FORM 10-Q-SB
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 March 31, 2000
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 0-9494
ASPEN EXPLORATION CORPORATION
---------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 84-0811316
(State or other jurisdiction of (IRS Employer
incorporation or organization) I.D. Number)
Suite 208, 2050 S. Oneida St., Denver, Colorado, 80224
------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(303) 639-9860
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 [ ]
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 10, 2000
----- ---------------------------
Common stock,
$.005 par value 5,271,322
<PAGE>
<TABLE>
<CAPTION>
Part One. FINANCIAL INFORMATION
Item 1. Financial Statements
ASPEN EXPLORATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, June 30,
2000 1999
---------- ----------
(Unaudited) (Audited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents, including $305,174
and $331,894 of invested cash at March 31, 2000
and June 30, 1999 respectively ......................... $ 323,252 $ 335,603
Precious metals .......................................... 18,823 18,823
Accounts receivable, trade ............................... 140,542 108,913
Prepaid expenses ......................................... 6,107 9,770
----------- -----------
Total current assets ............................. 488,724 473,109
----------- -----------
Investment in oil and gas properties,
at cost (full cost method of accounting) ............... 2,706,108 2,309,566
Less accumulated depletion and
valuation allowance ................................ (1,506,305) (1,280,305)
----------- -----------
1,199,803 1,029,261
----------- -----------
Property and equipment, at cost:
Furniture, fixtures and vehicles ...................... 192,398 178,403
Less accumulated depreciation ......................... (148,012) (136,237)
----------- -----------
44,386 42,166
----------- -----------
Cash surrender value, life insurance ...................... 239,095 239,095
----------- -----------
TOTAL ASSETS ..................................... $ 1,972,008 $ 1,783,631
=========== ===========
(Statement Continues)
See notes to Consolidated Financial Statements
2
<PAGE>
ASPEN EXPLORATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, June 30,
2000 1999
---------- ----------
(Unaudited) (Audited)
Current liabilities:
Accounts payable and accrued
expenses .............................................. $ 83,306 $ 280,920
Advances from joint owners .............................. 304,205 32,245
Notes payable - current ................................. 95,246 126,570
----------- -----------
Total current liabilities ............................... 482,757 439,735
----------- -----------
Notes payable - long term ............................... -- 81,003
----------- -----------
Stockholders' equity:
Common stock, $.005 par value:
Authorized: 50,000,000 shares
Issued: At March 31, 2000: 5,191,322 and
June 30, 1999: 5,191,322
26,456 25,956
Capital in excess of par value .......................... 5,969,102 5,951,602
Accumulated deficit ..................................... (4,465,974) (4,686,665)
Deferred compensation ................................... (40,333) (28,000)
----------- -----------
Total stockholders' equity .............................. 1,489,251 1,262,893
----------- -----------
Total liabilities and stockholders'
equity ................................................ $ 1,972,008 $ 1,783,631
=========== ===========
See Notes to Consolidated Financial Statements
3
<PAGE>
ASPEN EXPLORATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
--------------------------- ---------------------------
2000 1999 2000 1999
--------- ---------- --------- ---------
Revenues:
- ---------
Oil and gas .................................. $ 252,605 $ 292,612 $ 840,343 $ 920,415
Management fees .............................. 30,671 7,613 113,781 84,225
Interest and other, net ...................... 1,077 3,891 10,530 18,846
---------- ---------- ---------- ----------
Total Revenues ................................. 284,353 304,116 964,654 1,023,486
---------- ---------- ---------- ----------
Costs and expenses:
- -------------------
Oil & gas production ......................... 33,400 32,879 75,534 63,061
Depreciation, depletion
and amortization ............................ 86,925 28,000 237,775 84,000
Aspen Power Systems
expense ..................................... 1,562 38,977 45,356 38,977
Selling, general and
administrative .............................. 124,296 128,592 375,830 377,895
Interest expense ............................. 2,226 7,409 9,468 25,176
---------- ---------- ---------- ----------
Total Costs & Expenses ......................... 248,409 235,857 743,963 589,109
---------- ---------- ---------- ----------
NET INCOME ..................................... $ 35,944 $ 68,259 $ 220,691 $ 434,377
========== ========== ========== ==========
Basic earnings (loss) per
common share ................................. $ -0- $ .01 $ .04 $ .09
========== ========== ========== ==========
Diluted earnings (loss)
per common share ............................. $ -0- $ .01 $ .04 $ .08
========== ========== ========== ==========
Weighted average number of
common shares outstanding ..................... 5,191,322 4,916,322 5,191,322 4,916,322
========== ========== ========== ==========
Diluted weighted average number of
common shares outstanding ..................... 5,531,162 5,398,722 5,531,162 5,398,722
========== ========== ========== ==========
The accompanying notes are an integral
part of these statements.
