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 June 30, 1996
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.)
401 W. Front Street
Traverse City, Michigan 49684
(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 June 30,
1996.<PAGE>
GENERAL ENERGY RESOURCES AND TECHNOLOGY CORPORATION
Index to Form 10-Q
PART I - Financial Information Page
Item 1 Balance Sheets. . . . . . . . . . . . . . . . . . .3
Statements of Operations. . . . . . . . . . . . . .5
Statement of Cash Flows . . . . . . . . . . . . . .7
Notes to Financial Statements . . . . . . . . . . .9
Item 2 Management's Discussion and Analysis of Financial
Conditions and Results of Operations. . . . . . .10
PART II - Other Information
Signatures. . . . . . . . . . . . . . . . . . . . .12
<PAGE>
PART I - FINANCIAL INFORMATION
General Energy Resources and Technology Corporation
Balance Sheets
Item 1
ASSETS
June 30, December 31,
1996 1995
(Unaudited) (Unaudited)
CURRENT ASSETS
Cash $ 22,862 $ 136,108
Accounts receivable trade, less
Allowance for doubtful accounts
of $8,698 634,546 583,526
Prepaid expenses 62 437
_________ _________
Total current assets 657,470 720,071
PROPERTY AND EQUIPMENT, AT COST
Proved oil and gas properties,
Successful efforts method of
accounting 2,869,497 2,891,901
Unproved leasehold and minerals 85,106 85,106
Drilling contracts in progress 14,121 12,213
_________ _________
Total property and equipment 2,968,724 2,989,220
Less accumulated depreciation,
depletion, and amortization 2,641,481 2,650,669
_________ _________
Net property and equipment 327,243 338,551
OTHER ASSETS
Investments (net of unrealized
loss of $288,950) 1,050 1,050
_________ _________
$ 985,763 $1,059,672
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current installments of
Long-term debt $ 3,000 $ 3,000
Accounts payable trade 838,672 746,954
Joint interest prepayments 0 135,371
Other current liabilities 111,000 111,000
Stock purchase overpayments 0 25,603
_________ _________
Total current liabilities 952,672 1,021,928
LONG-TERM DEBT 57,774 55,429
STOCKHOLDERS' EQUITY
Common stock ($.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 <8,258,882> <8,251,884>
_________ _________
Total stockholders' equity <24,683> <17,685>
$ 985,763 $1,059,672
========= =========
See Accompanying Notes to Financial Statements
<PAGE>
<TABLE>
GENERAL ENERGY RESOURCES AND TECHNOLOGY CORPORATION
Statements of Operations
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues:
Oil and gas sales:
Working interest $ 19,536 110,508 35,453 180,976
Royalty interest 15,936 14,560 31,689 28,064
Repromotional income 2,349 5,569 2,349 6,041
Gain/Loss on sale of assets <4,352> 0 <4,352> <8,883>
Administrative overhead 6,200 4,200 10,400 8,400
Consulting fees 0 18,838 577 34,647
Write off of expired
credits 0 0 66,116 0
Miscellaneous income 2 2 2 2
__________ __________ __________ __________
Total revenues 39,671 153,677 142,234 249,247
Costs and expenses:
Lease and operating
expenses 4,830 81,156 22,589 127,117
Taxes other than on income 2,248 2,627 4,234 5,572
Dry holes and abandonments 28 <3,406> 84 <2,501>
Depreciation, depletion and
amortization 3,709 12,749 6,890 23,087
General and administrative 39,277 73,422 115,435 141,553
Interest expense 0 1,029 0 2,144
__________ __________ __________ __________
Total costs/expenses 50,092 167,577 149,232 296,972
__________ __________ __________ __________
Net income <loss> $ <10,421> <13,900> <6,998> <47,725>
========== ========== ========== ==========
Net income <loss> per weighted
average share of common stock $ <.001> <.002> <.0009> <.006>
========== ========== ========== ==========
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>General Energy Resources and Technology Corporation
Statement of Cash Flows
Six Months Ended June 30, (Unaudited)
1996 1995
____ ____
CASH FLOWS FROM OPERATING ACTIVITIES
Net income <loss> $ <6,998> $ <47,725>
Adjustments to reconcile net
earnings to net cash provided
by operating activities
Depreciation, depletion and
amortization 6,890 23,087
Abandonments, expired and
surrendered leases 0 0
<Gain> loss on sale of oil and
gas properties 4,353 8,883
<Increase> decrease in current
assets:
Trade accounts receivable <51,020> <8,332>
Prepaid expenses 375 313
Increase <decrease> in current
liabilities:
Trade accounts payable 91,718 102,020
Joint interest prepayments <135,371> <62,669>
Expired credits - stock
purchase overpayment <25,603> 0
_________ _________
NET CASH FROM OPERATING
ACTIVITIES <115,656> 15,577
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and
equipment <1,908> <2,288>
Proceeds from sale of oil and gas
property 1,973 694
_________ _________
NET CASH FROM INVESTING
ACTIVITIES 65 <1,594>
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in long-term debt 2,345 <28,236>
_________ _________
NET CASH FROM FINANCING
ACTIVITIES 2,345 <28,236>
_________ _________
NET INCREASE <DECREASE>
IN CASH <113,246> <14,253>
CASH AT BEGINNING OF PERIOD 136,108 55,923
_________ _________
CASH AT END OF PERIOD $ 22,862 $ 41,670
========= =========
<PAGE>
General Energy Resources and Technology Corporation
Notes to Financial Statements
NOTE 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 hole 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 1996 and 1995.
