<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended December 31, 1999
OR
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from N/A to
------------------- -------------------
Commission File Number 2-70145
SOUTH TEXAS DRILLING & EXPLORATION, INC.
(Exact name of registrant as specified in its charter)
TEXAS 74-2088619
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
9310 Broadway, Bldg. I, San Antonio, Texas 78217
(Address of principal executive offices)
(Zip Code)
210-828-7689
(Registrant's telephone number, including area code)
- --------------------------------------------------------------------------------
(Former name, 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 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
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. N/A
Yes No
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date.
<TABLE>
<CAPTION>
Class Outstanding at February 11, 2000
----- --------------------------------
<S> <C>
Common Stock, $.10 par value 6,120,838
</TABLE>
<PAGE> 2
SOUTH TEXAS DRILLING & EXPLORATION, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, March 31,
1999 1999
--------------- ---------------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 3,265,810 1,411,493
Receivables 925,689 1,096,948
Contract drilling in progress 1,180,514 221,000
Prepaid expenses 495,405 154,591
--------------- ---------------
Total current assets 5,867,418 2,884,032
--------------- ---------------
Property and equipment 19,311,475 15,734,010
Accumulated depreciation, depletion and amortization 9,802,596 8,611,165
--------------- ---------------
Net property and equipment 9,508,879 7,122,845
--------------- ---------------
Total assets 15,376,297 10,006,877
=============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments, long-term debt 3,866,872 443,565
Accounts payable 4,884,400 1,249,083
Accrued expenses 1,152,003 638,321
--------------- ---------------
Total current liabilities 9,903,275 2,330,969
Long-term debt, less current installments 288,955 2,354,205
--------------- ---------------
Total liabilities 10,192,230 4,685,174
--------------- ---------------
Shareholders' equity:
Preferred stock, Series A, 8%, cumulative, convertible, $2.00
redemption and liquidation value. Authorized 400,000 shares; issued
and outstanding 400,000 shares at December 31, and at March 31, 1999 800,000 800,000
Preferred stock, Series B, 8%, cumulative, convertible, $16.25
redemption and liquidation value. Authorized 184,615 shares; issued
and outstanding 184,615 shares at December 31, and at March 31, 1999 2,999,994 2,999,994
Common stock, $.10 par value. Authorized 15,000,000 shares;
issued 6,120,838 at December 31, and 6,100,784 at March 31, 1999 612,083 610,078
Additional paid-in capital 16,338,954 16,324,031
Retained earnings (deficit) (15,566,964) (15,412,400)
--------------- ---------------
Total shareholders' equity 5,184,067 5,321,703
--------------- ---------------
Total liabilities and shareholders' equity $ 15,376,297 10,006,877
=============== ===============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
2
<PAGE> 3
SOUTH TEXAS DRILLING & EXPLORATION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
December 31, December 31,
-------------------------- --------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues:
Contract drilling $ 7,147,079 2,053,809 13,541,654 9,953,464
Oil and gas 6,084 36,690 14,230 132,341
Management fees and other 41,107 25,390 54,768 75,408
----------- ----------- ----------- -----------
Total operating revenues 7,194,270 2,115,889 13,610,652 10,161,213
----------- ----------- ----------- -----------
Costs and expenses:
Contract drilling 6,356,123 1,758,234 11,641,109 9,090,390
Oil and gas 1,685 35,348 1,776 155,184
Depreciation, depletion and amortization 470,377 579,646 1,198,932 1,322,358
General and administrative 179,358 241,759 494,098 627,170
----------- ----------- ----------- -----------
Total operating costs and expenses 7,007,543 2,614,987 13,335,915 11,195,102
----------- ----------- ----------- -----------
Earnings (loss) from operations 186,727 (499,098) 274,737 (1,033,889)
----------- ----------- ----------- -----------
Other income (expense):
Interest expense (109,952) (75,205) (243,163) (250,593)
Interest income 12,833 20,951 50,498 76,600
Gain (loss) on sale of assets -- (4,718) 1,400 (45,983)