4
<PAGE>
ASPEN EXPLORATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended March 31,
2000 1999
--------- ---------
Cash flows from operating activities:
- -------------------------------------
Net gain (loss) ....................................................... $ 220,691 $ 434,377
Adjustments to reconcile net income
(loss) to net cash provided (used) by
operating activities:
Depreciation, depletion & amortization .............................. 237,775 84,000
Loss on write off of investments .................................... -- 3,400
Deferred compensation ............................................... 5,667 --
Changes in assets and liabilities:
- ----------------------------------
Increase in accounts receivable ..................................... (31,629) (177,673)
Decrease in prepaid expense ......................................... 3,663 6,460
Increase (decrease) in accounts payable and accrued
expense ........................................................... 74,346 (324,985)
--------- ---------
Net cash provided (used) by operating activities .................... 510,513 25,579
--------- ---------
Cash flows from investing activities:
- -------------------------------------
Conveyance of oil & gas properties for cash ......................... -- 477,950
Development & acquisition of oil & gas properties ................... (396,542) (488,097)
Purchase of office equipment ........................................ (13,995) (7,281)
Sale of mining data ................................................. -- 1,970
Prospect fees ....................................................... -- 12,900
--------- ---------
Net cash used in investing activities ............................... (410,537) (2,558)
--------- ---------
Cash flows from financing activities:
- -------------------------------------
Note payable - proceeds ............................................. -- 2,571
Repayment of notes payable .......................................... (112,327) (109,857)
--------- ---------
(112,327) (107,286)
--------- ---------
Net increase (decrease) in cash and cash equivalents ................ (12,351) (84,265)
Cash and cash equivalents, beginning of period ...................... 335,603 425,306
--------- ---------
Cash and cash equivalents, end of period ............................ $ 323,252 $ 341,041
========= =========
Interest paid ....................................................... $ 7,583 $ 25,176
========= =========
Schedule of non cash investing and financing activities:
- --------------------------------------------------------
Notes payable issued for properties ................................. $ -- $ 206,250
Common stock issued for properties .................................. -- 275,000
--------- ---------
$ -- $ 481,250
========= =========
The accompanying notes are an integral
part of these statements.
</TABLE>
5
<PAGE>
ASPEN EXPLORATION CORPORATION
Notes to Consolidated Financial Statements
(Unaudited)
March 31, 2000
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
------------------
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 uranium and other mineral
properties. The Company's oil and gas properties are located in California.
The Company has two wholly owned subsidiaries, Aspen Gold Mining Company
and Aspen Recursos de Mexico, as well as 25% owned Aspen Power Systems
Corporation ("APS") formed in February 1999. Aspen Gold Mining has staked 6
claims on Valdez Creek in central Alaska. Other than those claims, none of
the subsidiaries have any assets, liabilities or operations. The purpose of
APS will be to attempt to design, construct and possibly operate gas
turbine power plants to generate electrical energy. (See footnote 6 to the
financial statements.)
Consolidated financial statements
---------------------------------
The consolidated financial statements include the Company and its
wholly-owned subsidiaries, Aspen Gold Mining Company and Aspen Recursos de
Mexico. Significant intercompany accounts and transactions, if any, have
been eliminated.
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.
Management's Use of Estimates
-----------------------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent liabilities at the date of the
financial statements and reported amounts of revenues and expenses. Actual
results could differ from those estimates.
6
<PAGE>
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The mining and oil and gas industries are subject, by their nature, to
environmental hazards and cleanup costs for which the Company carries
catastrophe insurance. At this time, management knows of no substantial
costs from environmental accidents or events for which it may be currently
liable. In addition, the Company's oil and gas business makes it vulnerable
to changes in wellhead prices of crude oil and natural gas. Such prices
have been volatile in the past and can be expected to be volatile in the
future. By definition, proved reserves are based on current oil and gas
prices and estimated reserves. Price declines reduce the estimated quantity
of proved reserves and increase annual amortization expense (which is based
on proved reserves).
