<PAGE> 1
FORM 10-KSB
U.S. SECURITIES AND EXCHANGE COMMISSION
(Mark One) Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) of the SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________________to __________________
Commission file number: 0-3912
PETROL INDUSTRIES, INC.
(Exact Name of Registrant as Specified in its Charter)
NEVADA 75-1282449
(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation of Organization)
202 N. THOMAS, SUITE 4, SHREVEPORT, LOUISIANA 71107-6539
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (318) 424-6396
Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.10 per share
Check mark whether the issuer: (1) 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 (2) has been subject to such filing requirements for the past
90 days.
Yes: [ X ] No: [ ]
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ X ]
State the issuer's revenues for its most recent fiscal year: $849,750
The aggregate market value of the voting stock held by non-affiliates of
the registrant, computed by reference to the average of the closing bid and
asked price of the stock as of March 27, 1996 was $487,921.
ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE REGISTRANTS
The number of shares of common stock, $.10 par value, outstanding as of
March 27, 1996 was 1,599,741.
Transitional Small Business Disclosure Format: Yes: [ ] No: [ X ]
DOCUMENTS INCORPORATED BY REFERENCE:
None
Page 1 of 34 Pages
Index appears at Page 9
<PAGE> 2
PART I
ITEM 1. BUSINESS.
GENERAL DESCRIPTION
Petrol Industries, Inc. ("Petrol" or the "Company") was organized
under the laws of the State of Nevada in 1968 as a wholly-owned subsidiary
of Sovereign Industries, Inc. In 1970, Sovereign Industries, Inc.
distributed a substantial portion of Petrol's common stock to its
stockholders. Since the dates of their respective organizations, Petrol
and its wholly-owned subsidiaries have been engaged in a single industry
segment - drilling for and producing oil and gas on leased property located
in the Caddo Pine Island Field, and the Shreveport Field, both in Caddo
Parish, Louisiana. Petrol and its wholly-owned subsidiaries currently
employ 16 persons in the aggregate.
As of December 31, 1995, Petrol's leases contained 8 completed gas
wells, 18 completed wells producing oil and gas, and 370 completed oil
wells, principally in the Annona Chalk zone. Petrol estimates that, on the
average, its wells have been producing for a period in excess of 25 years.
An aggregate of 310 wells producing oil or oil and gas are currently being
operated. The Company expects that if received oil prices justify the
expenditure, approximately 50 of its wells will be placed back in operation
during the course of 1996, as a result of its on-going rework program
discussed below, although even so, it is expected that approximately 25-30
wells will temporarily not be operating at any given time as maintenance is
required. Current oil prices, however, do not justify significant
expenditures to restore operation of marginal wells. Management is
carefully examining whether to suspend production on all or certain wells
to conserve available capital and assets until world oil prices recover
significantly. During the course of 1995, the Company disposed of several
of its leases which had become unprofitable to operate.
Virtually all of the Company's oil production comes from property
characterized as stripper well property, meaning that the wells located
thereon produced an average of 10 barrels or less per day. In 1995,
Petrol's interests in oil wells and gas wells taken together with oil wells
owned by the limited partnerships organized in connection with its 1979,
1983 and 1984 drilling programs had a gross production of 13,455 barrels of
oil and 3,534 MCF of gas, and production, net to Petrol, of 10,059 barrels
of oil and 3,534 MCF of gas.
The prices obtained by Petrol for its oil are in direct proportion to
its gravity (a.p.i.); the higher the gravity, the higher the price.
Approximately 51% of Petrol's oil production constitutes high gravity,
light crude, having a gravity of 40 a.p.i. or above; the balance of
Petrol's production ranges from 18 to 39 a.p.i. During the calendar year
1995, the average price received by Petrol for its oil (including wells
owned by the various partnerships) was $16.59 per barrel of oil and $1.27
per MCF of gas.
<PAGE> 3
REWORK AND MAINTENANCE PROGRAMS
Petrol maintains for itself and the limited partnerships it formed
(see below) an ongoing rework and maintenance program with respect to all
its wells. During 1995, approximately $130,328 was expended on such
maintenance, approximately the same amount as expended in 1994.
DRILLING PROGRAMS
In 1979, 1983 and 1984 Petrol formed Louisiana partnerships in
commendam (limited partnerships) for the development of oil and gas wells
on its properties. In connection with such programs, Petrol contributed
drilling sites and hardware, was responsible for drilling and completing
the wells on a "turnkey" basis, and presently operates the completed wells.
Actual drilling was done by one of several locally available
subcontractors. The Company also handles the administrative and
bookkeeping arrangements for the partnerships. Petrol was paid fees for
drilling the partnerships' wells, receives additional fees for operating
the wells and is entitled to a share of the partnerships' net income.
The Company receives 75% of net revenues from the 26 wells drilled for
the 1983 limited partnership and from the 17 wells drilled for the 1984
limited partnership.
There was no drilling activity in 1994 or 1995.
MARKET FOR PETROL'S OIL AND GAS PRODUCTION
The Company's oil and gas production is sold to major oil companies
and other purchasers which gather oil production by tankwagon in areas
where pipelines are not available. Two companies, EOTT Energy Operating
Limited Partnership, formerly EOTT Energy ("EOTT") and Citgo Pipeline
Company together accounted for 92.5% of the Company's 1995 oil sales. More
than a dozen other customers account for the balance of the Company's
sales. Petrol is not a party to any long-term supply contracts for oil and
gas.
In recent years, Petrol's production has been sold at the local open
market price, which is reflective of world-wide supply of and demand for
crude oil and local demand for natural gas. Management believes that the
continuing desire of domestic refiners and marketers of oil and gas to
secure access to domestic production will continue to create a strong
market for Petrol's products. Petrol anticipates, however, that the price
which its products will command will continue to closely match world oil
prices, which in turn reflect world economic and political conditions.
