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, 1998 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, 4,303,901 shares having a par value of $.10 per share were
outstanding as of January 12, 1999.
Transitional Small Business Disclosure format (check one):
Yes No X
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DOUBLE EAGLE PETROLEUM AND MINING COMPANY
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INDEX
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Page
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Balance Sheets as of November 30, 1998
and August 31, 1998 I.
Statements of Operations for the three months
ended November 30, 1998 and 1997 II.
Statements of Cash Flows for the three months
ended November 30, 1998 and 1997 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 Report on Form 8-K VI.
Signatures VII.
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<PAGE>
PART I
FINANCIAL INFORMATION
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I.
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DOUBLE EAGLE PETROLEUM AND MINING COMPANY
BALANCE SHEETS
NOVEMBER 30, 1998 AND AUGUST 31, 1998
<CAPTION>
November 30, August 31,
1998 1998
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 203,804 97,429
Accounts receivable 204,102 156,174
Total Current Assets 407,906 253,603
OTHER ASSETS
Gas balancing arrangement 82,277 82,277
Investment 125 125
Other 16,500 36,500
Total Other Assets 98,902 118,902
PROPERTY AND EQUIPMENT
Undeveloped properties 601,254 602,359
Developed properties 4,444,117 4,051,469
Corporate and other 253,532 253,238
5,298,903 4,907,066
Less accumulated depreciation, depletion, and amortization 2,065,814 2,016,359
Net Properties and Equipment 3,233,089 2,890,707
Total Assets $ 3,739,897 3,263,212
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 174,921 70,852
Accrued production taxes 21,216 29,743
Line of credit arrangement 175,000 -
Total Current Liabilities 371,137 100,595
Total Liabilities 371,137 100,595
STOCKHOLDERS' EQUITY
Common stock, $.10 par value; - 10,000,000 shares,
authorized, 4,082,651 shares issued and outstanding 408,262 393,262
Capital in excess of par value 2,315,586 2,126,625
Retained earnings 644,912 642,730
Total Stockholders' Equity 3,368,760 3,162,617
Total Liabilities and Stockholders' Equity $ 3,739,897 3,263,212
<FN>
See accompanying notes to financial statements.
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<PAGE>
II.
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DOUBLE EAGLE PETROLEUM AND MINING COMPANY
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 1998 AND 1997
<CAPTION>
1998 1997
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REVENUES
Sales of oil and gas $ 181,148 $ 172,739
Sales of nonproducing leases 97,619 -
Other income 65 789
Total 278,832 173,528
COSTS AND EXPENSES
Production costs 22,170 15,597
Production taxes 24,097 20,318
Exploration expenses 82,541 50,282
Write offs and abandonments 10,792 4,653
General and administrative 89,524 101,344
Depreciation and depletion 49,455 33,885
Total 278,579 226,079
INCOME (LOSS) FROM OPERATIONS 253 (52,551)
OTHER INCOME
Interest income 1,929 7,895
1,929 7,895
INCOME (LOSS) BEFORE INCOME TAXES 2,182 (44,656)
INCOME TAX EXPENSE (BENEFIT)
Current - -
Deferred - (6,698)
Total - (6,698)
NET INCOME (LOSS) $ 2,182 $ (37,958)
NET EARNINGS (LOSS) PER COMMON SHARE -
BASIC AND DILUTED $ - $ -
AVERAGE SHARES OUTSTANDING 3,940,893 3,901,024
DIVIDENDS PER SHARE OF COMMON STOCK $ - $ -
<FN>
See accompanying notes to financial statements.
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<PAGE>
III.