Impairment of Long-lived Assets
-------------------------------
The Company evaluates the carrying value of assets other than oil and gas
assets for potential impairment on an ongoing basis. The Company evaluates
the carrying value of long-lived assets and long-lived assets to be
disposed of for potential impairment periodically. The Company considers
projected future operating results, cash flows, trends and other
circumstances in making such estimates and evaluations.
Financial Instruments
---------------------
The carrying value of current assets and liabilities reasonably
approximates their fair value due to their short maturity periods. The
carrying value of the Company's debt obligations reasonably approximates
their fair value as the stated interest rate approximates current market
interest rates of debt with similar terms.
Earnings Per Share
------------------
The Company follows the Financial Accounting Standards No. 128, which
changed the methodology of calculating earnings per share and renamed the
two calculations basic earnings per share and diluted earnings per share.
The calculations differ by eliminating any common stock equivalents (such
as stock options, warrants, and convertible preferred stock) from basic
earnings per share and changes certain calculations when computing diluted
earnings per share.
7
<PAGE>
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The following is a reconciliation of the numerators and denominators used
in the calculations of basic and diluted earnings (loss) per share for the
nine months ended March 31, 2000 and 1999:
<TABLE>
<CAPTION>
March 31, March 31,
2000 1999
Per Per
Net Share Net Share
Income Shares Amount Income Shares Amount
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Basic earnings per share:
Net income and
share amounts 220,691 5,191,322 .04 434,377 4,916,322 .09
Dilutive securities
stock options 560,000 760,000
Repurchased shares (220,160) (277,600)
----------------------------------------------------------------
Diluted earnings per share:
Net income and assumed
share conversion 220,691 5,531,162 .04 434,377 5,398,722 .08
======= ========= ==== ========= ========= =====
</TABLE>
Precious metals and revenues
----------------------------
Precious metals inventories are valued at the lower of cost (specific
identification method) or market. There was no allowance for unrealized
losses against inventories due to market decline at March 31, 2000.
Oil and gas properties
----------------------
The Company follows the "full-cost" method of accounting for oil and gas
properties. Under this method, all costs associated with property
acquisition, exploration and development activities, including internal
costs that can be directly identified with those activities, are
capitalized within one cost center. No gains or losses are recognized on
the receipt of prospect fees or on the sale or abandonment of oil and gas
properties, unless the disposition of significant reserves is involved.
Depletion and amortization of the full-cost pool is computed using the
units-of-production method based on proved reserves as determined annually
by the Company and independent engineers. An additional depletion provision
in the form of a valuation allowance is made if the costs incurred on oil
and gas properties, or revisions in reserve estimates, cause the total
8
<PAGE>
Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
capitalized costs of oil and gas properties in the cost center to exceed
the capitalization ceiling. The capitalization ceiling is the sum of (1)
the present value of future net revenues from estimated production of
proved oil and gas reserves applicable to the cost center plus (2) the
lower of cost or estimated fair value of the cost center's unproved
properties less (3) applicable income tax effects. The valuation allowance
was $281,719 at March 31, 2000 and March 31, 1999.
Property and equipment
----------------------
Depreciation and amortization of property and equipment are expensed in
amounts sufficient to relate the expiring costs of depreciable assets to
operations over estimated service lives, principally using the
straight-line method. Estimated service lives range from three to eight
years. When assets are sold or otherwise disposed of, the cost and
accumulated depreciation are removed from the accounts and any resulting
gain or loss is reflected in operations in the period realized.
Deferred compensation Costs
---------------------------
The Company records stock bonuses to employees as an expense and an
increase to paid-in capital in the year of grant unless the bonus vests
over future years. Bonuses that vest are deferred and expensed ratably over
the vesting period.
9
<PAGE>
Note 2 SEGMENT INFORMATION
The Company operates in three industry segments within the United States:
(1) oil and gas exploration and development, (2) mineral exploration and
development and (3) electrical generation construction.
Identified assets by industry are those assets that are used in the
Company's operations in each industry. Corporate assets are principally
cash, cash surrender value of life insurance, furniture, fixtures and
vehicles.
