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, 1997 Commission File # 0-9129
LOCH EXPLORATION, INC.
(Exact Name of Registrant as Specified in its Charter)
TEXAS 75-1657943
(State or other jurisdiction of (IRS Employer Identification Number)
Incorporation or Organization)
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 - $.01 par value 1,288,951
(Title of Class) (Number of shares Outstanding
on March 31, 1997)
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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, 1997 and December 31, 1996, and the related statements of operations
and cash flows for the three months ended March 31, 1997 and 1996, 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 and
statement of changes in shareholders' equity required by generally accepted
accounting principles. If the omitted disclosures and statement of changes in
shareholders' equity 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 5, 1997
2
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LOCH EXPLORATION, INC.
Balance Sheets
<TABLE>
<CAPTION>
March 31, December 31,
--------- ---------
1997 1996
--------- ---------
(Unaudited)
ASSETS
Current assets
<S> <C> <C>
Cash $ 121,014 $ 119,721
Trade accounts receivable 13,320 17,054
Accounts receivable, related parties 34,286 40,349
--------- ---------
Total current assets 168,620 177,124
Property and equipment - at cost
Oil and gas properties (full cost method) 245,862 245,862
Equipment 72,391 72,391
Accumulated depreciation and depletion (106,406) (100,631)
--------- ---------
Total property and equipment 211,847 217,622
--------- ---------
Total assets $ 380,467 $ 394,746
========= =========
</TABLE>
Unaudited - see accountants' compilation report
3
<PAGE>
LOCH EXPLORATION, INC.
Balance Sheets
<TABLE>
<CAPTION>
March 31, December 31,
--------- ---------
1997 1996
--------- ---------
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
<S> <C> <C>
Accounts payable and accrued liabilities $ 5,087 $ 8,038
Accounts payable, related parties 16,497 20,495
Current portion of long term debt 19,656 29,734
--------- ---------
Total current liabilities 41,240 58,267
Long term debt, less current portion 34,024 32,327
--------- ---------
Total liabilities 75,264 90,594
Shareholders' equity
Common stock, $.01 par value;
50,000,000 shares authorized; 1,288,951 and
1,288,951 shares issued and outstanding at
March 31, 1997 and December 31, 1996 12,890 12,890
Additional paid in capital 320,544 320,544
Retained earnings (28,231) (29,282)
--------- ---------
Total shareholders' equity 305,203 304,152
--------- ---------
Total liabilities and shareholders' equity $ 380,467 $ 394,746
========= =========
</TABLE>
Unaudited - see accountants' compilation report
4
<PAGE>
LOCH EXPLORATION, INC.
Statements of Operations
For the three months ended March 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
----------- -----------
Revenues
<S> <C> <C>
Oil and gas revenue $ 47,396 $ 43,124
Equipment rental 8,724 7,530
Revenue from lease operations 1,467 --
Reimbursements 1,156 --
Dividend income 1,226 --
Interest income -- 1,053
----------- -----------
59,969 51,707
Expenses
Lease operations 25,413 19,800
Depreciation and depletion 5,775 5,667
General and administrative 25,342 25,770
Interest expense 2,388 2,934
----------- -----------
58,918 54,171
----------- -----------
Net earnings (loss) before taxes $ 1,051 ($ 2,464)
Income taxes -- --
----------- -----------
Net earnings (loss) $ 1,051 ($ 2,464)
=========== ===========
Net earnings (loss) per share of common stock -- --
=========== ===========
Weighted average shares outstanding 1,288,951 1,288,948
=========== ===========
</TABLE>
Unaudited - see accountants' compilation report
5
<PAGE>
LOCH EXPLORATION, INC.
Statements of Cash Flows
For the three months ended March 31, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
--------- ---------
Cash flows from operating activities
<S> <C> <C>
Net earnings (loss) $ 1,051 ($ 2,464)
Reconciliation of net earnings (loss) to net cash
provided (used) by operating activities:
Depreciation and depletion 5,775 5,667
(Increase) decrease in accounts receivable 9,797 (14,128)
Increase (decrease) in accounts payable (6,949) 3,652
--------- ---------
Net cash provided (used) by operating activities 9,674 (7,273)
Cash flows from investing activities
Net cash provided (used) by investing activities -- --
Cash flows from financing activities
Repayment of debt (8,381) (7,241)
--------- ---------
Net cash provided (used) by financing activities (8,381) (7,241)
--------- ---------
Increase (decrease) in cash 1,293 (14,514)
Cash at beginning of period 119,721 139,285
--------- ---------
Cash at end of period $ 121,014 $ 124,771
========= =========
Supplemental cash flow information:
Income tax paid $ 0 $ 0
Interest paid 2,429 2,959
========= =========
</TABLE>
Unaudited - see accountants' compilation report
6
<PAGE>
Management's Discussion and Analysis of Financial Conditions
and Results of Operations:
During the first quarter of 1997, the assets of the Company amounted to $380,467
showing a decrease of $40,288 from the first quarter 1995 assets.
In February, 1997, the Board of Directors declared a 1-for-50 reverse stock
split in the Company's common stock, effective February 28, 1997. The Company
also changed the par value from $.001 per share to $.01 per share and reduced
the authorized shares from 150,000,000 to 50,000,000. All share and per share
data, as appropriate, reflect this split. The effect of the split is presented
retroactively within stockholders' equity at March 31, 1996 by transferring the
excess state capital to the paid-in-capital account.
Revenues and Operating Expenses:
Total revenue for the first quarter of 1997 was $59,969 compared to $51,707 for
the first quarter of 1996, with a 1997 first quarter net earnings of $1,051
compared to a net loss of $2,464 in the 1996 first quarter. This increase in
revenue and net earnings is primarily due to an increase in oil and gas related
revenues.
7
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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 - none
8
<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: May 5, 1997 /s/ Glenn L. Loch
------------------
President
9
<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-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 121,014
<SECURITIES> 0
<RECEIVABLES> 47,606
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 168,620
<PP&E> 318,253
<DEPRECIATION> (106,406)
<TOTAL-ASSETS> 380,467
<CURRENT-LIABILITIES> 41,240
<BONDS> 0
0
0
<COMMON> 12,890
<OTHER-SE> 292,313
<TOTAL-LIABILITY-AND-EQUITY> 305,203
<SALES> 47,396
<TOTAL-REVENUES> 59,969
<CGS> 0
<TOTAL-COSTS> 58,918
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,388
<INCOME-PRETAX> 1,051
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,051
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,051
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
