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 September 30, 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
--------------------------------
(Exact name of small business issuer as specified in its charter)
Colorado 84-0811034
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1703 Edelweiss Drive
Cedar Park, Texas 78613
-------------------- -----
(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, 1999, the number of shares outstanding of the Registrant's
$.01 par value Common Stock was 6,249,959.
Transitional Small Business Disclosure Format (Check one):
Yes No X
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PART I
Item 1. Condensed Consolidated Financial Statements
FieldPoint Petroleum Corporation
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
------
September 30, December 31,
1999 1998
------------- ------------
CURRENT ASSETS: (unaudited)
<S> <C> <C>
Cash $ 260,218 $ 1,375
Trading securities 2,880 2,880
Accounts receivable:
Due from investor -- 9,000
Oil and gas sales 125,363 50,026
Joint interest billings, allowance for doubtful
accounts of $20,000 respectively 105,366 67,225
Taxes recoverable -- 48,000
Prepaid expenses 2,535 2,535
------------ ------------
Total current assets 496,362 181,041
PROPERTY AND EQUIPMENT:
Oil and gas properties (successful efforts method):
Unproved leasehold costs -- 180,000
Leasehold costs 2,337,987 1,115,176
Lease and well equipment 348,384 172,860
Furniture and equipment 31,780 31,432
Transportation equipment 74,945 74,945
Less accumulated depletion and depreciation (631,258) (523,258)
------------ ------------
Net property and equipment 2,161,838 1,051,155
EARNEST MONEY DEPOSIT -- 40,000
OTHER ASSETS 28,065 16,815
------------ ------------
Total assets $ 2,686,265 $ 1,289,011
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Current portion of long-term debt $ 524,702 $ 449,500
Accounts payable and accrued expenses 77,747 128,347
Oil and gas revenues payable 59,500 62,538
Due to related party 1,200 15,000
------------ ------------
Total current liabilities 663,149 655,385
LONG-TERM DEBT, net of current portion 674,013 374,070
COMMMITMENTS
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value, 75,000,000 shares authorized;
6,249,959 and 4,613,259 shares issued and outstanding,
respectively 62,499 46,132
Additional paid-in capital 1,169,880 117,723
Retained earnings 117,974 97,801
Treasury stock, 125,000 shares of common stock (1,250) (2,100)
------------ ------------
Total stockholders' equity 1,349,103 259,556
------------ ------------
Total liabilities and stockholders' equity $ 2,686,265 $ 1,289,011
============ ============
</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,
---------------------------
1999 1998
REVENUE: (unaudited) (unaudited)
Oil and gas sales $ 248,677 $ 111,747
Well operational and pumping fees 32,759 36,380
Other -- --
----------- -----------
Total revenue 281,436 148,127
COSTS AND EXPENSES:
Production expense 96,103 58,422
Depletion and depreciation 36,000 30,169
General and administrative 81,246 88,529
----------- -----------
Total costs and expenses 213,349 177,120
OTHER INCOME (EXPENSE):
Interest income (expense), net (27,933) (15,094)
Miscellaneous 45 (59)
----------- -----------
Total other income (expense) (27,888) (15,153)
INCOME (LOSS) BEFORE INCOME TAXES 40,199 (44,146)
INCOME TAX (PROVISION) BENEFIT CURRENT (6,200) 6,000
----------- -----------
NET AND COMPREHENSIVE INCOME (LOSS) 33,999 (38,146)
BASIC AND DILUTED NET AND
COMPREHENSIVE INCOME (LOSS) $ * $ (.01)
----------- -----------
WEIGHTED AVERAGE SHARES OUTSTANDING 5,832,709 4,613,259
=========== ===========
* 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,
---------------------------
1999 1998
REVENUE: (unaudited) (unaudited)
Oil and gas sales $ 494,100 $ 335,405
Well operational and pumping fees 98,708 129,419
----------- -----------
Total revenue 592,808 464,824
COSTS AND EXPENSES:
Production expense 183,415 184,103
Depletion and depreciation 108,000 92,250
General and administrative 245,558 267,242
----------- -----------
Total costs and expenses 536,973 543,595
OTHER INCOME (EXPENSE):
Interest income (expense), net (58,368) (41,732)
Miscellaneous 24,706 5,465
----------- -----------
Total other income (expense) (33,662) (36,267)
----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES 22,173 (115,038)
INCOME TAX (PROVISION) BENEFIT CURRENT (2,000) 26,000
----------- -----------
NET AND COMPREHENSIVE INCOME (LOSS) 20,173 (89,038)
BASIC AND DILUTED NET AND
COMPREHENSIVE INCOME (LOSS) $ * (.02)
----------- -----------