GOVERNMENTAL REGULATION
Petrol, in the operation of its existing oil and gas wells and in the
drilling of new wells, is subject to a number of federal, state and other
laws and regulations concerning requirements relating to permits to drill
wells, the spacing of wells, the prevention of waste of oil and gas, and
the manner of drilling and completing wells. Management believes that
Petrol is in compliance with all federal, state and local statutes and
regulations regulating the discharge of materials into the environment or
otherwise relating to the protection of the environment. Although
compliance with such statutes and regulations has a material effect on the
Company's capital expenditures and earnings, such compliance does not
<PAGE> 4
adversely affect its competitive position in its industry, as all other
producers in its market are subject to the same statutes and regulations.
Should such regulations be strengthened, however, the Company would likely
not have the capital or liquid asset reserves to ensure compliance, given
the cash flow generated from oil sales at current oil prices.
ITEM 2. PROPERTIES.
a. LOCATION AND CHARACTER OF THE COMPANY'S PROPERTIES: Petrol, in
connection with its oil and gas production, currently leases approximately
110 parcels of property, located in the Caddo Pine Island Field and the
Shreveport Field, both located in Caddo Parish, Louisiana. Most of its
wells are shallow oil wells, completed in the Annona Chalk Zone, at depths
ranging from 1,400 feet to 1,600 feet. In general, the leases held by
Petrol provide that they shall remain in force so long as producing wells
are being operated thereon or so long as Petrol is actively engaged in
rework thereon. If Petrol does not produce any oil from a particular lease
and is not engaged in any rework on such lease for a period of three
consecutive months, such lease may at the option of the lessor, be deemed
abandoned. Because of the Company's shortage of capital and liquid assets,
Management is examining the possibility of suspending production on many of
its leases. If such a strategy is implemented, Management will seek to
minimize the adverse effect which suspension of production could have on
the Company's lease holdings.
b. RESERVES: See Supplemental Information regarding Oil and Gas
Producing Activities at Pages 20 to 23 and Schedules 3 and 4 at Pages 24 to
25, for estimates of net quantities of proved oil and gas reserves, and for
standardized measure of discounted future net cash flow relating thereto.
c. RESERVES REPORTED TO OTHER AGENCIES: The Company did not file any
estimates of oil and gas reserves with any federal authority or agency
during 1995.
d. PRODUCTION: For the years ended December 31, 1994 and 1995, the
average sales price (including transfers) per unit of oil produced was
$15.33 and $16.59, respectively, and the average production cost (lifting
cost) per unit of production for oil was $12.28 and $12.71, respectively.
e. PRODUCTIVE WELLS AND ACREAGE: As of December 31, 1995, the Company
held the following productive wells and developed acres:
OIL GAS OIL & GAS
--- --- ---------
(i) Gross Productive Wells 370 8 18
(ii) Net Productive Wells 355 1.2 10.5
(iii) Gross Developed Acres 4,396 1,310 958
(iv) Net Developed Acres 2,568.8 66 179.5
f. UNDEVELOPED ACREAGE: As of December 31, 1995, the Company held
the following undeveloped acreage:
(i) Gross Acres 121
(ii) Net Acres 54
g. DRILLING ACTIVITY: No drilling activity occurred in 1995 or 1994.
h. PRESENT ACTIVITIES: See Item 1.
<PAGE> 5
i. DELIVERY COMMITMENTS: The Company is not, and for more than three
years, had not been required to provide any fixed or determinable quantity
of oil or gas under any contracts or agreements.
ITEM 3. LEGAL PROCEEDINGS.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
<PAGE> 6
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS.
Until June 8, 1992, trading in the Company's common stock was reported
in the National Association of Securities Dealers' Automated Quotation
system. Since June 9, 1992, the Company's common stock has been traded
over-the-counter. Following are the high and low bids of its common stock
as of January 1, 1994, on a quarterly basis. Prices are reported by the
National Quotation Bureau, Inc. which may reflect inter-dealer prices,
without retail mark-up, mark-down or commission and may not necessarily
represent actual transactions.
HIGH BID LOW BID
-------- -------
1994
----
1st Quarter 1/4 9/50
2nd Quarter 1/4 3/100
3rd Quarter 3/10 1/4
4th Quarter 3/10 1/4
1995
----
1st Quarter 1/4 1/4
2nd Quarter 1/4 9/50
3rd Quarter 1/4 9/50
4th Quarter 1/4 4/25
1996
1st Quarter thru March 26 4/25 4/25
On March 27, 1996, there were 3,836 holders of record of its common
stock.
No dividends were declared or paid during 1994 or 1995 and the Company
has no present intention to pay cash dividends in the foreseeable future.
During the course of 1995, Joseph M. Rodano, President and Treasurer
of Petrol, as well as a member of its Board of Directors, purchased a total
of 65,100 shares Common Stock, $.10 par value per share, of Petrol
Industries, Inc. During the course of 1994, Mr. Rodano purchased a total
of 225,000 shares. Each purchase was, in each case, in an open market
transaction. All of the shares purchased by Mr. Rodano were purchased with
his personal funds. Mr. Rodano invested in the foregoing shares because he
believes that the market reacted excessively to Petrol's disclosure in its
1993 Annual Report on Form 10-KSB of its deteriorating financial condition
and that such securities accordingly are undervalued.
<PAGE> 7
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
1995 Compared to 1994
- ---------------------
(a) RESULTS OF OPERATIONS: Production declined 11.3% from 1994.
Cost-control measures succeeded in lowering both lifting costs and general
and administrative expenses; however, the decline in production offset the
increase in received oil prices and lower operating costs, resulting in a
net loss of $171,620, or $.11 per share, on revenues of $849,750. The
Company's operating loss of $171,218 actually declined from last year's
operating loss of $194,333.
