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
February 28, 1999 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, 4,365,401 shares having a par value of $.10 per share were
outstanding as of April 8, 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
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PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Balance Sheets as of February 28, 1999
and August 31, 1998 I.
Statements of Operations for the three and six months
ended February 28, 1999 and 1998 II.
Statements of Cash Flows for the six months
ended February 28, 1999 and 1998 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 4. Submission of matters to a vote of security holders VI.
Item 6. Exhibits and Report on Form 8-K VI.
Signatures VII.
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<PAGE>
PART I
FINANCIAL INFORMATION
<PAGE>
I.
DOUBLE EAGLE PETROLEUM AND MINING COMPANY
BALANCE SHEETS
FEBRUARY 28, 1999 AND AUGUST 31, 1998
<TABLE>
<CAPTION>
February 28, August 31,
1999 1998
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 204,429 $ 97,429
Accounts receivable 144,811 156,174
Total Current Assets 349,240 253,603
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 639,022 602,359
Developed properties 4,513,419 4,051,469
Corporate and other 254,296 253,238
5,406,737 4,907,066
Less accumulated depreciation, depletion, and amortization 2,115,268 2,016,359
Net Properties and Equipment 3,291,469 2,890,707
Total Assets $ 3,739,611 $ 3,263,212
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 81,657 $ 70,852
Accrued production taxes 24,216 29,743
Total Current Liabilities 105,873 100,595
Total Liabilities 105,873 100,595
STOCKHOLDERS' EQUITY
Common stock, $.10 par value; - 10,000,000 shares,
authorized, 4,365,401 shares issued and outstanding 436,537 393,262
Capital in excess of par value 2,660,538 2,126,625
Retained earnings 536,663 642,730
Total Stockholders' Equity 3,633,738 3,162,617
Total Liabilities and Stockholders' Equity $ 3,739,611 $ 3,263,212
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
II.
DOUBLE EAGLE PETROLEUM AND MINING COMPANY
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
February 28, February 28, February 28, February 28,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
REVENUES
Oil and gas sales $ 167,719 $ 216,805 $ 348,867 $ 389,544
Sales of nonproducing leases - - 97,619 -
Other income 358 304 423 1,093
Total 168,077 217,109 446,909 390,637
COSTS AND EXPENSES
Production costs 54,180 20,435 76,350 36,032
Production taxes 22,277 23,146 46,374 43,464
Exploration expenses 34,856 38,442 117,397 55,495
Write offs and abandonments 256 924 11,048 38,806
General and administrative 116,353 111,040 205,877 212,384
Depreciation and depletion 49,455 33,885 98,910 67,770
Total 277,377 227,872 555,956 453,951
(LOSS) FROM OPERATIONS (109,300 ) (10,763) (109,047 ) (63,314)
OTHER INCOME (EXPENSE)
Interest income 2,712 1,344 4,641 9,239
Interest expense (1,661 ) (309) (1,661 ) (309)
1,051 1,035 2,980 8,930
(LOSS) BEFORE INCOME TAXES (108,249 ) (9,728) (106,067 ) (54,384)
INCOME TAX (BENEFIT)
Current - - - -
Deferred - (1,460) - (8,158)
Total - (1,460) - (8,158)
NET (LOSS) $ (108,249 )$ (8,268) $ (106,067 )$ (46,226)
BASIC/DILUTED
(LOSS) PER SHARE $ (.03 )$ (.00) $ (.03 )$ (.01)
AVERAGE SHARES OUTSTANDING 4,253,320 3,880,651 4,092,100 3,880,651
DIVIDENDS PER SHARE OF COMMON STOCK $ .00 $ .00 $ .00 $ .00
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
III.