Earnings Per Share
Earnings per share is based on the weighted average number of
shares outstanding.
NOTE 2
NON CASH TRANSACTIONS
The Company had the following June 30, Dec. 31,
non cash transactions during the 1996 1995
periods ending June 30, 1996
and December 31, 1995 -0- -0-
NOTE 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. Additional terms of the agreement call for monthly
payments of the lesser of $20,000 or the month's production to
MEC. Based on current production estimates, management expects to
reduce this loan by approximately $250 per month.
In 1991, the Company recorded approximately $875,500 of long-term
debt on the Tulare Lakes Field. This represents the Company's 25%
share of the outstanding debt on the field. This is a non
recourse debt. General Energy is not a party to the purchase
contract between Chevron, Penteco and American Barter. The
Company's 25% was to be paid from Penteco Corporation's working
interest percentage, net of expenses. As of December 31, 1995,
the total revenue from the field continued to be less than the
total expenses with no expectation of improvement within the next
twelve months. Management determined the asset and liability to
be unrealistically presented on the financial statements and the
outstanding debt balance of $908,410 which included accrued
interest and the asset balance of $717,288, net of accumulated
DD&A, were written off.
NOTE 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 June 30, 1996 and December 31, 1995, and the
results of operations for the six months ended June 30, 1996 and
1995. All adjustments are of a normal recurring nature, except as
follows:
June 30, Dec. 31,
1996 1995
____ ____
Tulare Lakes Write-offs $299,164
Write-offs of Expired Credits $66,116
Interim financials should not necessarily be considered to be
indicative of the results of operations for the entire year.
NOTE 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.
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 six months ended June
30, 1996 totaled $76,118. This represents a decrease of
<$173,129> from the same period in 1995 and is largely the result
of revenue from the Tulare Lakes Field which was recorded as oil
and gas income in 1995 but discontinued in 1996.
Total expenses decreased ($147,740) from $296,972 at June 30,
1995 to $149,232 at June 30, 1996. Again, this decrease is the
result of operating expenses and DD&A for the Tulare Lakes Field
which were recorded in 1995 but discontinued in 1996.
Despite the reduction in earned revenue, the Company's net loss
for the six months ended June 30, 1996, was <$6,998> compared to
a loss of ($47,725) for the six months ended June 30, 1995.
Liquidity/Capital Resources
Net cash from operating activities decreased <$131,233> to
($115,656) at June 30, 1996 compared to $15,577 at June 30, 1995.
On June 2, 1995, a lawsuit was filed in Kings County, California,
against General Energy and its subsidiary, G.E.N.Y. Operations,
Inc. By Kings County Development Limited and J.G. Boswell
Company.
As a result, and to protect the corporation against ongoing legal
expenses, on March 25, 1996, the Company and its subsidiary filed
petitions for relief under Chapter 11 of the Bankruptcy Code.
The Company anticipates that cash flows will be generated from an
oil and gas project scheduled for completion in 1996, sufficient
to pay current operating liabilities.
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.
Subsequent Events
In July of 1996, the Chapter 11 Bankruptcy against General Energy
Resources and Technology Corporation was dismissed. G.E.N.Y.
Operations, Inc., a wholly owned subsidiary remained under the
protection of the Chapter 11 Bankruptcy. In August of 1996,
G.E.N.Y. Operations was sold to Penteco Corporation and venue for
the Chapter 11 Bankruptcy was removed from Michigan to Oklahoma.
The lawsuit involving General Energy and Kings County
Development, Ltd., and J.G. Boswell is on going. However, General
Energy has never been a working interest owner in the Tulare
Lakes Project which is the subject of the litigation.
<PAGE>
PART II - OTHER INFORMATION
General Energy Resources and Technology Corporation
Signatures
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized, on
the 27th day of August, 1996.
GENERAL ENERGY RESOURCES AND
TECHNOLOGY CORPORATION
By: H. TERRY SNOWDAY, JR.
_______________________________
H. Terry Snowday, Jr.
President and Director
(Principal Executive Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 22,862
<SECURITIES> 0
<RECEIVABLES> 643,244
<ALLOWANCES> 8,698
<INVENTORY> 0
<CURRENT-ASSETS> 657,470
<PP&E> 2,968,724
<DEPRECIATION> 2,641,481
<TOTAL-ASSETS> 985,763
<CURRENT-LIABILITIES> 952,672
<BONDS> 0
0
0
<COMMON> 799,187
<OTHER-SE> (823,870)
<TOTAL-LIABILITY-AND-EQUITY> 985,763
<SALES> 67,142
<TOTAL-REVENUES> 142,234
<CGS> 0
<TOTAL-COSTS> 26,823
<OTHER-EXPENSES> 122,409
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (6,998)
<INCOME-TAX> 0
<INCOME-CONTINUING> (6,998)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,998)
<EPS-PRIMARY> (0009)
<EPS-DILUTED> (0009)
</TABLE>