----------- ----------- ----------- -----------
Total other income (expense) (97,119) (58,972) (191,265) (219,976)
----------- ----------- ----------- -----------
Earnings (loss) before income taxes 89,608 (558,070) 83,472 (1,253,865)
Income taxes 3,654 (1,399) 10,036 28,231
----------- ----------- ----------- -----------
Net earnings (loss) 85,954 (556,671) 73,436 (1,282,096)
Preferred stock dividend requirements 76,000 76,000 228,000 228,000
----------- ----------- ----------- -----------
Net earnings (loss) applicable to common
stockholders $ 9,954 (632,671) (154,564) (1,510,096)
=========== =========== =========== ===========
Loss per common share-Basic and Diluted $ 0.00 (0.11) (0.03) (0.26)
=========== =========== =========== ===========
Weighted average number of shares
outstanding-Basic and Diluted 6,104,002 5,993,175 6,101,860 5,913,736
=========== =========== =========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE> 4
SOUTH TEXAS DRILLING & EXPLORATION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
Nine Months Ended
December 31,
------------------------------
1999 1998
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ 73,436 (1,282,096)
Adjustments to reconcile net earnings to net cash provided (used)
by operating activities:
Depreciation, depletion, amortization 1,198,932 1,322,358
Stock issued as compensation to directors and employees 15,054 --
Gain (loss) on sale of assets (1,400) 45,983
Changes in current assets and liabilities:
Accounts and notes receivable 171,259 (1,118,609)
Contract drilling in progress (959,514) 819,187
Prepaid expenses (340,814) (191,413)
Accounts payable 3,635,317 35,564
Prepaid drilling contracts 279,700 203,950
Accrued expenses 5,984 (90,609)
------------- -------------
Net cash provided (used) by operations 4,077,954 (255,685)
------------- -------------
Cash flows from financing activities:
Payments of debt (418,589) (473,422)
Proceeds of debt 1,776,645 --
Payment of dividends on preferred stock -- (64,000)
Proceeds from exercise of warrants and options 1,875 15,375
------------- -------------
Net cash provided (used) by financing activities 1,359,931 (522,047)
------------- -------------
Cash flows from investing activities:
Purchase of property and equipment (3,584,966) (787,103)
Proceeds from sale of equipment 1,398 58,365
------------- -------------
Net cash used in investing activities (3,583,568) (728,738)
------------- -------------
Net increase (decrease) in cash 1,854,317 (1,506,470)
Beginning cash and cash equivalents 1,411,493 2,586,710
------------- -------------
Ending cash and cash equivalents $ 3,265,810 1,080,240
============= =============
Supplementary Disclosure:
Common stock issued to directors -- 26,437
Retirement of treasury stock -- (136,905)
Interest paid 206,468 250,969
Increase in dividend accrual 227,999 227,999
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE> 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The condensed consolidated financial statements include the accounts of
South Texas Drilling & Exploration, Inc and its wholly-owned
subsidiaries. All significant intercompany balances and transactions
have been eliminated in consolidation.
2. The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions
to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have
been included.
3. The Company uses the asset and liability method of Statement 109 for
accounting for income taxes. Pursuant to this method, deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled.
Under Statement 109, the effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the period that
includes the enactment date.
4. At April 1, 1999, the Company had investment tax credit carryforwards
of approximately $20,000 (expiring 2000 through 2001) and minimum tax
credit carryforwards of $18,000, which are available to reduce future
Federal income taxes. In addition, the Company had net operating loss
carryforwards of approximately $13,135,000 (expiring 2000 through
2013), which are also available to reduce future taxable income and
taxes. A valuation allowance has been established to decrease total
gross deferred tax assets (primarily investment credit tax
carryforwards and net operating loss carryforwards) to the amount of
the total gross deferred tax liabilities due to the uncertainties
involved in the ultimate realization of the deferred tax assets.
