U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
[X] Quarterly Report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the Quarterly Period Ended September 30, 1998
[ ] Transition Report under Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the Transition Period from _____ to______
Commission file number: 0-9435
FieldPoint Petroleum Corporation
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(Exact name of small business issuer as specified in its charter)
Colorado 84-0811034
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1703 Edelweiss Drive
Cedar Park, Texas 78613
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(Address of principal executive offices) (Zip Code)
(512) 250-8692
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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. Yes X No
As of October 31, 1998, the number of shares outstanding of the Registrant's
$.01 par value Common Stock was 4,423,259.
Transitional Small Business Disclosure Format (Check one):
Yes No X
<PAGE>
PART I
Item 1. Condensed Consolidated Financial Statements
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<CAPTION>
FieldPoint Petroleum Corporation
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
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September 30, December 31,
1998 1997
CURRENT ASSETS: (unaudited)
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<S> <C> <C>
Cash $ 23,317 $ 48,457
Trading securities 2,880 2,880
Accounts receivable:
Oil and gas sales 58,825 73,159
Joint interest billings, allowance for doubtful
accounts of $20,000 and $0 respectively 79,172 61,392
Taxes recoverable 26,000 --
Prepaid expenses 2,535 1,635
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Total current assets 192,729 187,523
PROPERTY AND EQUIPMENT:
Oil and gas properties (successful efforts method):
Leasehold costs 1,113,399 954,995
Lease and well equipment 171,762 95,504
Furniture and equipment 31,623 30,758
Transportation equipment 74,945 74,945
Less accumulated depletion and depreciation (446,185) (353,935)
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Net property and equipment 945,546 802,267
OTHER ASSETS 16,815 20,000
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Total assets $ 1,155,090 $ 1,009,790
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES:
Current portion of long-term debt $ 216,540 $ 160,544
Accounts payable and accrued expenses 104,008 111,255
Oil and gas revenues payable 85,923 96,512
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Total current liabilities 406,471 368,311
LONG-TERM DEBT, net of current portion 441,325 255,877
COMMMITMENTS
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value, 75,000,000 shares authorised;
4,423,259 and 4,413,259 shares issued and outstanding,
respectively 44,232 44,132
Additional paid-in capital 96,678 83,906
Retained earnings 168,524 257,564
Treasury stock, 214,000 shares of common stock (2,140) --
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Total stockholders' equity 307,294 385,602
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Total liabilities and stockholders' equity $ 1,155,090 $ 1,009,790
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</TABLE>
See accompanying notes to these consolidated financial statements
<PAGE>
FieldPoint Petroleum Corporation
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For The Three Months Ended
September 30,
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1998 1997
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REVENUE: (unaudited) (unaudited)
Oil and gas sales $ 111,747 $ 124,028
Well operational and pumping fees 36,380 41,538
Other -- --
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Total revenue 148,127 165,566
COSTS AND EXPENSES:
Production expense 58,422 41,841
Depletion and depreciation 30,169 27,750
General and administrative 88,529 93,481
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Total costs and expenses 177,120 163,072
OTHER INCOME (EXPENSE):
Gain on sale of assets -- 3,235
Interest income (expense), net (15,094) (14,300)
Acquisition expenses -- --
Miscellaneous (59) 1,606
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Total other income (expense) (15,153) (9,459)
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INCOME (LOSS) BEFORE INCOME TAXES (44,146) (6,965)
INCOME TAX BENEFIT - CURRENT 6,000 8,667
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NET AND COMPREHENSIVE INCOME (LOSS) (38,146) 1,702
BASIC AND DILUTED NET AND
COMPREHENSIVE INCOME (LOSS) $ (.01) *
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WEIGHTED AVERAGE SHARES OUTSTANDING 4,413,259 4,000,000
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* Less than $.01
See accompanying notes to these consolidated financial statements
<PAGE>
FieldPoint Petroleum Corporation
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For The Nine Months Ended
September 30,
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1998 1997
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REVENUE: (unaudited) (unaudited)
Oil and gas sales $ 335,405 $ 411,053
Well operational and pumping fees 129,419 132,364
Other -- 2,000
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Total revenue 464,824 545,417
COSTS AND EXPENSES:
Production expense 184,103 129,553
Depletion and depreciation 92,250 83,250
General and administrative 267,242 237,642
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Total costs and expenses 543,595 450,445
OTHER INCOME (EXPENSE):
Gain on sale of assets -- 3,235
Interest income (expense), net (41,732) (27,065)
Acquisition expenses -- (45,000)
Miscellaneous 5,465 4,387
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Total other income (expense) (36,267) (64,443)
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INCOME (LOSS) BEFORE INCOME TAXES (115,038) 30,529
INCOME TAX BENEFIT (PROVISION) CURRENT 26,000 (15,333)
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NET AND COMPREHENSIVE INCOME (LOSS) (89,038) 15,196
BASIC AND DILUTED NET AND
COMPREHENSIVE INCOME (LOSS) $ (.02) *
