U. S. Securities and Exchange Commission
Washington, D. C. 20549
Form 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 10 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended September
30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
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Commission File Number: 0-9458
Eagle Exploration Company
----------------------------
(Exact name of Registrant as specified in it charter)
Colorado 84-0804143
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(State or other jurisdiction of (I.R.S. Employer ID Number)
incorporation or organization)
1801 Broadway, Suite 1420
Denver, Colorado 80202
-----------------------------
(Address of principal executive offices)
(303) 296-3677
-----------------
(Issuer's telephone number)
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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APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by court. Yes X No
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State the number of shares outstanding of each of the issuer's classed of
common equity, as of the latest practicable date: 3,072,836.
Transitional Small Business Disclosure format:
(Check One) Yes No X
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<PAGE>
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
INDEX TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
PART I FINANCIAL INFORMATION PAGE
- - ------ ---------------------- ----
Item 1 Unaudited Condensed Consolidated
- - ------
Balance Sheets - September 30, 1998,
and March 31, 1998 3
Unaudited Condensed Consolidated
Statements of Operations - Three
Months Ended September 30, 1997
and 1998 and Six Months Ended
September 30, 1997 and 1998 4
Unaudited Condensed Consolidated
Statement of Cash Flow - Six Months
Ended September 30, 1997 and 1998 5
Notes to Unaudited Condensed
Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis
- - ------
of Financial Condition and Results
of Operations 7
PART II SIGNATURES 8
- - ------- ----------
<PAGE>
PART I
- - ------
FINANCIAL INFORMATION
-----------------------
Item 1
- - ------
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
Assets
September 30, March 31,
1998 1998
------------- -----------
Current assets
Cash and cash equivalents .................... $ 1,757,513 $ 333,450
Certificates of deposit ...................... 797,000 297,000
Other receivables ............................ 4,449 4,143
----------- -----------
Total current assets ....................... 2,558,962 634,593
----------- -----------
Office furniture, equipment and other,
net of $235,671 of accumulated
depreciation at September 30, 1998,
and $228,797 of accumulated depreciation
at March 31, 1998 ............................ 66,546 44,066
Investment in limited liability company ....... 0 24,725
Other ......................................... 26,638 26,638
----------- -----------
Total assets ............................... $ 2,652,146 $ 730,021
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable ............................. $ 7,508 $ 24,825
Deposits, deferred revenue and other ......... 8,996 8,996
----------- -----------
Total current liabilities .................. 16,504 33,821
----------- -----------
Stockholders' equity
Common stock, no par value;
authorized 10,000,000 shares;
3,072,836 shares issued and
outstanding ............................... 6,632,998 6,632,998
Accumulated deficit ........................ (3,997,356) (5,936,798)
----------- -----------
2,635,642 696,200
----------- -----------
Total liabilities and
stockholders' equity .................... $ 2,652,146 $ 730,021
=========== ===========
See Notes to Unaudited Condensed Consolidated Financial Statements.
3
<PAGE>
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
For the Three For the Three For the Six For the Six
Months Ended Months Ended Months Ended Months Ended
September 30, September 30, September 30, September 30,
1998 1997 1998 1997
------------ ------------ ------------ ------------
Revenue:
Income from investment in
limited liability company .... $ 2,048,579 $ -- $ 2,048,579 $ --
Interest income ............... 21,353 11,175 33,348 21,759
Other income .................. 5,128 5,898 10,459 12,161
----------- ----------- ----------- -----------
Total Revenue ............. 2,075,060 17,073 2,092,386 33,920
----------- ----------- ----------- -----------
Expenses:
Depreciation .................. 3,580 1,700 6,874 3,400
Other operating expenses ...... 98,074 53,865 146,070 109,676
----------- ----------- ----------- -----------
Total Expense ............. 101,654 55,565 152,944 113,076
----------- ----------- ----------- -----------
Net Income (Loss) ......... $ 1,973,406 $ -38,492 $ 1,939,442 $ -79,156
=========== =========== =========== ===========
Net Income (Loss) Per Share $ .64 $ (.01) $ .63 $ (.03)
=========== =========== =========== ===========
Weighted average number of share
outstanding ................... 3,072,836 3,072,836 3,072,836 3,072,836
=========== =========== =========== ===========
</TABLE>
See Notes to Unaudited Condensed Consolidated Financial Statements.