The average price of an equivalent barrel of oil received in 1995 was
$16.59, up from $15.33 received on average in 1994. A restoration of
operating profitability will depend almost completely on either or both of
an increase in oil prices and an increase in production. Oil prices are,
of course, the result of world events outside the Company's control.
(b) FINANCIAL CONDITION AND LIQUIDITY: At current oil prices, the
Company will lack sufficient capital reserves and liquid or liquidatable
assets to permit a full year of operations. The Company continues to
consume liquid assets to fund operations, with cash and equivalents
declining 42.0% from December 31, 1994, to December 31, 1995. Total assets
declined by 23.0% and, due to the net loss of $171,620, there is a
stockholders' deficit of $81,682.
Management is examining available financing alternatives to enable
it to remain in operation until oil prices begin to recover. These
alternatives range from seeking outside equity capital to permit
continued or expanded operations, with the hope of lowering average
direct lifting costs, to shutting down all but minimal operations
utilizing only a skeleton staff, putting the Company in a suspended state
for as long as assets permit. Management is also examining the
possibility of realizing value for the Company's remaining assets,
including, if necessary, dissolution.
(c) ENVIRONMENTAL: The Company's operations are subject to numerous
laws and regulations designed to protect the environment and/or impose
remedial obligations. The Company operates certain oil fields for which
known or potential obligations for environmental remediation exist.
Although the Company is not aware of any environmental matters that
might have a material effect on the Company's financial condition at
December 31, 1995, there is the possibility that expenditures could be
required, or revised regulatory requirements could necessitate expenditures
at certain sites. Such expenditures could have a material impact on the
results of operations in a future period.
(d) OTHER: The Financial Accounting Standards Board issued an
accounting standard that is effective for fiscal years beginning after
December 15, 1995 and addresses the accounting for impairment of long-lived
assets. The Standard establishes guidance for recognizing and measuring
impairment losses and requires that the carrying amount of an impaired
asset be reduced to fair value. The Company does not anticipate that the
adoption of the standard in 1996 to have any impact on its financial
statements.
<PAGE> 8
1994 Compared to 1993
- ---------------------
(a) RESULTS OF OPERATIONS: Although production declined slightly
from 1993, and although cost-control measures succeeded in lowering both
lifting costs and general and administrative expenses, the decline in
received oil prices more than offset favorable developments, resulting in a
net loss of $180,338, or $.11 per share, on revenues of $883,626. The
Company's operating loss of $194,333 declined from the 1993 operating loss
of $287,397, excluding a write-down of its oil and gas properties of
approximately $568,000 and an adjustment of approximately of $95,000 to the
cash surrender value of a life insurance policy, a decline attributable
directly to the efficiencies in field production and in administration.
The average price of an equivalent barrel of oil received in 1994 was
$15.33, down from $16.51 received on average in 1993.
(b) FINANCIAL CONDITION AND LIQUIDITY: The Company continued to
consume liquid assets to fund operations, with cash and equivalents
declining 19.5% from December 31, 1993 to December 31, 1994. Total assets
declined by 9.0%, and, due to the net loss of $180,338, the stockholders'
equity declined by 66.7% to $89,938.
<PAGE> 9
ITEM 7. INDEX TO FINANCIAL STATEMENTS.
Page
----
Independent Auditors' Report of KPMG Peat Marwick LLP 10
Consolidated Balance Sheet - December 31, 1995 11
Consolidated Statements of Operations-Years ended
December 31, 1995 and 1994 12
Consolidated Statements of Changes in Stockholders'
Equity (Deficit) - Years ended December 31, 1995
and 1994 13
Consolidated Statements of Cash Flows - Years ended
December 31, 1995 and 1994 14
Notes to Consolidated Financial Statements 15
<PAGE> 10
Independent Auditors' Report
The Board of Directors and Stockholders
Petrol Industries, Inc.
We have audited the consolidated financial statements of Petrol Industries,
Inc. and Subsidiaries as listed in the accompanying index. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatements. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Petrol
Industries, Inc. and Subsidiaries at December 31, 1995 and 1994, and the
results of their operations and their cash flows for each of the years in
the two-year period ended December 31, 1995, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that
Petrol Industries, Inc. and Subsidiaries will continue as a going concern.
