SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 0-16203
Delta Petroleum Corporation
(Exact name of registrant as specified in its charter)
Colorado 84-1060803
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
555 17th Street, Suite 3310
Denver, Colorado 80202
(Address of principal (Zip Code)
executive offices)
(303) 293-9133
(Registrant's telephone number, including area code)
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. Yes X No___
5,436,758 shares of common stock $.01 par value were outstanding as
of February 10, 1998.
FORM 10-QSB
2ND QTR
FY 1998
INDEX
PART I FINANCIAL INFORMATION
PAGE NO.
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets - December 31, 1997 and
June 30, 1997 (unaudited). . . . . . . . . . . . . .1
Consolidated Statements of Operations -
Three and Six Months Ended
December 31, 1997 and 1996 (unaudited) . . . . . . .3
Consolidated Statement of Stockholders' Equity
Year Ended June 30, 1997 and
Six Months Ended December 31, 1997 (unaudited) . . .5
Consolidated Statements of Cash Flows -
Six Months Ended
December 31, 1997 and 1996 (unaudited) . . . . . . .6
Notes to Consolidated Financial Statements (unaudited) 7
Item 2. Management's Discussion and Analysis
Or Plan of Operations . . . . . . . . . . . . . . . . 10
PART II OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . 13
Item 2. Changes in Securities. . . . . . . . . . . . . . . 13
Item 3. Defaults upon Senior Securities. . . . . . . . . . 13
Item 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . . 13
Item 5. Other Information. . . . . . . . . . . . . . . . . 13
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . 13
DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
December 31, June 30,
1997 1997
ASSETS
Current Assets:
Cash $383,848 393,048
Trade accounts receivable, net of
allowance for doubtful accounts of
$50,000 at December 31, 1997 and
$48,722 at June 30, 259,233 333,535
Other current assets 129,616 10,100
Total current assets 772,697 736,683
Property and Equipment:
Oil and gas properties, at cost (using
the successful efforts method
of accounting):
Undeveloped offshore California properties 6,959,830 6,959,830
Undeveloped onshore domestic properties 876,068 714,605
Developed onshore domestic properties 3,374,455 3,383,523
Office furniture and equipment 80,446 80,446
11,290,799 11,138,404
Less accumulated depreciation and depletion (2,083,632) (2,059,461)
Net property and equipment 9,207,167 9,078,943
Investment in Bion Environmental
Technologies, Inc. (Bion) 1,238,454 503,328
Accounts receivable from officer
and affiliates 143,594 119,419
$11,361,912 10,438,373
December 31, June 30,
1997 1997
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable trade $567,865 776,702
Other accrued liabilities 31,457 21,835
Royalties payable 363,732 468,968
Total current liabilities 963,054 1,267,505
Stockholders' Equity
Preferred stock, $.10 par value;
authorized 3,000,000 shares; none issued - -
Common stock, $.01 par value;
authorized 300,000,000 shares,
issued 5,436,758 shares at December 31,
1997 and 5,230,631
shares at June 30, 1997 54,368 52,306
Additional paid-in capital 25,388,313 24,950,128
Cumulative unrealized gain (loss) 544,039 (213,969)
Accumulated deficit (15,587,862) (15,617,597)
Total stockholders' equity 10,398,858 9,170,868
Commitments and contingencies
$11,361,912 10,438,373
DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
December 31, December 31,
1997 1996
Revenue:
Oil and gas sales $476,055 432,698
Gain on sale of oil and gas properties 197,542 -
Other revenue 73,766 58,116
Total revenue 747,363 490,814
Expenses:
Lease operating expenses 94,632 134,736
Depreciation and depletion 63,446 80,823
