<PAGE>
U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended July 31, 2000
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
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Commission File No. 33-2249-FW
MILLER PETROLEUM, INC.
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(Name of Small Business Issuer in its Charter)
TENNESSEE 62-1028629
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(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
3651 Baker Highway
Huntsville, Tennessee 37756
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(Address of Principal Executive Offices)
Issuer's Telephone Number: (423) 663-9457
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 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.
(1) Yes X No (2) Yes X No
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APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Not applicable.
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date:
July 31, 2000
7,121,191
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Financial Statements of Miller Petroleum, Inc., a Tennessee
corporation (the "Company"), required to be filed with this Quarterly Report
were prepared by management and reviewed by Charles M. Stivers, Certified
Public Accountant of Manchester, Kentucky and commence on the following page,
together with related Notes. In the opinion of management, the Financial
Statements fairly present the financial condition of the Registrant.
<TABLE>
MILLER PETROLEUM, INC.
Consolidated Balance Sheets
<CAPTION>
ASSETS
July 31, April 30,
2000 2000
Unaudited
<S> <C> <C>
CURRENT ASSETS
Cash $ 106,908 $39,556
Accounts receivable - trade-, net 2,188,041 781,311
Inventory 484,549 484,549
Work in process 144,812
Prepaid expenses 13,994 27,988
Total Current Assets 2,938,304 1,333,404
FIXED ASSETS
Machinery and equipment 1,218,037 1,343,962
Vehicles 364,332 326,916
Buildings 313,335 313,335
Office Equipment 76,270 76,270
Less: accumulated depreciation (822,231) (833,519)
Total Fixed assets 1,149,743 1,226,964
OIL AND GAS PROPERTIES 652,348 2,311,825
PIPELINE FACILITIES 391,378 411,906
OTHER ASSETS
Land 511,500 511,500
Investments 500 500
Organization Costs 119 178
Total Other Assets 512,119 512,178
TOTAL ASSETS $5,643,892 $5,796,277
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable - trade $284,321 $402,330
Accrued expenses 65,049 50,795
Notes payable - current portion 2,419,663 2,418,566
Total Current Liabilities 2,769,033 2,871,691
LONG-TERM LIABILITIES
Notes payable - related 119,919 127,652
Notes payable 1,193,543 1,269,148
Total Long-Term Liabilities 1,313,462 1,396,800
Total Liabilities 4,082,495 4,268,491
STOCKHOLDERS' EQUITY
Common Stock: 500,000,000 shares
authorized at $0.0001 par value,
7,121,191 and 7,110,691 shares
issued and outstanding 712 711
Additional paid-in capital 2,422,637 2,462,138
Retained Earnings (861,952) (935,063)
Total Stockholders' Equity 1,561,397 1,527,786
TOTAL LIABILITIES AND
STOCKHOLDERS'S EQUITY $5,643,892 $5,796,277
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<TABLE>
MILLER PETROLEUM, INC.
Consolidated Statements of Operations
(UNAUDITED)
Three Months Twelve Months
Ended
July 31,2000 April 30, 2000
<S> <C> <C>
REVENUES
Service and drilling revenue $ 521,948 $ 431,980
Oil and gas revenue 162,016 863,422
Retail sales 991 44,497
Other revenue 123,904 573,244
Total Revenue 808,859 1,913,143
COSTS AND EXPENSES
Cost of sales 253,627 785,553
Selling, general and administrative 106,740 384,653
Salaries and wages 181,137 399,165
Depreciation, depletion and amortization 96,503 479,472
Total Costs and Expenses 638,007 2,048,843
INCOME (LOSS) FROM OPERATIONS 170,852 (135,700)
OTHER INCOME (EXPENSE)
Interest income 113 6,444
Interest expense (97,853) (354,039)
Total Other Income (Expense) (97,740) (347,595)
INCOME TAXES 0 0
NET INCOME (LOSS) 73,112 (483,295)
NET EARNING (LOSS) PER SHARE .01 (0.06)
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 7,116,191 7,012,110
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<TABLE>
MILLER PETROLEUM, INC.
