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, 1999
[ ] 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
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(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, 1999, the number of shares outstanding of the Registrant's $.01
par value Common Stock was 5,166,959.
Transitional Small Business Disclosure Format (Check one):
Yes No X
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<CAPTION>
PART I
Item 1. Condensed Consolidated Financial Statements
FieldPoint Petroleum Corporation
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, December 31,
1999 1998
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CURRENT ASSETS: (unaudited)
<S> <C> <C>
Cash $ 85,735 $ 1,375
Trading securities 2,880 2,880
Accounts receivable:
Due from investor -- 9,000
Oil and gas sales 58,198 50,026
Joint interest billings, less allowance for doubtful
accounts of $20,000 76,459 67,225
Income taxes recoverable 52,200 48,000
Prepaid expenses 2,535 2,535
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Total current assets 278,007 181,041
PROPERTY AND EQUIPMENT:
Oil and gas properties (successful efforts method):
Unproved leasehold costs -- 180,000
Proved leasehold costs 1,296,950 1,115,176
Lease and well equipment 176,321 172,860
Furniture and equipment 31,432 31,432
Transportation equipment 74,945 74,945
Less accumulated depletion and depreciation (559,258) (523,258)
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Net property and equipment 1,020,390 1,051,155
EARNEST MONEY DEPOSIT 40,000 40,000
OTHER ASSETS 16,815 16,815
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Total assets $ 1,355,212 $ 1,289,011
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 242,788 $ 449,500
Accounts payable and accrued expenses 128,385 128,347
Oil and gas revenues payable 66,969 62,538
Due to related party 20,000 15,000
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Total current liabilities 458,142 655,385
LONG-TERM DEBT, net of current portion 315,058 374,070
COMMMITMENTS
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value, 75,000,000 shares authorised;
5,166,759 and 4,613,259 shares issued and outstanding,
respectively 51,667 46,132
Additional paid-in capital 457,943 117,723
Treasury stock, 205,000 and 210,000 shares, at cost (2,050) (2,100)
Retained earnings 74,452 97,801
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Total stockholders' equity 582,012 259,556
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Total liabilities and stockholders' equity $ 1,355,212 $ 1,289,011
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See accompanying notes to these consolidated financial statements
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<TABLE>
<CAPTION>
FieldPoint Petroleum Corporation
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
March 31,
--------------------------
1999 1998
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REVENUE: (unaudited) (unaudited)
<S> <C> <C>
Oil and gas sales $ 98,515 $ 103,953
Well operational and pumping fees 33,143 46,658
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Total revenue 131,658 150,611
COSTS AND EXPENSES:
Production expense 28,359 68,968
Depletion and depreciation 36,000 30,750
General and administrative 76,661 98,228
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Total costs and expenses 141,020 197,946
OTHER INCOME (EXPENSE):
Interest income (expense), net (18,344) (11,991)
Miscellaneous 157 4,578
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Total other income (expense) (18,187) (7,413)
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INCOME (LOSS) BEFORE INCOME TAXES (27,549) (54,748)
INCOME TAX BENEFIT (PROVISION) CURRENT 4,200 15,300
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NET AND COMPREHENSIVE INCOME (LOSS) (23,349) (39,448)
BASIC AND DILUTED NET AND
COMPREHENSIVE INCOME (LOSS) (.01) (.01)
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WEIGHTED AVERAGE SHARES OUTSTANDING 4,661,937 4,413,259
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See accompanying notes to these consolidated financial statements
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<TABLE>
<CAPTION>
FieldPoint Petroleum Corporation
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
March 31,
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1999 1998
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(unaudited) (unaudited)
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (23,349) $ (39,448)
Adjustments to reconcile to net cash by operating activities:
Depletion and depreciation 36,000 30,750
Options issued for services -- 9,732
Changes in assets and liabilities:
Accounts receivable (8,406) (3,879)
Income taxes recoverable (4,200) (15,300)
Prepaid expenses and other assets -- (900)
Accounts payable and accrued expenses 38 (5,924)
Oil and gas revenues payable 4,431 (2,467)
Due to related party 5,000 --
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Net cash (used) provided by operating activities 9,514 (27,436)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of oil and gas properties (5,235) (202,250)
Purchase of furniture and equipment -- (390)
Decrease (increase) in restricted cash -- 14,000
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Net cash used by investing activities (5,235) (188,640)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt -- 250,000
Repayments of long-term debt (265,724) (40,260)
Proceeds from sales of common stock, net of offering fees 338,633 --
Proceeds from sales of treasury stock 7,172 --
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Net cash provided by financing activities 80,081 209,380
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NET INCREASE (DECREASE) IN CASH 84,360 (6,696)
CASH, beginning of the period 1,375 48,457
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CASH, end of the period $ 85,735 $ 41,761
========= =========
SUPPLEMENTAL INFORMATION:
Cash paid during the period for interest $ 18,344 $ 12,675
========= =========
Cash paid during the period for income taxes -- --
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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 Oklahoma, 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, 1998.
