FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1995
Commission File No. 0-10286
General Energy Resources and Technology Corporation
(Exact name of registrant as specified in its charter)
Michigan 38-2266968
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2320 West Aero Park Court
Traverse City, Michigan 49686
(Address of principal executive offices)
616-946-1473
Registrant's telephone number, including area code
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 a 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 Corporate Issuers:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date.
Common Stock, Par Value $.10 - 7,991,870 shares, as of September
30, 1995.
<PAGE>
GENERAL ENERGY RESOURCES AND TECHNOLOGY CORPORATION
Index
PART I - FINANCIAL INFORMATION
Item 1
Balance Sheets 3 & 4
Statements of Operations 5 & 6
Statement of Cash Flows 7 & 8
Notes to Financial Statements 9 & 10
Item 2
Management's Discussion and Analysis of Financial
Conditions and Results of Operations 11
PART II - OTHER INFORMATION
Signatures 12
<PAGE>
PART I - FINANCIAL INFORMATION
GENERAL ENERGY RESOURCES AND TECHNOLOGY CORPORATION
Balance Sheets
Item 1
Sept. 30, December 31,
1995 1994
Unaudited
ASSETS
Current Assets:
Cash $ 52,189 $ 55,923
Accounts receivable trade,
less allowance for doubt-
ful accounts of $8,698 485,487 372,824
Prepaid expenses 562 313
Total current assets 538,238 429,060
Property and equipment at cost:
Proved oil and gas properties,
successful efforts method
of accounting 3,715,489 3,724,331
Unproved leasehold and minerals 85,106 85,106
Drilling contracts in progress 12,446 11,253
Total property and
equipment 3,813,041 3,820,690
Less accumulated depreciation,
depletion, amortization, and
valuation allowance 2,766,777 2,733,451
Net property and
equipment 1,046,264 1,087,239
Other Assets
Investments net of allowance for
unrealized loss of $288,950 1,050 1,050
$ 1,585,552 $ 1,517,349
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current installments of long-
term debt $ 22,360 $ 54,749
Accounts payable-trade 631,618 474,937
Joint interest prepayments 167,434 108,583
Other current liabilities 111,000 111,000
Stock purchase overpayments 25,603 25,603
Total current liabilities 958,015 774,872
Long-term debt 948,728 951,750
Stockholders' equity
Common stock of $.10 par
value, 18,000,000 shares
authorized, 7,991,870 shares
issued and outstanding 799,187 799,187
Additional paid-in capital 7,435,012 7,435,012
Deficit <8,555,390> <8,443,472>
Total stockholders'
equity <321,191> <209,273>
$ 1,585,552 $ 1,517,349
See accompanying Notes to Financial Statements.
<PAGE>
<TABLE>
GENERAL ENERGY RESOURCES AND TECHNOLOGY CORPORATION
Statements of Operations
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
Unaudited Unaudited
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues:
Oil and gas sales:
Working interest $ 55,903 82,578 236,879 257,339
Royalty interest 15,379 16,640 43,443 57,195
Turnkey working interest income -0- 15,000 -0- 25,720
Repromotional income <101> 1,023 5,940 1,363
Gain/Loss on sale of assets -0- -0- <8,883> -0-
Administrative overhead 6,950 4,200 15,350 16,800
Consulting fees 19,687 -0- 54,334 -0-
Miscellaneous income -0- 1 2 832
Total revenues 97,818 119,442 347,065 359,249
Costs and expenses:
Lease and operating
expenses 87,217 60,513 214,334 195,084
Taxes other than on income 2,507 2,893 8,079 9,303
Dry holes and abandonments 88 781 <2,413> 2,565
Lease acquisition/retainage -0- 107 -0- 107
Depreciation, depletion and
amortization 10,600 12,555 33,687 36,279
General and administrative 60,684 40,836 202,237 149,128
Interest expense 915 1,001 3,059 3,767
Total costs/expenses 162,011 118,686 458,983 396,233
Net income <loss> $ <64,193> 756 <111,918> <36,984>
Net income <loss> per weighted
average share of common stock $ <.008> .00009 <.01> <.005>
Weighted average number of shares
outstanding 7,991,870 7,991,870 7,991,870 7,991,870
See accompanying Notes to Financial Statements.
