FORM 10-K (UNAUDITED)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Fiscal Year Ended December 31, 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.)
401 W. Front Street
Traverse City, Michigan 49684
(Address of principal executive offices)
(616) 946-1473
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on
Which registered
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK
(Title of Class)
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 by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. (X)
State the aggregate market value of the voting stock held by
nonaffiliates of the registrant. The aggregate market value shall
be computed by reference to the price at which the stock was
sold, or the average bid and asked prices of such stock, as of a
specified date within 60 days prior to the date of filing.
Common Stock, Par Value $.10 - 7,991,870 shares, as of March 1,
1996 at $.10 per share, for an aggregate market value of
$799,187.00.
The warrants previously issued, all expired on April 22, 1986.
As of March 1, 1996, there are 7,991,870 shares of Common Stock
outstanding.
<PAGE>
General Energy Resources and
Technology Corporation
Index to Form 10-K
PART I Page
Item 1 History and Business of the Company. . . . . . . 4
Description of Business of the Company . . . . . 5
Item 2 Properties . . . . . . . . . . . . . . . . . . . 7
Item 3 Legal Proceedings. . . . . . . . . . . . . . . . 9
Item 4 Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . .10
PART II
Item 5 Market for the Registrants Common Stock and
Related Security Holders Matters . . . . . . .10
Item 6 Selected Financial Data. . . . . . . . . . . . .11
Item 7 Management's Discussion and Analysis of
Financial Condition and Results of Operations.12
Item 8 Financial Statements . . . . . . . . . . . . . .14
Item 9 Disagreements on Accounting and Financial
Disclosure Matters . . . . . . . . . . . . . .33
PART III
Item 10 Directors and Executive Officers of the
Registrant . . . . . . . . . . . . . . . . . .33
Item 11 Executive Compensation . . . . . . . . . . . . .34
Item 12 Security Ownership of Certain Beneficial
Owners and Management. . . . . . . . . . . . .36
Item 13 Certain Relationships and Related Transactions .37
Signatures . . . . . . . . . . . . . . . . . . . . . . . .40
<PAGE>
PART I
ITEM 1. - HISTORY AND BUSINESS OF THE COMPANY
The Company was incorporated in Michigan in 1979 and commenced
business in 1980. Originally, the Company was formed as a passive
investor in oil and gas drilling ventures with Reef Petroleum
Corporation (RPC) which was the operator of the wells drilled.
However, in September of 1983, RPC filed a Chapter 11 Petition in
the Bankruptcy Court of the Western District of Michigan and
since then has liquidated all of its assets in a final bankruptcy
action. In 1986, the Company's involvement with RPC was
terminated.
During 1987, the Company entered into a Management Agreement with
Penteco Corporation to analyze the Company's financial position
and provide management services to the Company. The Agreement
called for an 18 month option to Penteco to purchase an
additional 1,000,000 shares at $.31 per share and a 36 month
option to purchase an additional 1,000,000 shares at $.50 per
share. In 1990, the Management Agreement was extended for a three
year period through September, 1993. Penteco has exercised part
of their option for 1,000,000 shares at $.31 per share. Effective
January 1993, the Management Agreement with Penteco Corporation
was terminated, and those responsible for management duties
became salaried employees or advisors to the Company.
In an exchange of shares in 1987, the Company purchased from
Penteco a 12% interest in the general partners portion of the
1985-A Limited Partnership (Penteco East Central Pipeline) and
from Penteco a 10% interest in Lincoln Gas and Oil Marketing
Corporation for a total price of $290,000. Penteco East Central
Pipeline is a gas gathering and transmission system located in
the area of Southern Kansas and Northern Oklahoma. In 1991,
Penteco East Central Pipeline was sold to Consolidated Capital of
North America. Penteco received, and is holding for the benefit
of the partnership, 450,000 shares of $1.00 preferred stock of
Consolidated Capital. In addition, Penteco acquired for the
partnership, a 10 percent working interest after debt service in
the Tulare Lakes Field from Chevron. Lincoln Gas and Oil
Marketing Corporation is located in Boston, Massachusetts and is
involved in the development and supply of gas to co-generation
facilities. In a restructuring of Lincoln Gas and Oil Marketing,
Penteco provided an opportunity for General Energy to increase
its holdings to 20 percent of Lincoln Gas and Oil Marketing and
also to receive a 10 percent interest in Eastern Pacific Energy
Corporation located in Los Angeles, California. During 1989 and
1992, the Company determined the value of these investments have
suffered permanent declines of $185,000 and $103,950
respectively. Consequently, these investments are now carried at
a value of $1,050.
It is the Company's intention to continue to drill or participate
in the drilling of exploratory and development wells in the
states of Michigan, Texas, Louisiana, Mississippi and Oklahoma in
an effort to develop its oil and gas reserves. In order to
facilitate this plan, the Company has purchased an interest in
various oil and gas leases.
During 1995, the Company participated in and operated a Niagaran
horizontal well in Otsego County. The well tested both oil and
gas and plans are to extend the well horizontally to further
improve the production rates. The Company has interest in several
gas wells that were hooked up in 1995 in South Texas and also
acquired and operated a Niagaran gas discovery in Grand Traverse
County which was drilled in early 1996.
DESCRIPTION OF BUSINESS OF THE COMPANY
Identification of Prospects and Prospect Acquisition
The Company will, as in the past, selectively maintain its lease
inventory on the basis of its own information, the interpretation
of the Company's seismic, geological and geophysical information
and such additional information as may be acquired. The Company
also is actively seeking and participating in exploration
projects with other companies by purchasing working interest on a
selective basis.
The following table provides information as to the expiration of
the Company's leases (assuming extension by payment of delay
rentals to the extent possible); and is intended to supply
information required pursuant to industry Guide 2 Paragraph 5.
All of the following leases are located in the state of Michigan.
Acres
Years of Expiration Gross Net
___________________ ____________________
1995 560.000 160.000
1996 332.203 200.000
1997 160.000 40.000
1998 0.000 0.000
Geology - Seismic Testing
The Company prefers, where possible, to act on the basis of
geophysical as well as geological information. A seismic survey
of the areas covered by its inventory of leases is undertaken and
evaluated. The Company's Geology Department seeks to utilize both
seismic and geological data (primarily the results from nearby
drilling) to locate geological traps which may contain
hydrocarbons.
Drilling, Completion and Operations of Producing Wells
1. During 1995, the Company participated in 1 wildcat prospect,
which was successful. The Company also participated in the
recompletion and workover of several wells in our 20 well Tulare
Lakes Field in California.
2. The rights and obligations of the Company, as operator, are
governed by a Lease Development Agreement (or, in the case of a
participation commencing with the acquisition of the lease, a
Lease Acquisition and Development Agreement) and a Standard
Operating Agreement which provides for the allocation of costs,
including specified amounts to defray the Company's
nonspecifically identifiable costs based upon the depth of the
well and other scheduled factors.
3. During 1995, the Company's Exploration Department supervised
the drilling and completion of its wells; which included downhole
completion as well as selecting the surface handling facilities
to measure and separate out water and gas from oil, providing the
connections to the gas pipelines and the storage tanks for oil
and installing meters to measure production.
Marketing
Production from the Company's royalty and working interests is
marketed by the operator of the well, generally to a major oil
company or gas utility.
