UNITED STATES SECURITIES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D C 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
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.
For the transition period from to
to
Commission File Number : 33 - 509 - D
Sunray Minerals, Inc.
(Exact name of registrant as specified in its charter)
Nevada 88 - 0210772
(State or other jurisdiction (IRS Employer identification
of incorporation or organization number)
580 Decker Drive, #200, Irving, Texas 75062
(Address of principal executive offices) (Zip Code)
214/650-1612
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Securities registered pursuant to section 12(g) of the Act:
Common
(Title of class)
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. [X] yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K ( 229.405 of this chapter) 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
any amendment to this Form 10-K. [X]
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
[ ] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
861,280 Common Shares
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the
Part of the Form 10-K (e.g., Part I, Part II, etc) into which the document is
incorporated: (1) Any annual report to security holders; (2) Any proxy or
information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933. The listed documents should be clearly
described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980).
Part I
ITEM 1. BUSINESS
Sunray Minerals, Inc. (the "Company"), formerly Tarragon Corporation, was
organized under the laws of the state of Nevada on August 22, l985. From 1985
until November, 1993 the Company engaged in no substantial business.
The Company was incorporated for the purpose of searching, investigating and
acquiring business opportunities.
Company effected a 1-for-100 reverse stock split of the issued and outstanding
shares of the stock effective November 10, 1993. The reverse split was approved
by the board of directors and by majority written consent of the majority
shareholder on November 5, 1993. Following the reverse split, the Company's
outstanding shares of common stock was reduced from 4,111,319 to 41,113.
During 1993, Benitex, A.G., a Liechtenstein corporation ("Benitex") acquired a
majority of the issued and outstanding shares of common stock of the Company.
The Company entered into an agreement with Benitex, to acquire working
interests in certain oil and gas properties in return for common stock. The
properties include producing oil and gas wells in Oklahoma. Also included are
oil leases in the same geographical area that will require additional
development. The properties were transferred to the Company on November 30,
1993. For financial reporting purposes, this transaction was recorded as a
purchase with the Company's the properties to Benitex as the basis. As a result
of the transaction, the Company acquired assets valued at $803,471 in return
for 286,000 post split shares of common stock.
The Company entered into an agreement with Waste Oil Recycling Corporation
(WORC) to merge their assets into the Company in return for common stock. The
merger was completed on November 30, l993. As a result of this merger, the
Company acquired assets consisting of a real estate mortgage receivable in the
principal amount of $500,000 and an investment as a minority stockholder in a
real estate operating company which is the obligor on the mortgage receivable
The Company issued 350,000 shares of post split common stock to the
stockholders of WORC to effect this merger.
On December 10, 1993, the Company entered into an agreement with Benitex which
provided for Benitex to acquire a minimum of 100,000 shares and a maximum of
700,000 shares of the common stock of the Company for a price of $3.00 per
share. The agreement provided for the purchase to be completed by September 30,
1994. The proceeds of the sale of common stock were used primarily to acquire
oil and gas prospects. Pursuant to this agreement, the Company issued 9,167
shares of common stock for $27,500 as of December 31, 1993. During 1994, the
Company issued 175,000 shares of common stock for $525,000 in cash. The
agreement terminated September 30, 1994.
The Company commenced oil and gas operations in December 1993. It is currently
engaged in oil and gas exploration and development in Oklahoma.
COMPETITION
The business of exploring, developing, and producing oil and gas is highly
competitive. The Company competes with numerous firms and other individuals in
its activities, including major oil firms and other independent exploration and
producing firms, many of which have substantially greater financial resources,
management and technical staffs, and facilities than those of the Company.
Major and independent oil and gas companies and individuals actively bid for
desirable producing properties as well as unexplored oil and gas prospects and
compete for equipment, services, and labor required to explore, develop, and
operate such properties. The Company faces intense competition in attempting to
form exploration groups with other energy firms to provide funding to complete
desired exploration, including drilling. In the opinion of the Company, the
decision of a firm to participate in a proposed exploration group is based on
the estimated likelihood of finding oil and gas in commercial quantities, the
cost of exploration and, if warranted, development, the size of the potential
reservoir, the interest to be earned by completing specified exploration or
drilling or providing necessary funding, alternative opportunities for the
employment of limited capital, the exploration philosophy or area of interest of
potential participants, the reputation of the Company, and other factors, many
of which are beyond the control of the Company.
In its efforts to acquire leases or other exploration rights in new prospect
areas, the Company faces competition from major oil companies, independent oil
firms, and oil and gas speculators. The ability to acquire leases or
exploration rights is generally determined by the amount of cash required to
obtain the property interest, the royalty or other interest reserved by the
transferor, and the nature of any commitment to drill or complete other
exploration.
GOVERNMENT REGULATION
The following discussion of government regulation is necessarily brief and is
not intended to constitute a comprehensive discussion of the various statute
rules, regulations, and governmental orders, policies, and practices which may
affect operations of the Company.
STATE AND LOCAL REGULATIONS OF DRILLING AND PRODUCTION
State regulatory authorities have established rules and regulations
requiring permits for drilling, drilling bonds, and reports concerning
drilling and producing activities. Such regulations also cover the
location of wells, the method of drilling and casing wells, the
surface use and restoration of well locations, the plugging and
abandoning of wells, the density of wells within a given area, and
other matters. The states in which the Company operates also have
statutes and regulations governing a number of environmental and
conservation matters, including the unitization and pooling of oil and
gas properties and establishment of maximum rates of production from
oil and gas wells.
