<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For three months ended March 31, 1996 Commission File No. 283574
ISRAMCO, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3145265
------------------------------- --------------------------
(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
800 Fifth Avenue, Suite 21D, New York, New York 10021
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 212-888-0200
NOT APPLICABLE
(Former name, former address and formal fiscal year if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
------- -------
26,691,198 Common Shares were outstanding as of March 31, 1996.
<PAGE> 2
ISRAMCO, INC.
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C> <C>
Part I. Financial Information
Item 1. Financial statements
Condensed consolidated balance sheets:
- March 31, 1996 (unaudited)
- December 31, 1995 1
Condensed consolidated statements of operations (unaudited):
- Three months ended March 31, 1996 and 1995 2
Condensed consolidated statements of cash flows (unaudited):
- Three months ended March 31, 1996 and 1995 3
Notes to condensed consolidated financial statements 4-6
Item 2. Management's discussion and analysis of financial statements 7-11
Part II. Other information
Signatures 12
</TABLE>
<PAGE> 3
ISRAMCO INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
A S S E T S 1996 1995
----------- ------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash including cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . $16,719,078 $16,506,242
Marketable securities, at market. . . . . . . . . . . . . . . . . . . . . . . . . . 5,845,915 5,767,520
Prepaid expenses and other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258,929 215,588
----------- -----------
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,823,922 22,489,350
Equipment, less accumulated depreciation of
$109,543 and $101,574 at March 31, 1996 and
December 31, 1995, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . 115,097 131,279
----------- -----------
T O T A L. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $22,939,019 $22,620,629
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . $ 339,033 $ 358,279
----------- -----------
Shareholders' Equity:
Common stock, $.01 par value; authorized
75,000,000 shares; issued and
outstanding 26,691,198 shares at
March 31, 1996 and at December 31, 1995 . . . . . . . . . . . . . . . . . . . . . 266,912 266,912
Additional paid-in capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,927,635 25,927,635
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,594,561) (3,932,197)
----------- -----------
22,599,986 22,262,350
----------- -----------
T O T A L. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $22,939,019 $22,620,629
=========== ===========
</TABLE>
See notes to the consolidated financial statements.
- 1 -
<PAGE> 4
ISRAMCO INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------------
1996 1995
----------- -----------
<S> <C> <C>
Revenues:
Operator fees from related party. . . . . . . . . . . . . . . . . . . . . . . . . . $ 126,252 $ 762,943
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307,606 276,242
Gain (loss) on sale of marketable
securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165,922 (315,804)
Office services to related party and other. . . . . . . . . . . . . . . . . . . . . 132,376 109,570
----------- -----------
732,156 832,951
----------- -----------
Expenses:
Interest expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 476 229
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,135 9,779
Exploration costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,599 136,354
Operator expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162,183 91,219
General and administrative - in part to
related party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217,168 193,560
Research and development. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,041) 22,637
----------- -----------
394,520 453,778
------------ -----------
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 337,636 $ 379,173
============ ===========
Income per common share:
Primary and fully diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $.01 $.01
===== =====
Weighted average number of shares:
Primary and fully diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,691,198 26,691,198
========== ==========
</TABLE>
See notes to the consolidated financial statements.
- 2 -
<PAGE> 5
ISRAMCO INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------------
1996 1995
------------ ------------
<S> <C> <C>
Cash flow from operating activities:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 337,636 $ 379,173
Adjustment to reconcile net income to net
cash provided by operating activities:
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,135 9,779
Exploration costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,599 136,354
(Gain) loss on sale of marketable
securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (165,922) 315,804
Loss (gain) on sale of property . . . . . . . . . . . . . . . . . . . . . . . . 6,587 (400)
Changes in assets and liabilities:
Prepaid and other current assets. . . . . . . . . . . . . . . . . . . . . . . (43,341) 120,297
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . (19,246) 255,837
Purchase of marketable securities . . . . . . . . . . . . . . . . . . . . . . (396,876)
Proceeds from sale of marketable
securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,527 47,363
----------- -----------
Net cash provided by operating
activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218,975 867,331
----------- -----------
Cash flows from investing activities:
Exploration and development costs . . . . . . . . . . . . . . . . . . . . . . . . . (5,599) (136,354)
Purchase of equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,000) (631)
Proceeds from sale of equipment . . . . . . . . . . . . . . . . . . . . . . . . . . 460 400
------------ -----------
Net cash (used in) investing
activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,139) (136,585)
------------ -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS. . . . . . . . . . . . . . . . . . . . . . . 212,836 730,746
Cash and cash equivalents, beginning of period . . . . . . . . . . . . . . . . . . . . 16,506,242 17,339,105
------------ -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD . . . . . . . . . . . . . . . . . . . . . . . $16,719,078 $18,069,851
=========== ===========
Supplemental disclosure of cash flow
information:
Cash paid during the year for interest. . . . . . . . . . . . . . . . . . . . . . $ 476 $ 229
</TABLE>
See notes to the consolidated financial statements.
