UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES ACT OF 1934
For the transition period from to.
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Commission File No. 1-6336
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Petrominerals Corporation
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(Exact name of registrant as specified in its charter)
Delaware No. 95-2573652
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
915 South Westminster Avenue, Alhambra, California 91803
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(Address of principal executive offices)
(818) 284-8842
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(Registrant's telephone number, including area code)
Check whether the Registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities 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.
[ ] [X]
No Yes
The number of shares of Registrant's common stock outstanding at March 31,
1997 was 8,475,336.
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PETROMINERALS CORPORATION
INDEX
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Page
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PART I - FINANCIAL INFORMATION
Item 1 Unaudited Consolidated Financial Statements
Consolidated Balance Sheets March 31, 1997
and December 31, 1996 3
Consolidated Statements of Operations
for the three months ended March 31, 1997 and 1996 5
Consolidated Statements of Cash Flows
for the three months ended March 31, 1997 and 1996 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II - OTHER INFORMATION 9
SIGNATURES 10
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PART I - FINANCIAL INFORMATION
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Item 1. Unaudited Consolidated Financial Statements
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PETROMINERALS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except par value data)
(Unaudited)
ASSETS
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March 31, December 31,
1997 1996
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Current Assets
Cash and cash equivalents $ 309 $ 614
Accounts receivable, net 174 183
Inventories 61 61
Prepaid expenses 27 16
Other current assets 20 20
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Total Current Assets 591 894
Restricted Cash 40 40
Property and Equipment, net (including
oil and gas properties accounted for
on the successful efforts method) 2,125 2,062
Notes Receivable and Other Assets 459 461
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Total Assets $ 3,215 $ 3,457
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LIABILITIES AND STOCKHOLDERS' EQUITY
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March 31, December 31,
1997 1996
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Current Liabilities
Accounts payable $ 176 $ 464
Current portion of long-term debt 8 8
Accrued liabilities 82 87
Royalties payable 40 42
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Total Current Liabilities 306 601
Long-Term Debt, net of current portion 9 7
Prepetition liabilities 516 521
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Total Liabilities 831 1,129
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Stockholders' Equity
Preferred stock:
$.10 par value, 5,000,000 shares
authorized; no shares issued
and outstanding - -
Common stock:
$.10 par value, 20,000,000 shares
authorized; 8,475,336 shares
issued and outstanding at March 31,
1997 and December 31, 1996, respectively 848 848
Capital in Excess of Par Value 563 563
Retained Earnings 973 917
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Total Stockholders' Equity 2,384 2,328
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Total Liabilities and Stockholders' Equity $ 3,215 $ 3,457
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See accompanying notes to the consolidated financial statements
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PETROMINERALS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
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For the three months
ended March 31,
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1997 1996
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REVENUES
Oilfield services $ 12 $ 2
Oil and gas 325 252
Gain on sale of assets - 2
Other income 31 16
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Total Revenues 368 272
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COSTS AND EXPENSES
Oilfield services 35 -
Oil and gas 130 193
Depreciation, depletion and amortization 28 28
General and administrative 110 88
Interest 1 1
Other expense 8 54
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Total Costs and Expenses 312 364
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Net income (loss) $ 56 $ (92)
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Net income (loss) per share $ .01 $ (.01)
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Weighted Average Common Shares
Outstanding 8,475 8,460
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See accompanying notes to consolidated financial statements.
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PETROMINERALS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
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For the three months
ended March 31,
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1997 1996
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Cash Flows from Operating Activities
Net income (loss) $ 56 $ (92)
Adjustments to reconcile net loss to net cash
provided from operating activities:
Depreciation, depletion and amortization 28 28
Loss on sale of assets - 2
Changes in operating working capital:
Accounts receivable 9 (38)
Prepaid (11) (15)
Inventory - 135
Accounts payable (288) 7
Royalties payable (2) 10
Accrued liabilities (5) (1)
Prepetition liabilities (5) -
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Net Cash Provided (Used) by Operating Activities (218) 36
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Cash Flows from Investing Activities
Capital expenditures (91) (27)
Collection of note receivable 2 4
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Net Cash Provided (Used) by Investing Activities (89) (23)
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Cash Flows from Financing Activities
Principal payment of debt - (16)
Long term debt borrowed 2 -
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Net Cash Provided (Used) by Financing Activities 2 (16)
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Net Decrease in Cash and Cash Equivalents (305) (3)
Cash and Cash Equivalents at beginning of period 654 325
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Cash and Cash Equivalents at end of period $ 349 $ 322
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See accompanying notes to the consolidated financial statements
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PETROMINERALS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED
MARCH 31, 1997 AND 1996
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
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The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting solely of normal recurring
adjustments) which are, in the opinion of management, necessary for a fair
statement of results for the interim periods. The results of operations for
the three month period ended March 31, 1997 are not necessarily indicative of
the results to be expected for the full year.