In the twelve month period ending December 31, 1995, the
following purchasers accounted for more than 10 percent of the
Company's oil and gas revenues:
Chevron 49%
Shell Oil 14%
Other purchasers of the Company's oil and gas production include
Michigan Consolidated Gas, Total Petroleum, Delta Oil Company,
Petrostar Energy and Peninsular Oil and Gas.
Substantially all gas sales are made under long term contracts
with the above utilities. These contracts may relate either to
the reserves from a specified well or wells or to those to be
developed from specified acreage and generally obligate the
utility to take or pay for specified annual quantities, typically
in amounts sufficient to account for the bulk of the reserves
within ten years or less. The contracts normally extend for a
term substantially co-extensive with the life of the reserves and
provide for periodic price adjustments, which usually involve
annual or more frequent price increases on the basis of specified
percentage or dollar increments and may also involve provision
for increases or price limitations based on the prices paid to
others for natural gas or alternative fuels or those permitted
generally to be paid for natural gas pursuant to government price
regulations. The Company has no reason to believe that any of the
contracts for the sale of gas will be voided. Oil is sold under
less structured arrangements and at posted prices more
immediately responsive to market conditions.
Contracts, Accounting and Related Functions
The Company handles the following procedures concerning the
drilling of new wells: Contract negotiations, price
determinations, government compliance, including, for example,
NGPA-FERC gas well filings, maintenance of computerized records
providing ownership and revenue distribution data on a well-by-
well and owner-by-owner basis. The Company generates and
distributes monthly reports containing information as to daily
production and sales together with, in the case of working
interest owners, operating statements detailing expenses.
Employees
The Company began employing certain accounting and operations
personnel in March, 1983. The Company presently has employees in
the executive, geology and land, data processing, accounting and
operations areas. The Company will also utilize third party
contractors for needed services. None of the Company's employees
are represented by a labor union or collective bargaining agent.
Relations with the employees are good. There have been no work
stoppages associated with labor disputes or grievances.
As of January 1, 1996, there are six employees of the Company.
Competition
The Company competes with major oil companies, independent
operators and others in acquiring drilling prospects, in
contracting for oil and gas field services and equipment, in
selling oil and gas production and in securing trained personnel.
The Company is not a significant factor in the oil and gas
business even within the limited geographic area in which its
operations are conducted.
ITEM 2. - PROPERTIES
Oil and Gas Reserves
The Company has not filed estimates of its oil and gas reserves
with any Federal Agency other than the Securities and Exchange
Commission. The reserve information set forth in this section has
been compiled from estimates made by the independent engineering
firm of K&A Energy Consultants, Inc., Tulsa, Oklahoma in a report
dated January 1, 1992 (and updated January 1, 1996 internally) on
an unescalated basis for the Companies most productive 16 wells
and from the independent engineering firm of Evan, Carey and
Crozier, Bakersfield, California in a report dated July 24, 1989
and revised August 1, 1993 by Basim Ziara, Petroleum Engineering
Consultants for the companies production purchase and operations
in California. The remaining reserve figures are from a report
dated January 1, 1988 and revised January 1, 1996 internally
based on 1988 through 1995 production history changes, if any,
and the acquisition and sale of production properties. The
Company removed all reserve estimates from the Tulare Lakes Field
in California and added reserves for the St. Dover & House #1-33A
well in Otsego County, Michigan.
Reserve Category - Net to the Appraised Interest
Interest Oil Gas Future Net Present Worth
Cond. (Mcf) Cash Flow Discounted at
(Bbls) 10 Percent
_________________________________________________________________
Proved Developed
Producing Totals n/a n/a n/a n/a
Oil and Gas Production
The Company's net oil and gas production, constituting its share
of production from its working and royalty interests for the
years ended December 31, 1995, 1994 and 1993 are set forth in the
table below:
1995 1994 1993
____ ____ ____
Oil (Bbls) 11,920 16,634 22,736
Gas (Mcf) 63,342 65,034 65,839
- --All of the Interests and Reserves of the Company are located
within Michigan, with the exception of three fields.
Prices and Costs
The following tables set forth the average sales price per unit
and average lifting cost with respect to the Company's production
of oil and gas for the past three years.
Average sales
Price per unit
1995 1994 1993
____ ____ ____
Oil (Per Bbl) 16.73 14.40 16.76
Gas (Per Mcf) 1.97 2.37 2.78
The price per barrel of oil as of March 31, 1996, is $20.50 and
the price per mcf of gas as of the same date ranges from $2.00 to
$3.50 per mcf.
Average lifting cost
(Oil & Gas Combined)
1995 1994 1993
____ ____ ____
12.24 9.06 9.44
Lifting costs include monthly operating charges and operating
expenses but, do not include severance or windfall profit taxes.
Average lifting cost per sales dollar was $.82
Gross Net Exploratory Wells Net Development Wells
_____ _____________________ _____________________
Year Wells Oil Gas Dry Oil Gas Dry
____ _____ ___ ___ ___ ___ ___ ___
1991 9 .0400 ---- .0450 .00475 .0812 .0200
1992 10 .0400 ---- .3250 .08000 .0812 ----
1993 5 ---- .0400 .0200 ---- ---- ----
1994 10 ---- .0050 .0600 ---- ---- ----
1995 1 .1500 ---- ---- ---- ---- ----
From inception through January 1, 1996, the total gross wells (a
well in which a working interest is owned) in which the Company
has an interest is 27 and the total net productive wells (the
fractional ownership working interests in gross wells equal to
one) is 1.49.
As of January 1, 1996, the total gross developed acres (acres
spaced or assignable to productive wells) is 7,720.
All working interests and acreage is located within the United
States of America.
The Company's total working interest reserves developed during
1995 are as follows:
Total Reserves
Wells Drilled Developed
______________________ ______________________
Total Successful Dry Disposal Well Oil (Bbls) Gas (Mcf)
_____ _________ ___ _____________ __________ _________
1 1 0 0 24,000 0
ITEM 3. - LEGAL PROCEEDINGS
On June 2, 1995, a lawsuit was filed in the Superior Court of the
State of California for the County of Kings by Kings County
Development Limited, a California Limited Partnership and J.G.
Boswell Company, a California corporation as Plaintiffs. This
lawsuit is due to a prior dispute between Chevron U.S.A., the
previous owner of the field, and the royalty and land owners and
was filed against numerous defendants including General Energy
Resources and Technology Corporation and G.E.N.Y. Operations
Inc., its subsidiary.
The cost of legal defense involving this lawsuit would have been
greater than the Company could bear. In addition, General Energy
does not have a working interest in the wells and was not a party
to the contract with Chevron. The judge in California has left
open the future option to consider a malicious prosecution action
against the Plaintiffs with regard to the cause of action against
General Energy.
Upon recommendation of legal counsel, on March 25, 1996, General
Energy and G.E.N.Y. Operations filed petitions for protection
under Chapter 11 of the Bankruptcy Code.
To date, all attempts to negotiate a settlement with the
California group have been unsuccessful. We hope that a
settlement can be reached in the context of these Chapter 11s and
are diligently working toward that conclusion.
ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The registrant did not submit any matters for a vote of security
holders during the fourth quarter of 1995 through the
solicitation of proxies or otherwise.
PART II
ITEM 5. - MARKET FOR THE REGISTRANTS COMMON STOCK
AND RELATED SECURITY HOLDERS MATTERS
As of March 1, 1996, there are 7,991,870 shares of the Company's
Common Stock outstanding. The Company has registered the Common
Stock under Section 15(d) of the Securities and Exchange Act of
1934. All warrants to purchase common shares expired on April 22,
1986 and there are no longer any warrants outstanding.
