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 June 30, 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 August 1, 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
June 30, 1996 and December 31, 1995, and the related statements of operations,
changes in shareholders' equity and cash flows for the six months ended June 30,
1996 and 1995, and the related statements of operations for the three months
ended June 30, 1996 and June 30, 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
August 7, 1996
2
<PAGE>
LOCH EXPLORATION, INC.
Balance Sheets
As of June 30, 1996 and December 31, 1995
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
ASSETS
Current assets
Cash $ 29,538 $ 139,285
Trade accounts receivable 16,783 14,304
Accounts receivable, related parties 34,383 27,795
Marketable securities 100,000 --
--------- ---------
Total current assets 180,704 181,384
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 (88,868) (77,534)
--------- ---------
Total property and equipment 234,090 245,424
--------- ---------
Total assets $ 414,794 $ 426,808
========= =========
</TABLE>
Unaudited - see accountants' compilation report
3
<PAGE>
LOCH EXPLORATION, INC.
Balance Sheets
As of June 30, 1996 and December 31, 1995
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities $ 10,411 $ 11,681
Accounts payable, related parties 18,135 10,143
Current portion of long term debt 35,132 33,428
--------- ---------
Total current liabilities 63,678 55,252
Long term debt, less current portion 44,534 59,911
--------- ---------
Total liabilities 108,212 115,163
Shareholders' equity
Common stock,$.001 par value;150,000,000
shares authorized;64,388,802 and 64,388,376
shares issued and outstanding at June 30, 1996
and December 31, 1995 64,388 64,388
Additional paid in capital 269,046 269,046
Retained earnings (26,852) (21,789)
--------- ---------
Total shareholders' equity 306,582 311,645
--------- ---------
Total liabilities and shareholders' equity $ 414,794 $ 426,808
========= =========
</TABLE>
Unaudited - see accountants' compilation report
4
<PAGE>
LOCH EXPLORATION, INC.
Statements of Operations
For the six months ended June 30, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Revenues
Oil and gas revenue $ 96,631 $ 111,606
Equipment rental 15,060 20,784
Revenue from lease operations -- 2,402
Reimbursements 6,000 --
Interest income 1,591 --
------------ ------------
119,282 134,792
Expenses
Lease operations 55,477 62,079
Depreciation and depletion 11,334 15,988
General and administrative 52,001 41,941
Interest expense 5,533 7,701
------------ ------------
124,345 127,709
------------ ------------
Net earnings (loss) before taxes ($ 5,063) $ 7,083
Income taxes -- --
------------ ------------
Net earnings (loss) ($ 5,063) $ 7,083
============ ============
Net earnings (loss) per share of common stock -- --
============ ============
Weighted average shares outstanding 64,388,802 61,030,232
============ ============
</TABLE>
Unaudited - see accountants' compilation report
5
<PAGE>
LOCH EXPLORATION, INC.
Statements of Operations
For the three months ended June 30, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Revenues
Oil and gas revenue $ 53,507 $ 63,495
Equipment rental 7,530 10,392
Revenue from lease operations -- 1,427
Reimbursements 6,000 --
Interest income 538 --
------------ ------------
67,575 75,314
Expenses
Lease operations 35,678 44,284
Depreciation and depletion 5,667 7,994
General and administrative 26,231 24,280
Interest expense 2,598 3,840
------------ ------------
70,174 80,398
------------ ------------
Net earnings (loss) before taxes ($ 2,599) ($ 5,084)
Income taxes -- --
------------ ------------
Net earnings (loss) ($ 2,599) ($ 5,084)
============ ============
Net earnings (loss) per share of common stock -- --
============ ============
Weighted average shares outstanding 64,388,802 61,099,614
============ ============
</TABLE>
Unaudited - see accountants' compilation report
6
<PAGE>
LOCH EXPLORATION, INC.
