SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
____
--------------------------
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES ACT OF 1934
For the quarterly period ended June 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission file number 0-30472
PIONEER OIL AND GAS Incorporated pursuant to the Laws of the State of Utah
Internal Revenue Service - Employer Identification No. 87-0365907
1206 W. South Jordan Parkway, Unit B
South Jordan, Utah 84095-4551
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 _ _
The total number of shares of the registrant's Common Stock, $.001 par value,
outstanding on June 30, 2000, was 8,135,018.
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements for Third Fiscal Quarter 2000
Period Ending JUNE 30, 2000
<PAGE>
<TABLE>
<CAPTION>
Financial Statements for Third Fiscal Quarter 2000
Period Ending June 30, 2000
PIONEER OIL AND GAS
Balance Sheet
June 30, Sept. 30,
As of 2000 1999
----------------------------------------------------------------------------------------------------------
(Unaudited)
Assets
Current assets:
<S> <C> <C>
Cash $ 165,340 $ 343,919
Accounts receivable 129,963 105,798
Resale leases, at lower of cost or market 288,038 17,333
----------- -----------
Total current assets 583,341 467,050
Property and equipment - net (successful efforts method) 653,923 586,005
Other assets 3,230 3,000
----------
$ 1,240,494 $ 1,056,055
------------ ------------
------------------------------------------------------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Cash overdraft $ - $ -
Accounts payable 95,358 109,099
Accrued expenses 21,862 22,426
Note payable to Bank 310,277 -
----------- ----------
Total current liabilities 427,497 131,525
----------- ----------
Commitments and contingencies - -
Stockholders' equity (deficit):
Common stock, par value $.001 per share, authorized
50,000,000 shares: 8,135,018 shares and 5,644,792
shares issued and outstanding, respectively 8,134 8,134
Additional paid-in capital 2,521,069 2,521,069
Stock subscription receivable (293,460) (293,460)
Accumulated deficit (1,311,213) (1,311,213)
Year to date income (loss) (111,534) -
Total stockholder's equity (deficit) 812,997 924,530
----------- -------
$ 1,240,494 $ 1,056,055
------------- ------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PIONEER OIL AND GAS
Statement of Income
Third Quarter Ending June 30, 2000
(unaudited)
2000 1999
---- ----
Revenue:
<S> <C> <C>
Oil and gas sales $255,431 $ 117,197
Royalty Revenue 34,867 10,982
Operational reimbursements 2,200 3023
Project and lease sales income - -
-------- ----------
292,498 131,202
Costs and expenses:
Cost of operations 124,399 81,733
General and administrative expenses 132,641 89,954
Exploration costs 50,075 37,173
Lease rentals 3,845 99
Depreciation, depletion and amortization 31,590 37,868
---------- ------
342,550 246,827
-------- -------
Profit (Loss) from operations (50,052) (115,625)
--------- ---------
Other income (expense):
Gain (loss) on assets sold or abandoned - 161,340
Gain on marketable securities - -
Interest expense (1,791) (31,443)
Other (expense) income - 11
--------- ---------
Income (loss before provision
for income taxes) (51,843) 14,283
---------- ------
Provision for income taxes - -
---------- -----
Net income (loss) $ (51,843) $ 14,283
-------------- -----------
Earnings per share - basic and diluted $ .01 $ .00
--------------- -------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PIONEER OIL AND GAS
Statement of Income
For Nine-Months Ending June 30,
(unaudited)
2000 1999
---- ----
Revenue:
<S> <C> <C>
Oil and gas sales $ 667,079 $ 375,971
Royalty Revenue 79,628 64,112
Operational reimbursements 4,445 9,149
Project and lease sales income - 3,270
-------- -----
751,152 452,502
Costs and expenses:
Cost of operations 266,905 232,588
General and administrative expenses 353,924 235,346
Exploration costs 142,009 142,810
Lease rentals 5,670 2,007
Depreciation, depletion and amortization 94,770 113,604
--------- -------
863,278 726,355
------- -------
Loss from operations (112,126) (273,853)
---------- ---------
Other income (expense):
Gain (loss) on assets sold or abandoned 52 217,197
Gain on marketable securities - -
Interest expense (3,660) (97,378)
Other (expense) income 4,201 467
--------- ------------
Income (loss before provision
for income taxes) (111,533) (153,567)
----------- ---------
Provision for income taxes - -
--------------- -----
Net income (loss) $ (111,533) $ (153,567)
------------ ------------
Earnings per share - basic and diluted $ (.01) $ (.02)
--------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PIONEER OIL AND GAS
Statement of Cash Flows
First The Nine-Months Ending June 30,
(unaudited)
2000 1999