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WEIGHTEDAVERAGE SHARES OUTSTANDING 4,413,259 4,000,000
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* Less than $.01
See accompanying notes to these consolidated financial statements
<PAGE>
<TABLE>
<CAPTION>
FieldPoint Petroleum Corporation
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
September 30,
1998 1997
(unaudited) (unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (89,038) $ 15,196
Adjustments to reconcile to net cash
provided by operating activities:
Depletion and depreciation 92,250 83,250
Gain on sale of assets -- (3,235)
Stock Compensations to Consultant 9,732 --
Changes in assets and liabilities:
Accounts receivable (3,446) 7,127
Taxes recoverable (26,000) --
Prepaid expenses and other assets (7,715) --
Accounts payable and accrued expenses (7,247) (23,784)
Oil and gas revenues payable (10,589) 3,082
Payable to related party -- 37,267
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Net cash (used) provided by operating activities (42,053) 118,903
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of vehicle -- 11,000
Purchase of oil and gas properties (234,662) (177,865)
Purchase of furniture and equipment (865) (47,726)
Decrease (increase) in restricted cash 10,000 100,000
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Net cash used by investing activities (225,527) (114,591)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt 375,000 171,594
Repayments of long-term debt (133,560) (209,374)
Proceeds from exercise of stock option 1,000 --
Repayment of stockholder -- (13,000)
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Net cash provided (used) by financing activities 242,440 (50,780)
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NET DECREASE IN CASH (25,140) (46,468)
CASH, beginning of the period 48,457 57,454
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CASH, end of the period $ 23,317 $ 10,986
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SUPPLEMENTAL INFORMATION:
Cash paid during the period for interest $ 43,789 $ 33,027
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Cash paid during the period for income taxes -- --
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</TABLE>
See accompanying notes to these consolidated financial statements.
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Nature of Business, Organization And Basis of Preparation And Presentation
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FieldPoint Petroleum Corporation (the "Company") is incorporated under the laws
of the state of Colorado. The Company is engaged in the acquisition, operation
and development of oil and gas properties, which are located in south central
Texas and Wyoming.
The Company began operations as Bass Petroleum, Inc. (Bass) in October 1989. On
December 31, 1997, the shareholders of Bass exchanged all their shares for
approximately 97% (including the 6% of EPC previously purchased by Bass) of
Energy Production Company (EPC), a public company, and Bass became a wholly
owned subsidiary of EPC. The management of Bass became the management of the
combined company. Concurrent with the transaction, the Company changed its name
to FieldPoint Petroleum Corporation and declared a 75 to 1 reverse stock split.
Although EPC is the acquiring entity for legal purposes, Bass is considered the
acquirer for accounting purposes, and the financial statements of the combined
company reflect the historical accounts of Bass and include the operations of
EPC beginning May 22, 1997. However, because EPC is the acquiring entity for
legal purposes, all stockholders' equity information in the accompanying
financial statements and footnotes has been restated to conform to EPC's capital
structure.
The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted.
However, in the opinion of management, all adjustments (which consist only of
normal recurring adjustments) necessary to present fairly the financial position
and results of operations for the periods presented have been made. These
condensed consolidated financial statements should be read in conjunction with
financial statements and the notes thereto included in the Company's Form 10-KSB
filing for the year ended December 31, 1997.
2. Acquisition of Working Interest in Shade Lease
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On February 18, 1998, the Company acquired a 97.9% working interest in the Shade
lease, which carries a 76.9565% net revenue interest in oil and gas production.
A total purchase price of $190,000 was paid for the interest and related
equipment. The lease currently has 3 producing oil and gas wells. The Company
also purchased all equipment related to the three wells on the lease from Fred
Bowman, Inc. The entire purchase price was funded by proceeds from long term
debt.
3. Stockholders Equity
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On January 1, 1998, the Company granted 50,000 options to purchase the Company's
common stock at $0.75 per share to a public relations consultant. The options
expire, if unused, on December 31, 1999. The value of the option at the date of
grant, as calculated pursuant to SFAS 123, of $9,732 is included in general and
administrative expenses for the quarter ended September 30, 1998. On September
8, 1998 a former board member exercised an option to acquire 10,000 shares of
the Company's common stock.
<PAGE>
PART I
Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion should be read in conjunction with the Company's
Financial Statements, and respective notes thereto, included elsewhere herein.
The information below should not be construed to imply that the results
discussed herein will necessarily continue into the future or that any
conclusion reached herein will necessarily be indicative of actual operating
results in the future. Such discussion represents only the best present
assessment of the management of FieldPoint Petroleum Corporation.
General
FieldPoint Petroleum Corporation derives its revenues from its operating
activities including sales of oil and gas and operating oil and gas properties.