ENVIRONMENTAL REGULATIONS
The Company's activities are subject to numerous laws and regulations
concerning the storage, use, and discharge of materials into the
environment, the remediation of environmental impacts, and other
matters relating to environmental protection, all of which may
adversely effect the Company's operations and the costs of doing
business. It is likely that state and federal environmental laws and
regulations will become more stringent in the future. Current
legislative proposals to reclassify a significant portion of oil and
gas production waste as "hazardous waste," would, if enacted, impose
stricter disposal requirements that could have a significant impact on
the operating costs of the Company and the oil and gas industry in
general. This adverse impact could result in a significant number of
wells becoming uneconomic. In addition, various states are
considering initiatives to further regulate the disposal of materials
associated with oil and gas exploration and production. In connection
with the recent acquisition of producing properties in Oklahoma, the
Company performed limited environmental inquiries and found no
material environmental noncompliance or cleanup liabilities. The
Company does not currently believe that it will be required in the
near future to expend amounts that are material by reason of
environmental laws and regulations.
PROPOSED ENERGY TAX
As a result of initiatives by the Clinton administration, Congress has
discussed a version of an energy tax that is based on the BTU content
of fossil fuels. If, as discussed, the energy tax is imposed on
production at the wellhead, it may be difficult for the producer of
oil or gas to pass such tax on to the oil or gas purchaser, which may
reduce the economic return to producers. No prediction can be made as
to whether any such energy tax will be adopted in any form.
FEDERAL AND BUREAU OF INDIAN AFFAIRS LEASES
A part of the Company's activities may be conducted under oil and gas
leases issued by the Bureau of Land Management or by the Indian tribes
under the supervision of the Bureau of Indian Affairs. These
activities must comply with the regulations and orders which regulate
several aspects of the oil and gas industry, including, but not
limited to, drilling and operations on these leases and the
calculation and payment of royalties to the federal government or the
governing Indian tribe. Operations on Indian tribal lands must also
comply with applicable requirements of the governing body of the tribe
involved.
SAFETY AND HEALTH REGULATIONS
The Company must also conduct its operations in accordance with
various laws and regulations concerning occupational safety and
health. Currently, the Company does not foresee expending substantial
amounts to comply with these occupational safety and health laws and
regulations. However, since such laws and regulations are frequently
changed and amended, the Company is unable to predict what amounts may
be required in the future to comply with these laws and regulations.
EMPLOYEES AND CONSULTANTS
The Company has one full time employee. In addition, the Company will engage
technical consultants as independent contractors to provide specific
geological, geophysical, and other professional services.
ITEM 2. PROPERTIES
The Company's significant oil and gas properties are located in Oklahoma.
In the oil and gas industry and as used herein, the word "gross" well or acre
a well or acre in which a working interest is owned; the number of gross well
is the total number of wells in which a working interest is owed. A "net" well
or acre is deemed to exist when the sum of fractional ownership working interest
in gross wells or acres equals one. The number of new wells or acres is the sum
of the fractional working interest owned in gross wells or acres.
WELLS AND ACREAGE
Shown below is a tabulation of the productive wells owned by the
Company as of December 31, 1995.
Productive Wells
Gross Net
Oil 2 .6
Gas 4 1.0
-- ---
Total 6 1.6
Set forth below is information respecting the developed and undeveloped
acreage owned by the Company as of December 31, 1995.
Developed Undeveloped
Acreage Acreage
Gross Net Gross Net
Texas 0 0 512.33 256.17
Oklahoma 760 207 2,441.69 2,003.92
---- ---- -------- --------
Totals 760 207 2,954.02 2,260.09
Set forth below is a tabulation of wells completed in the period indicated in
which the Company has participated and the results thereof for each of the four
years ended December 31, 1995.
Year Ended December 31,
- --------------------------------------------------------------------------
1995 1994 1993 1992
Gross Net Gross Net Gross Net Gross Net
Exploratory:
Dry 0 0 0 0 0 0 0 0
Oil 0 0 0 0 0 0 0 0
Gas 2 .50 0 0 0 0 0 0
-- --- -- -- -- -- -- --
Totals 2 .50 0 0 0 0 0 0
Year Ended December 31,
- ---------------------------------------------------------------------------
1995 1994 1993 1992
Gross Net Gross Net Gross Net Gross Net
Development:
Dry 2 .75 0 0 0 0 0 0
Oil 1 .08 2 .16 0 0 0 0
Gas 0 0 0 0 0 0 0 0
-- --- -- -- -- -- -- --
Totals 3 .83 2 16 0 0 0 0
PRODUCTION AND SALE OF OIL AND GAS
The following table summarizes certain production information for all proper
in which the Company had an interest during the periods indicated.
Year Ended December 31,
1995 1994 1993
Average net daily production:
Oil (BBLS) 23.04 22.68 16.48
Gas (MCF) 85.26 113.27 107.94
Equivalent barrels
of oil 14.21 18.88 17.99
Average sales Price:
Oil ($ per BBL) $ 18.64 $ 16.69 $ 13.85
Gas ($ per MCF) $ 1.07 $ 1.45 $ 2.05
Equivalent barrel
of oil $ 6.42 $ 9.85 $ 13.08
The average production cost per barrel of oil, which includes lifting cost
(electricity, fuel, water,
disposal, repairs, maintenance, pumper, transportation, and similar items), and
production taxes, were $8.90 for 1995.
The oil from the Company's producing wells is sold to one of a variety of
unaffiliated purchasers. The sale of oil is subject to price adjustments,
production curtailments, and similar provisions in oil purchase contracts, and
the sale of oil is subject to general economic and political conditions
affecting the production and price of crude oil and natural gas.
As of December 31, 1995, the Company owned working interests in oil and gas
producing properties and undeveloped leases located in Oklahoma. The following
is a table of the properties, working interest percent and type of production.
