FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1999
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)
231-946-1473
(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 ( ) No (X).
Applicable only to Corporate Issuers:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date.
Common Stock, Par Value $.10 - 7,991,870 shares, as of June 30,
1999.
<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
June 30, December 31,
1999 1998
(Unaudited) (Unaudited)
CURRENT ASSETS:
Cash $ 5,227 $ 2,817
Accounts Receivable Trade 52,513 48,819
Less Allowance for Doubtful
Accounts (13,526) (13,526)
Prepaid Expenses 1,617 1,785
_________ _________
Total Current Assets 45,831 39,895
PROPERTY AND EQUIPMENT, AT COST:
Proved Oil and Gas Properties,
Successful Efforts Method of
Accounting 2,358,252 2,358,252
_________ _________
Total Property and Equipment 2,358,252 2,358,252
Less Accumulated Depreciation,
Depletion, and Amortization 2,231,069 2,227,650
_________ _________
Net Property and Equipment 127,183 130,602
OTHER ASSETS:
Investments (net of unrealized
loss of $288,950) 1,050 1,050
_________ _________
$ 174,064 $ 171,547
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current Installments of
Long-Term Debt $ 0 $ 0
Accounts Payable Trade 420,435 408,416
Notes Payable 149,900 113,400
Salaries Payable 61,292 57,892
Accrued Interest 12,723 6,240
_________ _________
Total Current Liabilities 644,350 585,948
LONG-TERM DEBT 54,837 52,947
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 (8,759,322) (8,701,547)
_________ _________
Total Stockholders' Equity (525,123) (467,348)
$ 174,064 $ 171,547
========= =========
See Accompanying Notes to Financial Statements
<PAGE>
<TABLE>
General Energy Resources and Technology Corporation
Statements of Operations
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
REVENUES:
Oil and Gas Sales:
Working Interest $ 22,153 $ 19,463 $ 38,302 $ 37,746
Royalty Interest 352 203 567 2,971
Expense Reimbursement 1,000 0 13,000 15,000
Gain/Loss on Sale of Assets 0 0 0 900
Administrative Overhead 4,200 4,200 8,400 8,400
Oilfield Revenue Distribution 0 0 0 420
_________ _________ _________ _________
Total Revenues 27,705 23,866 60,269 65,437
COSTS AND EXPENSES:
Lease and Operating Expenses 15,589 12,439 27,594 29,791
Taxes Other Than on Income 1,514 1,183 2,508 2,119
Dry Holes and Abandonments 9 0 9 11
Depreciation, Depletion and
Amortization 1,059 2,310 3,420 4,996
General and Administrative 42,895 40,370 77,048 75,752
Interest Expense 4,454 85 7,466 844
_________ _________ _________ _________
Total Costs/Expenses 65,520 56,387 118,045 113,513
_________ _________ _________ _________
NET INCOME (LOSS) $ (37,815) $ (32,521) $ (57,776) $ (48,076)
========= ========= ========= =========
NET INCOME (LOSS) PER WEIGHTED
AVERAGE SHARE OF COMMON STOCK $ (.005) $ (.004) (.007) (.006)
========= ========= ========= =========
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 7,991,870 7,991,870 7,991,870 7,991,870
========= ========= ========= =========
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
General Energy Resources and Technology Corporation
Statement of Cash Flows
Six Months Ended June 30, (Unaudited)
1999 1998
____ ____
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (57,776) $ (48,076)
Adjustments to Reconcile Net
Earnings to Net Cash Provided by
Operating Activities:
Depreciation, Depletion and
Amortization 3,420 4,996
Abandonments, Expired and
Surrendered Leases 0 0
(Gain)Loss on Sale of Oil and
Gas Properties 0 0
(Increase)Decrease in Current Assets:
Trade Accounts Receivable (3,694) (500)
Prepaid Expenses 168 450
Increase(Decrease) in Current Liabilities:
Trade Accounts Payable 15,419 10,631
Notes Payable 36,500 34,000
Accrued Interest 6,483 0
_________ _________
NET CASH FROM OPERATING
ACTIVITIES 520 1,501
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Property and
Equipment 0 0
Proceeds From Sale of Oil and Gas
Property 0 0
_________ _________
NET CASH FROM INVESTING
ACTIVITIES 0 0
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase(Decrease) in
Long-Term Debt 1,890 631
_________ _________
NET CASH FROM FINANCING
ACTIVITIES 1,890 631
_________ _________
NET INCREASE(DECREASE) IN
CASH 2,410 2,132
CASH AT BEGINNING OF PERIOD 2,817 294
_________ _________
CASH AT END OF PERIOD $ 5,227 $ 2,426
========= =========
<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 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 its estimated useful life (seven years) by the
straight-line method.
