SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10Q
QUARTERLY REPORT PURSUANT OF SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended - December 31, 1996
0-9295
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Commission File Number
WINCO PETROLEUM CORPORATION
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(Exact name of registrant as specified in its charter)
Colorado 84-0794604
- ------------------------------- ---------------------------------------
(State of other jurisdiction of (I.R.S. Employer Identification number)
incorporation of organization
1645 Court Place, Suite 312
Denver, Colorado 80202
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(303) 623-9095
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(Registrant's telephone number, including area code)
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(Former name, former address, former fiscal year if change
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 Act of 1934
during the preceding 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.
X Yes No
------ ------
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the close of the period covered by this report.
Class: Common Stock, No par value
Outstanding as of December 31, 1996: 40,852,576
<PAGE>
WINCO PETROLEUM CORPORATION
CONDENSED BALANCE SHEET
DECEMBER 31, SEPTEMBER 30,
1996 1996
(Unaudited) (Audited)
------------ -------------
ASSETS
- ------
CURRENT ASSETS:
- --------------
Cash and short-term cash investments $ 124,636 $ 97,941
Notes and accounts receivable 80,882 82,170
Prepaid expenses and other 5,649 6,389
---------- ----------
TOTAL CURRENT ASSETS $ 211,167 $ 186,500
INVESTMENTS IN OIL AND GAS PROPERTIES
AT COST, NET (Using the full cost method
of accounting) 238,088 248,340
WELL EQUIPMENT INVENTORY AT LOWER
OF COST OR MARKET 31,947 53,476
FURNITURE, FIXTURES AND VEHICLES
AT COST, Net of allowances for depreciation 828 1,000
OTHER ASSETS 1,000 1,000
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$ 483,030 $ 490,316
========== ==========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
- ----------------------------------------
CURRENT LIABILITIES:
- -------------------
Accounts payable to stockholders
and directors $ 75 $ 150
Accounts payable and accrued liabilities 21,717 37,856
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TOTAL CURRENT LIABILITIES $ 21,792 $ 38,006
---------- ----------
STOCKHOLDERS' INVESTMENT
- ------------------------
Common stock, no par value; 50,000,000
shares authorized; 23,000,000 shares
issued and outstanding 307,000 307,000
Additional paid in capital 1,260,920 1,260,920
Accumulated deficit (1,106,682) (1,115,610)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY $ 461,238 $ 452,310
---------- ----------
$ 483,030 $ 490,316
========== ==========
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<PAGE>
WINCO PETROLEUM CORPORATION
CONDENSED STATEMENT OF EARNINGS
(UNAUDITED)
THREE MONTHS ENDED DECEMBER 31,
1996 1995
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REVENUES:
- --------
Oil and gas sales $ 72,770 $ 26,483
Interest income 955 1,214
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$ 73,725 $ 27,697
EXPENSES:
- --------
Lease operating expenses 38,385 20,664
General and administrative 14,872 12,979
Depreciation, depletion and
amortization 11,541 3,330
---------- ----------
$ 64,798 $ 36,973
Loss before income tax 8,927 (9,276)
Income tax expense (benefits) $ -- $ --
---------- ----------
NET PROFIT (LOSS): $ 8,927 $ (9,276)
- ----------------- ========== ==========
NET PROFIT (LOSS) PER COMMON SHARE:
- -----------------------------------
Primary and fully diluted $ -- $ --
========== ==========
WEIGHTED AVERAGE SHARES OUTSTANDING: 40,852,576 23,000,000
- ----------------------------------- ========== ==========
-3-
<PAGE>
WINCO PETROLEUM CORPORATION
STATEMENT OF CASH FLOW
THREE MONTHS ENDED DECEMBER 31,
1996 1995
------------ -------------
Cash flows from operating activities
Net profit (loss) $ 8,927 $ (9,276)
Adjustment to reconcile net profit (loss)
to net cash used in operating activities:
Depreciation, depletion and amortization 11,541 3,550
Changes in current assets and current
liabilities:
Accounts receivable (1,288) 5,949
Prepaid and other expenses (740) 742
Accounts payable 16,214 (8,278)
---------- ----------
Net cash provided by (used) in
operating activities 34,654 (7,313)
Cash flows from investing activities:
Investment in oil and gas properties (7,959) 394
---------- ----------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 26,695 (6,919)
Cash and cash equivalents at beginning
of the period 97,941 155,911
---------- ----------
Cash and cash equivalents at end
of the period $ 124,636 $ 148,992
========== ==========
-4-
<PAGE>
WINCO PETROLEUM CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
CONDENSED FINANCIAL STATEMENTS
- ------------------------------
1. The accompanying, unaudited, condensed financial statements have been
prepared in accordance with Rule 10-01 of Regulation S-X and do not include
all principles for completed financial statements.