The accompanying consolidated financial statements do not include footnotes
and certain financial presentations normally required under generally accepted
accounting principles; and, therefore, should be read in conjunction with the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1996.
Certain reclassifications have been made to the 1996 financial statements to
conform to the presentation used in 1997.
NOTE 2 - PER SHARE COMPUTATIONS
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Per share computations are based upon the weighted average number of common
shares outstanding during each year. Common stock equivalents are not included
in the computations since their effect would be anti-dilutive.
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ITEM 2 - Management Discussion and Analysis of Financial Condition and Results
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of Operations
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Financial Condition
The Company had a negative cash flow of approximately $305,000 for the three
months ended March 31, 1997. This decrease in cash was primarily the result
of paying off accrued liabilities associated with the Petrominerals 96-1
turnkey drilling contract. As a result, accounts payable decreased by
approximately $288,000 during this same period of time. The Company does not
currently have any plans to drill additional wells.
Three months ended March 31, 1997 as compared with the three months ended
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March 31, 1996.
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The Company had income from continuing operations of approximately $56,000 for
the three months ended March 31, 1997, as compared to a loss of approximately
$92,000 for the three months ended March 31, 1996. The net loss in 1996 was
primarily the result of remedial expenses associated with oil and gas
operations. This remedial work was not feasible during the periods of
depressed oil prices in the early 1990's, however, the Company was able to
complete this work during 1996.
Business Review
Oil and Gas Segment
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The Company continues to realize the benefit of remedial work that was
performed in the previous year. As a result of this remedial work, the new
well that was drilled by Petrominerals 96-1 and improved oil prices, the
Company's oil and gas revenues have increased by 29% as compared to the three
months ended March 31, 1996. Expenses relating to the production of oil and
gas have decreased by 48% during the same period. Management feels that the
profits during the first quarter will be representative of the next three
quarters of this year.
Oilfield Services Segment
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The Company continues to operate its wholly owned subsidiary Hydro-Test
International, Inc. (HTI) with existing equipment at the remaining facility
near Waller, Texas. There are no current or future plans to expand these
operations. Oilfield service revenues from HTI's operations increased by
$10,000 during the first three months of 1997, as compared to the same period
in 1996, however, oilfield service expenses increased by $35,000 during the
same period. It is difficult to determine if these losses will continue.
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PART II - OTHER INFORMATION
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ITEM 1. LEGAL PROCEEDINGS
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The Company is not a party to nor is its property the subject of any material
legal proceedings other than ordinary routine litigation incidental to its
business, or which is covered by insurance, except as previously disclosed in
the Company's Annual Report on Form 10-KSB for the year ended December 31,
1996.
ITEM 2. CHANGES IN SECURITIES
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None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
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None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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None.
ITEM 5. OTHER INFORMATION
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None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
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(a) Exhibits - None.
(b) Reports on Form 8-K - None.
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SIGNATURES
Pursuant to the requirement 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.
PETROMINERALS CORPORATION
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(Registrant)
Paul L. Howard
President, CEO & Chief Financial Officer
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PETROMINERALS CORPORATION
FORM 10-QSB
FOR THE THREE MONTHS ENDED
MARCH 31, 1997
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<MULTIPLIER> 1,000
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 309
<SECURITIES> 0
<RECEIVABLES> 174
<ALLOWANCES> 0
<INVENTORY> 61
<CURRENT-ASSETS> 591
<PP&E> 2,125
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,215
<CURRENT-LIABILITIES> 306
<BONDS> 0
0
0
<COMMON> 848
<OTHER-SE> 1,536
<TOTAL-LIABILITY-AND-EQUITY> 3,215
<SALES> 337
<TOTAL-REVENUES> 368
<CGS> 165
<TOTAL-COSTS> 165
<OTHER-EXPENSES> 146
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<INCOME-PRETAX> 56
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<NET-INCOME> 56
<EPS-PRIMARY> .01
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