Consolidated Statement of Stockholders' Equity
(UNAUDITED)
Additional
Common Shares Paid-in Retained
Shares Amount Capital Earnings Total
<S> <C> <C> <C> <C> <C>
Balance
April 30, 1999 6,921,556 $692 $2,271,158 ($451,769) $1,820,081
Common stock
issued for cash at
$1.00 per share 185,000 19 184,981 - 185,000
Common stock
issued for cash at
$1.59 per share 3,135 5,000 - 5,000
Common stock
issued for services
at $1.00 per share 1,000 1,000 - 1,000
Net loss for the
year ended
April 30, 2000 (483,295) (483,295)
Balance
April 30, 2000 7,110,691 $711 $2,462,139 $(935,064) 1,527,786
Common stock
repurchased for
$2.00 per share (45,000) (5) (89,996) (90,001)
Common stock
issued for services
at $1.00 per share 5,500 1 5,499 5,500
Common stock
issued for cash
at $0.90 per share 50,000 5 44,995 45,000
Net income for the
three months ended
July 31, 2000 73,112 73,112
Balance
July 31, 2000 7,121,191 $712 $2,422,637 ($861,952) $1,561,397
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
<TABLE>
MILLER PETROLEUM, INC.
Consolidated Statement of Cash Flows
(UNAUDITED)
Three Months Twelve Months
Ended
July 31, 2000 April 31, 2000
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 73,112 ($483,295)
Adjustments to Reconcile Net Income to
Net Cash Provided (Used) by Operating
Activities:
Depreciation, depletion and amortization 96,503 479,472
Allowance for Bad debts 20,533
Common stock issued for services 5,500 1,000
Changes in Operating Assets and Liabilities:
Decrease (increase) in accounts receivable (1,420,724) (484,441)
Decrease (increase) in inventory (11,963)
Decrease (increase) in work in process (144,812)
Increase (decrease) in accounts payable (118,009) 67,123
Increase (decrease) in accrued expenses 14,254 2,755
Net Cash Provided (Used) by Operating
Activities (1,494,176) (408,816)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment (37,416) (11,013)
Purchase of oil and gas properties (47,792)
Purchase of pipeline (2,239)
Net Cash Provided (Used) by Investing
Activities (37,416) (61,044)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on notes payable (82,241) (384,812)
Sale of common stock 45,000 190,000
Repurchase of common stock (90,000)
Proceeds from borrowing 417,714
Sale of Oil and Gas Properties 1,600,260
Sale of Equipment 125,925
Net Cash Provided (Used) by Financing
Activities $1,598,944 $446,978
NET INCREASE IN CASH $67,352 ($22,882)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 39,556 62,438
CASH AND CASH EQUIVALENTS,
END OF PERIOD $106,908 $39,556
CASH PAID FOR
Interest $97,853 $354,039
Income taxes - -
NON-CASH FINANCING ACTIVITIES:
Common stock issued for services $5,500 $ 1,000
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
MILLER PETROLEUM, INC.
Notes to the Consolidated Financial Statements
April 30, 2000 and July 31, 2000
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Certain information and footnote disclosures normally included in the
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these financial statements be read in conjunction with the
Registrant's April 30, 2000 Annual Report on Form 1OKSB. The results of
operations for the period ended July 31, 2000 are not necessarily
indicative of operating results for the full year.
The consolidated financial statements and other information furnished
herein reflect all adjustment which are, in the opinion of management of
the Registrant, necessary for a fair presentation of the results of the
interim periods covered by this report.
NOTE 2 - RELATED PARTY TRANSACTIONS
None.
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Item 2. Management's Discussion and Analysis or Plan of Operation.
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Miller Petroleum has over 40,000 acres held by production in
Tennessee. This acreage produces both gas and oil from the Mississippian age
Big Lime Formation. The properties contain a minimum three-year inventory of
conventional drilling locations. A recent "high volume" oil well drilled on
one of these properties showed that the oil reservoir has not yet been
pressure depleted. Miller Petroleum plans to aggressively continue the
development of this Big Lime reservoir. In addition, these properties are
presently being evaluated for their CBM potential.
