SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-KSB
(Mark
One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
Commission File
No. 2-72232
GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION
(Name of small business issuer in its charter)
COMMONWEALTH OF VIRGINIA 54-1082057
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
5990 Greenwood Plaza Blvd., Suite 127
Greenwood Village, Colorado 80111-4708
(Address of principal executive offices)
Issuer's telephone number, including area code:(303) 773-6016
Securities registered under Section 12(b) of the Exchange Act:
NONE
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.10 par value
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 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
Check if disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no
disclosure will be contained, to the best of registrant's
knowledge, in definitive proxy or information statements incorpo-
<PAGE>
rated by reference in Part III of this Form 10-KSB or any amendment
to this Form 10-KSB. (X)
Issuer's revenues for its most recent fiscal year: $1,711,000
The aggregate market value of voting stock held by non-
affiliates of the registrant was approximately $750,000 as of March
1, 1996.
The registrant had 18,844,245 shares outstanding at March 1,
1996.
DOCUMENTS INCORPORATED BY REFERENCE
Part III incorporates information by reference from the
Company's definitive proxy statement which will be filed with the
Commission within 120 days of December 31, 1995, pursuant to
Regulation 14A.
<PAGE>
GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION
INDEX TO FORM 10-KSB
PART I:
Page
----
Item 1. Description of Business. . . . . . . . . . . . 4
Item 2. Description of Properties. . . . . . . . . . . 7
Item 3. Legal Proceedings. . . . . . . . . . . . . . . 9
Item 4. Submission of Matters to a Vote of Security
Holders. . . . . . . . . . . . . . . . . . . . 9
PART II:
Item 5. Market for Common Equity and Related Stock-
holder Matters . . . . . . . . . . . . . . . . 10
Item 6. Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . 10
Item 7. Financial Statements . . . . . . . . . . . . . 14
Item 8. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure . . . . 30
PART III:
Item 9. Directors, Executive Officers, Promoters and
Control Persons; Compliance with Section 16(a)
of the Exchange Act. . . . . . . . . . . . . . 30
Item 10. Executive Compensation . . . . . . . . . . . . 30
Item 11. Security Ownership of Certain Beneficial
Owners and Management. . . . . . . . . . . . . 30
Item 12. Certain Relationships and Related
Item 13. Exhibits, List and Reports on Form 8-K . . . . 31
SIGNATURE PAGE. . . . . . . . . . . . . . . . . . . . . . . . 32
<PAGE>
PART I
Item 1. Description of Business
General
Great Eastern Energy and Development Corporation ("Great
Eastern") was incorporated under the laws of the Commonwealth of
Virginia on May 1, 1978. From its inception, Great Eastern has
been engaged in the acquisition and exploration of undeveloped
leasehold acreage in potential oil and gas producing areas and,
more recently, in the acquisition and development of more mature
oil and gas properties in established areas of production. Since
July 1982, Great Eastern has maintained its principal place of
business in Colorado.
On September 26, 1994, the Company retained the services of
Kirkpatrick Energy Associates, Inc. ("Kirkpatrick"), an investment
banking firm, to evaluate options available to the Company to
maximize shareholder value, including a possible sale of the
Company. Kirkpatrick's services were terminated October 30, 1995,
except as to certain companies identified by Kirkpatrick and
considered to be active and viable candidates for the purchase of,
or merger with, Great Eastern. There is no assurance that any
action or a possible sale will occur.
During each of the three years in the period ended December
31, 1992, the Company developed methane gas reserves from coalbeds
in southeastern Kansas. Associated with the sale of methane gas
from coalbeds is a tax credit under Section 29 of the Internal
Revenue Code, which mandated that companies drill qualifying wells
by December 31, 1992. Because taxable income, if any, generated by
the Company would either be sheltered entirely by existing net
operating losses or be sheltered partially, resulting in alterna-
tive minimum tax which may not be offset by the tax credit, the
Company could not utilize the benefits of the tax credit.
Given the Company's tax position, the benefit of the tax
credit could only be monetized by sale of the related properties to
an entity which could utilize the tax credit. On September 3,
1993, Great Eastern sold its entire working interest in certain
coalbed methane properties. By the terms of an Asset Purchase
Agreement, the Company will receive monthly payments, which are
secured by a mortgage, through December 31, 2002. A portion of the
monthly payments are attributable to the monetization of the tax
credit and will result in net cash flows to the Company in excess
of that which would have been received had the Company retained and
produced the properties.
The sale resulted in a reduction of approximately 7.36 billion
cubic feet of proved natural gas reserves, and a reduction of
approximately $3,368,000 in the standardized measure of discounted
future net cash flows.
<PAGE>
Great Eastern will continue to operate the properties for a
fee.
Great Eastern's primary exploratory efforts are in northwest-
ern Colorado. The Company believes the area has good potential for
hydrocarbons and seeks to have the potential tested through
farmouts or similar arrangements with other parties. The continued
instability in the price of oil and natural gas has resulted in
reduced expenditures for exploration activities throughout the
industry which in turn has hampered the Company's efforts to have
its Colorado acreage explored and developed. Since there has been
no material improvement in domestic drilling activities, no
assurance can be made that the Company's acreage will be developed.
The Company plans to maintain its acreage as long as economically
feasible and to continue its efforts to develop this acreage.
Also, Great Eastern owns and operates a gas pipeline in
southeastern Kansas. The pipeline operations were expanded during
December 1990 with the acquisition of all limited partnership
interests in an affiliated gathering system, Sycamore Valley
Gathering Ltd. ("Sycamore"). Subsequent thereto, capital was
infused to upgrade and expand the system to handle increased sales
volumes resulting from the success of the coalbed methane gas well
program. Natural gas is purchased from Sycamore and sold in the
interstate market under a gas sales contract with Westar Gas
Marketing, Inc., and in the intrastate market under gas sales
contracts with Bonanza Energy Corporation and Scott Rock Company.