- 3 -
<PAGE> 6
ISRAMCO, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(NOTE 1):
As used in these financial statements the term "Company" refers to
Isramco, Inc. and subsidiaries.
(NOTE 2):
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of Management, all
adjustments (consisting of only normal recurring adjustments) considered
necessary for a fair presentation have been included. Operating results for
the three-month period ended March 31, 1996 are not necessarily indicative of
the results that may be expected for the year ended December 31, 1996. For
further information, refer to the Consolidated Financial Statements and
footnotes thereto incorporated by reference in the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995.
(NOTE 3)- Consolidation:
The consolidated financial statements include the account of the
Company, its direct and indirect wholly owned subsidiaries Isramco Oil & Gas
Ltd. ("Oil & Gas") and Isramco Underwriters, Ltd., both Israeli companies,
Isramco Resources, Inc., a British Virgin Islands company and an immaterial
foreign wholly owned subsidiary. All intercompany balances and transactions
have been eliminated. Another wholly owned subsidiary of the Company, Isramco
Management (1988) Ltd., an Israeli company, is not included in the
consolidation because the Company has no voting rights. This entity serves as
the nominee for the unit holders of a Limited Partnership and has no
significant assets or operations.
(NOTE 4)- Contingencies:
A statement of claim filed in Israel in 1990 against the Company and
others in connection with an accident which occurred in the Yam 2 well site has
been settled. The Company's share of the settlement not covered by insurance
is approximately $600.
(continued)
- 4 -
<PAGE> 7
ISRAMCO, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(NOTE 4)- Contingencies: (continued)
In a Statement of Claim filed in the District Court of Tel-Aviv-Jaffa
on December 1, 1993 (the "Claim"), the Company along with Isramco-Negev 2
Limited Partnership, Isramco Oil and Gas Ltd., Dr. Joseph Elmaleh (former
Chairman of the Board of the Company), East Mediterranean Oil & Gas Limited,
The Trust Company of Kesselman and Kesselman (Trustees 1991) Ltd. and Mr. Danny
Toledano (President of the Company) and others have been named Defendants in a
lawsuit commenced by Mr. Chaim Chazan (the "Plaintiff"). In the Statement of
Claim the Plaintiff alleges damages and loss of profits arising out of his
purchase of Participation Units and Warrants pursuant to the fourth and fifth
Prospectuses issued by the Limited Partnership in Israel based on alleged
misleading statements set forth in each Prospectus, alleged breach of
obligations contained in each Prospectus, alleged misleading current reports
filed with the Israeli Securities Authority and with the Tel Aviv Stock
Exchange, and for activities as underwriters and/or in any other manner. The
dollar amount of the Claim is between $238,000 and $566,000. Plaintiff has
requested that the court recognize the Claim as a class action. If so
recognized, the Plaintiff values the damages and loss of profits to the class
to be between $13,832,000 and $32,880,000.
On September 20, 1995 the Plaintiff filed an application to amend his
application for approval of the Claim as a class action. In the amendment
application, among other things, it was contended that the Defendants concealed
from the public information regarding the results of a seismic survey that was
conducted in November 1991 and used such information internally to gain a
profit.
A statement of Defense has not been filed by the defendants in this
action. It is the Company's intention to vigorously defend against this claim.
Based on the opinion of counsel, management believes that it is too early in
the proceedings to determine whether any liability will inure to the Company.
(NOTE 5) - Income Taxes:
There is no income tax expense for the three months ended March 31,
1996 because the deferred tax asset valuation allowance was reduced by
approximately $115,000 primarily for federal income taxes on the income which
would have otherwise been provided for.
(continued)
- 5 -
<PAGE> 8
ISRAMCO, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(NOTE 6) - Other Matters:
The expiration date of the Company's Class A and Class B warrants is
April 16, 1997.
