UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to _____________________
Commission File Number 0-9946
GOLDEN OIL COMPANY
(Exact name of registrant as specified in its charter)
Delaware 84-0836562
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
550 Post Oak Boulevard, Suite 550, Houston, Texas 77027
(Address of principal executive offices) (Zip Code)
(713) 622-8492
(Registrants 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 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 [ ]
As of November 1, 1995, the Registrant had outstanding 1,404,291
shares of Common Stock, par value $.01 per share and 22,254 shares of Class B
Common Stock, par value $.01 per share.
<PAGE>
CONTENTS
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
- Consolidated Statements of Operations................... 3
- Consolidated Balance Sheets............................. 5
- Consolidated Statements of Cash Flows................... 7
- Notes to Consolidated Financial Statements.............. 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations............... 13
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K............................ 20
2
<PAGE>
GOLDEN OIL COMPANY
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
SEPTEMBER 30,
-----------------------------
1995 1994
----------- -----------
Revenues:
Oil and gas production .................. $ 293,631 $ 428,609
Other ................................... 8,500 5,992
----------- -----------
Total revenues ..................... 302,131 434,601
----------- -----------
Costs and expenses:
Production costs ........................ 203,989 256,268
Depreciation, depletion and
amortization .......................... 131,045 148,884
General and administrative .............. 127,245 195,245
----------- -----------
Total costs and expenses ........... 462,279 600,397
----------- -----------
(160,148) (165,796)
Gain (loss) on sale of property,
equipment and other assets .............. -- (215,481)
Property acquisition costs ................. (66,142) --
Interest expense ........................... (6,292) (12,444)
Other income (expense) ..................... (1,699) --
----------- -----------
Net earnings (loss) ........................ $ (234,281) $ (393,721)
----------- -----------
Net earnings (loss) per
common share ............................ $ (.17) $ (.28)
----------- -----------
Weighted average number of
common shares and common
share equivalents outstanding ......... 1,404,291 1,404,291
----------- -----------
See Notes to Consolidated Financial Statements.
3
<PAGE>
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------------
1995 1994
----------- -----------
Revenues:
Oil and gas production .................. $ 929,677 $ 1,257,721
Other ................................... 25,400 22,488
----------- -----------
Total revenues ..................... 955,077 1,280,209
----------- -----------
Costs and expenses:
Production costs ........................ 608,495 884,888
Depreciation, depletion and
amortization .......................... 391,455 474,374
General and administrative .............. 314,852 479,014
----------- -----------
Total costs and expenses ........... 1,314,802 1,838,276
----------- -----------
(359,725) (558,067)
Gain (loss) on sale of property,
equipment and other assets .............. 8,337 (207,791)
Property acquisition costs ................. (66,142) --
Interest expense ........................... (25,303) (36,917)
Other income (expense) ..................... (3,740) (12,759)
----------- -----------
Net earnings (loss) ........................ $ (446,573) $ (815,534)
----------- -----------
Net earnings (loss) per
common share ............................ $ (.32) $ (.58)
----------- -----------
Weighted average number of
common shares and common
share equivalents outstanding ......... 1,404,291 1,404,291
----------- -----------
See Notes to Consolidated Financial Statements.
4
<PAGE>
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
SEPTEMBER 30, DECEMBER 31,
ASSETS 1995 1994
------ ----------- -----------
Current assets:
Cash and cash equivalents ................. $ 12,414 $ 92,609
Short-term investments .................... 24,235 23,528
Accounts receivable, net .................. 455,981 461,619
Prepaid expenses and other ................ 51,746 44,183
----------- -----------
Total current assets ................. 544,376 621,939
----------- -----------
Property and equipment, at cost:
Oil and gas properties
(using the successful efforts
methods of accounting)
Producing properties ............... 5,779,080 5,994,169
Non-producing properties ........... 105,000 105,000
----------- -----------
Total oil and gas properties ......... 5,884,080 6,099,169
----------- -----------
Pipeline, field and other well
equipment ................................. 281,718 280,982
Other property and equipment ................. 461,125 455,610
----------- -----------
6,626,923 6,835,761
Less accumulated depreciation,
depletion and amortization ................ (3,337,123) (3,085,838)
----------- -----------
Net property and equipment ................ 3,289,800 3,749,923
----------- -----------
Investment in commercial realty .............. 222,039 228,076
Other assets ................................. 1,481 1,481
----------- -----------
$ 4,057,696 $ 4,601,419
----------- -----------
(Continued)
See Notes to Consolidated Financial Statements.