In addition to the operations that are carried out by Great
Eastern, part of its operations have been conducted through its
wholly-owned subsidiaries, Zoandra Petroleum, Inc. ("Zoandra"),
Sycamore and Patton Oil Co. ("Patton"). Great Eastern, Zoandra,
Sycamore and Patton are hereinafter collectively referred to as the
"Company".
Zoandra is the sole general partner and operator, and Great
Eastern is the sole limited partner, of Sycamore, a gas gathering
facility in southeastern Kansas. Zoandra's working interest
ownership in oil and gas properties is negligible. Since 1992, no
operations have been conducted through Patton.
Principal Products and Markets
The Company does not refine or process its oil production but
sells such production under short-term contracts at field prices
quoted by purchasers in the area of the producing property. A
portion of the Company's production comes from "stripper wells"
(i.e., wells with low production and relatively high operating
costs). Because this production is low margin, stripper wells are
particularly vulnerable to declines in oil prices.
<PAGE>
In addition, the Company transports and sells natural
gas to Westar Gas Marketing, Inc., Bonanza Energy Corporation and
Scott Rock Company. A portion of the gas purchased for resale is
produced by Great Eastern and Zoandra.
Major Customers and Suppliers
During 1995, there were three customers which individually
accounted for ten percent or more of the Company's revenue from oil
and gas sales. These customers were Texaco (31%), Bonanza Energy
Corporation (42%) and Memorial Exploration (16%). In view of the
demand for domestic oil at market prices, the Company does not
believe that the loss of any customers would adversely affect its
operations.
In addition, the Company's revenue from 1995 gas transmission
sales was from three customers, Westar Gas Marketing, Inc. (46%),
Bonanza Energy Corporation (53%) and Scott Rock Company (1%). Loss
of the gas sales contracts with either Westar Gas Marketing, Inc.
or Bonanza Energy Corporation could adversely affect gas transmis-
sion operations.
Commencing on September 3, 1993, virtually all of the gas
acquired by the Company's gas gathering facility was from one
seller under a long-term contract. The underlying gas is collater-
al for monthly payments to the Company under an Asset Purchase
Agreement secured by a mortgage.
Seasonality
Because a portion of the Company's activity occurs in the
Rocky Mountain area, the weather often is a significant factor in
exploration and production. The exploration areas are subject to
heavy snows, extremely low temperatures and spring thaws, making
drilling, if conducted during such periods, difficult and expen-
sive. The Company's principal production operations in Kansas are
not seriously affected by the weather.
Competition
As an independent oil and gas company lacking the financial
resources of major and large independent oil and gas companies, the
Company finds itself at a disadvantage in competing for the limited
financing available for acquisition, exploration and development of
oil and gas properties. The future effect of these competitive
factors on the Company and its operations cannot be accurately
predicted.
<PAGE>
Environmental Regulation
The Company is subject to a variety of federal, state and
local environmental laws and regulations relating to site rehabili-
tation, spillages, noise, air quality and waste disposal arising
from its operations. To date, the cost of complying with these
environmental laws and regulations and carrying insurance has not
been material. Whether such compliance in the future will
necessitate material capital expenditures is not known.
Government Regulation
The Company is subject to extensive federal and state
regulations governing its oil and gas activities. The Company owns
leasehold interests in federal and state acreage that entail
numerous reporting requirements. Federal and state regulations
affect well spacing and drilling permits.
Employees
At December 31, 1995, the Company had ten full-time, and one
part-time employees, including Donald G. Jumper, President, and
John W. Smith, Executive Vice President and Assistant Secretary.
Six full-time employees are oil field workers involved with
operating the Kansas oil and gas wells and a gas gathering system.
The remaining employees serve in support positions in land,
accounting and clerical functions.
Item 2. Description of Properties
The Company's interests in its properties are in the form of
direct interests in oil and gas leases. The Company believes it
has satisfactory title to its properties based upon generally
accepted industry standards. As is customary in the industry, only
a perfunctory title examination is conducted at the time property
is acquired by the Company. Prior to the commencement of drilling,
however, a thorough examination is conducted and material defects,
if any, are corrected before proceeding with operations.
A portion of the oil and gas properties owned by the Company
are leases requiring annual payment of a delay rental to retain the
Company's interest in the lease. The current annual delay rental
on most of the Company's leases is $1.00 per acre.
Great Eastern and Zoandra collectively own and operate a gas
gathering system along with gas treatment, dehydration and
compression facilities.
Current Drilling Operations
The Company has not conducted any drilling operations since
January 1, 1996.
<PAGE>
Oil and Gas Interests in Leasehold Acreage
The areas in which the Company holds oil and gas interests in
acreage as of December 31, 1995 are as follows:
<TABLE>
<CAPTION>
Undeveloped Acreage Developed Acreage
- -----------------------------------------------------------
Location Gross Net Gross Net
- -----------------------------------------------------------
<S> <C> <C> <C> <C>
Colorado 6,696 4,343 2,087 567
Kansas 160 160 5,040 4,167
Louisiana 1,658 40
New Mexico 320 20
Oklahoma 320 120
- ------------------------------------------------------------
6,856 4,503 9,425 4,914
============================================================
</TABLE>
Oil and Gas Wells
The following table summarizes the Company's gross and net
interests in oil and gas wells as of December 31, 1995. All net
well amounts are based on the working interests currently in effect
and include the Company's net interest in its wells and partnership
wells.
<TABLE>
<CAPTION>
Oil Gas
- ----------------------------------------------------
Gross Net Gross Net
- ----------------------------------------------------
<S> <C> <C> <C> <C>
Colorado 4 1.80
Kansas 30 25.43 22 20.92
Louisiana 24 1.25
New Mexico 2 .13
Oklahoma 2 .82
- ---------------------------------------------------
54 26.68 30 23.67
===================================================
</TABLE>
There was no drilling activity for the year ended December 31,
1994 and one (1) salt water disposal well was drilled in 1995.
