VINEYARD OIL & GAS COMPANY
10299 West Main Road
North East, PA 16428
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
Pursuant to the requirements of the Securities Exchange Act of 1934, we are
transmitting herewith the attached Form 10-QSB.
Sincerely,
Vineyard Oil & Gas Company
James J. Concilla
President
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 1998
Commission File Number 0-13871
Pennsylvania 25-1349204
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10299 West Main Road, North East, Pennsylvania 16428-0391
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (814) 725-8742
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 [ ]
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practical
date:
Common Stock, No Par Value - 5,125,562.50 shares as of September 30,1998
<PAGE>
<TABLE>
PART 1 - FINANCIAL INFORMATION
BALANCE SHEETS (UNAUDITED)
VINEYARD OIL & GAS COMPANY
<CAPTION>
September 30, December 31,
1998 1997
<S> <C> <C>
ASSETS
Current Assets
Cash $ 863,586 $ 680,464
Accounts receivable 2,444,967 2,426,739
Inventories 168,860 174,659
Prepaid Expenses 40,718 42,986
__________ __________
Total Current Assets 3,518,131 3,324,848
__________ __________
Property, Plant and Equipment 8,584,113 8,584,977
Accumulated depreciation 8,131,512 8,076,530
__________ __________
452,601 508,447
Deferred Costs and Other Assets
Cash restricted for plugging 463,824 382,057
Investment at equity 214,985 234,959
__________ __________
678,809 617,016
__________ __________
TOTAL ASSETS (NOTE) $ 4,649,541 $ 4,450,311
__________ __________
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 2,785,734 $ 2,605,660
Other accrued liabilities 39,178 27,387
__________ __________
Total Current Liabilities 2,824,912 2,633,047
Deferred revenue 358,740 394,572
Shareholder's Equity Common Stock, authorized
15,000,000 shares without par value, issued
5,125,562.5 shares at September 30, 1997,
at stated value of $.05 256,278 256,278
Additional paid-in capital 4,935,430 4,935,430
__________ __________
5,191,708 5,191,708
Retained earnings (deficit) (3,500,899) (3,544,096)
__________ __________
1,690,809 1,647,612
Less: cost of 67,944 shares held in treasury ( 224,920) ( 224,920)
__________ __________
1,465,889 1,422,692
__________ __________
$ 4,649,541 $ 4,450,311
__________ __________
</TABLE>
<PAGE>
See notes to condensed financial statements.
<TABLE>
PART I. - FINANCIAL INFORMATION
STATEMENTS OF INCOME AND RETAINED EARNINGS (UNAUDITED)
FOR THE THREE MONTHS AND SIX MONTHS
ENDED SEPTEMBER 30, 1998 AND 1997
VINEYARD OIL & GAS COMPANY
<CAPTION>
3 Months 3 Months 9 Months 9 Months
Ended Ended Ended Ended
Sept 30, Sept 30, Sept 30, Sept 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Earned revenues $ 3,448,990 $ 1,816,242 $ 9,051,236 $ 6,724,704
Other Income 47,508 7,585 86,747 52,592
__________ __________ __________ ____________
3,496,498 1,823,827 9,137,983 6,777,296
Cost of Earned Revenues 3,330,366 1,724,740 8,726,501 6,402,366
Selling, general and
administrative expenses 124,069 119,255 367,816 327,014
Interest 0 194 469 2,434
__________ __________ ___________ ___________
3,454,435 1,844,189 9,094,786 6,731,814
__________ __________ ___________ ___________
Income before income taxes 42,063 (20,362) 43,197 45,482
Income taxes 0 0 0 0
__________ __________ ___________ ___________
Net Income 42,063 (20,362) 43,197 45,482
Retained Earnings (Deficit)
Beginning of period (3,542,962)(3,671,187) (3,544,096) (3,737,031)
Retained Earnings (Deficit)
End of period (3,500,899)(3,691,549) (3,500,899) (3,691,549)
Income per common share .008 (.004) .008 .009
__________ __________ ___________ ___________
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
<TABLE>
STATEMENTS OF CASH FLOWS (UNAUDITED)
VINEYARD OIL & GAS COMPANY
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
<CAPTION>
3 Months 3 Months 9 Months 9 Months
Ended Ended Ended Ended
Sept 30, Sept 30, Sept 30, Sept 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Cash flow from operating
activities:
Income (loss) from operations $ 42,063 $ (20,362) $43,197 $ 45,482
Adjustments To Reconcile Net
Income to Net Cash Provided by
Operating Activities:
Depreciation and amortization 20,795 20,185 56,721 63,925
Provision for losses on
accounts receivable and
inventories 6,000 0 18,000 12,000
Gain on sale of property 0 0 (1,459) 0
Changes in operating assets
and liabilities providing
(using cash):
Accounts receivable (365,910) 557,983 (36,228) 2,213,280
Inventories 4,968 (6,551) 5,799 18,064
Prepaid expenses (6,156) 13,148 2,268 (4,248)
Other assets 35,425 (27,418) 19,974 (64,844)
Accounts payable 533,179 (203,125) 180,074 (1,841,512)
Other current liabilities 1,844 14,813 11,790 (16,228)
Deferred revenue (42,969) 2,412 (35,832) 7,587
__________ __________ _________ __________
Net cash provided by (used in)
operating activities 229,239 351,085 264,304 433,506
__________ __________ _________ __________
Cash flow from investing
activities:Capital expenditures 0 (3,976) (2,500) (3,976)
Proceeds from asset sale 0 0 3,085 0
__________ __________ _________ __________
Net cash used in investing
activities 0 (3,976) 585 ( 3,976)
__________ __________ _________ __________
Cash flow from financing
activities:Principal payments
on borrowings 0 (11,996) 0 (48,132)
__________ __________ __________ _________
Net cash (used in) financing
activities 0 (11,996) 0 (48,132)
__________ __________ __________ _________
Increase (Decrease) in cash 229,239 335,113 264,889 381,398
Cash at beginning of period 1,098,171 653,208 1,062,521 606,923
__________ __________ __________ _________
Cash at end of period $1,327,410 $ 988,321 $1,327,410 $ 988,321
__________ __________ __________ _________
</TABLE>
See notes to condensed financial statements.
