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 - March 31, 1998
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
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(State of other jurisdiction of (I.R.S. Employer Identification number)
incorporation of organization
P.O. BOX 342
GARDEN CITY, KANSAS 67846
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(Address of principal executive offices) (Zip Code)
(316) 275-2963
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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 March 31, 1998: 40,852,576
<PAGE>
WINCO PETROLEUM CORPORATION
CONDENSED BALANCE SHEET
MARCH 31, SEPTEMBER 30,
1998 1997
(UNAUDITED) (AUDITED)
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ASSETS
- ------
CURRENT ASSETS:
Cash and short-term cash
investments $ 332,415 $ 166,605
Notes and accounts receivable 104,355 69,927
Prepaid expenses and other - -
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TOTAL CURRENT ASSETS 436,770 236,532
INVESTMENTS IN OIL AND GAS PROPERTIES
At Cost, Net (Using the full cost
method of accounting) 287,247 310,031
WELL EQUIPMENT INVENTORY At Lower
of Cost or Market 32,217 32,218
FURNITURE, FIXTURES AND VEHICLES
At Cost, Net of Allowances for
Depreciation 361 361
OTHER ASSETS 1,000 1,000
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TOTAL ASSETS $ 757,595 $ 580,142
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LIABILITIES AND STOCKHOLDERS' INVESTMENT
- ----------------------------------------
CURRENT LIABILITIES:
Accounts payable to stockholders
and directors $ 14,720 $ 150
Accounts payable and accrued
liabilities 49,146 44,480
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TOTAL CURRENT LIABILITIES 63,866 44,630
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STOCKHOLDERS' INVESTMENT
Common stock, no par value;
500,000,000 shares authorized;
40,852,576 shares issued
and outstanding 307,000 307,000
Additional paid in capital 1,281,520 1,281,520
Accumulated deficit (864,041) (1,053,008)
Treasury stock (30,750) -
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TOTAL STOCKHOLDERS' INVESTMENT 693,729 535,512
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TOTAL LIABILITIES AND
STOCKHOLDERS' INVESTMENT $ 757,595 $ 580,142
========== ==========
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<PAGE>
WINCO PETROLEUM CORPORATION
CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
SIX MONTHS ENDED
MARCH 31,
1998 1997
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REVENUES:
- --------
Oil and gas sales $ 27,804 $ 50,429
Interest income 2,558 471
Gain on sale of assets 211,978 -
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242,340 50,900
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EXPENSES:
- --------
Lease operating expenses 30,313 33,866
General and administrative 6,617 7,370
Depreciation, depletion and
amortization 15,784 11,542
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52,714 52,778
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Income (Loss) before income tax 189,626 (1,878)
Income tax expense (benefit) - -
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NET INCOME (LOSS): $ 189,626 $ (1,878)
========== ==========
NET INCOME (LOSS) PER
COMMON SHARE-
Primary and fully diluted $ - $ -
========== ==========
WEIGHTED AVERAGE SHARES
OUTSTANDING: 40,852,576 40,852,576
========== ==========
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<PAGE>
WINCO PETROLEUM CORPORATION
STATEMENT OF CASH FLOW
SIX MONTHS ENDED MARCH 31,
1998 1997
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Cash flows from operating activities:
Net income (loss) $ 188,968 $ 7,049
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation, depletion and
amortization 22,784 23,083
Gain on sale of assets (211,978) -
Changes in current assets and
current liabilities:
Accounts Receivable (34,429) (7,608)
Prepaid and Other Expenses - (1,481)
Accounts Payable 19,237 20,017
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Net cash provided by (used) in
operating activities (15,418) 41,060
Cash flows from investing activities:
Investment in oil and gas properties - (2,416)
Proceeds from sale of Wyoming oil
& gas properties 211,978 -
Purchase of common stock for
treasury (30,750) -
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NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 165,810 38,644
CASH AND CASH EQUIVALENTS AT BEGINNING
OF THE PERIOD 166,605 97,941
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CASH AND CASH EQUIVALENTS AT END
OF THE PERIOD $ 332,415 $ 136,585
========== ==========
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<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 March 31, 1998 and the results of operations and
changes in financial position for the six months then ended. Operating
results for the six months ended March 31, 1998 are not necessarily
indicative of the results that may be expected for the fiscal year ending
September 30, 1998. 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, 1997.
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 $15,784 was made
for the six months ended March 31, 1998. Reserve for depreciation and
depletion was $69,282 and $784,475 on March 31, 1998 and September 30,
1997, respectively. Effective January 1, 1998, the Company sold all of its
interest in the Wyoming wells, which had been operated by the Company. As
such wells represented a significant portion of the Company's operating
activity, the transaction was treated as a sale of a business segment and
the related costs and accumulated depletion and depreciation have been
removed, with the resulting gain reflected in the statement of operations.
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
six month period ended March 31, 1998 and 1997. The weighted average
shares outstanding for the period ending March 31, 1998 and 199 was
40,852,576 and 40,852,576 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 six months ended March 31, 1998, the Company's working
capital increased $174,659, primarily as a result of the sale of the
Wyoming properties. The Company's working capital at March 31, 1998 was
$372,904.
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.
The Company elected to buy back some of its outstanding common stock.
As of March 31, 1998, the Company had purchased a total of 1,229,985 shares
at a cost of $30,750, which is reflected on the Balance Sheet as Treasury
Stock.
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED MARCH 31, 1998
- -------------------------------------------------------------
During the six months ended March 31, 1998 oil and gas sales decreased
approximately $22,625 from the comparable period in 1997, due to lower oil
and gas prices, the plugging of one of the Company's wells in Wyoming
during 1997 and the sale of all the Company's operated wells in Wyoming.
Lease operating expenses did decrease also, but only modestly as operating
expenses on the wells sold were generally not very high and there were some
extra costs on one of the remaining wells as a result of a workover.
Interest income increased from the comparable period in 1997 due to
more 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 expenses were consistent with the
comparable quarter in 1997.
-6-
<PAGE>
WINCO PETROLEUM CORPORATION
PART II
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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
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<PAGE>
SIGNATURES
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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 27, 1998
-8-
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<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> MAR-31-1998
<CASH> 332
<SECURITIES> 0
<RECEIVABLES> 104
<ALLOWANCES> 0
<INVENTORY> 32
<CURRENT-ASSETS> 437
<PP&E> 287
<DEPRECIATION> 0
<TOTAL-ASSETS> 758
<CURRENT-LIABILITIES> 64
<BONDS> 0
0
0
<COMMON> 40,852
<OTHER-SE> 1,282
<TOTAL-LIABILITY-AND-EQUITY> 758
<SALES> 28
<TOTAL-REVENUES> 242
<CGS> 30
<TOTAL-COSTS> 53
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 190
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 190
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
