FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from_________________ to _________________
Commission File Number: 0-9500
MOUNTAINS WEST EXPLORATION, INC
(Exact name of small business issuer in its charter)
New Mexico 85-0280415
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
616 CENTRAL AVE. SE., SUITE 230
ALBUQUERQUE, NEW MEXICO 87102
(Address of principal executive offices) (Zip Code)
Not Applicable
(Former names, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the issuer (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 issuer was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [X] No [ ]
The number of shares outstanding of the issuers common stock, par value $.001
per share, at August 9, 1996 was 36,566,220 shares.
Transitional Small Business Disclosure Format: Yes [ ] No [X]
PART I
ITEM 1. FINANCIAL STATEMENTS
MOUNTAINS WEST EXPLORATION, INC.
CONDENSED BALANCE SHEET
June 30, 1996
UNAUDITED
ASSETS
Current Assets
Cash .................................................... $ 73,440
Account receivable/prepaid expenses ..................... 4,851
-----------
Total current assets ................................ 78,291
Property and Equipment
Office furniture and equipment, at cost ................. 16,681
Less accumulated depreciation ........................... (8,261)
-----------
Net property and equipment .......................... 8,420
Oil and gas properties, using the successful
efforts method (Note 3) ................................. 2,498,269
Less accumulated depreciation, depletion
and amortization ........................................ (14,254)
-----------
Net oil and gas properties .......................... 2,484,015
Other assets
Term deposit account - restricted (Note 4) .............. 53,042
Note receivable, officer ................................ 100,000
Mineral Interest ........................................ 41,939
Other Investments ....................................... 1,901
-----------
Total other assets .................................. 196,882
-----------
$ 2,767,608
===========
LIABILITIES AND SHAREHOLDERS EQUITY
Current Liabilities
Advances ................................................ $ 2,627
Accounts Payable ........................................ 16,002
Accrued liabilities ..................................... 2,113
Due to affiliates ....................................... 2,437,019
-----------
Total Current Liabilities ........................... 2,457,761
Shareholders' Equity
Common Stock, $.001 par value, authorized:
50,000,00 shares, issued and
outstanding, 36,566,220 shares ...................... 36,566
Capital in excess of par value .......................... 1,557,088
Capital in excess of par value - warrants ............... 46,687
Accumulated deficit .................................... (1,330,494)
-----------
Total Stockholders Equity ........................... 309,847
-----------
$ 2,767,608
===========
See accompanying notes to financial statements.
MOUNTAINS WEST EXPLORATION, INC.
CONDENSED STATEMENTS OF OPERATIONS
UNAUDITED
Three Months Three Months
Ended Ended
June 30, 1996 June 30, 1995
REVENUES
Oil and Gas Sales ..................... $ 5,734 $ 2,989
Interest in sale of oil & gas
property ........................... -- --
------------ ------------
5,734 2,989
EXPENSES
Production costs ...................... 1,200 3,754
Depreciation and depletion ............ 1,277 677
General and administrative ............ 58,401 35,082
------------ ------------
Total expenses ..................... 60,878 39,513
------------ ------------
Loss from operations ..................... (55,144) (36,524)
Other income
Interest income ....................... 1,886 63
Interest expense ...................... -- (100)
------------ ------------
Total other income (loss) ................ 1,886 (37)
------------ ------------
Net earnings ............................. $ (53,258) $ (36,561)
============ ============
Earnings (loss) per common share: ........ $ (0.001) $ (0.001)
============ ============
Weighted Average Number of Shares
Outstanding (Note 2) .................. 36,566,220 36,635,720
============ ============
See accompanying notes to financial statements.
MOUNTAINS WEST EXPLORATION, INC.
CONDENSED STATEMENTS OF OPERATIONS
UNAUDITED
Six Months Six Months
Ended Ended
June 30, 1996 June 30, 1995
REVENUES
Oil and Gas Sales ..................... $ 9,414 $ 4,993
Interest in Sale of oil & Gas
property ........................... 170,000 --
------------ ------------
179,414 4,993
EXPENSES
Production costs ...................... 107,296 4,437
Exploration costs ..................... -- --
Depreciation and depletion ............ 2,552 1,337
Consulting ............................ -- --
General and administrative ............ 100,338 61,303
------------ ------------
Total expenses ..................... 210,186 67,077
------------ ------------
Loss from operations ..................... (30,772) (62,084)
Other income
Interest income ....................... 3,962 935
Interest expense ...................... (13) (100)
------------ ------------
Total other income (loss) .......... 3,949 835
------------ ------------
Net loss ................................. $ (26,823) $ (61,249)
============ ============
Earnings (loss) per common share: ........ $ (0.001) $ (0.002)
============ ============
Weighted Average Number of Shares
Outstanding (Note 2) .................. 36,570,725 36,635,720
============ ============
See accompanying notes to financial statements.
MOUNTAINS WEST EXPLORATION, INC.
