U. S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q-SB
(MARK ONE)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______ TO_______
Commission File Number 0-9494
ASPEN EXPLORATION CORPORATION
- --------------------------------------------------------------------------------
Delaware 84-0811316
- ------------------------------- -------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) I.D. Number)
Suite 208, 2050 S. Oneida Street, Denver, Colorado, 80224
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(303) 639-9860
- --------------------------------------------------------------------------------
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 [ ]
Indicate the number of shares outstanding of each of the Issuer's classes of
common stock as of the latest practicable date.
Class Outstanding at May 13, 1997
--------------- ---------------------------
Common stock,
$.005 par value 4,356,322
1
<PAGE>
Part One. FINANCIAL INFORMATION
Item 1. Financial Statements
ASPEN EXPLORATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, June 30,
1997 1996
----------- -----------
(Unaudited) (Unaudited)
Assets
- ------
Current assets:
Cash and equivalents................ $ 152,273 $ 102,223
Precious metals..................... 18,824 221,866
Accounts receivable................. 91,371 61,245
Prepaid expenses and other.......... 7,934 4,923
---------- ----------
Total current assets.............. 270,402 390,257
---------- ----------
Investment in oil and gas properties,
at cost (full cost method of
accounting)......................... 1,351,898 1,349,047
Less accumulated depreciation,
depletion, amortization and
valuation allowance............... (939,271) (873,221)
---------- ----------
Net oil and gas properties........ 412,627 475,826
---------- ----------
Property and equipment, at cost:
Furniture, fixtures and vehicles.... 145,037 146,087
Less accumulated depreciation and
amortization...................... (104,167) (95,094)
---------- ---------
Net property and equipment........ 40,870 50,993
---------- ---------
Undeveloped mining properties, at cost
less reserve for impairment of
$193,495............................ 163,287 76,434
---------- ---------
Organization cost - Aspen Recursos de
Mexico and ISL Resources (Note 3)... 26,058 23,869
---------- ---------
Cash Surrender Value, life insurance.. 206,659 179,470
---------- ----------
TOTAL ASSETS...................... $1,119,903 $1,196,849
========== ==========
(Statement Continues)
See notes to Consolidated Financial Statements
2
<PAGE>
ASPEN EXPLORATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Continued)
March 31, June 30,
1997 1996
----------- ------------
(Unaudited) (Unaudited)
Liabilities and Stockholders' Equity
- ------------------------------------
Current liabilities:
Accounts payable & accrued expenses ........ $ 207,504 $ 80,713
Advances from joint owners ................. 138,793 245,481
Severance taxes payable .................... 13,819 13,819
Due to related parties ..................... 54,622 5,216
----------- -----------
Total liabilities ............................ 414,738 345,229
----------- -----------
Notes Payable ................................ 150,000 -0-
----------- -----------
Stockholders' equity:
Common stock, $.005 par value:
Authorized: 50,000,000 shares
Issued: At March 31, 1997:
4,459,922 and 4,424,922 at June
30, 1996 .............................. 22,124 22,124
Outstanding: At March 31, 1997
4,356,322 and 4,321,322 at
June 30, 1996 .........................
Capital in excess of par value ............. 5,651,388 5,651,388
Accumulated deficit ........................ (5,071,593) (4,775,138)
----------- -----------
601,919 898,374
Less common stock in treasury,
at cost: 103,600 shares ................ (46,754) (46,754)
----------- -----------
Total stockholders' equity ................. 555,165 851,620
----------- -----------
Total liabilities and stockholders'
equity ....................................... $ 1,119,903 $ 1,196,849
=========== ===========
The accompanying notes are an integral
part of these statements.
