================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-QSB
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: JULY 31,1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
COMMISSION FILE NUMBER: 2-99565
ARXA INTERNATIONAL ENERGY, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3784149
(State or other jurisdiction) (IRS Employer
of incorporation or organization Identification No.)
25227 Grogan's Mill Road, Suite 125
The Woodlands, Texas 77380
(Address of principal executive offices, including zip code)
(281) 296-1621
(Registrant's telephone number, including area code)
-------------
Securities registered under Section 12(b) of the Exchange Act:
Name of Each Exchange Title of Each Class on Which Registered
--------------------- ---------------------------------------
Common Stock, $.001 par value OTC / ELECTRONIC BULLETIN BOARD
Indicate by check mark whether the registrant (I) has 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 (ii) has been subject to such filing requirements for the
past 90 days. Yes [X] No [ ]
As of July 31, 1997, there were 7,373,873 shares of Common Stock
outstanding.
Page 1 of 14
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<PAGE>
ARXA INTERNATIONAL ENERGY, INC.
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED JULY 31, 1997
------------------------------------
<TABLE>
<CAPTION>
Part I - Financial Information Page
------------------------------ ----
<S> <C>
Item 1. Financial Statements
Balance Sheets as of JULY 31, 1997 (unaudited)
and JANUARY 31, 1997 3
Statements of Operations for the Three
Months Ended JULY 31, 1997 and 1996 (unaudited) 4
Statements of Operations for the Six
Months Ended JULY 31, 1997 and 1996 (unaudited) 5
Statement of Stockholders' Equity
for the Six Months Ended JULY 31, 1997 (unaudited) 6
Statements of Cash Flows for the
Six Months Ended JULY 31, 1997 and 1996 (unaudited) 7
Notes to Unaudited Financial Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 13
-2-
</TABLE>
<PAGE>
ARXA INTERNATIONAL ENERGY, INC.
BALANCE SHEETS
AS OF JULY 31, 1997 (UNAUDITED) AND JANUARY 31, 1997
----------------------------------------------------
ASSETS
<TABLE>
<CAPTION>
JULY 31, 1997 JANUARY 31, 1997
--------------- ---------------
<S> <C> <C>
CURRENT ASSETS:
CASH and CASH EQUIVALENTS ........................... $ 118,437 $ 2,667
ACCOUNTS RECEIVABLE, TRADE .......................... 7,210 14,627
PREPAID EXPENSES .................................... 16,448 22,906
-------------- --------------
TOTAL CURRENT ASSETS ................................ 142,095 40,200
-------------- --------------
PROPERTY AND EQUIPMENT:
SUCCESSFUL EFFORTS METHOD:
UNPROVED OIL and GAS PROPERTIES...................... 1,144,159 1,144,159
PROVED OIL and GAS PROPERTIES........................ 544,992 471,682
FURNITURE AND EQUIPMENT ............................. 9,609 9,609
-------------- --------------
1,698,760 1,625,450
LESS - ACCUMULATED DEPLETION,
DEPRECIATION AND AMORTIZATION ..................... (15,292) (9,227)
-------------- --------------
NET PROPERTY AND EQUIPMENT .......................... 1,683,468 1,616,223
-------------- --------------
OTHER ASSETS:
ORGANIZATION COST, NET ............................... 570 663
COVENANT NOT TO COMPETE, NET.......................... - 59,914
INVESTMENT IN PIPELINE PARTNERSHIP.................... 20,000 20,000
-------------- --------------
TOTAL OTHER ASSETS ................................... 20,570 80,577
-------------- --------------
$ 1,846,133 $ 1,737,000
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
ACCOUNTS PAYABLE, TRADE ............................. $ 33,734 $ 29,554
ACCRUED EXPENSES .................................... 185,596 122,750
CURRENT LIABILITIES, LONG TERM DEBT 132,055 29,265
-------------- --------------
TOTAL CURRENT LIABILITIES ........................... 351,385 181,569
-------------- --------------
LONG-TERM DEBT, NET OF CURRENT MATURITIES.............. 50,000 79,770
-------------- --------------
STOCKHOLDERS' EQUITY:
PREFERRED STOCK ..................................... 131,010 426,943
COMMON STOCK ........................................ 7,374 7,306
ADDITIONAL PAID-IN CAPITAL .......................... 3,968,667 3,435,488
ACCUMULATED DEFICIT ................................. (2,662,303) (2,394,076)
-------------- --------------
TOTAL STOCKHOLDERS' EQUITY .......................... 1,444,748 1,475,661
-------------- --------------
$ 1,846,133 $ 1,737,000
============== ==============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
OF THESE FINANCIAL STATEMENTS.
