<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
OR
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: 0-12185
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DAUGHERTY RESOURCES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
PROVINCE OF BRITISH COLUMBIA NOT APPLICABLE
(State or other jurisdiction of incorporation or (I.R.S. EMPLOYER
organization) IDENTIFICATION NO.)
120 PROSPEROUS PLACE, SUITE 201
LEXINGTON, KENTUCKY 40509-1844
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (859) 263-3948
-------------
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 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 OF EACH OF THE REGISTRANT'S CLASSES OF
COMMON STOCK, AS OF JUNE 30, 2000, WAS 2,913,030.
Transitional Small Business Disclosure Format (check one): Yes No X.
--- ---
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<PAGE> 2
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
The information required by this Item 1 appears on pages i through iv
of this Report, and is incorporated herein by reference.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The following is a discussion of the Company's financial condition and
results of operations. This discussion should be read in conjunction with the
Financial Statements of the Company described in Item 1 of this Report.
Statements contained in this "Management's Discussion and Analysis of Financial
Condition and Results of Operations," which are not historical facts may be
forward looking statements. Reliance upon such information involves risks and
uncertainties, including those created by general market conditions, competition
and the possibility that events may occur which could limit the ability of the
Company to maintain or improve its operating results or execute its primary
growth strategy. Although management believes that the assumptions underlying
the forward-looking statements are reasonable, any of the assumptions could be
inaccurate, and there can be no assurances that the forward-looking statements
included herein will prove to be accurate. The inclusion of such information
should not be regarded as a representation by management or any other person
that the objectives and plans of the Company will be achieved. Moreover, such
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those projected. Readers
are cautioned not to place undue reliance on these forward-looking statements
that speak only as of the date hereof.
Daugherty Resources, Inc., formerly Alaska Apollo Resources Inc., (the
"Company" or the "Registrant") is a diversified natural resources company with
assets in oil and gas, and gold prospects. Originally formed in 1979 to develop
gold properties, the Company in the fourth quarter of 1993, acquired its wholly
owned subsidiary, Daugherty Petroleum, Inc.
Since acquiring Daugherty Petroleum, Inc., the Company has increased
its reserves through the acquisition of oil and gas properties in the
Appalachian and Illinois Basins, and the drilling of wells in the Appalachian
Basin through joint venture and turnkey drilling programs, where Daugherty
Petroleum, Inc. is the primary decision maker. The Company continues to
aggressively seek acquisitions and drilling programs.
LIQUIDITY
The Company continues its tradition of realizing revenues from its oil
and gas operations. For the six months ending June 30, 2000, the Company drilled
seventeen wells (4.30 net wells) (fourteen natural gas wells, three wells
capable of producing both oil and natural gas) completed eight natural gas wells
and extended its gathering system by 17,760 feet. By comparison, for the same
period of 1999, the Company drilled four natural gas wells (1.95 net wells).
Drilling operations for the first six months of 2000 were primarily related to a
joint venture on the Company's farmout acreage acquired from Equitable Resources
Energy Corporation, now Equitable Production Company.
The Company funds its operations through a combination of cash flow
from operations, capital raised through drilling partnerships and the sale of
stock. Operational cash flow is generated by sales of natural gas and oil from
interests the Company owns in wells, well operations of partnership wells, and
well drilling and completions for Company sponsored partnerships.
The Company continues to review additional opportunities for
acquisitions of oil and gas properties. Previous acquisitions have been
completed using Company stock to pay for the acquisitions. Generally, interests
in wells purchased include a majority interest in the wells and the right to
operate wells.
The Company acquired wells in two acquisitions in the last quarter of
1999. One transaction was with Environmental Energy, Inc., and its affiliated
limited partnerships, which closed on October 21, 1999 and allowed the
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Company to acquire interests in 41 oil and gas wells located in Kentucky,
Louisiana and Tennessee. On October 13, 1999 the Company agreed to purchase from
Ken-Tex Oil & Gas, Inc. 50% interest in 24 natural gas wells located in Knox
County, Kentucky together with gathering systems, easements and operating rights
for $425,000 payable in 191,519 shares of restricted common stock valued at
$2.2191 per share. Because of the ownership structure of the well interests the
transaction was originally designed to be a three part closing. As of June 30,
2000 four closing have been conducted and a total of 165,588 shares of stock had
been issued in connection with the acquisition. Additional interests may be
acquired in subsequent closings for which the company is prepared to issue up to
an additional 25,931 shares of stock.