5
<PAGE>
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(UNAUDITED)
SEPTEMBER 30, DECEMBER 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1994
- ------------------------------------ ------------ ------------
Current liabilities:
Notes payable and
current portion of long-term debt ......... $ 142,704 $ 389,237
Accounts payable ............................ 1,316,677 1,222,417
Accrued expenses ............................ 82,375 112,285
------------ ------------
Total current liabilities ................. 1,541,756 1,723,939
------------ ------------
Long-term debt ................................. 85,033 --
Other liabilities .............................. 37,214 37,214
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $.01;
authorized 10,000,000 shares, none issued . -- --
Common stock, par value $.01;
authorized 15,000,000 shares,
issued and outstanding 1,404,291
shares at September 30, 1995 and
December 31, 1994 ......................... 14,043 14,043
Class B common stock,
par value $.01; authorized 3,500,000
shares, issued and outstanding
22,254 shares at September 30, 1995
and December 31, 1994 ..................... 223 223
Additional paid-in capital ..................... 13,819,679 13,819,679
Accumulated deficit ............................ (11,440,252) (10,993,679)
------------ ------------
Total stockholders' equity ........... 2,393,693 2,840,266
------------ ------------
$ 4,057,696 $ 4,601,419
------------ ------------
See Notes to Consolidated Financial Statements.
6
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------
1995 1994
--------- ---------
Cash flow from operating activities:
Net earnings (loss) ............................. $(446,573) $(815,534)
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation, depletion
and amortization ............................ 391,455 474,374
Equity in net loss of
investments in commercial realty ............ 6,037 --
Reserve for deferred property
acquisition costs ........................... 66,142 --
(Gain) on sale of property
and equipment ............................... (8,337) --
Loss on sale of producing
properties .................................. -- 207,791
Loss on sale of long term
investments ................................. -- 12,759
Allowance for doubtful accounts ............... -- (20,000)
Changes in components of working capital:
(Increase) decrease in accounts
receivable, net ........................... 5,638 (167,545)
(Increase) in prepaid expenses and other .... (7,563) (12,769)
Increase in accounts payable ................ 94,260 17,973
(Decrease) in other liabilities ............. -- (2,067)
Increase (decrease) in accrued expenses ..... (29,910) 34,593
--------- ---------
Net cash provided by (used
in) operating activities ...................... $ 71,149 $(270,425)
--------- ---------
(Continued)
See Notes to Consolidated Financial Statements.
7
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------
1995 1994
--------- ---------
Cash flows from investing activities:
Proceeds from sale of property
and equipment ............................... $ 9,500 $ --
Proceeds from sale of producing
properties .................................. 21,053 214,399
Additions of oil and gas properties ........... (12,277) --
Additions of other property and
equipment ................................... (7,413) (21,262)
(Increase) in short-term investments .......... (707) (716)
Decrease in other assets ...................... -- 30,573
--------- ---------
Net cash provided by investing activities ........ $ 10,156 $ 222,994
--------- ---------
Cash flows from financing activities:
Proceeds from issuance of
long-term debt .............................. -- 25,000
Payment of long-term debt ..................... (161,500) (211,000)
--------- ---------
Net cash used in financing activities ............ $(161,500) $(186,000)
--------- ---------
Net increase (decrease) in cash and
cash equivalents .............................. (80,195) (233,431)
Cash and cash equivalents at beginning
of period ..................................... 92,609 262,553
--------- ---------
Cash and cash equivalents at end
of period ..................................... $ 12,414 $ 29,122
--------- ---------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest expense was $32,816 and $35,003 for the nine
months ended September 30, 1995 and 1994, respectively. No cash was paid for
income taxes during the corresponding periods.
See Notes to Consolidated Financial Statements.
8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
For a summary of significant accounting principles, see Notes
to Consolidated Financial Statements and Note 1 thereof contained in
the Annual Report on Form 10-K of Golden Oil Company ("Golden" or
"Company") for the year ended December 31, 1994, which is incorporated
herein by reference. The Company follows the same accounting policies
during interim periods as it does for annual reporting purposes.