As discussed in Note 2 to the financial statements, the Company's recurring
losses from operations and net capital deficiency raise substantial doubt
about the entity's ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 2. The
financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
KPMG PEAT MARWICK LLP
Shreveport, Louisiana
March 16, 1996
<PAGE> 11
<TABLE>
PETROL INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheet
December 31, 1995
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 170,012
Accounts receivable:
Trade 79,136
Other 11,852
---------
90,988
Inventory 29,990
Prepaid expenses 15,208
---------
Total current assets 306,198
---------
Property and equipment, at cost:
Land 7,000
Developed and undeveloped oil and gas
properties-successful efforts method 4,366,904
Trucks and other operating equipment 327,041
Furniture and fixtures 37,072
---------
4,738,017
Less accumulated depreciation, depletion and
amortization 4,687,020
---------
50,997
---------
Cash surrender value of life insurance, net 39,376
Other assets 1,107
---------
$ 397,678
=========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 42,219
Payable to interest owners 244,078
Payable to officer, net 110,708
Accrued expenses 82,355
---------
Total current liabilities 479,360
---------
Stockholders' equity (deficit):
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 1995 and 1994 159,724
Accumulated deficit (241,406)
---------
Total stockholders' equity (deficit) (81,682)
---------
Contingencies
---------
$ 397,678
=========
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> 12
<TABLE>
PETROL INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
Years ended December 31, 1995 and 1994
1995 1994
---- ----
<S> <C> <C>
Revenues:
Oil and gas sales $ 834,968 869,936
Other operating income 14,782 13,690
--------- ---------
849,750 883,626
--------- ---------
Expenses:
Lease operating expense 661,729 709,350
General and administrative 347,593 354,807
Depreciation, depletion and
amortization 11,646 13,802
--------- ---------
1,020,968 1,077,959
--------- ---------
Operating loss (171,218) (194,333)
Other income and (expense):
Gain on sale of assets 4,212 18,300
Interest and dividend income 12,526 9,227
Interest expense (17,140) (13,532)
--------- ---------
(402) 13,995
--------- ---------
Loss before provision
for income taxes (171,620) (180,338)
Income Tax --- ---
--------- ---------
Net loss $ (171,620) (180,338)
========= =========
Net loss per share $ (.11) (.11)
========= =========
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> 13
<TABLE>
PETROL INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity (Deficit)
Years ended December 31, 1995 and 1994
1995 1994
---- ----
<S> <C> <C>
Preferred stock $ --- ---
Common stock:
Balance at beginning and end of year 159,724 159,724
--------- ---------
Accumulated deficit:
Balance at beginning of year (69,786) 110,552
Net loss (171,620) (180,338)
--------- ---------
Balance at end of year (241,406) (69,786)
--------- ---------
Total stockholders' equity $ (81,682) 89,938
(deficit) ========= =========
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> 14
<TABLE>
PETROL INDUSTRIES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended December 31, 1995 and 1994
1995 1994
---- ----
<S> <C> <C>
Operating activities:
Net loss $ (171,620) (180,338)
Adjustments to reconcile net loss to
cash used by operating activities:
Depreciation, depletion and 11,646 13,802
amortization
Gain on sale of assets (4,212) (18,300)
Losses on retirements of property
and equipment included in lease
operating expenses 17,643 20,421
Increase in cash surrender value
of life insurance (11,100) (11,100)
Other --- (524)
Increase in accounts receivable (924) (8,688)
Decrease (increase) in inventory (7,438) 7,420
Decrease in prepaid expenses 431 1,426
Increase in accounts payable and
accrued expenses 23,373 101,318
Increase in payable to interest owners 29,097 27,695
-------- --------
Net cash used by operating
activities (113,104) (46,868)
-------- --------
Investing activities:
Capital expenditures (22,229) (41,202)
Proceeds from sale of property and
equipment 12,550 25,900
-------- --------
Net cash used by investing activities (9,679) (15,302)
-------- --------
Financing activities --- ---
-------- --------
Decrease in cash and cash equivalents (122,783) (62,170)
Cash and cash equivalents at beginning
of year 292,795 354,965
-------- --------
Cash and cash equivalents at end of year $ 170,012 292,795
======== ========
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> 15
PETROL INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1995 and 1994
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION -- The consolidated financial statements
include the accounts of Petrol Industries, Inc. and its Subsidiaries
(the "Company"), all of which are wholly owned. All significant
intercompany transactions have been eliminated.
CASH AND CASH EQUIVALENTS -- For purposes of reporting cash flows,
cash and cash equivalents include cash on hand, demand deposits with
banks or other financial institutions, and short-term, highly liquid
investments with original maturities of three months or less.
INVENTORY -- Inventory consists of crude oil accumulated in the
Company's own storage tanks and is valued at the posted market price
at the end of the year.
PROPERTY AND EQUIPMENT -- The Company's oil and gas producing
activities are accounted for using the successful efforts method of
accounting in accordance with Statement of Financial Accounting
Standards No. 19. The costs incurred to acquire property (proved and
unproved) and all development costs and exploratory costs which find
proved oil and gas reserves are capitalized. The costs of exploratory
wells drilled are capitalized until determination is made as to
whether such wells have found proved oil and gas reserves. Upon final
determination, such costs are charged to operations if no reserves are
found or are capitalized as producing oil and gas properties. Total
cost capitalized for oil and gas producing activities that exceed the
estimated discounted future net cash flows related to oil and gas
reserve quantities are charged to expense on a quarterly basis.
DEPRECIATION, DEPLETION AND AMORTIZATION -- Depreciation, depletion
and amortization of producing oil and gas properties are provided
under the unit-of-production method, comparing production to estimated
proved developed oil and gas reserves.
Other property and equipment are depreciated on a straight-line basis
over their estimated useful lives.
INCOME TAXES -- The Company follows the provisions of Statement of
Financial Accounting Standards No. 109 (SFAS 109), ACCOUNTING FOR
INCOME TAXES, which requires the asset and liability method of
accounting for income taxes. Under this method, deferred tax assets
and liabilities are determined based on differences between the
financial statement carrying amounts and the tax bases of existing
assets and liabilities and are measured using the enacted tax rates
that are assumed will still be in effect when the differences are
expected to reverse. The effect on deferred taxes of a change in a
tax rate is recognized in the statement of income for the period
covering the enactment date.
<PAGE> 16
PETROL INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
USE OF ESTIMATES -- Management of the Company has made a number of
estimates and assumptions relating to the reporting of assets and
liabilities to prepare these financial statements in conformity with
generally accepted accounting principles. Actual results could differ
from those estimates.
FINANCIAL INSTRUMENTS -- Statement of Financial Accounting Standards
No. 107, DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS,
requires that the Company disclose estimated fair values for its
financial instruments. Fair value estimates set forth below for the
Company's financial instruments:
Accounts receivable, accounts payable, payable to interest owners
and accrued expense -- The carrying amounts approximate fair
value because of the short maturity of these instruments.
