U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the Quarterly Period Ended September 30, 1996
[ ] Transition Report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the Transition Period from __________ to _________
Commission file number 0-10006
--------
AMERICAN RIVERS OIL COMPANY
---------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Wyoming 84-0839926
------------------------------ ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
700 East Ninth Avenue, Suite 106, Denver, CO 80203
-------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(303) 832-1117
-------------------------
(Issuer's telephone number)
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
----- -----
The number of shares outstanding as of November 12, 1996 of the issuer's $.01
par value Common Stock and $.01 par value Class B Common Stock were 3,256,770
and 7,267,820, respectively.
Transitional Small Business Disclosure Format
(Check one):
Yes No X
----- -----
<PAGE>
AMERICAN RIVERS OIL COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1996
(Unaudited)
ASSETS
------
<TABLE>
<CAPTION>
<S> <C>
Current Assets:
Cash $ 70,745
Oil and gas sales receivable 97,592
Prepaid expenses 3,946
-----------
Total current assets 172,283
Oil and Gas Properties, at cost, using successful efforts method:
Proved properties 3,897,840
Less accumulated depreciation, depletion and amortization (185,630)
-----------
Net oil and gas properties 3,712,210
Investment in Bishop Capital Corporation 1,901,355
Other Assets 20,020
-----------
$ 5,805,868
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Payable to major Class B shareholder $ 60,940
Payable to Bishop Capital Corporation:
Note 100,000
Other 19,070
Note payable to bank 703,866
Current maturities of long-term debt 6,600
Accounts payable and accrued expenses 92,745
-----------
Total current liabilities 983,221
Long-Term Debt, less current maturities 70,584
Deferred Income Taxes 95,400
Stockholders' Equity:
Preferred stock, $.50 par value; 5,000,000 shares
authorized; no shares issued --
Common stock, $.01 par value; 20,000,000 shares
authorized; 4,028,004 issued 40,280
Class B common stock, $.01 par value; 8,000,000 shares
authorized; 7,267,820 issued and outstanding 72,678
Additional paid-in capital 7,140,606
Accumulated deficit (860,839)
Less treasury stock, at cost, 1,101,234 of common shares (1,736,062)
-----------
Total stockholders' equity 4,656,663
-----------
$ 5,805,868
===========
See accompanying notes to these consolidated financial statements.
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
AMERICAN RIVERS OIL COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months For the Six Months
Ended September 30, Ended Septemer 30,
--------------------------- --------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUE:
Oil and gas sales $ 153,048 $ 22,757 $ 319,566 $ 49,165
Operator fees 1,500 1,500 3,000 3,750
----------- ---------- ---------- ----------
Total revenue 154,548 24,257 322,566 52,915
EXPENSES:
Oil and gas production costs 105,692 13,904 178,656 26,554
General and administrative 116,388 38,542 244,451 69,083
Depreciation, depletion and amortization 27,000 7,350 61,000 15,840
----------- ---------- ---------- ----------
Total expenses 249,080 59,796 484,107 111,477
----------- ---------- ---------- ----------
LOSS FROM OPERATIONS (94,532) (35,539) (161,541) (58,562)
OTHER EXPENSE:
Equity in loss of Bishop Capital Corporation 124,258 -- 233,427 --
Interest expense 17,871 4,293 27,045 9,537
---------- ---------- ---------- ----------
142,129 4,293 260,472 9,537
---------- ---------- ---------- ----------
LOSS BEFORE INCOME TAXES (236,661) (39,832) (422,013) (68,099)
DEFERRED INCOME TAX BENEFIT 88,000 14,700 156,000 25,200
---------- ---------- ---------- -----------
NET LOSS $ (148,661) $ (25,132) $ (266,013) $ (42,899)
========== ========== ========== ===========
NET LOSS PER SHARE:
Common stock $ (.03) $ (.06)
========== ===========
Class B common stock $ (.01) $ (.01)
========== ===========
AVERAGE NUMBER OF SHARES
OUTSTANDING:
Common stock 2,890,765 2,871,374
========= =========
Class B common stock 7,267,820 7,267,820
========= =========
See accompanying notes to these consolidated financial statements.