3
<PAGE>
<TABLE>
<CAPTION>
ASPEN EXPLORATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
--------------------------- ---------------------------
1997 1996 1997 1996
---- ---- ---- ----
Revenues:
<S> <C> <C> <C> <C>
Oil and gas............ $ 121,470 $ 47,749 $ 284,907 $ 243,026
Mineral................ 204 -0- 2,975 246,589
Alaska mining tax
exemption............. -0- -0- -0- 45,000
Interest and other, net 1,308 (1,232) 9,886 4,213
--------- --------- --------- ---------
Total Revenues........... 122,982 46,517 297,768 538,828
========= ========= ========= =========
Costs and expenses:
Oil & gas production... 8,830 18,905 33,456 39,790
Loss on sale of
precious metals....... -0- 6,519 10,002 52,835
Depreciation, depletion
and amortization...... 30,510 23,109 79,548 55,588
Selling, general and
administrative........ 111,346 141,407 471,217 417,230
--------- --------- --------- ---------
Total Costs & Expenses... 150,686 189,940 594,223 565,443
--------- --------- --------- ---------
NET INCOME............... $ (27,704) $(143,423) $(296,455) $ (26,615)
========= ========= ========= =========
Net Income per share..... $ (.01) (.03) $ (.07) (.01)
========= ========= ========= =========
Weighted average number of
common shares outstanding 4,356,322 4,271,322 4,356,322 4,271,322
========= ========= ========= =========
The accompanying notes are an integral
part of these statements.
4
</TABLE>
<PAGE>
ASPEN EXPLORATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine months ended March 31,
1997 1996
----------- -----------
Cash flows from operating activities:
Net income (loss)..................... $ (296,455) $ (26,615)
Adjustments to reconcile net income
to net cash provided by operating
activities:
Proceeds from sale of precious metals. -0- 553,601
Depreciation, depletion & amortization 79,598 55,588
Loss on sale of precious metals....... -0- 52,835
Decrease (increase) in precious metals 203,042 (246,589)
Increase in accounts receivable....... (30,126) (42,363)
Increase in prepaid expenses.......... (3,011) (1,558)
Increase (Decrease) in accounts
payable and accrued expenses........ 20,103 27,211
Increase (Decrease) in payable to
related parties..................... 49,406 (3,991)
---------- ---------
Net cash provided by (used in)
operating activities................ 22,557 368,119
---------- ---------
(Statement Continues)
5
<PAGE>
ASPEN EXPLORATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Continued)
Nine months ended March 31,
1997 1996
---------- ----------
Cash flows from investing activities:
Additions to undeveloped mining
properties.......................... (86,853) (7,354)
Sale of oil & gas properties.......... 100,000 -0-
Purchase of oil & gas properties...... (180,677) (373,965)
Proceeds - prospect fees.............. 77,826 -0-
Investment in subsidiaries "Aspen
Recursos de Mexico" and "ISL
Resources Corporation".............. (6,664) (649)
Additions to office equipment and
vehicles............................ (3,050) (22,310)
Proceeds - return of equipment........ 4,100 -0-
Additions to cash surrender value..... (27,189) (42,251)
--------- ---------
Net cash used in investing activities. (122,507) (446,529)
--------- ---------
Cash flows from financing activities:
Note from insurance company........... 150,000 -0-
--------- ---------
Net cash from financing activities.... 150,000 -0-
--------- ---------
Net (decrease) increase in cash....... 50,050 (78,410)
--------- ---------
Cash and cash equivalents,
at beginning of period.............. 102,223 116,891
--------- ---------
Cash and cash equivalents,
at end of period.................... $ 152,273 $ 38,481
========= =========
The accompanying notes are an integral
part of these statements.
6
<PAGE>
ASPEN EXPLORATION CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
March 31, 1997
Note 1 - Basis of Presentation
The accompanying unaudited, consolidated financial statements have been prepared
in accordance with Item 310 of Regulation S-B and do not include all of the
information and footnotes required by generally accepted accounting principles
for complete consolidated financial statements. In the opinion of management,
all adjustments (consisting of normal recurring adjustments) considered
necessary for a fair presentation have been included. Operating results for the
nine months ended March 31, 1997 are not necessarily indicative of the results
that may be expected for the fiscal year ending June 30, 1997. These statements
should be read in conjunction with the consolidated financial statements and
notes thereto included in Form 10-K-SB for the fiscal year ended June 30, 1996,
which is available without cost from Aspen Exploration Corporation upon request.