The fair value estimates are made at a specific point in time, based
on relevant market information and information about the financial
instruments. These estimates are subjective in nature and involve
uncertainties and matters of significant judgment and therefore cannot
be determined with precision. Changes in assumptions could
significantly affect the estimates.
(2) LIQUIDITY AND FINANCIAL CONDITION
At current oil prices at year end December 31, 1995, the Company will
lack sufficient capital reserves and liquid or liquidatable assets to
permit a full year of operations. The Company continues to consume
liquid assets to fund operations, with cash and equivalents declining
42.0% from December 31, 1994, to December 31, 1995. Total assets
declined by 23.0% and, due to the net loss of $171,620, there is a
stockholders' deficit of $81,682.
Management is examining available financing alternatives to enable it
to remain in operation until oil prices begin to recover. These
alternatives range from seeking outside equity capital to permit
continued or expanded operations, with the hope of lowering average
direct lifting costs, to shutting down all but minimal operations
utilizing only a skeleton staff, putting the Company in a suspended
state for as long as assets permit. Management is also examining the
possibility of realizing value for the Company's remaining assets,
including, if necessary, dissolution. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
(3) CASH SURRENDER VALUE LIFE INSURANCE
In 1993, the Company borrowed $78,666 against a life insurance policy.
No payments have been paid on the principal as of December 31, 1995.
The stated rate of interest is 8%. There are no terms for repayment.
The outstanding loan amount has been netted against the cash surrender
value of the policy which totaled $114,071 at December 31, 1995.
<PAGE> 17
PETROL INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(4) INCOME TAXES
There was no income tax expense (benefit) reported for the years ended
December 31, 1995 and 1994.
The following table presents reconciliations of the expected tax
expense (benefit) using the statutory federal tax rates of 34% in 1995
and 1994, and the Company's actual tax benefit:
1995 1994
---- ----
Tax (benefit) at the statutory
federal rate $ (58,351) (61,315)
Increase in valuation allowance 38,525 41,881
Other, net 19,826 19,434
-------- ---------
$ ___ ___
======== ========
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at
December 31, 1995 and 1994, are presented below.
1995 1994
---- ----
Deferred tax assets:
Net property and equipment, principally
due to differences in depreciation $ 57,401 90,902
Tax net operating loss carryforward 418,762 368,838
Capital loss carryforward 97,223 97,223
Statutory depletion carryforward 275,671 253,569
--------- ---------
Total gross deferred tax assets 849,057 810,532
Less valuation allowance (849,057) (810,532)
--------- ---------
Net deferred tax assets $ ___ ___
========= =========
Due to the Company's history of net operating losses and the
uncertainties that affect the ultimate realization of the above
deferred tax amounts, the Company has recorded a 100% valuation
allowance applicable to these deferred tax assets. The Company will
periodically review the realizability of these assets and adjust the
related valuation allowance as needed.
The valuation allowance for deferred tax assets of approximately
$849,000 at December 31, 1995, has increased approximately $38,000
(the same as the increase in certain deferred tax assets) from the
amount determined at January 1, 1995. Any subsequently recognized tax
benefits relating to the valuation allowance would be reported as a
reduction of income tax expense in the consolidated statement of
operations.
<PAGE> 18
PETROL INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
At December 31, 1995, the Company has a capital loss carryforward of
approximately $286,000 that expires in 1996. Additionally, the
Company has federal tax net operating loss carryforwards of
approximately $1,232,000 which expire between 2003 and 2010, which
could be used to offset future federal taxable income. The Company
has a statutory oil and gas depletion carryforward of approximately
$811,000, which has no expiration date.
There were no taxes paid in 1995 and 1994.
(5) PAYABLE TO INTEREST OWNERS
The Company has recorded as a payable totaling $244,078 to
approximately 100 individual owners of royalty, working interests,
and/or overriding royalty interests as a result of proceeds it
received in settling a dispute in a property, plus the undistributed
net revenues since the settlement date in 1992. The Company intends
to distribute the funds when more accurate information is available
regarding the amounts due to individual interest owners.
(6) BUSINESS AND CREDIT CONCENTRATIONS
The Company has been engaged in a single industry segment - drilling
for and producing oil and gas on leased property located in the Caddo
Pine Island Field and the Shreveport Field, both in Caddo Parish,
Louisiana.
The Company is primarily involved in the production of oil which is
sold to approximately nineteen oil companies. The Company had sales
to two major customers in 1995 and 1994 as follows:
1995 1994
---- ----
Customer 1 $ 223,000 251,000
Customer 2 549,000 559,000
------- -------
$ 772,000 810,000
======= =======
(7) NET LOSS PER SHARE
Net loss per share of common stock was computed on the weighted
average number of shares outstanding of 1,597,241 for 1995 and 1994,
respectively.
(8) AFFILIATED PARTNERSHIPS
The Company serves as general partner in several limited partnerships
engaged in exploration and production activities. The Company is
compensated for providing management and accounting services to the
partnerships (see Note 9). The Company also serves as operator on
partnership wells and in connection therewith receives and disburses
partnership funds.
<PAGE> 19
PETROL INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Indebtedness to partnerships for their portion of undistributed net
revenue was approximately $17,654 at December 31, 1995, and is
included in accounts payable.
(9) OTHER OPERATING INCOME AND LEASE OPERATING EXPENSE
Other operating income for the years ended December 31, 1995 and 1994,
consists of the following:
1995 1994
---- ----
Affiliated partnerships - operations
and administration fee $ 12,667 13,308
Other 2,115 382
------ ------
$ 14,782 13,690
====== ======
Lease operating expense includes severance tax of $20,027 and $26,666,
for the years ended December 31, 1995 and 1994, respectively.
