FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1996 Commission File # 0-9129
LOCH EXPLORATION, INC.
(Exact Name of Registrant as Specified in its Charter)
TEXAS 75-1657943
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification 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 of 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 64,388,802
(Title of Class) (Number of shares Outstanding
on March 31, 1996
1
<PAGE>
Rigler, Hess and Rohmer
316 W. Broadway
Gainesville, Texas 76240
(817)665-0738
ACCOUNTANTS' COMPILATION REPORT
Loch Exploration, Inc.
Gainesville, Texas
We have compiled the accompanying balance sheet of Loch Exploration, Inc. as of
March 31, 1996 and December 31, 1995, and the related statements of operations,
changes in shareholders' equity and cash flows for the three months ended March
31, 1996 and 1995, 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 statements, 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, Hess and Rohmer
A Professional Corporation
Certified Public Accountants
May 10, 1996
2
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Part I Financial information
Item I. Financial statements
LOCH EXPLORATION, INC.
Balance Sheets
As of March 31, 1996 and December 31, 1995
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
ASSETS
Current assets
Cash $ 124,771 $ 139,285
Trade accounts receivable 16,396 14,304
Accounts receivable, related parties 39,831 27,795
--------- ---------
Total current assets 180,998 181,384
Property and equipment - at cost
Oil and gas properties (full cost method) 250,567 250,567
Equipment 72,391 72,391
Accumulated depreciation and depletion (83,201) (77,534)
--------- ---------
Total property and equipment 239,757 245,424
--------- ---------
Total assets $ 420,755 $ 426,808
========= =========
</TABLE>
Unaudited - see accountants' compilation report
3
<PAGE>
LOCH EXPLORATION, INC.
Balance Sheets
As of March 31, 1996 and December 31, 1995
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 12,336 $ 11,681
Accounts payable, related parties 13,140 10,143
Current portion of long term debt 37,132 33,428
--------- ---------
Total current liabilities 62,608 55,252
Long term debt, less current portion 48,966 59,911
--------- ---------
Total liabilities 111,574 115,163
Shareholders' equity
Common stock, $.001 par value; 150,000,000
shares authorized; 64,388,802 and 64,388,376
shares issued and outstanding at March 31, 1996
and December 31, 1995 64,388 64,388
Additional paid in capital 269,046 269,046
Retained earnings (24,253) (21,789)
--------- ---------
Total shareholders' equity 309,181 311,645
--------- ---------
Total liabilities and shareholders' equity $ 420,755 $ 426,808
========= =========
</TABLE>
Unaudited - see accountants' compilation report
4
<PAGE>
LOCH EXPLORATION, INC.
Statements of Operations
For the three months ended March 31, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Revenues
Oil and gas revenue $ 43,124 $ 48,111
Equipment rental 7,530 9,342
Revenue from lease operations -- 975
Interest income 1,053 --
------------ ------------
51,707 58,428
Expenses
Lease operations 19,800 16,745
Depreciation and depletion 5,667 7,994
General and administrative 25,770 17,661
Interest expense 2,934 3,861
------------ ------------
54,171 46,261
------------ ------------
Net earnings (loss) before taxes $ (2,464) $ 12,167
Income taxes -- --
------------ ------------
Net earnings (loss) $ (2,464) $ 12,167
============ ============
Net earnings (loss) per share of common stock -- --
============ ============
Weighted average shares outstanding 64,388,802 64,388,376
============ ============
</TABLE>
Unaudited - see accountants' compilation report
5
<PAGE>
LOCH EXPLORATION, INC.