Name and Location Working Producing
Interest Wells
Per cent Oil Gas
Bivin #1-26 0.27851600 X X
Lincoln County, Oklahoma
Ruby-Carpenter #1-23 0.32971167 X X
Lincoln County, Oklahoma
Payne #2-26 0.2875000 X
Lincoln County, Oklahoma
Clara Jane #1 0.22500000 X X
Noble County, Oklahoma
Warner #1 0.2500000 X
Noble County, Oklahoma
Billings State #1 0.2500000 X
Noble County, Oklahoma
EXECUTIVE OFFICES
The Company's principal executive offices are located at 580 Decker Drive,
Irving, Texas 75016. The office space is within the offices leased by Las
Colinas Oil Corp. (Las Colinas), a related party. Las Colinas provides the
Company office space, supplies, office equipment, etc for a monthly fee in the
amount of $750. The directors and executive officers of the Company also se
as the directors, executive officers and employees of Las Colinas.
ITEM 3. LEGAL PROCEEDINGS
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted during 1995.
PART II
ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The common stock of the Company is traded in the over-the-counter market and
has been in the National Quotation Bureau's "pink sheets" since March 21, 1986.
Initially, the trading symbol was SURL. The symbol was changed to SRAY in May,
1994. It is quoted on the electronic "Bulletin Board" inter-dealer quote
system.
No dividends have been paid on the common stock, and the Company does not
anticipate paying dividends in the foreseeable future.
ITEM 6. SELECTED FINANCIAL DATA
YEARS ENDED DECEMBER 31
1995 1994 1993 1992 1991
STATEMENT OF
OPERATIONS DATA:
<TABLE>
<S> <C> <C> <C> <C> <C>
Total Revenue $ 132,356 $ 235,958 $ 19,069 $ 71,674 $ 17
Net Loss $ (528,694) $ (459,286) $ (22,039) $ (283,097) $ (7,019)
Net Loss per share $ (.61) $ (.62) $ (.23) $ (6.89) $ (.46)
Weighted average number
of shares outstanding 861,280 741,021 96,196 41,113 15,266
Cash dividends declared -0- -0- -0- -0- -0-
BALANCE SHEET DATA:
Working Capital $ 423,664 $ 23,065 $ (14,318) -0- $ 19,622
Total Assets $1,332,934 $1,875,611 $1,836,451 -0- $ 25,216
Long Term Debt -0- -0- -0- -0- -0-
Stockholders' Equity
(Deficit) $1,328,634 $1,858,916 $1,793,202 $ (25,730) $ 19,622
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
GENERAL
The following discussion provides information on the results of operations for
the three years ended December 31, 1995 and the financial condition and
financial resources as of December 31, 1995, 1994 and 1993. The financial
statements including the notes thereto should be referred to in conjunction
this discussion.
Profitability of the operations of the Company in any accounting period is
directly related to realized prices of oil and/or gas sold, the volume of oil
and gas produced and the results of exploration and development activities.
Company utilizes the successful efforts method of accounting for exploration
development and production of oil and gas reserves, whereby all non-production
costs and expenses are incurred. All productive costs are capitalized and
amortized as depletion and depreciation using the units of production method
The basis of the units of production method are reservoir studies performed
engineers who use current production, economic life and knowledge of the area
where production exists, among other factors, to derive and estimate the volume
of the recoverable reserves. Reservoir studies are performed annually and rates
of depletion and/or depreciation are adjusted as necessary. Accordingly, the
results of operations of the Company may fluctuate from period to period based
on the foregoing factors, among others.
Oil and gas accounting methods utilized by the company limits the amount of
costs which the Company may capitalize by requiring the Company to recognize a
valuation allowance to the extent that capitalized costs of oil and gas
properties, net of accumulated depreciation, depletion and amortization and
related deferred taxes, exceed the discounted future net revenues of proved oil
and gas reserves, plus the lower of costs or fair market value of un-evaluated
properties, net of Federal income tax. This limitation on capitalized costs of
oil and gas properties is generally referred to as the "Ceiling Test
Limitation". As a result of this limitation, the Company recorded a valuation
allowance at December 31, 1995 of -0-, December 31, 1994 of $179,244, December
31, 1993 of -0-.
RESULTS OF OPERATIONS
The Company participated with a non-affiliated oil company in drilling an
exploratory well in Texas. The Company owned a 50% interest in the venture.
The drilling was completed in the first quarter of the year. The well could not
be economically produced and was abandoned.
On August 1, 1995, the Company sold ten producing wells in order to raise cash
to meet obligations (see Liquidity and Capital Resources). The wells sold
represented virtually all of the oil and gas production of the Company at the
time of the sale. Production of the wells retained by the Company is minimal.
The Company acquired an interest in one oil well and one gas well that was
drilled during the fourth quarter of the year. The gas well is completed, but
production is delayed until transmission line is completed.
The Company sold a lease to an unaffiliated oil exploration company. Under
terms of the sale agreement, the Company retained a 25% reversionary interesy
after the exploration company recovers its drilling, completion and operating
costs.
The Company suffered a loss of $528,694. The Company lost $238,989 in the sale
of properties, a loss in the mortgage settlement of $31,975, both of which are
one time charges. In addition, the dry hole costs were $135,132, which are
due to the West Texas venture. Management of the Company is examining various
alternatives in order to decrease overhead costs.
The sales from oil and gas decreased from $198,175 in 1994 to $103,541 in 1995
as a result of the sale of oil and gas properties that occurred August 14,
1995. Total operating expense decreased from $695,244 in 1994 to $390,086 in
1995. This reduction was made up of $58,359 in lease operating- related party
and 360,293 reduction in depreciation and depletion due to the aforementioned
sale. This was partially offset by the increase in dry hole costs of $53,244
from West Texas venture and increase in general and administrative of $71,220
from wages, consultants and office expense. The general and administrative
related-party expense decreased by $10,938 as a result of lower fees for rent
and other services.