Exploration expenses 176,423 70,114
General and administrative 390,729 346,982
Stock option expense 5,478 11,157
Total expenses 730,708 643,812
Net income (loss) $16,655 (152,998)
Basic earnings (loss) per common share $ * (0.03)
Weighted average number of common
shares outstanding 5,283,566 5,037,998
* less than $.01 per share
DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Six Months Ended
December 31, December 31,
1997 1996
Revenue:
Oil and gas sales $793,261 779,349
Gain on sale of oil and gas properties 434,144 -
Other revenue 141,878 120,833
Total revenue 1,369,283 900,182
Expenses:
Lease operating expenses 189,236 248,604
Depreciation and depletion 152,671 179,403
Exploration expenses 226,442 289,734
Abandoned and impaired properties - 180,508
General and administrative 759,390 938,407
Stock option expense 11,809 24,036
Total expenses 1,339,548 1,860,692
Net income (loss) $29,735 (960,510)
Basic earnings (loss) per common share $0.01 (0.20)
Weighted average number of common
shares outstanding 5,257,452 4,914,076
DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
Consolidated Statement of Stockholders' Equity
Year ended June 30, 1997 and six months ended December 31, 1997
(Unaudited)
<TABLE>
Additional
Preferred Stock Common Stock paid-in
Shares Amount Shares Amount capital
<S> <C> <C> <C> <C> <C>
Balance, July 1, 1996 160 $16 4,488,283 44,882 21,299,784
Unrealized gain on equity securities - - - - -
Stock options granted as compensation - - - - 40,469
Preferred stock converted into common stock (160) (16) 396,601 3,966 (3,950)
Shares issued for cash upon exercise of options - - 186,700 1,867 758,977
Shares issued for undeveloped oil and gas properties - - 63,000 630 172,620
Shares issued for developed oil and gas properties - - 500 5 1,604
Shares issued for services - - 7,500 75 29,925
Amortization of consulting expense - - - - -
Shares reacquired and retired - - (4,070) (40) (18,022)
UFG settlement - - 92,117 921 2,668,721
Net loss - - - - -
Balance, June 30, 1997 - - 5,230,631 52,306 24,950,128
Unrealized gain on equity securities - - - - -
Stock options granted as compensation - - - - 11,809
Shares issued for cash upon exercise of options - - 37,000 370 53,380
Shares issued for cash - - 156,950 1,570 348,430
Shares issued for services - - 22,500 225 64,463
Shares reacquired and retired - - (10,323) (103) (39,897)
Net income (loss) - - - - -
Balance, December 31, 1997 - $ - 5,436,758 54,368 25,388,313
</TABLE>
<TABLE>
Cumulative
Unamortized unrealized
consulting gain Accumulated
expense (loss) deficit Total
<S> <C> <C> <C> <C>
Balance, July 1, 1996 (105,000) (255,184) (13,160,590) 7,823,908
Unrealized gain on equity securities - 41,215 - 41,215
Stock options granted as compensation - - - 40,469
Preferred stock converted into common stock - - - -
Shares issued for cash upon exercise of options - - - 760,844
Shares issued for undeveloped oil and gas properties - - - 173,250
Shares issued for developed oil and gas properties - - - 1,609
Shares issued for services - - - 30,000
Amortization of consulting expense 105,000 - - 105,000
Shares reacquired and retired - - - (18,062)
UFG settlement - - - 2,669,642
Net loss - - (2,457,007) (2,457,007)
Balance, June 30, 1997 - (213,969) (15,617,597) 9,170,868
Unrealized gain on equity securities - 758,008 - 758,008
Stock options granted as compensation - - - 11,809
Shares issued for cash upon exercise of options - - - 53,750
Shares issued for cash - - - 350,000
Shares issued for services - - - 64,688
Shares reacquired and retired - - - (40,000)
Net income - - 29,735 29,735
Balance, December 31, 1997 - 544,039 (15,587,862) 10,398,858
</TABLE>
See accompanying notes to consolidated financial statements.
DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
Six Months Ended
December 31, December 31,
1997 1996
<S> <C> <C>
Net cash used in operating activities ($548,556) (931,846)
Cash flows from investing activities:
Additions to property and equipment (509,751) (477,222)
Proceeds from sale of oil and gas properties 663,000 -
Proceeds from sale of securities available for sale 46,532 -
Net cash provided by investing activities 199,781 (477,222)
Cash flows from financing activities:
Stock issued for cash upon exercise of options 13,750 732,157
Issuance of common stock for cash 350,000 -
Increase in accounts receivable from
officer and affiliates (24,175) (4,710)
Net cash provided by financing activities 339,575 727,447
Net decrease in cash (9,200) (681,621)
Cash at beginning of period 393,048 1,629,738
Cash at end of period $383,848 948,117
Supplemental cashflow information:
Cash paid for interest $3,633 -
Non-cash financing activities:
Stock issued for oil and gas properties - 174,859
</TABLE>
See accompanying notes to consolidated financial statements.
DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
Notes to Consolidated Financial Statements
Six Months Ended December 31, 1997 and 1996
(Unaudited)
(1) Basis of Presentation
The accompanying unaudited consolidated financial statements
have been prepared in accordance with the instructions to Form 10-
QSB and, in accordance with those rules, do not include all the
information and notes required by generally accepted accounting
principles for complete financial statements. As a result, these
unaudited consolidated financial statements should be read in
conjunction with the Company's audited consolidated financial
statements and notes thereto filed with the Company's most recent
annual report on Form 10-KSB. In the opinion of management, all
adjustments, consisting only of normal recurring accruals,
considered necessary for a fair presentation of the financial
position of the Company and the results of its operations have been
included. Operating results for interim periods are not
necessarily indicative of the results that may be expected for the
complete fiscal year. For a more complete understanding of the
Company s operations and financial position, reference is made to
the consolidated financial statements of the Company, and related
notes thereto, filed with the Company s annual report on Form 10-
KSB for the year ended June 30, 1997, previously filed with the
Securities and Exchange Commission.
In February 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 128,
Earnings per Share (Statement No. 128) effective for periods ending
after December 15, 1997. Statement No. 128 changes the
computation, presentation and disclosure requirements for earnings
per share for entities with publicly held common stock or potential
common stock. Under such requirements the Company is required to
present both basic earnings per share and diluted earnings per
share. Basic earnings per share is computed by dividing income
available to common stockholders by the weighted-average number of
common shares outstanding during the period. Diluted earnings per
share is computed by dividing income available to common
stockholders by all dilutive potential common shares outstanding
during the period. The Company adopted the provisions of Statement
No. 128 as of December 31, 1997. The application of Statement
No. 128 did not have an effect on the presentation of basic earnings
per common share for any prior periods.
Quarter Ended Quarter Ended
September 30, 1997 December 31, 1997
Weighted average number
of common shares outstanding 5,231,338 5,283,566
Incremental shares from
assumed conversion of options 246,825 431,948
Diluted weighted average number of
common shares outstanding 5,478,163 5,715,514
(2) Investments
The Company adopted Statement of Financial Standards No. 115
as of July 1, 1994. The Company's investment in Bion Environmental
Technologies, Inc. (Bion) is classified as an available for sale
security and reported at its fair market value, with unrealized
gains and losses excluded from earnings and reported as a separate
component of stockholders' equity. During the six months ended
December 31, 1997, the Company realized a gain on the sale of
securities available for sale of $8,694 which is included in other
income.
The cost and estimated fair market value of its investment in
Bion at December 31, 1997 and June 30, 1997 are as follows:
Estimated
Unrealized Market
Cost Gain/(Loss) Value
December 31, 1997 $694,415 544,039 1,238,454
June 30, 1997 $717,297 (213,969) 503,328
(3) Stockholder's Equity
On December 23, 1997, the Company completed a sale of 156,950
shares of the Company's Common stock to an industry participant
with net proceeds to the Company of $350,000.
The Company received proceeds from the exercise of options to
purchase shares of its common stock of $13,750 during the six
months ended December 31, 1997.
During the six months ended December 31, 1997, the Company s
president exercised options to purchase 32,000 shares of the
Company s common stock. Payment for the shares of common stock
purchased upon exercise of the option was made in shares of the
Company s common stock previously owned by the Company s president,
valued at the market price on the date of exercise. The Company
recorded the 10,323 shares of the Company s common stock reacquired
at cost, which shares were subsequently retired.
