<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB - QUARTERLY OR TRANSITIONAL REPORT
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
----------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
EXCHANGE ACT
For the transition period from to
------ ------
Commission file number 0-6540
------------
Oceanic Exploration Company
--------------------------------------------
(Exact name of small business issuer as specified in its charter)
Delaware 84-0591071
------------------ --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5000 South Quebec Street, Suite 450, Denver, CO 80237
------------------------------------------------------
(Address of principal executive offices)
(303) 220-8330
-------------------------------------------------------
(Issuer's Telephone number)
-------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by 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.
[ X ] Yes [ ] No
Shares outstanding at Common $.0625 Par Value
August 10, 1995
3,915,154
<PAGE>
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
--------------------
OCEANIC EXPLORATION COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
------
June 30, March 31,
1995 1995
--------- ----------
<S> <C> <C>
Cash $ 190,174 154,628
Receivables:
Affiliates 3,439 2,237
Other -- 9,633
--------- ----------
3,439 11,870
Prepaid expenses 982 4,347
Restricted cash -- 15,629
--------- ----------
Total current assets 194,595 186,474
--------- ----------
Oil and gas property
interests, full-cost method
of accounting -- Greece 39,000,000 39,000,000
Less accumulated amortization,
depreciation and
valuation allowance (37,698,409) (37,629,909)
----------- -----------
1,301,591 1,370,091
----------- -----------
Other assets 615 757
----------- -----------
$ 1,496,801 1,557,322
=========== ===========
</TABLE>
(Continued)
<PAGE>
3
OCEANIC EXPLORATION COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS, CONTINUED
<TABLE>
<CAPTION>
LIABILITIES AND
---------------
STOCKHOLDER'S DEFICIT
---------------------
June 30, March 31,
1995 1995
---------- ----------
<S> <C> <C>
Current liabilities:
Notes payable to affiliate (note 2) $ 2,000,000 2,000,000
Accounts payable 232,803 181,879
Accounts payable to affiliates 60,000 60,000
United Kingdom taxes payable,
including accrued interest 408,958 408,948
Accrued expenses 130,383 90,487
---------- ----------
Total current liabilities 2,832,144 2,741,324
---------- ----------
Deferred income taxes (note 4) 776,002 808,062
Other noncurrent liabilities 15,788 15,217
---------- ----------
Total liabilities 3,623,934 3,564,603
---------- ----------
Stockholders' deficit:
Common stock, $.0625 par value.
Authorized 12,000,000 shares;
issued and outstanding
3,915,154 shares 244,697 244,697
Capital in excess of par value 6,665 6,665
Accumulated deficit (2,127,133) (2,007,281)
---------- ----------
Total stockholders' deficit (2,127,133) (2,007,281)
---------- ----------
Contingencies (note 3)
$ 1,496,801 1,557,322
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
4
OCEANIC EXPLORATION COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended
June 30,
--------------------------
1995 1994
--------------------------
<S> <C> <C>
Revenues:
Oil and gas sales - Greece (note 3) $ -- 183,333
Other 120,164 70,094
-------- --------
120,164 253,427
-------- --------
Costs and expenses:
Interest and financing costs 45,222 27,564
Exploration expenses 14,601 38,479
Amortization and depreciation 68,500 80,189
General and administrative 143,753 152,472
-------- --------
272,076 298,704
-------- --------
Loss before income taxes (151,912) (45,277)
Provision for income taxes (note 4) (32,060) 39,533
-------- --------
Net loss $(119,852) (84,810)
======== =======
Loss per common share $ (.03) (0.02)
======== =======
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
5
OCEANIC EXPLORATION COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
June 30,
-----------------------------
1995 1994
-----------------------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (119,852) (84,810)
Adjustments to reconcile net loss
to net cash provided by (used in)
operating activities:
Amortization and depreciation 68,500 80,189
Deferred income tax benefit (32,000) (33,800)
Decrease (increase) in
receivables 8,431 (103,585)
Decrease (increase) in
restricted cash 15,629 (87)
Decrease in prepaid expenses
and other assets 3,507 936
Increase in accounts payable 50,924 2,565
Increase (decrease) in accrued
expenses 39,896 (13,092)
Increase in other noncurrent
liabilities 571 1,067
-------- --------
Net cash provided by (used in)
operating activities 35,546 (150,617)
-------- --------