The Company engaged in a segment of the oil business that requires a virtual
continuous drilling program. The Company utilizes the knowledge and experience
of Management, along with outside consultants, in determining the geographic
areas and depth of the wells, which are primary economic considerations. The
wells in which the Company attempts to acquire an interest are normally
considered shallow, but usually are lower risk due to lower costs than those
drilled to greater depths. Deeper wells are more costly and, therefore,
present greater risks.
The Company intends to utilize the cash received from the mortgage pay off to
acquire interests in several wells to be drilled during the next fiscal year.
LIQUIDITY AND CAPITAL RESOURCES
The Company engaged in drilling a well as a 50% partner with an unrelated oil
company. The well could not be economically produced and was abandoned. The
cost of this well to the Company exceeded cash reserves. In addition, revenue
from existing production showed decline causing an increase in current payables.
Management of the Company decided to sell properties in order to have sufficient
cash to meet Company current obligations.
On August 14, 1995, the Company sold virtually all of its producing properties
to Paul B. McCully, Vice President of the Company, for $225,000. The properties
were subsequently sold to the Paul B. McCully 1995-A Energy Acquisition and
Development Program, a limited partnership in which the general partner is Paul
B. McCully.
The Company used the economic value of the wells in the reserve report prepared
by an independent engineering firm dated January 1, 1995 to arrive at an
equitable value for the transaction. The sales price was determined by
adjusting those stated values by a factor representing the time difference of
money to arrive at fair market value. Because of the relationship between the
Company and Mr. McCully, this transaction could not be considered to be a result
of arm's length negotiations. However, the terms of the transaction were
approved by a majority of the disinterested members of the board of directors
and, in the opinion of management of the Company, are as favorable to the
Company as could be obtained in arm's length transactions. Further, management
believes that the method of determining fair market value used in this
transaction is an industry accepted method in these types of transactions. The
Company recognized a loss from this transaction of $238,989 in 1995.
Proceeds from the sale were used to pay creditors and provide cash for drill
additional wells and administrative costs.
In October 1995, the Company was informed by the management of Great Western
Asset Group ("GWAG") that they had an opportunity to sell the office building
on which the Company held a second mortgage. Their acceptance of the offer
was partially contingent on the Company's willingness to accept a reduction in
the principal and interest due. Management of the Company sought the advise of
financial consultants to ascertain a current value of the mortgage. After
negotiations with GWAG management, the Company agreed to accept $422,675 as
settlement of the amount due. This transaction resulted in a loss to the
Company of $31,975.
The Company received the funds in December 1995. All creditors have been paid.
The Company intends to use the excess funds for drilling oil and gas prospects.
INFLATION
The Company's activities have not been, and in the near term are not expected to
be, materially affected by inflation or changing prices in general. The
Company's oil exploration and production activities are generally affected by
prevailing prices for oil, however. (See ITEM 1. BUSINESS.)
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data included in this report are
contained in ITEM 14, EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
Set forth below are the name, age and position of each executive officer and
director of the Company who served during the year ended December 31, 1995.
NAME AGE POSITION(S) TERM BEGAN TERMINATED
Michael P. O'Brien 41 President/Director 1993 N/A
Paul B. McCully 65 Vice President/ 1993 January 3, 1996
Director
S. Randell Wyatt 37 Secretary/Treasurer 1993 N/A
& Director
All directors of the Company serve for one year and/or until their respective
successors are elected and qualified. Executive officers serve at the pleasure
of the board of directors.
MICHAEL P. O'BRIEN, age 41, has been involved with the oil and gas industry for
20 years. He served as Vice President Land for a large independent oil and gas
company where he was employed from 1974 to 1988. He is currently on the board
of directors and serves as an officer in two companies relating to drilling,
exploration, production and operating, including Las Colinas Oil Corp., where he
has been employed since 1988 (See ITEM 13, CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS). He has completed courses with the Institute for Energy
Development, an extension of the University of Oklahoma, and is currently
classified as a Registered Land Professional with the American Association of
Petroleum Landmen.
PAUL B. MCCULLY, age 65, is chairman of Las Colinas Oil Corp., an oil and gas
exploration and production firm, where he has been employed since 1988 (See
ITEM 13, CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS). In 1961, Mr. McCully
founded Will-Mc Oil Corp., which was engaged in exploration and production of
oil and gas. He was president of Will-Mc Oil Corp. from 1963 to 1988, incluing
the period following the sale of the company in 1986 to Harbert Energy,
Birmingham, Alabama. Mr McCully received a B.S. degree in Petroleum Enginee
in 1952 from Texas Tech University. Mr. McCully resigned January 3, 1996.
S. RANDELL WYATT, age 37, has been employed in the oil and gas industry since
1982. He worked in the Land Department of an independent oil and gas company
where he was responsible for negotiating and preparing contracts and agreements,
oil and gas leases, title examinations and administrating prospects from
inception to the pipeline. He was previously employed by Las Colinas Oil Corp.
and was responsible for various accounting functions, insurance matters,
preparation of contracts and agreements, title examinations for land
acquisition and revenue set ups for producing wells (See ITEM 13, CERTAIN
RELATIONSHIPS RELATED TRANSACTIONS).
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Based solely upon a review of forms 3, 4, and 5 and amendments thereto,
furnished to the Company during or respecting its last fiscal year, no director
officer, beneficial owner of more than 10% of any class of equity securities
the Company or any other person known to be subject to Section 16 of the
Exchange Act failed to file on a timely basis reports required by Section 16
of the Exchange Act for the last fiscal year.
ITEM 11. EXECUTIVE COMPENSATION
The following is a summary of cash compensation paid to the President during the
last fiscal year. None of the Company's other executive officers received total
compensation in excess of $100,000.