Selected Production, Price and Cost Data
The following table sets forth annual net production, and the
average sales price and average production (lifting) costs per unit
of oil and gas produced by the Company for the years ended December
31, 1995 and 1994. Average production costs are converted to
equivalent units of oil due to the dominance of oil sales during
the periods.
<PAGE>
<TABLE>
<CAPTION>
Oil (Bbls) Gas (Mcf)
- -------------------------------------------------- Average
Average Production Cost
Year Production Price Production Price (Equivalent Bbl)
- -------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1995 34,741 $16.36 55,028 $1.40 $5.54
1994 32,270 14.59 85,142 1.53 6.11
</TABLE>
See Item 6, Management's Discussion and Analysis of Financial
Condition and Results of Operations, for a comparison of 1995 and
1994 operating results. Additional information concerning the
Company's reserves and production appears in Note 11 of Notes to
the Consolidated Financial Statements.
Pipeline Activity
Great Eastern and Zoandra collectively own a gas gathering
system, along with gas treatment, dehydration and compression
facilities, which connects to gas transmission lines owned by two
unaffiliated companies. Throughout fiscal 1995, Great Eastern
purchased gas from Sycamore and, after treatment, dehydration and
compression, sold the gas to Westar Gas Marketing, Inc., Bonanza
Energy Corporation and Scott Rock Company.
Exploration and Development Activity
During 1994, the Company completed a waterflood feasibility
study of the Lansing/Kansas City formation in the SW Wil Field in
Edwards County, Kansas and commenced a waterflood of certain
properties in the field in an effort to increase oil production.
Because of the promising results of the initial waterflood,
management implemented a waterflood of additional properties in the
field during 1995. Some selected developmental drilling for oil
and gas may be conducted in Kansas. No exploratory wells are
scheduled to be drilled in 1996.
Other
Although most of the efforts of Great Eastern are expected to
be directed to the above areas and projects, it also owns interests
in other properties located in Colorado, Kansas, Louisiana, New
Mexico and Oklahoma.
Item 3. Legal Proceedings
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of security holders during
the fourth quarter of 1995.
<PAGE>
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
During May 1994, the common stock of Great Eastern (symbol
GREN) was delisted from the National Association of Securities
Dealers Automated Quotation (NASDAQ) system, Small-Cap Issues. The
common stock of Great Eastern is traded on the NASD Bulletin Board
under the symbol GREN.U. The high and low bid prices for 1995 and
1994 were as follows:
1995 High Low
----------- ----------- ------------
1st quarter $.13 $.09
2nd quarter .13 .13
3rd quarter .13 .13
4th quarter .13 .06
1994
-----------
1st quarter .19 .06
2nd quarter .06 .06
3rd quarter .13 .06
4th quarter .06 .06
As of December 31, 1995, there were 1,228 holders of record of
Great Eastern's common stock.
Since inception, Great Eastern has not paid any cash dividends
on its common stock. Any earnings realized by Great Eastern will
be reinvested into the development of its business and, according-
ly, no payment of dividends is anticipated in the foreseeable
future.
Item 6. Management's Discussion and Analysis of Financial Condition
and Results of Operations
CAPITAL RESOURCES
Given the existing state of petroleum prices, the Company does
not anticipate utilizing any material amount of its limited funds
to conduct exploratory drilling activities. The Company will
continue efforts to farmout high risk prospects to major oil and
gas companies thereby avoiding the risk and the potential depletion
of cash from exploratory drilling activities. With respect to its
development activities, management will fund only those activities
that have a high likelihood of giving the Company an above average
return on its investment. Given the present economic condition in
the industry, no assurance can be made that the Company will be
successful in its efforts.
<PAGE>
LIQUIDITY
During 1995, the Company's liquidity position improved as a
result of retained cash flow provided by operating activities in
excess of reduced levels of investments in oil and gas properties.
Cash flow of approximately $98,000 was provided by operations. At
December 31, 1995, the Company had net working capital of
$1,038,000. The Company has no bank debt and, with the exception
of one compressor, no oil and gas properties are pledged as
collateral. Management believes that the Company's liquidity is
adequate to meet the planned operations for fiscal 1996.
Should oil prices continue to decline, additional wells may
become uneconomical and the Company will abandon such wells. Such
abandonment will require plugging and site rehabilitation expendi-
tures.
During 1995, the Company commenced a program to relocate some
of its gas gathering and transmission lines at the request of the
Kansas Department of Transportation. The costs of the relocations,
including lost sales, will be reimbursed by KDOT. A $122,000
receivable was recorded at December 31, 1995 for costs incurred in
1995.
RESULTS OF OPERATIONS
1995 compared to 1994
The Company reported a net loss of $326,000 for the year ended
December 31, 1995 compared to a net loss of $312,000 for the year
ended December 31, 1994. Fiscal 1995 results were lower than
fiscal 1994 primarily because of decreases in installment sales
income of $114,000 and gas transmission sales of $437,000, a
$71,000 impairment of undeveloped leaseholds, and a $66,000 loss on
the sale of real estate. These decreases were partially offset by
the Company's efforts to reduce overhead costs. Included in 1995
installment sales income is an $84,000 gain resulting from the
proceeds received under the Asset Purchase Agreement for two wells
which were sold by the purchaser. The remainder of the decline is
primarily due to the effects of a decline in gas prices which has
resulted in a decline in gas production and gas transmissions.
