<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended: September 30, 1995
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from __________ to __________
Commission File Number: 0-3912
PETROL INDUSTRIES, INC.
(Exact Name of Small Business Issuer as Specified in its Charter)
NEVADA 75-1282449
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation of Organization)
202 N. THOMAS, SUITE 4 SHREVEPORT, LA 71107-6539
(Address of Principal Executive Offices)
(318) 424-6396
(Issuer's Telephone Number, Including Area Code)
N/A
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
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.
YES [XX] NO [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court.
YES [ ] NO [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 1,599,741
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<TABLE>
Item 1. Financial Statements
PETROL INDUSTRIES, INC. & SUBSIDIARIES
Consolidated Balance Sheets
September 30, December 31,
1995 1994
(unaudited)
------------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 280,482 $ 292,795
Accounts receivable:
Trade 60,896 80,503
Other 9,498 9,561
--------- ---------
70,394 90,064
Note Receivable from Employee 36,104 ---
Inventory 43,714 22,552
Prepaid expenses 6,702 15,639
--------- ---------
Total current assets 437,396 421,050
--------- ---------
Property and equipment, at cost:
Land 7,000 7,000
Developed and undeveloped oil and gas
properties successful efforts method 4,370,720 4,490,189
Trucks and other operating equipment 325,143 324,743
Furniture and fixtures 36,772 35,468
--------- ---------
4,732,635 4,857,400
Less accumulated depreciation, depletion and
amortization 4,687,978 4,791,005
--------- ---------
44,657 66,395
--------- ---------
Cash surrender value of life insurance, net 36,601 28,276
Other assets 1,107 1,107
--------- ---------
$ 526,761 $ 516,828
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 41,751 $ 51,627
Payable to interest owners 237,061 214,981
Accrued expenses 279,539 160,282
--------- ---------
Total current liabilities 558,351 426,890
Stockholders' equity:
Preferred stock-no par value. Authorized 1,000,000
shares; no shares issued or outstanding --- ---
Common stock-$.10 par value. Authorized 10,000,000
shares; issued and outstanding 1,597,241 shares
in 1994 and 1993 159,724 159,724
Retained earnings (191,314) (69,786)
--------- ---------
Total stockholders' equity (31,590) 89,938
--------- ---------
$ 526,761 $ 516,828
========= =========
</TABLE>
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<TABLE>
PETROL INDUSTRIES, INC. & SUBSIDIARIES
Consolidated Statements of Operations
(unaudited)
Quarter Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
-------------------- --------------------
<S> <C> <C> <C> <C>
Revenues:
Oil and gas sales $ 205,270 229,586 630,574 663,628
Other operating income 3,475 3,506 9,337 9,497
--------- --------- --------- ---------
208,745 233,092 639,911 673,125
--------- --------- --------- ---------
Expenses:
Lease operating expense 174,452 173,889 498,496 538,448
General and administrative 84,974 89,371 252,669 264,940
Depreciation, depletion and
amortization 3,525 19,575 10,575 58,725
--------- --------- --------- ---------
262,951 282,835 761,740 862,113
--------- --------- --------- ---------
Operating loss (54,206) (49,743) (121,829) (188,988)
--------- --------- --------- ---------
Other income and (expense):
Gain on sale of assets --- --- 4,212 7,767
Interest income 3,261 2,503 8,738 6,371
Interest expense (4,657) (3,506) (12,649) (8,898)
--------- --------- --------- ---------
(1,396) (1,003) 301 5,240
--------- --------- --------- ---------
Net loss $ (55,602) (50,746) (121,528) (183,748)
========= ========= ========= =========
Net loss per share $ (.04) (.03) (.08) (.12)
========= ========= ========= =========
Average common shares 1,597,241 1,597,241 1,597,241 1,597,241
outstanding ========= ========= ========= =========
</TABLE>
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<TABLE>
PETROL INDUSTRIES, INC. & SUBSIDIARIES
Consolidated Statements of Cash Flows
Nine months ended September 30, 1995 and 1994
(unaudited)
1995 1994
---- ----
<S> <C> <C>
Operating activities:
Net loss $ (121,528) $(183,748)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation, depletion and amortization 10,575 58,725
Gain on sale of assets (4,212) (7,767)
Losses on retirements of property and
equipment included in lease operating
expenses 13,124 12,031
Net Decrease (increase) in cash surrender
value of life insurance (8,325) (8,325)
Other --- (525)
Net (increase) decrease in accounts receivable 19,670 (11,918)
Net (increase) decrease in inventory (21,162) (12,232)
Net (increase) decrease in prepaid expenses 8,937 11,659
Increase (decrease) in accounts payable, accrued
expenses and payable to interest owners 131,461 177,616
-------- --------
Net cash used by operating activities 28,540 35,516
Investing activities:
Net decrease (increase) in employee note
receivable (36,104) ---
Purchases of property and equipment (17,299) (24,040)
Proceeds from sale of property and equipment 12,550 8,200
-------- --------
Net cash (used) provided by investing
activities (40,853) (15,840)
-------- --------
Financing activities-purchase and retirement of
common stock --- ---
(Decrease) increase in cash and cash equivalents (12,313) 19,676
Cash and cash equivalents at beginning of period 292,795 354,965
-------- --------
Cash and cash equivalents at end of period $ 280,482 $ 374,641
======== ========
</TABLE>
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<TABLE>
PETROL INDUSTRIES, INC. & SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
Nine months ended September 30, 1995 and 1994
(unaudited)
1995 1994
---- ----
<S> <C> <C>
Stockholders' equity at January 1 $ 89,938 $ 270,276
Retirement of stock --- ---
Net loss for the nine-month period (121,528) (183,748)
-------- --------
Stockholders' equity at September 30 $ (31,590) $ 86,528
======== ========
</TABLE>
<PAGE> 6
PETROL INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
1. The accompanying unaudited consolidated financial statements have
been prepared by the Registrant in accordance with generally accepted
accounting principles, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements have been condensed or omitted
pursuant to such rules and regulations, although management believes that the
disclosures are adequate to make the information presented not misleading. In
the opinion of management, the accompanying financial statements contain all
adjustments necessary for a fair statement of the results for the interim
periods presented. It is suggested that these consolidated financial
statements be used in conjunction with the consolidated financial statements
and the notes thereto included in the Registrant's 1994 Annual Report on Form
10-KSB.