In April 1996, Dr. Joseph Elmaleh resigned as Chairman of the Board,
Chief Executive Officer and as a director of the Company. Pursuant to a
termination agreement, the Company agreed to pay Dr. Elmaleh $123,750
representing the balance of unpaid consulting fees, $270,000 in consideration
of a covenant not to compete for a period of three years, and, purchased from
Southern Shipping and Energy, Inc., a company which Dr. Elmaleh controls,
292,675 shares of the Company's common stock for $208,238. In connection with
this agreement, the Company expects to take a charge to earnings of
approximately $190,000 in the second quarter of 1996 and $22,500 in each of the
following 11 quarters.
- 6 -
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
During the first quarter of 1996 the Company invested mainly in intensive
activity of seismic interpretation and subsurface mapping over the areas of the
six offshore licenses and the onshore license. During the second quarter of
1996 a comparative examination of the different prospects will be made to
determine the order of priority for the contribution of the exploration
program.
During the three month period ended March 1996, the Company expended $5,599 in
oil and gas exploration as compared to $136,354 during the same period in 1995.
The difference is mainly due to the drilling of the Yam West 1 well offshore
which took place during the quarter ended March 31, 1995.
In the three month period ended March 31, 1996 the Company had cash inflow from
sales of marketable securities of $87,527 as compared to net cash outflow of
$349,513 in the three month period ended March 31, 1995. In the first quarter
of 1995 the Company acquired 350,000 shares of J.O.E.L. - Jerusalem Oil
Exploration Ltd. (which shares are traded on the Tel Aviv stock market) at a
cost of approximately $96,000.
The Company financed its operations during the three month periods ended March
31, 1996 and 1995 from its own funds and did not need to use any lines of
credit or loans. The Company does not presently have any lines of credit with
any institution. The Company believes that it has sufficient funds to fulfill
its present capital requirements.
The expiration date for the Class A and Class B Warrants is April 16, 1997.
Results of Operations
The Company reported net income of $337,636 ($0.01 per share) in the three
month period ended March 31, 1996 compared to net income of $379,173 ($0.01 per
share) in the three month period ended March 31, 1995.
The gain in the three month period ended March 31, 1996 is a result of income
from operator's fees, interest, gains from a rise in value of marketable
securities and office services to a related party. Part of the gain is offset
by general and administrative expenses and operator expenses.
During the three month period ended March 31, 1996 the Company continued to
participate in work programs in the Negev Med Venture, the Yam Carveout Venture
and began its participation in the Shederot Venture (as from January 1996).
The Company holds a 1.0043% working interest in each of the Petroleum Assets
held by the various ventures.
- 7 -
<PAGE> 10
Negev Med Venture
Two seismic surveys and two wells were drilled (the Yam Yafo 1 and the Yam West
1) by the Negev Med Venture since its inception. During 1995 and the beginning
of 1996 the activity of seismic interpretation and subsurface mapping over the
five licenses of the Venture have been carried out.
Following the accumulated data on Authorization for Expenditure (AFEs in the
five licenses of the Venture).
<TABLE>
<CAPTION>
Total Accumulated
Expenses from
Inception date
Expended in of Licenses
License AFE January-March 1996 (May 1, 1993) Company's Share
- ------- --- ------------------ ------------- ---------------
<S> <C> <C> <C> <C>
Med Tel Aviv $39,082,500 $ 28,269 $38,418,121 $385,833
Med Yavne 24,854,500 105,695 23,477,498 235,785
Med Hasharon 1,372,000 28,567 1,230,163 12,355
Med Hadera 824,500 31,659 716,693 7,198
Med Ashdod 762,000 29,603 721,607 7,247
---------- -------- ---------- --------
$66,895,500 $ 223,793 $64,564,082 $648,417
</TABLE>
For information regarding the proposed work program for the continuation of the
exploration in the Med Venture's licenses - see below.
The Yam Carveout Venture (within the Negev Ashquelon License)
The participants in the Yam Carveout Venture previously approved the drilling
of the Yam 3 well to a target depth of approximately 19,300 feet, subject to
obtaining all governmental approvals at the estimated cost of $25 million for a
dry hole plus $3 to $4 million for testing, if required. Authorizations for
Expenditure (AFE) in the amount of $2.9 million have been approved for
preparatory work and for the purchase of casing and wellhead equipment. The
Company's share is 1.0043%. Since no approval has been obtained from the
Ministry of Defense to drill the Yam 3 during 1993/1994 no major preparation
work has been performed. During the three month period ended March 31, 1996
the Yam Carveout expenses were $42,699. The Company's share is 1.0043% or
$429.