The accompanying consolidated financial statements are
condensed and unaudited and have been prepared pursuant to the rules
and regulations of the Securities and Exchange Commission ("SEC"). In
the opinion of management, the unaudited interim financial statements
reflect all adjustments of a normal recurring nature which are
necessary to present a fair statement of the results for the interim
periods presented. Interim results are not necessarily indicative of a
full year of operations. Certain information and note disclosures
normally included in annual financial statements prepared in accordance
with generally accepted accounting principles have been condensed or
omitted pursuant to SEC rules and regulations; however, the Company
believes that the disclosures made are adequate to make the information
presented not misleading. These financial statements should be read in
conjunction with the financial statements and the notes thereto
included in the Company's Form 10-K for the year ended December 31,
1994.
RECLASSIFICATIONS
Certain amounts from prior periods have been reclassified to
conform to the presentation format for the 1995 Consolidated Financial
Statements with no effect on reported results of operations.
ACCOUNTS RECEIVABLE
Amounts shown as accounts receivable are net of $35,000 at
September 30, 1995 and December 31, 1994 to reflect estimated
provisions for doubtful collection of certain non-recourse obligations
primarily in connection with certain working interest participants and
drilling arrangements of a Company subsidiary.
9
INVESTMENTS
The Company adopted the provision of Statement of Financial
Accounting Standards No. 115, Accounting for Certain Investments in
Debt and Equity Securities ("SFAS" 115) effective January 1, 1994.
There was no impact resulting from the adoption of this standard as
aggregate cost of investments approximates market value. The Company's
short-term investments at September 30, 1995 and December 31, 1994
consisted of a certificate of deposit held by a federally insured bank.
Prior to the adoption of SFAS 115, investment securities were
carried at the lower of average cost or market.
The Company holds an interest in its headquarters office
building. For presentation purposes in the accompanying financial
statements, the Company accounts for its investment using the equity
method and recognizes its pro rata share of net income or loss in its
current operating statements.
(2) CERTAIN FIXED PRICE SALE AGREEMENTS
In order to plan Company operations and with a view towards
protection against sudden declines in oil and gas prices as experienced
in late 1993 and the first half of 1994, during the first quarter of
1995 the Company entered into fixed price agreements with two principal
purchasers of its oil production. Under such agreements, the Company
has contracted for the sale of approximately eighty percent of its
current average daily oil production at prices, net of all transport
charges or "basis differential" adjustments, of $17.00 per barrel. The
agreements, which may be extended or modified, are for a term through
at least March 1, 1996.
10
(3) DEVELOPMENT OF SOUTH DOG CREEK FIELD
During the second quarter of 1995, the Company proceeded with
field work for waterflood development of its South Dog Creek field in
Osage County, Oklahoma. All of the Company's joint working interest
owners have elected to join in such development, and to pay their
respective pro-rata shares of such initial stage costs. For initial
phase field work, capital costs are expected to aggregate approximately
$135,000. Field work was commenced during the third quarter, and is
anticipated to continue through early 1996. Although field work has
begun, the Company does not anticipate significant increases in
production volumes from the South Dog Creek field until further
development occurs. Upon completion of the initial phase of
development, the Company will evaluate the production response before
proceeding with possible further development. Also, further development
of the South Dog Creek field is subject to the availability of
financing from third party sources. Until actual production results are
available, there can be no assurance as to the availability of such
financing.
(4) AGREEMENTS TO PURCHASE OIL AND GAS PROPERTIES
During the fourth quarter of 1993, the Company entered into an
agreement to purchase proved producing reserves in the State of New
Mexico, and incurred certain legal and administrative costs to hold
such properties under contract. During the third quarter of 1995, the
Company evaluated the proposed purchase of these properties in light of
current prices in the oil and gas industry; required capital
expenditures arising from environmental issues arising subsequent to
the originally proposed purchase date; and the availability of
financing to complete these purchases. In view of such factors the
Company elected not to complete the purchase of these properties and
has recognized a one-time, non-cash charge to "Property acquisition
costs" of $66,142 in the third quarter operations.
(5) STRATEGIC CONSIDERATIONS
In earlier stages of its development, the Company's strategic
emphasis focused on oil and gas exploration. This strategy met with
success when the South Dog Creek field was discovered by Mr. A.M.