-3-
<PAGE>
ARXA INTERNATIONAL ENERGY, INC.
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
JULY 31, 1997 AND 1996
(UNAUDITED)
------------------------------------
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JULY 31,
------------------------------------
1997 1996
--------------- ---------------
<S> <C> <C>
REVENUES, OIL and GAS ............................ $ 9,821 $ -
--------------- ---------------
OPERATING COSTS and EXPENSES:
PRODUCTION EXPENSES ............................ 19,595 11,450
DEPLETION, DEPRECIATION AND
AMORTIZATION ................................. 16,012 30,104
GENERAL AND ADMINISTRATIVE EXPENSES ............ 160,003 92,424
--------------- ---------------
TOTAL 195,610 133,978
--------------- ---------------
OPERATING LOSS ................................... (185,789) (133,978)
OTHER INCOME (EXPENSE):
INTEREST INCOME ................................ 1,001 5,674
INTEREST EXPENSE ............................... (2,057) (3,328)
--------------- ---------------
(1,056) 2,346
INCOME TAXES ..................................... - -
--------------- ---------------
NET LOSS ......................................... (186,845) (131,632)
RETAINED DEFICIT, BEGINNING ...................... (2,475,458) (1,467,483)
DIVIDENDS ........................................ - (11,563)
--------------- ---------------
RETAINED DEFICIT, ENDING ......................... $ (2,662,303) $ (1,610,678)
NET LOSS PER COMMON SHARE ........................ $ (.025) $ (.02)
=============== ===============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING .... 7,373,873 6,666,638
=============== ===============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
OF THESE FINANCIAL STATEMENTS.
-4-
<PAGE>
ARXA INTERNATIONAL ENERGY, INC.
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED
JULY 31, 1997 AND 1996
(UNAUDITED)
------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JULY 31,
------------------------------------
1997 1996
--------------- ---------------
<S> <C> <C>
REVENUES, OIL and GAS ............................ $ 25,153 $ -
--------------- ---------------
OPERATING COSTS and EXPENSES:
PRODUCTION EXPENSES ............................ 25,045 11,450
DEPLETION, DEPRECIATION AND
AMORTIZATION ................................. 40,385 60,139
GENERAL AND ADMINISTRATIVE EXPENSES ............ 219,681 206,773
--------------- ---------------
TOTAL 285,111 278,362
--------------- ---------------
OPERATING LOSS ................................... (259,958) (278,362)
OTHER INCOME (EXPENSE):
INTEREST INCOME ................................ 1,032 6,991
INTEREST EXPENSE ............................... (4,335) (7,073)
--------------- ---------------
(3,303) (82)
INCOME TAXES ..................................... - -
--------------- ---------------
NET LOSS ......................................... (263,261) (278,444)
RETAINED DEFICIT, BEGINNING ...................... (2,394,077) (1,320,671)
DIVIDENDS ........................................ (4,965) (11,563)
--------------- ---------------
RETAINED DEFICIT, ENDING ......................... $ (2,662,303) $ (1,610,678)
NET LOSS PER COMMON SHARE ........................ $ (.035) $ (.04)
=============== ===============
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING .... 7,373,873 6,335,012
=============== ===============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
OF THESE FINANCIAL STATEMENTS.