<PAGE>
The following table presents oil and gas operational and
financial data:
<TABLE>
<CAPTION>
1995 1994
- ---------------------------------------------------------------
<S> <C> <C>
Oil production (Bbls) 34,741 32,270
Gas production (Mcf) 55,028 85,142
Average oil price $ 16.36 $ 14.59
Average gas price 1.40 1.53
Oil sales 568,000 471,000
Gas sales 77,000 131,000
- ---------------------------------------------------------------
645,000 602,000
- ---------------------------------------------------------------
Production taxes 29,000 25,000
Lease operating expense 214,000 259,000
- ---------------------------------------------------------------
243,000 284,000
- ---------------------------------------------------------------
Gross profit $ 402,000 $ 318,000
===============================================================
</TABLE>
The Company reported increased profits from oil and gas opera-
tions. Oil sales increased 21% as a result of an 8% increase in
production volumes and a 12% increase in sales prices. Production
volumes increased as a result of successful waterflood activity in
the Trousdale unit.
Natural gas sales decreased 41% as a result of a 35% decrease
in production volumes and a 8% decrease in sales prices. The
decline in production volumes (30,000 Mcf) is attributed to normal
decline coupled with downhole mechanical problems.
Total production costs decreased 14%. Average production
costs per equivalent barrel decreased to $5.54 in 1995 from $6.11
in 1994 due to the Company converting its western Kansas operations
to contract employees at a cost savings in personnel and in vehicle
expenses charged to the properties.
The following table presents gas transmission operational
data:
<TABLE>
<CAPTION>
1995 1994
- ---------------------------------------------------------------
<S> <C> <C>
Gas volumes (Mcf) 563,931 722,778
Average sales price $ 1.51 $ 1.79
Average purchase price 1.30 1.31
Gas sales 852,000 1,295,000
Meter fee income 55,000 49,000
- ---------------------------------------------------------------
907,000 1,344,000
- ---------------------------------------------------------------
Cost of gas 734,000 950,000
Operating expenses 227,000 244,000
- ---------------------------------------------------------------
961,000 1,194,000
- ---------------------------------------------------------------
$ (54,000) $ 150,000
===============================================================
</TABLE>
<PAGE>
Decreased demand from the marketplace resulted in a decrease
in the average sales prices of 16%. The combination of decreased
volumes and declining sales prices resulted in a decrease in gas
sales of 34%. The average purchase price of gas did not materially
change from the prior year and cost of gas decreased by 23% as a
result of lower volumes. Operating expenses reflected a modest
decrease of 7%.
On September 3, 1993, Great Eastern sold its entire working
interest in certain coalbed methane gas properties located in
southeastern Kansas. The contingent purchase, non-recourse
payment, as defined in the Asset Purchase Agreement, will be paid
out over a period through December 31, 2002. During 1995, the
Company reflected net installment sales income of $115,000 as
compared to $229,000 during 1994. Included in 1995 installment
sales income is an $84,000 gain resulting from the proceeds
received under the Asset Purchase Agreement for two wells sold by
the purchaser. Installment sales income was net of $277,000 and
$338,000 for the years ended December 31, 1995 and 1994, respec-
tively, representing a pro-rata portion of the cost of the
properties sold.
Depreciation, depletion and amortization decreased to $215,000
in 1995 from $296,000 in 1994 primarily due to certain wells
becoming fully amortized in 1994.
In the fourth quarter of 1995, the Company recorded a $71,000
impairment as a result of its decision not to renew certain leases
on undeveloped acreage.
Effect of changing prices
During fiscal 1995, the decline in gas prices has adversely
affected the Company as sales and gathering of natural gas
comprised a significant portion of the Company's operations. The
slight increase in oil prices was not sufficient to offset the
effects of decreasing gas prices. Given the volatile nature of the
oil and gas industry, price fluctuations may affect both the
revenues received and the Company's ability to attract investors to
participate in sharing arrangements.
As a product of the low oil and gas prices, the over-supply of
drilling rigs and competition in the oil field service industry has
returned and drilling costs have stabilized during the year. No
assurance can be given that this trend will continue.
<PAGE>
Item 7. Financial Statements
GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Report of independent accountants........................... 15
Consolidated balance sheet at December 31, 1995............. 16
Consolidated statement of operations for the years ended
December 31, 1995 and 1994.................................. 17
Consolidated statement of changes in shareholders' equity
for the years ended December 31, 1995 and 1994.............. 18
Consolidated statement of cash flows for the years ended
December 31, 1995 and 1994.................................. 19
Notes to consolidated financial statements.................. 20
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and
Board of Directors of Great Eastern
Energy and Development Corporation
In our opinion, the consolidated financial statements listed in the
accompanying index present fairly, in all material respects, the
financial position of Great Eastern Energy and Development
Corporation and its subsidiaries at December 31, 1995 and the
results of their operations and their cash flows for the years
ended December 31, 1995 and 1994, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is
to express an opinion on these financial statements based on our
audits. We conducted our audits of these statements in accordance
with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Denver, Colorado
March 25, 1996
<PAGE>
<TABLE>
GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In thousands, except for share information)
<CAPTION>
December 31,
1995
------------
ASSETS
<S> <C>
CURRENT ASSETS
Cash and cash equivalents....................... $ 439
Certificates of deposit......................... 311
Receivables, net of allowance for doubtful
accounts of $234............................... 274
Prepaid expenses and other current assets....... 146
------------
Total current assets........................ 1,170
------------
OIL AND GAS PROPERTIES, at cost (accounted
for using the successful efforts method)
Proved oil and gas properties.................. 9,472
Undeveloped leaseholds......................... 65
Pipeline equipment............................. 1,304
Equipment inventory............................ 37
------------
10,878
Less accumulated depreciation, depletion,
amortization and impairment................... ( 9,848)
------------
1,030
Properties held under installment sales, net of
accumulated depreciation, depletion and
amortization of $715........................... 1,510
------------
2,540
------------
OTHER ASSETS..................................... 73
------------
$3,783
============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable................................... $ 17