Year Ended
December 31 Title Compensation
Michael P. O'Brien 1995 Pres/Dir $13,961
1994 -0-
1993 -0-
Paul B. McCully resigned as an officer and director of the Company on January 3,
1996. The Board of Directors approved issuing 25,000 shares of common stock of
the Company to Mr. McCully as compensation for prior service.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following tables set forth as of December 31, 1995, the number of shares of
the Company's outstanding Common Stock owned of record or beneficially by each
person who held of record, or was known by the Company to own beneficially,
more than 5% of the Company's 861,280 shares of Common Stock outstanding, and
the name and shareholdings of each officer, director, and all officers and
directors as a group.
NAME OF PERSON
OR GROUP OWNERSHIP SHARES PERCENT
Principal Shareholders
Wellshire Securities, Inc. Direct 405,483 47.08%
D. B. Brown Family Trust Direct 58,335 6.77%
Serliana A. G. Direct 73,509 8.53%
Officers & Directors None
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Officers and Directors, Michael P. O'Brien and Paul B. McCully are officers
directors and employees of Las Colinas Oil Corp (Las Colinas). The Company
occupies office space within the offices leased by Las Colinas and utilizes
space, supplies, office equipment, etc. Las Colinas has agreed to supply the
services for a monthly fee. The Company paid $19,000 to Las Colinas under the
agreement in the year ended December 31, 1995. The amounts paid were as
follows: January through April was $2,500 per month, May through July was
$1,750 per month and August through December was $750 per month.
Las Colinas Oil Corp. is the operator for certain oil and gas properties in
which the Company owns a working interest. As the operator, Las Colinas charges
a fee for services and pays the expenses incidental to the wells. These
expenses including the service fees are billed to the Company on a monthly
basis. Las Colinas also collects and disburses a portion of oil & gas revenues
for the Company, and at December 31, 1995, the balance owed to the Company w
$10,144. Las Colinas may also own a working interest in the same properties
the Company.
The Company also owns an interest in certain oil and gas properties which are
operated by operators other than Las Colinas Oil Corp. In these instances the
direct charges to the wells are similar to those charges by Las Colinas Oil
Corp. Revenue is distributed either direct from the first purchaser to the
Company or through the operator to the Company.
The oil and gas prospects and producing properties owned by the Company were
acquired from Las Colinas Oil Corp.
On August 14, 1995 the Company sold the producing properties to an
officer/director for $225,000. This transaction resulted in a loss to the
Company of $252,231. The Company used the economic value of the wells in the
reserve report prepared by an independent engineering firm dated January 1, 1995
to arrive at an equitable value for the transaction. The sales price was
determined by adjusting those stated values by a factor representing the time
difference of money to arrive at fair market value. Because of the relationship
between the Company and the Officer/Director, this transaction could not be
considered to be a result of arm's length negotiations. However, the terms of
the transaction were approved by a majority of the disinterested members of the
board of directors and, in the opinion of management of the Company, are as
favorable to the Company as could be obtained in arm's length transactions.
Further, management believes that the method of determining fair market value
used in this transaction is an industry accepted method in these types of
transactions.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, AND REPORTS ON FORM 8-K
A. The following documents are filed as part of this report:
(1) Financial Statements Page
Report of independent auditor F-1
Balance Sheets as of December 31, 1995 and 1994 F-2
Statements of Operations for the years
ended December 31, 1995, 1994 and 1993 F-3
Statements of Stockholders' Equity as of
December 31, 1995, 1994 and 1993 F-4
Statements of Cash Flow for the years
ended December 31, 1995, 1994 and 1993 F-5 - F-6
Notes to Financial Statements F-7 - F-13
Schedules other than those listed above are omitted because of the absence o
conditions which they are required or because the information is shown in th
financial statements.
B. Reports on Form 8-K filed during the last quarter of fiscal 1994:
None
C. EXHIBITS
The following exhibits are included as part of this report (see exhibit inde
separate exhibit volume):
SEC
Exhibit Reference Title of Document Location
No. No.
Item 2. Acquisition Agreement between Sunray Incorporated
2.01 2 Minerals, Inc. and Waste Oil Recycling, Inc., (3) by
entered into as of November 30, 1993 reference
2.02 2 Articles of Merger of Waste Oil Recycling Incorporated
Corp. into Sunray Minerals, Inc., and related (3) by
Plan of Merger reference
Item 3. Incorporated
3.01 3 Articles of Incorporation (1) by
reference
3.02 3 Amendment to Articles of Incorporation Incorporated
(1)
by reference
3.03 3 Certificate of Amendment to Articles Incorporated
of Incorporation (2)
by Reference
3.04 3 Bylaws Incorporated
(1)
by Reference
Item 10. Material Contracts
10.01 10 Asset Acquisition Agreement between Sunray Incorporated
Minerals, Inc. and Benitex, A.G. entered into (3)
as of November 30, 1993 by Reference
10.02
10 Stock Purchase Acquisition Agreement between Incorporated
Sunray Minerals, Inc. and Benitex, A.G., (3) by
entered into as of December 10, 1993 Reference
(1) Incorporated by reference from the Registrant's registration statement on
form S-18 filed with the Commission, SEC file number 33-509-D.
(2) Incorporated by reference from the Registrant's annual report on form 10-k
for the fiscal year ended December 31, 1991.
(3) Incorporated by reference from Registrant's annual report on form 10-K for
the fiscal year ended December 31, 1993.
SIGNATURES
Pursuant to the requirements of section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the Company has duly caused this report to be signed
its behalf by the undersigned, thereto duly authorized.
SUNRAY MINERALS, INC.
Date: August 23, 1996 /s/Michael P. O'Brien, President
and Director
Pursuant to the requirements of the Securities and Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the Company
and in capacities and on the dates indicated.
Date: August 23, 1996 /s/ Michael P. O'Brien, President
and Director
Date: August 23, 1996 /s/ S. Randell Wyatt, Secretary/
Treasurer and Director
J. S. OSBORN, P.C.
Certified Public Accountants
17430 Campbell Road, Suite 114
Dallas, Texas 75252
214-735-0033 Fax 214-735-0035
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
of Sunray Minerals, Inc.