-5-
<PAGE>
ARXA INTERNATIONAL ENERGY, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JULY 31, 1997
(UNAUDITED)
------------------------------------------------
<TABLE>
<CAPTION>
SHARES AMOUNT ADDITIONAL
-------------------------- --------------------------- PAID-IN ACCUMULATED
COMMON PREFERRED COMMON PREFERRED CAPITAL DEFICIT
---------- ---------- ---------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 31, 1997 7,306,159 426,944 $ 7,306 $ 426,944 $ 3,435,488 $ (2,394,076)
RETIREMENT OF COMMON STOCK (1,070,125) - (1,070) - (92,853)
RETIREMENT OF PREFERRED STOCK - (41,764) - (41,764)
ISSUANCE OF WARRANTS - - - - 25,000
DIVIDENDS - - - - - (4,966)
SYNDICATION COSTS - - - - (25,000)
---------- ---------- ---------- ------------ ------------
BALANCE, APRIL 30, 1997 6,236,034 385,180 $ 6,236 $ 385,180 $ 3,342,635
CONVERSION OF PREFERRED TO COMMON 254,170 (254,170) 254 (254,170) 253,916
ISSUANCE OF COMMON STOCK FOR CASH 500,000 - 500 - 349,500
ISSUANCE OF COMMON STOCK FOR:
INVESTMENT BANKING SERVICES 250,000 - 250 - (250)
CONSULTING SERVICES 150,000 - 150 - (150)
ISSUANCE OF COMMON STOCK OPTIONS
FOR CASH (NET OF COST) - - - - 35,000
RETIREMENT OF COMMON STOCK WITH CASH (16,000) - (16) - (11,984)
CORRECTION OF PRIOR PERIOD (331)
NET LOSS FOR SIX MONTHS
ENDED JULY 31, 1997 - - - - - (263,261)
---------- ---------- ---------- ------------ ------------ ------------
BALANCE, JULY 31, 1997 7,373,873 131,010 $ 7,374 $ 131,010 $ 3,968,667 $ (2,662,303)
========== ========== ========== ============ ============ ============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
OF THESE FINANCIAL STATEMENTS.
-6-
<PAGE>
ARXA INTERNATIONAL ENERGY, INC.
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED
JULY 31, 1997 AND 1996
(UNAUDITED)
------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JULY 31,
------------------------------------
1997 1996
--------------- ---------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET LOSS ................................................. $ (263,261) $ (278,444)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
DEPLETION, DEPRECIATION AND
AMORTIZATION ........................................... 40,385 60,139
OFFICER SALARY.......................................... 90,000 -
--------------- ---------------
(132,876) (218,305)
CHANGES IN WORKING CAPITAL, NET OF
EFFECTS OF NON-CASH TRANSACTIONS ....................... (14,064) (57,899)
--------------- ---------------
NET CASH USED IN OPERATING ACTIVITIES..................... (146,940) (276,204)
--------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
PURCHASE OF PROPERTY and EQUIPMENT, NET................... (73,310) (249,653)
RETIREMENT OF NON-COMPETE AGRMNT FOR NOTE PAYABLE ........ 25,687 -
--------------- ---------------
NET CASH USED IN INVESTING ACTIVITIES .................... (47,623) (249,653)
--------------- ---------------
CASH FLOWS FROM (USED IN)FINANCING ACTIVITIES:
SALE OF COMMON STOCK, NET ................................ 350,000 945,901
SALE OF STOCK OPTIONS, NET ............................... 35,000 -
PROCEEDS FROM NOTES PAYABLE .............................. 47,500 -
CONVERSION OF PREFERRED STOCK TO NOTE PAYABLE ............. 110,000 -
REPAYMENT OF NOTES PAYABLE ............................... (84,480) (107,515)
PAYMENT OF SYNDICATION COSTS ............................. (27,000)
RETIREMENT OF PREFERRED STOCK FOR NOTE PAYABLE............ (135,687) -
RETIREMENT OF COMMON STOCK FOR CASH ...................... (12,000) -
--------------- ---------------
NET CASH PROVIDED BY FINANCING ACTIVITIES ................ 310,333 811,386
--------------- ---------------
NET INCREASE (DECREASE) IN CASH .......................... 115,770 285,529
CASH AT BEGINNING OF PERIOD .............................. 2,667 34,402
--------------- ---------------
CASH AT END OF PERIOD .................................... $ 118,437 $ 319,931
=============== ===============
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
OF THESE FINANCIAL STATEMENTS.