The stock is principally traded on the over-the-counter market.
The high and low sales prices for the Company's Common Stock, for
the following periods were:
Common Stock Common Stock
1995 Bid Asked 1994 Bid Asked
____ ____________ ____ ____________
December 31 1/16 1/4 December 31 1/16 1/4
September 30 1/16 1/4 September 30 1/16 1/4
June 30 1/16 1/4 June 30 1/16 1/4
March 31 1/16 1/4 March 31 1/16 1/4
The number of holders of record of the Common Stock as of March
1, 1996 totaled approximately 1,000. No dividends, either cash or
stock, have been declared as of December 31, 1995, and there is
no present intention on the part of the Company to declare
dividends in the foreseeable future.
<PAGE>
<TABLE>
ITEM 6. - SELECTED FINANCIAL DATA
<CAPTION>
Years Ended December 31,
1995 1994 1993 1992 1991
____ ____ ____ ____ ____
<S> <C> <C> <C> <C> <C>
Revenues $ 753,294 $ 460,618 $ 556,550 $ 682,724 $ 618,991
Net profit (loss) before
extraordinary items $ 191,588 ($ 146,250) ($ 467,877) ($ 232,198) $ 54,274
Net profit (loss) per
share before
extraordinary items $ .02 ($ .018) ($ .059) ($ .029) $ .006
Net profit (loss) from
operations $ 191,588 ($ 146,250) ($ 467,877) ($ 232,198) $ 54,274
Net profit (loss) per
share $ .02 ($ .018) ($ .059) ($ .029) $ .007
Total assets $1,059,672 $1,517,349 $1,310,805 $1,585,195 $2,080,393
Current portion of
long-term debt $ 3,000 $ 54,749 $ 147,200 $ 36,000 $ 396,000
Long-term debt $ 54,923 $ 951,750 $ 918,703 $ 941,359 $ 969,994
Stockholders' equity ($ 17,685) ($ 209,273) ($ 63,023) $ 384,854 $ 446,512
</TABLE>
<PAGE>
ITEM 7. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity/Capital Resources
Net cash from operating activities for the Company as of the
three most recent year-ends is as follows:
1995 1994 1993
____ ____ ____
Cash Flows 333,180 (89,695) (88,643)
The Company has generated cash flow from operations, bank
borrowings and the funds derived from its initial public offering
in 1981, which yielded $3.7 million. Private sales from stock and
the exercise of options have provided additional working capital.
In June 1989, one of the Company's major trade creditors,
Mosbacher Energy Company (MEC), filed an operator's lien against
various properties in which the Company owns a working interest
and for which the Company owed MEC operating expenses. The liens
resulted in the curtailment of revenue from these properties. A
repayment plan was negotiated and on June 1, 1990, the Company
signed a $292,814 promissory note with 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. The terms of the agreement call for a monthly
payment to Mosbacher Energy Company of the lesser of $20,000 or
one months production of the secured properties.
In August of 1991, the Company borrowed $350,000 from Huntington
Banks of Michigan. The note was secured by the personal
guarantees of H. Terry Snowday and Edgar R. Puthuff, directors of
the Company. Interest was payable monthly at one percent over the
bank prime rate.
Proceeds from this note were loaned to American Barter Petroleum,
Inc. to be used in a production property purchase in California.
Interest is due at one percent over prime and principal is paid
back out of production according to a predetermined schedule. In
exchange for this loan, the Company received a 25 percent
interest in net revenue.
Both notes were paid in full in October, 1992.
In 1991, the Company recorded approximately $875,500 of long-term
debt on the Tulare Lakes Field. This represents a 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% interest
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.
The Company has been able to satisfy its long-term debt
commitments. The balance of accounts payable however, has
increased to $692,031 at December 31, 1995 compared to $434,937
at December 31, 1994. A large portion of the accounts payable are
for services provided by companies that have been very tolerant
regarding timing of payment for these services.
The monthly operating cost for direct obligations for rent of the
Company's office space will be $775.00. Management is aware that
it has limited capital resources available with which to continue
a lease acquisition/exploration program. Evaluation of various
investment alternatives will continue to be made on a case-by-
case and/or well-by-well basis, and commitments will be made as
funds permit.
Management believes cash flow from the sale of its currently
producing oil and gas properties as well as the two projects
being completed in 1996, should be sufficient to pay current
operating liabilities and to amortize the current portion of the
long-term debt.
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.
The price that the Company received for oil during 1995 ranged
from $15.26 to $18.75. The posted price for crude oil is at
$20.50 per barrel as of March 31, 1996. There is uncertainty as
to the price of oil over the next twelve months.
While the sale of gas remains subject to NGPA regulated pricing
policies, it is recognized that certain concessions must be made
as to contractual pricing to insure that the Company's gas
reserves remain a competitive alternative fuel.
Results of Operations
_____________________
Revenues
Oil and gas sales
Working interest $ 277,027 $ 333,805 $ 412,239
Royalty interest 57,007 71,268 91,108
Gain (loss) on sale of
turnkey working interests
and oil properties 29,456 31,970 22,808
Repromotional income 5,739 1,743 14,321
Consulting income 59,198 0 0
Administrative overhead 25,700 21,000 10,500
Gain on write-off 299,164 0 0
Other income 3 832 5,574
_________ _________ _________
Total Revenues 753,294 460,618 556,550
Net Earnings (loss) $ 191,588 $ (146,250) $ (467,877)
========= ========= =========
The Company's total revenues increased $292,676 from $460,618 at
December 31, 1994 to $753,294 at December 31, 1995 and the
Company's operating loss decreased $337,838 from $(146,250) at
December 31, 1994 to $191,588 at December 31, 1995.
A major factor contributing to the Company's year end earnings
was a gain of $299,164 resulting from the write-off of a
producing oil and gas property and its liability.
The cost incurred in oil and gas property acquisitions,
exploration and development activities for the year ended
December 31, 1995 totaled $29,117 and capitalized costs related
to oil and gas producing activities as of December 31, 1995
totaled $338,551 as compared to $42,111 and $1,087,239
respectively in 1994.