Statements of Changes in Shareholders' Equity
For the year ended December 31, 1995 and
and the six months ended June 30, 1996 and 1995
<TABLE>
<CAPTION>
Additional Retained
Common Stock Paid in Earnings
--------------------------
Shares Amount Capital (Deficit)
------------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Balance January 1,1995 64,388,376 $ 64,388 $ 269,046 ($ 64,759)
Net earnings June 30,1995 -- -- -- 7,083
Common stock issued to
former shareholders 426 -- -- --
Net earnings July 1 to
December 31, 1995 -- -- -- 35,887
---------- ---------- ---------- ----------
Balance December 31, 1995 64,388,802 64,388 269,046 (21,789)
Net earnings(loss)
June 30, 1996 -- -- -- (5,063)
---------- ---------- ---------- ----------
Balance June 30, 1996 64,388,802 $ 64,388 $ 269,046 ($ 26,852)
========== ========== ========== ==========
</TABLE>
Unaudited - see accountants' compilation report
7
<PAGE>
LOCH EXPLORATION, INC.
Statements of Cash Flows
For the six months ended June 30, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Cash flows from operating activities
Net earnings (loss) ($ 5,063) $ 7,083
Reconciliation of net earnings (loss) to net cash
provided (used) by operating activities:
Depreciation and depletion 11,334 15,988
(Increase) decrease in accounts receivable (9,067) (45,829)
Increase (decrease) in accounts payable 6,722 27,020
Increase (decrease) in taxes payable -- 352
--------- ---------
Net cash provided (used) by operating activities 3,926 4,614
Cash flows from investing activities
Purchased marketable securities (100,000) --
Purchased leaseholds and workovers -- (46,602)
--------- ---------
Net cash provided (used) by investing activities (100,000) (46,602)
Cash flows from financing activities
Advances of debt -- 31,000
Repayment of debt (13,673) (4,239)
--------- ---------
Net cash provided (used) by financing activities (13,673) 26,761
--------- ---------
Increase (decrease) in cash (109,747) (15,227)
Cash at beginning of period 139,285 21,744
--------- ---------
Cash at end of period $ 29,538 $ 6,517
========= =========
Supplemental cash flow information:
Income tax paid $ 0 $ 0
Interest paid 5,820 3,840
========= =========
</TABLE>
Unaudited - see accountants' compilation report
8
<PAGE>
Management's Discussion and Analysis of Financial Conditions and Results
of Operations:
During the second quarter of 1996, the assets of the Company amounted to
$414,794 showing a decrease of $59,365 from the second quarter 1995 assets. This
decrease is primarily due to the Company's sale of oil and gas producing
properties during the second quarter 1995 and the decrease in accounts
receivable in the second quarter 1996.
Revenues and Operating Expenses:
Total revenue for the second quarter of 1996 was $67,575 compared to $75,314 for
the second quarter of 1995, with a 1996 second quarter net loss of $2,599
compared to a net loss of $5,084 in the 1995 second quarter. The decrease in
revenue is primarily due to a decrease in oil and gas and equipment rental
revenues. The increase in net earnings is due to the decrease in lease
operations.
9
<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
10
<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 7, 1996 s/ Glenn L. Loch, President
------------------------
Glenn L. Loch, President
11
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 129,538
<SECURITIES> 0
<RECEIVABLES> 51,166
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 180,704
<PP&E> 322,958
<DEPRECIATION> (88,868)
<TOTAL-ASSETS> 414,794
<CURRENT-LIABILITIES> 63,678
<BONDS> 0
0
0
<COMMON> 64,388
<OTHER-SE> 242,194
<TOTAL-LIABILITY-AND-EQUITY> 414,794
<SALES> 96,631
<TOTAL-REVENUES> 119,282
<CGS> 0
<TOTAL-COSTS> 55,477
<OTHER-EXPENSES> 63,335
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,533
<INCOME-PRETAX> (5,063)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,063)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,063)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
