<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995 Commission File # 0-9129
------
LOCH EXPLORATION, INC.
(Exact name of registrant as specified in its charter)
TEXAS 75-1657943
----- ----------
(State of other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Indentification Number)
414 E. Elm, Gainesville, Texas 76240
------------------------------------------------
(Address of principal executive offices) (Zip Code)
(817) 668 - 1271
-----------------
(Registrant's telephone number, including area code)
___________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve 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 ninety (90) days.
YES X NO
------------- -------------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock - $.001 par value 64,388,376
------------------------------ ----------
(Title of Class) Number of shares outstanding on June 30, 1995
<PAGE>
[RIGLER, MURRELL, HESS & ROHMER LETTERHEAD APPEARS HERE]
ACCOUNTANTS' COMPILATION REPORT
-------------------------------
Loch Exploration, Inc.
Gainesville, Texas
We have compiled the accompanying balance sheet of Loch Exploration, Inc. as of
June 30, 1995, and the related statements of operations, retained earnings, and
cash flows for the six months ended June 30, 1995 and June 30, 1994, and the
related statements of operations for the three months ended June 30, 1995 and
June 30, 1994, in accordance with Statements on Standards for Accounting and
Review Services issued by the American Institute of Certified Public
Accountants.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and, accordingly, do not express
an opinion or any other form of assurance on them.
Management has elected to omit substantially all of the disclosures required by
generally accepted accounting principles. If the omitted disclosures were
included in the financial statement, they might influence the user's conclusions
about the company's financial position, results of operations and cash flows.
Accordingly, these financial statements are not designed for those who are not
informed about such matters.
Rigler, Murrell, Hess, & Rohmer
A Professional Corporation
Certified Public Accountants
August 14, 1995
<PAGE>
LOCH EXPLORATION, INC.
INCOME STATEMENT
For the three months ended June 30, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Revenue:
Lease operating $ 1,427 $ 2,726
Compressor lease 10,392 10,392
Oil and gas sales 63,495 43,959
------------------------
75,314 57,077
Costs and expenses:
Costs of assets sold
Lease operating expense 44,284 26,006
General and administrative 24,280 22,271
Depletion and depreciation 7,994 2,537
Interest expense 3,840 6,640
------------------------
80,398 57,454
------------------------
Income (loss) before taxes (5,084) (377)
Income taxes 0 0
------------------------
Net income (loss) ($5,084) ($377)
========================
Net income (loss) per common
and common equivalent share ($0.0001) ($0.0000)
========================
Weighted average number of
shares outstanding 61,099,614 61,099,614
========================
</TABLE>
UNAUDITED - See accountant's compilation report.
<PAGE>
LOCH EXPLORATION, INC.
STATEMENT OF STOCKHOLDERS EQUITY
For the year ended December 31, 1994 and
the six months ended June 30, 1995 and 1994
<TABLE>
<CAPTION>
Shares of
common Additional Retained
stock Common paid in earnings
issued stock capital (deficit)
<S> <C> <C> <C> <C>
Balance December 31, 1993 60,960,851 $ 60,961 $ 56,035 $(55,075)
Treasury stock acquired
Treasury stock traded for property 150,000
Stock issued to related parties in
repayment of loans and interest 277,525 277 9,461
Net gain, June 30, 1994 8,227
------------------------------------------------------
Balance June 30, 1994 61,238,376 61,238 215,496 (46,848)
Stock issued to retire debt,
1993A Debentures 3,150,000 3,150 53,550
Net gain, December 31, 1994 4,299
------------------------------------------------------
Balance December 31, 1994 64,388,376 64,388 269,046 (42,549)
Net gain, June 30, 1994 7,083
------------------------------------------------------
Balance June 30, 1995 64,388,376 $ 64,388 $269,046 $(35,466)
======================================================
</TABLE>
UNAUDITED - See accountant's compilation report.
<PAGE>
LOCH EXPLORATION, INC.
STATEMENT OF CASH FLOWS
For the six months ended June 30, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 7,083 $ 8,225
Adjustments to reconcile net
income (loss) to net cash flows
from operating activities:
Depletion and depreciation 15,988 5,074
Interest converted to stock 2,800
Decrease in accounts receivable (45,829) (61,392)
Increase in accounts payable 27,020 19,114
Increase in taxes payable 352 0
------------------
Net cash provided (used) by
operating activities 4,614 (26,179)
Cash flows from investing activities:
Purchased property and equipment (12,506)
Purchased oil and gas properties (46,602) (8,625)
Sold oil and gas properties 6,977
------------------
Net cash provided (used) by
investing activities (46,602) (14,154)
Cash flows from financing activities:
Advances from notes payable 31,000 12,500
Repayment of notes payable (4,239)
Sale of debentures
------------------
Net cash provided (used) by
financing activities 26,761 12,500
------------------
Net increase (decrease) in cash
and equivalents (15,227) (27,833)
Cash and equivalents, beginning 21,744 49,273
------------------
Cash and equivalents, ending $ 6,517 $ 21,440
==================
Supplemental cash flow information:
Income taxes paid $0 $0
Interest paid 3,840 3,840
==================
</TABLE>
UNAUDITED - See accountant's compilation report.