Cash flows from financing activities:
Borrowings from affiliates - 200,000
-------- --------
Net cash provided by financing
activities -- 200,000
-------- --------
Net increase in cash 35,546 49,383
Cash at beginning of period 154,628 48,928
-------- --------
Cash at end of period $ 190,174 98,311
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
6
OCEANIC EXPLORATION COMPANY AND SUBSIDIARIES
--------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
June 30, 1995
-------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Basis of Presentation
---------------------
The consolidated balance sheet as of March 31, 1995, which has been derived
from audited statements, and the unaudited interim consolidated financial
statements included herein have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
note disclosures normally included in annual financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to those rules and regulations, although the Company believes
that the disclosures made are adequate to make the information presented not
misleading. In the opinion of management, all adjustments consisting of normal
reoccurring accruals have been made which are necessary for the fair
presentation of the periods presented. The accounting policies of the Company
are set forth in the financial statements and notes thereto and are included in
the Company's latest annual report on Form 10-KSB. It is suggested that these
consolidated financial statements be read in conjunction with that document.
(2) NOTES PAYABLE
-------------
Notes payable to affiliate at June 30 and March 31, 1995 represent
borrowings under a $2,000,000 line of credit established in favor of the Company
by NWO Resources, Inc. (NWO) (an affiliate). The NWO line of credit, which
expires January 1, 1996, provides for cumulative draws of up to $2,000,000 with
interest payable monthly on the outstanding principal balance at the greater of
the U.S. bank prime lending rate or 1 3/4% above the 30-day LIBOR. Borrowings
under the line of credit are secured by the Company's 15% net profits interest
in the offshore Greece oil and gas properties. As of August 10, 1995, the
Company is in default on the line of credit as it has not made its interest
payments for May, June and July 1995.
(3) OIL AND GAS SALES - GREECE
--------------------------
Effective January 1, 1993, the operator of the Greek properties negotiated
an agreement with the Greek government which amended the original license
agreement. The amendment provides for a sliding scale for calculating the
operator's recoverable costs and expenses and for the calculation of the Greek
royalty interest. The working interest owner who has the contractual obligation
to the Company for the 15% net profits interest has asserted that the
calculation of the amounts due to the Company should be based on the amended
agreement with the Greek government. The Company disagrees with this
interpretation and has commenced a legal action in Canada seeking a declaration
by the Court that amounts due the
<PAGE>
7
Company attributable to its 15% net profits interest be calculated based on the
terms of the license agreement before this amendment. The Company is seeking
damages of approximately $5,000,000 for the period from January 1, 1993 through
March 31, 1994 plus undetermined future damages. While the Company believes it
has a reasonable possibility of prevailing in the litigation, the ultimate
outcome of the matter cannot presently be determined. Accordingly, no amounts
have been recorded in the accompanying financial statements for current revenues
or damages, if any, that may ultimately be awarded to the Company.
In response to the legal action commenced by the Company, the working
interest owner has ceased remitting payments to the Company and has filed a
counteraction seeking damages in the amount of $4,800,000 plus interest and
costs, alleging the Company was overpaid for the period January 1, 1989 through
December 31, 1993. As the working interest owner has ceased remitting payments
to the Company for its 15% net profits interest, the Company has not recorded
any revenues for Greece for the year ended March 31, 1995 or for the quarter
ended June 30, 1995. A revenue accrual had been made for the quarter ended June
30, 1994 but was subsequently reversed in the financial statements for the year
ended March 31, 1995. While the Company also believes that it will prevail on
the counterclaim, the ultimate outcome of that matter likewise cannot be
determined. Accordingly, no provision for any liability or loss that may result
upon final resolution of the counterclaim has been recognized in the financial
statements.