During the fourth quarter of 1998, the Company adopted Statement of
Financial Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information" (SFAS 131). The adoption of SFAS 131
requires the presentation of descriptive information about reportable
segments which is consistent with that made available to the management of
the Company to assess performance.
The oil and gas segment derives its revenues from the sale of oil and gas
and prospect generation and administrative overhead fees charged to
participants in its oil and gas ventures. The mining segment receives its
revenues primarily from the sale of minerals and precious metals and from
time to time from the sale of a mineral venture that it has originated.
Electrical generation construction will receive its revenues from the sale,
design, construction and/or operation of gas turbine or other electrical
generation projects. As of March 31, 2000 the Company was in the planning
stage of this segment and no revenues have been received. Corporate income
is primarily derived from interest income on funds held in money market
accounts.
During the nine months ended March 31, 2000 there were no intersegment
revenues. The accounting policies applied by each segment are the same as
those used by the Company in general.
Net sales to one customer of the oil and gas segment totalled approximately
$670,682 of revenues or 80% for the nine months ended March 31, 2000.
There have been no differences from the last annual report in the basis of
measuring segment profit or loss. There have been no material changes in
the amount of assets for any operating segment since the last annual report
except for the oil and gas segment which capitalized approximately $397,000
for the development and acquisition of oil and gas properties, and office
furniture, fixtures and equipment which capitalized approximately $14,000
in acquisitions for furniture and computers.
10
<PAGE>
Note 2 SEGMENT INFORMATION (CONTINUED)
Segment information consists of the following for the nine months ended
March 31, 2000:
<TABLE>
<CAPTION>
Oil and Gas Mining Power Plant Corporate Consolidated
----------- ------ ----------- --------- ------------
Revenues:
<S> <C> <C> <C> <C> <C>
2000 $ 954,124 $ -0- $ -0- $ 10,530 $ 964,654
1999 1,004,640 -0- -0- 18,846 1,023,486
Income (loss) from
operations:
2000 $ 652,590 $ -0- $(45,356) $ (386,543) $ 220,691
1999 857,579 -0- -0- (423,202) 434,377
Identifiable assets:
2000 $ 1,340,345 $ 18,823 $ -0- $ 612,840 $ 1,972,008
1999 1,371,933 44,679 -0- 623,516 2,040,128
Depreciation, depletion
and valuation charged
to identifiable assets:
2000 $(1,506,305) $ -0- $ -0- $ (148,012) $(1,654,317)
1999 (1,081,902) -0- -0- (129,544) (1,211,446)
Capital expenditures:
2000 $ 396,542 $ -0- $ -0- $ 13,995 $ 410,537
1999 488,097 -0- -0- 7,281 495,378
</TABLE>
11
<PAGE>
Note 3 NOTES PAYABLE
The Company owes the following debt:
March 31, June 30,
2000 1999
-------------------------
Note payable to related party, monthly
principal and interest payments of $4,269,
due September, 2000, collateralized by
working interests in the Emigh lease $ 24,793 $ 59,487
Note payable to auto dealership, monthly
principal and interest payments of $879, due
July, 2000, collateralized by new vehicle 1,703 10,336
Note payable to an unaffiliated third party
for the acquisition of producing gas
properties in Tehama and Glenn Counties,
California, interest at 5.475% and
collateralized by working interests in the
Johnson and Gay Gas Units 68,750 137,750
--------- ---------
95,246 207,573
Less current portion 95,246 126,57
--------- ---------
Long term portion $ -0- $ 81,003
========= ==========
12
<PAGE>
Note 4 COMMITMENTS AND CONTINGENCIES
The Company has recently acquired an 11.9% working interest in the Cygnus
#1 well, operated by Continental Operating Company, located slightly north
of the Company's leasehold in the Denverton Creek gas field, Solano County,
California. This well was directionally drilled to a depth of approximately
11,000 feet and encountered approximately 80 feet of potential net pay in
the Starkey and Peterson formations. The Peterson sand was perforated and
tested at a stabilized rate of 3 Million Cubic Feet Per Day (3,000 MCFPD)
of high BTU natural gas (1120 BTU) with condensate. The flowing tubing
pressure was 3,589# and the shut in tubing pressure was 4,490#. Gas sales
commenced on April 9th at a rate of 3,500 MCFPD, 25 barrels of condensate
per day (BCPD), and 12 barrels of water per day (BWPD), with a flowing
tubing pressure (FTP) of 3,900#. The current rate is 3275 MCFPD, 20 BCPD
and 5 BWPD, with a FTP of 3100#. Gas prices for May 2000 are $3.03 per
MMBTU.