(10) RELATED PARTY TRANSACTIONS
Payable to officer, net, consists of the following:
Accrued salary plus interest $ 212,646
Note payable to Company plus interest (37,338)
Advances (64,600)
-------
$ 110,708
=======
Interest at a bank's prime rate is accruing on all accrued salary and
unpaid interest thereon. Interest cost included in expense during
1995 and 1994 were $10,847 and $7,238, respectively. The note payable
represents a $35,000 note payable issued to the Company during 1995,
repayable on demand; the loan bears interest at an annual rate of
one-quarter of a percent in excess of prime rate of a bank. Interest
included in income during 1995 was $2,324. Advances are non-interest
bearing.
* * * * *
<PAGE> 20
PETROL INDUSTRIES, INC. AND SUBSIDIARIES
Supplemental Oil and Gas Information
(unaudited)
OIL AND GAS PRODUCING ACTIVITIES
Information shown in Schedules 1 through 4 are presented in accordance with
Statement of Financial Accounting Standards No. 69, DISCLOSURES ABOUT OIL
AND GAS PRODUCING ACTIVITIES.
Capitalized Costs Relating to Oil and Gas Producing Activities-Schedule 1
- -------------------------------------------------------------------------
This schedule presents the capitalized costs of proved oil and gas
properties along with the applicable accumulated depreciation, depletion,
and amortization.
Costs Incurred in Oil and Gas Property Acquisition, Exploration, and
Development Activities-Schedule 2
- --------------------------------------------------------------------
This schedule presents costs incurred in oil and gas producing activities
by type of expenditure.
Estimated Net Quantities of Proved Oil and Gas Reserves-Schedule 3
- ------------------------------------------------------------------
All of the Company's oil and gas reserves are located in one geographic
area within the continental United States. Reserves cannot be measured
exactly since reserve estimates involve many subjective judgments and must
be reviewed periodically and adjusted to reflect additional information
gained from reservoir performance, new geological and geophysical data, and
economic changes.
Proved reserves are those quantities of oil and gas that appear with
reasonable certainty to be recoverable in the future from known reservoirs
under existing economic and operating conditions at that time. As
additional information becomes available or conditions change, estimates
must be revised. Significant declines in the price of crude oil or
significant technological changes may render these reserves to be
uneconomical to develop. The last analysis of geological and engineering
data performed by the Company to estimated proved reserves was performed in
1974. Since 1974, changes in proved reserves have been made for the
results of annual production volumes, management estimates, and revisions
identified in a 1989 analysis of proved developed reserves.
Proved developed reserves are those quantities of proved oil and gas
reserves that are recoverable through existing wells within existing
equipment and operating methods. The last analysis of geological and
engineering data performed by the Company to estimated proved developed
reserves was performed as of January 1, 1989. Since 1989, changes in
proved developed reserves have been made for the results of annual
production volumes.
Standardized Measure of Discounted Future Net Cash Flows Relating to Proved
Oil and Gas Reserve Quantities-Schedule 4
- ---------------------------------------------------------------------------
Estimated future net cash flows were determined by summing yearly future
cash inflows computed by applying year-end prices (approximately $17.83 per
barrel for oil at December 31, 1995) to estimated quantities of proved
<PAGE> 21
PETROL INDUSTRIES, INC. AND SUBSIDIARIES
Supplemental Oil and Gas Information
(unaudited)
developed reserves as of each year end. The estimated future production
costs were deducted based on the assumed continuation of the cost levels
and economic conditions existing at the respective year end. Income taxes
are not included due to the Company not being in a tax paying position.
The future net cash flows were then discounted at 10%.
The Company cautions readers that the standardized measure information,
which places a value on proved reserves, is not indicative of either fair
market value or present value of future cash flows. Other logical
assumptions could have been used for this computation which would likely
have resulted in significantly different amounts. This information is
disclosed in accordance with Statement No. 69 solely to provide readers
with a common base for use in preparing their own estimates of future cash
flows and for comparing reserves among companies. Management of the
Company does not rely on the computations in Schedule 4 when making
investment and operating decisions.
Schedule 4 also presents a summary of the principal sources of change in
the standardized measure of discounted future net cash flows for the years
1995 and 1994.
<PAGE> 22
<TABLE>
SCHEDULE 1
PETROL INDUSTRIES, INC. AND SUBSIDIARIES
Capital Costs Relating to Oil and Gas
Producing Activities
December 31, 1995
(unaudited)
1995
----
<S> <C>
Proved properties $ 4,367,671
Other 327,041
---------
4,694,712
Accumulated depreciation, depletion
and amortization 4,652,801
---------
Net capitalized costs $ 41,911
=========
NOTE: Included in capitalized Costs at December 31, 1995, is $746,941, representing
contributions of capital costs made by the Company to affiliated limited
partnerships pursuant to various partnership agreements.
</TABLE>
<PAGE> 23
<TABLE>
SCHEDULE 2
PETROL INDUSTRIES, INC. AND SUBSIDIARIES
Costs Incurred in Oil and Gas Property Acquisition,
Exploration, and Development Activities
Years ended December 31, 1995 and 1994
(unaudited)
1995 1994
---- ----
<S> <C> <C>
Developmental costs $ 18,935 31,604
======= =======
</TABLE>
<PAGE> 24
<TABLE>
SCHEDULE 3
PETROL INDUSTRIES, INC. AND SUBSIDIARIES
Estimated Net Quantities of
Proved Oil and Gas Reserves
Years ended December 31, 1995 and 1994
(unaudited)
1995 1994
---- ----
Barrels Barrels
of Oil of Oil
------- -------
<S> <C> <C>
Proved reserves:
Beginning of year 5,571,900 5,629,218
Production (50,854) (57,318)
Sales of minerals in place (4,065) ---
Revisions, extensions and discoveries --- ---
--------- ---------
End of year 5,516,981 5,571,900
========= =========
Barrels
of Oil
-------
Proved developed reserves:
December 31, 1995 356,454
=======
December 31, 1994 411,373
=======
NOTE-The proved and proved developed reserves are all located within the
United States.