Summary of Significant Accounting Policies
- ------------------------------------------
Aspen Exploration Corporation ("the Company") was incorporated on February 28,
1980 and is engaged in the business of acquiring and developing interests in
domestic oil and gas properties and gold and other mineral properties.
Unaudited Financial Statements
- ------------------------------
The Company has decided to postpone the audit of its financial statements for
the year ended June 30, 1996 due to the shortage of cash and efforts to reduce
its operating expenses. As a result, the Company has presented the accompanying
annual financial statements for fiscal year 1996 without audit along with the
financial statements for the nine months ended March 31, 1997, which were also
unaudited. When and if the Company has sufficient financial resources to devote
to the audit, it will have its independent auditors complete their audit of
fiscal 1996 and issue their audit opinion on those financial statements.
A summary of the Company's significant accounting policies follows:
Going Concern
- -------------
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplates continuation of the
Company as a going concern. However, the Company has sustained substantial
operating losses in recent years. In addition, the Company has used substantial
amounts of working capital in its operations. Current liabilities exceed current
assets by $144,336, and the Company has a working capital deficit.
7
<PAGE>
Note 1 - Basis of Presentation (Continued)
In addition, the Company's loss for the nine months ended March 31, 1997 is
$296,455. As of May, 1997, the Company has used all of its cash and gold
reserves and has withdrawn $150,000 against the cash value of a life insurance
policy on its president and has sold all its non-California oil and gas
properties for $100,000 to pay creditors. From certain perspectives these
matters may raise doubt about the Company's ability to continue as a going
concern. Pending the financial outcome of these matters, the accompanying
financial statements do not include any adjustments that might result from these
uncertainties.
In view of these matters, realization of a major portion of the assets in the
accompanying balance sheet is dependent upon continued operations of the
Company, which in turn is dependent upon the Company's ability to meet its
financing requirements, and the success of future operations. Management
believes that actions presently being taken to revise the Company's operating
and financial requirements provide the opportunity for the Company to continue
and to improve its operations and cash flow.
In its oil and gas operations, the Company intends to focus attention on
opportunities in California, particularly those situations where the Company may
be able to require investors to pay prospect generation fees. Such fees may be
sufficient to pay for the Company's working interest in an initial well. The
Company also typically will "back in" after payout for a more substantial
interest in successful wells. The Company will also seek out production purchase
situations and, upon finding same, will attempt to retain a carried interest in
such purchases. Funding likely would come from outside sources.
In its uranium operations the Company has been seeking the best way to proceed
with two large uranium exploration projects in which it is involved in Wyoming.
At the end of March, 1997, the Company was in advanced discussions with a third
party to possibly assign ISL Resources Corporation to the third party, along
with the Company's interest in the two uranium projects. In this arrangement the
Company would subsequently be assigned a percentage of the stock in ISL
Resources and would receive a future cash consideration if such were available.
Consolidated Financial Statements
- ---------------------------------
The consolidated financial statements include the Company and its wholly-owned
subsidiaries, Aspen Gold Mining Company, Aspen Recursos de Mexico, and ISL
Resources Corporation. Significant intercompany accounts and transactions have
been eliminated.
8
<PAGE>
Note 1 - Basis of Presentation (Continued)
Statement of Cash Flows
- -----------------------
For statement of cash flow purposes, the Company considers short-term
investments with original maturities of three months or less to be cash
equivalents. Cash restricted from use in operations beyond three months is not
considered a cash equivalent.
Note 2 - Net Income (Loss) per Common Share
Net income (loss) per common share is based on the weighted average number of
shares of common stock outstanding during the period.