5. On September 29, 1999, the Company completed its acquisition of the
drilling operations of Howell Drilling, Inc., a San Antonio, Texas
based land drilling contractor. The purchase included two drilling
rigs, a Cabot 900 and a Cabot 750, drill pipe and collars, assorted
spare drilling equipment, transportation equipment and office furniture
and fixtures. The total expenditure for the Howell operations was
$2,513,395, of which $1,750,000 was financed by the Company's primary
lender. The terms of the new debt are the same as the previously
outstanding debt from the lender. The interest rate is prime (8.50% at
December 31, 1999) plus 1.75%. The debt provides for monthly principal
payments (based on a seven year amortization) of $20,833 plus interest
and a due date of November 1, 2000. The acquisition was accounted for
as a purchase. The purchase price was allocated based on the fair
market value of the assets at the date of acquisition.
5
<PAGE> 6
SOUTH TEXAS DRILLING & EXPLORATION, INC. AND SUBSIDIARIES
6. The following table presents a reconciliation of the numerators and
denominators of the basic EPS and diluted EPS computations as required
by Financial Accounting Standards No. 128:
<TABLE>
<CAPTION>
Three Months Ended
December 31, 1999
-----------------------------------------
Weighted
Average
Income Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
<S> <C> <C> <C>
Net earnings $ 85,954
Less: preferred stock dividends (76,000)
-----------
Income available to common
stockholders - Basic and Diluted $ 9,954 6,104,002 $ 0.00
=========== ============= =========
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended
December 31, 1998
-----------------------------------------
Weighted
Average
Income Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
<S> <C> <C> <C>
Net loss $ (556,671)
Less: Preferred stock dividends (76,000)
-----------
Income (loss) available to common
stockholders - Basic and Diluted $ (632,671) 5,993,175 $ (0.11)
=========== ============= =========
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended
December 31, 1999
-----------------------------------------
Weighted
Average
Income Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
<S> <C> <C> <C>
Net earnings $ 73,436
Less: Preferred stock dividends (228,000)
-----------
Income (loss) available to common
stockholders - Basic and Diluted $ (154,564) 6,101,860 $ (0.03)
=========== ============= =========
</TABLE>
6
<PAGE> 7
SOUTH TEXAS DRILLING & EXPLORATION, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Nine Months Ended
December 31, 1998
-------------------------------------------
Weighted
Average
Income Shares Per-Share
(Numerator) (Denominator) Amount
------------- ------------- ----------
<S> <C> <C> <C>
Net loss $ (1,282,096)
Less: Preferred stock dividends (228,000)
-------------
Income (loss) available to common stockholders-
Basic and Diluted $ (1,510,096) 5,913,736 $ (0.26)
============= ============= =========
</TABLE>
7. In the quarter ended June 30, 1999, the Company changed its estimated
useful lives on drilling rigs from seven years to twelve years. This
change was implemented in order to more accurately reflect the
Company's historical experience with regard to its drilling rigs.
Because of this change, net income for the nine-month period ended
December 31, 1999, was approximately $108,000 higher than it would have
been had the useful lives not been changed.
8. The Company had been named as a defendant in lawsuits filed on
September 8 and 9, 1999 by Sutton Producing Company and the working
interest owners in the 57th and 288th Judicial District Courts of Bexar
County, Texas. These lawsuits alleged products liability, negligence,
misrepresentation, and fraud, as well as violations of the Deceptive
Trade Practices Act, including breach of express and implied
warranties, false representations , and unconscionability. These suits
were dismissed on January 31, 2000.