The Company issued 22,500 shares of the Company s common stock
to a former employee as a part of a severance package. This
transaction was recorded at its estimated fair market value of the
common stock issued, which was based on the quoted market price of
the stock at the time of issuance. The Company also agreed to
forgive approximately $20,000 in debt owed to the Company by the
former employee.
Item 2. Management's Discussion and Analysis or Plan of
Operations
Liquidity and Capital Resources.
At December 31, 1997, the Company had a working capital
deficit of $190,357 compared to a working capital deficit of
$530,822 at June 30, 1997.
The Company's current liabilities include royalties
payable of $363,732 at December 31, 1997 which represent the
Company's estimate of royalties payable on production attributable
to the Company's 91.68% owned subsidiary, Amber Resources Company
("Amber"), interest in certain wells in Oklahoma, including
production prior to the acquisition of Amber. The Company believes
that the operators of the affected wells have paid some of the
royalties on behalf of the Company and have withheld such amounts
from revenues attributable to the Company's interest in the wells.
The Company has contacted the operators of the wells in an attempt
to determine what amounts the operators have paid on behalf of the
Company over the past five years, which amounts would reduce the
amounts owed by the Company. To date the Company has not received
information adequate to allow it to determine the amounts paid by
the operators. The Company has been informed by its legal counsel
that the applicable statue of limitations period for actions on
written contracts arising in the state of Oklahoma is five years.
The statute of limitation has expired for royalty owners to make a
claim for a portion of the estimated royalties that had previously
been accrued. Accordingly, these amounts have been written off and
recorded as other income.
The Company believes that it is unlikely that all claims
that might be made for payment of royalties payable in suspense or
for recoupment royalties payable would be made at one time.
Further, Amber, rather than Delta, would be directly liable for
payment of any such claims. The Company believes, although there
can be no assurance, that it may ultimately be able to settle with
potential claimants for less than the amounts recorded for
royalties payable.
The Company expects to raise additional capital by selling its
common stock in order to fund its capital requirements for its
portion of the costs of the drilling and completion of development
wells on its proved undeveloped properties during the next twelve
months. There is no assurance that it will be able to do so or
that it will be able to do so upon terms that are acceptable. The
Company does not currently have a credit facility with any bank and
it has not determined the amount, if any, that it could borrow
against its existing properties. The Company will continue to
explore additional sources of both short-term and long-term
liquidity to fund its working capital deficit and its capital
requirements for development of its properties including
establishing a credit facility, sale of equity or debt securities
and sale of non-strategic properties. Many of the factors which
may affect the Company's future operating performance and liquidity
are beyond the Company's control, including oil and natural gas
prices and the availability of financing.
On December 23, 1997, the Company completed a sale of 156,950
shares of the Company s Common stock to an industry participant
with net proceeds to the Company of $350,000.
The Company received the proceeds from the exercise of options
to purchase shares of its common stock of $13,750 during the six
months ended December 31, 1997.
After evaluation of the considerations described above, the
Company believes that its cash flow from its existing producing
properties, proceeds from the sale of producing properties, and
other sources of funds will be adequate to fund its operating
expenses and satisfy its other current liabilities over the next
year or longer.
Results of Operations
Net Earnings (Loss). The Company reported net earnings for
the three and six months ended December 31, 1997 of $16,655 and
$29,735 compared to a net loss of $152,998 and $960,510 for the
three and six months ended December 31, 1996, respectively.
Revenue. Total revenue for the three and six months ended
December 31, 1997 were $747,363 and $1,369,283 compared to $490,814
and $900,187 for the three and six months ended December 31, 1996,
respectively. Oil and gas sales for the three and six months
ended December 31, 1997 were $476,055 and $793,261 compared to
$432,698 and $779,349 for the three and six months ended December
31, 1996, respectively. The Company's oil and gas sales were
impacted by an increase in oil and gas prices, the sale of certain
oil and gas properties and the receipt of $75,000 of previously
unrecorded oil revenues relating to a well which had been held in suspense.