<PAGE>
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six For the Six
Months Ended Months Ended
September 30, September 30,
1998 1997
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $1,939,442 $ (79,156)
---------- ----------
Adjustments to reconcile net income
(loss) to net cash provided (used)
by operating activities:
Depreciation 6,874 3,400
Change in assets and liabilities:
Decrease (increase) in accounts
receivable (306) 1,039
(Decrease) in accounts payable (17,317) (5,630)
---------- ----------
Total adjustments (10,749) (1,191)
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NET CASH FLOWS PROVIDED (USED)
BY OPERATING ACTIVITIES 1,928,693 (80,347)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of certificates of deposit (500,000) (297,000)
Purchase of furniture and equipment (29,355) (500)
Return on investment in limited
liability company 24,725 -
---------- ----------
NET CASH FLOWS (USED)
BY INVESTING ACTIVITIES (504,630) (297,500)
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NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 1,424,063 (377,847)
CASH AND CASH EQUIVALENTS, BEGINNING
OF YEAR 333,450 510,055
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CASH AND CASH EQUIVALENTS, END OF
YEAR $1,757,513 $ 132,208
========== ==========
See Notes to Unaudited Condensed Consolidated Financial Statements.
<PAGE>
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Opinion of Management
- - ---------------------
1. The financial information furnished reflects all adjustments which are, in
the opinion of management, necessary to a fair presentation of the
financial position at September 30, 1998, and March 31, 1998, and of the
condensed consolidated statements of operations and condensed consolidated
statements of cash flows for the six months ended September 30, 1997 and
1998. Except for as noted in the Company's 10-KSB, we are unable to obtain
audited financial statements supporting the Company's investment in a
limited liability company (LLC) at March 31, 1998, or monthly financial
statements for the six months ended September 30, 1998. Therefore, this
report has not incorporated the financial information concerning the
Company's ownership in the LLC. The results of operations and statements of
cash flows for the periods presented are not necessarily indicative of
those to be expected for the entire year.
2. The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information, with the above mentioned exception.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles. For further
information refer to the audited consolidated financial statements and
notes thereto for the year ended March 31, 1998, included in the Company's
10-KSB filed with the Securities and Exchange Commission on June 30, 1998.
<PAGE>
Item 2: Management's' Discussion and Analysis of Financial Condition
- - ------ -------------------------------------------------------------
and Results of Operation.
------------------------
Financial Condition, Liquidity and Capital Resources
- - ----------------------------------------------------
Cash and cash equivalents increased for the six months ended September 30, 1998
to $1,757,513 from $333,450. For the same period the certificates of deposits
increased $500,000. This increase in cash, cash equivalents and certificates of
deposit is primarily due to the sale of the apartment complex owned by the
limited liability company which the Company had a membership interest.
Stockholders' equity increased from $696,200 to $2,635,642 for the six months
ended September 30, 1998.
The Company reported in its June 30, 1998, 10-Q that it participated for its
37.5 percent working interest in the wash down and completion of the Sexson
#1-19, Wallace County, Kansas. The well was perforated from 5,006 feet to 5,014
feet. A 3/4 inch choke was installed and flowed for one hour for an estimated
gas volume of 3.78 million cubic feet of gas per day. On August 12, 1998, the
well went on line with a 31/64 choke and produced 1.592 million cubic feet of
gas for 17 hours. Due to high line pressures, the well production volumes have
fluctuated day to day. As a result the well is averaging slightly over one
million cubic feet of gas per day. Disbursements are expected in December, 1998.
At a special meeting of the Board of Directors this fiscal quarter, 275,000
stock options were granted to the directors and employees as an incentive to
initiate and implement a merger, acquisition, or long term business plan for the
Company.
Results of Operations
- - ---------------------
For the six months ended September 30, 1998, compared to the six months ended
- - --------------------------------------------------------------------------------
September 30, 1997.
- - -------------------
For the six months ended September 30, 1998, the Company's total revenue was
$2,092,386 as compared to $33,920 for the six months ended September 30, 1997.
This is primarily due to the sale of the building within the LLC.
Total expenses for the six month period ended September 30, 1998, were $152,944
as compared to $113,076 for the period ended September 30, 1997. This increase
was due primarily to the non-capitalized costs associated with the drilling of
the Sexson #1-19.
<PAGE>
EAGLE EXPLORATION COMPANY AND SUBSIDIARIES
PART II
- - -------
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.
EAGLE EXPLORATION COMPANY
(Registrant)
By: /s/ Raymond N. Joeckel
-----------------------------------
Raymond N. Joeckel
President/Chief Financial Officer
By: /s/ Paul M. Joeckel
-----------------------------------
Paul M. Joeckel
Secretary
Date:November 10, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 1,757,513
<SECURITIES> 797,000
<RECEIVABLES> 4,449
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,558,962
<PP&E> 302,217
<DEPRECIATION> 235,671
<TOTAL-ASSETS> 2,652,146
<CURRENT-LIABILITIES> 16,504
<BONDS> 0
0
0
<COMMON> 6,632,998
<OTHER-SE> (3,997,356)
<TOTAL-LIABILITY-AND-EQUITY> 2,652,146
<SALES> 0
<TOTAL-REVENUES> 2,092,386
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 152,944
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,939,442
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,939,442
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,939,442
<EPS-PRIMARY> .63
<EPS-DILUTED> .63
</TABLE>
