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)
-------- OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly period ended Commission File
November 30, 2000 Number 0-6529
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
-------- OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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DOUBLE EAGLE PETROLEUM AND MINING CO.
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(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
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(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, 4,888,103 shares having a par value of $.10 per share were
outstanding as of January 2, 2001.
Transitional Small Business Disclosure format (check one):
Yes No X
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DOUBLE EAGLE PETROLEUM AND MINING COMPANY
INDEX
Page
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PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements
Balance Sheets as of November 30, 2000
and August 31, 2000 I.
Statements of Income for the three months
ended November 30, 2000 and 1999 II.
Statements of Cash Flows for the three months
ended November 30, 2000 and 1999 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 2. Changes in Securities; Recent Sales
of Unregistered Securities VI.
Item 6. Exhibits and Report on Form 8-K
Signatures VII.
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PART I
FINANCIAL INFORMATION
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<TABLE>
<CAPTION>
I.
DOUBLE EAGLE PETROLEUM AND MINING COMPANY
BALANCE SHEETS
NOVEMBER 30, 2000 AND AUGUST 31, 2000
November 30 August 31
2000 2000
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(Unaudited)
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash and cash equivalents $ 181,455 $ 141,641
Accounts receivable 678,149 494,593
Prepaid expenses 3,451 4,930
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Total Current Assets 863,055 641,164
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PROPERTIES AND EQUIPMENT
Undeveloped properties 840,876 835,210
Developed properties 7,212,504 7,002,000
Corporate and other 214,101 213,491
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8,267,481 8,050,701
Less accumulated depreciation, depletion, and impairment (2,950,690) (2,841,697)
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Net Properties and Equipment 5,316,791 5,209,004
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OTHER ASSETS 75,884 75,884
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TOTAL ASSETS $ 6,255,730 $ 5,926,052
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LIABILITIES
CURRENT LIABILITIES
Accounts payable $ 344,516 $ 520,978
Accrued production taxes 52,610 39,610
Line of credit 750,000 500,000
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Total Current Liabilities 1,147,126 1,060,588
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STOCKHOLDERS' EQUITY
Common stock, $.10 par value; 10,000,000 shares authorized;
Authorized; issued and outstanding 4,864,101 shares as of
November 30, 2000 and 4,831,401 shares as of August 31, 2000 486,410 483,140
Capital in excess of par value 3,805,584 3,754,144
Retained earnings 816,610 628,180
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Total Stockholders' Equity 5,108,604 4,865,464
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 6,255,730 $ 5,926,052
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See accompanying notes to financial statements.
</TABLE>
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II.
DOUBLE EAGLE PETROLEUM AND MINING COMPANY
STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2000 AND 1999
2000 1999
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REVENUES
Sales of oil and gas $ 613,142 $ 302,019
Sales of nonproducing leases -- 4,125
Other income 92 279
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Total 613,234 306,423
COSTS AND EXPENSES
Production costs 81,301 47,689
Production taxes 73,722 41,941
Exploration expenses 32,402 23,742
Write offs and abandonments 2,166 250
General and administrative 112,270 103,508
Depreciation and depletion 108,993 89,043
Cost of nonproducing leases sold -- 1,060
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Total 410,854 307,233
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INCOME (LOSS) FROM OPERATIONS 202,380 (810)
OTHER INCOME (EXPENSE)
Interest income 3,136 8,474
Interest expense (17,086) (3,041)
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(13,950) 5,433
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INCOME BEFORE INCOME TAXES 188,430 4,623
INCOME TAX EXPENSE -- --
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NET INCOME $ 188,430 $ 4,623
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NET EARNINGS PER COMMON SHARE - BASIC $ 0.04 $ --
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NET EARNINGS PER COMMON SHARE - DILUTED $ 0.03 $ --
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AVERAGE SHARES OUTSTANDING - BASIC 4,838,244 4,605,137
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AVERAGE SHARES OUTSTANDING - DILUTED 5,927,022 5,276,817
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See accompanying notes to financial statements.