-3-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMERICAN RIVERS OIL COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
September 30,
----------------------
1996 1995
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(266,013) $ (42,899)
Adjustments to reconcile net loss to net cash provided
by (used in) operating activities:
Depreciation, depletion and amortization 61,000 15,840
Equity in loss of Bishop Capital Corporation 233,427 --
Deferred income tax benefit (156,000) (25,200)
Changes in operating assets and liabilities:
(Increase) decrease in:
Oil and gas sales receivable (32,819) (23,918)
Other assets (13,692) --
Increase (decrease) in:
Payable to Class B shareholder 6,236 --
Payable to Bishop Capital Corporation (4,509) --
Accounts payable and accrued expenses (53,323) 81,944
--------- ---------
Net cash provided by (used in) operating activities (225,693) 5,767
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition and development costs for oil and gas properties (605,236) (16,446)
Proceeds from sale of oil and gas property 28,055 --
--------- ---------
Net cash used in investing activities (577,181) (16,446)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 820,866 --
Principal payments on borrowings (17,522) (25,128)
Proceeds from private placement of common stock 75,000 --
Private placement offering costs (5,000) --
Owners' capital contributions -- 35,807
--------- ---------
Net cash provided by financing activities 873,344 10,679
--------- ---------
Increase in Cash 70,470 --
Cash, beginning of period 275 --
--------- ---------
Cash, end of period $ 70,745 $ --
========= =========
Supplemental Information:
Cash paid for interest $ 19,051 $ 9,537
========= =========
See accompanying notes to these consolidated financial statements
-4-
</TABLE>
<PAGE>
AMERICAN RIVERS OIL COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
In October 1995, Metro Capital Corporation (Metro) and Karlton Terry Oil
Company (KTOC) entered into an Asset Purchase Agreement whereby KTOC agreed
to exchange certain oil and gas properties ( the "Contributed Properties")
for a total of 7,717,820 shares of Class B common stock of Metro, which
represented 80% of the issued and outstanding voting securities of Metro.
On November 29, 1995, the shareholders of Metro approved this transaction
and the closing occurred on December 8, 1995. The shareholders also
approved changing the name of the Company from Metro to American Rivers Oil
Company (AROC). At the closing date, additional working interests in the
KTOC oil and gas properties (the " Option Properties") were acquired for
cash, a portion of the Class B common shares issued in the transaction, and
other consideration.
The unaudited consolidated balance sheet at September 30, 1996 reflects
AROC's investment in Bishop using the equity method (See Note 2). The
unaudited consolidated statements of operations and cash flows for the
three and six months ended September 30, 1996 include the operations of the
Contributed Properties, the Option Properties and the operating results of
Bishop utilizing the equity method of accounting.
The unaudited consolidated statements of operations and cash flows for the
three and six months ended September 30, 1995 include the operating results
and cash flows related to the Contributed Properties and include an
allocation of KTOC's general and administrative expenses based on KTOC's
activities related to the Contributed Properties compared to its overall
activities. The net amounts required to fund such activities are presented
as a capital contribution from KTOC.
In the opinion of management, all adjustments, consisting of normal
recurring accruals, have been made which are necessary for a fair
presentation of the financial position of the Company at September 30, 1996
and the results of operations and cash flows for the three and six month
periods ended September 30, 1996 and 1995. Quarterly results are not
necessarily indicative of expected annual results because of the impact of
fluctuations in prices received for oil and natural gas and other factors.
For a more complete understanding of the Company's operations and financial
position, reference is made to the consolidated financial statements of the
Company, and related notes thereto, filed with the Company's annual report
on Form 10-KSB for the year ended March 31, 1996, previously filed with the
Securities and Exchange Commission.
2. Investment in Bishop Capital Corporation
Bishop is being operated autonomously by the prior management of Metro
pursuant to the terms of separate Operating, Management and Voting
Agreements. Since the Company does not exercise control over Bishop's
operations, the investment is accounted for by the equity method.
