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
May 31, 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 July 1, 1999.
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:
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Item 1. Financial Statements
Balance Sheets as of May 31, 1999 (Unaudited)
and August 31, 1998 I.
Statements of Operations for the three and nine months
ended May 31, 1999 and 1998 (Unaudited) II.
Statements of Cash Flows for the nine months
ended May 31, 1999 and 1998 (Unaudited) III.
Notes to Financial Statements (Unaudited) IV.
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial Condition V.
PART II. OTHER INFORMATION
Item 5. Other Information VI.
Item 6. Exhibits and Report on Form 8-K VI.
Signatures VII.
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PART I
FINANCIAL INFORMATION
I.
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DOUBLE EAGLE PETROLEUM AND MINING COMPANY
BALANCE SHEETS
MAY 31, 1999 AND AUGUST 31, 1998
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May 31, August 31,
1999 1998
(Unaudited)
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ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 91,088 $ 97,429
Accounts receivable 186,198 156,174
Total Current Assets 277,286 253,603
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 651,725 602,359
Developed properties 4,681,521 4,051,469
Corporate and other 254,296 253,238
5,587,542 4,907,066
Less accumulated depreciation, depletion, and amortization 2,164,724 2,016,359
Net Properties and Equipment 3,422,818 2,890,707
Total Assets $ 3,799,006 $ 3,263,212
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 94,403 $ 70,852
Accrued production taxes 27,216 29,743
Line of credit arrangement 100,000 -
Total Current Liabilities 221,619 100,595
Total Liabilities 221,619 100,595
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 480,312 642,730
Total Stockholders' Equity 3,577,387 3,162,617
Total Liabilities and Stockholders' Equity $ 3,799,006 $ 3,263,212
<FN>
See accompanying notes to financial statements.
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II.
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DOUBLE EAGLE PETROLEUM AND MINING COMPANY
STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
For the Three Months For the Nine Months
Ended Ended
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May 31, May 31, May 31, May 31,
1999 1998 1999 1998
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REVENUES
Sales of oil and gas $ 150,085 137,989 468,952 527,533
Sales of nonproducing leases 81,000 50,000 178,619 50,000
Other - primarily zeolites 106 4,083 529 5,176
Total 231,191 192,072 648,100 582,709
COSTS AND EXPENSES
Production costs 46,032 32,574 122,382 68,606
Production taxes 18,072 21,941 61,446 65,405
Cost of nonproducing leases sold 11,325 4,216 11,325 4,216
Exploration 40,846 42,559 158,243 131,283
Write offs and abandonments 3,107 2,008 14,155 7,585
General and administrative 93,609 147,578 299,486 359,962
Depreciation and depletion 49,455 33,885 148,365 101,655
Total 262,446 284,761 815,402 738,712
(LOSS) FROM OPERATIONS (31,255 ) (92,689) (167,302) (156,003)
OTHER INCOME (EXPENSE)
Interest income 1,903 8,426 6,544 17,665
Interest expense - (2,225) (1661) (2,534)
Total 1,903 6,201 4,883 15,131
(LOSS) BEFORE INCOME TAXES (29,352 ) (86,488) (162,419) (140,872)
INCOME TAX EXPENSE (BENEFIT)
Current - - - -
Deferred - (12,973) - (21,131)
Total - (12,973) - (21,131)
NET (LOSS) $ (29,352 ) (73,515) (162,419) (119,741)
BASIC/DILUTED
(LOSS) PER SHARE $ (.01 ) (.02) (.04) (.03)
AVERAGE SHARES OUTSTANDING 4,365,401 3,909,477 4,184,201 3,890,365
DIVIDENDS PER SHARE OF COMMON STOCK $ .00 .00 .00 .00
<FN>
See accompanying notes to financial statements.
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III.