In December 1995 the Negev Ashquelon license (including the Yam Carveout within
its area) was extended to January 30, 1998. The Oil Commissioner's letter
extending the license period stipulated that a well of up to 1,500 meters in
depth would have to be spudded by October 1, 1996 and that a deeper well would
have to be spudded by April 1, 1997. These terms of the license are now being
renegotiated to fit them to the proposed work program outlined below.
- 8 -
<PAGE> 11
The failure to commence drilling in the stipulated time periods may be regarded
as a breach of the terms of the license and the Commissioner has the power to
rescind the granting of the license to the participants. The participants are
required to pre-coordinate their activities in the license area on a "timely"
basis with a number of government authorities. Should this coordination not be
attainable within the license term the license may expire without the Yam 3
well being drilled. As of this date the Ministry of Defense has rejected all
applications to drill the Yam 3 well.
For information regarding the proposed work program for the continuation of the
exploration in this license - see below.
Shederot Venture
During the three month period ended March 31, 1996 the work program in the
Shederot license consisted of seismic interpretation of pre-existing data and
preliminary mapping, reprocessing of selected seismic section and design of new
seismic field acquisition project which is scheduled to be carried out in the
second quarter of 1996.
During the three month period ended March 31, 1996 the Shederot Venture
expended $75,361. The Company's share is 1.0043% or $757.
The Proposed Work Program for the Continuation of the Offshore Exploration
The Company as Operator has recommended to the participants in the Licenses
that the following prospects be focused on during the next three years:
(a) the testing of the Yam structure by deepening the Yam 2 well
by an addition of approximately 1,000 feet and retesting the source in which
oil was discovered at the time and carrying out additional production tests, if
justified, in the additional section to be drilled. The carrying out the
activities in the Yam 2 well depends on two factors:
(i) receiving positive results from the engineering analysis of
the well which will determine whether the planned activity in
the existing well is feasible and,
(ii) receiving an implementable approval form the Defense
Authorities.
The results of reentering the Yam 2 well, if carried out, will be a
basis for considering the drilling of Yam 3 which was planned at the
time and not approved then by the Defense Authorities.
Isramco, Inc. as Operator will carry out the engineering analysis in
the next few months and will start negotiations with the Defense
Authorities for obtaining a principal authorization to carry out the
work. If these actions will result in positive answers then the
deepening of the well and the production tests will be carried out
when a drilling rig becomes available during the year 1997. The cost
of reentering and deepening the well and the production tests, if
carried out, are estimated at $12 million.
- 9 -
<PAGE> 12
(b) examination of the possible structure located some 3 to 4.5
miles off the shore between the cities of Netanya and Herzlia. The level of
the seismic knowledge on this structure is still insufficient for a drilling
decision and therefore plans are made to cover the structure with complementary
seismic survey. Shooting of this survey is scheduled for the end of 1996 and
depends on the availability of suitable seismic vessel in the region. If the
survey will be carried out according to schedule then it appears that a
drilling decision, if at all, can be made at the beginning of next year.
Actual drilling can begin, based on the availability of a suitable drilling rig
during the years 1997-1998. The cost of the seismic survey, if carried out, is
approximately $1 million and costs of drilling and production tests, if both
carried out, are estimated at $30 million.
(c) examination of two deep water anticlinal structures (water
depth of 2,300 feet and more), the first, at a distance of approximately 19
miles northwest of Tel Aviv and the second, approximately 19 miles northwest of
Ashdod.
Isramco as Operator applied on behalf of the partners to the Oil Commissioner
at the Ministry of Energy and Infrastructure, to extend the duration of the
offshore licenses held by the group and to adjust the work obligations
stipulated in the licenses to fit the work program as outlined above, taking
into consideration the tough offshore rig market.
Operator's Fees
In the three month period ended March 31, 1996, the Company earned $126,000
which was based on the minimum monthly compensation of $42,000 per month. In
the three month period ended March 31, 1995, the Company earned Operator's fees
of $636,943 above the minimum monthly compensation (which was $42,000 per month
for three months or $126,000), primarily from the Yam West 1 well. The Company
believes that Operator's fees during April - December 1996 will be based mainly
on the minimum monthly compensation which at present is $42,000 per month
($6,000 x 7 licenses).