On June 22, 2000, the Company announced that it had discovered a new
oil and gas field on a 5,000-acre tract located in Bell County, Kentucky. The
Company acquired the drilling rights to the tract in April of 1998 from
Equitable Production Company, formerly Equitable Resources Energy Company.
During the second quarter, the Company completed the acquisition of an
oil and gas lease from J. M. Huber Corporation covering 12,300 acres located in
Claiborne County, Tennessee. The lease is adjacent to the 5,000-acre tract
located in Bell County, Kentucky.
The Company has primarily concentrated in drilling wells on prospects
it generates in the Appalachian Basin. Historically, a major portion of the
Company's revenues have been from its activities as "turnkey driller" and
operator of various drilling programs in the Appalachian Basin. During the first
six months of 2000, approximately 91% of the Company's revenues were derived
from joint venture drilling.
Through the end of the second quarter, the Company has drilled 17
wells, which represent approximately 57% of its announced goal of 30 wells for
fiscal year 2000. While the Company's working interest in the wells that it
drills varies from well to well, for the three (3) wells drilled quarter ending
June 30, 2000, it increased its average working interest to 33.33%. The Company
expects that it will drill an additional 13 wells during the last two quarters
of 2000 and maintain working interests ranging from 15% to 50% of each well it
drills.
As of June 30, 2000, Sentra Corporation, the Company's natural gas
utility subsidiary, completed its first full six months of operations with sales
of $36,309. Sentra has installed approximately 75,100 feet of transmission line
and 18,500 feet of distribution line. As of August 11, 2000, Sentra had 81
customers, 15 of which are commercial accounts. In addition, Sentra has
installed 67 risers that are awaiting the setting of meters and the commencement
of service, and has an additional 94 applications from customers requesting
service. Sentra expects high demand for natural gas service in its service areas
because of ease of usage, economy and reliability. Further, demand is expected
to increase because of continued growth and acceptance of natural gas by the
chicken industry that is a major commercial segment in the economy of Sentra's
service areas and as of August 11, 2000, Sentra is running a service line to one
chicken broiler house complex and in negotiations with several other owners of
similar operations to provide natural gas service. By the end of the third
quarter, Sentra expects to be providing natural gas service to at least four
such complexes with a total of 20 broiler houses an increase of 150% over the
eight (8) houses it serviced at the end of the second quarter. Each broiler
house consumes the rough equivalent of 7 average residences
Working capital for the period ending June 30, 2000 was a negative
$2,885,714 compared to the same period in 1999, when working capital was a
negative $2,342,765.
During the period ending June 30, 2000 and compared to that same period
in 1999, the changes in the composition of the Company's current assets were:
cash balances increased $36,692 from $296,775 to $333,467; accounts receivable
balances increased $124,970 from $64,798 to $189,768; Other current assets such
as prepaids and notes receivable decreased $525,561 from $530,000 to $4,439. The
majority of the decrease was due to the divestiture of Red River Hardwoods, Inc.
during 1999. Overall, current assets decreased by $363,899 to $527,674.
Current liabilities for the period ended June 30, 2000 were $3,413,388
compared to $3,234,338 for the period ended June 30, 1999.
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While the Company believes its cash flow resulting in operating
revenues will contribute significantly to its short term financial commitments
and operating costs, it has continued to refine its long term strategy in 2000
to meet the Company's financial obligations. This strategy includes:
o INCREASING JOINT VENTURE DRILLING. Higher oil and gas prices have
sparked an increased interest in partnership drilling. The Company
drilled three (3) wells during the second quarter pursuant to the
terms of a partnership agreement dated April 30, 2000. On August 3,
2000, the Company signed a partnership agreement and turnkey drilling
and operating agreement to drill up to 11 wells by March 31, 2001.