-5-
<PAGE>
AMERICAN RIVERS OIL COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Following is a summary of condensed unaudited financial information pertaining
to Bishop.
September 30,
1996
-------------
Balance sheet data:
Current assets $ 816,000
Noncurrent assets 1,304,000
Current liabilities (205,000)
Unrealized holding gain (14,000)
-----------
Company's equity in net assets $ 1,901,000
===========
Three Months Six Months
Ended Ended
September 30, September 30,
1996 1996
------------- -------------
Operations data:
Revenue $ 13,000 $ 29,000
Costs and expenses (143,000) (303,000)
Gain on sale of marketable securities 1,000 26,000
Other income (expense) 5,000 15,000
--------- ---------
Net loss $(124,000) $(233,000)
========= =========
Company's equity in Bishop's loss $(124,000) $(233,000)
========= =========
3. Notes Payable
The payable to a major Class B shareholder includes a note payable of
$17,000 which is unsecured and bears interest at 10%.
The note payable of $100,000 to Bishop Capital Corporation, a wholly-owned
subsidiary, bears interest at 10% and is collateralized by producing oil
and gas properties in Louisiana.
The note payable to bank is a secured bank credit agreement (the
"Agreement") in which the Company had an initial borrowing limit of
$1,000,000 as of September 30, 1996. Under terms of the Agreement, the
outstanding principal balance cannot exceed the bank's commitment amount
which decreases each succeeding month until the note matures on September
13, 1997. As of November 12, 1996, $743,866 was outstanding under the
Agreement and the bank's commitment amount was $960,405.
-6-
<PAGE>
AMERICAN RIVERS OIL COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Interest is payable monthly at the prime rate as published in the Wall
Street Journal plus 1% (9.25% at September 30, 1996).
Borrowings under the Agreement are secured by a mortgage on the Company's
interests in its Denver-Julesburg Basin producing properties and is
personally guaranteed by two individuals who are officers and directors of
the Company.
The Agreement includes restrictive convenants which, among other matters,
include debt restrictions, dividends declared, the sale of assets and the
creation of liens.
4. Net Loss Per Share
The computation of net loss per share is based on the rights of each class
of common stock. The Class B common stock is not entitled to participate in
any distribution of shares or assets of Bishop until such shares are
converted into common stock beginning June 1998. Accordingly, the common
shares were allocated 100% of Bishop's loss and a pro rata percentage of
the remaining consolidated loss based on the ratio of common shares
outstanding to total common and Class B shares outstanding. The Class B
common shares were allocated the remaining pro rata percentage of the loss.
5. Subsequent Events
In November 1996, the Company signed a letter of intent to merge with Opon
Development Company ("ODC") subject to, among other conditions,
negotiations and execution of a definitive agreement, obtaining of project
financing for ODC's only asset consisting of a 4.55% working interest in
the Opon oil and gas field in Columbia, South America and shareholder
approval of both companies. Upon conclusion of the merger ODC shareholders
would own 90 - 95% of American Rivers, the surviving entity, and ODC
management would operate the Company. The merger is expected to be
completed in the first quarter of 1997 but there is no assurance that the
transaction will be completed.
The Company also completed the private placement offering which realized
net proceeds of $910,487 ($590,887 as of September 30, 1996) which has been
or will be used for development of its River Lease Prospects and/or
acquiring additional producing oil and gas properties. In addition, the
Company will spin off Bishop Capital Corporation, a wholly - owned
subsidiary, to holders of the Company's Common stock of record at November
18, 1996. The holders of the Company's Class B common stock will not
participate in the spin-off.
-7-
<PAGE>
AMERICAN RIVERS OIL COMPANYAND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
Company's unaudited consolidated financial statements and notes thereto. The
information presented for the three and six months ended September 30, 1995 only
includes the operations of the Contributed Properties. Additionally, they
include an allocation of Karlton Terry Oil Company's (KTOC) general and
administrative expenses based on KTOC's activities related to the Contributed
Properties compared to its overall activities.