ITEM 8. - FINANCIAL STATEMENTS
Index to Financial Statements
Consolidated Balance Sheets. . . . . . . . . . . . . . 15
Consolidated Statements of Operations. . . . . . . . . . 17
Consolidated Statements of Cash Flows. . . . . . . . . . 19
Consolidated Statements of Stockholders' Equity. . . . . 21
Notes to Consolidated Financial Statements . . . . . . . 22
Supplemental Schedules . . . . . . . . . . . . . . . . . 31
<PAGE>
General Energy Resources and Technology Corporation
and Subsidiary
Consolidated Balance Sheets, December 31, 1995 and 1994
ASSETS
1995 1994
____ ____
CURRENT ASSETS
Cash $ 136,108 $ 55,923
Accounts Receivable Trade 592,224 381,522
Less Allowance for Doubtful Accounts (8,698) (8,698)
Prepaid Expenses 437 313
_________ _________
Total Current Assets 720,071 429,060
PROPERTY AND EQUIPMENT, AT COST
Proved Oil and Gas Properties,
Successful Efforts Method of
Accounting 2,891,901 3,724,331
Unproved Leasehold and Minerals 85,106 85,106
Drilling Contracts in Progress 12,213 11,253
_________ _________
2,989,220 3,820,690
Less Accumulated Depreciation,
Depletion, and Amortization 2,650,669 2,733,451
_________ _________
Net Property and Equipment 338,551 1,087,239
OTHER ASSETS
Investments (net of unrealized
loss of $288,950) 1,050 1,050
_________ _________
$1,059,672 $1,517,349
========= =========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Current Portion Long-Term Debt $ 3,000 $ 54,749
Account Payable Trade 692,031 434,937
Notes Payable 111,000 111,000
Joint Interest Prepayment 135,371 108,583
Salaries Payable 54,923 40,000
Stock Options Payable 25,603 25,603
_________ _________
Total Current Liabilities 1,021,928 774,872
LONG-TERM DEBT 55,429 951,750
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 (8,251,884) (8,443,472)
_________ _________
Total Stockholders' Equity (17,685) (209,273)
========= =========
Total Liabilities and
Stockholders' Equity $1,059,672 $1,517,349
========= =========
See Accompanying Notes to Financial Statements
<PAGE>
General Energy Resources and Technology Corporation
and Subsidiary
Consolidated Statements of Operations
For the Years Ending December 31, 1995, 1994 and 1993
1995 1994 1993
____ ____ ____
REVENUES
Oil and Gas Sales
Working Interest $ 277,027 $ 333,805 $ 412,239
Royalty Interest 57,007 71,268 91,108
Gain(Loss) on Turnkey
Working Interests and
Oil Properties 29,456 31,970 22,808
Promotional Income 5,739 1,743 14,321
Consulting Income 59,198 0 0
Administrative Overhead 25,700 21,000 10,500
Gain on write-off 299,164 0 0
Other Income 3 832 5,574
_________ _________ _________
Total Revenues 753,294 460,618 556,550
COSTS AND EXPENSES
Lease and Operating
Expenses 275,189 248,987 318,290
Taxes Other Than Income 10,634 11,782 17,432
Dry Holes and
Abandonments 929 24,312 326,372
Depreciation, Depletion
And Amortization 41,175 45,515 60,853
General and
Administrative 229,568 191,612 189,948
Interest Expense, Net of
Capitalized Interest 4,211 84,660 111,532
_________ _________ _________
Total Costs and
Expenses 561,706 606,868 1,024,427
_________ _________ _________
NET EARNINGS (LOSS)
BEFORE TAXES 191,588 (146,250) (467,877)
CURRENT INCOME TAXES 0 0 0
_________ _________ _________
NET EARNINGS (LOSS) $ 191,588 $ (146,250) $ (467,877)
========= ========= =========
Per Share of Common Stock,
Weighted Average Method
Income Before
Extraordinary Items $ .02 $ (.018) $ (.059)
========= ========= =========
Net Income $ .02 $ (.018) $ (.059)
========= ========= =========
Weighted Average Number of
Shares Outstanding 7,991,870 7,991,870 7,925,203
========= ========= =========
See Accompanying Notes to Financial Statements
<PAGE>
General Energy Resources and Technology Corporation
and Subsidiary
Consolidated Statements of Cash Flows
For the Years Ending December 31, 1995, 1994 and 1993
1995 1994 1993
____ ____ ____
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ 191,588 $ (146,250) $ (467,877)
Adjustments to Reconcile
Net Earnings to Net
Cash Provided by
Operating Activities
Depreciation, Depletion
and Amortization 41,175 45,515 60,853
Abandonments, Expired and
Surrendered Leases 3,555 36,175 364,905
(Gain)Loss on Sale of
Turnkey Working Interest
and Oil and Gas
Properties 8,883 0 (11,918)
Permanent Decline in
Valuation of Investment 0 0 0
(Increase)Decrease in
Current Assets:
Trade Accounts
Receivable (210,702) (228,875) (109,873)
Prepaid Expenses (124) 125 1,324
Increase(Decrease) in
Current Liabilities:
Trade Accounts Payable 257,094 163,615 73,943
Salaries Payable 14,923 40,000 0
Joint Interest
Prepayments 26,788 0 0
_________ _________ _________
NET CASH FROM OPERATING
ACTIVITIES 333,180 (89,695) (88,643)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of Property
and Equipment (22,907) (15,714) (31,506)
Proceeds from Sale of
Property and Equipment 694 0 10,000
Write-off of Oil & Gas
Property 717,288 0 0
_________ _________ _________
NET CASH FROM INVESTING
ACTIVITIES 695,075 (15,714) (21,506)
CASH FLOWS FROM FINANCING ACTIVITIES
Acquisition of
Short-Term Debt 0 100,000 11,000
Acquisition of Long-
Term Debt 0 78,091 181,293
Reduction of Long-Term
Debt (39,660) (57,495) (92,749)
Write-off of Long-Term
debt (908,410) 0 0
Proceeds from Issuance
of Stock 0 0 20,000
_________ _________ _________
NET CASH FROM FINANCING
ACTIVITIES (948,070) 120,596 119,544
_________ _________ _________
NET INCREASE(DECREASE)
IN CASH 80,185 15,187 9,395
CASH AT BEGINNING OF PERIOD 55,923 40,736 31,341
_________ _________ _________
CASH AT END OF PERIOD $ 136,108 $ 55,923 $ 40,736
========= ========= =========
See Accompanying Notes to Financial Statements
<PAGE>
<TABLE>
General Energy Resources and Technology Corporation
and Subsidiary
Consolidated Statements of Stockholders' Equity
For the Years Ending December 31, 1995, 1994 and 1993
<CAPTION>
Additional Retained Total
Common Paid-in Earnings Treasury Stockholder
Stock Capital (Deficit) Stock Equity
________ _________ ___________ ________ ________
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1993 $ 779,187 $7,435,012 $(7,829,345) $ 0 $ 384,854
Net Earnings(Loss) for the
Year 0 0 (467,877) 0 (467,877)
Issue of Stock 20,000 0 0 0 20,000
________ _________ __________ _______ ________
Balance at December 31, 1993 799,187 7,435,012 (8,297,222) 0 (63,023)
Net Earnings(Loss) for the
Year 0 0 (146,250) 0 (146,250)
Issue of Stock 0 0 0 0 0
________ _________ __________ _______ ________
Balance at December 31, 1994 799,187 7,435,012 (8,443,472) 0 (209,273)
Net Earnings(Loss) for the
Year 0 0 191,588 0 191,588
Issue of Stock 0 0 0 0 0
________ _________ __________ _______ ________
Balance at December 31, 1995 $ 799,187 $7,435,012 $(8,251,884) $ 0 $ (17,685)
======== ========= ========== ======= ========
Common Stock Outstanding December 31, 1994 7,991,870 Shares
Common Stock Issued during 1994 0 Shares
Common Stock Outstanding December 31, 1995 7,991,870 Shares
See Accompanying Notes to Financial Statements
/TABLE
<PAGE>
General Energy Resources and Technology Corporation
and Subsidiary
Consolidated Notes to Financial Statements
December 31, 1995, 1994 and 1993
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Consolidated Statements
The consolidated financial statements include the accounts of
General Energy Resources and Technology Corporation (a Michigan
Corporation) and its wholly owned subsidiary, G.E.N.Y.
Operations, Inc. (a California Corporation) which was formed in
1993. All significant intercompany balances and transactions have
been eliminated in consolidation.
Oil & Gas 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 non-producing 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.