The Company is also in negotiations with other parties interested in
drilling wells during the remaining of fiscal year 2000. Because of
the level of interest in drilling the Company believes that it will
meet its goal of drilling 30 wells during 2000.
o ACQUISITION OF REVENUE PRODUCING PROPERTIES. The Company continues to
review existing oil and gas properties for sale in its areas of
interest. In addition to reviewing new properties, the Company
intends to finalize the Ken-Tex acquisition in 2000.
o INSTALLATION OF ADDITIONAL NATURAL GAS GATHERING SYSTEM. The
Company's plan to expand its natural gas gathering system in 2000 by
more than 50,000 feet is progressing. On May 5, 2000, 14,000 feet of
four-inch pipeline was completed and gas flow commenced from the
three wells located in the Company's Hatfield Gap Field. The Company
owns wells in its Kay Jay Field that are shut in or experiencing
production constraints due to pipeline restrictions and a 40,000-foot
gathering line extension to the Kay Jay Field is planned.
The Company has secured a portion of the right of way along the
proposed route for the gathering line extension and is in
negotiations for the remainder of the right of way. It is anticipated
that construction on the line will be completed prior to the end of
2000. This extension will allow the Company to increase its flow of
gas from wells it owns and operates, plus transport gas from wells it
drills in the future.
o GOLD AND SILVER PROPERTIES. It is the Company's objective to realize
the value of its gold and silver properties by 1) obtaining a joint
venture partner to provide funds for additional exploration on its
prospects or 2) divesting of its gold and silver properties. To help
achieve its goal in March 2000, the Company commissioned an
engineering review and an appraisal by qualified independent third
parties of its gold and silver properties, which were completed early
in the second quarter.
RESULTS OF OPERATIONS
For the six-month period ending June 30, 2000, the Company's gross
revenues increased $3,397,644 to $3,937,25595 from $539,611 for the same period
in 1999. The majority of the increase was attributable to increased turnkey
drilling operations. The Company experienced net income from continuous
operations of $528,491 in this period compared to a net income of $177,509 in
the same period of 1999.
The Company's gross revenues were derived from drilling contract
revenues of $3,575,797 (91%), from natural gas and oil operations and production
revenues of $325,149 (8%) and natural gas distribution of $36,309 (1%).
The increase in gross revenues of $3,397,644 was primarily attributable
to the increased in drilling activity during the period. Contract revenues from
drilling activities increased by $3,248,963 from $326,834 in the first six
months of 1999 to $3,575,797 in the first three months of 2000.
During the first six months of 2000, total direct costs increased by
$2,216,428 to $2,619,834 compared to $403,406 in the first six months of 1999.
These direct costs included drilling and related costs for 17 natural gas wells.
4
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PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 5. OTHER INFORMATION.
Not Applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) List of Documents Filed with this Report.
PAGE
----
(1) Balance Sheet for the Period Ended June 30, 2000............ i
Income Statement for the Period Ended June 30, 2000......... ii-iii
Segmented Information....................................... iv
Computation of Per Share Earnings........................... v
All schedules have been omitted since the information required to be
submitted has been included in the financial statements or notes or has been
omitted as not applicable or not required.
(2) Exhibits--
The exhibits indicated by an asterisk (*) are incorporated by
reference.
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
3(a)* Memorandum and Articles for Catalina Energy & Resources Ltd., a
British Columbia corporation, dated January 31, 1979, filed as
an exhibit to Form 10 Registration Statement filed May 25, 1984.
(File No. 0-12185).
3(b)* Certificate for Catalina Energy & Resources Ltd., a British Columbia
corporation, dated November 27, 1981, changing the name of Catalina
Energy & Resources Ltd. to Alaska Apollo Gold Mines Ltd., and
further changing the authorized capital of the Company from
5,000,000 shares of common stock, without par value per share, to
20,000,000 shares of common stock, without par value per share,
filed as an exhibit to Form 10 Registration Statement filed May 25,
1984. (File No. 0-12185).
3(c)* Certificate of Change of Name for Alaska Apollo Gold Mines Ltd., a
British Columbia corporation, dated October 14, 1992, changing the
name of Alaska Apollo Gold Mines Ltd. to Alaska Apollo Resources
Inc., and further changing the authorized capital of the Company
from 20,000,000 shares of common stock, without par value per share,
to 6,000,000 shares of common stock, without par value per share.
3(d)* Altered Memorandum of Alaska Apollo Resources Inc., a British
Columbia corporation, dated September 9, 1994, changing the
authorized capital of the Company from 6,000,000 shares of common
stock, without par value per share, to 20,000,000 shares of common
stock, without par value per share.