RESULTS OF OPERATIONS
Three Months Ended September 30, 1996 Compared to 1995
Revenue
The Company's oil and gas sales revenue increased by $130,000 in the quarter
ended September 30, 1996 compared to the corresponding quarter in 1995.
Production volumes for oil and natural gas also increased significantly in the
current quarter compared to the corresponding quarter in 1995. The revenue and
production volume increases are primarily attributable to the acquisition of
producing oil and natural gas properties in the Denver-Julesburg Basin. The
average sales price of oil increased 24% and the average sales price of natural
gas remained comparable for the quarter ended September 30, 1996 compared to the
corresponding quarter in 1995.
The production volumes and average sales prices during the periods were as
follows:
Three Months Ended
September 30,
---------------------
1996 1995
------ ------
Oil production (barrels) 3,893 1,099
Average sales price per barrel $20.27 $16.40
Natural gas production (mcf) 48,830 3,096
Average sales price per mcf $ 1.52 $ 1.53
Expenses
Oil and gas production costs increased $92,000 in the quarter ended September
30, 1996 compared to the corresponding quarter in 1995 due primarily to
production expenses associated with the Denver-Julesburg Basin properties. The
increase included approximately $28,000 of costs complying with new
Environmental Protection Agency (EPA) regulations which require firewalls around
all storage tanks and the backfilling of existing drilling pits and which
compliance work was subtantially completed as of September 30, 1996. On a BOE
basis (BOE means barrel of oil equivalent, using a conversion ratio of six mcf
of natural gas to one barrel of
-8-
<PAGE>
oil), production costs per BOE were $8.78 (including $2.33 for the EPA costs)
for the quarter ended September 30, 1996 compared to $8.61 for the comparable
quarter of 1995. If the EPA costs were not incurred, in the current quarter,
production costs would have been $6.28 per BOE due to fixed components of oil
and gas production expenses being allocated over a larger production base.
General and administrative expenses increased by $78,000 for the quarter ended
September 30, 1996 compared to the corresponding quarter in 1995. The increase
is due to increases in salaries, professional fees and other expenses associated
with a public company.
Depreciation, depletion and amortization expense increased by $20,000 in the
current quarter compared to the corresponding quarter in 1995 due to increased
production volumes.
The equity in loss of Bishop Capital Corporation (an unconsolidated wholly-owned
subsidiary) represents the Company's equity in Bishop's operations for the three
months ended September 30, 1996. No amounts were shown in 1995 since the reverse
acquisition did not occur until December 1995.
Interest expense increased by $13,000 for the current quarter of 1996 over the
corresponding quarter of 1995 due to a higher average amount of debt
outstanding.
Six Months Ended September 30, 1996 Compared to 1995
Revenue
The Company's oil and gas sales revenue increased by $270,000 for the six months
ended September 30, 1996 compared to the corresponding period in 1995.
Production volumes for oil and natural gas also increased significantly in the
current period compared to the corresponding period in 1995. The revenue and
production volume increases are primarily attributable to the acquisition of
producing oil and natural gas properties in the Denver-Julesburg Basin. The
average sales price of oil increased 18% and the average sales price of natural
gas decreased by 3% in the six month period ended September 30, 1996 compared to
the corresponding period in 1995.
The production volumes and average sales prices during the periods were as
follows:
Six Months Ended
September 30,
--------------------
1996 1995
------ ------
Oil production (barrels) 8,312 2,341
Average sales price per barrel $20.41 $17.27
Natural gas production (mcf) 93,936 5,306
Average sales price per mcf $ 1.59 $ 1.64
Expenses
Oil and gas production costs increased $152,000 in the six months ended
September 30, 1996 compared to the corresponding period in 1995 due primarily to
production expenses associated
-9-
<PAGE>
with the Denver-Julesburg Basin properties. The increase included approximately
$40,000 of costs related to the Company complying with the new Environmental
Protection Agency (EPA) regulations. Production costs per BOE for the six months
ended September 30, 1996 was $7.45 (including $1.67 for the EPA compliance
costs) compared to $8.23 for the comparable period in 1995. The decrease without
regard for the EPA costs is due to fixed components of oil and gas production
expense being allocated over a larger production base.