The Company has deepened its Emigh #35-1 well, located in a structurally
favorable position approximately one half mile south of the Cygnus #1 well,
to encounter the Peterson and 3rd Starkey formations. This well encountered
potential net pay in both of these horizons. Selected intervals of the
Peterson formation were perforated and the well is currently flowing 900
MCFPD, 10 BCPD, and 8 BWPD.
During the third quarter ended March 31, 2000, the Company entered into a 3
year rental agreement for office space in Bakersfield, California. The
annual rental expense will be $8,200.
NOTE 5 SUBSEQUENT EVENTS
On April 20, 2000 the Company borrowed $125,000 from the cash surrender
value of its president's life insurance policy. These funds will be used to
pay for the Company's share of the acquired Cygnus #1 well and the
deepening of the Emigh #35-1 well.
On April 20, 2000 one of the Company's former directors exercised an option
to purchase 80,000 shares of the Company's stock for an average price of
$0.26 per share or $20,800.
13
<PAGE>
NOTE 6 ASPEN POWER SYSTEMS
On March 1, 2000 Aspen Exploration Corporation passed a resolution
concerning Aspen Power Systems Corporation ("APS") which (1) reduced its
interest in APS from 85% to 25%; (2) accepted a note receivable from APS in
the amount of $130,000 with interest at 8% per annum and (3) transferred
its 60% relinquished interest ratably to R. V. Bailey, president and
chairman of Aspen Exploration Corporation, Ray K. Davis, consulting
accountant to Aspen Exploration, and Larry Baccari, not otherwise
affiliated with Aspen Exploration, in exchange for $15,000 each to be
contributed to the working capital of Aspen Power Systems.
After the exchange of shares and the contribution of capital, the ownership
of Aspen Power Systems will be 25% each for Aspen Exploration Corporation
and Messrs. Bailey, Baccari and Davis. Aspen Exploration plans to account
for its 25% interest in APS using the equity method of accounting.
The Company will not be required to fund any future projects of APS and no
further dilution of the Company's equity in APS is anticipated. The Company
has expensed the entire amount of funds advanced to APS and has assigned no
value to the note receivable due from APS.
On March 2, 2000 Larry Baccari, a manager of Aspen Power, LLC was granted
non-qualified stock options to purchase 100,000 shares of Aspen Exploration
Corporation. The options are exercisable at a price of $0.625 per share for
a period of four years through March 15, 2004.
On March 16, 2000 Aspen Power Systems Corporation, a 25% owned affiliate,
converted from a corporation to a limited liability company.
14
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Liquidity and Capital Resources
- -------------------------------
March 31, 2000 as compared to March 31, 1999
- --------------------------------------------
From June 30, 1999 to March 31, 2000 Aspen's working capital decreased from
$33,374 to $5,967, an 82% decrease. The decrease in working capital is due
primarily to payment for Aspen's share of drilling wells in progress from the
previous quarter.
During fiscal 1999, Aspen Exploration Corporation created Aspen Power Systems
Corporation ("APS"), an 85% owned subsidiary. Aspen had dedicated certain cash
resources to investigate the economic possibilities of the sale, design,
construction and/or operation of gas turbines to produce electricity. Aspen
spent a total of approximately $130,000 in order to provide funding for APS to
attempt to commence funding its own operations. Such dedicated funding came from
Aspen's operating funds derived from oil and gas production. There is no
assurance APS will be able to fund its own operations after the dedicated
funding by Aspen is fulfilled. Through March 31, 2000, APS has expended $129,300
on this project, $45,356 of which was expensed in the nine months ended March
31, 2000.
In March 2000 the Aspen Board approved a plan whereby Aspen would exchange its
85% interest in APS in exchange for a $130,000 note receivable with interest at
8% and retain a 25% interest in APS. Mr. Bailey, Chairman and President of
Aspen, and Ray K. Davis, consulting accountant to Aspen, and Larry Baccari, not
otherwise affiliated with Aspen, have each agreed to invest $15,000 (a total of
$45,000) for working capital purposes in exchange for a 75% interest in APS.