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net income $ 111,533) $ 153,567)
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Gain on assets sold or abandoned -
Depreciation, depletion and amortization 94,770 113,604
Gain on forgiveness of debt - -
Realized loss on marketable securities - -
Stock issued to employee stock ownership plan - -
(increase) decrease in:
Accounts receivable (24,165) 16
Resale leases (270,705) (3,558)
Property and Equipment (162,688) 60,391
Other assets (230) (200)
Increase (decrease) in:
Outstanding checks in excess of bank balance - (78,854)
Accounts payable (13,741) (76,513)
Accrued expenses (563) (255,045)
-------- ---------
Net cash (used in) provided by
operating activities (488,855) (393,726)
--------- ---------
Cash flows from investing activities:
Proceeds from sale of property - -
Acquisition of property and equipment - -
------- -------
Net cash provided by investing activities - -
----- -----
Cash flow from financing activities:
Proceeds from note payable 310,277 98,279
Payments on note payable - -
Proceeds from issuance of common stock - 403,776
Collection of stock subscription receivable - -
Stock subscription receivable - (300,000)
----- ---------
Net cash (used in) provided by
financing activities 310,277 202,055
------- -------
Net increase (decrease) in cash (178,579) (191,671)
Cash, beginning of period $ 343,919 $ 255,148
------------ ----------
Cash, end of period $ 165,340 $ 63,477
----------- ----------
</TABLE>
<PAGE>
PIONEER OIL AND GAS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
First Fiscal Quarter Ending December 31, 1999
(Unaudited)
NOTE 1 - UNAUDITED INTERIM INFORMATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Regulation
S-B. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three-month and nine-month periods ending
June 30, 2000 are not necessarily indicative of the results that may be expected
for the year ending September 30, 2000. For further information, refer to the
financial statements and footnotes thereto included in the Company's Form 10-SB
for the year ended September 30, 1999.
(1) The unaudited financial statements include the accounts of Pioneer Oil and
Gas and include all adjustments (consisting of normal recurring items) which
are, in the opinion of management, necessary to present fairly the financial
position as of June 30, 2000 and the results of operations and cash flows for
the three-month and nine-month periods ended June 30, 2000 and 1999. The results
of operations for the three-month and nine-month periods ended June 30, 2000 are
not necessarily indicative of the result to be expected for the entire year.
(2) Loss per common share is based on the weighted average number of shares
outstanding during the period.
<PAGE>
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(Period Ending June 30, 2000)
Unaudited financial data
The discussion and analysis contained herein should be read in conjunction with
the preceding financial statements and the information contained in the
Company's 10SB. Except for the historical information contained herein, the
matters discussed in this 10 QSB contain forward looking statements within the
meaning of Section 27a of the Securities Act of 1933, as amended, and Section
21e of the Securities Exchange Act of 1934, as amended, that are based on
management's beliefs and assumptions, current expectations, estimates, and
projections. Statements that are not historical facts, including without
limitation statements which are preceded by, followed by or include the words
"believes," "anticipates," "plans," "expects," "may," "should," or similar
expressions are forward-looking statements. Many of the factors that will
determine the company's future results are beyond the ability of the Company to
control or predict. These statements are subject to risks and uncertainties and,
therefore, actual results may differ materially. All subsequent written and oral
forward-looking statements attributable to the Company, or persons acting on its
behalf, are expressed qualified in their entirety by these cautionary
statements. The Company disclaims any obligation to update any forward-looking
statements whether as a result of new information, future events or otherwise.
Important factors that may include, but are not limited to: the risk of
a significant natural disaster, the inability of the Company to insure against
certain risks, fluctuations in commodity prices, the inherent limitations in the
ability to estimate oil and gas reserves, changing government regulations, as
well as general market conditions, competition and pricing, and other risks
detailed from time to time in the Company's SEC reports, copies of which are
available upon request from the Company.