General and administrative expenses increased by $175,000 for the six months
ended September 30, 1996 compared to the corresponding period in 1995. The
increase is due to increases in salaries, professional fees and other expenses
associated with a public company.
Depreciation, depletion and amortization expense increased by $45,000 in the
current six month period compared to the corresponding period in 1995 due to
increased production volumes.
Interest expense increased by $17,000 for the six months ended September 30,
1996 over the corresponding period in 1995 due to a higher average amount of
debt outstanding.
FINANCIAL CONDITION
At September 30, 1996, the Company had a working capital deficit of $811,000.
The following summary table reflects the Company's cash flows for the six months
ended September 30, 1996 and 1995:
Six Months Ended
September 30,
-------------------------
1996 1995
---------- ---------
Net cash provided by (used in)
operating activities $ (226,000) $ 6,000
Net cash used in investing activities (577,000) (16,000)
Net cash provided by financing activities 873,000 10,000
The Company had a net use of cash in operating activities of $226,000 for the
six months ended September 30, 1996 compared to net cash provided by operating
activities of $6,000 for the six months ended September 30, 1995. The net use of
cash in the current period primarily resulted from the payment of accounts
payable and accrued expenses and overhead costs.
Net cash used in investing activities of $577,000 for the six months ended
September 30, 1996 resulted from the acquisition of additional working interests
in producing oil and gas properties in the Denver-Julesburg Basin from unrelated
third parties and a major Class B shareholder. Net cash used in investing
activities of $16,000 for the six months ended September 30, 1995 resulted from
capital expenditures on the Sparkle #1 and Ohio River #1 wells.
-10-
<PAGE>
Net cash provided by financing activities of $873,000 for the six months ended
September 30, 1996 resulted from borrowings of $703,000 from a bank, $100,000
from Bishop Capital Corporation, $17,000 from a major Class B shareholder offset
by principal payments on borrowings of $17,000. In addition, the Company
received net proceeds of $70,000 from the private placement of common stock. Net
cash provided by financing activities of $10,000 for the six months ended
September 30, 1995 resulted from owners' contributions of $35,000 offset by
principal payments on borrowings of $25,000.
The Company's oil and gas strategy is and will continue to be the acquisition
and development of leases underlying large rivers and lakes in known oil and gas
fields (the "River Leases"). The Company is acquiring producing cash flow
properties in the Denver-Julesburg Basin to augment and diversify its strategy
on the River Leases. The Company will also review and consider acquiring or
participating in other oil and gas projects which management may expect will
increase the cash flow and/or add to the long-term financial stability of the
Company.
A substantial portion of the Company's oil and gas reserves are Proved
Undeveloped Reserves and the estimated expenditures to develop these properties
amount to $1,321,000. Successful development and production of such reserves
cannot be assured. Additional drilling will be necessary in future years both to
maintain production levels and to define the extent and recoverability of
existing reserves. There is no assurance that present oil and gas wells of the
Company will continue to produce at current or anticipated rates of production,
that development drilling will be successful, that production of oil and gas
will commence when expected, or that there will be favorable markets for oil and
gas which may be produced in the future.
The Company's development plans include the drilling of offsets to the
existing river wells as a preliminary priority while gradually drilling new
wells under previously undrilled river projects at the rate of three to five
wells per year. It is estimated that capital of $1,700,000 will be required to:
(i) meet operating capital requirements; (ii) carry out management's plans to
drill three to five development wells in fiscal 1997; (iii) purchase existing
producing oil and gas wells; and (iv) repay outstanding debt. The assets
transferred to Bishop Capital Corporation as part of the acquisition are not
available for use by the Company. To meet these requirements, management was
conducting a private placement of up to 1,800,000 shares of the Company's common
stock for gross proceeds of $1,800,000. As of September 30, 1996, the Company
received proceeds of $590,887 (net of commissions and other offering expenses).
