SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
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OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1997 Commission File Number 09358
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
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OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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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
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Capital stock, 10,960,091 shares having a par value of $.01 per share were
outstanding as of May 7, 1997.
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TYREX OIL COMPANY
TABLE OF CONTENTS
Page Number
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Balance Sheets, March 31, 1997 (Unaudited)
and June 30, 1996 i
Statements of Operations for the three months and nine months
ended March 31, 1997 and 1996 (Unaudited) ii
Condensed Statements of Cash Flows for the nine
months ended March 31, 1997 and 1996 (Unaudited) iii
Notes to Condensed Financial Statements (Unaudited) iv
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations v-vi
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K vii
Signatures viii
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PART I
FINANCIAL INFORMATION
<PAGE>
<TABLE>
i
TYREX OIL COMPANY
CONDENSED BALANCE SHEETS
<CAPTION>
March 31, June 30,
1997 1996
(See Note
(Unaudited) Below)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,702,658 $ 478,195
Certificates of deposit 105,000 105,000
Accounts receivable 140,842 154,683
Prepaid maintenance fees - 862
Accrued interest receivable 105 159
Total 1,948,605 738,899
OTHER ASSETS
Investment - 89,109
Other 359 6,777
Total 359 95,886
PROPERTY AND EQUIPMENT, at cost
Oil and gas properties - using successful efforts method,
net of accumulated depreciation and depletion 1,116,430 1,994,961
Less: impairment allowance (40,603) (40,603)
1,075,827 1,954,358
Other equipment, net of accumulated depreciation 3,369 5,944
Total 1,079,196 1,960,302
Total $ 3,028,160 $ 2,795,087
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 51,474 $ 68,775
Accrued expenses 56,398 64,144
Lease payable 944 2,486
Deposit payable 180,325 -
Current portion of debt - 43,107
Total 289,141 178,512
DEFERRED COMPENSATION 38,602 32,491
LONG-TERM DEBT - 154,001
Total 327,743 365,004
STOCKHOLDERS' EQUITY
Common stock, $.01 par value: authorized - 50,000,000 shares;
issued and outstanding - 10,960,091 shares at March 31, 1997
and June 30, 1996 109,601 109,601
Additional paid-in capital 5,396,910 5,396,910
Retained (deficit) (2,800,107) (3,070,441)
2,706,404 2,436,070
Less: Treasury stock, at cost, 45,000 shares at March 31, 1997
and June 30, 1996 (5,987) (5,987)
Total 2,700,417 2,430,083
Total $ 3,028,160 $ 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>
ii
TYREX OIL COMPANY
STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
For the three months For the nine months
ended March 31, ended March 31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
REVENUES
Sales of oil and gas $ 375,463 $ 316,443 $ 1,202,169 $ 935,983
Sales of properties 280,917 - 660,117 5,141
Interest income 13,661 1,308 26,562 3,516
Income from partnership - (8,319) 17,530 11,529
Sales of investments 100,000 - 100,377 -
Other 22,069 19,666 69,318 73,697
Total 792,110 329,098 2,076,073 1,029,866
COSTS AND EXPENSES
Production costs 150,217 184,634 471,431 497,472
Production taxes 40,810 27,517 129,863 94,489
Cost of properties sold 272,369 - 641,588 6,010
Cost of investments sold 81,771 - 88,437 -
Interest expense - 5,451 6,365 14,992
General and administrative 75,788 71,486 223,119 243,970
Depreciation and depletion 58,330 82,434 200,349 208,559
Exploration 17,675 55,038 44,588 98,608
Total 696,960 426,560 1,805,740 1,164,100
INCOME (LOSS) BEFORE INCOME
TAXES 95,150 (97,462) 270,333 (134,234)
INCOME TAXES
Current - - - -
Deferred - - - -
- - - -
NET INCOME (LOSS) $ 95,150 $ (97,462) $ 270,333 $ (134,234)
DIVIDENDS PER SHARE OF COMMON
STOCK $ - $ - $ - $ -
NET INCOME (LOSS)PER SHARE OF
COMMON STOCK $ .01 $ (.01) $ .02 $ (.01)
WEIGHTED AVERAGE SHARES
OF COMMON STOCK OUTSTANDING 10,960,091 10,960,091 10,960,091 10,877,291
<FN>
See accompanying notes to condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
iii
TYREX OIL COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MARCH 31, 1997 AND 1996
(UNAUDITED)
<CAPTION>
1997 1996
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ 270,334 $ (134,234)
Charges not requiring cash:
Depreciation and depletion 200,349 208,559
Abandoned properties 38,776 78,853
(Gain) Loss on sale of assets (18,873) 869
(Gain) on sale of investments (11,940) -
Decrease (Increase) in operating assets:
Accounts receivable 13,841 (51,033)
Prepaid maintenance fees 862 864
Accrued interest receivable 54 3,947
Other assets - 521
(Decrease) Increase in operating liabilities:
Accounts payable and accrued expenses (25,047) (2,051)
Deferred compensation 6,111 3,994
Net cash provided by operating activities 474,467 110,289
INVESTING ACTIVITIES:
Acquisitions of property and equipment (68) (66,168)
Deposit received 180,325 -
Proceeds from sale of property and equipment 660,922 5,141
Proceeds from sale of investments 100,377 -
Net revenue from investments 7,090 10,007
Net cash provided by (used in) investing activities 948,646 (51,020)
FINANCING ACTIVITIES:
Issuance of stock bonuses - 12,891
Purchase of treasury stock - (2,635)
Proceeds of borrowings - 250,000
Repayment of loan principal and leases (198,650) (181,943)
Net cash provided by (used in) financing activities (198,650) 78,313
INCREASE IN CASH 1,224,463 137,582
CASH AND CASH EQUIVALENTS
Beginning of period 478,195 330,381
End of period $ 1,702,658 $ 467,963
<FN>
See accompanying notes to condensed financial statements.