Alloway, the founder of Golden Oil Company and a leading
explorationist, in Osage County, Oklahoma. In more recent years, there
have been a number of material adverse changes affecting the industry,
and particularly small companies with the strategic emphasis on
exploration. Accordingly, the Company has concentrated on plans for
secondary development of reserves in Osage County, and also established
a broader scope of operations with greater geographic and production
diversity. The Company has completed extensive engineering and
regulatory work related to the waterflood development of the South Dog
Creek field.
11
During late 1993 and 1994, the Company diversified outside of
the energy sector through acquisition of limited interests in the
commercial office building in Houston, Texas where the Company
maintains its principal offices. The Company is actively reviewing more
substantial transactions outside the energy sector. While such
diversification appears to offer more attractive long-term
opportunities than are offered by the oil and gas sector currently, the
Company's ability to arrange financing as would be necessary to enter
into a material transaction involves a number of factors which at this
time are unresolved. Such factors include the degree of success which
the Company experiences in the development of its reserves classified
as proved undeveloped and the trends of both oil and gas prices.
End of Notes to Financial Statements.
12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
LIQUIDITY AND CAPITAL RESOURCES
Golden Oil Company is a diversified company whose current operations
emphasize oil and gas production and development. Over the last several years,
the Company increased the size and scope of its oil and gas operations through a
number of corporate transactions, primarily involving asset purchases and
mergers. Corporate transactions also have been undertaken or considered in other
business sectors. To date, an investment has been made in the real estate sector
through acquisition of a limited partnership interest in the Company's
headquarters office building in Houston, Texas. However, the Company is actively
reviewing more substantial transactions outside the energy sector.
The Company's operations during 1994 and to date during 1995 have been
funded primarily through internally generated funds from operating activities,
sale of scattered nonstrategic oil and gas properties, existing working capital,
and borrowings under its credit facilities. During the second quarter of 1995,
the Company restructured and extended its scheduled maturities of indebtedness.
Management anticipates that the Company will meet ordinary operating needs for
working capital from internal sources. However, in order to complete development
of its proved undeveloped reserves, or to make acquisitions either within or
outside of the oil and gas sector, the Company will require additional
financing. The Company may arrange new financing through public or private
offerings of the Company's securities, asset sales, joint ventures, or other
means. If the Company is successful in its financing efforts, one use of
proceeds will be to improve its current working capital position.
The Company maintains credit agreements with certain banks for the
purpose of acquiring oil and gas properties, maintaining working capital and
outlays for capital expenditures. The Company's note obligation to Western Bank,
Tulsa, Oklahoma (now Bank IV, Oklahoma) in the original aggregate principal
amount of $525,000 has been paid down to $8,000 outstanding at September 30,
1995. The terms of the credit agreement required principal payments of $18,500
each month through November 1, 1995. Such note was fully repaid and retired on
October 4, 1995. The Company also maintains a $100,000 line of credit with the
same bank under which $70,000 was borrowed at September 30, 1995. The Company
anticipates that the remaining principal amount outstanding will convert to a
self-amortizing basis payable over a period of not less than one year.
13
The Company also maintains a $150,000 line of credit with a separate
commercial bank, under which it had borrowed $149,737 at September 30, 1995.
Upon expiration of this credit line in November 1995, unless the Company
arranges a new credit line, it is obligated to amortize the principal
outstanding over a period not to exceed two years. Subsequent to September 30,
1995, the Company obtained a letter of commitment from the bank to increase its
credit to an aggregate amount of $400,000 subject to certain conditions,
including the personal guaranty from an officer of the Company. The Company
anticipates that a fee will be paid in connection with such proposed personal
guaranty of the Company's indebtedness. Management can make no assurances that
it will be able to meet such conditions to complete the increased financing. If
successful in this financing, the Company will utilize a portion of the credit
proceeds to reduce its working capital deficit.
Cash flow generated by operating activities was $71,149 for the first
nine months of 1995 compared to ($270,425) for the first nine months of 1994.
The increase from the first nine months of 1994 primarily reflects an increase
in average oil prices received in the first nine months of 1995 from the first
nine months of 1994, partially offset by a decline in production volumes due to
the sale of certain nonstrategic properties during 1994. In addition, the
Company has made substantial reductions in corporate overhead, both through
reductions in personnel and fees for outside services.
During the first quarter of 1995, the Company entered into fixed price
arrangements at an average net price of approximately $17.00 per barrel on the
majority of its oil production. The fixed price of $17.00 represents an increase
of $2.00 per barrel compared to an average price of $15.00 per barrel received
in the first nine months of 1994. The Company believes revenues generated under
the fixed price arrangements and the effect of reductions in corporate overhead
during the past three quarters will generate cash flows sufficient to meet its
operating and capital requirements.