The Financial Accounting Standard Board recently issued Standard No. 128,
Earnings per Share. The statement simplifies the standards for computing
earnings per share and makes them compatible to international standards. FAS 128
supersedes Accounting Principles Board Opinion No. 15 and replaces the
presentation of primary EPS with a presentation of basic EPS. The Standard also
requires dual presentation of basic and diluted EPS on the face of the income
statement for all entities with complex capital structures and provides guidance
on other computational changes.
The Company is aware of this new Standard but does not know what effect the new
Standard will have, if any, on the financial position and results of operations
of the Company once the Standard is adopted.
Note 3 - Organization Costs
During the first quarter ended September 30, 1994, the Company formed a
subsidiary (Aspen Recursos de Mexico, S.A. de C.V.), which is qualified to do
business in Mexico, so that the Company can pursue management's decision to
investigate and acquire interests in mineral prospects in Mexico. During the
quarter ended September 30, 1995, the Company began amortizing its costs to
organize its subsidiary and will continue to do so over the next 60 months. As
of March 31, 1997, the subsidiary had acquired no properties in Mexico.
During the quarter ended December 31, 1996 the Company formed a new subsidiary
(ISL Resources Corporation) for certain uranium activities. As of March 31, 1997
the Company has incurred approximately $6,120 in organization costs on its
behalf.
Note 4 - Commitments and Contingencies
As of March 31, 1997, the Emigh #34-1 and the Grey Wolf #1 wells have been
completed as producing gas wells. The Company discontinued seismic work on the
Brandt 16X-27 well and refunded approximately $46,500 to investors. There were
no unexpended funds due investors or to be spent on the above projects at the
time of this filing.
9
<PAGE>
Note 4 - Commitments and Contingencies (Continued)
The Company drilled a test well in the North Rosedale Prospect (the Enron 66X)
during the quarter ended March 31, 1997. No oil or gas in commercial quantities
were found and the well has been plugged and abandoned. Approximately $138,000
of investor funds remains to offset anticipated costs on this project.
The Company has an employment agreement with its president which provides for
compensation of $125,000 per year to be paid, reimbursement of expenses, health
insurance, and other benefits, including a split dollar life insurance plan. The
agreement provides for a two year term which is automatically renewable for two
additional two year terms (through November 8, 1999) at the president's option.
The Company is only entitled to terminate this agreement upon the president's
death, disability, or for "cause" (as defined in the agreement).
The president may terminate the agreement if his duties for the Company change
substantially from those he is currently performing, or in the event there is a
"change of control" in the Company as defined in the agreement. If the president
terminates the agreement for either of the foregoing reasons, the Company will
be obligated to pay the president severance pay in an amount equal to the
remaining amount due under the agreement, but not less than two years' salary.
This payment must be made in a lump sum to the president within thirty days of
his termination of the agreement.
The Company entered into an employment agreement with Robert Cohan on April 16,
1997, which provides for the payment of $85,000 for the first year of
employment, plus reimbursement of expenses, including health insurance and the
lease payments on a truck. If the Company wishes to employ Mr. Cohan for an
additional 12 months and Mr. Cohan wishes to continue his employment with the
Company, the renewal employment agreement is effective April 16, 1998 to April
15, 1999 at the rate of $90,000 per year.
In November, 1996, the Company drilled, completed and built a gas pipeline for
the Emigh #34-1 well located in the Denverton Creek Field, Solano County,
California. The Emigh #34-1 was drilled to a total depth of 10,200' and extended
the previously defined productive limits of the field in a northeasterly
direction. The Company perforated a six foot interval in the Bunker formation.
The well was hooked up to a CalResources, LLC (Shell Oil Co.) pipeline November
13, 1996, and commenced producing 3.3 million cubic feet (MMCF) of high BTU
(1,056) gas per day. [Note: in the oil and gas business M equals 1,000.] To the
end of March, 1997, the well produced 386,531 MMBTU of gas (an average rate of
2800 MMBTU per day), 1107 barrels of condensate, and 937 barrels of formation
water. Gas prices in January, 1997, were at record levels of $4.245 per MMBTU.