WEIGHTED AVERAGE SHARES OUTSTANDING 5,717,076 4,613,259
=========== ===========
* Less than $.01
See accompanying notes to these consolidated financial statements
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<CAPTION>
FieldPoint Petroleum Corporation
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
September 30,
---------------------------
1999 1998
(unaudited) (unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 20,173 $ (89,038)
Adjustments to reconcile to net cash
provided by operating activities:
Depletion and depreciation 108,000 92,250
Stock Compensations to Consultant 41,450 9,732
Changes in assets and liabilities:
Accounts receivable (104,478) (3,446)
Taxes recoverable 48,000 (26,000)
Prepaid expenses and other assets (11,250) (7,715)
Accounts payable and accrued expenses (50,600) (7,247)
Oil and gas revenues payable (3,038) (10,589)
Payable to related party (13,800) --
----------- -----------
Net cash provided (used) by operating activities 34,457 (42,053)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of oil and gas properties (1,218,335) (234,662)
Purchase of furniture and equipment (348) (865)
Decrease in restricted cash -- 10,000
Decrease in earnest money deposit 40,000 --
----------- -----------
Net cash used by investing activities (1,178,683) (225,527)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt 1,110,000 375,000
Repayments of long-term debt (734,855) (133,560)
Proceeds from exercise of stock option 46,000 1,000
Proceeds from sales of common stock, net of offering fees 931,019 --
Proceeds from sale of treasury stock 50,905 --
----------- -----------
Net cash provided by financing activities 1,403,069 242,440
----------- -----------
NET INCREASE (DECREASE) IN CASH 258,843 (25,140)
CASH, beginning of the period 1,375 48,457
----------- -----------
CASH, end of the period $ 260,218 $ 23,317
=========== ===========
SUPPLEMENTAL INFORMATION:
Cash paid during the period for interest $ 59,202 $ 43,789
=========== ===========
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
--------------------------------------------------------------------------
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, 1998.
2. Acquisition of Working Interest in Oklahoma
-------------------------------------------
During the period ended September 30, 1999, the Company acquired a 25% working
interest in certain leaseholds in the state of Oklahoma. A total price of
$1,368,000 was paid for the interest and related equipment of which, $180,000
was paid during the year ended December 31, 1998. The leases currently have
producing and non-producing oil and gas wells. The Company also purchased all
equipment related to the wells on the leases from Pontotoc Production, Inc. The
entire purchase price was funded by proceeds from long term debt and sales of
Common Stock.
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 September 30, 1998. During the
period ended September 30, 1998 a former board member exercised an option to
acquire 10,000 shares of the Company's common stock. During the period ended
September 30, 1999 the president exercised options to acquire 60,000 shares,
also during the period ended September 30, 1999 a director exercised options to
acquire 25,000 shares. The public relations consultant exercised all 50,000
options during the period ended September 30, 1999. Also during the period the
Company issued 35,000 of common and 10,000 shares of treasury stock to a
consultant in lieu of cash for services rendered.
As of September 30, 1999 the Company issued 1,466,666 shares of common stock
through its unit offering priced at $.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, bank financing, and the
recently completed equity offering. The Company categorises its operating
expenses into the categories of production expenses and other expenses.
Comparison of three months ended September 30, 1999 to the three months ended
September 30, 1998
- --------------------------------------------------------------------------------
Results of Operations
Revenues increased 90% or $133,309 to $281,436 for the three month period ended
September 30, 1999 from the comparable 1998 period, this was due to the overall
increase in the average price received for oil and gas sales. Production volumes
increased 33% on a BOE basis. Average oil sales prices increased 74% to $20.15
for the period ended September 30, 1999 compared to $11.55 for the period ended
September 30, 1998. Average gas sales prices increased 46% to $2.10 for the
period ended September 30, 1999 compared to $1.44 for the period ended September
30, 1998.