2. The consolidated financial statements included herein are
consolidated with the accounts of Petrolind Drilling Funds, Inc. and Realco,
Inc., both wholly owned subsidiaries of the Registrant, neither of which was
active during 1994 or 1993.
3. Net income per share of common stock is computed on the weighted
average number of shares outstanding during the nine months ended September
30. The weighted average number of shares outstanding was determined by
totaling the number of shares outstanding at the end of each month and
dividing that total by the number of months.
Total Number of
Shares Outstanding
1995 1994
--------- ---------
January 31 1,597,241 1,597,241
February 28 1,597,241 1,597,241
March 31 1,597,241 1,597,241
April 30 1,597,241 1,597,241
May 31 1,597,241 1,597,241
June 30 1,597,241 1,597,241
July 31 1,597,241 1,597,241
August 31 1,597,241 1,597,241
September 30 1,597,241 1,597,241
4. The expected tax benefit resulting from operating losses for the
first nine months of 1995 has not been recorded because it is not expected to
be realizable. Additionally, there were no significant changes in the
temporary differences that give rise to significant portions of the deferred
tax assets and deferred tax liabilities at September 30, 1995.
<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Oil and gas revenues declined 10.6% in the third quarter of 1995,
compared to the third quarter of 1994, the result of a 14.3% decline in
production with only a 0.5% decrease in oil prices. The Company's net loss
for the period increased only 8.8% to $55,602, compared to $50,746 in the 1994
period.
The Company sustained an operating loss of $54,206 in the third quarter
of 1995, compared to an operating loss of $49,743 in the prior year's third
quarter. For the nine month period ended September 30, 1995, the Company's
net loss decreased approximately 33.9% to $121,528 from the $183,748 net loss
in the prior year's period. The decrease is due to an increase in oil prices
as compared to 1994 coupled with certain Company reductions in operating
costs. Operating losses in the 1995 period decreased 35.6% compared to the
1994 period for similar reasons.
Management has reduced operating costs over the past several years in an
effort to restore profitability in the face of current oil prices, and has
seen substantial savings from these reductions. Profitability is contingent
essentially upon two factors: increasing production from the Company's mineral
leases, or increases in world oil prices. While Management continues to
explore possible approaches to increasing oil production, including
technological developments or pursuing drilling operations, improvements in
production are expected to come, if at all, more from general improvements in
local weather conditions than from other factors.
Oil prices averaged $15.92 per barrel ($15.82 including the barrel
equivalent of gas) during the third quarter of 1995, compared to an average of
$16.75 per barrel in the 1994 period ($16.67 including the barrel equivalent
of gas). For the nine month period, oil prices averaged $16.71 per barrel in
1995 ($16.61 including the barrel equivalent of gas) compared to $15.28
($15.21 including the barrel equivalent of gas) in 1994.
The Company had cash and cash equivalents at September 30, 1995 of
$280,482, compared to $374,641 at the end of September 30, 1994. Management
estimates that it owes $237,061 from the settlement of the Horne Lease dispute
with Oryx to owners of other interests in the Horne Lease.
In May and June, 1995, Joseph M. Rodano, President and Treasurer of
Petrol Industries, Inc., as well as a member of its Board of Directors,
purchased a total of 20,000 Shares Common Stock, $.10 par value per share, of
Petrol Industries, Inc. In July, 1995, Mr. Rodano purchased an additional
20,000 Shares Common Stock, $.10 par value per share of Petrol Industries,
Inc. Each purchase was, in each case, made in an open market transaction.
All of the Shares purchased by Mr. Rodano were purchased with his personal
funds. As of September 30, 1995, Mr. Rodano owns an aggregate of 384,725
Shares, comprising approximately 25% of the outstanding Shares.
<PAGE> 8
SIGNATURE
---------
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PETROL INDUSTRIES, INC.
Dated: November 9, 1995 By: Joseph M. Rodano
--------------------------------------
Joseph M. Rodano
President and Treasurer
<PAGE> 9
EXHIBIT INDEX
Exhibit
No. Description
------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 280,482
<SECURITIES> 0
<RECEIVABLES> 60,896
<ALLOWANCES> 0
<INVENTORY> 43,714
<CURRENT-ASSETS> 437,396
<PP&E> 4,732,635
<DEPRECIATION> 4,687,978
<TOTAL-ASSETS> 526,761
<CURRENT-LIABILITIES> 558,351
<BONDS> 0
<COMMON> 159,724
0
0
<OTHER-SE> (191,314)
<TOTAL-LIABILITY-AND-EQUITY> 526,761
<SALES> 630,574
<TOTAL-REVENUES> 639,911
<CGS> 498,496
<TOTAL-COSTS> 498,496
<OTHER-EXPENSES> 263,244
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,649
<INCOME-PRETAX> (121,528)
<INCOME-TAX> 0
<INCOME-CONTINUING> (121,528)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (121,528)
<EPS-PRIMARY> (.08)
<EPS-DILUTED> (.08)
</TABLE>