(4) INCOME TAXES
------------
Income tax expense (benefit) consists of the following:
<TABLE>
<CAPTION>
Three Months Ended
June 30, June 30,
---------------------------------
1995 1994
---------------------------------
<S> <C> <C>
Current:
Foreign - Greece $ -- 73,333
-------- --------
Total current - 73,333
-------- --------
Deferred:
Foreign - Greece (32,060) (33,800)
-------- --------
Total deferred (32,060) (32,060)
-------- --------
Total income tax
expense (benefit) (32,060) (39,533)
======== ========
</TABLE>
<PAGE>
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
-----------------------------------------------------------------------
OF OPERATIONS
-------------
Liquidity and Capital Resources
-------------------------------
In the past, the Registrant's principal source of revenue was from its net
profits interest in an oil and gas concession located offshore Greece. The
average per barrel price for oil production from the Registrant's concession in
Greece was $14.47, $12.38 and $15.65 for the years ended March 31, 1995, 1994,
and 1993, respectively.
Due to high Greek income taxes and royalties in combination with declining
production levels, low oil prices and increasing operating costs, the consortium
operating the Greek properties believed that the Greek operation was at its
economic breakeven point. As a result, Denison Mines Ltd. (Denison) of Canada
and its partners commenced negotiations in 1992 with senior Greek government
officials to obtain relief from the high level of government taxes and
royalties. On February 23, 1993, the consortium reached an agreement with the
Greek government resulting in an amendment to the License Agreement known as Law
98/1975 which regulates the operation of the field. The amendment was ratified
by the Greek Parliament on June 23, 1993 and was retroactive to January 1, 1993.
The amendment provides for a sliding scale for both the cost recovery
factor and the Greek royalty interest based on the annual adjusted gross income
from operations on a calendar year basis. The new law also provides for a
reduction in the effective Greek income tax rate from 50% to 40%.
In addition, the new law required Denison and its partners to spend $15
million during 1993 and 1994 in infill drilling in order to enhance the
recoverability of the hydrocarbons. In March 1994, the consortium announced the
discovery of a new oil field by the drilling of the Prinos North-2 well.
According to Denison's 1994 Annual Report, two oil bearing zones were flow
tested with a 30 meter upper section flowing at about 3,200 barrels per day and
a 7 meter lower section flowing at 150 barrels per day. Oil in place was
calculated at about 18 million barrels of which 5 million may be recoverable.
The crude from this discovery has an API gravity of about 25 degrees, contains
about 7% sulphur and may have a selling value of between $1.50 and $4.00 per
barrel less than Prinos crude. The Registrant has not received any further
information regarding the development plans, if any, for this new discovery.
Denison, who has the contractual obligation to pay the Registrant's 15% net
profits interest, has asserted that the calculation of the amounts due the
Registrant should be based on the amended agreement with the Greek government.
The Registrant disagrees with this interpretation and has commenced legal action
seeking a declaration by the Court that amounts due the Registrant attributable
to its 15% net profits interest be calculated based on
<PAGE>
9
the terms of the license agreement prior to the 1993 amendment. The Registrant
is seeking damages of approximately $5,000,000 for the period from January 1,
1993 through March 31, 1994 plus undetermined future damages. The Registrant
believes there is a reasonable possibility of prevailing in the litigation but
the ultimate outcome of the lawsuit cannot be determined at this time.
Furthermore, there are no assurances that the Registrant will be able to collect
from Denison on a successful judgement or settlement of the pending litigation.
Therefore, no amounts have been recorded in the financial statements for
revenues or damages, if any, that may ultimately be awarded. On November 25,
1994, the case was transferred to the Commercial List of the Ontario Court. A
court date has been scheduled for February 1996.
In response to the lawsuit filed against Denison by the Registrant, Denison
has filed a counterclaim seeking damages of approximately $4,800,000 plus
interest and costs alleging that the Registrant was overpaid for the period from
January 1, 1989 through December 31, 1993. In addition, Denison has ceased
remitting payments to the Registrant for its 15% net profits interest.
Accordingly, the Registrant has not recorded any oil and gas revenues for Greece
for the current year. While the Registrant also believes that it will prevail
on the counterclaim, the ultimate outcome likewise cannot be determined.
Accordingly, no provision for any liability or loss that may result upon final
resolution of the counterclaim has been recognized in the financial statements.