Irving, Texas
We have audited the accompanying balance sheets of Sunray Minerals, Inc. (a
Nevada corporation) as of December 31, 1995 and 1994 and the related statements
of operations, stockholders' equity (deficit), and cash flows for each of the
three years in the period ended December 31, 1995. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these 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
misstatement. 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 financial statements referred to above present fairly, in
all material respects, the financial position of Sunray Minerals, Inc. as of
December 31, 1995 and 1994, and the results of its operations and its cash for
for each of the three years in the period ended December 31, 1995 in conformity
with generally accepted accounting principles.
J. S. Osborn, P.C.
Dallas, Texas
May 6, 1996
SUNRAY MINERALS, INC.
BALANCE SHEET
December 31, 1995 and 1994
ASSETS
-----------
1995 1994
------------------------------
CURRENT ASSETS:
Cash $ 415,809 $ 4,003
Account receivable-Trade 2,125 17,151
Accounts receivable-Related party 10,144 10,167
Interest receivable 114 11,105
----------- -----------
Total Current Assets 428,192 42,426
PROPERTY AND EQUIPMENT:
Oil and gas properties 486,000 1,277,887
Less: Accumulated depreciation,
depletion and amortization (91,030) (402,035)
---------- ----------
Total Property & Equipment 394,970 875,852
OTHER ASSETS:
Restricted common stock 510,000 510,000
Mortgage note receivable 0 445,972
---------- ----------
Total Other Assets $ 510,000 955,972
---------- ----------
TOTAL ASSETS $ 1,333,162 $ 1,874,250
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 2,810 $ 16,220
Payroll taxes payable $ 1,490 474
---------- ----------
Total Current Liabilities 4,300 16,694
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value;
10,000,000 Shares authorized,
no shares issued 0 0
Common stock, $0.01 par value,
20,000,000 shares authorized;
861,280 shares issued and
outstanding at December 31, 1995
and 1994 8,613 8,613
Additional paid-in capital 2,956,803 2,956,803
Accumulated deficit (1,636,554) (1,107,860)
---------- ----------
Total Stockholders' Equity 1,328,862 1,857,556
========== ==========
Total Liabilities & Stockholders'
Equity $1,333,162 $1,874,250
========== ==========
SUNRAY MINERALS, INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993
------------------------------------------------------------------
REVENUE:
Sales from oil and gas $ 103,541 $ 198,175 $ 0
Sales from oil and gas-
related party 0 0 11,494
Interest 28,624 34,503 7,575
Other income 191 1,920 0
---------- ---------- ---------
Total Revenue 132,356 234,598 19,069
OPERATING EXPENSE:
Lease operating 73 0 0
Lease operating-related party 59,375 117,734 8,249
Depreciation and depletion 35,792 396,085 5,951
Dry hole costs 135,132 81,888 0
Interest 0 105 0
General and administrative 139,083 67,863 24,057
General and administrative-
related party 20,631 31,569 2,851
---------- ---------- ---------
Total Operating Expense 390,086 695,244 41,108
OTHER INCOME AND EXPENSE:
Loss on sale of property 238,989 0 0
Loss on mortage note receivable 31,975 0 0
---------- ---------- ---------
Total Other Income and Expense 270,964 0 0
---------- ---------- ---------
NET INCOME (LOSS) $ (528,694) $ (460,646) $ (22,039)
Weighted average shares outstanding 861,280 741,021 96,196
========== ========= =========
EARNING (LOSS) PER SHARE:
Earning (loss) per share $ (0.61) $ (0.62) $ (0.23)
SUNRAY MINERALS, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
December 31, 1995, 1994, and 1993
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
1995 1994 1993
- -------------------------------------------------------------------------------------------------
Shares Amount Shares Amount Shares Amount
PREFERRED STOCK:
Balance at beginning of year 0 $ 0 0 $ 0 0 $ 0
------ ------- ------- ------- ------ ---------
Balance at end of year 0 $ 0 0 $ 0 0 $ 0
COMMON STOCK:
Balance at beginning of year 861,280 $ 8,613 686,280 $ 6,863 41,113 $ 411
Issuance of stock 175,000 1,750 645,167 6,452
------- -------- ------- ---------- ------- ---------
Balance at end of year 861,280 $ 8,613 861,280 $ 8,613 686,280 $ 6,863
ADDITIONAL PAID-IN CAPITAL:
Balance at beginning of year $2,956,803 $2,433,553 $ 599,034
Issuance of stock 523,250 1,834,519
Balance at end of year $2,956,803 $ 2,956,803 $2,433,553
ACCUMULATED DEFICIT:
Balance at beginning of year $(1,107,860) $ (647,214) $ (625,175)
Net loss (528,694) (460,646) (22,039
--------- --------- ---------
Balance at end of year $(1,636,554) $(1,107,860) $ (647,214)
--------- --------- ---------
TOTAL STOCKHOLDERS'
EQUITY (DEFICIT) $ 1,328,862 $ 1,857,556 $1,793,202
</TABLE>
SUNRAY MINERALS, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 1995, 1994, and 1993
1995 1994 1993
---------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(528,694) $(460,646) $ (22,039)
Adjustments to reconcile net loss to
net cash (used) by operating
activities:
Depreciation and depletion 35,791 396,084 5,951
Unrealized loss on marketable securities 0 0 0
Issuance of stock for services 0 0 0
Loss on sale of properties 220,091 0 0
Loss on sale of mortgage note principal 23,297 0 0
Changes in working capital:
(Increase) decrease in
Accounts receivable 15,026 (17,151) 0
Accounts receivable-related party 23 1,326 (11,493)
Interest receivable 10,991 (3,530) (7,575)
Increase (decrease) in:
Accounts payable (13,410) (10,742) 12,268
Accounts payable-related party 0 (16,287) 6,766
Payroll taxes payable 1,016 474 0
NET CASH PROVIDED (USED)
BY OPERATING ACTIVITIES (235,869) (110,472) (16,122)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of properties 0 (474,416) 0
Sale of properties 225,000 0 0
Collection of Note Receivable 422,675 54,028 0
-------- -------- --------
NET CASH PROVIDED (USED)
BY INVESTING ACTIVITIES: 647,675 (420,388) 0
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of stock 0 525,000 27,500
-------- -------- --------
NET CASH PROVIDED
BY FINANCING ACTIVITIES: 0 525,000 27,500
NET INCREASE (DECREASE) IN CASH: 411,806 (5,860) 11,378
CASH AT BEGINNING OF YEAR 4,003 9,863 (1,515)
--------- -------- --------
CASH AT END OF YEAR $ 415,809 $ 4,003 $ 9,863
========= ========= ========
See accompanying notes.