In the opinion of Winco Petroleum Corporation the accompanying
unaudited, condensed financial statements contain all adjustments
(consisting of normal adjustments) necessary to present fairly the
financial position as of December 31, 1996 and the results of operations
and changes in financial position for the three months then ended.
Operating results for the three months ended December 31, 1996 are not
necessarily indicative of the results that may be expected for the fiscal
year ending September 30, 1997. These statements should be read in
conjunction with the financial statements and notes thereto included in
Form 10-K for the fiscal year ended September 30, 1996.
INVESTMENTS IN OIL AND GAS PROPERTIES
- -------------------------------------
2. Depreciation and depletion of the full cost pool is computed using a
unit-of-production method based on proved reserves as determined annually
by the Company and independent engineers. A provision of $11,541 was made
for the three months ended December 31, 1996. Reserve for depreciation and
depletion was $996,181 and $984,811 on December 31, 1996 and September 30,
1996 respectively.
EARNINGS PER SHARE
- ------------------
3. Earnings per common share were computed by dividing net income by the
weighted average number of shares of common stock outstanding during the
three month period ended December 31, 1996 and 1995. The weighted average
shares outstanding for the period ending December 31, 1996 and 1995 was
40,852,576 and 23,000,000 shares, respectively.
-5-
<PAGE>
WINCO PETROLEUM CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
During the three months ended December 31, 1996 the Company's working
capital increased $40,881. Working capital increased as a result of
improved oil and gas sales due to the Company's acquisition of additional
interests in oil and gas properties and better prices. The Company's
working capital at December 31, 1996 was $89,375.
The Company intends to utilize funds to purchase producing properties.
The Company also may participate in oil and gas development programs
through sharing arrangements with industry participants. The Company will
consider those arrangements which are financially feasible under current
conditions.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 1996
- ------------------------------------------------------------------
During the three months ended December 31, 1996 oil and gas sales
increased approximately $46,287 from the comparable period in 1995 due to
additional production from the interests in four (4) oil leases acquired by
the Company and improved oil and gas prices. There was a corresponding
increase in lease operating expenses of $17,951 between the same periods.
Interest income decreased from the comparable period in 1995 due to
less cash available for investment.
Due to net operating loss carry forward and the tax credits available
for financial reporting and tax reporting purposes, the Company does not
expect any significant income tax effects in the current year.
General and administrative expense increased from the comparable
quarter in 1995, primarily as a result of costs associated with the
distribution of Notice and Proxy to the shareholders.
-6-
<PAGE>
WINCO PETROLEUM CORPORATION
PART II
- -------
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
None
-7-
<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.
WINCO PETROLEUM CORPORATION
/s/ CECIL O'BRATE
---------------------------------
Cecil O'Brate
President
Dated: April 30, 1997
-8-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 124,636
<SECURITIES> 0
<RECEIVABLES> 80,882
<ALLOWANCES> 0
<INVENTORY> 31,947
<CURRENT-ASSETS> 211,167
<PP&E> 238,088
<DEPRECIATION> 0
<TOTAL-ASSETS> 483,030
<CURRENT-LIABILITIES> 21,792
<BONDS> 0
0
0
<COMMON> 307,000
<OTHER-SE> 1,260,920
<TOTAL-LIABILITY-AND-EQUITY> 483,030
<SALES> 72,770
<TOTAL-REVENUES> 73,725
<CGS> 0
<TOTAL-COSTS> 64,798
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (8,927)
<INCOME-TAX> 0
<INCOME-CONTINUING> (8,927)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8,927)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