Accounts payable and accrued expenses........... 115
------------
Total current liabilities................ 132
------------
NOTES PAYABLE.................................... 40
------------
COMMITMENTS (Note 10) -
SHAREHOLDERS' EQUITY
Preferred stock, $10.00 par value, 4,000,000
shares authorized, none issued or outstanding
Common stock, $.10 par value, 40,000,000
shares authorized, 18,844,245 shares issued
and outstanding................................ 1,884
Additional paid-in capital...................... 29,242
Accumulated deficit............................. (27,470)
Notes receivable - officers..................... (45)
------------
Total shareholders' equity............... 3,611
------------
$ 3,783
============
<FN>
The accompanying notes are an integral part
of the consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except for per share amounts)
<CAPTION>
Year ended December 31,
1995 1994
--------------------------
<S> <C> <C>
REVENUES
Oil and gas sales................... $ 645 $ 602
Gas transmission sales.............. 907 1,344
Installment sales income............ 115 229
Interest and other income (expense). 110 (5)
--------------------------
1,777 2,170
--------------------------
EXPENSES
Production taxes.................... 29 25
Lease operating expense............. 214 259
Cost of gas transmission............ 961 1,194
Depletion, depreciation and
amortization....................... 215 296
Impairment of oil and gas properties 71 6
General and administrative.......... 533 603
Loss on sale of real estate......... 66 -
Exploration expense................. 7 8
Interest expense.................... 7 3
Settlement of litigation............ - 88
--------------------------
2,103 2,482
--------------------------
NET LOSS............................. $ (326) $ (312)
==========================
NET LOSS PER SHARE................... $ (.02) $ (.02)
==========================
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING......................... 18,844 18,844
==========================
<FN>
The accompanying notes are an integral part
of the consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(Dollars in thousands)
<CAPTION>
Common stock Additional Notes Total
-------------------------- paid-in Accumulated receivable- shareholders'
Shares Amount capital deficit officers equity
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1993...... 18,844,245 $1,884 $29,242 $(26,832) $(45) $4,249
Net loss.......................... (312) (312)
-----------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1994...... 18,844,245 1,884 29,242 (27,144) (45) 3,937
Net income........................ (326) (326)
-----------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1995...... 18,844,245 $1,884 $29,242 $(27,470) $(45) $3,611
===================================================================================
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
<CAPTION>
Year ended December 31,
1995 1994
--------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss............................... $ (326) $ (312)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Changes in accounts receivable........ (6) 65
Provision for recovery of accounts
receivable........................... - (1)
(Gain) loss from conveyances of real
estate, property and equipment....... (25) 67
Depletion, depreciation, amortization 215 296
Depletion, depreciation and
amortization charged against
installment sales income............. 277 338
Impairment of oil and gas properties.. 71 6
Changes in accounts payable and
accrued expenses..................... 13 (29)
Other................................. (121) (49)
--------------------------
Net cash provided by operating
activities.......................... 98 381
--------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Changes in certificates of deposit..... (5) 81
Additions to oil and gas properties.... (163) (260)
Proceeds from conveyances of
properties............................ 254 17
Increase in other assets............... (10) (15)
--------------------------
Net cash provided by (used in)
investing activities................. 76 (177)
--------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of debt..................... ( 7) (15)
--------------------------
INCREASE IN CASH AND CASH EQUIVALENTS... 167 189
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR................................ 272 83
--------------------------
CASH AND CASH EQUIVALENTS AT END OF
YEAR................................... $ 439 $ 272
==========================
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the year for interest $ 7 $ 3
==========================
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES
Additions to oil and gas properties
in exchange for notes payable........ $ - $ 59
==========================
<FN>
The accompanying notes are an integral part
of the consolidated financial statements.
</FN>
</TABLE>
<PAGE>
GREAT EASTERN ENERGY AND DEVELOPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Great Eastern Energy and Development Corporation and subsid-
iaries ("Great Eastern" or the "Company") operates in the oil and
gas industry in the United States. The Company is engaged in
acquiring, exploring, developing and operating oil and gas
properties and conducts its business primarily through joint
operations with other oil and gas companies. Great Eastern also
operates a gas transmission facility.
The Company does not refine or process its oil production but
sells such production under short-term contracts at field prices
quoted by purchasers in the area of the producing property. A
portion of the Company's production comes from "stripper wells"
(i.e., wells with low production and relatively high operating
costs). Because this production is low margin, stripper wells are
particularly vulnerable to declines in oil prices.
Commencing on September 3, 1993, virtually all of the gas
acquired by the Company's gas gathering facility was from one
seller under a long-term contract. The underlying gas is collater-
al for monthly payments to the Company under an Asset Purchase
Agreement secured by a mortgage. (See Note 4).
Principles of consolidation
The consolidated statements include the accounts of the
Company and its wholly-owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated in
consolidation.
Cash and Cash Equivalents
The Company considers all highly-liquid investments purchased
with a maturity of three months or less to be cash equivalents.
Concentrations of Credit Risk
The Company maintains demand deposit and certificates of
deposit accounts with one bank in Lexington, Kentucky.
The Company enters into sharing arrangements with other oil
and gas companies and sells its oil and gas to various purchasers.
Financial instruments which potentially subject the Company to
concentrations of credit risk are primarily accounts receivable.
The Company performs ongoing credit evaluations of the oil and gas
companies' and purchasers' financial condition and, generally,
requires no collateral from the companies or purchasers.
<PAGE>
Fair Value of Financial Instruments
The Company's financial instruments consist of cash and cash
equivalents, receivables, payables and certificates of deposit. The
carrying amounts of such financial instruments approximate fair
value because of the short maturity of these instruments.