Statement of Cash Flows
For purposes of the statement of cash flows, the Company
considers all highly liquid investment instruments purchased with
an original maturity of three months or less to be cash
equivalents.
No income taxes have been paid during 1995, 1994, or 1993.
Interest paid (net of amounts capitalized) amounted to $4,211
during 1995, $84,660 during 1994 and $111,532 for 1993.
Earnings Per Share
Earnings per share is based on the weighted average number of
shares outstanding. Common stock equivalents (stock options and
warrants) were antidilutive in 1995, 1994 and 1993.
NOTE 2
BUSINESS OPERATIONS, SIGNIFICANT CUSTOMERS, AND CREDIT RISK
General Energy Resources and Technology Corporation (the
"Company", formerly Reef Energy Corporation) was incorporated
under the laws of the State of Michigan in June, 1979 for the
purpose of investing in oil and gas exploration and production.
Effective June 1987, the Board of Directors and stockholders
changed the name of the Company to General Energy Resources and
Technology Corporation. The Company and its predecessors have
been engaged in the exploration, development and production of
oil and gas. The operations are conducted entirely within the
United States.
The Company created a wholly owned subsidiary, G.E.N.Y.
Operations, Inc. in 1993 to function as the operator for the
Tulare Lakes Field in Kings County, California. As operator, all
revenues and expenses are passed on to the working interest
owners, and the subsidiary therefore, shows no profit or loss. At
December 31, 1995, total assets and liabilities were $461,838 and
$451,838 respectively.
During 1995, sales to two major customers accounted for 49 and 14
percent of total revenues. During 1994, sales to three major
customers accounted for 50, 15 and 10 percent of total revenues.
During 1993, sales to three major customers accounted for 45, 17
and 11 percent of total revenues.
NOTE 3
INVESTMENTS
In 1987, the Company purchased from Penteco Corporation (a
related party), a 12% interest (3.36% overall interest) in the
general partner's portion of the Penteco East Central pipeline
1985-A limited partnership and a 10% interest in Lincoln Gas &
Oil Marketing Corporation in exchange for Company stock valued at
a total price of $290,000. Penteco East Central Pipeline was
initially a gas gathering and transmission system located in the
area of Southern Kansas and Northern Oklahoma. Lincoln Gas and
Oil Marketing Corporation is located in Boston, Massachusetts and
is involved in the development and supply of gas to cogeneration
facilities.
During 1989 and 1992, the Company determined the value of these
investments have suffered permanent declines of $185,000 and
$103,950 respectively. Consequently, these investments are now
carried by management at a value of $1,050.
NOTE 4
NOTES PAYABLE
Unsecured loan payable to a related party shareholder. This
represents money loaned to G.E.N.Y. Operations in 1993 to cover
Society Bank loan payments which were left unpaid by the prior
operator of the Tulare Lakes Field. This loan is non interest
bearing and is expected to be paid off in 1996. Also, the Company
signed a line of credit with Society Bank. It is personally
guaranteed by several of the directors. Interest is being charged
at 2% above the prime rate. The note is due May, 1996.
12/31/95 12/31/94
_________ _________
Note payable Calvert $ 11,000 $ 11,000
Note payable Society Bank 100,000 100,000
_________ _________
$ 111,000 $ 111,000
========= =========
NOTE 5
LONG-TERM DEBT
Long-term debt consisted of:
12/31/95 12/31/94
_________ _________
Note payable Mosbacher $ 58,429 $ 61,514
Tulare Lakes liability 0 944,985
_________ _________
58,429 1,006,499
Less Current portion (3,000) (54,749)
_________ _________
$ 55,429 951,750
========= =========
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 a 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.
In 1993, the Company recorded, through their subsidiary G.E.N.Y.
Operations, $100,000 of long-term debt with Society Bank. The
debt was paid in monthly increments of $10,000 and fully paid
within 1994.
NOTE 6
NON CASH TRANSACTIONS
1995 1994 1993
____ ____ ____
Tulare Lakes Write-off $299,164 $ 0 $ 0
NOTE 7
RELATED PARTIES
The Company recorded approximately $18,000 and $28,000 in
management fees during 1992 and 1991 respectively to Penteco. The
management fees were for preparation of a business plan and
ongoing management throughout the year in accordance with the
management agreement dated March 13, 1987, between the Company
and Penteco. As of December 31, 1995, the Company has a liability
to Penteco of $13,262 for management fees and out-of-pocket
costs. The Company and Penteco have mutual directors. As of
January 1, 1993, the agreement expired.
As of January 1, 1993, Terry Snowday is to receive an annual
salary of $20,000, and Charles Taylor is to receive an annual
consulting fee of $10,000. At December 31, 1995, amounts accrued
but not paid to Snowday and Taylor are $54,923 and $20,000
respectfully. As of January 1, 1995, Charles Taylor resigned as
consultant to General Energy.
As discussed in Notes 2 and 3, Company stock was exchanged with
Penteco in 1987 for investments in Penteco East Pipeline and
Lincoln Gas & Oil Marketing Corporation. Penteco is the general
partner in Penteco East Pipeline. Penteco and Lincoln Gas and Oil
have mutual directors.
The Company received an interest in the general partner's
interest of Penteco East Pipeline. However, the Company does not
receive a K-1 for this investment even though the partnership has
been active and has had income. It is the understanding of
management that the Company is not a general partner even though
they purchased a portion of the general partners interest. There
is no written agreement explaining how profits, losses,
distributions, liabilities, etc. are to be divided regarding the
Company's interest in the general partner's interest.
In 1991, the Company loaned $350,000 to American Barter. American
Barter agreed to repay this loan, with interest at the Company's
borrowing rate and to assign a 25% working interest in the Tulare
Lakes Field. The Tulare Lakes Field was purchased from Chevron by
Penteco and American Barter in 1991. The Agreement between
Chevron and Penteco and American Barter states that the note owed
to Chevron will be repaid from production from the Tulare Lakes
Field. If production does not cover debt payments, General Energy
is not liable to Chevron or other third parties. The Company
booked 25% of the purchase price as proved oil and gas
properties, approximately $875,900. The Company also recorded 25%
of the liabilities for Penteco and American Barter's purchase of
the fields along with 25% of American Barter's $350,000 debt to
General Energy, borrowed for costs of revitalizing the field.
During 1992 and 1993, additional debt has been recorded for
Society Bank loans used to pay off the original $350,000, and for
operating expenses and accrued interest. In 1993, the Company
sold a 1% interest to Richard Calvert, a company shareholder, for
$10,000. As of December 31, 1995, management determined the
Company's 25% interest to be misrepresented on the Financial
Statements and the asset and related liability were written off.
During 1992, the Company repurchased a 5% interest in the
Fons-Jacob well from a Company director in exchange for 504,015
shares of restricted stock issued at $.20 per share. This well
was plugged & abandoned in 1993.
During 1993, the Company sold 200,000 shares of restricted stock
to Company shareholders at $.10 per share. One of these
shareholders also loaned $11,000 to the Company through its
subsidiary, which is expected to be repaid in 1996.
The Company sold working interests to several major shareholders
and directors during 1995. Accounts receivable from these related
parties totaled $50,094 at December 31, 1995, while related party
accounts payable amounted to $7,476. No interest has been accrued
on any of the above amounts.
NOTE 8
STOCK OPTION AGREEMENT
The Company had a outstanding Stock Option Agreement with an
employee to purchase 100,000 shares of General Energy stock for
$.25 per share. This Agreement expired on January 5, 1993.