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DOUBLE EAGLE PETROLEUM AND MINING COMPANY
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 1998 AND 1997
<CAPTION>
1998 1997
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OPERATING ACTIVITIES:
Net income (loss) $ 2,182 $ (37,958)
Charges to income not requiring cash:
Depreciation and depletion 49,455 33,885
Abandoned properties 10,792 4,653
Decrease (increase) in operating assets:
Accounts receivable (47,928) 5,458
Deposits 20,000 (88,630)
Increase (decrease) in operating liabilities:
Accounts payable 104,069 72,628
Accrued production taxes (8,527) (11,736)
Deferred tax liability - (6,698)
Net cash provided by (used in) operating activities 130,043 (28,398)
INVESTING ACTIVITIES:
Purchases of properties (402,628) (379,167)
Net cash (used in) investing activities (402,628) (379,167)
FINANCING ACTIVITIES:
Proceeds from private placement 203,960 -
Net borrowings on letter of credit arrangement 175,000 -
Net cash provided by financing activities 378,960 -
INCREASE (DECREASE) IN CASH 106,375 (407,565)
CASH AND CASH EQUIVALENTS
Beginning of period 97,429 868,313
End of period $ 203,804 $ 460,748
SUPPLEMENTAL DISCLOSURES OF CASH AND
NON-CASH TRANSACTIONS
Cash paid during the period for interest $ - $ -
<FN>
See accompanying notes to financial statements.
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IV.
DOUBLE EAGLE PETROLEUM AND MINING COMPANY
NOTES TO FINANCIAL STATEMENTS
1.Summary of Significant Accounting Policies
Refer to the Company's annual financial statements for the year ended August
31, 1998, 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, 1998, are not
necessarily indicative of the operating results for the full year.
4.Common Stock and Warrants
During the quarter ended November 30, 1998, the Company offered through
private placement a minimum 150,000 and a maximum of 375,000 Units for $1.375
per Unit. Each Unit consists of one share of common stock and one redeemable
warrant to purchase one share of common stock at an exercise price of $1.375
per share. As of November 30, 1998, the Company has sold 150,000 Units,
receiving $203,961 in net proceeds after payment of offering costs. The
Company expects to place all of the Units offered for sale.
<PAGE> 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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Current quarter as compared to the corresponding quarter of one year ago
- ------------------------------------------------------------------------
The Company experienced net income of $2,182 for the current quarter as compared
to a net loss of $37,958 for the corresponding quarter of one year ago. The
positive operating results can be attributed to the sale in the current quarter
of the shallow production rights on a prospect the Company drilled in the
current quarter. The prospect proved to be a dry hole for the Company.
Acquisitions accounted for an increase in oil and gas sales of 5% for the
current quarter as compared to the corresponding quarter of one year ago. During
the current quarter, the Company purchased a 25% working interest in three oil
fields in Wyoming. The Company acquired 122,250 barrels of producing oil
reserves. The increase in oil and gas sales was offset by an increase in
production costs.
Costs and expenses increased 23% for the current quarter as compared to the
corresponding quarter of one year ago. The increase is due primarily to the
expensing of an exploratory dry hole, and an increase in depreciation and
depletion of oil and gas properties. General and administrative expenses
decreased 12% as the Company implemented a program to reduce overhead expenses.
FINANCIAL CONDITION
- -------------------
During the current quarter, the Company received $204,000 in proceeds from the
private placement of shares of the Company's stock. In addition the Company
borrowed a net of $175,000 on its letter of credit arrangement. The Company also
experienced a net cash flow from operations of $130,000. The Company utilized
$375,000 of these funds in the purchase of the working interests discussed
above. These transactions, combined with other operations, resulted in a net
decrease in working capital of $116,000.
<PAGE>
VI.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORT ON FORM 8-K
No reports on Forms 8-K were filed during the period covered by this report.
<PAGE>
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 13, 1999
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-END> NOV-30-1998
<CASH> 203,804
<SECURITIES> 0
<RECEIVABLES> 204,102
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 407,906
<PP&E> 5,298,903
<DEPRECIATION> 2,065,814
<TOTAL-ASSETS> 3,739,897
<CURRENT-LIABILITIES> 371,137
<BONDS> 0
0
0
<COMMON> 408,262
<OTHER-SE> 2,960,498
<TOTAL-LIABILITY-AND-EQUITY> 3,739,897
<SALES> 278,767
<TOTAL-REVENUES> 278,832
<CGS> 0
<TOTAL-COSTS> 278,579
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,182
<INCOME-TAX> 0
<INCOME-CONTINUING> 2,182
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,182
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