Recently, the Company sold its interest in Kentucky oil
and gas
properties in order to concentrate its exploration efforts in the East
Tennessee portion of the Eastern Overthrust Belt. Management feels that this
area has tremendous petroleum potential as shown by the development of Swan
Creek Field. Knox Dolomite wells in this field have reserves in excess of 2
Bcf per well. Swan Creek Field is also producing substantial amounts of oil
from a separate shallow reservoir.
Miller Petroleum has obtained a 20 well farmout from
Tengasco, Inc.
in their Swan Creek Field area. Miller has drilled two successful Knox
Dolomite wells in Swan Creek Field proper. A third Knox well drilled on this
farmout by Miller has resulted in a new field discovery on a separate
structure from Swan Creek. Miller Petroleum's most recent well in this field,
the Dewey Sutton #1, encountered significant amounts of light crude oil in the
Trenton Formation. The Sutton #1 is presently being put on pump, and the
Company is in the process of surveying an offset to this Trenton oil
discovery.
At this time Miller Petroleum management has identified 12
additional large structures similar to Swan Creek Field. The company plans to
test these structures as aggressively as possible while continuing to identify
additional targets in the Eastern Overthrust Belt.
Liquidity and Capital Resources
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Cash and cash equivalents at July 31, 2000, increased by $67,352
from the April 30, 2000 balance, due primarily to the increases in the price
for crude oil and natural gas and the increase in our drilling activity.
The Company believes that its current cash flow will be sufficient
to support its cash requirements for the next 12 months.
Results of Operations
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The Company had revenues of $808,859 for the first quarter of its
fiscal year, up from the $502,376 in revenues recognized during the last
quarter.
The Company's net income was $73,112. Income before depreciation,
depletion and amortization for the first quarter was $169,615.
Increases in Miller Petroleum, Inc. revenue is due to the successful
drilling program it commenced this year in Campbell, Claiborne and Hancock
County, Tennessee.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
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On or about January 20, 2000, the Company filed a complaint against Blue
Ridge Group, Inc. in the Chancery Court of Hawkins County at Rogersville,
Tennessee, Case No. 13951, asserting that Blue Ridge had breached a Footage
Drilling Contract with the Company. Miller asserted that Blue Ridge had
breached the said contract by quitting the job without drilling to the
required depth, failing to drill a straight hole, and by damaging the well
bore by failing to conduct its operations in a good and workmanlike manner in
accordance with good industry practice. The plaintiff has asked that it be
awarded its initial payment of $37,000.00 to Blue Ridge, damages occasioned by
the improper deviation of the hole from the vertical plane; damages for the
cost of re-drilling and/or re-working the hole, damages allowed by the parties
contract, further and equitable relief to which it may be entitled, and to
assess the costs of this cause, including Miller's discretionary costs, to
Blue Ridge.
The Blue Ridge action is pending and the Company believes that its
contract with the plaintiff was breached. However, a decision for the
defendant would not have a material effect on the Company.
Item 2. Changes in Securities.
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None.
Item 3. Defaults Upon Senior Securities.
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None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
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None; not applicable.
Item 5. Other Information.
None; not applicable.
Item 6. Exhibits and Reports on Form 8-K.*
(a) Exhibits.
None.
(b) Reports on Form 8-K.
None.
* A summary of any Exhibit is modified in its entirety by reference
to the
actual Exhibit.
SIGNATURES
Pursuant to the requirements 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.
MILLER PETROLEUM, INC.
Date: 09-20-2000 By: /s/ Deloy Miller
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Deloy Miller, CEO and
Director
Date: 09-20-2000 By: /s/ Lawrence L. LaRue
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Lawrence L. LaRue,
Secretary/Treasurer and
Director
Date: 09-20-2000 By: /s/ Herman Gettelfinger
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Herman Gettelfinger
Director