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DOUBLE EAGLE PETROLEUM AND MINING COMPANY
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MAY 31, 1999 AND 1998
(UNAUDITED)
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1999 1998
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OPERATING ACTIVITIES:
Net (loss) income $ (162,419) $ (119,741)
Charges to income not requiring cash:
Depreciation and depletion 148,365 101,655
Abandoned properties 14,155 7,585
Gain on sale of assets (167,294) (45,784)
Decrease (increase) in operating assets:
Accounts receivable (30,024) 35,701
Deposits 20,000 -
Increase (decrease) in operating liabilities:
Accounts payable 23,551 (99,021)
Accrued production taxes (2,527) (8,735)
Deferred tax liability - (21,131)
Net cash (used in) provided by operating activities (156,193) (149,471)
INVESTING ACTIVITIES:
Proceeds from sale of properties 178,619 50,000
Purchase of properties (705,955) (557,130)
Net cash (used in) investing activities (527,336) (507,130)
FINANCING ACTIVITIES:
Issuance of common stock 62,500 9,375
Proceeds from private placement 514,688 -
Borrowing on line of credit 100,000 -
Net cash provided by financing activities 677,188 9,375
(DECREASE) IN CASH (6,341) (647,226)
CASH AND CASH EQUIVALENTS
Beginning of period 97,429 868,313
End of period $ 91,088 $ 221,087
SUPPLEMENTAL DISCLOSURES OF CASH AND
NON-CASH TRANSACTIONS
Cash paid during the period for interest $ 1,661 $ 2,534
<FN>
See accompanying notes to financial statements.
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IV.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
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 May 31, 1999, are not
necessarily indicative of the operating results for the full year.
4.Correction of Previous Quarter Results
An error was made in the previous quarter, resulting in an overstatement of
oil and gas revenues. The result of the error was the overstatement of assets
and oil and gas revenues of $30,000, and liabilities and production taxes of
$3,000. The information for the current quarter contained in the income
statement is reflective of adjustments made to the previous quarter.
V.
DOUBLE EAGLE PETROLEUM AND MINING COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
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Year to Date Results of Operations Compared to Prior Year to Date Results
- -------------------------------------------------------------------------
An increase in production resulting from acquisitions of producing properties
has not overcome the decline in revenues resulting from a decline in oil and gas
pricing experienced during the first six months of the current nine month
period. Overall, revenues from the sale of oil and gas declined 11% from the
same nine month period of one year ago. Work performed to enhance production on
producing properties resulted in a 78% increase in production costs over the
same nine month period of one year ago. Exploration costs increased 21%, while
general and administrative expenses declined 17% as compared to the
corresponding nine month period of the prior year. Depreciation and depletion
expense increased 46%, due to the increase in production.
Current Quarter Compared to Previous Quarter
- --------------------------------------------
Revenues from oil and gas sales increased 9% over the previous quarter, due to
an increase in oil and gas pricing. Production costs and general and
administrative expenses experienced declines of 15% and 20%, respectively, while
exploration costs experienced a 17% increase over the previous quarter.
Current Quarter Compared to Corresponding Quarter of Prior Year
- ---------------------------------------------------------------
Revenues from oil and gas sales increased 9% over the corresponding quarter of
the prior year, due primarily to an increase in production. Production costs
increased by 41%, while general and administrative expenses decreased by 37%.
Depreciation and depletion expense increased 46%, due to the increase in
production.
Financial Condition
- -------------------
Operating activities for the nine month period ending May 31, 1999 consumed
$156,000 of cash. Purchases of oil and gas properties also required $705,000 of
cash. Cash of $577,000 was provided by the issuance of additional shares of the
Company's stock. Another $178,000 was provided by the sale of non-producing oil
and gas properties, while $100,000 was provided by borrowings on the Company's
line of credit.
VI.
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
Stephen H. Hollis, Ken M. Daraie and Thomas J. Vessels continue to serve as
directors of the Company after the resignation from the Board of William N.
Heiss in May 1999 and Tom R. Creager in June 1999. Mr. Hollis also is the Chief
Executive Officer of the Company.
ITEM 6. EXHIBITS AND REPORT ON FORM 8-K
No Forms 8-K were filed during the period covered by this report.
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: July 14, 1999
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-END> MAY-31-1999
<CASH> 91,088
<SECURITIES> 0
<RECEIVABLES> 186,198
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 277,286
<PP&E> 5,587,542
<DEPRECIATION> 2,164,724
<TOTAL-ASSETS> 3,799,006
<CURRENT-LIABILITIES> 221,619
<BONDS> 0
0
0
<COMMON> 436,537
<OTHER-SE> 3,140,850
<TOTAL-LIABILITY-AND-EQUITY> 3,799,006
<SALES> 648,100
<TOTAL-REVENUES> 648,100
<CGS> 815,402
<TOTAL-COSTS> 815,402
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,661
<INCOME-PRETAX> (162,419)
<INCOME-TAX> (162,419)
<INCOME-CONTINUING> (162,419)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (162,419)
<EPS-BASIC> (.04)
<EPS-DILUTED> (.04)
</TABLE>
