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 December 31, 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
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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 February 3, 1997.
<PAGE>
TYREX OIL COMPANY
TABLE OF CONTENTS
Page Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Balance Sheets, December 31, 1996
(Unaudited) and June 30, 1996 i
Statements of Operations for the three months and six months
ended December 31, 1996 and 1995 (Unaudited) ii
Condensed Statements of Cash Flows for the six
months ended December 31, 1996 and 1995 (Unaudited) iii
Notes to Condensed Financial Statements
(Unaudited) iv
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations v
PART II. OTHER INFORMATION
Item 4. Submission of matters to a vote of security holders vi
Item 6. Exhibits and Reports on Form 8-K vi
Signatures vii
<PAGE>
PART I
FINANCIAL INFORMATION
<PAGE>
<TABLE>
i
TYREX OIL COMPANY
CONDENSED BALANCE SHEETS
<CAPTION>
December 31, June 30,
1996 1996
(See Note
(Unaudited) Below)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 951,936 $ 478,195
Certificates of deposit 105,000 105,000
Accounts receivable 164,263 154,683
Prepaid maintenance fees 262 862
Accrued interest receivable 290 159
Total 1,221,751 738,899
OTHER ASSETS
Investment 81,642 89,109
Other 489 6,777
Total 82,131 95,886
PROPERTY AND EQUIPMENT, at cost
Oil and gas properties - using successful efforts method,
net of accumulated depreciation and depletion 1,463,296 1,994,961
Less: impairment allowance (40,603) (40,603)
1,422,693 1,954,358
Other equipment, net of accumulated depreciation 4,076 5,944
Total 1,426,769 1,960,302
Total $ 2,730,651 $ 2,795,087
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 28,032 $ 68,775
Accrued expenses 59,318 64,144
Lease payable 1,470 2,486
Current portion of debt - 43,107
Total 88,820 178,512
DEFERRED COMPENSATION 36,565 32,491
LONG-TERM DEBT - 154,001
Total 125,385 365,004
STOCKHOLDERS' EQUITY
Common stock, $.01 par value: authorized - 50,000,000 shares;
issued and outstanding - 10,960,091 shares at December 31,
1996 and June 30, 1996 109,601 109,601
Additional paid-in capital 5,396,910 5,396,910
Retained (deficit) (2,895,258) (3,070,441)
2,611,253 2,436,070
Less: Treasury stock, at cost, 45,000 shares at December 31, 1996
and June 30, 1996 (5,987) (5,987)
Total 2,605,266 2,430,083
Total $ 2,730,651 $ 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 six months
ended December 31, ended December 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
REVENUES
Sales of oil and gas $ 429,636 $ 309,650 $ 826,706 $ 619,540
Sales of properties 71,200 5,141 379,200 5,141
Interest income 9,116 1,126 12,901 2,208
Income from partnership (6,834) 6,107 17,530 19,848
Sales of investments - - 377 -
Other 21,945 28,553 47,249 54,031
Total 525,063 350,577 1,283,963 700,768
COSTS AND EXPENSES
Production costs 112,390 163,228 321,214 312,838
Production taxes 47,976 32,752 89,053 66,972
Cost of properties sold 67,119 6,010 369,219 6,010
Cost of investments sold 1,720 - 6,666 -
Interest expense 1,651 4,774 6,365 9,541
General and administrative 75,349 93,816 147,331 172,484
Depreciation and depletion 68,371 53,671 142,019 126,125
Exploration 12,359 38,190 26,913 43,570
Total 386,935 392,441 1,108,780 737,540
INCOME (LOSS) BEFORE INCOME
TAXES 138,128 (41,864) 175,183 (36,772)
INCOME TAXES
Current - - - -
Deferred - - - -
- - - -
NET INCOME (LOSS) $ 138,128 $ (41,864) $ 175,183 $ (36,772)
DIVIDENDS PER SHARE OF COMMON
STOCK $ .00 $ .00 $ .00 $ .00
NET INCOME (LOSS)PER SHARE OF
COMMON STOCK $ .01 $ .00 $ .02 $ .00
WEIGHTED AVERAGE SHARES
OF COMMON STOCK OUTSTANDING 10,960,091 10,836,341 10,960,091 10,836,341
<FN>
See accompanying notes to condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
iii
TYREX OIL COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1996 AND 1995
(UNAUDITED)
<CAPTION>
1996 1995
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ 175,183 $ (36,772)
Charges not requiring cash:
Depreciation and depletion 142,019 126,125
Abandoned properties 22,363 32,805
(Gain) Loss on sale of assets (9,981) 869
Loss on sale of investments 6,288 -
Decrease (Increase) in operating assets:
Accounts receivable (9,580) (95,080)
Prepaid maintenance fees 600 580
Accrued interest receivable (131) 2,675
Other assets - 521
(Decrease) Increase in operating liabilities:
Accounts payable and accrued expenses (45,569) 3,954
Deferred compensation 4,074 1,957
Net cash provided by operating activities 285,266 37,634
INVESTING ACTIVITIES:
Acquisitions of property and equipment (68) (64,467)
Proceeds from sale of property and equipment 379,200 5,141
Proceeds from sale of investments 377 -
Net revenue from investments 7,090 (619)
Net cash provided by (used in) investing activities 386,599 (59,945)
FINANCING ACTIVITIES:
Issuance of stock bonuses - 12,891
Proceeds of borrowings - 250,000
Repayment of loan principal and leases (198,124) (170,866)
Net cash provided by (used in) financing activities (198,124) 92,025
INCREASE IN CASH 473,741 69,714
CASH AND CASH EQUIVALENTS
Beginning of period 478,195 330,381
End of period $ 951,936 $ 400,095
<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 December 31, 1996, are not
necessarily indicative of the operating results for the full year.