Denison's suspension of the Registrant's principal source of revenue has
resulted in the Registrant's inability to fulfill its financial obligations as
they become due and therefore the Registrant faces potential insolvency.
Accordingly, the Registrant's auditors have issued an opinion on the
Registrant's financial statements for the year ended March 31, 1995 that
included an explanatory paragraph discussing the uncertainty regarding the
Registrant's ability to continue as a going concern.
The Registrant has used draws against its line of credit with NWO, the
parent company of International Hydrocarbons, the Registrant's majority
stockholder, to cover its general operating expenses. The NWO line of credit
provides for cumulative draws of up to $2,000,000 with interest payable monthly
on the outstanding balance at the greater of the U. S. bank prime lending rate
or 1- 3/4% above the 30-day LIBOR in effect on the date of each draw against the
line of credit. Such draws are evidenced by promissory notes payable no later
than January 1, 1996. Cumulative draws on the NWO line of credit are $2,000,000
at June 30, 1995. The line of credit is secured by the Registrant's 15% net
profits interest in the offshore Greece properties. Recent discussions with NWO
indicate that NWO is unwilling to extend further financial assistance to the
Registrant. As of August 10, 1995, the Registrant is in default on the line of
credit as it has not made its interest payments for May, June and July 1995.
The Registrant will require additional funds to finance its litigation
costs, pay interest expense, and continue limited operations. Management is
reviewing the Registrant's activities and taking actions to reduce overhead
costs. On July 7, 1995, a
<PAGE>
10
resolution was passed by the Board of Directors of the Registrant directing the
two independent directors on the Board to attempt to negotiate with NWO an
extension of the due date of the line of credit until December 31, 1996, and an
increase in the amount available on such line by an additional $700,000. It was
further resolved that if the independent directors could not negotiate a
satisfactory extension of the line of credit with NWO, then the Registrant would
investigate pursuing a rights offering to raise the required additional capital
to enable the Company to fund its operations through December 31, 1996. The
rights offering would be done on the basis that International Hydrocarbons would
agree to buy all remaining shares not purchased by the other shareholders and
would also be contingent upon NWO entering into a standstill agreement with the
Registrant. If an agreement could not be reached on either of the foregoing
options then the independent directors would refer the matter back to the entire
Board for further consideration.
The independent directors have discussed the Registrant's proposal to
extend the line of credit with NWO and have been notified by NWO that there was
no interest on the part of NWO in restructuring the loan without the rights
offering.
On August 8, 1995, a meeting of the Board of Directors was held to discuss
NWO's position and determine the next option available to the Registrant. The
Board passed a resolution authorizing the Registrant to attempt a rights
offering to raise $600,000 by offering 6 million shares to its shareholders at
$.10 per share subject to International Hydrocarbons agreeing to purchase all
shares not purchased by other shareholders of the Registrant. It was further
resolved that NWO would be asked to provide advances to cover the costs of the
Denison litigation up to an estimated $100,000 with the amount of such advances
plus interest thereon to be repaid upon receipt of the proceeds of the rights
offering. In addition, NWO would execute a standstill agreement wherein NWO
would agree to suspend collection of interest and principal on the $2,000,000 of
promissory notes currently outstanding until December 31, 1996.
NWO has agreed in principal to the terms of the above proposal and a
settlement agreement has been reached. This agreement is included as Exhibit
10.18 to this Form 10-QSB. The Registrant is beginning the preparation of the
necessary documentation to proceed with the rights offering. There can be no
assurances that the rights offering will be successfully completed under the
time constraints of the settlement agreement with NWO. Unless additional funds
can be made available, it is unlikely that the Registrant can continue as a
going concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
<PAGE>
11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PRECEEDINGS
Not applicable.
ITEM 2. CHANGE IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits filed herewith are listed below and if not located in another
previously filed registration statement or report, are attached to this Report
at the pages set out below. The "Exhibit Number" below refers to the Exhibit
Table in Item 601 of Regulation S-B.
