U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from ________ to ________
Commission File Number 0-10337
OKLAHOMA ENERGY CORPORATION
-------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
An Oklahoma Corporation 73-1129531
- --------------------------------- -------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
6 East 5th Street, Ste 800, Tulsa, OK 74103-4444
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(Address of principal executive offices)
(918) 587-4470
----------------------------
(Issuer's telephone number)
CAYMAN RESOURCES CORPORATION
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities 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 _____.
State the number of shares outstanding of each issuer's classes
of common equity, as of March 31, 1998
Common 44,435,843
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
OKLAHOMA ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
March 31, 1998
(Unaudited)
(00's omitted)
ASSETS
Current assets:
Cash and cash equivalents $ (44,780)
Receivables and other, less allowance for
doubtful accounts of $88 50,805
Prepaid expenses and other 1,500
-----------
Total current assets 7,525
-----------
Property and equipment, at cost:
Refinery $10,284,476
Other 348,214
-----------
10,632,690
Less accumulated depreciation, depletion
and amortization (1,680,178)
-----------
8,952,512
-----------
Total assets $ 8,960,037
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts and revenues payable $ 7,375,603
Notes payable and current portion of
long-term debt 184,221
-----------
Total current liabilities 7,559,824
-----------
Long-term accounts payable and long-term debt,
net 1,252,533
-----------
Deferred income taxes 775,608
-----------
Reserve for refinery cleanup 1,213,420
-----------
Stockholders' equity:
Preferred stock 63,866
Common stock 2,379,413
Additional paid-in capital 28,133,405
Accumulated deficit (32,397,787)
Treasury stock, at cost (20,154)
-----------
Total stockholders' deficit (1,841,348)
-----------
Total liabilities and stockholders' equity $ 8,960,037
===========
The accompanying note is an integral part of the
condensed consolidated financial statements.
<PAGE>
OKLAHOMA ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(00's omitted, except per share data)
Three Months Ended
March March
1998 1997
Operating revenues:
Oil and gas sales $ 0 9,034
Product sales 0 -0-
Management and overhead fees 0 53,923
Other 0 27,327
--------- -------
Total operating revenues 0 90,284
--------- -------
Operating costs and expenses:
Oil and gas production 0 768
Cost of product sales 0 16,384
General and administrative 0 159,498
Operating expense 0 55,469
Interest expense 0 43,104
--------- ------
Total operating costs
and expenses $ 0 266,223
--------- -------
Loss before income taxes $ 0 (175,939)
Income taxes
--------- --------
Net loss $ 0 (175,939)
========= ========
The accompanying note is an integral part of the
condensed consolidated financial statements.
<PAGE>
OKLAHOMA ENERGY CORPORATION
NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1998
A. The condensed consolidated financial statements included herein
have been prepared by the Company, without audit, pursuant to
the rules and regulations of the Securities and Exchange
Commission and, in the opinion of management, include all
adjustments, consisting only of normal recurring accruals,
necessary to present fairly the resulting operations for the
indicated periods. Certain information and footnote
disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the
disclosures are adequate to make the information presented not
misleading. It is suggested that these condensed consolidated
financial statements be read in conjunction with the financial
statements and the notes thereto included in the Company's
latest annual report on Form 10-KSB.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
Presently, the Company has no working capital with which to
operate. The Company lacks necessary capital to meet its
obligations. The Company is attempting to reorganize, restructure
and settle it's obligations with capital raised from outside
investors.
SIGNIFICANT EVENTS
Reactivation of Cyril Refinery
In January of 1994, the Company began its Cyril Refinery
operations. The Company shut down refinery operations in April of
1995. During the sixteen months of operation, the Company
experienced substantial mechanical problems and was unable to meet
product specifications demanded by its customers. As a result, the
Company realized significant losses from its operation of the Cyril
Refinery which caused the loss of its crude oil credit lines and
the ultimate shut down of refinery operations.
Although the Company is now pursuing financing which will
enable it to start up operations of the Refinery again, there is
absolutely no assurance that the Company will be successful. If
the Company is unable to secure such financing, it will eventually
be forced to close down operations entirely and liquidate the Cyril
Refinery.
