SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
AMENDMENT NO. 1
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
[ ] 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___
6,015,858 shares of common stock $.01 par value were outstanding
as of November 9, 1998.
FORM 10-QSB
1st QTR.
FY 1999
INDEX
PART I FINANCIAL INFORMATION
PAGE NO.
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets - September 30, 1998 and
June 30, 1998 (unaudited). . . . . . . . . . . . . .1
Consolidated Statements of Operations -
Three Months Ended
September 30, 1998 and 1997 (unaudited). . . . . . .3
Consolidated Statement of Stockholders' Equity
Year Ended June 30, 1998 and
Three Months Ended September 30, 1998 (unaudited). .4
Consolidated Statements of Cash Flows -
Three Months Ended
September 30, 1998 and 1997 (unaudited). . . . . . .5
Notes to Consolidated Financial Statements (unaudited) 6
Item 2. Management's Discussion and Analysis
Or Plan of Operations . . . . . . . . . . . . . . .9
PART II OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . 14
Item 2. Changes in Securities. . . . . . . . . . . . . . . 14
Item 3. Defaults upon Senior Securities. . . . . . . . . . 14
Item 4. Submission of Matters to a Vote of
Security Holders. . . . . . . . . . . . . . . . . 14
Item 5. Other Information. . . . . . . . . . . . . . . . . 14
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . 14
DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30, June 30,
1998 1998
ASSETS
Current Assets:
Cash $9,417 17,135
Trade accounts receivable, net of
allowance for doubtful accounts of $50,000 at
September 30, 1998 and June 30, 1998 235,790 224,285
Accounts receivable - related parties 216,213 127,415
Other current assets 10,100 10,100
Total current assets 471,520 378,935
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 688,962 726,127
Developed onshore domestic properties 3,541,974 3,369,881
Office furniture and equipment 80,446 80,446
11,271,212 11,136,284
Less accumulated depreciation and depletion (2,303,241) (2,234,525)
Net property and equipment 8,967,971 8,901,759
Investment in Bion Environmental
Technologies, Inc. (Bion) 569,130 1,069,149
$10,008,621 10,349,843
September 30, June 30,
1998 1998
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Loan payable (Note 3) $450,000 -
Accounts payable trade 685,259 570,469
Other accrued liabilities 10,000 10,000
Royalties payable 214,614 264,320
Total current liabilities 1,359,873 844,789
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 5,515,858 shares at
September 30, 1998 and
5,513,858 shares at
June 30, 1998 55,159 55,139
Additional paid-in capital 25,584,721 25,571,921
Accumulated other comprehensive
income 9,436 457,594
Accumulated deficit (17,000,568) (16,579,600)
Total stockholders' equity 8,648,748 9,505,054
Commitments
$10,008,621 10,349,843
DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
September 30, September 30,
1998 1997
Revenue:
Oil and gas sales $202,479 317,206
Gain on sale of oil and gas properties - 236,602
Other revenue 61,160 68,112
Total revenue 263,639 621,920
Expenses:
Lease operating expenses 77,979 94,604
Depreciation and depletion 68,716 89,225
Exploration expenses 41,714 50,019
Dry hole costs 97,218 -
General and administrative 379,146 368,661
Stock option expense 6,845 6,331
Loss on sale of securities available for sal 12,989 -
Total expenses 684,607 608,840
Net income (loss) ($420,968) 13,080
Basic income (loss) per common share ($0.08) $ *
Weighted average number of common
shares outstanding 5,515,684 5,231,338
* less than $.01 per share
DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
Consolidated Statement of Stockholders' Equity
Year ended June 30, 1998 and three months ended September 30, 1998
<TABLE>
Additional
Common Stock paid-in
Shares Amount capital
<S> <C> <C> <C>
Balance, July 1, 1997 5,230,631 $52,306
24,950,128
Unrealized gain on equity securities - - -
Stock options granted as compensation - - 46,402
Shares issued for cash upon exercise of options 114,100 1,141
202,395
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 loss - - -
Balance, June 30, 1998 5,513,858 55,139
25,571,921
Unrealized gain on equity securities - - -
Stock options granted as compensation - - 6,845
Shares issued for cash 2,000 20 5,955
Net loss - - -
Balance, September 30, 1998 5,515,858 55,159
25,584,721
</TABLE>
<TABLE>
Cumulative
unrealized
gain Accumulated
(loss) deficit Total
<S> <C> <C> <C>
Balance, July 1, 1997 (213,969) (15,617,597)
9,170,868
Unrealized gain on equity securities 671,563 - 671,563