<TABLE>
<CAPTION>
Exhibit Number Name of Exhibit Location
<C> <S> <C>
3.1 Articles of Incorporation Page 58 of Report on
(including all amendments) Form 10-K for year
ended Sept. 30, 1980
3.2 Bylaws (including all amend- Page 15 of Form 8
ments) (Amendment No. 1 to
10-K Report) dated
June 1, 1982
10.1 Memorandum of Agreement dated Report on Form 10-K
June 30, 1976 between Oceanic for year ended Sep-
Exploration Company and Denison tember 30, 1976
Mines Limited
10.2 Letter Agreement dated July 28, Report on Form 10-K
1976 amending Agreement of for year ended Sep-
June 30, 1976 tember 30, 1976
10.3 Amendment dated August 27, 1976 Report on Form 10-K
to Agreement of June 30, 1976 for year ended Sep-
tember 30, 1976
</TABLE>
<PAGE>
12
<TABLE>
<CAPTION>
Exhibit Number Name of Exhibit Location
<C> <S> <C>
10.4 Farm-out Agreement with Page 38 of Form 10-KSB
Enterprise Oil Exploration for year ended
Limited and NMX Resources March 31, 1995
(Overseas) Limited dated
September 22, 1989
10.5 Letter Agreement with Page 54 on Form 10-KSB
Enterprise Oil Exploration for year ended
Limited and NMX Resources March 31, 1995
(Overseas) Limited dated
September 22, 1989
10.6 Letter of Indemnification with Page 62 on Form 10-KSB
Enterprise Oil Exploration for year ended
Limited and NMX Resources March 31, 1995
(Overseas) Limited dated
September 22, 1989
10.7 Management Agreement with Page 63 on Form 10-KSB
Cordillera Corporation dated for year ended
January 1, 1990 March 31, 1995
10.8 Management Agreement with Page 67 on Form 10-KSB
San Miguel Valley Corporation for year ended
dated January 1, 1990 March 31, 1995
10.9 Office Building Lease with Page 71 on Form 10-KSB
Sorrento West Properties, Inc. for year ended
dated March 1, 1991 March 31, 1995
10.10 Addendum to Office Building Page 129 on Form 10-KSB
Lease dated March 1, 1994 for year ended
March 31, 1995
10.11 Promissory Note with NWO Page 131 on Form 10-KSB
Resources, Inc. dated for year ended
June 15, 1994 March 31, 1995
10.12 Promissory Note with NWO Page 132 on Form 10-KSB
Resources, Inc. dated for year ended
July 18, 1994 March 31, 1995
10.13 Security Agreement in favor Page 133 on Form 10-KSB
of NWO Resources, Inc. for year ended
dated July 27, 1994 March 31, 1995
10.14 Promissory Note with NWO Page 149 on Form 10-KSB
Resources, Inc. dated for year ended
September 22, 1994 March 31, 1995
10.15 Promissory Note with NWO Page 150 on Form 10-KSB
Resources, Inc. dated for year ended
December 15, 1994 March 31, 1995
</TABLE>
<PAGE>
13
<TABLE>
<CAPTION>
Exhibit Number Name of Exhibit Location
<C> <S> <C>
10.16 Promissory Note with NWO Page 151 on Form 10-KSB
Resources, Inc. dated for year ended
January 1, 1995 March 31, 1995
10.17 Promissory Note with NWO Page 152 on Form 10-KSB
Resources, Inc. dated for year ended
February 15, 1995 March 31, 1995
10.18 Letter Agreement between Page 15 of signed
NWO Resources, Inc. and original of this
the Registrant dated Report
August 9, 1995
</TABLE>
(b) There have been no reports on Form 8-K filed during the quarter for
which this Report is filed.
<PAGE>
14
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.
OCEANIC EXPLORATION COMPANY
Date: August 10, 1995 /s/ Charles N. Haas
-------------------- ---------------------------------------
Charles N. Haas
President
Date: August 10, 1995 /s/ Diana J. Peters
-------------------- ---------------------------------------
Diana J. Peters
Treasurer and
Chief Financial Officer
<PAGE>
Exhibit 10.18
[LETTERHEAD]
August 9, 1995
Board of Directors
Oceanic Exploration Company
5000 S Quebec St Ste 450
Denver CO 80237
Gentlemen:
Based upon the proposal made to NWO Resources, Inc. ("NWO") by the Board of
Directors of Oceanic Exploration Company ("Oceanic") during its Special
Meeting on August 8, 1995, and confirming the telephone notification of
acceptance given by the undersigned on August 8, 1995 to Oceanic, NWO agrees
to the following workout arrangement:
1. Except as provided under paragraph "2" below, and subject to the
implementation on or before December 31, 1995 of the rights offering
described under paragraph "6" below, NWO will forebear collection until
December 31, 1996 of the interest and principal on the $2,000,000 of
promissory notes ("Oceanic Notes") which it holds from Oceanic.