Amounts owed to the officers and directors for excess payments
for stock options amount to $25,603 and are included in current
liabilities.
NOTE 9
CONTINGENCIES AND COMMITMENTS
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.
In the normal course of business, the Company makes various
commitments and incurs certain contingent liabilities that are
not presented in the accompanying financial statements. The
Company does not anticipate any losses as a result of these
commitments and contingent liabilities.
The Company, through its subsidiary G.E.N.Y. Operations, Inc., is
the operator of that certain oil and gas project located in Kings
County, California, commonly known as the Tulare Lakes Field
("Project"). The Company is the successor operator to American
Barter Petroleum/ABO Oil Company who, following litigation, was
removed as operator ("Prior Operator"). During the course of its
operations of the Project, prior operator caused or incurred,
certain obligations in an aggregate amount currently unknown, but
which resulted in the recordation of at least three oil and gas
liens affecting the project. These claims appear to have only an
indirect affect on the Company as predecessor operator through
its subsidiary, as amounts unpaid by prior operator are expected
to be withheld from future revenue. Therefore, no potential
liability has been recorded on the Company's books.
Several of the joint working interest owners in the Tulare Lakes
Project are contesting the amounts shown on the Company's books
as being owed by them. Management maintains that all amounts due
are valid and has initiated legal action to collect these amounts
due. These contested amounts do not appear to have a direct
material affect to the Company because most amounts unpaid are
expected to be withheld from their future share of revenue as
working interest owners. Therefore, no potential liability has
been recorded on the Company's books.
NOTE 10
LEASE COMMITMENTS
The Company entered into a 24 month Lease Agreement for it's
office facilities on February 1, 1996. This lease requires
payments of $775 per month.
NOTE 11
SUBSEQUENT EVENTS
The Company continues to have a working capital deficit and
declining cash flows from existing oil and gas operations. The
Company anticipates that cash flows will be generated in 1996
from two new projects being completed in 1996 in which the
Company retains a total 31.25% working interest.
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 if it can negotiate a settlement with the Plaintiff.
NOTE 12
OIL AND GAS ACTIVITIES
The following is a summary of certain financial information
(including cost, both capitalized and expenses) with respect to
the Company's oil and gas activities, all of which are located in
the United States:
Costs Incurred in Oil and Gas Property
Acquisition, Exploration and Development Activities
Years Ended December 31,
1995 1994 1993
____ ____ ____
Acquisition of unproved
properties $ 0 $ 0 $ 0
========= ========= =========
Exploration and development
costs $ 29,117 $ 42,111 $ 373,703
========= ========= =========
Results of Operations for Producing Activities
Sales $ 334,034 $ 405,073 $ 503,347
Production costs 285,823 260,271 335,292
Exploration costs 929 24,419 326,421
Depreciation, depletion and
amortization 41,175 45,515 60,853
_________ _________ _________
327,927 735,728 722,566
_________ _________ _________
Results of Operations from
producing activities
(excluding corporate over-
head and interest costs) $ 6,107 $ (330,205) $ (219,219)
========= ========= =========
NOTE 13
"SUPPLEMENTAL" OIL AND GAS RESERVES INFORMATION (UNAUDITED)
The following tables present the Company's estimate of its proved
oil and gas reserves and future net cash flows. The Company
emphasizes that reserve and related future net cash flow
estimates are inherently imprecise and that estimates of new
discoveries are more imprecise than those of producing oil and
gas properties. Accordingly, the estimates are expected to change
as future information becomes available. The Company has received
reports from independent petroleum reservoir engineers for a
portion of their reserves through January 2, 1992. The Company's
staff geologist along with K&A Energy Consultants and Evan, Carey
and Crozier Engineering, has updated these reserve estimates
through December 1991. All estimates for December 1993, 1994 and
1995 have been updated by the Company's staff geologist without
the assistance of independent petroleum engineers. The Company
has prepared the following tables to comply with the applicable
provisions of the Securities and Exchange Commission's disclosure
regulations. Estimated net quantities of proved developed oil and
gas reserves attributable to working interests for the years
ended December 31, 1995, 1994 and 1993 are as follows (all
reserves are located in the United States):
Oil (Bbls) Gas (Mcf)
__________ _________
Proved developed reserves as
of December 31, 1992 432,798 829,847
New discoveries and extensions 7,250 152,500
Production (49,119) (128,686)
Revision of previous estimates (81,990) 799,375
Sale of Reserves (2,506) (9,210)
_________ _________
Proved developed reserves as
of December 31, 1993 306,433 1,643,826
New discoveries and extensions 0 62,000
Production (14,250) (59,346)
Revision of previous estimates (1,700) (31,000)
Sale of Reserves 0 0
_________ _________
Proved developed reserves as
of December 31, 1994 290,483 1,615,480
New discoveries and extensions 22,500 0
Production (11,920) (63,342)
Revision of previous estimates (6,000) (120,000)
Sale of Reserves 0 0
_________ _________
Proved developed reserves as
of December 31, 1995 295,063 1,432,138
The above amounts represent proved developed reserves. The
Company does not estimate proved undeveloped reserves,
accordingly, the reserve amounts do not include undeveloped
reserves.
The Company's estimates of the standardized measure of discounted
future net cash flows are as follows:
1995 1994 1993
____ ____ ____
Future cash inflows n/a $9,534,176 $9,936,886
Future production and
development costs n/a 4,333,716 4,441,096
_________ _________ _________
Future net cash flows 5,200,460 6,495,790
10 percent annual discount
for estimated timing of
cash flows n/a 1,426,720 1,511,342
_________ _________ _________
Standardized measure of
discounted future net
cash flows n/a $3,773,740 $3,984,448
========= ========= =========
The price per barrel of oil as of March 31, 1994 was $13.50 and
the price per Mcf of gas as of the same date ranged from $2.16 to
$3.49. The price per barrel as of March 31, 1995 was $17.25 and
the price per Mcf of gas as of the same date ranged from $2.00 to
$2.79 per Mcf. The price per barrel as of March 31, 1996 was
$20.50 and the price for gas as of the same date ranged from
$2.00 to $3.50 per Mcf.