Oil and gas properties
The Company follows the successful efforts method of account-
ing for oil and gas operations whereby all exploration costs,
including geological and geophysical costs, annual delay rentals on
undeveloped leases and exploratory dry hole costs are charged to
expense as incurred. Intangible drilling and development costs are
capitalized on successful wells and development dry holes.
Undeveloped leasehold costs are capitalized and charged to expense
if abandoned or impaired, based on a prospect-by-prospect evalua-
tion.
Capitalized costs relating to producing properties are
depleted on the units-of-production method based on estimated
quantities of proved reserves. Proved oil and gas properties are
not capitalized in an amount that exceeds the discounted future net
revenues of the associated property.
Pipeline equipment is depreciated using the straight-line
method over periods ranging from 7 to 12 years.
Investment in managed partnerships
The Company accounts for its investment in managed partner-
ships on the proportionate share method.
Properties held under installment sales
Income from the sale of producing oil and gas properties under
installment sales is reflected in operations as earned. Income
from the sale is reduced by a pro-rata portion of the cost of the
properties sold.
Natural gas hedging
The Company periodically hedges a portion of its natural gas
production. When direct investments are made in futures contracts,
gains or losses on the hedges are deferred and recognized in income
as the natural gas is produced and delivered. As of December 31,
1995, the Company had no open hedging positions.
<PAGE>
Net loss per share
Net loss per share of common stock is computed based on the
weighted average number of common shares outstanding during the
year. Common stock equivalents were anti-dilutive and were
excluded from the computation.
New Accounting Standards
In March 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Live Assets and for Long-
Lived Assets to be Disposed of." SFAS No. 121 will be adopted by
the Company in the first quarter of 1996, and it is not expected to
have a material impact on the Company's financial position or
results of operations.
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and the reported amounts of revenue and
expenses during the periods presented. Actual results could differ
from those estimates making it reasonably possible that a change in
these estimates could occur in the near term.
NOTE 2 - LEGAL SETTLEMENT
Patton Oil Co. v. McMahon, et al.
Under applicable law, Patton shareholders who dissented from
the exchange offer of Great Eastern shares for Patton shares,
completed in June 1985, were entitled to tender their shares and
receive fair value for such shares in cash. Six shareholders
holding 218,969 shares exercised their right to receive cash. The
fair market value at the time of the exchange was determined by
independent evaluation to be $.40 per share of Patton common stock.
Patton made payment of $.40 per share for such stock and the
dissenting shareholders made supplemental demands for cash payments
of approximately $4.25 per share.
On October 27, 1994, Patton and the dissenting shareholders
agreed to settle. The Settlement Agreement and Mutual Release
requested a remand to the District Court, Arapahoe County,
Colorado, with instructions to vacate all outstanding judgments and
to dismiss the Action with prejudice. Commensurate with the
settlement, Patton paid the dissenting shareholders an aggregate of
$88,308, and the action was dismissed with prejudice.
<PAGE>
NOTE 3 - RECEIVABLES
December 31,
1995
--------------
(In thousands)
Joint interest billings.................. $278
Accrued oil and gas sales................ 222
Note receivable.......................... 5
Accrued interest......................... 3
--------------
508
Allowance for doubtful accounts.......... (234)
--------------
$274
==============
On December 30, 1991, the Company purchased certain loans and
accrued interest in the aggregate amount of $45,280 which certain
officers of the Company owed to a bank. The loans were obtained by
the officers to acquire stock of the Company and, accordingly, are
reflected as a reduction of shareholders' equity in the consolidat-
ed balance sheet at December 31, 1995.
NOTE 4 - OIL AND GAS PROPERTIES
On September 3, 1993, Great Eastern sold its entire working
interest in certain coalbed methane gas properties (the Properties)
located in southeastern Kansas. The contingent purchase, non-
recourse payment, as defined in the Asset Purchase Agreement (the
Agreement), will be paid out over a period through December 31,
2002, and is secured by a mortgage.
Great Eastern will continue to operate the Properties for a
fee. Great Eastern and its wholly-owned subsidiary will also
continue to own and operate a natural gas gathering system and,
after dehydration and compression, will market the gas through
existing interstate and intrastate markets.
Commensurate with the execution of the Agreement, a wholly-
owned subsidiary of Great Eastern entered into a contract to
purchase all of the natural gas for $1.25 per thousand cubic feet
(Mcf) the price to be redetermined annually. During 1995, this
price was reduced to $1.10 per Mcf, based on terms of the Agree-
ment.
The effect of the sale on estimated quantities of proved oil
and gas reserves and the standardized measure of discounted future
net cash flows and changes therein relating to proved oil and gas
reserves is disclosed in Note 11 - Supplementary Oil and Gas
Information (Unaudited).
In the fourth quarter of 1995, the Company recorded a $71,000
impairment as a result of its decision not to renew certain leases
on undeveloped acreage.
<PAGE>
NOTE 5 - PREPAID EXPENSES AND OTHER CURRENT ASSETS
December 31,
1995
--------------
(In thousands)
Reimbursable construction costs due
from the State of Kansas............... 122
Prepaid expenses......................... 24
--------------
$146
==============
NOTE 6 - OTHER ASSETS
December 31,
1995
--------------
(In thousands)
Property and equipment, at cost, net
of accumulated depreciation of
$409................................... $ 73
==============
NOTE 7 - ACCOUNTS PAYABLE AND ACCRUED
EXPENSES
December 31,
1995
--------------
(In thousands)
Trade accounts payable................... $ 70
Revenue distribution payable............. 45
--------------
$115
==============
NOTE 8 - INCOME TAXES
The difference between the provision for income taxes and the
amounts which would have been reported by applying the statutory
federal income tax rate to income before provision for income taxes
is as follows:
1995 1994
----------------
(In thousands)
Tax expense (benefit) by applying the statutory
federal income tax rate to pretax loss
$(111) $(106)
Change in previous estimate (33) (14)
----------------
(144) (120)
Increase in valuation allowance 144 120
----------------
$ 0 $ 0
================
<PAGE>
Long-term deferred tax assets and liabilities are comprised of
the following at December 31, 1995:
1995
--------------
(In thousands)
Deferred tax assets:
Net operating loss carryforwards $8,509
Deferred tax liabilities: --------------
Depreciation, depletion and amortization (197)
--------------
Net deferred tax asset 8,312
Valuation allowance (8,312)
--------------
$ -
==============
A valuation allowance of $8,312,000 was provided at December
31, 1995 for net operating loss carryforwards which more likely
than not will not be utilized prior to their expiration.