<PAGE>
VINEYARD OIL & GAS COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
1. In the opinion of the Company, the accompanying unaudited condensed
consolidated financial statements contain all adjustments (consisting of
only normal recurring accruals) necessary to present fairly the results for
the nine months ended September 30, 1998, and are not necessarily indicative
of the results to be expected for the full year.
2. Primary earnings per share are determined by dividing net income by the
weighted average number of common equivalent shares outstanding (5,125,562.50
in 1998 and 1997).
3. No federal income tax was due or paid during the periods ending September
30,1998, due to available operating loss carry forwards.
4. Cash Flow Information
For purposes of the statement of cash flows, cash includes demand
deposits, certificates of deposit, and short term investments with
original maturities of three months or less.
Cash is classified as follows, for financial statement reporting
purposes:
<TABLE>
<CAPTION>
September 30, 1998
<S> <C>
Unrestricted cash $ 863,586
Cash restricted for well
plugging 463,824
__________
$1,327,410
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
IN THE QUARTER ENDED SEPTEMBER 30, 1998
Material Changes in Financial Conditions
Vineyard Oil & Gas Company's cash position increased $264,889 for
the nine month period and $229,239 for the three month period
ended September 30, 1998.For the nine month period accounts receivable
increased
$36,228 while accounts payable increased $180,074, resulting in a positive
cash flow of $143,846. For the three month period ended September 30, 1998,
accounts receivable increased $365,910 while accounts payable increases
$533,179 for a net increase of $167,269. Net income and non-cash expenses
account for the balance of the cash increase, generally. Inventories
decreased $5,799 for the nine month period and $4,968 for the three month
period ended September 30, 1998. This reflected normal inventory movement
Prepaid expenses decreased $2,268, or 5%, for the nine month period due to
periodic write offs to operations. Other assets, excluding restricted cash,
decreased $19,974 for the nine months ended September 30, 1998. This
consists
of profits of $27,318 offset by net withdrawals of $47,292. Fixed assets
increased by $2,500 for equipment purchases and was reduced by $3,365 for a
vehicle which was sold. The increase in accumulated depreciation was the
result of depreciation
charges of $56,721 and $20,795 for the nine and three month periods and
decreased by the write off of accumulated depreciation for an asset that
was sold.
Current liabilities increased $191,865 for the nine month period and
$535,023
for the three month period ended September 30,1998. Accounts payable
for gas
purchases accounted for substantially all of the increases.
The company incurred no additional long-term debt during this nine month
period.
Deferred revenue decreased $35,832 for the nine month period ended September
30, 1998. This account was increased by $11,852 representing interest
earned
on moneys held for future plugging activities and was decreased by $47,682,
the cost of plugging wells.
Shareholders' equity increased $43,197 for the nine month period ended
September 30, 1998, the amount of net income for the period.
MATERIAL CHANGES and RESULTS of OPERATIONS
Earned revenues increased $2,326,532 and $1,632,748 for the nine and three
month periods ended September 30, 1998, as compared to the prior year. Of
these
increases, gas marketing increased $2,240,768 and $1,557,650 respectively.
Cost of sales increased $2,324,135 and $1,605,626 for the nine and three
month periods of which $2,290,713 and $1,600,364 were attributable to gas
purchases. General and administrative expenses increased $40,802 for the
nine
month period and $4,814 for the three month period ended September 30,
1998,
over the same periods for 1997. Consulting and other fees accounted for
$17,000 of the increase. Net income decreased $2,285 for the nine month
period as compared to 1997. Net income for the three month period ended
September 30, 1998, increased $42,063 over the income at June 30, 1998.
Wells
were sold in the third quarter and the gain of $20,000 is included in other
income. Plugging costs of $19,400 were reclassified to deferred liability
due
to a procedural change for handling such costs. Gas marketing sales volume
increased but profit decreased due to lower margins on spot deals. This
decrease was offset by increases in income from field services.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
____________________________
NOT APPLICABLE
ITEM 2. CHANGES IN SECURITIES
________________________________
NOT APPLICABLE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
__________________________________________
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
________
NONE
(b) REPORTS ON FORM 8-K
___________________
NONE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<EXCHANGE-RATE> 1
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 863,586
<SECURITIES> 0
<RECEIVABLES> 2,555,972
<ALLOWANCES> 111,005
<INVENTORY> 168,860
<CURRENT-ASSETS> 3,518,131
<PP&E> 8,584,113
<DEPRECIATION> 8,131,512
<TOTAL-ASSETS> 4,649,541
<CURRENT-LIABILITIES> 2,824,912
<BONDS> 0
<COMMON> 256,278
0
0
<OTHER-SE> 1,209,611
<TOTAL-LIABILITY-AND-EQUITY> 4,649,541
<SALES> 9,051,236
<TOTAL-REVENUES> 9,137,983
<CGS> 8,726,501
<TOTAL-COSTS> 8,726,501
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 469
<INCOME-PRETAX> 43,197
<INCOME-TAX> 0
<INCOME-CONTINUING> 43,197
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 43,197
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
