U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly Report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the Quarterly Period Ended March 31, 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
--------------------------------
(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 April 30, 1998, the number of shares outstanding of the Registrant's $.01
par value Common Stock was 4,413,259.
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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March 31, December 31,
1998 1997
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CURRENT ASSETS: (unaudited)
<S> <C> <C>
Cash $ 41,761 $ 48,457
Trading securities 2,880 2,880
Accounts receivable:
Oil and gas sales 65,734 73,159
Joint interest billings, no allowance for doubtful
accounts considered necessary 72,696 61,392
Taxes recoverable 15,300 -
Prepaid expenses 2,535 1,635
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Total current assets 200,906 187,523
PROPERTY AND EQUIPMENT:
Oil and gas properties (successful efforts method):
Leasehold costs 1,105,676 954,995
Lease and well equipment 147,073 95,504
Furniture and equipment 31,148 30,758
Transportation equipment 74,945 74,945
Less accumulated depletion and depreciation (384,685) (353,935)
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Net property and equipment 974,157 802,267
OTHER ASSETS 6,000 20,000
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Total assets $ 1,181,063 $ 1,009,790
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LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Current portion of long-term debt $ 165,518 $ 160,544
Accounts payable and accrued expenses 105,331 111,255
Oil and gas revenues payable 94,045 96,512
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Total current liabilities 364,894 368,311
LONG-TERM DEBT, net of current portion 460,283 255,877
COMMMITMENTS
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value, 75,000,000
shares authorised; 4,413,259 and
4,000,000 shares issued and outstanding,
respectively 44,132 44,132
Additional paid-in capital 93,638 83,906
Retained earnings 218,116 257,564
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Total stockholders' equity 355,886 385,602
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Total liabilities and stockholders' equity $ 1,181,063 $ 1,009,790
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See accompanying notes to these consolidated financial statements
<PAGE>
<TABLE>
FieldPoint Petroleum Corporation
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
March 31,
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1998 1997
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REVENUE: (unaudited) (unaudited)
<S> <C>
Oil and gas sales $ 103,953 $ 145,395
Well operational and pumping fees 46,658 45,913
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Total revenue 150,611 194,308
COSTS AND EXPENSES:
Production expense 68,968 41,953
Depletion and depreciation 30,750 27,750
General and administrative 98,228 73,766
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Total costs and expenses 197,946 143,469
OTHER INCOME (EXPENSE):
Interest income (expense), net (11,991) (10,684)
Miscellaneous 4,578 3,638
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Total other income (expense) (7,413) (7,046)
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INCOME (LOSS) BEFORE INCOME TAXES (54,748) 43,793
INCOME TAX BENEFIT (PROVISION) CURRENT 15,300 (12,000)
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NET AND COMPREHENSIVE INCOME (LOSS) (39,448) 31,793
BASIC AND DILUTED NET AND
COMPREHENSIVE INCOME (LOSS) (.01) .01
----------- -----------
WEIGHTED AVERAGE SHARES OUTSTANDING 4,413,259 4,000,000
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See accompanying notes to these consolidated financial statements
<PAGE>
<TABLE>
<CAPTION>
FieldPoint Petroleum Corporation
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
March 31,
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1998 1997
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(unaudited) (unaudited)
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (39,448) $ 31,793
Adjustments to reconcile to net cash
provided by operating activities:
Depletion and depreciation 30,750 27,750
Options issued for services 9,732 --
Changes in assets and liabilities:
Accounts receivable (3,879) (24,138)
Taxes recoverable (15,300) --
Prepaid expenses and other assets (900) --
Accounts payable and accrued expenses (5,924) (162)
Oil and gas revenues payable (2,467) (8,611)
Federal income taxes payable -- 2,000
Due to related party -- (1,833)
Other -- 437
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Net cash (used) provided by operating activities (27,436) 27,236
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of oil and gas properties (202,250) (56,678)
Purchase of furniture and equipment (390) (19,043)
Decrease (increase) in restricted cash 14,000 --
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Net cash used by investing activities (188,640) (75,721)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt 250,000 49,135
Repayments of long-term debt (40,260) (22,718)
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Net cash provided by financing activities 209,380 26,417
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NET DECREASE IN CASH (6,696) (22,068)
CASH, beginning of the period 48,457 57,454
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CASH, end of the period $ 41,761 $ 35,386
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SUPPLEMENTAL INFORMATION:
Cash paid during the period for interest $ 12,675 $ 11,227
========= =========
Cash paid during the period for income taxes -- --
========= =========
</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
--------------------
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 March 31, 1998.
<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 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 March 31, 1998 were substantially higher than net
expenses for the period ended March 31, 1997.
Comparison of three months ended March 31, 1998 to the three months ended March
31, 1997
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Results of Operations
Revenues decreased 29% or $43,697 to $150,611 for the three month period ended
March 31, 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 7% on a BOE basis. Average oil sales prices decreased 34% TO $13.68
for the period ended March 31, 1998 compared to $20.84 for the period ended
March 31, 1997. Average gas sales prices decreased 31% to $1.32 for the
three-month period ended March 31, 1998 compared to $1.92 for the period ended
March 31, 1997.
Production expenses increased 64% or $27,015 to $68,968 for the three month
period ended March 31, 1998 form the comparable 1997 period, this was primarily
due to expenses related to repairing a casing leak on the Wyoming property's
Elkhorn #16 injection well. Depletion and depreciation increased slightly due to
the purchase of the Shade lease and related equipment during the period ended
March 31, 1998 compared to the 1997 period. General and administrative overhead
cost increased 33% or $24,462 to $98,228 for the three-month period ended March
31, 1998 from the three-month period ended March 31, 1997. This was attributable
to audit fees booked during the period and cost related to an option granted
during the period pursuant to SFAS 123.
Liquidity and Capital Resources
Cash flow consumed by operating activities was $27,436 for the three-month
period ended March 31, 1998, as compared to $27,236 in cash flow provided by
operating activities in the 1997 period. The decrease in cash from operating
activities was primarily due to lower net income.
Cash flow used by investing activities was $188,640 in the period ended March
31, 1998, compared to $75,721 for March 31, 1997. This is primarily due to the
purchase of additional oil and gas properties. Cash flow from financing
activities was $209,380 for the period ended March 31, 1998, compared to $26,417
for the same period in 1997. This was due to increases in long-term debt.
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.
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
The company knows of no material litigation pending, threatening or contemplated
unsatisfied judgements against it, or any other proceeding in which the company
is a party. The company knows of no material legal actions pending or threatened
or judgements entered against any officers or the Board of Directors of the
Company in their capacity as such.
Item 2. Changes in Securities
None.
Item 3. Default Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
The following Reports were filed by the Company on Form 8-K during the First
Quarter of 1998:
a. A report on Form 8-K filed on January 14, 1998 reporting an event under
Item 1. Changes in Control of the Registrant and Item 2. Acquisition or
Disposition of Assets.
b. A report on Form 8-K filed on March 4, 1998 reporting an event under
Item 2. Acquisition or Disposition of Assets.
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
authorised.
Date: 5/14/98 By: /s/ Ray Reaves
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Ray Reaves
Treasurer, Chief Financial Officer