The Company subsequently completed its private placement by raising an
additional $319,600 (net of commissions and other offering expense) for a total
of $910,487. Since the maximum proceeds were not raised, management may seek
alternative financing arrangements, including additional bank financing and/or
the promotion of drilling arrangement to oil industry partners and other
investors. There is no assurance that the bank financing or the promotion of
drilling arrangements to industry partners and other investors will occur. The
Company now intends to drill what is considered to be its best river location
with the best potential to increase the cash flow of the Company which may
provide operating capital to drill subsequent river wells. No commitments have
been received for any such financing or drilling arrangements. If such financing
is not obtained or alternate drilling arrangements completed, the Company could
experience significant cash flow problems. In such case, the Company may have to
promote a well by selling a portion\ of its leasehold acreage. While management
believes obtaining financing through industry partner promotion is a viable
means to fund development, it is not the preferred alternative since it results
in a lower share of the related proved reserves and cash flows.
-11-
<PAGE>
On November 12, 1996, the Company announced that it signed a letter of
intent to merge with Opon Development Company (ODC) subject to, among other
conditions, negotiation and execution of a definitive agreement, obtaining of
project financing for ODC's Columbian project and shareholder approval of both
companies. American Rivers would be the surviving entity in the merger. ODC's
only asset is a 4.55% working interest in and to the prolific Opon oil and gas
field in Colombia, South America which is operated by Amoco Colombia Petroleum
Corp., with Hondo Magdalena Oil & Gas Company being the other partner. Upon
conclusion of the merger ODC shareholders would own 90-95% of American Rivers
and ODC management would operate the company. American Rivers' current oil and
gas operations are expected to continue. The merger is expected to be completed
in the first quarter of 1997 but there is no assurance that the transaction will
be completed.
ODC and the Company are in discussion with NM Rothschild & Sons Limited
regarding project finance. The Company is also in discussions with, and expect
to engage Rothschild Natural Resources for financial and advisory support.
The Company also will spin-off its Bishop Capital Corporation subsidiary
(which has a net worth of approximately $2 million) to holders of its common
stock of record at November 18, 1996. The holders of Class B common stock will
not participate in the spin-off.
-12-
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
None
Item 2. Changes in Securities
---------------------
None
Item 3. Default Upon Senior Securities
------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None
Item 5. Other Information
-----------------
None
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
a. Exhibits
Exhibit 27. Financial Data Schedule (submitted only in electronic
format)
b. Reports on Form 8-K
None
-13-
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
AMERICAN RIVERS OIL COMPANY
(Registrant)
Date: November 12, 1996 By: /s/ Karlton Terry
------------------
Karlton Terry
President
(Principal Executive Officer)
Date: November 12, 1996 By: /s/ Jubal Terry
----------------
Jubal Terry
Vice President and Acting
Chief Financial Officer
(Principal Financial Officer)
-14-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Article 5 FDS for 2nd Quarter 10-QSB
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> SEP-30-1996
<CASH> 70,745
<SECURITIES> 0
<RECEIVABLES> 97,592
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 172,283
<PP&E> 3,897,840
<DEPRECIATION> 185,630
<TOTAL-ASSETS> 5,805,868
<CURRENT-LIABILITIES> 983,221
<BONDS> 0
0
0
<COMMON> 112,958
<OTHER-SE> 4,543,705
<TOTAL-LIABILITY-AND-EQUITY> 5,805,868
<SALES> 319,566
<TOTAL-REVENUES> 322,566
<CGS> 178,656
<TOTAL-COSTS> 484,107
<OTHER-EXPENSES> 233,427
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 27,045
<INCOME-PRETAX> (422,013)
<INCOME-TAX> 156,000
<INCOME-CONTINUING> (266,013)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (266,013)
<EPS-PRIMARY> (.06)
<EPS-DILUTED> (.06)
</TABLE>