-7-
<PAGE>
ARXA INTERNATIONAL ENERGY, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JULY 31, 1997 AND 1996
(UNAUDITED)
1. SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND OPERATIONS
ARXA International Energy, Inc.(the Company) is engaged in crude oil and natural
gas exploration, development, and production. The Company was inactive prior to
August 8, 1995.
CASH AND CASH EQUIVALENTS
For purposes of the statement of cash flows, the Companies consider all
short-term securities purchased with a maturity of three months or less to be
cash equivalents.
ORGANIZATION COSTS
Organization costs are amortized on a straight line basis over sixty months for
both financial and income tax reporting purposes.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is computed by the
straight-line methods for financial and federal income tax reporting over their
useful lives which are generally five to seven years.
COVENANTS NOT TO COMPETE
Covenants not to compete are amortized on a straight line basis over two years
for financial reporting purposes and fifteen years for income tax reporting
purposes.
INCOME TAXES
Deferred income taxes are provided for temporary differences between financial
statement and income tax reporting, principally from the recognition of tax loss
carry forwards as a deferred tax asset. Because the utilization of the net
operating loss carry forward cannot be determined at this time, the Company has
provided a valuation allowance for the entire deferred tax asset in accordance
with the provisions of Financial Accounting Standards Board No. 109 "Accounting
for Income Taxes".
-8-
<PAGE>
ARXA INTERNATIONAL ENERGY, INC.
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
FOR THE SIX MONTHS ENDED JULY 31, 1997 AND 1996
(UNAUDITED)
1. SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
OIL AND GAS PROPERTIES
The Company accounts for its exploration and production activities under the
successful efforts method of accounting. Under this method, oil and gas lease
acquisitions costs are capitalized when incurred. Unproved properties are
assessed on a property-by-property basis and any impairment in value is
recognized. If the unproved properties are determined to be productive, the
appropriate related costs are transferred to proved oil and gas properties.
Lease rentals are expensed as incurred.
Oil and gas exploration costs, other than the costs of drilling exploratory
wells, are charged to expense as incurred. The costs of drilling exploratory
wells are capitalized pending determination of whether proved reserves are
discovered. If proved reserves are not discovered, such drilling costs are
expensed. The costs of all development well and related equipment used in the
production of crude oil and natural gas are capitalized.
The Company amortizes capitalized costs, including gas gathering systems, using
a unit-of-production method based on proved oil and gas reserves as estimated by
independent petroleum engineers. Depreciation of other property, plant and
equipment is computed using principally the straight-line method over estimated
useful lives of three to thirty years.
NET LOSS PER COMMON SHARE
Net loss per common share is determined by dividing the weighted average number
of common shares outstanding during the period into net loss. Common share
equivalents in the form of warrants are excluded from the calculation since they
have a anti-dilutive effect on per share calculation.
-9-
<PAGE>
ARXA INTERNATIONAL ENERGY, INC.