Sources of Changes in the Standardized Measure
of Discounted Future Net Cash Flows
1995 1994 1993
____ ____ ____
Beginning of period $3,647,961 $3,984,448 $3,815,908
Sales of oil and gas
produced, net of
production costs (324,205) (393,962) (306,521)
Net changes in prices,
production costs and
reserve estimates (482,000) (116,125) (97,809)
Sale of reserves 0 0 (9,190)
Extensions, discoveries
and improved recovery,
less related costs 480,000 173,600 582,060
_________ _________ _________
End of period $3,321,756 $3,647,961 $3,984,448
========= ========= =========
<PAGE>
Schedule V
Property and Equipment
Balance at Retirements Balance
Beginning Additions Adjustments at End
of Period at Cost and Sales of Period
_________ _________ _________ _________
Year end 12/31/93
Proved oil and gas
properties $4,544,407 $ 875,922 $1,590,015 $3,830,314
Unproved leasehold
and minerals 85,007 0 0 85,007
_________ _________ _________ _________
$4,629,414 $ 875,922 $1,590,015 $3,915,321
========= ========= ========= =========
Year end 12/31/94
Proved oil and gas
properties $3,830,314 $ 32,374 $ 138,357 $3,724,331
Unproved leasehold
and minerals 85,007 99 0 85,106
_________ _________ _________ _________
$3,915,321 $ 32,473 $ 138,357 $3,809,437
========= ========= ========= =========
Year end 12/31/95
Proved oil and gas
properties $3,724,331 $ 18,391 $ 850,821 $2,891,901
Unproved leasehold
and minerals 85,106 0 0 85,106
_________ _________ _________ _________
$3,809,437 $ 18,391 $ 850,821 $2,977,007
========= ========= ========= =========
Schedule VI
Accumulated Depreciation, Depletion, Amortization and
Valuation Allowances of Property and Equipment
Balance at Charged to Retirements Balance
Beginning Cost and Adjustments at End
Of Period Expenses and Sales of Period
_________ _________ _________ _________
Proved oil and gas
properties
Year end 12/31/93 $3,129,164 $ 60,853 $ 368,236 $2,821,781
========= ========= ========= =========
Year end 12/31/94 $2,821,781 $ 45,515 $ 133,845 $2,733,451
========= ========= ========= =========
Year end 12/31/95 $2,733,451 $ 41,175 $ 123,957 $2,650,669
========= ========= ========= =========
<PAGE>
Schedule VIII
Valuation and Qualifying Accounts
Balance at Collections Balance
Allowance for Beginning and at End
Doubtful Accounts of Period Additions Write offs of Period
_________________ _________ _________ __________ _________
Year end 12/31/93 $ 8,698 $ 0 $ 0 $ 8,698
Year end 12/31/94 $ 8,698 $ 0 $ 0 $ 8,698
Year end 12/31/95 $ 8,698 $ 0 $ 0 $ 8,698
Schedule X
Supplementary Income Statement Information
Charges to Costs and Expenses
Item 1995 1994 1993
____ ____ ____ ____
Maintenance and repairs n/a n/a n/a
Depreciation of Intangible
Assets 35,894 17,359 19,782
Property taxes n/a n/a n/a
Royalties n/a n/a n/a
Advertising n/a n/a n/a
Only amounts which exceed 1% of total sales and revenues are
required in this schedule.
<PAGE>
ITEM 9. - DISAGREEMENTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE MATTERS
There are no disagreements with the independent accountants on
accounting and financial disclosure matters.
PART III
ITEM 10. - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Directors and Officers
The positions held by each director and officer of the Company
are shown in the following table:
Positions and Offices
Name Age With the Company
____ ___ ________________
H. Terry Snowday, Jr. 61 Chairman of the Board and
President, Chief Executive
Officer and Director
Rosalie A. Newman 44 Chief Financial Officer and
Treasurer
Leslie L. Guernsey 40 Secretary
Edgar R. Puthuff 61 Director
John G. Ross 60 Director
Charles W. Taylor 57 Director
Edward A. Ward 62 Director
Officers may be removed, with or without cause, by a vote of a
majority of all directors.
Directors are elected at the annual meeting of shareholders and
serve a one year term. Vacancies and new positions which occur
between annual stockholders' meetings are filled by remaining
directors.
H. Terry Snowday, Jr., an original investor and director was
Executive Vice President of the Company from 1979 until November,
1985. From January, 1986 to January, 1987, he was Vice President
of Penteco Corporation of Tulsa, Oklahoma. He became President
and Chief Executive Officer of General Energy Resources and
Technology Corporation on January 20, 1987.
Rosalie A. Newman, Chief Financial Officer and Treasurer, has
been an employee of the Company since June 15, 1981.
Leslie L. Guernsey, Secretary, has been an employee of the
Company since April 5, 1976.
Edgar R. Puthuff, a director since 1987, is Chairman and
President of Miller Puthuff Associates, Inc., Manufacturers
Representative in Troy, Michigan. He is also a Director of U.S.
Communications, Inc. and a private investor.
John G. Ross, a director since 1991, is a member of the New York
Stock Exchange. For 15 years, he was a partner of DeCordova,
Cooper & Company, a specialist firm which was acquired by Paine
Webber Specialists, Inc. in September, 1989. In September, 1990,
he retired as Sr. Vice President of Paine Webber Specialists,
Inc. to manage personal business activities.
Charles W. Taylor, a director since 1987, is Chairman and Chief
Financial Officer of Penteco Corporation in Tulsa, Oklahoma. In
1989, he became Chairman, President and Chief Executive Officer
of Penteco Corporation. Since 1987, he has been Chairman of
Lincoln Gas and Oil Marketing. Previously, he served for over 17
years as President and Chief Executive Officer of various
commercial banks and as a Director of these banks.
Edward A. Ward II, a director since 1983, is the principal of Ned
Ward Realtors in New Vernon, New Jersey. He is a Director of the
National Association of Realtors and Past President of the New
Jersey Association of Realtors.
ITEM 11. - EXECUTIVE COMPENSATION
Directors received no compensation for such positions in 1995.
Compensation for certain officers and related parties is
determined by the Compensation Committee, which consists of
Directors Edgar R. Puthuff, Edward A. Ward II and John G. Ross. A
meeting of the committee in December, 1992 set the compensation
for H. Terry Snowday and Charles Taylor as follows: President, H.
Terry Snowday - an annual base salary of twenty thousand
($20,000) dollars plus a yearly bonus as recommended by the
committee based on annual profits per the audited financial
statements. Charles Taylor - to be paid his normal consulting
rates for time worked on behalf of General Energy with a minimum
of ten thousand ($10,000) dollars per year. Charles Taylor
resigned as consultant on January 1, 1995.
Combined compensation expense of seventy four thousand nine
hundred twenty three ($74,923) dollars for H. Terry Snowday and
Charles Taylor has been accrued but not paid.
Directors and Officers of the Company have in the past and may in
the future participate, directly or through partnerships, in the
Company's drilling activities.
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term Compensation
_____________________________
Annual Compensation Awards Payouts
_________________________ ___________________ _______
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Other Annual Restricted LTIP All Other
Principal Salary Bonus Compensation Stock Award(s) Options/ Payouts Compensation
Position Year ($) ($) ($) ($) SARS (#) ($) ($)
________ ____ _____ _____ _______ _______ ________ _______ _______
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CEO 1995 20,000
1994 20,000
1993 20,000
</TABLE>
<PAGE>
Stock Option Plan
There is no current Stock Option Plan in effect.
Amounts owed to officers and directors for excess payments under
a previously existing Stock Option Plan amount to $25,603 and are
included in current liabilities.
In 1986, one of the former officers returned his option stock to
the Company. These 15,000 shares were held in treasury by the
Company and recorded at par value. The Company reissued all
treasury stock in 1992.
Stock Option Agreement
The Company entered into a Stock Option Agreement with Penteco
Corporation (Penteco). Penteco had an option to purchase
1,000,000 shares at a price of $.31 per share and an option to
purchase another 1,000,000 shares at a price of $.50 per share at
various times. That option was renewed by the Board to extend
through September, 1993. Penteco exercised part of their option
for the 1,000,000 shares at $.31. Effective January 1993,
Penteco's Stock Option Agreement was terminated as a result of
the termination of the Company's Management Agreement with
Penteco Corporation. The Company had an outstanding Stock Option
Agreement with an employee to purchase 100,000 shares of General
Energy stock for $.25 per share. This Agreement expired on
January 5, 1993.
ITEM 12. - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table provides information with respect to the
shares of common stock of the Company beneficially owned by each
beneficial owner of more than 5% of such shares, each director
and officer of the Company, and all directors and officers as a
group as of December 31, 1995.
