SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
-------
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1996 Commission File Number 09358
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
-------
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
-------------- --------------
TYREX OIL COMPANY
(Exact name of registrant as specified
in its charter)
WYOMING 83-0245581
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
777 North Overland Trail, Suite 101, P.O. Box 2459
Casper, Wyoming 82602
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 307-234-4260
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed 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 Exchange 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.
Yes X No
------ -----
Capital stock, 10,960,091 shares having a par value of $.01 per share were
outstanding as of November 12, 1996.
<PAGE>
TYREX OIL COMPANY
TABLE OF CONTENTS
Page Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Report of Independent Certified Public Accountants i
Condensed Balance Sheets, September 30, 1996
(Unaudited) and June 30, 1996 ii
Statements of Operations for the three months
ended September 30, 1996 and 1995 (Unaudited) iii
Condensed Statements of Cash Flows for the three
months ended September 30, 1996 and 1995 (Unaudited) iv
Notes to Condensed Financial Statements
(Unaudited) v
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations vi
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K vii
Signatures viii
<PAGE>
PART I
FINANCIAL INFORMATION
<PAGE>
i
HOCKER, LOVELETT, HARGENS & YENNIE, P.C.
----------------------------------------
Certified Public Accountants
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors
Tyrex Oil Company
Casper, Wyoming
The accompanying condensed balance sheet of Tyrex Oil Company as of September
30, 1996, and the related statements of operations, and condensed statements of
cash flows for the three month periods ended September 30, 1996 and 1995, were
not audited by us and, accordingly we do not express an opinion on them.
We have previously audited, in accordance with generally accepted auditing
standards, the balance sheet as of June 30, 1996, and the related statements of
operations and retained earnings and cash flows for the year then ended (not
presented herein); and in our report dated August 28, 1996, we expressed an
unqualified opinion on those financial statements. In our opinion, the
information set forth in the accompanying balance sheet as of June 30, 1996, is
fairly stated in all material respects in relation to the balance sheet from
which it has been derived.
/s/ Hocker, Lovelett, Hargens & Yennie, P.C.
Casper, Wyoming
November 12, 1996
<PAGE>
<TABLE>
TYREX OIL COMPANY ii
CONDENSED BALANCE SHEETS
<CAPTION>
September June 30,
30,
1996 1996
(See Note
(Unaudited) Below)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 775,989 $ 478,195
Certificates of deposit 105,000 105,000
Accounts receivable 190,427 154,683
Prepaid maintenance fees 551 862
Accrued interest receivable 1,440 159
Total 1,073,407 738,899
OTHER ASSETS
Investment 95,205 89,109
Other 2,209 6,777
Total 97,414 95,886
PROPERTY AND EQUIPMENT, at cost
Oil and gas properties - using successful efforts method,
net of accumulated depreciation and depletion 1,609,245 1,994,961
Less: impairment allowance (40,603) (40,603)
1,568,642 1,954,358
Other equipment, net of accumulated depreciation 4,780 5,944
Total 1,573,422 1,960,302
Total $ 2,744,243 $ 2,795,087
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 90,135 $ 68,775
Accrued expenses 59,343 64,144
Lease payable 1,967 2,486
Current portion of debt 57,879 43,107
Total 209,324 178,512
DEFERRED COMPENSATION 34,528 32,491
LONG-TERM DEBT 33,253 154,001
Total 277,105 365,004
STOCKHOLDERS' EQUITY
Common stock, $.01 par value: authorized - 50,000,000 shares;
issued and outstanding - 10,960,091 shares at September 30,
1996 and June 30, 1996 109,601 109,601
Additional paid-in capital 5,396,910 5,396,910
Retained (deficit) (3,033,386) (3,070,441)
2,473,125 2,436,070
Less: Treasury stock, at cost, 45,000 shares at September 30, 1996
and June 30, 1996 (5,987) (5,987)
Total 2,467,138 2,430,083
Total $ 2,744,243 $ 2,795,087
<FN>
Note: The balance sheet at June 30, 1996 has been taken from the audited
financial statements at that date and condensed.
See accompanying notes to condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
iii
TYREX OIL COMPANY
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)
<CAPTION>
1996 1995
<S> <C> <C>
REVENUES
Sales of oil and gas $ 397,070 $ 309,890
Sales of properties 308,000 -
Interest income 3,785 1,082
Income from partnership 24,364 13,741
Sales of investments 377 -
Other 25,304 25,478
Total 758,900 350,191
COSTS AND EXPENSES
Production costs 208,824 149,610
Production taxes 41,077 34,220
Cost of properties sold 302,100 -
Cost of investments sold 4,946 -
Interest expense 4,714 4,767
General and administrative 71,982 78,668
Depreciation and depletion 73,648 72,454
Exploration 14,554 5,380
Total 721,845 345,099
INCOME BEFORE INCOME TAXES 37,055 5,092
INCOME TAXES
Current - -
Deferred - -
NET INCOME $ 37,055 $ 5,092
NET INCOME PER SHARE OF COMMON STOCK $ .00 $ .00
DIVIDENDS PER SHARE OF COMMON STOCK $ - $ -
WEIGHTED AVERAGE SHARES OF COMMON
STOCK OUTSTANDING 10,960,091 10,795,091
<FN>
See accompanying notes to condensed financial statements.