Results of Operations -
Total Revenue for the third fiscal quarter increased 123 percent from
$131,202 in fiscal 1999 to $292,498 in fiscal 2000. For the nine-month period
revenues increased 66 percent from $452,502 to $751,152. The increase in revenue
was due primarily to an increase in oil and gas sales
Total oil and gas sales (including royalty revenue) increased from
$128,179 to $290,298 in the third quarter and from $440,083 to $746,707 for the
nine-month period. This increase was largely due to higher product prices.
Average oil prices for the quarter increased from $15.14 bbl to $25.71 bbl while
gas prices increased from $1.58 MCF to $2.07 MCF. For the nine-month period,
average oil prices increased from $11.59 bbl to $24.12 bbl while gas prices
increased from $1.59 to $1.95. Gas production for the nine-month period
increased by 48 percent as more wells were brought on line from our Mamm Creek
and Pilot properties. For the quarter gas increased 93 percent primarily due to
the restoration of our Pilot property. Oil production was essentially flat
showing only a one percent increase for the quarter and 14 percent decline for
the nine-month period due to natural production declines and downtime due to
operational problems on our Climax 7-2 and Willow Creek properties.
<PAGE>
Project and lease sales income for the quarter was zero as was the
corresponding fiscal 1999 quarter. No projects or leases were sold during the
third quarter or nine-month period of fiscal 2000. The company is currently
developing several projects some of which should sell during the last fiscal
quarter.
Costs of operations increased from $81,733 to $124,399 for the quarter
due to major non-recurring repairs on our Climax 7-2 and Tribal A properties.
For the nine-month period operations expenses increased 15 percent from $232,588
to $266,905.
General and administrative expenses increased from $89,954 to $132,641
for the quarter and from $235,346 to $353,924 for the nine-month period. These
increases were due to salary increases for employees, costs associated with
becoming fully reporting and larger payments to working interest partners due to
higher product prices.
The Company's net loss for the third quarter (fiscal 2000) was $51,843
compared to a net income of $14,283 for the third fiscal quarter 1999. However,
the third fiscal quarter 1999 loss from operations was $115,625 and the net
income was due to the sale of properties. For the nine-month period (fiscal
2000) the Company posted a loss of $111,533 compared to a loss of $153,567 for
fiscal 1999.
Liquidity and Capital Resources
During the nine-months of fiscal 2000 cash used in operating activities
was $488,855 while investing activities provided no cash. Financing activities
provided $310,277 from the Company's bank line of credit. A major use of cash
was $270,705 for the purchase of resale leases to increase the Company's
inventory of acreage for future development and sale.
<PAGE>
PART II. OTHER INFORMATION
Item 1 - Legal Proceedings
None.
Item 2 - Changes in Securities
None.
Item 3 - Defaults Upon Senior Securities
None.
Item 4 - Submission of Matters to a Vote of Security Holders
(a) On June 28, 2000, the Company held its Annual Meeting of Stockholders.
(b) At the meeting Don J. Colton, Gregg B. Colton and John O. Anderson were
elected as the members of the Board of Directors for the Company until the
Company's next annual meeting of the shareholders.
(c) Stockholders voted on the following matters:
(i) The election of the following directors of the Company:
DIRECTOR: FOR AGAINST
Don J. Colton 5,457,556 51,535
Gregg B. Colton 5,457,556 51,535
John O. Anderson 5,457,556 51,535
(ii) The ratification of the appointment of Tanner + Co. as auditor for the
Company for the current year.
For the appointment
of Tanner + Company Against
Number of Shares 5,457,556 51,535
.
Item 5 - Other Information
None.
Item 6 - Exhibits and Reports on Form 8-K
(a) There are no exhibits with this report.
(b) The registrant did not file any reports on Form 8-K during the
fiscal quarter ended June 30, 2000.
SIGNATURES
Pursuant to the requirements 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.
Pioneer Oil and Gas
Dated: Aug. 9, 2000 /s/ Don J. Colton
-----------------------------------
President and Chief Executive Officer