Stock options granted as compensation - - 46,402
Shares issued for cash upon exercise of options - -
203,536
Shares issued for cash - - 350,000
Shares issued for services - - 64,688
Shares reacquired and retired - - (40,000)
Net loss - (962,003) (962,003)
Balance, June 30, 1998 457,594 (16,579,600)
9,505,054
Unrealized gain on equity securities (448,158) -
(448,158)
Stock options granted as compensation - - 6,845
Shares issued for cash - - 5,975
Net loss - (420,968) (420,968)
Balance, September 30, 1998 9,436 (17,000,568)
8,648,748
</TABLE>
DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
September 30, September 30,
1998 1997
Net cash used in operating activities ($239,564) (401,898)
Cash flows from investing activities:
Additions to property and equipment (134,928) (228,712)
Proceeds from sale of securities available
for sale 49,597 -
Proceeds from sale of oil and gas properties - 295,000
Increase in accounts receivable from
related parties (88,798) (17,881)
Net cash provided by (used in)
investing activities (174,129) 48,407
Cash flows from financing activities:
Loan payable 400,000 -
Stock issued for cash upon exercise
of options - 13,750
Issuance of common stock for cash 5,975 -
Net cash provided by
financing activities 405,975 13,750
Net decrease in cash (7,718) (339,741)
Cash at beginning of period 17,135 393,048
Cash at end of period $9,417 53,307
See accompanying notes to consolidated financial statements.
DELTA PETROLEUM CORPORATION
AND SUBSIDIARY
Notes to Consolidated Financial Statements
Three Months Ended September 30, 1998 and 1997
(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, 1998, previously filed with the Securities
and Exchange Commission.
In June 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 130, Reporting
Comprehensive Income (Statement No. 130), effective for years
beginning after December 15, 1997. Statement No. 130 establishes
standards for reporting and display of comprehensive income and
its components in a full set of general-purpose financial
statements. The Company adopted Statement No. 130 effective
July 1, 1998 and, accordingly, has reported accumulated other
comprehensive income (loss) as a separate line item in the
stockholders' equity section of its consolidated balance sheets
at September 30, 1998 and June 30, 1998. The components of total
comprehensive income (loss) for the periods consist of net
earnings and unrealized gain (loss) on equity securities and are
as follows:
Three Months Ended September 30,
1998 1997
Net income (loss) $(420,968) 13,080
Other comprehensive
net earnings (loss) (448,158) 167,776
Total comprehensive
net income (loss) $(869,126) 180,856
(2) Investments
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 first quarter fiscal
1999, the Company received an additional 2,387 shares of Bion's
common stock for rent provided by the Company. Also during the
first quarter of fiscal 1999, the Company realized a loss on the
sale of securities available for sale of $12,989.
The cost and estimated market value of the Company's
investment in Bion at September 30, 1998 and June 30, 1998 are as
follows:
Estimated
Unrealized Market
Cost Gain Value
September 30, 1998 $559,694 9,436 569,149
June 30, 1998 $611,555 457,594 1,069,149
(3) Loan Payable
On August 20, 1998, the Company entered into a loan
agreement with an unrelated entity for $400,000. The loan bears
interest at the annual rate of 10%, is due November 20, 1998 and
is collateralized by all producing oil and gas properties owned
by the Company. In addition to the principal and interest
payment required, the Company will also pay this entity $50,000
cash or assign to it interests in various wells currently owned
by Delta that have a present value of $50,000. The Company's
officers have personally guaranteed this loan.
(4) Subsequent Events
On October 2, 1998, the Company entered into an agreement
with MDC Group, Inc. ("MDC") to provide public and broker
relations. The agreement is for a period of six months
and provides for the Company to issue 250,000 shares of its
restricted common stock and options to purchase shares of common
stock at prices ranging from $2.50 to $6.00 per share with
expiration dates ranging from 90 days to one year as compensation
for these services. Prior to the end of the first six month
period of the Agreement, Delta may elect to extend the
Agreement for an additional six month period in which event MDC will
receive an additional 100,000 shares of the common stock of Delta.