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
FOR THE SIX MONTHS ENDED JULY 31, 1997 AND 1996
(UNAUDITED)
2. LONG-TERM DEBT
For the six months ended July 31, 1997, the Company borrowed short and long-term
funds for the purposes of retiring common and preferred stock, release of
certain liens on oil and gas properties, and investment in its oil and gas
producing activities. The following summarizes long-term debt at July 31, 1997:
Notepayable, J. O. Schofield, dated March 12, 1997, non-interest bearing
(imputed interest at eight percent), payable at seven percent of net funds
received through March 12, 1999, after March 12, 1999 the note is repaid
with the Company's common stock at the average market price for the five
days
preceding March 13, 1999 ................................... $ 77,285
Note payable, Duke Resources, dated March 12, 1997,
due September 12, 1997, bears interest at eight
percent and is unsecured ................................... 79,770
Note payable, individual, dated February 28, 1997,
due February 28, 1998, non-interest bearing
(imputed interest at eight percent), unsecured,
repayable in cash or common stock at $1 per share .......... 25,000
---------
182,055
Current maturities of long-term debt ........................... (132,055)
---------
Long-term debt ................................................. $ 50,000
=========
Current maturities of long-term debt are $132,055 and $50,000 for the years
ended July 31, 1998 and 1999.
3. COMMITMENTS AND CONTINGENCIES
The Companies leases corporate office space under a month to month agreement.
Rent expense for the six months ended July 31, 1997 was $18,000.
-10-
<PAGE>
ARXA INTERNATIONAL ENERGY, INC.
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
FOR THE SIX MONTHS ENDED JULY 31, 1997 AND 1996
(UNAUDITED)
4. SHAREHOLDERS' EQUITY
The Company has authorized 100,000,000 shares of common stock, par value $.001.
The Company has authorized 2,000,000 shares of preferred stock, $1 par value, 5%
cumulative, convertible into $1 per common share; redeemable at $2 per share,
plus arrears. At July 31, 1997 and January 31, 1997, the total outstanding
shares of preferred stock totaled 131,010 and 426,944, respectively.
During the period ending July 31, 1997, the Company under the terms of an
agreement with a shareholder retired a portion of a covenant not to compete and
retired 1,070,125 shares of common stock and 41,764 shares of preferred stock in
exchange for a note payable of $110,000.
During the period ending July 31, 1997 certain shareholders converted 254,170
shares of preferred stock into 254,170 shares of common stock.
In mid-June 1997 an investment banking group that was granted a stock option to
sell 1,000,000 shares of common stock for $700,000 sold 500,000 shares of common
stock and delivered $350,000 to the Company.
During the six months ended July 31, 1997 the Company issued 400,000 shares of
common in exchange for investment banking and consulting services.
Warrants for the purchase of common stock, $.001 par value, are summarized as
follows:
Exercise Price Expiration Date Number of Warrants
-------------- ----------------- ------------------
$2.00 August 9, 2000 2,025,000
$5.00 February 28, 1998 356,458
No warrants have been exercised during any time period.
-11-
<PAGE>
ARXA INTERNATIONAL ENERGY, INC.
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
FOR THE SIX MONTHS ENDED JULY 31, 1997 AND 1996
(UNAUDITED)
5. INCOME TAXES
At July 31, 1997 and 1996, the effective tax rate for the Company is
reconcilable to statutory tax rates as follows:
1997 1996
-------- --------
U.S. federal Statutory Tax Rate 34% 34%
Reconciling item .............. (34) (34)
-------- --------
Effective rate ................ -0- -0-
======== ========
For the six months ended July 31, 1997 and 1996, the Company's deferred tax
asset, resulting from net operating losses, totaled $686,845 and $313,812,
respectively. Income tax expense for the six months ended July 31, 1997 and 1996
was zero due a valuation allowance which offset the deferred tax asset and tax
expense at these dates.
6. SUBSEQUENT EVENTS
The Company announced on September 9, 1997 that it has entered into negotiations
for the possible acquisition of the petroleum producing areas and other assets
of Phoenix Energy Group, Inc. in exchange for ARXA common stock. These
negotiations are in a preliminary stage and the parties have not agreed upon the
material terms of the proposed transaction. Phoenix Energy Group is an oil and
gas producing company with interests in several producing properties located in
southeast Texas. The potential acquisition is being considered as a continuation
of the Company's strategy for building value with acquisitions that have
existing cash flow and offer additional development drilling locations with the
potential for increased cash flow.