Statements of Changes in Shareholders' Equity
For the years ended December 31, 1995 and 1994
and the three months ended March 31, 1996 and 1995
<TABLE>
<CAPTION>
Additional Retained
Common Stock Paid in Earnings
----------------------
Shares Amount Capital (Deficit)
------------ -------- ----------- --------
<S> <C> <C> <C> <C>
Balance, January 1, 1994 60,960,851 $60,961 $56,035 ($66,433)
Stock issued in satisfaction
of payable to a related party 277,525 277 9,461 -
Treasury stock contributed by
shareholders (2,500,000) - - -
Treasury stock issued to
acquire oil and gas property 2,500,000 - 150,000 -
Stock issued to retire debentures 3,150,000 3,150 53,550 -
Net earnings - - - 1,674
----------- ------- ---------- --------
Balance December 31, 1994 64,388,376 64,388 269,046 (64,759)
Net earnings March 31, 1995 - - - 12,167
Common stock issued to former
shareholders 426 - - -
Net earnings April 1 to
December 31, 1995 - - - 30,803
----------- ------- --------- --------
Balance December 31, 1995 64,388,802 64,388 269,046 (21,789)
Net earnings(loss) March 31,
1996 - - - (2,464)
---------- ------- --------- --------
Balance March 31, 1996 64,388,802 $64,388 $269,046 ($24,253)
========== ======= ========= =========
</TABLE>
Unaudited - see accountants' compilation report
6
<PAGE>
LOCH EXPLORATION, INC.
Statements of Cash Flows
For the three months ended March 31, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Cash flows from operating activities
Net earnings (loss) ................................. ($ 2,464) $ 12,167
Reconciliation of net earnings (loss) to net cash
provided (used) by operating activities:
Depreciation and depletion .......................... 5,667 7,994
(Increase) decrease in accounts receivable .......... (14,128) (7,285)
Increase (decrease) in accounts payable ............. 3,652 (4,249)
--------- ---------
Net cash provided (used) by operating activities ..... (7,273) 8,627
Cash flows from investing activities
Purchased leaseholds and workovers .................. -- (7,722)
--------- ---------
Net cash provided (used) by investing activities ..... -- (7,722)
Cash flows from financing activities
Repayment of debt ................................... (7,241) (2,463)
--------- ---------
Net cash provided (used) by financing activities ..... (7,241) (2,463)
--------- ---------
Increase (decrease) in cash .......................... (14,514) (1,558)
Cash at beginning of period .......................... 139,285 14,764
--------- ---------
Cash at end of period ................................ $ 124,771 $ 13,206
========= =========
Supplemental cash flow information:
Income tax paid ..................................... $ 0 $ 0
Interest paid ....................................... 2,959 3,861
========= =========
</TABLE>
Unaudited - see accountants' compilation report
7
<PAGE>
Management's Discussion and Analysis of Financial Conditions and Results
of Operations:
During the first quarter of 1996, the assets of the Company amounted to $420,755
showing a growth increase of $2,357 from the first quarter 1995 assets.
Revenues and Operating Expenses:
Total revenue for the first quarter of 1996 was $51,707 compared to $58,428 for
the first quarter of 1995, with the 1996 first quarter net loss of $2,464
compared to a net earnings of $8,604 in the 1995 first quarter. This decrease in
revenue is primarily due to a 1995 sale of oil properties. The decrease in net
earnings is due to the decrease in revenue and to a temporary increase in
general and administrative expenses.
8
<PAGE>
Part II - Other Information
Item 6
Exhibits and Reports on Form 8-K:
(A) Exhibits
27 Financial Data Schedule
(B) Reports on Form 8-K
Date of report 05/10/96
9
<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.
Glenn L. Loch
-------------
Date: May 10, 1996 Glenn L. Loch
President
10
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 124,771
<SECURITIES> 0
<RECEIVABLES> 56,227
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 180,998
<PP&E> 322,958
<DEPRECIATION> 83,201
<TOTAL-ASSETS> 420,755
<CURRENT-LIABILITIES> 62,608
<BONDS> 0
0
0
<COMMON> 64,388
<OTHER-SE> 244,793
<TOTAL-LIABILITY-AND-EQUITY> 420,755
<SALES> 43,124
<TOTAL-REVENUES> 51,707
<CGS> 0
<TOTAL-COSTS> 19,800
<OTHER-EXPENSES> 31,437
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,934
<INCOME-PRETAX> (2,464)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,464)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,464)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