Costs of nonproducing leasehold and mineral interests are not
amortized but are charged to operations when such properties are
abandoned, surrendered, determined to be worthless or transferred
to producing properties and depleted when successfully developed.
Maintenance and repairs are charged to expense when incurred.
Renewals and betterments are capitalized. When assets are sold,
retired or otherwise disposed of, applicable costs and
accumulated depreciation and depletion are removed from the
accounts and the resulting gain or loss is recognized.
Interest Capitalization
Interest costs applicable to the drilling and equipment of in-
progress and shut-in oil and gas wells are capitalized until such
time as the wells begin producing. There were no entries for
interest capitalization during 1999 and 1998.
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 June 30, Dec. 31,
cash transactions during the 1999 1998
periods ending June 30, 1999
and December 31, 1998
Write-off of Accounts Payable -0- 12,019
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 does not
expect to reduce this loan within the current year.
NOTE 4
INTERIM STATEMENTS
The Company believes that the accompanying unaudited financial
statements contain all adjustments (including appropriate
provision for depreciation, depletion and amortization normally
determined at year end) necessary to present fairly the financial
position as of June 30, 1999 and December 31, 1998, and the
results of operations for the six months ended June 30, 1999 and
1998. All adjustments are of a normal recurring nature.
Interim financials should not necessarily be considered to be
indicative of the results of operations for the entire year.
NOTE 5
CONTINGENCIES
The prices of the Company's natural gas production are subject to
the regulations of the Federal Energy Regulatory Commission
(FERC). The Company believes it has substantially complied with
regulations as issued.
Item 2 - Management's Discussion and Analysis of Financial
Conditions and Results of Operations
Results of Operations
The Company's total earned revenue for the six months ended June
30, 1999 totaled $60,269. This represents a decrease of ($5,168)
from the same period in 1998 and is largely the result of a
reduction in oil and gas income.
Total expenses increased $4,532 from $113,513 at June 30, 1998 to
$118,045 at June 30, 1999.
The Company's net loss for the six months ended June 30, 1999
increased $9,700 from ($48,076) at June 30, 1998 to ($57,776) at
June 30, 1999.
Liquidity/Capital Resources
Net cash from operating activities decreased $981 to $520 at June
30, 1999 compared to $1,501 at June 30, 1998.
Management has developed plans to provide services in an Antrim
gas project located in the State of Michigan and anticipates
consulting fees.
As part of this project, the Company anticipates purchasing new
computer hardware and software which will be Year 2000 compliant.
In view of it's currently limited activity, the Company has
determined that the potential consequences of Year 2000 issues
would not have a material effect on business, results of
operations, or financial conditions.
Management feels that cash flows generated in 1999 from
consulting fees and from additional loan advances will be
sufficient to pay current operating liabilities.
<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 12th day of August, 1999.
GENERAL ENERGY RESOURCES AND
TECHNOLOGY CORPORATION
By: H. TERRY SNOWDAY, JR.
_______________________________
H. Terry Snowday, Jr.
President and Director
(Principal Executive Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 5,227
<SECURITIES> 0
<RECEIVABLES> 52,513
<ALLOWANCES> 13,526
<INVENTORY> 0
<CURRENT-ASSETS> 45,831
<PP&E> 2,358,252
<DEPRECIATION> 2,231,069
<TOTAL-ASSETS> 174,064
<CURRENT-LIABILITIES> 644,350
<BONDS> 0
0
0
<COMMON> 799,187
<OTHER-SE> (1,324,310)
<TOTAL-LIABILITY-AND-EQUITY> 174,064
<SALES> 38,869
<TOTAL-REVENUES> 60,269
<CGS> 0
<TOTAL-COSTS> 30,102
<OTHER-EXPENSES> 87,943
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (57,776)
<INCOME-TAX> 0
<INCOME-CONTINUING> (57,776)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (57,776)
<EPS-BASIC> (007)
<EPS-DILUTED> (007)
</TABLE>