3(e)* Certificate of Change of Name for Alaska Apollo Resources Inc., a
British Columbia corporation, dated June 24, 1998, changing the name
of Alaska Apollo Resources Inc. to
5
<PAGE> 6
Daugherty Resources, Inc. and further changing the authorized
capital of the Registrant from 20,000,000 shares of common stock,
without par value per share, to 50,000,000 shares of common stock,
without par value, and authorizing the creation of 6,000,000 shares
of preferred stock, without par value per share. (File No.0-12185).
3(f)* Altered Memorandum of Daugherty Resources, Inc., a British Columbia
corporation, dated June 24, 1998, changing the authorized common
stock of the Registrant from 50,000,000 shares of common stock,
without par value per share, to 10,000,000 shares of common stock,
without par value. (File No.0-12185).
3(g)* Altered Memorandum of Daugherty Resources, Inc., a British Columbia
corporation, dated June 25, 1998, changing the authorized preferred
stock of the Registrant from 6,000,000 shares of preferred stock,
without par value per share, to 1,200,000 shares of preferred stock,
without par value. Filed as an exhibit to Form 8-K, by the Company
for reporting an event on June 29, 1998. (File No.0-12185).
3 (h)* Special Resolution of Daugherty Resources, Inc., a British Columbia
corporation, dated June 30, 1999, changing the authorized capital of
the Registration from 10,000,000 shares of common stock, without par
value per share, to 100,000,000 shares of common stock, without par
value per share, and from 1,200,000 shares of preferred stock,
without par value per share, to 5,000,000 shares of preferred stock,
without par value per share. Altered Memorandum of Daugherty
Resources, Inc., dated June 30, 1999, changing the authorized
capital of the Company to 105,000,000 shares divided into 5,000,000
shares of preferred stock, without par value and 100,000,000 common
shares without par value. Special Resolution of Daugherty Resources,
Inc., a British Columbia corporation, dated June 30, 1999, altering
Article 23.1(b) of the Company Articles by substituting a new
Article 23.1(b) that sets forth the conditions and terms upon which
the preferred shares can be converted to common stock. Filed as an
exhibit to Form 8-K, for the Company for reporting an event on
October 25, 1999. (File No.0-12185).
4* See Exhibit No. 3(a), (b), (c), (d), (e), (f), (g) and (h).
10(a)* Alaska Apollo Resources Inc. 1997 Stock Option Plan, filed as
Exhibit 10(a) to Form 10-K for the Company for the fiscal year
ended December 31, 1996. (File No. 0-12185).
10(b)* Incentive Stock Option Agreement by and between Alaska Apollo
Resources Inc. and William S. Daugherty dated March 7, 1997, filed
as Exhibit 10(b) to Form 10-K for the Company for the fiscal year
ended December 31, 1996. (File No. 0-12185).
10(c)* Agreement of Purchase and Sale by and between Environmental Energy
Partners I, Ltd., Environmental Energy Partners II, Ltd,
Environmental Operating Partners, Ltd., Environmental Holding, LLC,
Environmental Processing Partners, Ltd., Environmental Energy, Inc.,
and Environmental Operating, Inc., as Sellers and Daugherty
Petroleum, Inc., as Buyer, and Daugherty Resources, Inc. as
Accommodating Party, dated as of January 26, 1999, filed as an
Exhibit to Form 8-K by the Company for reporting an event on May 25,
1999 (File No. 0-12185).
10(d)* Agreement for the Purchase and Sale by and between H&S Lumber, Inc.,
Buyer, and Daugherty Petroleum, Inc., Seller, for the sale of Red
River Hardwoods, Inc., an 80% subsidiary of Daugherty Petroleum,
Inc., which was effective June 30, 1999, and closed December 1,
1999, filed as Exhibit 10.1 to Form 8-K by the Company for reporting
an event on December 9, 1999 (File No. 0-12185).
11 Computation of Per Share Earnings.
6
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24 Powers of Attorney.
27 Financial Data Schedule.
(b)* Reports on Form 8-K.
None
(c) Financial Statement Schedules.
No schedules are required, as all information required has been
presented in the unaudited financial statements.
7
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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 of the
undersigned hereunto duly authorized.
DAUGHERTY RESOURCES, INC.
