FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1997
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 September
30, 1997.<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 . . . . . . . . . . .8
Item 2 Management's Discussion and Analysis of Financial
Conditions and Results of Operations. . . . . . .9
PART II - Other Information
Signatures. . . . . . . . . . . . . . . . . . . . .11
<PAGE>
PART I - FINANCIAL INFORMATION
General Energy Resources and Technology Corporation
Balance Sheets
Item 1
ASSETS
Sept. 30, December 31,
1997 1996
(Unaudited) (Unaudited)
CURRENT ASSETS:
Cash $ 15,184 $ 8,858
Accounts receivable trade, less
allowance for doubtful accounts
of $8,698 113,523 121,220
Prepaid expenses 625 500
_________ _________
Total current assets 129,332 130,578
PROPERTY AND EQUIPMENT, AT COST:
Proved oil and gas properties,
successful efforts method of
accounting 2,523,934 2,726,399
Unproved leasehold and minerals 0 85,106
Drilling contracts in progress 10,070 10,070
_________ _________
Total property and equipment 2,534,004 2,821,575
Less accumulated depreciation,
depletion, and amortization 2,360,358 2,536,810
_________ _________
Net property and equipment 173,646 284,765
OTHER ASSETS:
Investments (net of unrealized
loss of $288,950) 1,050 1,050
_________ _________
$ 304,028 $ 416,393
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current installments of
long-term debt $ 3,000 $ 3,000
Accounts payable trade 485,748 464,012
Notes payable 16,500 21,500
Salaries payable 53,692 53,692
_________ _________
Total current liabilities 558,940 542,204
LONG-TERM DEBT 44,249 47,521
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 <8,533,360> <8,407,531>
_________ _________
Total stockholders' equity <299,161> <173,332>
$ 304,028 $ 416,393
========= =========
See accompanying notes to financial statements.
<PAGE>
<TABLE>
GENERAL ENERGY RESOURCES AND TECHNOLOGY CORPORATION
Statements of Operations
<CAPTION>
Three Months Ended Nine Months Ended
Sept. 30 Sept. 30
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenues:
Oil and gas sales:
Working interest $ 18,847 31,147 69,253 66,600
Royalty interest 306 19,012 19,710 50,701
Repromotional income 0 0 0 2,349
Gain/Loss on sale of assets 0 <7,476> <32,146> <11,828>
Administrative overhead 4,200 4,200 12,600 14,600
Consulting fees 0 0 0 577
Write-off of expired credits 0 0 0 66,116
Miscellaneous income 250 100 250 102
__________ __________ __________ __________
Total revenues 23,603 46,983 69,667 189,217
Costs and expenses:
Lease and operating expenses 19,038 29,365 51,495 51,954
Taxes other than on income 1,230 3,096 5,708 7,330
Dry holes and abandonments 0 58 <158> 142
Depreciation, depletion and
amortization 2,781 3,616 8,959 10,506
General and administrative 33,826 31,396 126,308 146,831
Interest expense 0 2,174 3,184 2,174
__________ __________ __________ __________
Total costs/expenses 56,875 69,705 195,496 218,937
__________ __________ __________ __________
Net income <loss> $ <33,272> <22,722> <125,829> <29,720>
========== ========== ========== ==========
Net income <loss> per weighted
average share of common stock $ <.004> <.003> <.016> <.004>
========== ========== ========== ==========
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
Nine Months Ended September 30, (Unaudited)
1997 1996
____ ____
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income <loss> $ <125,829> $ <29,720>
Adjustments to reconcile net
earnings to net cash provided
by operating activities:
Depreciation, depletion and
amortization 8,959 10,506
Abandonments, expired and
surrendered leases 14 0
<Gain> loss on sale of oil and
gas properties 32,146 1,928
<Increase> decrease in current
assets:
Trade accounts receivable 7,697 454,153
Prepaid expenses <125> <250>
Increase <decrease> in current
liabilities:
Trade accounts payable 21,736 <277,313>
Notes payable <5,000> 0
Joint interest prepayments 0 <135,371>
Expired credits - stock
purchase overpayment 0 <25,603>
_________ _________
NET CASH FROM OPERATING
ACTIVITIES <60,402> <1,670>
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and
equipment 0 <7,578>
Proceeds from sale of oil and gas
property 70,000 4,473
_________ _________
NET CASH FROM INVESTING
ACTIVITIES 70,000 <3,105>
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase <decrease> in long-term
debt <3,272> <111,261>
_________ _________
NET CASH FROM FINANCING
ACTIVITIES <3,272> <111,261>
_________ _________
NET INCREASE <DECREASE>
IN CASH <6,326> <116,036>
CASH AT BEGINNING OF PERIOD 8,858 136,108
_________ _________
CASH AT END OF PERIOD $ 15,184 $ 20,072
========= =========
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 it's 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 it's 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 Sept. 30, Dec. 31,
non cash transactions during the 1997 1996
periods ending September 30,
1997 and December 31, 1996 -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.
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 September 30, 1997 and December 31, 1996, and the
results of operations for the nine months ended September 30,
1997 and 1996. All adjustments are of a normal recurring nature,
except as follows:
Sept. 30, Dec. 31,
1997 1996
____ ____
Loss on Sale of Assets $32,146
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 nine months ended
September 30, 1997 totaled $69,667. This represents a decrease of
<$119,550> from the same period in 1996 and is largely the result
of a loss in the nine months ended September 30, 1997 in the
amount of <$32,146> from the sale of the Company's mineral
interest and income in the nine months ended September 30, 1996
from the write-off of expired credits in the amount of $66,116.
Total expenses decreased <$23,441> from $218,937 at September 30,
1996 to $195,496 at September 30, 1997.
The Company's net profit for the nine months ended September 30,
1997 decreased <$96,109> from <$29,720> at September 30, 1996 to
<$125,829> at September 30, 1997.
Liquidity/Capital Resources
Net cash from operating activities decreased <$58,732> to
<$60,402> at September 30, 1997 compared to <$1,670> at September
30, 1996.
Management feels that cash flows will be sufficient to pay
current operating liabilities and to amortize the remaining
current portion of it's 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.
<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 4th day of December, 1997.
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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 15,184
<SECURITIES> 0
<RECEIVABLES> 122,221
<ALLOWANCES> 8,698
<INVENTORY> 0
<CURRENT-ASSETS> 129,332
<PP&E> 2,534,004
<DEPRECIATION> 2,360,358
<TOTAL-ASSETS> 304,028
<CURRENT-LIABILITIES> 558,940
<BONDS> 0
0
0
<COMMON> 799,187
<OTHER-SE> (1,098,348)
<TOTAL-LIABILITY-AND-EQUITY> 304,028
<SALES> 88,963
<TOTAL-REVENUES> 69,667
<CGS> 0
<TOTAL-COSTS> 57,203
<OTHER-EXPENSES> 138,293
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (125,829)
<INCOME-TAX> 0
<INCOME-CONTINUING> (125,829)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (125,829)
<EPS-PRIMARY> (.016)
<EPS-DILUTED> (.016)
</TABLE>