During the second quarter of 1995, the Company proceeded with field
work for waterflood development of its South Dog Creek field in Osage County,
Oklahoma. All of the Company's joint working interest owners have elected to
join in such development, and to pay their respective pro-rata shares of such
initial stage costs. For initial phase field work, capital costs are expected to
aggregate approximately $135,000. Field work was commenced during the third
quarter, and is anticipated to continue through early 1996. Although field work
has begun, the Company does not anticipate significant increases in production
volumes from the South Dog Creek field until further development occurs. Upon
completion of the initial phase of development, the Company will evaluate the
production response before proceeding with possible further development. Also,
further development of the South Dog Creek field is subject to the availability
of financing from third party sources. Until actual production results are
available, there can be no assurance as to the availability of such financing.
14
At September 30, 1995, the Company had a working capital deficit of
$997,380 and a current ratio of .35 to 1.00 compared to a working capital
deficit of $1,102,000 and a current ratio of .36 to 1.00 as of December 31,
1994. The decrease in the working capital deficit at September 30, 1995
primarily results from reduction in the Company's current portion of long-term
debt. The Company signed an agreement to amortize one line of credit over a
period of two years beginning in November 1995. As a result, only the principal
payments due through September 30, 1996 are included in the current portion of
long-term debt.
Due to factors including changes in tax laws, adverse changes in the
economics of exploration drilling and the availability to the Company of
alternative uses of capital, during the late 1980s the Company curtailed
exploration activities. If the Company commences such programs in the future, it
intends to continue its previous policy of sharing exploration risks with third
party drilling participants. Certain of the Company's oil and gas leases provide
for ongoing drilling arrangements for periodic development of proved reserves.
The Company's principal development obligations under such agreements have been
suspended pending clarification of title assignments on certain federal leases.
The Company expects to obtain drilling participations from industry partners so
as to reduce the amount of the Company's required drilling commitments. The
Company believes that conditions in the independent oil and gas industry may
continue to generate opportunities to expand its scope of operations through
corporate transactions.
15
RESULTS OF OPERATIONS
COMPARISON OF THE THREE MONTHS ENDED SEPTEMBER 30, 1995 WITH THE THREE MONTHS
ENDED SEPTEMBER 30, 1994.
REVENUES
Revenues from oil and gas production decreased from $428,609 during the
third quarter of 1994 to $293,631 in the comparable 1995 quarter, a decrease of
$134,978 (31%). The decrease is primarily attributable to the sale of certain
scattered nonstrategic properties during the second, third, and fourth quarters
in 1994. Additionally, gas price decreased $.34 per mcf from $1.28 per mcf
during the third quarter of 1994 to $.94 per mcf during the third quarter of
1995. In addition, average oil postings decreased $.24 per barrel from $17.13
per barrel for the third quarter of 1994 to $16.89 for the same period in 1995.
Other revenue was $8,500 for the third quarter of 1995 compared to
$5,992 for the comparable period in 1994, primarily due to an increase in
gathering and operating fees.
COSTS AND EXPENSES
Oil and gas production costs decreased by $52,279 from $256,268 for the
third quarter of 1994 to $203,989 for the same period in 1995 due primarily to
decreases in field operating expenses as a result of the sale of certain
scattered, nonstrategic wells during the second, third and fourth quarters of
1994. General and administrative expenses decreased by $68,000 from $195,245 for
the third quarter of 1994 to $127,245 for the same period in 1995. The decrease
is primarily attributable to reductions in personnel and corporate overhead made
during the fourth quarter of 1994 and the first quarter of 1995.
Depreciation, depletion and amortization expenses decreased from
$148,884 for the third quarter of 1994 to $131,045 for the comparable period of
1995 due primarily to disposal of certain nonstrategic properties during the
second, third and fourth quarters of 1994. In addition, during the second
quarter of 1994, certain properties became fully depleted for book purposes
although such wells have continuing production.
Loss on property and equipment during the third quarter of 1994 of
$215,481 reflects the sale of certain scattered, nonstrategic wells during the
second, third and fourth quarters of 1994. Property acquisition costs during the
third quarter of 1995 of $66,142 reflects the writedown of deferred property
acquisition costs related to the proposed purchase of properties in New Mexico.