</TABLE>
<PAGE>
iv
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 March 31, 1997, are not
necessarily indicative of the operating results for the full year.
4. Subsequent Event
The Company has accepted an offer to sell its producing oil and gas
properties for $1.8 million effective as of January 1, 1997. The sale
is subject to the execution of a definitive agreement. The Company has
received a deposit of $180,325 on the pending sale.
If the sale closes as anticipated, the Company will not have any
significant income from oil and gas sales in future quarters. Furthermore,
if completed with the effective date January 1, 1997, the financial
statements subsequent to this date will reflect the transfer of oil and
gas revenue and expenses, currently being reflected by the Company in the
Statement of Operations, to the buyer.
<PAGE>
v
TYREX OIL COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
During the nine months ended March 31, 1997, the Company's working capital
increased by $1,099,077. In addition to the working capital provided as a result
of net income of $270,000, the increase can be attributed to the proceeds
received on the sale of various producing and nonproducing properties. Revenue
from oil and gas sales has shown a positive increase and the Company is
continuing to control expenses.
Management believes that the Company's liquidity is sufficient to meet future
cash needs of operations. The Company has conditionally accepted an offer to
sell its producing oil and gas properties for an additional $1.8 million. The
cash balance includes a deposit of $180,000 on the sale of these properties. If
the sale closes as anticipated, the Company will not have any significant income
from oil and gas sales in future quarters. Furthermore, if completed with the
effective date January 1, 1997, the financial statements subsequent to this date
will reflect the transfer of oil and gas revenue and expenses, currently being
reflected by the Company in the Statement of Operations, to the buyer.
RESULTS OF OPERATIONS
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Current Year-To-Date Compared to Corresponding Year-To-Date
- -----------------------------------------------------------
The Company had net income of $270,000 in the current period compared to a net
loss of $134,000 in the previous period. The increase in net income can be
attributed to higher oil prices and the gains resulting on the sales of oil and
gas properties and investments. The increase can also be attributed to lower
expenses as a result of fewer expiring nonproducing leases, lower exploration
costs, fewer delay rental payments, and a decreased per barrel depletion charge.
General and administrative costs were $20,000 lower during the current period
due to cost containment measures by the Company. Interest expense was $8,600
lower and interest income $23,000 higher due to the Company's improved cash
position.
Current Quarter Compared to Corresponding Quarter of Prior Year
- ---------------------------------------------------------------
Sales of oil and gas increased by approximately $59,000 compared to the same
period one year ago. Again, this increase can be primarily attributed to higher
oil prices of approximately $3 per barrel. Production taxes increased
approximately 48% to coincide with the increase in sales revenue. Production
costs and depletion expense were lower as a result of declining production.
Exploration costs were lower by $37,000 due to fewer expiring nonproducing
leases.
During the current quarter, the Company sold several marginal oil and gas
properties and the coal property for a net gain of $8,500. The Company had no
such sales during the same quarter one year ago.
General and administrative costs during the current quarter increased by 6%
primarily due to an increase in shareholder relations costs. The Company
continues to employ cost containment measures.
<PAGE>
vi
TYREX OIL COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
Current Quarter Compared to Previous Quarter
- --------------------------------------------
The Company had net income of $95,000 for the current quarter compared to net
income of $138,000 for the previous quarter. Oil prices declined by $2 per
barrel and production decreased due to severe winter operating conditions. The
Company sold additional oil and gas properties during the current quarter for a
net gain of $8,500 compared to the gain of $4,000 in the previous quarter.
Depreciation and depletion expense decreased by 15% also due to the decline in
production.
During the current quarter, the Company sold the coal partnership investment for
a net profit of $18,000 which had incurred a loss of $6,800 during the previous
quarter. Interest income increased by $4,000 and interest expense decreased by
$1,600 during the current quarter compared to the previous quarter again due to
the Company's improved cash position. Other general and administrative costs
remained fairly stable.
<PAGE>
vii
PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORT ON FORM 8-K
A Form 8-K was not filed in the period covered by this report.
<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: May 14, 1997
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<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,807,658
<SECURITIES> 0
<RECEIVABLES> 140,947
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,948,605
<PP&E> 3,908,359
<DEPRECIATION> 2,829,164
<TOTAL-ASSETS> 3,028,160
<CURRENT-LIABILITIES> 289,141
<BONDS> 0
0
0
<COMMON> 109,601
<OTHER-SE> 2,590,816
<TOTAL-LIABILITY-AND-EQUITY> 3,028,160
<SALES> 1,931,604
<TOTAL-REVENUES> 2,076,073
<CGS> 0
<TOTAL-COSTS> 1,799,375
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,365
<INCOME-PRETAX> 270,333
<INCOME-TAX> 0
<INCOME-CONTINUING> 270,333
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 270,333
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