7
<PAGE> 8
SOUTH TEXAS DRILLING & EXPLORATION, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
Cash and cash equivalents at December 31, 1999 were $3,265,810 compared
to $1,411,493 at March 31, 1999. The current ratio at December 31, 1999 was .59
compared to 1.24 at March 31, 1999. Working capital decreased to $(4,035,857) at
December 31, 1999 from $553,063 at March 31, 1999. The primary reasons for the
decrease in the current ratio and in working capital were the
re-characterization of debt from long-term to current due to the debt's maturity
in November, 2000, the utilization of cash to fund the refurbishment of one of
the Company's drilling rigs and to partially fund the purchase of the drilling
assets of Howell Drilling, Inc. The Company believes that, for the current
fiscal year, it will continue to maintain its ability to meet its cash
requirements for debt service and operations. In the nine-month period ended
December 31, 1999, the Company's operations generated cash flow of $4,078,000
while in the same period a year earlier operations used cash flow of $256,000.
Accounts receivable decreased to $925,689 at December 31, 1999 from $1,096,948
at March 31, 1999. Contract drilling in progress increased to $1,180,514 at
December 31, 1999 from $221,000 at March 31, 1999. The substantial increase in
contract drilling in progress at December 31, 1999 compared to March 31, 1999,
was due to more drilling contracts in process at December 31, 1999 than at March
31, 1999.
Since March 31, 1999, property and equipment costs increased
$3,577,465. Of this amount, $3,448,058 was spent on drilling equipment, $114,617
on transportation equipment and $14,790 on office furniture and fixtures. Of the
funds spent on drilling equipment, $538,807 was spent on the refurbishment of
one of the Company's drilling rigs. The refurbishment began in April, 1999 and
the rig was returned to service in August, 1999. In late September, 1999, the
Company completed the purchase of the drilling operations of Howell Drilling,
Inc., a San Antonio, Texas based land drilling contractor. The purchase included
two drilling rigs, a Cabot 900 and a Cabot 750, drill pipe and collars, assorted
spare drilling equipment, transportation equipment and office furniture and
fixtures. The total expenditure for the Howell operations was $2,513,395, of
which $1,750,000 was financed.
Debt obligations in the form of notes payable increased by a net of
$1,358,057 from March 31, 1999 to December 31, 1999. This increase was comprised
of new debt of $1,776,645 and principal payments of $418,588. The major element
of new debt was the debt incurred to purchase Howell Drilling, Inc. This debt
was provided by the Company's primary lender. The terms of the debt provide for
an interest rate of prime (8.50% at December 31, 1999) plus 1.75%, monthly
principal payments (based on a seven-year amortization) of $20,833 plus interest
and a due date of November 1, 2000. Based on its prior dealings with its lender,
the Company believes it will be able to refinance the debt prior to its
maturity. Accounts payable at December 31, 1999 were $4,884,400 an increase of
$3,635,317 from $1,249,083 at March 31, 1999. The primary reason for this
increase was the higher costs associated with turnkey contracts. Accrued
expenses increased to $1,152,003 at December 31, 1999 from $638,321 at March 31,
1999.
Results of Operations
Contract drilling revenue for the quarter ended December 31, 1999 was
$7,147,079 compared to $2,053,809 in the same quarter a year earlier. This
increase in drilling revenue was the result of increased dayrates, increased
drilling days and an increased percentage of turnkey jobs. In the current
quarter, the Company had 562 drilling days, using eight rigs, compared to 227
drilling days, using six rigs, in the same quarter in fiscal 1999. The rig
utilization rate for the current quarter was 77% compared to 41% in the same
quarter a year earlier. The average revenues per drilling day increased to
$12,717 from $9,048 in the corresponding quarter of fiscal 1999. This increase
was due to increased utilization of turnkey contracts and slightly higher
dayrates in the current quarter.
Oil and gas revenue for the quarter ended December 31, 1999 was $6,084,
principally from overriding royalty interests, compared to $36,690 in the same
quarter a year earlier. This decrease in revenue in the current quarter was due
to the Company's sale of all its operated oil and gas properties in the last
quarter of fiscal 1999.