<PAGE>
Sale of Company's Oil and Gas Assets to Satisfy Working Capital
Debt
Effective January 1, 1995, the Company assigned substantially
all its oil and gas production to the Cayman Lenders Limited
Liability Corporation in exchange for a release of indebtedness and
in lieu of foreclosure on the $1,600,000 in debt loaned to it by a
group of individuals known as the Capital Investors. Such funds
were borrowed by the Company in 1993 to finance the renovation of
the Cyril Refinery.
Cyril Refinery Vendor Payables
The Company and its subsidiary have a substantial amount of
past-due vendor payables for which it has no source of repayment.
The Company is currently developing a plan to offer such vendors a
settlement plan to be financed with new investment funding. The
Company has not now secured such new financing and can in no way be
assured of securing such financing.
Oklahoma Industrial Finance Authority $750,000 Loan
On November 10, 1993, the Company secured a $750,000 loan from
the Oklahoma Industrial Finance Authority (OIFA), which funds were
used to satisfy a portion of the Company's start-up working capital
needs. The OIFA loan was for one year and is now in default with
interest accruing at eight percent (8%). The OIFA has decided not
to foreclose at this time in anticipation of the Company's ability
to secure new financing and pay off the loan. However, this
decision is not binding and the OIFA could decide to begin such
proceedings at any time.
Environmental Considerations.
In 1988, the property formerly owned by Oklahoma Refining
Corporation (ORC site) in Cyril, Oklahoma, including that portion
of the Cyril Refinery owned by CPC was placed on the National
Priority List (NPL). This action was taken by the EPA in
accordance with the Comprehensive Environmental Response
Compensation Liability Act of 1980 (CERCLA), as amended by the
Superfund and Reauthorization Act of 1986 (SARA). In 1991, the EPA
concluded a Remedial Investigation/Feasibility Study (RIFS) of the
Cyril Refinery site. The RIFS identified certain areas where
contamination and hazardous chemicals exist. The RIFS conclusion
was that the contaminants found at the ORC site did not pose an
immediate hazard of significant risk to human health at off-site
testing locations used by the study. It was therefore determined
that the contaminants contained within the ORC site could be
remediated over a period of time. In 1991, the EPA issued a
Proposed Plan of Action (PPA) which outlined several alternative
actions which could be taken to either contain, remediate or remove
the identified contaminated material. Following public hearings,
the EPA issued its Record of Decision (ROD) which together with the
PPA outlines in general the EPA's plan to clean up the entire ORC
site.
<PAGE>
In April of 1996, the Oklahoma Department of Environmental
Quality (ODEQ) filed an announcement of changes to the CRC site
remediation plan which greatly reduced the scope and cost of the
"clean-up" work. They announced that rather than building a
bioremediation plant, they plan to isolate the remaining soil into
one location on the ORC property (not on the Company's property)
where they will "encapsulate" the material with concrete. The ODEQ
and EPA have informed the Company that they will transport
approximately 1,500 cubic yards of soil from the Company's property
to the EPA/ODEQ-controlled property to be encapsulated.
The Company is aware of the need to cooperate with State and
Federal agencies to provide a plan and implement that plan to clean
up any and all identifiable hazards on its property. In January
1992, the Company executed a Consent Agreement and Final Order with
the Oklahoma State Department of Health. All of the work required
by such Consent Order has now been completed by the Company. In
addition to the requirements made of the Company in accordance with
the Consent Order, the Company plans to continue to cooperate with
the Oklahoma State Department of Health (OSDH) and the EPA to
complete the remediation of all hazardous areas located on the CPC
property. The Company has developed a plan to achieve this goal
and believes that those plans are feasible. Management estimates,
based upon review and evaluation of the above studies, that the
cost to transport the remaining soil to the EPA encapsulation site
is approximately $100,000. This will substantially complete the
Company's requirement under the Consent Order dated January 1,
1992.
ITEM 3. EXHIBITS AND REPORTS ON FORM 8-K
A) Exhibits
Exhibit 27 - Financial Data Schedule
B) Reports on Form 8-K
None
SIGNATURE
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.
DATED: June 30, 1998 OKLAHOMA ENERGY CORPORATION
By: /s/ David M. Whitney
David M. Whitney
President and
Chief Executive Officer
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63,866
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