<PAGE> 25
</TABLE>
<TABLE>
SCHEDULE 4
PETROL INDUSTRIES, INC. AND SUBSIDIARIES
Standardized Measure of Discounted Future Net Cash
Flows Relating to Proved Oil and Gas Quantities
Years ended December 31, 1995 and 1994
(unaudited)
1995 1994
---- ----
(in thousands)
<S> <C> <C>
Future cash inflows $ 6,428 6,512
Future production and development
cost (4,582) (5,093)
Future income tax (expense)
benefit --- ---
------- -------
Future net cash flows (deficit) 1,846 1,419
10% annual discount for estimated
timing of cash flows (deficit) (664) (547)
------- -------
Standardized measure of discounted
future net cash flows (deficit) $ 1,182 872
======= =======
Principal sources of change in the standardized measure of discounted
future net cash flows for the years shown:
1995 1994
---- ----
(in thousands)
Net changes in prices and production
cost, including excise taxes $ 386 3,814
Sales and transfers of oil and gas
produced, net of production costs 184 161
Net change due to revisions,
extensions, and discoveries --- ---
Net change due to purchase (sales) of
minerals-in-place (69) ---
Development cost incurred during the
period 19 27
Accretion of discount 87 (416)
Change in production rates (timing)
and other (297) 2,994
------ ------
$ 310 6,580
====== ======
NOTE-The proved and proved developed reserves are located within the United
States.
</TABLE>
<PAGE> 26
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
<PAGE> 27
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
(a) The Directors of Petrol are as follows:
Position with the Company
and Business Experience Director
Name Age During Past Five Years Since
- ---- --- ------------------------- --------
Joseph M. Rodano 59 Chairman of the Board of 1972
Directors, President
and Chief Executive Officer
of Petrol since 1972;
Treasurer of Petrol since
1980; Assistant Secretary
since March, 1996.
Robert M. Bontempi 64 Director, Retired; Bond 1972
Salesman, Thomson McKinnon
Securities, 1983-1988.
Arlys C. Milan 41 Vice President of Petrol 1994
since 1990; Office Manager
for more than 4 years prior
thereto; elected to Board
of Directors in August,
1994; Secretary since
March, 1996.
All Directors serve until the next annual meeting of stockholders and
until their successors are duly elected and qualify.
(b) The chief executive officers and four most highly compensated
executive officers of the Company are as follows:
Position with the Company and Business
Name Age Experience During Past Five Years
- ---- --- --------------------------------------
Joseph M. Rodano 59 See "Directors" above.
Howard E. Chase 59 Secretary of Petrol since November,
1982; is still associated with the law
firm of Morrison Cohen Singer &
Weinstein, LLP; President and
Chief Executive Officer of DeTomaso
Industries, Inc. since September, 1995.
Mr. Chase resigned his position as
Secretary effective February 21, 1996.
Arlys C. Milan 41 See "Directors" above.
Jimmy S. Foster 52 Vice President of Petrol since April,
1990; Field Supervisor for more than
five years prior thereto.
All Officers serve at the pleasure of the Board of Directors.
<PAGE> 28
(c) Significant Employees.
None.
(d) Family Relationships.
None.
(e) Business Experiences.
See (a) and (b) above.
(f) Involvement in Legal Proceedings.
Not applicable to any person listed in (a) or (b) above.
The Company has no standing audit, nominating or compensation
committees, or committees performing similar functions. The Board of
Directors met once in 1995.
ITEM 10. EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and Certain Other Compensation
The following table shows, for the three most recently ended fiscal
years ended December 31, the cash compensation paid or accrued for those
years to the Chief Executive Officer of the Company who is the only one
among the four most highly compensated executive officers of the Company
whose aggregate annual salary and bonus paid in compensation for services
rendered in all the capacities in which he served exceeded $100,000 for the
Company's last fiscal year:
<TABLE>
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation Awards Payouts
___________________________________ ________________________________
Name and Restricted All Other
Principal Other Annual Stock Options/ LTIP Compensation
Position Year Salary($) Bonus($) Compensation($) Awards($) SARs(#) Payouts($) ($)
- --------- ---- --------- -------- --------------- ---------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Joseph M. Rodano, 1994 125,000 - - - - - -
President, Chief 1995 125,000 - - - - - -
Executive Officer,
and Chairman of the
Board
</TABLE>
Stock Option Grants
There were no grants of stock options/SARs made during the fiscal year
ended December 31, 1995 and 1994 to Mr. Rodano.
<PAGE> 29
<TABLE>
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
_________________________________________________________________________________________________________________
Individual Grants
____________________________________________________________
Percent of Potential Realizable Value
Total at Assumed Annual Rates of (Alternative to
Options/ Stock Price Appreciation Potential Realizable
SARs For Option Term Realizable Value)
Options/ Granted to __________________________ ____________________
SARs Employees Exercise or
Granted in Fiscal Base Price Expiration Grant Date
Name (#) Year ($/Sh) Date 5%($) 10%($) Present Value $
- ---- ------- ---------- ----------- ---------- ----- ------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
NOT APPLICABLE
</TABLE>
Stock Option Exercises
Mr. Rodano did not exercise any stock options during the fiscal year
ended December 31, 1995 or 1994 and did not have any unexercised options at
the fiscal year-end.
