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 September 30, 1997
[ ] 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.)
601 South Boulder, Ste 500, Tulsa, OK 74119-1323
(Address of principal executive offices)
(918) 587-4470
(Issuer's telephone number)
CAYMAN RESOURCES CORPORATION
(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 September 30, 1997
Common 38,048,095
Series A 40,000
Series B 83,334
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
OKLAHOMA ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
September 30, 1997
(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)
Six Months Ended
Sept Sept
1997 1996
Operating revenues:
Oil and gas sales $ 7,496 9,034
Product sales -0- -0-
Management and overhead fees 13,488 53,923
Other 1,065 27,327
--------- -------
Total operating revenues 22,049 90,284
--------- -------
Operating costs and expenses:
Oil and gas production 3,313 768
Cost of product sales -0- 16,384
General and administrative 19,487 159,498
Operating expense 55,469
Interest expense 1,845 43,104
--------- ------
Total operating costs
and expenses $ 24,645 266,223
--------- -------
Loss before income taxes $( 2,596) (175,939)
Income taxes -
--------- ------
Net loss $( 2,596) (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
SEPTEMBER 30, 1997
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
None
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: December 29, 1997 OKLAHOMA ENERGY CORPORATION
By: /s/ David M. Whitney
David M. Whitney
President and
Chief Executive Officer
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<PERIOD-END> SEP-30-1997
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0
63,866
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<CGS> 22,800
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