DOUBLE EAGLE PETROLEUM AND MINING COMPANY
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
OPERATING ACTIVITIES:
Net (loss) $ (106,067) $ (46,226)
Charges to income not requiring cash:
Depreciation and depletion 98,910 67,770
Abandoned properties 11,048 5,577
Decrease (increase) in operating assets:
Accounts receivable 11,363 39,869
Deposits 20,000 (90,391)
Increase (decrease) in operating liabilities:
Accounts payable 10,805 (97,245)
Accrued production taxes (5,527) (11,736)
Deferred tax liability - (8,158)
Net cash provided by (used in) operating activities 40,532 (140,540)
INVESTING ACTIVITIES:
Purchases of properties (510,720) (485,511)
Net cash (used in) investing activities (510,720) (485,511)
FINANCING ACTIVITIES:
Proceeds from private placement 514,688 -
Issuance of common stock 62,500 -
Borrowings on line of credit arrangement - 150,000
Net cash provided by financing activities 577,188 150,000
INCREASE (DECREASE) IN CASH 107,000 (476,051)
CASH AND CASH EQUIVALENTS
Beginning of period 97,429 868,313
End of period $ 204,429 $ 392,262
SUPPLEMENTAL DISCLOSURES OF CASH AND
NON-CASH TRANSACTIONS
Cash paid during the period for interest $ 1,661 $ 309
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE> 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 February 28, 1999, are not
necessarily indicative of the operating results for the full year.
4.Common Stock and Warrants
During the six months ended February 28, 1999, the Company offered through
private placement 374,750 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.
<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
Year to Date Results of Operations Compared to Prior Year to Date Results
During the current six month period, the Company purchased an interest in the
"Government Bridge" filed. The increase in production contributed by this
acquisition was not enough to offset the decrease in revenues resulting from a
decline in oil and gas pricing. Overall, oil and gas sales dropped 10% from the
same six month period of one year ago. The Company performed a substantial
amount of work enhancing the production on the government bridge field. This
resulted in a 112% increase in production costs over the same six month period
of one year ago. Exploration costs increased 112% for the current six months as
compared to the corresponding six months of the prior year. This increase was
due primarily to the drilling and write-off of a dry hole. Depreciation and
depletion expense increased 46%, due to an increase in production.
Current Quarter Compared to Previous Quarter
Revenues from oil and gas sales declined by 7%, due primarily to a decline in
oil and gas pricing. Production costs increased by 144%, primarily due to work
performed on the Government Bridge field. Exploration costs declined by 58% as
there was no drilling activity in the current quarter. General and
administrative expenses increased by 30%, due primarily to shareholder relations
expenses.
Current Quarter Compared to Corresponding Quarter of Prior Year
Oil and gas sales decreased 23% due to a decline in oil and gas pricing.
Production costs increased 165% due primarily to work on the Government Bridge
field. Depreciation and depletion increased 46% due to an increase in
production.
Financial Condition
Operating activities for the six month period ending February 28, 1999 provided
$40,500 of cash. $515,000 was provided from the private placement of 374,750
shares of stock. The primary use of these funds was the acquisition of the
Government Bridge field for $384,000. This acquisition resulted in an increase
in 122,250 barrels of producing oil reserves. Overall, working capital increased
by $86,000.
<PAGE>
VI.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the annual stockholders' meeting on January 20, 1999 the following
directors were elected:
William N. Heiss
Tom R. Creager
Stephen H. Hollis
Ken M. Daraie
Thomas J. Vessels
Hocker, Lovelett, Hargens & Skogen, P.C. was approved as auditor for the year
ending August 31, 1999, with 2,330,392 votes for, 2,220 votes against, and
13,017 abstaining.
ITEM 6. EXHIBITS AND REPORT ON FORM 8-K
No 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: April 13, 1999
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-END> FEB-28-1999
<CASH> 204,429
<SECURITIES> 0
<RECEIVABLES> 144,811
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 349,240
<PP&E> 5,406,737
<DEPRECIATION> 2,115,268
<TOTAL-ASSETS> 3,739,611
<CURRENT-LIABILITIES> 105,873
<BONDS> 0
0
0
<COMMON> 436,537
<OTHER-SE> 3,197,201
<TOTAL-LIABILITY-AND-EQUITY> 3,739,611
<SALES> 446,909
<TOTAL-REVENUES> 446,909
<CGS> 0
<TOTAL-COSTS> 555,956
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,661
<INCOME-PRETAX> (106,067)
<INCOME-TAX> 0
<INCOME-CONTINUING> (106,067)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (106,067)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