4. Subsequent Event
The Company has accepted an offer to sell substantially all of its
producing oil and gas properties to an unaffiliated third party for $1.8
million effective as of January 1, 1997. The sale is subject to the
execution of a definitive agreement along with approval of Tyrex
shareholders.
<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 six months ended December 31, 1996, the Company's working capital
increased by $572,500. The increase is primarily the result of proceeds of
$300,000 received on the sale of the Poison Creek Prospect and $70,000 on the
sale of the Fuller Reservoir Properties and the increase from net income of
$175,000. 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 accepted an offer to sell
substantially all of its producing oil and gas properties for $1.8 million
effective as of January 1, 1997. The Company has not disclosed plans for the
use of the proceeds from the sale.
RESULTS OF OPERATIONS
Current Year-To-Date Compared to Corresponding Year-To-Date
-----------------------------------------------------------
The Company had net income of $175,000 in the current period compared to a net
loss of $37,000 in the previous period. The increase in net income can be
attributed to higher oil prices, lower exploration costs, and decreased per
barrel depletion charges. In addition, production for the six months ended
December 31, 1996 was approximately 2,000 BOE higher than in the corresponding
period in 1995. During the current period, the Company also recognized a
$10,000 profit on the sale of two producing properties. Exploration costs were
lower due to fewer nonproducing leases expiring and decreased costs for annual
delay rentals as a result of properties expiring in the previous year.
General and administrative costs were $25,000 lower during the current period
due to cost containment measures by the Company. Salaries, office expenses and
office rent were all lower as the Company concentrated efforts on controlling
and reducing expenses.
Current Quarter Compared to Corresponding Quarter
-------------------------------------------------
Sales of oil and gas increased by approximately $120,000 when compared to the
same period one year ago. Again, this increase can be primarily attributed to
higher oil prices and some increased production. Income from the coal
partnership was significantly lower due to the curtailed production at the
plant.
Overall costs and expenses decreased when compared to the same period in the
prior year. Exploration costs decreased by $26,000 due to fewer expiring
nonproducing leases. General and administrative costs declined by 20% due to
cost containment measures previously implemented by the Company.
Current Quarter Compared to Previous Quarter
--------------------------------------------
The Company had net income of $138,000 for the current quarter compared to net
income of $37,000 for the previous quarter. In addition to increased oil and
gas sales, production costs were significantly lower during the current quarter.
Interest expense was lower during the current quarter as the Company used
available cash resources to pay off existing notes payable. The Company
recognized $31,000 less in Coal Partnership income during the current quarter
due to lower production at the Coal plant.
<PAGE>
vi
PART II
OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the annual stockholders' meeting on December 5, 1996 the following
directors were elected:
John D. Traut
William P. Gruman
Doris K. Backus
Tom N. Richardson
Morris R. Massey
Hocker, Lovelett, Hargens & Skogen, P.C. was ratified as auditor for the year
ending June 30, 1997.
Subsequent to the annual stockholders' meeting, a special meeting of the Board
of Directors was held on December 5, 1996. Tom N. Richardson was elected
President and Chief Executive and Financial Officer, and Mr. John D. Traut was
elected Chairman of the Board of Directors.
ITEM 6. EXHIBITS AND REPORT ON FORM 8-K
A Form 8-K was not required to be filed in the period covered by this report.
<PAGE>
vii
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: February 13, 1997
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 1,056,936
<SECURITIES> 0
<RECEIVABLES> 164,263
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,221,751
<PP&E> 4,204,149
<DEPRECIATION> 2,777,379
<TOTAL-ASSETS> 2,730,651
<CURRENT-LIABILITIES> 88,820
<BONDS> 0
0
0
<COMMON> 109,601
<OTHER-SE> 2,495,665
<TOTAL-LIABILITY-AND-EQUITY> 2,605,266
<SALES> 1,205,906
<TOTAL-REVENUES> 1,283,963
<CGS> 0
<TOTAL-COSTS> 1,102,415
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,365
<INCOME-PRETAX> 175,183
<INCOME-TAX> 0
<INCOME-CONTINUING> 175,183
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 175,183
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