10
<PAGE>
Note 4 - Commitments and Contingencies (Continued)
Based on log analysis and mud log shows, it appears that approximately 70 feet
to 100 feet of additional pay may exist behind-pipe in the Bunker, McCormick,
H&T, and 1st Starkey Sands. These zones will be tested in the future. The
Company has approximately 1,280 gross acres under lease in the immediate
vicinity and, following the success of the Emigh #34-1, has carried out
additional subsurface geological studies in the area including detailed analysis
of seismic data. The Company is encouraged by the apparent potential for
additional gas producing locations for this field and, accordingly, is planning
to seek additional funding in order to drill at least one additional well in the
field, probably before September, 1997, if funding is arranged for (of which
there can be no assurance).
Gross revenues produced by the Emigh #34-1 well were $1,229,791 ($128,700 net to
the Company) through March 31, 1997. The well, with drilling, completion and
pipeline costs of $817,000, paid out (returned the entire investment) after just
4 months of production. Now that payout has occurred, the Company has backed in
for a total working interest of 23.55% (17.19% net revenue interest). This well
is currently (May, 1997) producing 2.1 MMBTU/D, and may produce as much as 3.5
billion cubic feet (BCF) of gas over the life of the well. Gas prices in May
1997 were $2.005 per MMBTU.
The Company has staked certain uranium claims in the Powder River basin of
Wyoming. The Company owns 75% interest in these claims and R. V. Bailey,
president of the Company, owns 25%. The Company has also filed a number of
Notices of Intent to Locate (NOITLs) with certain surface owners and with the U.
S. Bureau of Land Management.
The Company has formed a subsidiary, ISL Resources Corporation, a Wyoming
corporation, in order to carry on uranium activities in certain situations.
Management of the Company believes that the in situ leaching of uranium,
commonly referred to as ISL, is the best possible way to license and commence
production of uranium under the present environmental climate. Discussions for
providing financing for ISL Resources have been held with certain parties, but
there is no assurance that funding will be provided.
The Company filed suit in 1993 against Newmont Exploration Ltd. of Denver for
alleged breaches of contract related to a lode gold project near Nome, Alaska.
In 1996 attorneys representing Newmont filed a motion for summary judgment with
the court in Barrow, Alaska, which the Company's attorneys have opposed. A
decision on the motion is expected some time in 1997. A tentative trial date of
January, 1998 has been set.
11
<PAGE>
Note 5 - Certain Relationships and Related Transactions
On February 11, 1997 Registrant issued restricted shares of its common stock to
the following officers, directors, employees and consultants:
Issued To Capacity Shares
--------- -------- ------
Lawton L. Clark Director 20,000
Robert F. Sheldon Director 20,000
Robert A. Cohan Officer 75,000
Judith L. Shelton Employee 10,000
Ray K. Davis Consultant 10,000
Shares were issued to such persons for services rendered pursuant to the
exemption from registration found in Section 4(2) of the Securities Act of 1933.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
NOTE: Company's financial statements at June 30, 1996 are not audited.
- ----- ----------------------------------------------------------------
Liquidity and Capital Resources
- -------------------------------
March 31, 1997 as compared to March 31, 1996
- --------------------------------------------
Because of a shortage of operating funds, Registrant has postponed the
preparation of audited financial statements. The financial statements contained
herein for the fiscal year ended June 30, 1996 are unaudited. Field work for the
audit has been completed and Registrant expects to complete the audit during the
1997 calendar year. Registrant has sustained substantial operating losses in
recent years. In addition, Registrant has used substantial amounts of working
capital in its operations. Current liabilities exceed current assets by
$144,336, and Registrant has a working capital deficit.
In view of this deficit, realization of a major portion of the assets in the
accompanying balance sheet is dependent upon continued operations of Registrant,
which in turn is dependent upon Registrant's ability to meet its financing
requirements, and the success of future operations. Management believes that
actions presently being taken to revise Registrant's operations and financial
requirements provide the opportunity for Registrant to continue as a going
concern.