/TABLE
<PAGE>
GENERAL ENERGY RESOURCES AND TECHNOLOGY CORPORATION
Statement of Cash Flows
Nine Months Ended
September 30, 1995 & 1994
Unaudited
1995 1994
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income <loss> $ <111,918> $ <36,984>
Adjustments to reconcile net
earnings to net cash
provided by operating
activities:
Depreciation, depletion and
amortization 33,687 36,279
Abandonments, expired and
surrendered leases -0- 4,513
<Gain> loss on sale of oil
and gas properties 8,883 -0-
<Increase> decrease in
current assets:
Trade accounts receivable <112,663> <287,815>
Prepaid expenses <249> <187>
Increase <Decrease> in
current liabilities:
Trade accounts payable 156,680 201,102
Joint interest prepayments 58,851 184,024
NET CASH FROM OPERATING
ACTIVITIES 33,271 100,932
CASH FLOWS FROM INVESTING
ACTIVITIES
Acquisition of property and
equipment <2,288> <19,376>
Proceeds from sale of oil
and gas property 694 -0-
NET CASH FROM INVESTING
ACTIVITIES <1,594> <19,376>
CASH FLOWS FROM FINANCING
ACTIVITIES
Reduction of long-term debt <35,411> <116,166>
Issuance of stock -0- -0-
Acquisition of long-term debt -0- 80,000
NET CASH FROM FINANCING
ACTIVITIES <35,411> <36,166>
NET INCREASE <DECREASE>
IN CASH <3,734> 45,390
CASH AT BEGINNING OF PERIOD 55,923 40,736
CASH AT END OF PERIOD $ 52,189 86,126
<PAGE>
GENERAL ENERGY RESOURCES AND TECHNOLOGY CORPORATION
Notes to Financial Statements
(1) Summary of Significant Accounting Policies
Property and Equipment
The Company utilizes the successful efforts method of accounting
for its oil and gas exploration and development program. Under
this method of accounting, costs of drilling and completing
successful wells are capitalized, while costs of dry holes are
charged to expense when incurred. Depletion and amortization of
producing leasehold and mineral interests and related intangible
development costs are provided by the unit-of-production method
based on estimates of recoverable oil and gas reserves prepared
by independent petroleum engineers. Lease and well equipment is
depreciated over its estimated useful life (seven years) by the
straight-line method.
Costs of nonproducing leasehold and mineral interests are not
amortized but are charged to operations when such properties are
abandoned, surrendered, determined to be worthless or transferred
to producing properties and depleted when successfully developed.
Maintenance and repairs are charged to expense when incurred.
Renewals and betterments are capitalized. When assets are sold,
retired or otherwise disposed of, applicable costs and
accumulated depreciation and depletion are removed from the
accounts and the resulting gain or loss is recognized.
Interest Capitalization
Interest costs applicable to the drilling and equipment of in-
progress and shut-in oil and gas wells are capitalized until such
time as the wells begin producing. There were no entries for
interest capitalization during 1995 and 1994.
Earnings Per Share
Earnings per share is based on the weighted average number of
shares outstanding.
(2) Non Cash Transactions
Sept. 30, Dec. 31,
1995 1994
The Company had the following
non cash transactions during
the periods ending September 30,
1995 and December 31, 1994 -0- -0-
(3) Long-Term Debt
On June 1, 1990, the Company signed a $292,814 promissory note
with Mosbacher Energy Company (MEC) for the amount owed MEC by
General Energy corporation for well operations as of May 7,
1990. The note is secured by the Company's interest in eleven
producing properties operated by MEC and bears interest at 7 1/4
percent per annum. Monthly payments are the lesser of $20,000 or
the month's production from the secured properties.
