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 March 31, 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 March 31,
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 . . . . . . . . . . . . . .6
Notes to Financial Statements . . . . . . . . . . .7
Item 2 Management's Discussion and Analysis of Financial
Conditions and Results of Operations. . . . . . .8
PART II - Other Information
Signatures. . . . . . . . . . . . . . . . . . . . .10
<PAGE>
PART I - FINANCIAL INFORMATION
General Energy Resources and Technology Corporation
Balance Sheets
Item 1
ASSETS
March 31, December 31,
1996 1995
(Unaudited) (Unaudited)
CURRENT ASSETS
Cash $ 9,571 $ 136,108
Accounts Receivable Trade, Less
Allowance for Doubtful Accounts
of $8,698 690,110 583,526
Prepaid Expenses 250 437
_________ _________
Total Current Assets 699,931 720,071
PROPERTY AND EQUIPMENT, AT COST
Proved Oil and Gas Properties,
Successful Efforts Method of
Accounting 2,891,901 2,891,901
Unproved Leasehold and Minerals 85,106 85,106
Drilling Contracts in Progress 12,835 12,213
_________ _________
Total Property and Equipment 2,989,842 2,989,220
Less Accumulated Depreciation,
Depletion, and Amortization 2,653,851 2,650,669
_________ _________
Net Property and Equipment 335,991 338,551
OTHER ASSETS
Investments (net of unrealized
loss of $288,950) 1,050 1,050
_________ _________
$1,036,972 $1,059,672
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current Installments of
Long-Term Debt $ 3,000 $ 3,000
Accounts Payable Trade 823,604 746,954
Joint Interest Prepayments 55,856 135,371
Other Current Liabilities 111,000 111,000
Stock Purchase Overpayments 0 25,603
_________ _________
Total Current Liabilities 993,460 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 (8,248,461) (8,251,884)
_________ _________
Total Stockholders' Equity (14,262) (17,685)
$1,036,972 $1,059,672
========= =========
See Accompanying Notes to Financial Statements
<PAGE>
General Energy Resources and Technology Corporation
Statements of Operations
Three Months Ended March 31, (Unaudited)
1996 1995
____ ____
REVENUES
Oil and Gas Sales
Working Interest $ 15,917 $ 70,468
Royalty Interest 15,753 13,504
Repromotional Income 0 472
Gain/Loss on Sale of Assets 0 (8,883)
Consulting Fees 577 15,809
Administrative Overhead 4,200 4,200
Write-off of Expired Credits 66,116 0
_________ _________
Total Revenues 102,563 95,570
COSTS AND EXPENSES
Lease and Operating Expenses 17,759 45,961
Taxes Other Than on Income 1,986 2,945
Dry Holes and Abandonments 56 905
Depreciation, Depletion and
Amortization 3,181 10,338
General and Administrative 76,158 68,131
Interest Expense 0 1,115
_________ _________
Total Expenses 99,140 129,395
_________ _________
NET INCOME (LOSS) $ 3,423 $ (33,825)
========= =========
NET INCOME (LOSS) PER WEIGHTED
AVERAGE SHARE OF COMMON STOCK $ .0004 $ (.004)
_________ _________
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 7,991,870 7,991,870
_________ _________
See Accompanying Notes to Financial Statements
<PAGE>
General Energy Resources and Technology Corporation
Statement of Cash Flows
Three Months Ended March 31, (Unaudited)
1996 1995
____ ____
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ 3,423 $ (33,825)
Adjustments to Reconcile Net
Earnings to Net Cash Provided by
Operating Activities
Depreciation, Depletion and
Amortization 3,181 10,338
Abandonments, Expired and
Surrendered Leases 0 0
(Gain)Loss on Sale of Oil and
Gas Properties 0 8,883
(Increase)Decrease in Current Assets:
Trade Accounts Receivable (106,584) 53,097
Prepaid Expenses 188 188
Increase(Decrease) in Current Liabilities:
Trade Accounts Payable 76,650 (69,441)
Joint Interest Prepayments (79,515) 114,953
Expired Credits - Stock Purchase
Overpayment (25,603) 0
_________ _________
NET CASH FROM OPERATING
ACTIVITIES (128,260) 84,193
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of Property and
Equipment (622) (1,117)
Proceeds from Sale of Oil and Gas
Property 0 693
_________ _________
NET CASH FROM INVESTING
ACTIVITIES (622) (424)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in Long-Term Debt 2,345 (11,922)
_________ _________
NET CASH FROM FINANCING
ACTIVITIES 2,345 (11,922)
_________ _________
NET INCREASE(DECREASE) IN
CASH (126,537) 71,847
CASH AT BEGINNING OF PERIOD 136,108 55,923
_________ _________
CASH AT END OF PERIOD $ 9,571 $ 127,770
========= =========
<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 c
apitalized 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 non March 31, Dec. 31,
cash transactions during the 1996 1995
periods ending March 31, 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 March 31, 1996 and December 31, 1995, and the
results of operations for the three months ended March 31, 1996
and 1995. All adjustments are of a normal recurring nature,
except as follows:
March 31, Dec. 31,
1996 1995
____ ____
Tulare Lakes Write $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 quarter ended March
31, 1996 totaled $36,447. This represents a decrease of ($59,123)
from the same quarter in 1995 and is largely the result of
revenue from the Tulare Lake Field which was recorded as oil and
gas income in 1995 but discontinued in 1996.
Total expenses decreased ($30,255) from $129,395 at March 31,
1995 to $99,140 at March 31, 1996. Again, this decrease is the
result of operating expenses and DD&A for the Tulare Lake Field
which were recorded in 1995 but discontinued in 1996.
Despite the reduction in earned revenue, the Company's net profit
for the three months ended March 31, 1996, was $3,423 compared to
a loss of ($33,825) for the three months ended March 31, 1995. A
major factor contributing to the Company's first quarter profit
was income derived from the write-off of expired credit balances
totaling $66,116.
Liquidity/Capital Resources
Net cash from operating activities decreased $212,453 to
($128,260) at March 31, 1996 compared to $84,193 at March 31,
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 a successful resolution within the
context of Chapter 11 and anticipates that cash flows will be
generated from two oil and gas project being completed 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.
<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 15th day of May, 1996.
GENERAL ENERGY RESOURCES AND
TECHNOLOGY CORPORATION
By: H. TERRY SNOWDAY, JR.
_______________________________
H. Terry Snowday, Jr.
President and Director
(Principal Executive Officer)
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<CASH> 9,571
<SECURITIES> 0
<RECEIVABLES> 698,808
<ALLOWANCES> 8,698
<INVENTORY> 0
<CURRENT-ASSETS> 699,931
<PP&E> 2,989,842
<DEPRECIATION> 2,653,851
<TOTAL-ASSETS> 1,036,972
<CURRENT-LIABILITIES> 993,460
<BONDS> 0
0
0
<COMMON> 799,187
<OTHER-SE> (813,449)
<TOTAL-LIABILITY-AND-EQUITY> 1,036,972
<SALES> 31,670
<TOTAL-REVENUES> 102,563
<CGS> 0
<TOTAL-COSTS> 19,745
<OTHER-EXPENSES> 79,395
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,423
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,423
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,423
<EPS-PRIMARY> 0004
<EPS-DILUTED> 0004
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