The primary sources of temporary differences giving rise to
deferred tax liabilities are costs deducted and proceeds recognized
for tax purposes in excess of or less than net amounts amortized
for financial reporting purposes under the successful efforts
method of accounting, principally intangible drilling costs,
impairment of capitalized oil and gas property costs and proceeds
from the sale and exchange of oil and gas properties.
At December 31, 1995, the Company has federal income tax net
operating loss carryforwards of $25,213,000 which expire from 1996
through 2010.
Under Section 382 of the Internal Revenue Code of 1986, as
amended, if certain significant ownership changes occur, there
could be an annual limitation on the amount of net operating loss
carryforwards that can be utilized. Such a limitation could
substantially reduce any future potential benefit of the net
operating loss carryforward. The Company has not experienced a
change in ownership under these rules.
NOTE 9 - MAJOR CUSTOMERS
During 1995 and 1994, three customers individually accounted
for in excess of ten percent of the Company's revenue from oil and
gas sales the following:
1995 1994
---- ----
Texaco 31% 33%
Bonanza Energy Corporation 42% 31%
Memorial Exploration 16% 14%
In view of the demand for domestic oil at market prices, the
Company does not believe that the loss of any customers would
adversely affect its operations.
<PAGE>
During 1995 and 1994, two customers individually accounted for
in excess of ten percent of the Company's revenue from gas
transmission sales the following:
1995 1994
---- ----
Westar Gas Marketing, Inc. 46% 60%
Bonanza Energy Corporation 53% 39%
Loss of these gas sales contracts could adversely affect gas
transmission operations.
<PAGE>
NOTE 10 - LEASE COMMITMENTS
The Company is obligated for noncancelable operating lease
payments with initial terms exceeding one year relating to office
space and certain equipment leases. The lease agreements require
future minimum lease payments as follows:
Year Ending December 31, Amount Payable
1996 $ 66
1997 49
1998 17
1999 17
2000 -
----
$149
====
Rent expense in 1995, 1994 and 1993 was $25,000, $28,000 and
$31,000 respectively.
NOTE 11 - SUPPLEMENTARY OIL AND GAS INFORMATION (UNAUDITED)
The Company's oil and gas operations are conducted in the
United States. Information relating to these operations is
summarized as follows:
Costs incurred in oil and gas activities
Year ended December 31,
1995 1994
-----------------------
(In thousands)
Acquisition of undeveloped
leaseholds...................... $ 1 $ 16
Exploration costs................. 7 8
Development costs................. 163 303
<PAGE>
Oil and gas reserves
The following quantity and value information is based on
prices as of the end of each respective reporting period. No price
escalations were assumed except for gas sales made under terms of
contracts which include fixed and determinable escalations.
Operating costs and production taxes were deducted in determining
the quantity and value information. Such costs were estimated
based on current costs and were not adjusted to anticipate
increases due to inflation or other factors. No deductions were
made for general overhead, depreciation and interest.
The determination of oil and gas reserves is based on
estimates and is highly complex and interpretive. The estimates
are subject to continuing change as additional information becomes
available and an accurate determination of the reserves may not be
possible for several years after discovery.
Estimated quantities of proved oil and gas reserves
Following is a reconciliation of the Company's interest in net
quantities of proved oil and gas reserves. Proved reserves are the
estimated quantities of crude oil and natural gas which geological
and engineering data demonstrate with reasonable certainty to be
recoverable in future years from known reservoirs under existing
economic and operating conditions. Estimated reserves of oil
(barrels) and natural gas (thousands of cubic feet) as of December
31, 1995 and 1994, and the changes thereto for the years then ended
are as follows:
<TABLE>
<CAPTION
Oil (Bbls) Gas (Mcf)
------------------------
Total Proved Reserves: (In thousands)
<S> <C> <C>
Estimated quantity, December 31, 1993 214 1,674
Revisions in previous estimates...... 371 (104)
Production........................... (32) (85)
------------------------
Estimated quantity, December 31, 1994 553 1,485
------------------------
Revisions in previous estimates...... 51 (624)
Production........................... (35) (55)
------------------------
Estimated quantity, December 31, 1995 569 806
========================
Proved developed reserves:
December 31, 1994 478 1,485
========================
December 31, 1995 495 806
========================
</TABLE>
<PAGE>
Standardized measure of discounted future net cash flows and
changes therein relating to proved oil and gas reserves
Estimated discounted future net cash flows and changes therein
were determined in accordance with Statement of Financial Account-
ing Standards No. 69. Certain information concerning the assump-
tions used in computing the valuation of proved reserves and their
inherent limitations are discussed below. Great Eastern believes
such information is essential for a proper understanding and
assessment of the data presented.
Future cash inflows are computed by applying year-end prices
of oil and gas relating to Great Eastern's proved reserves to the
year-end quantities of those reserves.
The assumptions used to compute the proved reserve valuation
do not necessarily reflect Great Eastern's expectations of actual
revenues to be derived from those reserves nor their present worth.
Assigning monetary values to the reserve quantity estimation
process does not reduce the subjective and ever-changing nature of
such reserve estimates.