Interest expense decreased by $6,152 from $12,444 for the third quarter of 1994
to $6,292 for the same period in 1995.
16
Primarily reflecting the factors discussed above, the Company reported
a net loss for the three months ended September 30, 1995 of $234,281 compared to
a net loss of $393,721 for the same period of 1994.
17
RESULTS OF OPERATIONS
COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 1995 WITH THE NINE MONTHS
ENDED SEPTEMBER 30, 1994.
REVENUES
Revenues from oil and gas production decreased from $1,257,721 during
the first nine months of 1994 to $929,677 in the first nine months of 1995, a
decrease of $328,044 (26%). The primary reason for the decrease was due to a
decline in the average production volumes in the first nine months of 1995 as a
result of the sale of certain scattered nonstrategic properties during the
second, third, and fourth quarters in 1994. The production volume declines and
gas price declines were partially offset by the increase in average oil price
postings of $2.25 per barrel from $15.00 per barrel for the first nine months of
1994 to $17.25 per barrel in the first nine months of 1995. Additionally, during
February and March 1995 the Company entered into certain fixed price
arrangements at an average net price of approximately $17.00 per barrel for the
majority of its oil production for a period through March 1996. Also, the
average price per mcf of gas decreased by approximately $.44 per mcf from $1.38
per mcf for the first nine months of 1994 to $.94 per mcf for the same period in
1995.
COSTS AND EXPENSES
Oil and gas production costs decreased from $884,888 for the first nine
months of 1994 to $ 608,495 for the first nine months of 1995, a decrease of
$276,393, reflecting decreases in field operating expenses related to properties
sold in 1994. General and administrative expenses decreased from $479,014 for
the first nine months of 1994 to $314,852 for the same period in 1995, a
decrease of $164,162. The decrease is primarily attributable to reductions in
personnel and corporate overhead made during the fourth quarter of 1994 and the
first quarter of 1995.
Depreciation, depletion, and amortization expense decreased $82,919
from $474,374 for the first nine months of 1994 to $391,455 for the comparable
period of 1995 due primarily to disposals of certain nonstrategic properties
during 1994 and the first quarter of 1995.
Loss on property and equipment during the first nine months of 1994 of
$207,791 reflects the sale of certain scattered nonstrategic wells during the
second, third and fourth quarters of 1994. Property acquisition cost during the
first nine months of 1995 of $66,142 is due to the writedown in the third
quarter of deferred property acquisition costs related to the proposed purchase
of properties in New Mexico.
18
The decrease in interest expense of $11,614 from $36,917 for the first
nine months of 1994 compared to $25,303 for the first nine months of 1995 is due
to a decrease in average aggregate amounts outstanding for borrowings under the
Company's financing arrangements.
Other income (expense) reflects a net expense of $3,740 for the first
nine months of 1995, compared to net expense of $12,759 for the first nine
months of 1994. The net expense of $12,759 during the first nine months of 1994
is due to a loss on the sale of a long-term investment.
Primarily reflecting the factors discussed above, the Company reported
a net loss for the nine months ended September 30, 1995 of $446,573 compared to
a net loss of $815,534 for the same period of 1994.
19
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
None.
(b) Reports on Form 8-K
None.
20
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.
GOLDEN OIL COMPANY
Date: By: /s/ RALPH T. MCELVENNY, JR.
Chief Executive Officer
By: /s/ JEFFREY V. HOUSTON
Chief Financial and
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER
30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 12,414
<SECURITIES> 24,235
<RECEIVABLES> 455,981
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 544,376
<PP&E> 6,626,923
<DEPRECIATION> (3,337,123)
<TOTAL-ASSETS> 4,057,696
<CURRENT-LIABILITIES> 1,541,756
<BONDS> 0
<COMMON> 14,266
0
0
<OTHER-SE> 2,379,427
<TOTAL-LIABILITY-AND-EQUITY> 4,057,696
<SALES> 293,631
<TOTAL-REVENUES> 302,131
<CGS> 203,989
<TOTAL-COSTS> 462,279
<OTHER-EXPENSES> 67,841
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,292
<INCOME-PRETAX> (234,281)
<INCOME-TAX> 0
<INCOME-CONTINUING> (234,281)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (234,281)
<EPS-PRIMARY> (.17)
<EPS-DILUTED> (.17)
</TABLE>