On July 3, 1997 Moose Operating Co., Inc, as General Partner for the West Sandy
Creek Partners, Ltd. notified the Company that it had negotiated the sale of the
West Sandy Creek Prospect Gas Gathering System to Dominion Pipeline together
with a new gas sales contract for the wells in the West Sandy Creek Prospect
area. The Company considered the purchased price to be fair based on the
gathering systems current economics and approved the sale of the Company's two
percent working
-12-
<PAGE>
ARXA INTERNATIONAL ENERGY, INC.
NOTES TO FINANCIAL STATEMENTS(CONTINUED)
FOR THE SIX MONTHS ENDED JULY 31, 1997 AND 1996
(UNAUDITED)
6. SUBSEQUENT EVENTS (continued)
interest in the Partnership. The sale of the pipeline system to Dominion
Pipeline was approved by the West Sandy Creek Partners and on August 9, 1997 the
Company received $10,450.00 for its interest in the gas gathering system. In
August the Company was notified that American Exploration had acquired
approximately 12 square miles of 3D seismic data in the West Lavaca River area
as per a licensing agreement with the West Sandy Partners of which the Company
has a two percent working interest. The data is currently being evaluated and
integrated into the development drilling program for West Lavaca River.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
For the three months ended July 31, 1997 the Company continued its drilling
program in West Sandy Creek, Lavaca County, Texas. During the period the Company
in conjunction with the operator Moose Oil and Gas drilled two unsuccessful
wells, the Celli #2 and the RB. Miller #11. Both wells were plugged and
abandoned after encountering non-commercial quantities of oil.
The Company continued its development drilling program in West Lavaca River,
Lavaca County, Texas. The Knebel #1 was drilled and completed during July and is
in the process of being converted to commercial gas sales. ARXA has a two
percent working interest in the well. A second well, the Dancer Gas Unit #1 was
plugged and abandoned after encountering non-commercial shows of gas.
The Company in conjunction with Moose Operating Company began production testing
of the Smothers #1 well in West Lavaca River, Lavaca County, Texas that was
drilled to a depth of 13,500 feet. The first of several zones being evaluated is
producing oil and gas. The results of this initial test will be evaluated prior
to testing the remaining potential producing zones in the well.
In Cameron Parish Louisiana the Company in conjunction with the operator
continued evaluation of the Hansen #3 discovery. Additional rehabilitation work
on the Hansen #3 is being evaluated. The Company also plans to participate in
the drilling of a new well in the area before the end of 1997.
-13-
<PAGE>
ARXA INTERNATIONAL ENERGY, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to signed on its behalf by the
undersigned thereunto duly authorized.
ARXA INTERNATIONAL ENERGY, INC.
(Registrant)
Date: 9-15-97 By: /s/ WILLIAM J. BIPPUS
William J. Bippus
President
Date: 9-15-97 By: /s/ DENNIS P. MCGRATH
Dennis P. McGrath
Controller
-14-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM JULY 31, 1997 FORM 10-Q FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-END> JUL-31-1997
<CASH> 118,437
<SECURITIES> 0
<RECEIVABLES> 7,210
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 142,095
<PP&E> 1,698,760
<DEPRECIATION> (15,292)
<TOTAL-ASSETS> 1,846,133
<CURRENT-LIABILITIES> 351,385
<BONDS> 0
0
131,010
<COMMON> 7,374
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,846,133
<SALES> 25,153
<TOTAL-REVENUES> 25,153
<CGS> 0
<TOTAL-COSTS> 285,111
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,335
<INCOME-PRETAX> (263,261)
<INCOME-TAX> 0
<INCOME-CONTINUING> (263,261)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (263,261)
<EPS-PRIMARY> (0.035)
<EPS-DILUTED> (0.035)
</TABLE>
