINING COMPANY
STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED NOVEMBER 30, 1997 AND 1996
<CAPTION>
1997 1996
<S> <C> <C>
REVENUES
Oil and Gas sales $ 250,089 $ 167,462
Other Income 789 15,056
Total 250,878 182,518
COSTS AND EXPENSES
Production costs 28,277 15,007
Production taxes 24,748 12,116
Exploration expenses 50,282 11,009
Write offs and abandonments 4,653 1,750
General and administrative 101,344 75,676
Depreciation and depletion 33,885 40,550
Total 243,189 156,108
INCOME FROM OPERATIONS 7,689 26,410
OTHER INCOME (EXPENSES)
Interest expense 7,895 384
Interest income - (5,120)
7,895 (4,736)
INCOME (LOSS) BEFORE INCOME TAXES 15,584 21,674
INCOME TAX EXPENSE
Current - -
Deferred 2,337 -
Total 2,337 -
NET INCOME $ 13,247 $ 21,674
INCOME (LOSS) PER COMMON SHARE $ - $ .01
WEIGHTED AVERAGE COMMON STOCK
OUTSTANDING 3,989,399 2,712,371
DIVIDENDS PER SHARE OF COMMON STOCK $ - $ -
<FN>
See accompanying notes to financial statements.
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III.
DOUBLE EAGLE PETROLEUM AND MINING COMPANY
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 1997 AND 1996
<CAPTION>
1997 1996
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 13,247 $ 21,674
Charges to income not requiring cash:
Depreciation and depletion 33,885 40,550
Abandoned properties 4,653 831
Decrease (increase) in operating assets:
Accounts receivable (63,782) (39,173)
Lease application deposits (88,630) (14,200)
Increase (decrease) in operating liabilities:
Accounts payable 81,628 (53,178)
Accrued production taxes (11,736) 4,867
Deferred Tax liability 2,337 -
Net cash (used in) operating activities (28,398) (38,629)
INVESTING ACTIVITIES:
Purchases of properties (379,167) (39,175)
Purchase of investment - (15,989)
Net cash (used in) investing activities (379,167) (55,164)
FINANCING ACTIVITIES:
Stock offering costs paid - (40,336)
Proceeds from borrowings - 98,981
Net cash provided by financing activities - 58,645
(DECREASE) IN CASH (407,565) (35,148)
CASH AND CASH EQUIVALENTS
Beginning of period 868,313 41,232
End of period $ 460,748 $ 6,084
SUPPLEMENTAL DISCLOSURES OF CASH AND
NON-CASH TRANSACTIONS
Cash paid during the period for interest $ - $ 5,120
<FN>
See accompanying notes to financial statements.
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IV.
NOTES TO FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Refer to the Company's annual financial statements for the year ended August
31, 1997, 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, 1997, are not
necessarily indicative of the operating results for the full year.
4. Common Stock and Warrants
In December 1996 the Company issued 1,118,250 "Units" of Company securities
for cash. Each unit consisted of one share of the Company's $.10 par value
common stock and one warrant to purchase one share of common stock at a
price of $3.00 per share. During the quarter ended November 30, 1997, the
Company separated the common stock and warrants that compose the Company's
units. As of November 30, 1997, none of the warrants have been exercised.
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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
RESULTS OF OPERATIONS
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Three months ended November 30, 1997 Compared to Three Months Ended November 30,
1996
Oil and gas sales increased 49% for the current quarter as compared to the
corresponding quarter of a year ago. The increase in sales was due primarily to
an increase in production, along with an increase in oil and gas pricing during
the period ended November 1997. The growth in production can be attributed
primarily to production on the Waltman 21-19 well, which began producing in
February 1997, along with an increase in production on the Marianne Field, and
an additional interest acquired in the Long Butte Field in the prior fiscal
year.
Costs and expenses also increased 56% for the current quarter as
compared to the corresponding quarter of a year ago. Exploration expenses
experienced a significant increase, due primarily to rentals on newly acquired
nonproducing leases, and the unsuccessful drilling of the Buffalo Robe #1 well.
Production costs increased by $12,600, which constituted a higher percentage
of oil and gas sales than during the prior year. General and administrative
expenses decreased as a percentage of oil and gas sales but increased in
actual amount from $75,676 to $101,344.
Primarily as a result of the increased costs for exploration expense, general
and administrative expense and production costs and taxes, income before
income taxes decreased by $6,090 during the three months ended November 30,
1997 as compared with the prior year period.
FINANCIAL CONDITION
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Cash consumed by operating activities was $28,398 for the quarter ended November
30, 1997, as compared to $38,629 consumed in the corresponding quarter of a year
ago. Changes in working capital required cash of $325,045 for the current
quarter. The primary use of this working capital was expended on the development
of the Graham Field. The company expects to see production on this field resume
during the current fiscal year, as soon as existing transportation pipelines are
brought back on line. Changes in working capital for the corresponding quarter
of a year ago required cash of just $6,309.
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VI.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORT ON FORM 8-K
No reports on Form 8-K were filed during the period covered by this report.
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VII.
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/ Stephen H. Hollis
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Stephen H. Hollis
Treasurer and Principal Financial Officer
Date: January 7, 1998
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-END> NOV-30-1997
<CASH> 460,748
<SECURITIES> 0
<RECEIVABLES> 241,213
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 790,591
<PP&E> 4,670,639
<DEPRECIATION> 1,674,145
<TOTAL-ASSETS> 3,880,987
<CURRENT-LIABILITIES> 246,589
<BONDS> 0
0
0
<COMMON> 388,062
<OTHER-SE> 3,198,705
<TOTAL-LIABILITY-AND-EQUITY> 3,880,987
<SALES> 250,089
<TOTAL-REVENUES> 250,878
<CGS> 0
<TOTAL-COSTS> 243,189
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 15,584
<INCOME-TAX> 2,337
<INCOME-CONTINUING> 13,247
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,247
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