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<TABLE>
<CAPTION>
III.
DOUBLE EAGLE PETROLEUM AND MINING COMPANY
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2000 AND 1999
2000 1999
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 188,430 $ 4,623
Charges to income not requiring cash:
Depreciation and depletion 108,993 89,043
Abandoned properties 2,166 250
Gain on sale of nonproducing leases -- (3,065)
Decrease (increase) in operating assets:
Accounts receivable (183,556) 76,156
Prepaid expenses 1,479 (10,731)
Increase (decrease) in operating liabilities:
Accounts payable (176,462) (49,121)
Accrued production taxes 13,000 (2,860)
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Net cash (used in) provided by operating activities (45,950) 104,295
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CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of properties and assets -- 4,125
Purchases of properties and assets (218,946) (415,017)
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Net cash (used in) investing activities (218,946) (410,892)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 54,710 1,096,835
Repayments of long-term debt -- (508,399)
Net borrowings under line of credit arrangement 250,000 --
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Net cash provided by financing activities 304,710 588,436
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INCREASE IN CASH AND CASH EQUIVALENTS 39,814 281,839
CASH AND CASH EQUIVALENTS
Beginning of period 141,641 237,755
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End of period $ 181,455 $ 519,594
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SUPPLEMENTAL DISCLOSURES OF CASH AND
NON-CASH TRANSACTIONS
Cash paid during the period for interest $ 17,086 $ 3,041
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See accompanying notes to financial statements.
</TABLE>
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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, 2000, 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's 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, 2000, are not
necessarily indicative of the operating results for the full year.
4. Common Stock and Warrants
The Company intends to notify the holders of the Company's publicly traded
1,095,550 outstanding warrants of its intention to redeem the warrants.
Each warrant allows the holder to purchase one share of common stock at a
price of $3.00 per share. Due to the recent market price of the Company's
common stock, the Company believes substantially all of the holders of the
outstanding warrants will exercise the warrants and purchase the shares of
common stock underlying the warrants. If all the warrants are exercised, of
which there is no assurance, the Company would receive $3,286,650 in
proceeds.
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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
Current quarter as compared to the corresponding quarter of one year ago
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The Company had net income of $188,430 for the current quarter as compared to
net income of $4,623 for the corresponding quarter of one year ago. Oil and gas
sales increased by 103% as a result of an approximate 10% increase in production
volume and an increase in oil and gas pricing. Production costs, taxes and
depreciation and depletion increased 48% as a result of the increased production
volume and increased revenues.
Sales of non-producing leases decreased by $4,125 and exploration expenses
increased by $8,660. General and administrative expenses increased by $8,762 or
8.5%.
FINANCIAL CONDITION
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During the current quarter, the Company utilized an additional $250,000 from its
existing line of credit to proceed with the completion of the Leonard 1-24 and
Lloyd 1-26 wells. The Company also reduced its accounts payable by $176,000
during the current quarter. During the quarter, the Company received $20,000
from the exercise of 10,000 options at $2.00 per share and, $10,500 from the
exercise of 7,000 Underwriter's warrants to purchase common stock and additional
warrants. The Underwriters warrants were issued in connection with the Company's
public offering in 1996. In addition, the Company received net proceeds of
$24,210 from the exercise of publicly traded warrants after the payment of
transfer agent expenses. Overall, the Company's working capital position
improved by $135,000 as a result of its favorable results of operations for the
current quarter.
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VI.
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES; RECENT SALES OF UNREGISTERED SECURITIES
During the quarter ended November 30, 2000, one holder of warrants received
10,000 shares of common stock, at $1.375 per share, from the exercise on August
28, 2000, of warrants received in a private placement of stock and warrants in
October 1998. Also during the quarter, the Company issued 10,000 shares to one
holder of options upon the exercise of those options, at $2 per share. The
issuance of these shares upon the exercise of the warrants and options was made
pursuant to exemptions from registration in accordance with Rules 505 and/or 506
and/or Sections 3(b) and/or 4(2) of the Securities Act of 1933.
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 8, 2001