2. Any monies collected by Oceanic from Denison Mines either before or after
December 31, 1996 will first be applied to paying accrued interest on the
Oceanic Notes. After all accrued interest has been paid, and prior to
December 31, 1996, Oceanic will be permitted to use up to $200,000 of
monies collected from Denison for working capital purposes. All remaining
collections from Denison will be applied first to accrued interest and
then to reducing principal on the Oceanic Notes.
3. Oceanic will amend the security held by NWO so as to clarify that NWO has
a full security interest in all proceeds from Oceanic's lawsuit against
Denison and any existing and future Oceanic receivables from Denison.
4. The interest rate on the Oceanic Notes will be increased to 1 1/8% above
NWO's borrowing costs on the date of execution of this workout agreement.
5. Oceanic agrees to diligently pursue its lawsuit against Denison.
6. Oceanic will attempt to raise $600,000 of working capital to pay
litigation, administrative and other operating costs by making a rights
offering to its shareholders. In order to maximize the chances for a
successful rights offering, the offering will be for the issuance of
6,000,000 shares of Oceanic stock in exchange for $600,000.
<PAGE>
Board of Directors
Oceanic Exploration Company
August 9, 1995
Page Two
7. In order to enable Oceanic to diligently pursue its lawsuit against
Denison, NWO agrees to make advances to Oceanic based upon statements
provided to NWO for legal fees reflected in statements received by
Oceanic subsequent to August 1, 1995 in connection with the Denison
litigation up to an estimated $100,000 in litigation expenses.
8. Oceanic agrees to reimburse NWO for such advances together with interest
thereon computed at the annual rate of 10% upon receipt of the proceeds
of the rights offering referred to in paragraph "6" above or January 31,
1996, whichever occurs earlier.
If the foregoing is acceptable to Oceanic, indicate your acceptance in the
space provided below and we will proceed with the preparation of any
additional documentation in the furtherance of this arrangement.
Yours very truly,
NWO RESOURCES, INC.
/s/ John E. Jones
John E. Jones
Secretary-Treasurer
Accepted and agreed to this 10th day of August, 1995.
OCEANIC EXPLORATION COMPANY
By: /s/ Charles N. Haas
--------------------------
Charles N. Haas, President
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-QSB
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1995 AND FROM FORM 10-KSB FOR THE FISCAL
YEAR ENDED MARCH 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 3-MOS
<FISCAL-YEAR-END> MAR-31-1995 MAR-31-1996
<PERIOD-END> MAR-31-1995 JUN-30-1995
<CASH> 154,628 190,174
<SECURITIES> 15,629 0
<RECEIVABLES> 11,870 3,439
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 186,474 194,595
<PP&E> 39,000,000 39,000,000
<DEPRECIATION> 37,629,909 37,698,409
<TOTAL-ASSETS> 1,557,322 1,496,801
<CURRENT-LIABILITIES> 2,741,324 2,832,144
<BONDS> 0 0
<COMMON> 244,697 244,697
0 0
0 0
<OTHER-SE> 6,665 6,665
<TOTAL-LIABILITY-AND-EQUITY> 1,557,322 1,496,801
<SALES> 0 0
<TOTAL-REVENUES> 321,495 120,164
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 1,045,205 226,854
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 150,164 45,222
<INCOME-PRETAX> (873,874) (151,912)
<INCOME-TAX> (77,272) (32,060)
<INCOME-CONTINUING> (796,602) (119,852)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (796,602) (119,852)
<EPS-PRIMARY> (.20) (.03)
<EPS-DILUTED> (.20) (.03)
</TABLE>