The Company's capital for investment in producing oil and gas properties has
been provided by cash flow from operating activities and from bank financing.
The Company categorises its operating expenses into the categories of production
expenses and other expenses. Due to the impact of lower oil and gas prices and
cost associated with being a public company and additional workovers in the form
of remedial repairs, the Company's net expenses for the period ended September
30, 1998 were substantially higher than net expenses for the period ended
September 30, 1997.
Comparison of three months ended September 30, 1998 to the three months ended
September 30, 1997
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Results of Operations
Revenues decreased 11% or $17,439 to $148,127 for the three month period ended
September 30, 1998 from the comparable 1997 period, this was due to the overall
decrease in the average price received for oil and gas sales. Production volumes
increased 36% on a BOE basis. Average oil sales prices decreased 35% to $11.55
for the period ended September 30, 1998 compared to $17.78 for the period ended
September 30, 1997. Average gas sales prices decreased 17% to $1.44 for the
three-month period ended September 30, 1998 compared to $1.74 for the period
ended September 30, 1997.
Production expenses increased 40% or $16,581 to $58,422 for the three month
period ended September 30, 1998 from the comparable 1997 period, this was
primarily due to additional workovers in the form of remedial repairs. Depletion
and depreciation increased slightly due to the purchase of leasehold and related
equipment during the period ended September 30, 1998 compared to the 1997
period. General and administrative overhead cost decreased 5% or $4,952 to
$88,529 for the three-month period ended September 30, 1998 from the three-month
period ended September 30, 1997. This was attributable to lower legal fees.
Comparison of nine months ended September 30, 1998 to the nine months ended
September 30, 1997
- --------------------------------------------------------------------------------
Results of Operations
Revenues decreased 15% or $80,593 to $464,824 for the nine month period ended
September 30, 1998 from the comparable 1997 period, this was due to the overall
decrease in the average price received for oil and gas sales. Production volumes
increased 19% on a BOE basis. Average oil sales prices decreased 35% to $12.49
for the period ended September 30, 1998 compared to $19.10 for the period ended
September 30, 1997. Average gas sales prices decreased 3% to $1.55 for the nine
month period ended September 30, 1998 compared to $1.60 for the period ended
September 30, 1997.
Production expenses increased 42% or $54,550 to $184,103 for the nine month
period ended September 30, 1998 from the comparable 1997 period, this was
primarily due to expenses related to additional workovers in the form of
remedial repairs. Depletion and depreciation expense increased 11% to $92,250,
this was due to the purchase of leasehold and related equipment during the
period ended September 30,1998 compared to the 1997 period. General and
<PAGE>
administrative overhead cost increased 12% or $29,600 to $267,242 for the nine
month period ended September 30, 1998 from the nine month period ended September
30, 1997. This was attributable to the Company recording an allowance for
doubtful accounts, and an increase in salary expense for the period.
Net other expense for the nine months ended September 30, 1998 was $36,267
compared to $64,443 for the comparable 1997 period. The decrease was primarily
due to acquisition expenses incurred during 1997 in connection with the reverse
merger.
Liquidity and Capital Resources
Cash flow used by operating activities was $42,053 for the nine month period
ended September 30, 1998, as compared to $118,903 in cash flow provided by
operating activities in the 1997 period. The decrease in cash from operating
activities was primarily due to the net loss in 1998.
Cash flow used by investing activities was $225,527 for the period ended
September 30, 1998, compared to $114,591 for the period ended September 30,
1997. This is primarily due to the purchase of additional oil and gas
properties. Cash flow from financing activities was $242,440 for the period
ended September 30, 1998, compared to a use of $50,780 for the same period in
1997. This was due to increases in long-term debt during 1998.
The Company cannot predict how prices will vary during 1998 and what effect they
will ultimately have on the Company. However, management believes that the
Company will be able to generate sufficient cash from operations to service its
bank debt and provide for maintaining current production of its oil and gas
properties.
Impact of Year 2000
The Company is assessing the impact of year 2000 issue on its operations,
including the development and implementation of project plans and cost estimates
required to make its information systems Year 2000 compliant. Based on existing
information, the Company believes that anticipated spending necessary to become
Year 2000 compliant will not have a material effect on the financial position,
cash flows or results of operations of the Company. There can be no assurance,
however, as to the ultimate effect of the Year 2000 issue on the Company.
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
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The Company is a party to a lawsuit arising in the ordinary course of business.
In the opinion of management, final judgement or settlement, if any, that may be
awarded or entered into in connection with this suit would not have a material
adverse effect on the Company's financial position or results of operations.
Item 2. Changes in Securities
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None.
Item 3. Default Upon Senior Securities
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None
Item 4. Submission of Matters to a Vote of Security Holders
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None.
Item 5. Other Information
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None.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
None
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: November 30, 1998 By: /s/ Ray Reaves
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Ray Reaves, Treasurer, Chief Financial Officer
