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 - June 30, 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 December 31, 1997: 40,852,576
<PAGE>
WINCO PETROLEUM CORPORATION
CONDENSED BALANCE SHEET
JUNE 30, SEPTEMBER 30,
1998 1997
(Unaudited) (Audited)
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ASSETS
- ------
CURRENT ASSETS:
Cash and short-term cash investment $ 328,974 $ 166,605
Notes and accounts receivable 110,598 69,927
Prepaid expenses and other - -
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TOTAL CURRENT ASSETS 439,572 236,532
INVESTMENTS IN OIL AND GAS PROPERTIES
At Cost, Net (Using the full cost
method of accounting) 271,463 310,031
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 $ 744,613 $ 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 45,441 44,480
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TOTAL CURRENT LIABILITIES 60,161 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 (873,318) (1,053,008)
Treasury stock (30,750) -
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TOTAL STOCKHOLDERS' INVESTMENT 684,452 535,512
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TOTAL LIABILITIES AND
STOCKHOLDERS' INVESTMENT $ 744,613 $ 580,142
========== ==========
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<PAGE>
WINCO PETROLEUM CORPORATION
CONDENSED STATEMENT OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
JUNE 30,
1998 1997
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REVENUES:
Oil and gas sales $ 29,973 $ 61,793
Interest income 3,570 629
Gain on sale of assets - 76,463
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33,543 138,885
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EXPENSES:
Lease operating expenses 25,801 26,577
General and administrative 1,234 19,315
Depreciation, depletion and
amortization 15,784 11,370
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42,819 57,262
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Income (Loss) before income tax (9,276) 81,623
Income tax expense (benefit) - -
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NET INCOME (LOSS): $ (9,276) $ 81,623
========== ==========
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
NINE MONTHS ENDED JUNE 30,
1998 1997
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Cash flows from operating activities:
Net income (loss) $ 179,691 $ 88,674
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation, depletion and
amortization 38,568 34,453
Gain on sale of assets (211,978) -
Changes in current assets and
current liabilities:
Accounts Receivable (40,671) (18,154)
Prepaid and Other Expenses - (1,481)
Accounts Payable 15,531 1,269
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Net cash provided (used) in
operating activities (18,859) 104,761
Cash flows from investing activities:
Investment in oil and gas properties - 56,171
Proceeds from sale of Wyoming oil
& gas properties 211,978 -
Purchase of common stock for treasury (30,750) -
---------- ----------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 162,369 160,932
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 $ 328,974 $ 258,873
========== ==========
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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 June 30, 1998 and the results of operations and
changes in financial position for the nine months then ended. Operating
results for the nine months ended June 30, 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 three months ended June 30, 1998. Reserve for depreciation and
depletion was $85,066 and $744,475 on June 30, 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
three month period ended June 30, 1998 and 1997. The weighted average
shares outstanding for the period ending June 30, 1998 and 1997 was
40,852,576.
-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 June 30, 1998, the Company's working
capital increased $6,507, from normal operations. The Company's working
capital at June 30, 1998 was $379,411.
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 THREE MONTHS ENDED JUNE 30, 1998
- --------------------------------------------------------------
During the three months ended June 30, 1998 oil and gas sales
decreased approximately $31,820 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 considerably lower than the
comparable quarter in 1997. The difference is primarily related to timing
of payments for legal and accounting services with respect to the audit and
SEC filings for the Company's prior fiscal year-end.
-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
-7-
<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: September 14, 1998
-8-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> APR-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 328,974
<SECURITIES> 0
<RECEIVABLES> 110,598
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 439,572
<PP&E> 411,444
<DEPRECIATION> 107,403
<TOTAL-ASSETS> 744,613
<CURRENT-LIABILITIES> 60,161
<BONDS> 0
0
0
<COMMON> 307,000
<OTHER-SE> 377,482
<TOTAL-LIABILITY-AND-EQUITY> 744,613
<SALES> 29,973
<TOTAL-REVENUES> 33,543
<CGS> 0
<TOTAL-COSTS> 42,819
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (9,276)
<INCOME-TAX> 0
<INCOME-CONTINUING> (9,276)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,276)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