Production volumes and average prices received for the three
and six months ended December 31, 1997 and 1996 are as follows:
Three Months Ended Six Months Ended
December 31, December 31,
1997 1996 1997 1996
Production:
Oil (barrels) 6,567 2,187 8,544 4,721
Gas (Mcfs) 123,937 175,962 262,462 326,379
Average Price:
Oil (per barrel) $17.94 $21.92 $17.94 $21.21
Gas (per Mcf) $ 2.89 $2.18 $2.42 $2.08
Lease Operating Expenses. Lease operating expenses were
$94,632 and $189,236 for the three and six months ended December
31, 1997 and $134,736 and $248,604 for the three and six months
ended December 31, 1996, respectively. On a Mcf equivalent basis,
lease operating expenses were $.60 and $.60, respectively, per Mcf
equivalent during the three and six months ended December 31, 1997
compared to $.71 and $.70, respectively, per Mcf equivalent for the
same periods in 1996.
Depreciation and Depletion Expense. Depreciation and
depletion expense for the three and six months ended December 31,
1997 were $63,446 and $152,671 compared to $80,823 and $179,403 for
the same period in 1996. On a Mcf equivalent basis, depreciation
and depletion expense were $.39 and $.48, respectively, per Mcf
equivalent during the three and six months ended December 31, 1997
compared to $.43 and $.51, respectively, per Mcf equivalent for the
same periods in 1996. The decrease in depreciation and depletion
expense can be attributable to the sale of certain oil and gas
properties during the first two quarters of fiscal 1998.
Exploration Expenses. The Company recorded exploration
expenses of $176,423 and $226,442 for the three and six months
ended December 31, 1997 compared to $70,114 and $289,734 for the
same period in 1996. Exploration costs were attributed to the
Company's participation in the shooting of 3-D seismic on
prospects in the Sacramento Basin in Northern California. By
virtue of this seismic activity, the Company has identified
numerousnew drilling locations. Recently the Company began
drilling on these properties and expects to continue doing so for
the next few years.
Abandoned and Impaired Expense. The company recorded an
expense for abandonment and impairment of oil and gas properties
of $180,508 relating to a dry hole for the six months ended
December 31, 1996.
General and Administrative Expenses. General and
administrative expenses for the three and six months ended
December 31, 1997 were $390,729 and $759,390 compared to $346,982
and $938,407 for the same periods in 1996. General and
administrative expenses for the six months ended December 31,
1997 decreased from the prior year as a result of a decrease in
salaries and public relation expenses.
Future Operations
The Company's Offshore California proved undeveloped
reserves are attributable to its interests in four federal units
(plus one additional lease) located offshore California near
Santa Barbara. While these interests represent ownership of
substantial oil and gas reserves classified as proved
undeveloped, the cost to develop the reserves will also be very
substantial. The Company may be required to farm out all or a
portion of its interests in these properties if it cannot fund
its share of the development costs. There can be no assurance
that the Company can farm out its interests on acceptable terms.
If the Company were to farm out its interests in these
properties, its share of the proved reserves attributable to the
properties would be decreased substantially. The Company may
also incur substantial dilution of its interests in
the properties if it elects to use other methods of financing the
development costs.
These units have been formally approved and are regulated by
the Minerals Management Service of the Federal Government.
However, due to a history of opposition to offshore drilling and
production in California by some individuals and groups, the
process of obtaining all of the necessary permits and
authorizations to develop the properties will be lengthy and even
after all required approvals are obtained, lawsuits may possibly
be filed to attempt to further delay the development of the
properties. While the Federal Government has recently attempted
to expedite this process, there can be no assurance that it will
be successful in doing so. The Company does not have a
controlling interest in and does not act as the operator of any
of the offshore California properties and consequently will not
control the timing of either the development of the properties or
the expenditures for development. Management and its independent
engineering consultant have considered these factors relating to
timing of the development of the reserves in the preparation of
the reserve information relating to these properties. As
additional information becomes available in the future, the
Company's estimates of the proved undeveloped
reserves attributable to these properties could change, and such
changes could be substantial.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. The Company is not engaged in any
material pending legal proceedings to which the Company or its
subsidiaries are a party or to which any of its property is
subject.