Interest Income
Interest income increased in the three month period ended March 31, 1996
compared to in the three month period ended March 31, 1995, due to higher
average interest rate and/or higher average investment balances.
Gain on Marketable Securities
In the three month period ended March 31, 1996 the Company had gains from
marketable securities of $165,922 comprised of $163,561 from unrealized holding
gains and $2,361 from realized gains.
Increase or decrease in the gains or losses from marketable securities are
dependent on the market prices in general and the composition of the portfolio
of the Company.
- 10 -
<PAGE> 13
Exploration Cost
As described above the three month period ended March 31, 1996 was mainly used
for seismic interpretation and subsurface mapping, the Company expended on oil
and gas exploration less than in the previous period in 1995 by $130,755 when
the drilling of the Yam West 1 well took place.
Operator's Expenses
Operator's expenses increased in the three month period ended March 31, 1996 as
compared to the three month period ended March 31, 1995, as a result of less
manpower costs which the Company could charge the various ventures and less
income from foreign currency exchange.
General and Administrative Expenses
General and Administrative expenses during the three month period ended March
31, 1996 were similar to those during the three month period ended March 31,
1995.
Directors fees, president's salary and professional fees during the three month
period ended March 31, 1996 were more than during the same period ended March
31, 1995. The expenses during the three month period ended March 31, 1995
included tax payments which were higher than the tax payments in the same
period ended March 31, 1996.
Condition Subsequent
On April 17, 1996, Dr. Joseph Elmaleh resigned as the Chairman
of the Board, Chief Executive Officer and as a Director of Isramco, Inc. (the
"Company") pursuant to a Termination Agreement entered into between the Company
and Dr. Joseph Elmaleh (the "Termination Agreement").
Pursuant to the terms of the Termination Agreement: (i) the Company
terminated the July 1995 Consulting Agreement with Dr. Joseph Elmaleh and paid
to Dr. Elmaleh the sum of $123,750 representing the balance of the unpaid
consulting fees otherwise due to Dr. Elmaleh through the remaining term of the
Consulting Agreement; (ii) Dr. Joseph Elmaleh covenanted that for a term of
three (3) years not to directly or indirectly either on behalf of himself or on
behalf of any business venture, as an employee, agent, broker, consultant,
partner, principal, stockholder, officer or otherwise compete with the Company
in connection with the exploration for oil and gas in the State of Israel or in
the territorial waters offshore Israel or in territories currently under the
control of the State of Israel. The Company paid to Dr. Joseph Elmaleh the sum
of $270,000 in consideration of his covenant not to compete as set forth in the
Termination Agreement; and, (iii) the Company purchased from Southern Shipping
and Energy Inc. ("SSE"), a company controlled by Dr. Elmaleh, 292,675 shares of
the common stock of the Company held by SSE for a purchase price of
$208,238.21.
The terms and conditions of the Termination Agreement are fully set
forth in Exhibit A to Form 8-K filed by the Company for the month of April,
1996.
In connection with this agreement, the Company expects to take a
charge to earnings of approximately $190,000 in the second quarter of 1996 and
$22,500 in each of the following 11 quarters.
- 11 -
<PAGE> 14
ISRAMCO, INC.
PART II. OTHER INFORMATION
Item 6. Reports on Form 8-K
Form 8-K for the month of January, 1996 dated January 18,
1996;
Form 8-K for the month of April, 1996 dated April 1, 1996;
Form 8-K for the month of April, 1996 dated April 17 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
<TABLE>
<S> <C>
ISRAMCO, INC.
--------------------------------------------------
(Registrant)
Date: May 15, 1996
By: s/Haim Tsuff
----------------------------------------------
(Signature)
Haim Tsuff
Chairman of the Board and
Principal Financial Officer
</TABLE>
- 12 -
<PAGE> 15
EXHIBIT INDEX
Exhibit 27 - Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 16,719,078
<SECURITIES> 5,845,915
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 22,823,922
<PP&E> 224,640
<DEPRECIATION> 109,543
<TOTAL-ASSETS> 22,939,019
<CURRENT-LIABILITIES> 339,033
<BONDS> 0
0
0
<COMMON> 266,912
<OTHER-SE> 22,333,074
<TOTAL-LIABILITY-AND-EQUITY> 22,939,019
<SALES> 0
<TOTAL-REVENUES> 732,156
<CGS> 0
<TOTAL-COSTS> 162,183
<OTHER-EXPENSES> 232,337
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 476
<INCOME-PRETAX> 337,636
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 337,636
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