Production expenses increased 64% or $37,681 to $96,103 for the three month
period ended September 30, 1999 from the comparable 1998 period, this was
primarily due to additional workovers in the form of remedial repairs and
acquisition of producing oil and gas properties during period. Depletion and
depreciation increased 19% or $5,831 to $36,000 this was primarily due to the
purchase of additional oil and gas properties and related equipment during the
period ended September 30, 1999 compared to the 1998 period. General and
administrative overhead cost decreased 8% or $7,283 to $81,246 for the three
month period ended September 30, 1999 from the comparable 1998 period. This was
attributable to lower legal and engineering fees related to research of possible
acquisitions.
Comparison of nine months ended September 30, 1999 to the nine months ended
September 30, 1998
- --------------------------------------------------------------------------------
Results of Operations
Revenues increased 27% or $127,984 to $592,808 for the nine month period ended
September 30, 1999 from the comparable 1998 period, this was due to the overall
increase in the average price received for oil and gas sales. Production volumes
increased 22% on a BOE basis. Average oil sales prices increased 27% to $15.96
for the period ended September 30, 1999 compared to $12.49 for the period ended
September 30, 1998. Average gas sales prices increased 7% to $1.67 for the nine
month period ended September 30, 1999 compared to $1.55 for the period ended
September 30, 1998.
Production expenses decreased slightly for the nine month period ended September
30, 1999 from the comparable 1998 period, this was primarily due to lower
contract engineering cost. Depletion and depreciation expense increased 17% to
$108,000, this was due to the purchase of additional oil and gas properties and
related equipment during the period ended September 30, 1999 compared to the
1998 period. General and administrative overhead cost decreased 8% or $21,684 to
$245,558 for the nine month period ended September 30, 1999 from the nine month
period ended September 30, 1998. This was attributable to lower legal and
engineering fees related to research of possible acquisitions.
<PAGE>
Net other expense for the nine months ended September 30, 1999 was $33,662
compared to $36,267 for the comparable 1998 period. The decrease was primarily
due to an increase in miscellaneous income which offset interest expense.
Liquidity and Capital Resources
Cash flow provided by operating activities was $34,457 for the nine month period
ended September 30, 1999, as compared to $42,053 in cash flow used by operating
activities in the 1998 period. The increase in cash from operating activities
was primarily due to the net income in 1999.
Cash flow used by investing activities was $1,178,683 for the period ended
September 30, 1999, compared to $225,527 for the period ended September 30,
1998. This is primarily due to the purchase of additional oil and gas
properties. Cash flow provided by financing activities was $1,403,069 for the
period ended September 30, 1999, as compared to $242,440 provided by financing
activities for the same period in 1998. This was due to increases in long-term
debt and proceeds from sales of common stock during 1999.
The Company cannot predict how oil and gas 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.
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
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 month ended September 30, 1999,
the Company sold approximately 15.6 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 year 2002. In connection
with such sales the Company paid cash commissions to W.B. McKee Securities, Inc.
in the amount of $35,112.45.
With respect to these sales, the Company relied on Section 4 (2) of the Act,
Rule 501 and 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 of 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 third
Quarter of 1999:
a. A report on Form 8-K filed on July 6, 1999 reporting an event under
Item 2. Acquisition or Disposition of Assets.
b. Exhibit 27 Financial Data Schedule
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: October 31, 1999 By: /s/ Ray Reaves
----------------------------------------------
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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 260,218
<SECURITIES> 2,880
<RECEIVABLES> 230,729
<ALLOWANCES> 20,000
<INVENTORY> 0
<CURRENT-ASSETS> 496,362
<PP&E> 2,793,096
<DEPRECIATION> 631,258
<TOTAL-ASSETS> 2,686,265
<CURRENT-LIABILITIES> 663,149
<BONDS> 0
0
0
<COMMON> 62,449
<OTHER-SE> 1,286,604
<TOTAL-LIABILITY-AND-EQUITY> 2,686,604
<SALES> 494,100
<TOTAL-REVENUES> 592,808
<CGS> 291,415
<TOTAL-COSTS> 536,973
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (58,368)
<INCOME-PRETAX> 22,173
<INCOME-TAX> (2,000)
<INCOME-CONTINUING> 20,173
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,173
<EPS-BASIC> .004
<EPS-DILUTED> .004
</TABLE>