</TABLE>
<PAGE>
<TABLE> iv
TYREX OIL COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
(UNAUDITED)
<CAPTION>
1996 1995
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 37,055 $ 5,092
Charges not requiring cash:
Depreciation and depletion 73,648 72,454
Abandoned properties 11,099 -
(Gain) on sale of assets (5,900) -
Loss on sale of investments 4,569 -
Decrease (Increase) in operating assets:
Prepaid maintenance fees 311 387
Accrued interest receivable (1,281) 1,443
Accounts receivable (35,744) (39,881)
Other assets - 521
Increase (Decrease) in operating liabilities:
Accounts payable and accrued expenses 16,559 60,147
Deferred compensation 2,037 (80)
Net cash provided by operating activities 102,353 100,083
INVESTING ACTIVITIES:
Acquisitions of property and equipment (68) (344)
Proceeds from sale of property and equipment 308,100 -
Proceeds from sale of investments 377 -
Net revenue from investments (6,473) (2,204)
Net cash provided by (used in) investing activities 301,936 (2,548)
FINANCING ACTIVITIES:
Repayment of loan principal and leases (106,495) (38,221)
Net cash (used in) financing activities (106,495) (38,221)
INCREASE IN CASH 297,794 59,314
CASH AND CASH EQUIVALENTS
Beginning of period 478,195 330,381
End of period $ 775,989 $ 389,695
<FN>
See accompanying notes to condensed financial statements.
</TABLE>
<PAGE>
v
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. Summary of Significant Accounting Policies
Refer to the Company's annual financial statements for the year ended June
30, 1996, for a description of the accounting policies which have been
continued without change. Also, refer to the notes with those annual
statements for additional details of the Company's financial condition,
results of operations and changes in cash flows. The details in those
notes have not changed except as a result of normal transactions in the
interim.
2. Management Representation
In management's opinion, all adjustments necessary for a fair presentation
are reflected in the interim financial statements. Such adjustments are of
a normal recurring nature.
3. Interim Results of Operations
The results of operations for the period ended September 30, 1996, are not
necessarily indicative of the operating results for the full year.
4. Significant Event
During the current quarter, the Company sold the Poison Creek Prospect on
a contingent agreement. The Company received proceeds of $300,000 which
were recorded as return of capital. The remaining basis of $198,000 will
be retained as oil and gas property and equipment until final disposition
of the agreement within one year. No gain or loss was recognized during
the current quarter on said sale.
<PAGE>
vi
TYREX OIL COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
During the three months ended September 30, 1996, the Company's working capital
increased by $303,696. The increase is primarily the result of proceeds of
$300,000 received on the sale of the Poison Creek Prospect. The Company is
continuing to control expenses and did not acquire any material oil and gas
properties during this three month period.
Management believes that the Company's liquidity is sufficient to meet future
cash needs of operations. Management does not anticipate selling any material
amounts of nonproducing properties strictly as a means of raising working
capital.
RESULTS OF OPERATIONS
- ---------------------
Current Quarter Compared to Previous Quarter
- --------------------------------------------
The Company had net income of $37,000 in the current quarter compared to a net
loss of $22,000 in the fourth quarter of fiscal year 1995-1996. The increase in
net income can be attributed to higher oil prices, lower exploration costs, and
decreased depletion charges. During the fourth quarter of last fiscal year, the
Company had a reserve study conducted by outside engineers, and thus the
depletion calculation per barrel was decreased due to an increase in total
reserves booked by the Company. During the current quarter, exploration costs
also decreased by $10,000 because of fewer nonproducing leases expiring.
During the current quarter, the Company sold the Poison Creek Prospect on a
contingent agreement. The Company received proceeds of $300,000 which were
recorded as return of capital. The remaining basis of $198,000 will be retained
as oil and gas property and equipment until final disposition of the agreement
within one year. No gain or loss was recognized during the current quarter on
said sale. The Company sold two small leases at a net gain of $5,900 during
the current quarter compared to no sales during the previous quarter.
Current Quarter Compared to Corresponding Quarter
- -------------------------------------------------
Sales of oil and gas increased by $88,000 to $397,070, a 28% increase when
compared to $309,890 for the same period one year ago. Net income also increased
by $32,000 over the corresponding quarter of last year. The increases are
primarily due to higher oil prices.
Production costs increased by $59,214 over the corresponding quarter because of
the successful workovers of the State 42-16 well and the Peterson "G" well.
Production taxes also increased by $6,857 due to increased oil and gas revenues.
Exploration costs were $9,000 higher because more nonproducing leases expired in
the quarter.
General and administrative costs were $6,700 lower in the current quarter
compared to the same period one year ago due to cost containment measures
previously implemented by the Company.
<PAGE>
vii
PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORT ON FORM 8-K
A Form 8-K was filed on September 27, 1996 regarding the sale of the
Poison Creek Prospect.
<PAGE>
viii
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TYREX OIL COMPANY
(Registrant)
/s/ Tom N. Richardson
------------------------------
Tom N. Richardson
President and Principal
Financial Officer
Date: 11/14/96
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> SEP-30-1996
<CASH> 880,989
<SECURITIES> 0
<RECEIVABLES> 190,427
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,073,407
<PP&E> 4,490,178
<DEPRECIATION> 2,916,756
<TOTAL-ASSETS> 2,744,243
<CURRENT-LIABILITIES> 209,324
<BONDS> 33,253
0
0
<COMMON> 109,601
<OTHER-SE> 2,357,537
<TOTAL-LIABILITY-AND-EQUITY> 2,744,243
<SALES> 705,070
<TOTAL-REVENUES> 758,900
<CGS> 0
<TOTAL-COSTS> 717,131
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,714
<INCOME-PRETAX> 37,055
<INCOME-TAX> 0
<INCOME-CONTINUING> 37,055
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37,055
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