2. 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. The consultant
exercised 20,000 options during the period ended March 31, 1999.
On March 25, 1999 the Company issued 533,500 shares of common stock through its
ongoing unit offering priced at $0.75 per unit, each unit consist of one (1)
share of common stock and one (1) class A warrant.
<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.
During the period the Company began raising capital by selling stock through a
Private placement. The Company categorises its operating expenses into the
categories of production expenses and other expenses.
Comparison of three months ended March 31, 1999 to the three months ended March
31, 1998
- --------------------------------------------------------------------------------
Results of Operations
Revenues decreased 13% or $18,953 to $131,658 for the three month period ended
March 31, 1999 from the comparable 1998 period. This was due to the overall
decrease in the average price received for oil and gas sales. Production volumes
increased 12% on a BOE basis. Average oil sales prices decreased 24% to $10.41
for the period ended March 31, 1999 compared to $13.68 for the period ended
March 31, 1998. Average gas sales prices decreased 6% to $1.24 for the
three-month period ended March 31, 1999 compared to $1.32 for the period ended
March 31, 1998.
Production expenses decreased 59% or $40,609 to $28,359 for the three month
period ended March 31, 1999 from the comparable 1998 period, this was primarily
due to expenses related to repairing a casing leak on the Wyoming property's
Elkhorn #16 injection well during the 1998 period. Depletion and depreciation
increased slightly due to the purchase of additional oil and gas properties, and
related equipment. General and administrative overhead cost decreased 22% or
$21,567 to $76,661 for the three-month period ended March 31, 1999 from the
three-month period ended March 31, 1998. This was attributable to a reduction in
legal fees booked during the 1999 period and cost related to an option granted
during the 1998 period pursuant to SFAS 123.
Liquidity and Capital Resources
Cash flow provided by operating activities was $9,514 for the three-month period
ended March 31, 1999, as compared to $27,436 in cash flow used by operating
activities in the 1998 period. The increase in cash from operating activities
was primarily due to a lower net loss.
Cash flow used by investing activities was $5,235 in the period ended March 31,
1999, compared to $188,640 for March 31, 1997. This is primarily due to the
purchase of additional oil and gas properties. Cash flow from financing
activities was $80,081 for the period ended March 31, 1999, compared to $209,380
for the same period in 1998. This was due to the issuance of common stock, and
increases in long-term debt offset by repayments of long-term debt.
The Company cannot predict how prices will vary during 1999 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>
Impact of Year 2000
The Company is assessing the impact of the year 2000 issue on its operations,
including the development and implemention 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.
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
- -----------------------------
SALE OF RESTRICTED SECURITIES. During the three months ended March 31, 1999, the
Company sold approximately 18 Units, each Unit consisting of 30,000 shares of
Common Stock and 30,000 Warrants to purchase Common Stock, at a purchase price
of $22,500 per Unit. Each Warrant is exercisable to purchase one share of Common
Stock at $1.25 per share until expiration in May 2002. In connection with such
sales the Company paid cash commissions to W.B. McKee Securities, Inc. in the
amount of $40,012.50.
With respect to these sales, the Company relied on Section 4 (2) of the Act, and
Rule 501 and Rule 506 of Regulation D promulgated thereunder. The investors were
given a copy of a Private Placement Memorandum containing information concerning
the Company, a Form D was filed with the SEC and the Company complied with the
other applicable requirements or Rule 501 and 506.
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 1999:
a. A report on Form 8-K filed on January 12, 1999 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
authorized.
Date: 4/30/99 By: /s/ Ray Reaves
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Ray Reaves, Treasurer, Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
</LEGEND>
<CIK> 0000316736
<NAME> FieldPoint Petroleum Corporation
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<EXCHANGE-RATE> 1
<CASH> 85,735
<SECURITIES> 2,880
<RECEIVABLES> 134,657
<ALLOWANCES> 20,000
<INVENTORY> 0
<CURRENT-ASSETS> 278,007
<PP&E> 1,579,648
<DEPRECIATION> (559,258)
<TOTAL-ASSETS> 1,355,212
<CURRENT-LIABILITIES> 458,142
<BONDS> 0
0
0
<COMMON> 51,667
<OTHER-SE> 457,943
<TOTAL-LIABILITY-AND-EQUITY> 1,355,212
<SALES> 98,515
<TOTAL-REVENUES> 131,658
<CGS> 28,359
<TOTAL-COSTS> 141,020
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,344
<INCOME-PRETAX> (27,549)
<INCOME-TAX> 4,200
<INCOME-CONTINUING> (23,349)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (23,349)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