CONDENSED STATEMENTS OF CASH FLOWS
UNAUDITED
Six Months Six Months
Ended Ended
June 30, June 30,
1996 1995
Cash flows from operating activities
Cash received from customers ...................... $ 180,918 $ 4,993
Cash paid to suppliers & employees ................ (207,498) (21,559)
Interest received ................................. 3,962 935
Interest paid ..................................... (13) (100)
--------- ---------
Net cash used by operating activities .......... (22,631) (15,731)
Cash flows from investing activities
Acquisition of fixed assets ....................... -- (334)
Acquisition of oil, gas & mineral activities ...... (317) (47,562)
Acquisition of other investments .................. (16,901) --
--------- ---------
Net cash used by investing activities .......... (17,218) (47,896)
Cash flows from financing activities
Net draw on line of credit ........................ -- 21,210
Purchase of Treasury Stock ........................ (2,040) --
--------- ---------
Net cash provided (used) by
financing activities ........................ (2,040) 21,210
--------- ---------
Net decrease in cash ................................ (41,889) (42,417)
Cash at beginning of period .......................... 115,329 44,755
--------- ---------
Cash at end of period ............................... $ 73,440 $ 2,338
========= =========
Reconciliation of net loss to cash provided
by operating activities
Net loss ....................................... $ (26,823) $ (61,249)
Adjustments
Depreciation, depletion and
amortization ............................. 2,552 1,337
Decrease (increase) in prepaid
expenses and accounts receivable ......... (551) 2,000
Increase (decrease) in advances,
accounts payable and
accrued liabilities ...................... 2,192 (280)
Increase in due to affiliate ................ -- 42,461
--------- ---------
Net Cash used by
Operating Activities ........................ $ (22,631) $ (15,731)
========= =========
Noncash Investing or Financing Activities
The Company was loaned $573,563 & $42,461 for the six month periods ended June
30, 1996 and 1995, respectively. These amounts were invested in its oil and gas
property in Papua, New Guinea.
See accompanying notes to financial statements
MOUNTAINS WEST EXPLORATION, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
The balance sheet at June 30, 1996 and statements of operations and statements
of cash flows for the six months ended June 30, 1996 and 1995 have been prepared
by the company, without audit. In the opinion of management, all adjustments,
including normal recurring adjustments necessary to present fairly the financial
position, results of operations and cash flows, have been made. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted. It is suggested that these financial statements be read in
conjunction with the Company's audited financial statements at December 31,1995.
The results of operations for the six months ended June 30, 1996 are not
necessarily indicative of operating results for the full year.
2. NOTES TO FINANCIAL STATEMENTS.
Net income or loss per common share has been computed based on the weighted
average number of shares outstanding during the period. Stock options issued in
1991 have not been considered as their effect would be antidilutive.
3. OIL AND GAS PROPERTIES
Capitalized costs using the successful efforts method related to the Company's
oil and gas activities as of June 30, 1996 are as follows:
Proved developed properties ............................. $ 14,779
Proved shut - in property ............................... 2,483,490
Accumulated depreciation,
depletion, amortization and
valuation allowances ................................. (14,254)
-----------
Net capitalized costs ................................... $ 2,484,015
===========
4. CONTINGENCIES
During the quarter ended March 31, 1996, the Company sold its interest in PPL
165. The restricted term deposit that is currently carried on the Company's
balance sheet at $53,042 was pledged as a guarantee for a bond required by the
government. The Company will negotiate with GEDD for a release of claim to these
funds. If, during the next two quarters the Company is unsuccessful in obtaining
a release from GEDD, the deposit will be charged against the sale.
ITEM 2. MANAGEMENT' DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operations
During the quarter ended June 30, 1996, oil and gas sales were $5,734 compared
to $2,989 for the same period in the prior year. Additional production from its
Colorado properties is expected to continue providing an increase in revenue
during in the current quarter. Material increases in revenues are not
anticipated by management to occur until the Company's New Guinea properties are
placed in production, which is estimated will occur in the fall of 1997.
Changes in Financial Condition
The Company has experienced an increase in cash and total assets in the six
months of this year. It is management's belief expenditures for the rest of the
year will be minimal and will, in addition to the ordinary day-to-day costs of
operations of the Company's offices in Albuquerque, consist of the costs of the
President's travel to New Guinea to meet with other owners of interests in PPL
156 or with owners of the unitized properties that include PPL 56. Because of
the effort being devoted to completing pipe-line and bringing this property on
production Management cannot predict how many such trips may be necessary.
Because GEDD, Inc. has agreed to bear the costs of developing an exploration
program for PPL 165, Management does not anticipate any additional costs or
expenses related to that concession.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Other than the judgment described in the Company's annual report on form 10-KSB,
incorporated herein by reference, Management knows of no legal proceedings or
unsatisfied judgments which have not been provided for in any court or agency to
which the Company or any of its officers or directors are or may be a party.
ITEM 2. CHANGES IN SECURITIES
NONE
ITEM 3. DEFAULTS IN SENIOR SECURITIES
NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDER
NONE
ITEM 5. OTHER INFORMATION
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) There are no exhibits required by Item 601 of regulation S-K.
(b) Reports on Form 8-K. State whether any reports on Form 8-K have been
filed during the quarter for which this report is filed, listing the
items reported, any financial statement filed, and the dates of any such
reports.
NONE
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.
Robert A. Doak, Jr. August 9, 1996
_______________________________________________________ ______________
Robert A. Doak, Jr. President, Chief Executive Officer
and Chief Financial Officer
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