From March 31, 1996 to March 31, 1997, Registrant's working capital (current
assets less current liabilities) decreased by $416,960. The decrease in working
capital is primarily attributable to a decrease of over $226,000 in the amount
of cash and precious metals (primarily gold) held in inventory by Registrant.
The decrease in precious metals inventory is due to a decrease of in-kind
production received by Registrant. Registrant received approximately 748 ounces
of raw gold for the nine-month period ended March 31, 1996 as compared to -0-
12
<PAGE>
ounces of raw gold for the nine-month period ended March 31, 1997. Cambior, the
operator of the Valdez Creek mining property, has ceased mining operations
effective June 30, 1995. Gold processing, however, continued through September,
1995. The surface area of the mine has been restored by Cambior, and they have
reassigned all their interest in the mining claims to Registrant. Registrant may
explore for mineable lode gold deposits on the Valdez Creek property if funding
can be obtained from outside parties.
The financial information related to the June 30, 1996 Balance Sheet in this
Form 10- Q-SB is unaudited because Registrant is postponing the audit until
additional funds are available to pay for such audit, which is partially
complete.
Due to the cessation of royalties from the Valdez Creek gold mine in Alaska,
Registrant does not have sufficient cash flow to fully carry on all activities
as was done previously. Management made a decision to enter into uranium
exploration and promotion by acquiring certain uranium properties in calendar
1995 and 1996. However, Registrant has been unsuccessful thus far in finding a
joint venture partner for the uranium ventures and this has caused a shortage of
operating funds. In order to provide interim financing, Registrant has, in
November, 1996, withdrawn $125,000 and $25,000 in February, 1997 against a split
dollar insurance plan (total value of the plan assets was approximately
$200,000). Registrant has also sold its non-California oil and gas production
for $100,000 cash to its consulting accountant, officer and shareholder. Certain
management of Registrant has also elected to go on a deferred compensation plan,
whereby portions of salaries are not paid and are postponed to a future time
when Registrant may be able to pay such deferred salaries. At March 31, 1997
Registrant owed approximately $55,000 to officers of Registrant as deferred
compensation.
Although Registrant is looking forward to increased revenues from California oil
and gas production in the future, current income from California oil and gas
production is inadequate to fund the monthly general and administrative costs of
Registrant and there is no other current source of income.
Registrant is undertaking steps in order to derive revenues from the uranium
properties at the earliest time. Registrant will also take such steps as
feasible in order to keep costs for uranium-related activities to a minimum.
Registrant has formed a wholly-owned subsidiary in 1996, ISL Resources
Corporation, a Wyoming corporation, in order to carry on certain uranium
activities. Management of Registrant believes that the in situ leaching of
uranium, commonly referred to as ISL, is the best possible way to license and
commence production of uranium under the present environmental climate.
Discussions for providing financing for ISL Resources have been held with
certain parties, but there is no assurance that funding will be provided.
Registrant intends to pursue funding for ISL Resources in the future. There is
no assurance such funding will take place. It is likely that, to the extent any
additional funding is received, it will reduce the Registrant's interest in ISL
Resources. Such reduction may be significant.
13
<PAGE>
Without additional funding from outside sources, Registrant may be unable to
continue to operate at the current level, even though Registrant has only three
full time employees.
Results of Operations
- ---------------------
For the nine months ended March 31, 1997 Registrant's operations continued to be
focused on the production of oil and gas, and the investigation for possible
acquisition of producing oil and gas properties and properties prospective for
precious metals production.
Registrant had no precious metals revenues for the nine-month period ended March
31, 1997 compared to $246,589 in revenues for the nine-month period ended March
31, 1996. This decrease in precious metals revenue was due to a cessation of
mining activities effective June 30, 1995, although Registrant continued to
receive in-kind gold royalties through September 30, 1995.