SUNRAY MINERALS, INC.
STATEMENTS OF CASH FLOWS
For The Years Ended December 31, 1995, 1994, and 1993
SUPPLEMENTAL DISCLOSURE OF
--------------------------
CASH FLOW AND NON-CASH INVESTING ACTIVITIES
-------------------------------------------
1995 1994 1993
---------------------------------------------------------------------
CASH FLOW INFORMATION:
Interest paid $ 0 $ 105 $ 0
Income taxes paid 0 0 0
NON-CASH INVESTING ACTIVITIES:
Common stock issued for:
Property and equipment $ 0 $ 0 $ 803,471
Restricted common stock 0 0 510,000
Mortgage note receivable 0 0 500,000
--------- -------- --------
Total $ 0 $ 0 $1,813,471
========= ========= =========
SUNRAY MINERALS, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1995 and 1994
Note A - Nature of Business and Summary of Significant Accounting Policies:
History:
The Company was organized August 22, 1985, as a Nevada corporation under the
name Tarragon Corporation for the purpose of seeking, investigating, and, if
such investigation warrants, acquiring an interest in potential business
opportunities. The Company's name was changed to Sunray Minerals, Inc. on
December 31, 1991. The Company has not paid a dividend to its investors.
The Company reverse split its issued and outstanding common stock on the
basis of 1:100 for shareholders of record November 30, 1993. This action
reduced the outstanding common shares from 4,111,319 to 41,113.
The Company entered into an agreement with Waste Oil Recycling Corporation to
merge their assets into the Company in return for the Company's common stock.
The merger was completed November 30, 1993.
The Company entered into an agreement with Benitex, A.G. to acquire working
interests in producing and nonproducing oil and gas wells plus undeveloped oil
and gas leases located in Oklahoma. The Company exchanged its stock for the
properties. This exchange was completed on December 1, 1993.
The Company commenced oil and gas operations in December 1993.
During 1995 the Company sold most of its producing properties.
Basis of Accounting:
It is the Company's policy to prepare its financial statements on the accrual
basis of accounting in accordance with generally accepted accounting
principles. Receipts are recorded as income in the preiod in which they are
earned and expenses are recognized in the period in which the related liability
is incurred.
Cash and Cash Equivalents:
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments with a maturity of three months or less to be cash
equivalents.
Concentration of Credit Risks:
The Company places its cash investments in high credit quality instruments
and, by policy, limits the amount of credit exposure to any one financial
institution.
Earnings (Loss) per Common Share:
Earnings (loss) applicable to common stock is based on the weighted average
number of shares of common stock and common stock equivalents outstanding.
Property and Equipment:
The Company follows the successful efforts method of accounting for
exploration, development and production of oil and gas reserves, whereby all
productive costs are capitalized and unproductive costs are expensed in the
year incurred. Geological and geophysical costs and costs of carrying and
retaining undeveloped properties are charged to expense as incurred. Costs of
drilling exploratory wells and other test wells that do not find proved
reserves are charged to expense. Costs of development wells or other
successful wells are capialized and depleted using the units of production
method based on total proved reserves applicable to each property. Costs of
unproved properties are assessed periodically, and loss recognized if
the properties are impaired. Estimates of oil and gas reserves were prepared
by a related party engineer. Net capitalized costs of oil and gas properties
are subject to a ceiling test. For ceiling test purposes, the Company compares
its undiscounted standardized measure of future net cash flows from estimated
production to net oil and gas properties. There were charges to depletion in
the amounts of $179,244, relating to ceiling test limitations in 1994. The
Company has working interests in developed and undeveloped leases located in
Texas and Oklahoma. Most of these leases are operated by an affiliate.
Upon sale or retirement of depreciable or depletable proeprty, the cost and
related accumulated depreciation, depletion and amortization are removed and
gain or loss is recognized. Renewals and replacements that improve or extend
the useful life of existing properties are capitalized.
Depletion and Depreciation:
The Company will deplete its cost in the leases and related equipment on a
lease by lease basis using the units of production method based upon the amount
of production in relation to its estimated reserves as determined by current
engineering studies.
Oil and Gas Revenues:
Sales from oil and gas are accrued in the month of actual production.
Income Tax:
The Company is subject to the greater of federal income taxes computed under
the regular system or the alternative minimum tax (AMT) system. No provision
for income taxes has been made due to the Company having an accumulated net
operating loss.
The Company adopted Statement of Financial Accounting Standards ("SFAS") No.
109, "Accounting for Income Taxes," effective January 1, 1993.