By: /s/ William S. Daugherty
-------------------------------
William S. Daugherty, President
Dated: August 14, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ William S. Daugherty Chairman of the Board, President,
-------------------------- Director of the Registrant August 14, 2000
William S. Daugherty
/s/ James K. Klyman * Director of the Registrant August 14, 2000
--------------------------
James K. Klyman
/s/ Charles L. Cotterell * Director of the Registrant August 14, 2000
--------------------------
Charles L. Cotterell
*By /s/ William S. Daugherty
------------------------
William S. Daugherty
Attorney-in-Fact
</TABLE>
8
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DAUGHERTY RESOURCES. INC.
SUMMARY CONSOLIDATED BALANCE SHEETS
(United States Dollars)
Unaudited
6/30/99 6/30/00
------------ ------------
ASSETS
CURRENT ASSETS
Cash $ 296,775 $ 333,467
Accounts receivable 64,798 189,768
Inventory -- --
Other current assets 530,000 4,439
------------ ------------
TOTAL CURRENT ASSETS 891,573 527,674
OIL & GAS PROPERTIES (NET) 4,614,704 6,877,934
MINING PROPERTY (NET) 11,232,229 4,450,000
PROPERTY & EQUIPMENT (NET) 103,327 258,663
OTHER ASSETS
Related party loans 256,427 317,661
Bonds & deposits 41,000 41,000
Other assets 99,297 110,586
Goodwill, net of amortization of $1,207,954 760,567 581,610
------------ ------------
1,157,291 1,050,857
------------ ------------
TOTAL ASSETS $ 17,999,124 $ 13,165,128
============ ============
LIABILITIES & STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Short-term loans & notes $ 1,029,177 $ 1,140,588
Current portion of LT debt 141,000 158,908
Accounts payable 441,073 349,251
Accrued liabilities 794,167 1,149,550
Drilling prepayments 828,921 615,091
------------ ------------
TOTAL CURRENT LIABILITIES 3,234,338 3,413,388
LONG-TERM LIABILITIES 1,591,902 1,863,298
PAYABLE TO RELATED PARTIES 181,219 43,745
------------ ------------
5,007,459 5,320,431
MINORITY INTEREST -- --
STOCKHOLDER'S EQUITY
Common stock 21,319,145 22,318,618
Preferred stock 650,000
Common stock subscribed -- 73,497
Additional paid in capital -- --
Retained earnings (deficit) (8,504,989) (15,725,909)
Current income (loss) 177,509 528,491
------------ ------------
12,991,665 7,844,697
------------ ------------
TOTAL LIABILITIES &
STOCKHOLDER'S EQUITY $ 17,999,124 $ 13,165,128
============ ============
Unaudited-Internally prepared by Company management
i
<PAGE> 10
DAUGHERTY RESOURCES, INC.
SUMMARY CONSOLIDATED STATEMENTS OF INCOME
(United States Dollars)
Unaudited
<TABLE>
<CAPTION>
For the six month period ended
6/30/99 6/30/00
--------------------- ----------------------
<S> <C> <C> <C> <C>
GROSS REVENUE $ 539,611 100.00% $ 3,937,255 100.00%
DIRECT EXPENSES 403,406 74.76% 2,619,834 66.54%
----------- ------ ------------ ------
GROSS PROFIT 136,205 25.24% 1,317,421 33.46%
GENERAL & ADMINISTRATIVE EXPENSES
Salaries & wages 184,088 34.11% 229,655 5.83%
Accounting & audit 44,969 8.33% 45,209 1.15%
Advertising & promotion -- 0.00% -- 0.00%
Amortization 89,478 16.58% 116,999 2.97%
Bad debts -- 0.00% -- 0.00%
Depreciation 20,400 3.78% 29,544 0.75%
General consulting 30,530 5.66% 207,560 5.27%
Insurance 14,588 2.70% 13,499 0.34%
Legal 79,498 14.73% 51,524 1.31%
Office & general 59,109 10.95% 5,893 0.15%
Payroll & property tax 9,839 1.82% 29,585 0.75%
Rent 28,444 5.27% 22,440 0.57%
Repairs & maintenance 2,622 0.49% 6,100 0.15%
Shareholder & investor information 8,340 1.55% 18,636 0.47%
Travel & entertainment 21,492 3.98% 46,721 1.19%
----------- ------ ------------ ------
TOTAL G & A EXPENSES 593,397 109.97% 823,365 20.91%
OTHER INCOME (EXPENSE)
Interest & dividend income 27,277 5.05% 30,863 0.78%
Miscellaneous -- 0.00% 126,895 3.22%
Gain (loss) on sale of equipment -- 0.00% 8,354 0.21%
Interest expense (86,944) -16.11% (131,677) -3.34%
----------- ------ ------------ ------
INCOME BEFORE INCOME TAX & OTHER (516,859) -95.78% 528,491 13.42%
Income tax expense (benefit) -- 0.00% -- 0.00%
DISCONTINUED OPERATIONS
Income (loss) from discontinued operations (238,904) -44.27% -- 0.00%
Gain (loss) on disposal 933,272 172.95% -- 0.00%
----------- ------ ------------ ------
NET INCOME (LOSS) $ 177,509 32.90% $ 528,491 13.42%
=========== ====== ============ ======
DEFICIT, beginning of period (8,504,989) $(15,725,909)
DEFICIT, end of period (8,327,480) $(15,197,418)
Shares outstanding 2,272,182 2,545,540
EARNINGS PER SHARE $ 0.08 $ 0.21
</TABLE>
Unaudited-Internally prepared by Company management
ii
<PAGE> 11
DAUGHERTY RESOURCES, INC.