Number of Shares Percent of Common
Name Of Common Stock Stock Outstanding
____ _______________ _________________
H. Terry Snowday, Jr. 366,596 4.58%
Robert M. Andrews 548,765 6.86%
12683 S. Marina Village Dr.
Traverse City, MI 49684
Richard E. Calvert 449,935 5.62%
P.O. Box 368
Perrinton, MI 48871-0368
Leslie L. Guernsey 6,700 (4)
Armond Hansen 502,118 6.28%
P.O. Box 6007
Mesa, AZ 85216-6007
Rosalie A. Newman 10,309 (4)
Edgar R. Puthuff 941,998 (1) 11.78%
John G. Ross 75,649 (2) (4)
Charles W. Taylor 1,102,146 (3) 13.79%
Edward A. Ward II 65,149 (4)
all directors and officers
as a group (7 in the group) 2,568,547 32.13%
(1) Includes 10,000 shares owned by Edgar Puthuff & William
Miller Trust of the Miller Puthuff Associates, Inc. Employees
Pension Profit Sharing Plan, 17,649 shares owned by Edgar R.
Puthuff Trust Miller Puthuff Associates Employees Pension Plan,
575,015 shares owned by Miller Puthuff Associates Pension Plan
Profit Sharing Plan Profit Sharing Plan Trust and 100,000 shares
owned by Edgar Puthuff Tr of the Miller Puthuff Associates
Employees Pension Profit Sharing Plan.
(2) Includes 35,649 shares held by Patricia E. Ross, his wife.
(3) Includes 1,102,146 shares held by Penteco Corporation.
(4) Less than 1%
The above list includes officers and directors who have a
beneficial ownership in the securities of the Company. All
officers and directors are voting FOR on all proposals. It is not
known how the other 5% shareholders intend to vote their proxies.
ITEM 13. - CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS
There are no family relationships between the officers and/or
directors of the Company other than Edward A. Ward II is a
brother-in-law of H. Terry Snowday.
Director Charles W. Taylor is President, Chairman of the Board
and Chief Executive Officer of Penteco Corporation and Chairman
of the Board of Lincoln Gas and Oil Marketing Corporation.
In 1987, the Company entered into a Management Agreement with
Penteco Corporation to analyze the Company's financial position
and provide management services to the Company. Mr. Charles
Taylor, a director of the Company, owns 25% of the outstanding
shares of Penteco and is a director and officer of that Company.
Director's Snowday, Puthuff and Ward are minority investors in
Penteco Corporation. Mr. Taylor abstained from voting for the
Management Agreement considering his position with Penteco.
Effective January 1993, the Management Agreement with Penteco
Corporation was terminated and those responsible for management
duties became salaried employees or advisors to the Company.
In July of 1990, Penteco Corporation agreed to accept 1,891,182
shares of General Energy Resources and Technology Corporation
stock as payment for management fees for the period November,
1987 to May, 1990 totaling $94,559.10. The Company had a two year
buy-back option and in September 1992, the Company repurchased
the 1,891,182 shares of General Energy Corporation stock at $.06
per share. The Company then issued 886,040 shares at $.20 to
replace the shares purchased and as payment for additional
management fees accrued through August, 1992.
As of December 31, 1995, the Company has a liability to Penteco
of $13,262 for management fees and out-of-pocket costs.
In 1991, the Company loaned $350,000 to American Barter. American
Barter agreed to repay this loan, with interest at the Company's
borrowing rate and to assign a 25% working interest in the Tulare
Lakes Field. The Tulare Lakes Field was purchased from Chevron by
Penteco and American Barter in 1991. The agreement between
Chevron and Penteco and American Barter states that the note owed
to Chevron will be repaid from production from the Tulare Lakes
Field. If production does not cover debt payments, General Energy
is not liable to Chevron or other third parties. The Company
booked 25% of the purchase price as proved oil and gas
properties, approximately $875,900. The Company also recorded 25%
of the liabilities for Penteco and American Barter's purchase of
the field along with 25% of American Barter's $350,000 debt to
General Energy, borrowed for costs of revitalizing the field.
During 1992, and 1993, additional debt has been recorded for
Society Bank loans used to pay off the original $350,000 and for
operating expenses and accrued interest. In 1993, the Company
sold a 1% interest to a company shareholder for $10,000. The
Company's 25% interest 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.
During 1991, the Company organized the sale of 306,410 shares of
privately held General Energy stock. The Company did not purchase
the stock, only brought together the buyers and sellers. The
Company earned approximately $18,000 from this sale. These funds
were applied to pay other obligations and settlements due the
seller of the shares and costs related to the transaction.
During 1992, the Company repurchased a 5% interest in the Fons-
Jacob well from a Company director in exchange for 504,015 shares
of restricted stock issued at $.20 per share.
During 1993, the Company sold 200,000 shares of restricted stock
to Company shareholders at $.10 per share. One of these
shareholders also loaned $11,000 to the Company through its
subsidiary, which is expected to be repaid in 1996.
The Company sold several turnkey working interests to major
shareholders and directors during 1995. Accounts receivable from
these related parties totaled $50,094 at December 31, 1995 while
related party accounts payable amounted to $7,476. No interest
has been accrued on any of the above amounts.
<PAGE>
Pursuant to the requirements of Section 13, or 15(d) 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, on the 12th day of April, 1996.
GENERAL ENERGY RESOURCES AND
TECHNOLOGY CORPORATION
By: H.TERRY SNOWDAY, JR.
_____________________________
H. Terry Snowday, Jr.
President
Pursuant to the requirements of the Securities and Exchange Act
of 1934, this report has been signed below by the following
person(s) on behalf of the registrant and in the capacities and
on the date(s) indicated.
Signature Title Date
_________ _____ ____
H. TERRY SNOWDAY, JR. President, Chairman of the 05/07/96
_____________________ Board, Chief Executive
H. Terry Snowday, Jr. Officer and Director
ROSALIE A. NEWMAN Chief Financial Officer and 05/07/96
_____________________ Treasurer
Rosalie A. Newman
EDGAR R. PUTHUFF Director 05/07/96
_____________________
Edgar R. Puthuff
JOHN G. ROSS Director 05/07/96
_____________________
John G. Ross
CHARLES W. TAYLOR Director 05/07/96
_____________________
Charles W. Taylor
EDWARD A. WARD Director 05/07/96
_____________________
Edward A. Ward
<TABLE> <S> <C>
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<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 136,108
<SECURITIES> 0
<RECEIVABLES> 592,224
<ALLOWANCES> 8,698
<INVENTORY> 0
<CURRENT-ASSETS> 720,071
<PP&E> 2,989,220
<DEPRECIATION> 2,650,669
<TOTAL-ASSETS> 1,059,672
<CURRENT-LIABILITIES> 1,021,928
<BONDS> 0
0
0
<COMMON> 799,187
<OTHER-SE> (816,872)
<TOTAL-LIABILITY-AND-EQUITY> 1,059,672
<SALES> 334,034
<TOTAL-REVENUES> 753,294
<CGS> 0
<TOTAL-COSTS> 285,823
<OTHER-EXPENSES> 275,883
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,211
<INCOME-PRETAX> 191,588
<INCOME-TAX> 0
<INCOME-CONTINUING> 191,588
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<NET-INCOME> 191,588
<EPS-PRIMARY> .02
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