<PAGE>
LOCH EXPLORATION, INC.
BALANCE SHEET
As of June 30, 1995 and December 31, 1994
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
ASSETS
Current assets:
Cash $ 6,517 $ 21,744
Accounts receivable, net 107,223 61,394
-----------------------
Total current assets 113,740 83,138
Oil and gas property:
Oil and gas property 360,753 314,151
Accumulated depletion (52,446) (39,144)
-----------------------
Total oil and gas property 308,307 275,007
Fixed assets:
Equipment 71,891 71,891
Accumulated depreciation (19,779) (17,093)
-----------------------
Total fixed assets 52,112 54,798
-----------------------
Total Assets $ 474,159 $412,943
=======================
</TABLE>
UNAUDITED - See accountant's compilation report.
<PAGE>
LOCH EXPLORATION, INC.
BALANCE SHEET
As of June 30, 1995 and December 31, 1994
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 46,134 $ 19,114
Accrued taxes payable 352
Notes payable 2,605 6,844
------------------
Total current liabilities 49,091 25,958
Related party liabilities:
Accounts payable related parties 2,800 2,800
Notes payable related parties 34,800 34,800
------------------
Total related party liabilities 37,600 37,600
Long term debt:
Notes payable 31,000
Debentures payable 65,000 65,000
Unamortized discount (6,500) (6,500)
------------------
Total long term debt 89,500 58,500
------------------
Total liabilities 176,191 122,058
Stockholders' equity:
Common stock, $.001 par value; 150,000,000
shares authorized; 60,960,851 shares issued
and 61,238,376 shares issued and outstanding
June 30, 1995 and December 31, 1994 64,388 64,388
Additional paid in capital 269,046 269,046
Retained earnings (35,466) (42,549)
------------------
Total stockholders' equity 297,968 290,885
------------------
Total Liabilities and
Stockholders' Equity $474,159 $412,943
==================
</TABLE>
UNAUDITED - See accountant's compilation report.
<PAGE>
LOCH EXPLORATION, INC.
INCOME STATEMENT
For the six months ended June 30, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Revenue:
Lease operating $ 2,402 $ 5,075
Compressor lease 20,784 20,784
Oil and gas sales 111,606 77,176
------------------------
134,792 103,035
Costs and expenses:
Costs of assets sold
Lease operating expense 62,079 41,397
General and administrative 41,941 39,139
Depletion and depreciation 15,988 5,074
Interest expense 7,701 9,200
------------------------
127,709 94,810
------------------------
Income (loss) before taxes 7,083 8,225
Income taxes 0 0
------------------------
Net income (loss) $ 7,083 $ 8,225
========================
Net income (loss) per common
and common equivalent share $ 0.0001 $ 0.0001
========================
Weighted average number of
shares outstanding 61,030,232 61,030,232
========================
</TABLE>
UNAUDITED - See accountant's compilation report.
<PAGE>
Management's Discussion and Analysis of Financial Conditions and Results of
---------------------------------------------------------------------------
Operations:
-----------
During the second quarter of 1995, the assets of the Company amounted to
$474,159 showing an increase of $61,799 from the second quarter 1994 assets.
This increase is primarily due to the Company's acquisition of various oil and
gas producing properties during the year.
Revenues and Operating Expenses:
--------------------------------
Total revenue for the second quarter of 1995 was $75,314 compared to $57,077 for
the second quarter of 1994, with the 1995 second quarter net income of ($5,084)
compared to ($377) in the 1994 second quarter. This negative income was
primarily due to higher than usual lease operating expenses for the quarter.
<PAGE>
PART 11 - Other Information
Item 6 Exhibits and Reports on Form 8-K:
----------------------------------
(A) Exhibits:
---------
27 Financial Data Schedule
(B) Reports on Form 8-K: None
--------------------
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Loch Exploration, Inc.
----------------------
Date: August 15, 1995 s/ Glenn L. Loch, President
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 6,517
<SECURITIES> 0
<RECEIVABLES> 107,223
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 113,740
<PP&E> 432,644
<DEPRECIATION> 72,225
<TOTAL-ASSETS> 474,159
<CURRENT-LIABILITIES> 49,091
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 474,159
<SALES> 111,606
<TOTAL-REVENUES> 134,792
<CGS> 0
<TOTAL-COSTS> 120,008
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,701
<INCOME-PRETAX> 7,083
<INCOME-TAX> 0
<INCOME-CONTINUING> 7,083
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,083
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