Additional subjectivity occurs when determining present values
because the rate of producing the reserves must be estimated. In
addition to errors inherent in predicting the future, variations
from the expected production rate also could result directly or
indirectly from factors outside Great Eastern's control, such as
unintentional delays in development, environmental concerns and
changes in prices or regulatory controls.
The reserve valuation assumes that all reserves will be
disposed of by production. However, if reserves are sold in place,
additional economic considerations also could affect the amount of
cash eventually realized.
Future development and production costs are computed by
estimating the expenditures to be incurred in developing and
producing the proved oil and gas reserves at the end of the year,
based on year-end costs and assuming continuation of existing
economic conditions.
Future income tax expense is not provided based on the
availability of net operating loss carryforwards.
A discount rate of 10 percent per year was used to reflect the
timing of the future net cash flows.
<PAGE>
<TABLE>
<CAPTION>
December 31,
1995 1994
----------------------
(In thousands)
<S> <C> <C>
Future cash flows......... $11,031 $10,575
Future production costs... (4,767) (4,838)
Future development costs.. (60) (63)
----------------------
Future net cash flows..... 6,204 5,674
10% annual discount for
estimated timing of
cash flows............... (2,692) (2,234)
----------------------
Standardized measure of
discounted future net
cash flows............... $ 3,512 $ 3,440
======================
</TABLE>
The following are principal sources of changes in the
standardized measure of discounted future net cash flows:
<TABLE>
<CAPTION>
Year ended December 31,
1995 1994
------------------------
(In thousands)
<S> <C> <C>
Beginning balance............. $ 3,440 $ 1,718
Sales of oil and gas pro-
duced, net of production
costs........................ (402) (318)
Net increase (decrease) in
prices and production costs.. 848 456
Changes in estimated future
development costs............ (20) (16)
Development costs incurred
during the year.............. 23 13
Revisions in previous
quantity estimates........... (283) 1,562
Accretion of discount......... 344 172
Changes in rates of
production and other......... (438) (147)
------------------------
Ending balance................ $3,512 $3,440
========================
</TABLE>
Oil and gas prices at December 31, 1995 of $17.04 per barrel
of oil and $1.64 per thousand cubic feet of gas were used in the
estimation of the Company's reserves and future net cash flows.
<PAGE>
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
Not applicable.
PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange
Act
Item 10. Executive Compensation
Item 11. Security Ownership of Certain Beneficial Owners and
Management
Item 12. Certain Relationships and Related Transactions
Items 9, 10, 11 and 12 are omitted because the Company will
file a definitive proxy statement (the "Proxy Statement") pursuant
to Regulation 14A under the Securities Exchange Act of 1934 not
later than 120 days after the close of the fiscal year. The
information required by such Items will be included in the
definitive proxy statement to be so filed for the Company's annual
meeting of stockholders scheduled for May 29, 1996 and is hereby
incorporated by reference.
<PAGE>
Item 13. Exhibits, List and Reports on Form 8-K.
(a) Exhibits.
Exhibit
Number Description of Document
- ------------------------------------------------------------------------
3.1 Restated Articles of Incorporation of Great Eastern. (1)
3.2 Bylaws of Great Eastern. (1)
10.1 Stock Option plan of Great Eastern. (1)
10.2 Stock Options held by officers and directors of Great Eastern.
(1)
10.3 Incentive Stock Option Plan of Great Eastern. (1)
10.4 Incentive Stock Options held by officers of Great Eastern. (1)
10.5 1984 Employee's Incentive Stock Option Plan of Great Eastern.
(1)
10.6 1984 Incentive Stock Options held by officers and employees of
Great Eastern. (1)
11.1 Statement re: computation of per share earnings. (2)
22.1 List of subsidiaries. (3)
- ------------------------------------------------------------------------
1) Incorporated by reference to the Company's registration
statement #2-72232 on Form S-14 filed February 1, 1985.
(2) Included by reference to Item 7, Financial Statements, Note 1
of Notes to Consolidated Financial Statements, Net income
(loss) per share, of this Form 10-KSB.
(3) Included by reference to Item 1, Description of Business, of
this Form 10-KSB.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended
December 31, 1995.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GREAT EASTERN ENERGY AND
DEVELOPMENT CORPORATION
Signature Title Date
- --------- ----- ----
/s/DONALD G. JUMPER Chief Executive Officer, March 25, 1996
Donald G. Jumper President, Chief Financial
and Accounting Officer and
Director
In accordance with the Exchange Act, this report has been signed
below by the following persons on behalf of the registrant in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/DONALD G. JUMPER Chief Executive Officer, March 25, 1996
- ------------------------ President, Chief Financial
Donald G. Jumper and Accounting Officer and
Director
/s/ALEX G. CAMPBELL, JR. Chairman and Director March 25, 1996
- ------------------------
Alex G. Campbell, Jr.
/s/WILLIAM T. YOUNG, JR. Director March 25, 1996
- ------------------------
William T. Young, Jr.
/s/JOHN I. CREWS, JR. Director March 25, 1996
- ------------------------
John I. Crews, Jr.
/s/S. BUFORD SCOTT Director March 25, 1996
- ------------------------
S. Buford Scott
/s/EDWARD S. BARR Director March 25, 1996
- ------------------------
Edward S. Barr
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-01-1995
<PERIOD-END> Dec-31-1995
<CASH> 750
<SECURITIES> 0
<RECEIVABLES> 274
<ALLOWANCES> 0
<INVENTORY> 37
<CURRENT-ASSETS> 146
<PP&E> 13,066
<DEPRECIATION> (10,563)
<TOTAL-ASSETS> 3,783
<CURRENT-LIABILITIES> 172
<BONDS> 0
<COMMON> 1,884
0
0
<OTHER-SE> 1,727
<TOTAL-LIABILITY-AND-EQUITY> 3,611
<SALES> 1,777
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,103
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (326)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> 0
</TABLE>