SUMMARY CONSOLIDATED STATEMENTS OF CASH FLOWS
(United States Dollars)
Unaudited
<TABLE>
<CAPTION>
For the six month period ended
6/30/99 6/30/00
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income (loss) $ 177,509 $ 528,491
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation, depletion, & amortization 205,878 306,543
Gain on sale of subsidiary (963,731) --
Changes in current assets & liabilities
(Increase) decrease in:
Accounts receivable 74,689 28,100
Inventory -- --
Other current assets (487,795) (4,439)
Increase (decrease) in:
Short-term loans & notes 887,348 (15,849)
Accounts payable (128,749) (340,905)
Accrued liabilities 33,892 498,395
Drilling prepayments (96,589) (1,921,373)
--------- -----------
Net cash provided by (used in) operating activities (297,548) (921,037)
CASH FLOWS FROM INVESTING ACTIVITIES
Change in oil & gas properties (59,602) (1,152,109)
Change in mining properties -- --
Change in property & equipment (1,322) (178,146)
Change in other assets 120,793 5,842
--------- -----------
Net cash provided by (used in) investing activities 59,869 (1,324,413)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 109,324 311,387
Change in long-term liabilities (516,473) 82,121
Change in payable to related party 445,847 (91,698)
--------- -----------
Net cash provided by (used in) financing activities 38,698 301,810
--------- -----------
NET INCREASE (DECREASE) IN CASH (198,981) (1,943,640)
-----------
CASH AT BEGINNING OF PERIOD 495,756 2,277,107
--------- -----------
CASH AT END OF PERIOD $ 296,775 $ 333,467
========= ===========
</TABLE>
Unaudited-Internally prepared by Company management
iii
<PAGE> 12
DAUGHERTY RESOURCES, INC.
SEGMENTED INFORMATION
For the six month period ended June 30,2000
(United States Dollars)
Unaudited
<TABLE>
<CAPTION>
WOOD
OIL & GAS MINING PRODUCTS* CORPORATE TOTAL
--------- ------ --------- --------- -----
<S> <C> <C> <C> <C> <C>
GROSS EXTERNAL REVENUE $3,937,255 -- -- -- $ 3,937,255
INTERSEGMENT REVENUES -- -- -- -- --
INTEREST REVENUE 21,711 -- -- 9,152 30,863
INTEREST EXPENSE 89,392 -- -- 42,285 131,677
DEPRECIATION 29,544 -- -- -- 29,544
DEPLETION 160,000 -- -- -- 160,000
AMORTIZATION OF GOODWILL -- -- -- 89,478 89,478
SEGMENT PROFIT (LOSS) $ 986,154 -- -- (457,663) $ 528,491
========== ========= === ========= ===========
SEGMENT ASSETS $6,877,934 4,450,000 -- 1,837,194 $13,165,128
========== ========= === ========= ===========
EXPENDITURES FOR SEGMENT
ASSETS $1,152,109 -- -- 178,146 $ 1,330,255
========== ========= === ========= ===========
</TABLE>
*Discontinued operation.
Unaudited-Internally prepared by Company management
iv