On October 12, 1998, the Company entered into an agreement
with an unrelated entity to acquire two exploration licenses
covering approximately 1.9 million acres in the Pavlodar region
of Eastern Kazakhstan in exchange for 250,000 shares of the
Company's common stock and 500,000 warrants to purchase common
stock at prices ranging from $3.50 to $5.00 per share.
On November 3, 1998, the Company entered into a letter
agreement with an unrelated entity to sell its right, title and
interest in 23 oil and gas wells located in Oklahoma
for $1,384,000 at closing and an additional payment of
approximately $83,000 on March 15, 1999.
Item 2. Management's Discussion and Analysis or Plan of
Operations
Liquidity and Capital Resources.
At September 30, 1998, the Company had a working capital
deficit of $888,353 compared to a working capital deficit of
$465,854 at June 30, 1998.
The Company's current assets include accounts receivable from
related parties (including affiliated Companies) of $216,213 at September
30, 1998 which is primarily for drilling costs, and lease operating
expense on wells owned by the related parties and operated by the
Company. The amounts are due on open account and are non-interest
bearing. The Company's current liabilities include royalties
payable of $214,614 at September 30, 1998 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. 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.
On August 20, 1998, the Company entered into a loan
agreement with an unrelated entity for $400,000. The loan bears
interest at the annual rate of 10%, is due November 20, 1998 and
is collateralized by all producing oil and gas properties owned
by the Company. In addition to the principal and interest
payment required, the Company will also pay this entity $50,000
cash or assign to it interests in various wells currently owned
by Delta that have a present value of $50,000. The Company's
officers have personally guaranteed this loan.
On November 3, 1998, the Company entered into a letter
agreement with an unrelated entity to sell its right, title and
interest in 23 oil and gas wells located in Oklahoma for $1,384,000
at closing and an additional payment of approximately $83,000
on March 15, 1999. The proceeds from the sale will be used to
pay off the $400,000 loan payable and other current obligations,
and the balance will be used for future drilling.
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.
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, pay off the loan payable, and satisfy its other current
liabilities over the next year or longer.
Results of Operations
Net Earnings (Loss). The Company reported net a net loss
for the three months ended September 30, 1998 of $420,968
compared to net income of $13,080 for the three months ended
September 30, 1997. The loss during first quarter fiscal 1999
included an expense for dry holes of $97,218 During the first
quarter of fiscal 1998 the Company had a gain on sale of oil and gas
properties of $236,602.
Revenue. Total revenue for the three month period ended
September 30, 1998 was $263,639 compared to $621,920 for the
three months ended September 30, 1997. Total revenue
for the three months ended September 30, 1998 included a gain on
sale of oil and gas properties of $236,602. Oil and gas sales
for the three months ended September 30, 1998 were $202,479
compared to $317,206 for the three months ended September 30,
1997. The Company's oil and gas sales were impacted by a
decrease in both oil and gas production and prices.
Production volumes and average prices received for the three
month period ended September 30, 1998 and 1997 are as follows:
Three Months Ended
September 30,
1998 1997
Production:
Oil (barrels) 1,848 1,977
Gas (Mcfs) 94,139 140,525
Average Price:
Oil (per barrel) $11.11 $17.96
Gas (per Mcf) $1.93 $2.00
Lease Operating Expenses. Lease operating expenses were
$77,979 and $94,604 for the three months ended September 30, 1998
and 1997, respectively. On a MCF equivalent basis,
production expenses and taxes were $.74 and $.62, respectively,
during the three months period ended September 30, 1998 and 1997.
During the three months ended September 30, 1998, the
Company incurred additional workover expenses compared to the same
period a year ago.
Depreciation and Depletion Expense. Depreciation and
depletion expense for the three months ended September 30, 1998
and 1997 were $68,716 and $89,225, respectively. On a
MCF equivalent basis, depreciation and depletion expense were
$.65 and $.62 per Mcf equivalent during the three
months ended September 30, 1998 and 1997, respectively.
Exploration Expense. The Company recorded exploration
expenses of $41,714 and $50,019 for the three ended September 30,
1998 and 1997, respectively. Exploration costs
include delay rental payments, engineering, geological and
geophysical cost incurred during the period.
General and Administrative Expenses. General and
administrative expenses for the three months ended September 30,
1998 were $379,146 compared to $368,661 for the three months
ended September 30, 1997.