Item 2. Changes in Securities. None.
Item 3. Defaults Upon Senior Securities. None.
Item 4. Submission of Matters to a Vote of Security
Holders. None
Item 5. Other Information. None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
27. Financial Data Schedule.
(b) Reports on Form 8-K:
None.
SIGNATURE
Pursuant to the requirements of Section 13 or 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.
DELTA PETROLEUM CORPORATION
(Registrant)
s/Aleron H. Larson, Jr.
Aleron H. Larson, Jr.
Chairman of the Board, Treasurer and
Chief Financial Officer
s/Kevin K. Nanke
Kevin K. Nanke, Controller and
Principal Accounting Officer
Date: February 12, 1998
INDEX
(2) Plan of Acquisitions, Reorganization, Arrangement,
Liquidation, or Succession. Not applicable.
(3) Articles of Incorporation and By-laws. The Articles of
Incorporation and Articles of Amendment to Articles of
Incorporation and By-laws of the Registrant were filed as
Exhibits 3.1, 3.2, and 3.3, respectively, to the
Registrant's Form 10 Registration Statement under the
Securities and Exchange Act of 1934, filed September 9,
1987, with the Securities and Exchange Commission and are
incorporated herein by reference. Statement of Designation
and Determination of Preferences of Series A Convertible
Preferred Stock of Delta
Petroleum Corporation is incorporated by Reference to
Exhibit 28.3 of the Current Report on Form 8-K dated June
15, 1988. Statement of Designation and Determination of
Preferences of Series B Convertible Preferred Stock of Delta
Petroleum Corporation is incorporated by reference to
Exhibit 28.1 of the Current Report on Form 8-K dated August
9, 1989. Statement of Designation and Determination of
Preferences of Series C Convertible Preferred Stock of Delta
Petroleum Corporation is incorporated by reference to
Exhibit 4.1 of the Current Report on Form 8-K dated June 7,
1996.
(4) Instruments Defining the Rights of Security Holders.
Not applicable.
(9) Voting Trust Agreement. Not applicable.
(10) Material Contracts. Not applicable.
(11) Statement Regarding Computation of Per Share Earnings. Not
applicable.
(12) Statement Regarding Computation of Ratios. Not applicable.
(13) Annual Report to Security Holders, Form 10-Q or Quarterly
Report to Security Holders. Not applicable.
(16) Letter re: Change in Certifying Accountants. Not applicable.
(17) Letter re: Director Resignation. Not applicable.
(18) Letter Regarding Change in Accounting Principals. Not
applicable.
(19) Previously Unfiled Documents. Not applicable.
(21) Subsidiaries of the Registrant. Not applicable.
(22) Published Report Regarding Matters Submitted to Vote of
Security Holders. Not applicable.
(23) Consent of Experts and Counsel. Not applicable.
(24) Power of Attorney. Not applicable.
(27) Financial Data Schedule. File herewith electronically.
(99) Additional Exhibits. Not applicable.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> DEC-31-1997
<CASH> 383,848
<SECURITIES> 0
<RECEIVABLES> 259,233
<ALLOWANCES> 50,000
<INVENTORY> 0
<CURRENT-ASSETS> 772,697
<PP&E> 11,290,799
<DEPRECIATION> 2,083,632
<TOTAL-ASSETS> 11,361,912
<CURRENT-LIABILITIES> 963,054
<BONDS> 0
0
0
<COMMON> 54,368
<OTHER-SE> 10,344,490
<TOTAL-LIABILITY-AND-EQUITY> 11,361,912
<SALES> 793,261
<TOTAL-REVENUES> 1,369,283
<CGS> 0
<TOTAL-COSTS> 1,339,548
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 29,735
<INCOME-TAX> 0
<INCOME-CONTINUING> 29,735
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 29,735
<EPS-PRIMARY> .01
<EPS-DILUTED> .00
</TABLE>