In 1991, the Company recorded approximately $873,500 of long-term
debt on the Tulare Lakes Field. This represents the Company's
25% share of the outstanding debt on the field. The debt is to
be paid from production. This is a non recourse debt. General
Energy is not a party to the purchase contract between Chevron
and Penteco and American Barter. In 1993, the Company sold a 1%
interest in the field, leaving an outstanding balance of $944,985
for the Company's share of Tulare Lakes debt which includes
accrued interest.
(4) Interim Statements
The Company believes that the accompanying unaudited financial
statements contain all adjustments (including appropriate
provision for depreciation, depletion and amortization normally
determined at year end) necessary to present fairly the financial
position as of September 30, 1995 and December 31, 1994, and the
results of operations for the nine months ended September 30,
1995 and 1994. All adjustments are of a normal recurring nature.
Interim financials should not necessarily be considered to be
indicative of the results of operations for the entire year.
(5) Contingencies
The prices of the Company's natural gas production are subject to
the regulations of the Federal Energy Regulatory Commission
(FERC). The Company believes it has substantially complied with
regulations as issued.
<PAGE>
PART I
Item 2 Management's Discussion and Analysis of Financial
Conditions and Results of Operations
Results of Operations
The Company's total earned revenue for the nine months ended
September 30, 1995 totaled $347,065. This represents a decrease
of 3% from the same period in 1994. The decrease in revenue is
largely the result of a decrease in oil and gas revenue and
turnkey working interest income.
The Company's total expenses of $458,983 for the nine months
ended September 30, 1995 increased 16% from the same quarter in
1994. The most significant increases occurred in general and
administrative expense and lease operating expenses. The
increase in general and administrative expense is largely the
result of additional payroll expense which is offset by an
increase in consulting fee revenue.
The Company's net loss for the nine months ended September 30,
1995 was <$111,918> compared to a loss of <$36,984> for the nine
months ended September 30, 1994.
Liquidity/Capital Resources
Net cash decreased $49,124 to <$3,734> at September 30, 1995
compared to $45,390 at September 30, 1994.
Management feels that cash flows will be sufficient to pay
current operating liabilities and to amortize the remaining
current portion of its long-term debt, given its participation in
several successful oil and gas discoveries and the change in
operations of the large California project (Tulare Lakes) that
experienced significant cost overruns in 1992, 1993 and 1994.
Management has developed contingency plans to obtain additional
capital by the issuance of debt or sale of equities to the extent
that these actions become necessary in the future.
<PAGE>
GENERAL ENERGY RESOURCES AND TECHNOLOGY CORPORATION
PART II - OTHER INFORMATION
Signatures
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
GENERAL ENERGY RESOURCES AND TECHNOLOGY CORPORATION
Date: 11/15/95 Signature:
H. Terry Snowday, Jr.
President and Director
(Principal Executive Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 52,189
<SECURITIES> 0
<RECEIVABLES> 494,185
<ALLOWANCES> 8,698
<INVENTORY> 0
<CURRENT-ASSETS> 538,238
<PP&E> 3,813,041
<DEPRECIATION> 2,766,777
<TOTAL-ASSETS> 1,585,552
<CURRENT-LIABILITIES> 958,015
<BONDS> 0
<COMMON> 799,187
0
0
<OTHER-SE> (1,120,378)
<TOTAL-LIABILITY-AND-EQUITY> 1,585,552
<SALES> 280,332
<TOTAL-REVENUES> 347,065
<CGS> 0
<TOTAL-COSTS> 222,413
<OTHER-EXPENSES> 236,570
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,059
<INCOME-PRETAX> (111,918)
<INCOME-TAX> 0
<INCOME-CONTINUING> (111,918)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (111,918)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