8
<PAGE> 9
SOUTH TEXAS DRILLING & EXPLORATION, INC. AND SUBSIDIARIES
Total operating costs and expenses for the quarter ended December 31,
1999 were $7,007,543, up $4,392,556, from operating costs and expenses of
$2,614,987 in the same quarter a year earlier. When compared with the same
quarter a year earlier, contract drilling costs increased $4,597,889 in the
quarter ended December 31, 1999. Average drilling costs per day in the current
quarter were $11,310 compared to $7,746 in the same quarter a year earlier. The
average daily drilling margin increased to $1,407 in the current quarter from
$1,302 in the same quarter a year earlier. Depreciation, depletion and
amortization costs decreased to $470,377 in the quarter ended December 31, 1999
from $579,646 in the quarter ended December 31, 1998. This decrease was the
result of the combination of increased depreciation expense due to the Company's
purchase of the assets of Howell Drilling , Inc.; decreased depreciation expense
due to the increase in the estimated useful lives of drilling rigs and decreased
depletion expense due to the Company's sale of its oil and gas interests in the
last quarter of fiscal 1999 resulting in no depletion expense in the current
quarter. This change in estimated useful lives was implemented in order to more
accurately reflect the Company's historical experience with regard to its
drilling rigs. This change in estimated useful lives reduced depreciation
expense in the current quarter by approximately $36,000. In the same quarter in
fiscal 1999, depletion expense included a write-down in the value of oil and gas
properties of approximately $180,000 due to the decreased prices of oil and
natural gas at the time. General and administrative expenses decreased to
$179,358 in the current quarter from $241,759 in the same quarter a year
earlier. General and administrative expenses in the same quarter in fiscal 1999
included a charge of approximately $107,000 for a settlement agreement
negotiated with the Company's former Chairman of the Board.
Other income and expense increased to $97,119 of net expenses in the
current quarter from $58,972 of net expenses in the same quarter a year earlier.
The primary reason for the increase was higher interest expense due to debt
incurred to purchase the drilling assets of Howell Drilling Inc. and increases
in interest rates on the Company's variable interest rate debt.
Contract drilling revenue for the nine months ended December 31, 1999
was $13,541,654 compared to $9,953,464 in the same period in fiscal 1999. This
increase in drilling revenue was the result of increased demand for drilling
rigs in the nine-month period ended December 31, 1999. In the nine months ended
December 31, 1999, the Company had 1,150 drilling days compared to 957 drilling
days in the same period in fiscal 1999. The rig utilization rate for the nine
months ended December 31, 1999, was 63% compared to 58% in the same period in
fiscal 1999. Average revenues per drilling day were $11,775 compared to $10,401
in the same period in fiscal 1999.
Oil and gas revenue for the nine months ended December 31, 1999 was
$14,230, principally from overriding royalty interests, compared to $132,341 in
the same period a year earlier. This decrease in revenue in the current year was
due to the Company's sale of all its operated oil and gas properties in the last
quarter of fiscal 1999.
Total operating costs and expenses for the nine months ended December
31, 1999 were $13,335,915, up $2,140,813, from operating costs and expenses of
$11,195,102 in the same period a year earlier. Drilling costs increased
$2,550,719 in the current year when compared to the same period in fiscal 1999.
Average drilling costs per day in the current year were $10,123 compared to
$9,499 in the same period a year earlier. Depreciation, depletion and
amortization costs decreased to $1,198,932 in the nine months ended December 31,
1999 from $1,322,358 in the same period in fiscal 1999. General and
administrative expenses decreased to $494,098 in the nine months ended December
31, 1999 from $627,170 in the same period in fiscal 1999.
Other income and expense decreased to $191,265 of net expenses in the
nine months ended December 31, 1999 from $219,976 of net expenses in the same
period a year earlier.