Aspen will not be required to fund any future projects of APS and no further
dilution of Aspen's equity in APS is anticipated. Aspen has expensed the entire
$129,300 advanced to APS and has assigned no value to the note receivable due
from APS.
Aspen believes that it has sufficient funds on hand or that will be generated
from current operations to fund its activities for the next twelve months.
Results of Operations
---------------------
March 31, 2000 Compared to March 31, 1999
- -----------------------------------------
For the nine months ended March 31, 2000 Aspen'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 in California.
15
<PAGE>
Oil and gas revenues for the nine months ended March 31, 2000 decreased $80,072,
from $920,415 to $840,343, an 8.7% decrease. This decrease reflects the normal
decline in production of mature oil and gas properties and will be offset
somewhat by new production that will come on line in the fourth quarter from the
Cygnus 1 and Emigh 35-1 well which was successfully deepened in April, 2000.
Oil and gas production expenses increased $12,473 from $63,061 to $75,534 for
the nine month period ended March 31, 2000. This increase was due to increased
water production in existing oil wells, the cost of putting a previously flowing
oil well on a pumping unit and the cost of putting a flowing gas well on
compression as well as various other maintenance projects.
Depletion, depreciation and amortization increased significantly, from $84,000
to $237,775, a 183% increase. This increase reflects the under estimate of
actual depletion expense for the three quarters of 1999 by approximately
$130,000 and an increase in the value of the full cost pool on which the
depletion rate is calculated.
Selling, general and administrative expenses decreased by $2,065 or less than 1%
from $377,895 to $375,830. Selling, general and administrative expenses remained
fairly constant when comparing the two periods with no significant change in any
category.
As a result of Aspen's operations for the nine months ended March 31, 2000,
Aspen ended the period with net income of $220,691 compared to net income of
$434,377 a year earlier. This decrease of approximately $214,000 reflected a
decrease in total revenues of $58,800 due primarily to a decline in oil and gas
revenues received from mature producing properties. Aspen also incurred $45,356
in operating expenses associated with Aspen Power Systems Corporation. These
costs were primarily for prospect review, financial studies and travel costs.
Depletion expense increased by approximately $154,000 from March 31, 1999.
However, depletion was understated by approximately $120,000 for the first nine
months of 1999.
Pursuant to the requirements of the Securities Exchange Act of 1934, Aspen has
duly caused and authorized this report to be signed on its behalf by the
undersigned.
ASPEN EXPLORATION CORPORATION
/s/ R. V. Bailey
-------------------------------
By: R. V. Bailey,
May 10, 2000 Chief Executive Officer,
Principal Financial Officer
16
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 12-MOS
<FISCAL-YEAR-END> JUN-30-2000 JUN-30-1999
<PERIOD-END> MAR-31-2000 JUN-30-1999
<CASH> 323,252 335,603
<SECURITIES> 0 0
<RECEIVABLES> 140,542 108,913
<ALLOWANCES> 18,823<F1> 18,823
<INVENTORY> 6,107<F2> 9,770
<CURRENT-ASSETS> 488,724 473,109
<PP&E> 2,898,506 2,487,969
<DEPRECIATION> (1,654,317) (1,416,542)
<TOTAL-ASSETS> 1,972,008 1,783,631
<CURRENT-LIABILITIES> 482,757 439,735
<BONDS> 0 0
(4,465,974)<F3> (4,686,665)
0 0
<COMMON> 5,995,558 5,977,558
<OTHER-SE> (40,333)<F4> (28,000)
<TOTAL-LIABILITY-AND-EQUITY> 1,972,008 1,783,631
<SALES> 840,343 920,415
<TOTAL-REVENUES> 964,654 1,023,486
<CGS> 75,534 63,061
<TOTAL-COSTS> 743,963 589,109
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 9,468 25,176
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 220,691 434,377
<EPS-BASIC> .04 .09
<EPS-DILUTED> .04 .08
<FN>
<F1>Precious Metals
<F2>PrePaid Expense
<F3>Accumulated Deficit
<F4>Deferred Compensation
</FN>
</TABLE>