<TABLE>
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
Value of Unexercised
Number of Unexercised In-the-Money
Shares Option/SARs at Option/SARs at
Acquired FY-End(#) FY-End ($)
on Value ___________________________ ___________________________
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
NOT APPLICABLE
</TABLE>
Long-Term Incentive Plan Awards in Last Fiscal Year
There were no awards made in the fiscal year ended December 31, 1995
and 1994 to Mr. Rodano under any form of Company LTIP (w/incentives
spanning more than one fiscal year).
<TABLE>
LONG-TERM INCENTIVE PLANS - AWARDS
IN LAST FISCAL YEAR
____________________________________________________________________________________________________
Estimated Future Payouts Under Non-Stock
Number of Shares, Price-Based Plans
Units or Other Performance or Other ________________________________________
Rights Period Until Maturation Threshold Target Maximum
Name (#) or Payout ($ or #) ($ or #) ($ or #)
- ---- ----------------- ----------------------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
NOT APPLICABLE
</TABLE>
<PAGE> 30
Howard Chase, Secretary of Petrol, is associated with the firm of
Morrison Cohen Singer & Weinstein, LLP. He resigned his position as
Corporate Secretary effective February 2, 1996.
Except as described above, no annuity, pension or retirement benefits,
plans for cash or non-cash compensation or other existing plans or
arrangements for remunerating officers and directors, other than salary,
are presently in effect. The Company does not have any stock option, stock
appreciation or other form of incentive plan or arrangement for its
management or employees.
Non-management directors were paid an annual fee of $800 in 1995, with
the remainder of the fees being accrued.
There are no retirement, resignation or termination arrangements with
executive officers due to change in control of the Company, or for any
other reason.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) The following table sets forth, as of March 19, 1996, information
concerning the beneficial ownership of Petrol's Common Stock by each person
who is known by management to own beneficially more than 5% of such
securities:
Name of Amount and Nature Percent
Beneficial Owner of Beneficial Ownership of Class
---------------- ----------------------- --------
Joseph M. Rodano 409,825 (direct) 25.6%
(b) The following table sets forth, as of March 19, 1996, information
concerning the beneficial ownership of voting securities of the Company by
all current directors individually, by the Chief Executive Officer and the
four next most highly compensated officers, and by all directors and
officers as a group:
Name of Amount and Nature Percent
Beneficial Owner of Beneficial Ownership of Class
---------------- ----------------------- --------
Joseph M. Rodano 409,825 (direct) 25.6%
Robert M. Bontempi 0 0.0%
Howard E. Chase 1,000 (direct) .06%
Arlys C. Milan 0 0.0%
Jimmy S. Foster 0 0.0%
(c) CHANGES IN CONTROL: There are no arrangements known to the
Company, including any pledge by any person of securities of the Company,
the operation of which may at a subsequent date result in a change in
control thereof.
<PAGE> 31
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) TRANSACTIONS WITH MANAGEMENT AND OTHERS: In April, 1995, the
Company loaned its president the principal sum of $35,000, repayable on
demand; the loan bears interest at an annual rate of one-quarter of a
percent in excess of the prime rate.
(b) Certain Business Relationships of Directors.
Not applicable.
(c) Indebtedness of Management in excess of $60,000.
Not applicable.
(d) Transactions with Promoters.
Not applicable.
<PAGE> 32
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
1. Exhibits
3(a) Certificate of Incorporation of the Company, and
amendments thereto (Filed as Exhibit 3(a) to the
Company's 1981 Annual Report on Form 10-K and
incorporated herein by reference).
3(b) By-laws of the Company (Filed as Exhibit 3(b) to the
Company's 1981 Annual Report on Form 10-K and
incorporated herein by reference).
10(a) Compromise Agreement between Petrol Industries, Inc.
and Enron Oil Trading & Transportation Company dated
as of November 30, 1992 (contained in the Company's
1992 Annual Report on Form 10-K).
10(b) Compromise Agreement between and among Petrol
Industries, Inc., Oryx Energy Company and Enron Oil
Trading & Transportation Company dated as of November
30, 1992 (contained in the Company's 1992 Annual
Report on Form 10-K).
22 Subsidiaries of the Company (Filed as Exhibit 22 to
Registrant's 1981 Annual Report on Form 10-K and
incorporated herein by reference).
(b) Reports on Form 8-K
None filed during the last quarter of 1995.
<PAGE> 33
SIGNATURES
Pursuant to the requirements of Section 13 of 15(d) of the Securities
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.
March 29, 1996 By: Joseph M. Rodano
--------------------------------
Joseph M. Rodano
President and Treasurer
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.
March 29, 1996 By: Joseph M. Rodano
-----------------------------------
Joseph M. Rodano - Director
March 29, 1996 By: Robert Bontempi
-----------------------------------
Robert Bontempi - Director
March 29, 1996 By: Arlys C. Milan
-----------------------------------
Arlys C. Milan - Director
<PAGE> 34
EXHIBIT INDEX
Exhibit
No. Description
------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 170,012
<SECURITIES> 0
<RECEIVABLES> 79,136
<ALLOWANCES> 0
<INVENTORY> 29,990
<CURRENT-ASSETS> 306,198
<PP&E> 4,738,017
<DEPRECIATION> 4,687,020
<TOTAL-ASSETS> 397,678
<CURRENT-LIABILITIES> 479,360
<BONDS> 0
<COMMON> 159,724
0
0
<OTHER-SE> (241,406)
<TOTAL-LIABILITY-AND-EQUITY> 397,678
<SALES> 834,968
<TOTAL-REVENUES> 849,750
<CGS> 661,729
<TOTAL-COSTS> 661,729
<OTHER-EXPENSES> 359,239
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,140
<INCOME-PRETAX> (171,620)
<INCOME-TAX> 0
<INCOME-CONTINUING> (171,620)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (171,620)
<EPS-PRIMARY> (.11)
<EPS-DILUTED> (.11)
</TABLE>