9
<PAGE> 10
SOUTH TEXAS DRILLING & EXPLORATION, INC. AND SUBSIDIARIES
Accounting Matters
In June, 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities." SFAS No. 133 establishes
accounting and reporting standards for derivative instruments, including certain
derivative investments embedded in other contracts, and for hedging activities.
SFAS No. 133 requires that an entity recognize all derivatives as either assets
or liabilities in the statement of financial position and measure those
instruments at fair value. If certain conditions are met, a derivative may be
specifically designated as a "fair value hedge," a "cash flow hedge," or a hedge
of a foreign currency exposure of a net investment in a foreign operation. The
accounting for changes in the fair value of a derivative (that is, gains and
losses) depends on the intended use of the derivative and the resulting
designation. In June 1999, the FASB issued SFAS No. 137, which delayed the
adoption of SFAS No. 133 for all fiscal quarters of all fiscal years beginning
after June 15, 2000. Management does not expect that the adoption of SFAS No.
133 will have a material impact on the Company's financial position, results of
operations or liquidity as the Company has no derivative instruments and no
hedging activities.
Year 2000
In fiscal 1998, the Company began the process of identifying,
evaluating and implementing changes to computer programs necessary to address
the year 2000 issue. This issue affects computer systems that have
time-sensitive programs that may not properly recognize the year 2000. This
could result in system failures or miscalculations. The Company has addressed
its internal year 2000 issue with modifications to existing programs and
conversions to new programs. As of the report date, the Company has not
experienced any operational or administrative problems associated with the year
2000 issue.
Market Risk
There have been no significant changes in the Company's market risk
factors since March 31, 1999, except for the additional debt incurred for the
purchase of Howell Drilling, Inc.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company had been named as a defendant in lawsuits filed on
September 8 and 9, 1999 by Sutton Producing Company and the working interest
owners in the 57th and 288th Judicial District Courts of Bexar County, Texas.
These lawsuits alleged products liability, negligence, misrepresentation, and
fraud, as well as violations of the Deceptive Trade Practices Act, including
breach of express and implied warranties, false representations , and
unconscionability. These suits were dismissed on January 31, 2000.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Exhibit No. Description
----------- -----------
27 Financial Data Schedule
(b) Reports on Form 8-K.
An 8-K was filed by the Company on October 14, 1999 reporting the
acquisition by the Company of the drilling operations of Howell
Drilling Inc.
10
<PAGE> 11
SOUTH TEXAS DRILLING & EXPLORATION, INC. AND SUBSIDIARIES
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.
SOUTH TEXAS DRILLING & EXPLORATION, INC.
/s/ Michael E. Little
-----------------------------------------
Michael E. Little
Chairman of the Board
Dated: February 11, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Michael E. Little
- ----------------------------- Chairman of the Board and February 11, 2000
Michael E. Little Chief Executive Officer
/s/ Wm. Stacy Locke
- ----------------------------- President and Chief February 11, 2000
Wm. Stacy Locke Operating Officer and
Director
/s/ William D. Hibbetts
- ----------------------------- Director February 11, 2000
William D. Hibbetts
/s/ Chris F. Parma
- ----------------------------- Vice President and February 11, 2000
Chris F. Parma Chief Financial Officer
</TABLE>
11
<PAGE> 12
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 3,265,810
<SECURITIES> 0
<RECEIVABLES> 2,106,203
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,867,418
<PP&E> 19,311,475
<DEPRECIATION> 9,802,596
<TOTAL-ASSETS> 15,376,297
<CURRENT-LIABILITIES> 9,903,275
<BONDS> 0
0
3,799,994
<COMMON> 612,083
<OTHER-SE> 771,990
<TOTAL-LIABILITY-AND-EQUITY> 15,376,297
<SALES> 14,230
<TOTAL-REVENUES> 13,610,652
<CGS> 1,776
<TOTAL-COSTS> 13,335,915
<OTHER-EXPENSES> 191,265
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 83,472
<INCOME-TAX> 10,036
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 73,436
<EPS-BASIC> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