Oil and gas revenues, which includes income from management fees, for the nine
months ended March 31, 1997 increased by 17% ($41,881) when compared to the same
period in the prior year. Such increase was due to the Emigh #34-1 gas well,
Solano County, California, which began production on November 15, 1996.
Oil and gas production expenses decreased by about 16% ($6,334) when compared to
the prior year. The decrease in overall production expenses for the current
period, as compared to the prior year, is attributable to Registrant's interest
in certain properties acquired in November, 1995, in California which are
working interests, and the sale of non-California properties which were
properties with high operating costs.
Depletion, depreciation and amortization increased $23,960 (43%) from $55,588 at
March 31, 1996 to $79,548 at March 31, 1997. This increase in depletion,
depreciation and amortization was also largely due to the acquisition of new,
shorter lived producing properties in California in November, 1995.
During January, 1995, the Registrant received notice from the State of Alaska
Department of Revenue for unpaid License Tax on Royalties from Mines and Mining
for the years 1991 through 1993. Registrant contested these License Taxes and
believed it to be exempt from these taxes. Pending the outcome of the
Registrant's petition seeking relief from these taxes, Registrant recorded a
liability of $45,000 at June 30, 1995 for the estimated amount of taxes due. On
October 30, 1995 the Alaska Department of Revenue notified Registrant that it
had accepted its petition for relief and no taxes were due through September 30,
1995. Accordingly, Registrant reversed its recorded liability to the State of
Alaska and recorded income in the amount of $45,000 for the Alaska Mining
License Tax exemption at September 30, 1996.
14
<PAGE>
Selling, general and administrative expenses increased by $53,987 (13%) from
$417,230 at March 31, 1996 to $471,217 for the nine months ended March 31, 1997,
reflecting increased costs incurred in pursuing the Anvil Gold-Newmont
litigation, and increased operating costs for the California office.
As a result of Registrant's operations for the nine months ended March 31, 1997,
Registrant ended the nine-month period with a net loss of $296,455 compared to
net income of $116,808 for the previous nine-month period. This decrease
reflected both decreased revenues and increased expenses for the nine-month
period as compared to the prior year. The largest decline, $243,614, was in
mineral income due to the cessation of operations at the Valdez Creek Mine on
June 30, 1995.
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
ASPEN EXPLORATION CORPORATION
(Registrant)
/s/ R. V. Bailey
-------------------------------
By: R. V. Bailey,
May 13, 1997 Chief Executive Officer,
Principal Financial Officer
15
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 12-MOS
<FISCAL-YEAR-END> JUN-30-1997 JUN-30-1996
<PERIOD-END> MAR-31-1997 JUN-30-1996
<CASH> 152,273 102,223
<SECURITIES> 7,934<F1> 4,923
<RECEIVABLES> 91,371 61,245
<ALLOWANCES> 0 0
<INVENTORY> 18,824<F2> 221,866
<CURRENT-ASSETS> 270,402 390,257
<PP&E> 1,496,935 1,495,134
<DEPRECIATION> 1,043,438 968,315
<TOTAL-ASSETS> 1,119,903 1,196,849
<CURRENT-LIABILITIES> 414,738 345,229
<BONDS> 150,000<F5> 0
5,651,388<F3> 5,651,338
(46,754)<F6> (46,754)
<COMMON> 22,124 22,124
<OTHER-SE> (5,071,593)<F4> (4,775,138)
<TOTAL-LIABILITY-AND-EQUITY> 1,119,903 1,196,849
<SALES> 287,882 441,866
<TOTAL-REVENUES> 297,768 492,311
<CGS> 33,456 20,885
<TOTAL-COSTS> 594,223 375,503
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (296,455) 116,808
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (296,455) 116,808
<EPS-PRIMARY> (.07) .03
<EPS-DILUTED> (.07) .03
<FN>
<F1>Precious Metals
<F2>Prepaid Expense
<F5>Notes Payable
<F3>Capital in Excess of Par
<F6>Treasury Stock
<F4>Retained Earnings
</FN>
</TABLE>