Note B - Property and Equipment:
Property and Equipment at cost, are summarized as follows:
1995 1994
------ ------
Oil and gas properties, successful
efforts method:
Producing leasehold costs $ 74,229 $ 783,867
Nonproducing leasehold costs 315,722 346,405
Intangible development costs 84,965 63,331
Lease and well equipment 11,084 84,284
--------- ---------
$ 486,000 $1,277,887
Less accumulated depreciation and depletion 91,030 402,035
--------- ---------
$ 394,970 $ 875,852
Costs incurred in oil and gas property acquisition, exploration and development
activities:
1995 1994 1993
Acquisition costs $ 10,001 $ 400,648 $ 803,471
Exploration costs 101,820 0 0
Development costs 21,358 73,768 0
Note C - Investment in Restricted Common Stock:
The Company has recorded as an Other Asset an investment in 85,000 shares of
Great Western Asset Group, Inc. This investment was one of the assets acquired
as a result of the merger with Waste Oil Recycling Corp. Great Western Asset
Group, Inc., located in Mesa, Arizona, owns, manages and invests in property
and unimproved real estate in the southwestern United States. These shares
are held as restricted shares and cannot currently be sold or otherwise
transferred. These shares are accounted for using the cost method.
Note D - Mortgage Note Receivable:
The Company recorded as an Other Asset a mortgage note receivable in the amount
of $445,972 in 1994. The mortgage provided for interest at a rate of 7%
annually whereby only interest payments were made on an annual basis. The
Company held a subordinated position collateralized by a deed of trust and
assignment of rents for an office building located in Mesa, Arizona. Interest
income in the amount of$11,105 was accrued as of December 31, 1994. The
building was sold in 1995 and the Company accepted $422,675 as payment in
full of this obligation. The Company recorded a loss in the amount of $31,975
as a result of this transaction.
Note E - Common Stock:
The Company on November 10, 1993 effected a 1 for 100 reverse stock stplit for
shareholders of record on November 30, 1993. The Company issued 175,000 shares
for cash and 745,167 shares for assets in 1994 and 1993, respectively.
Note F - Income Taxes:
The Company has net operating loss carryforwards totaling $651,334 that is
available to offset its future income tax liability.
No deferred tax asset has been recognized for the operating loss carryforward
as it is more likely thannot that all or a portion of the net operating loss
will not be recognized and any valuation allowance would reduce the benefit
to zero.
Note G - Related Party Transactions:
The Company's officers and directors are officers, directors and employees of
Las Colinas Oil Corp. (Las Colinas). The Company occupies office space within
the offices leased by Las Colinas and utilizes their personnel, supplies and
office equipment. Las Colinas agreed to supply these services for a fixed
monthly fee. During 1995,1994 and 1993 the Company recorded $19,000, $30,000
and $4,793 respectively as an expense under this agreement.
Las Colinas is the Operator for certain oil & gas properties in which the
Company owns a working interest. As the operator, Las Colinas charges a fee
for services and pays the expenses incidental to the leases. These expenses
including the service fees are billed to the Company on a monthly basis. Las
Colinas also collects and disburses oil & gas revenues for certain properties
of the Company. The balance owed to the Company for oil & gas revenues
was $10,144 and $10,167 at December 31, 1995 and 1994 respectively. Las
Colinas may also own a working interest in the same properties as the Company.
In 1994 the Company issued 175,000 shares of common stock to Benitex, A.G. for
cash $525,000. These funds were used primarily to purchase nonproducing
properties from Las Colinas. The value of these properties was determined by
actual costs to Las Colinas or independent third party appraisals.
During 1995 the Company sold to an affiliate the majority of its existing
producing properties for $225,000 cash. The sales price was calculated using
a discounted net present value based upon an independent reserve appraisal.
The sale of these properties resulted in a net loss to the Company in the
amount of $238,989.
Note H - Subsequent Events (unaudited):
During the first quarter of 1996 a director of the Company resigned and the
Company agreed to issue 25,000 shares of its common stock as compensation for
prior service.
Note I - Supplemental information about oil & gas activities (unaudited):
<TABLE> 1995 1994 1993
Oil Gas Oil Gas Oil Gas
BBL MCF BBL MCF BBL MCF
<S> <C> <C> <C> <C> <C> <C>
Beginning Period 38,004 108,643 84,264 593,559 0 0
Revision of previous
estimates 4,777 155,907 (45,159) (445,497) 0 0
Additions 5,617 0 7,718 1,935 84,762 596,641
Dispositions (39,231) (129,254) 0 0 0 0
Production (4,847) (17,966) (8,279) (41,344) (498) (3,042)
------- -------- ------- -------- ------- ------
End of Period 4,320 117,330 38,004 108,653 84,264 593,599
======= ======== ======= ======= ======= =======
</TABLE>
Following are the standard measures of discounted future net cash flows and
changes therein relating to proved oil and gas reserves as of December
31, 1995, 1994 and 1993:
1995 1994 1993
-----------------------------------------------
Future cash flows $ 162,122 $ 933,100 $2,521,860
Future production costs (75,794) (476,090) (604,590)
0 0 0
---------- ----------- -------------
Future net cash flows 86,328 457,010 1,917,270
10% annual discount
for estimates timing
of cash flows (33,567) (148,200) (843,220)
---------- ----------- -------------
Standard measure of
discounted future
net cash flows $ 52,761 $ 308,810 $ 1,074,050
========== ========== ============
The principal sources of changes in the standardized measure of discounted
future net cash flows were as follows:
Standardized measure of
discounted future net
cash flows - beginning
of year $ 308,810 $ 1,075,050 $ 0
Sales of oil and gas
produced, net of
production costs (44,093) (80,441) (3,245)
Extensions, discoveries
and improved recovery
less related costs 0 0 216,530
Revisions of previous
quantity estimates 13,044 (1,168,489) 0
Purchase of reserves
in place 0 0 0
Sales of reserves
in place (225,000) 0 0
Accretion of discount 0 9,274 57,294
------- ---------- --------
Standardized measure
of discounted future
net cash flows - end
of year $ 52,761 $ 308,810 $ 1,074,050