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 be
substantial. The estimated cost, which will be incurred over the
life of the properties (assumed to be 38 years), for the complete
development of all of the properties in which Delta owns an
interest, including delineation wells, environmental mitigation,
development wells, fixed platforms, fixed platform facilities,
pipelines and power cables, onshore facilities and platform
removal is currently estimated to be slightly
in excess of approximately $3 billion. The Company's share of
such costs is estimated to be $216,000,000. Operating expenses
for the same properties over the same period of time,
including platform operating costs, well maintenance and repair
costs, oil, gas and water treating costs, lifting costs and
pipeline transportation costs are expected to be approximately
$3,325,000,000 with the Company's share estimated to be
$285,000,000.
Each working interest owner will be required to pay its
proportionate share of these costs based upon the amount of the
interest that it owns. The size of Delta's working interest in
the units varies from 2.492% to 15.60%. The Company may be
required to farm out all or a portion of its interests in these
properties to a third party 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. Net revenues
over the same time period, to be shared by all of the working
interest owners in proportion to the size of their respective
working interests, are estimated to be approximately
$2,924,000,000 after the payment of all of
the above expenses and amounts due to owners of royalty interests
with Delta's share estimated to be $228,000,000.
These units have been formally approved and are regulated by
the MMS. 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.
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. It is
anticipated that, based upon discussion with appropriate
governmental agencies, development of the subject leases will
require from three to five year for permitting. Because of the
substantial reserves contained in the projects, it is generally
accepted that they will be developed; however,
the time required to complete development may be from five to ten
years. As additional information becomes available in the
future, the Company's estimates of the proved undeveloped
reserves attributable to these properties could materially
change.
The MMS initiated the California Offshore Oil and Gas Energy
Resources (COOGER) study at the request of the local regulatory
agencies of the three counties (Ventura, Santa Barbara
and San Luis Obispo) affected by offshore oil and gas
development. A private consulting firm is currently conducting
the study under a contract with the MMS. The COOGER study seeks
to present a long-term regional perspective of potential onshore
constraints that should be considered when developing existing
undeveloped offshore leases. COOGER will project the
economically recoverable oil and gas production from offshore
leases which have not yet been developed. These projections will
be utilized to assist in identifying a potential range of
scenarios for developing these leases. These scenarios will then
be compared to the projected infrastructural, environmental and
socioeconomic baselines between 1995 and 2015.
No specific decisions regarding levels of offshore oil and
gas development or individual projects will occur in connection
with the COOGER study. Information presented in the study
is intended to be utilized as a reference document to provide the
public, decision makers and industry with a broad overview of
cumulative industry activities and key issues associated with
a range of development scenarios. The exact effects upon
offshore development of the adoption of any one of the scenarios
are not yet capable of analysis because the study has not yet
been completed and reviewed. However, the Company has evaluated
its position with regard to the scenarios currently being studied
with respect to properties and the results of such evaluation are
set forth in its Form 10-KSB for the year ended June 30, 1998.
Current Status. On November 5, 1996, the MMS issued a
Directed Suspension of Operations for the POCS Non-Producing
Leases and Units, pursuant to CFR 250.10(b)(4),
extending the existing Suspension of Operations ("SOO") from
January 1, 1997 until December 31, 1998. This action permitted
unit owners to cease paying lease payments to the Federal
government and suspended the requirements relating to development
of the leases during this period. The Directive cited the fact
that the MMS had requested in 1992 that the lease owners
participate in what became known as the COOGER (California
Offshore Oil and Gas Energy Resources) Study and during the term
of the Study that the leases would be held under a SOO.
The MMS issued a second letter on December 24, 1996 with the
intent to notify all lease owners of the course of action to be
followed by the lease and unit operators prior to the
expiration of the SOO. In another letter, on September 17,
1998, the MMS informed all owners and operators that due to
delays in the COOGER Study, the SOO's on the units would
be extended through the first quarter of 1999 and revised the
dates for actions required by the previous letters. During 1998
each operator is to meet with the MMS to discuss conceptual
plans that will lead to eventual development. By January 15,
1999, each operator will submit what the MMS has termed "Schedule
of Events" for a specific lease or unit that it operates and
also a request for a Suspension of Production time period to
execute the Schedule of Events. The lease and unit Schedule of
Events, when approved by the MMS, will go into effect on April
1, 1999.
In order to carry out the requirements of the December 24,
1996 and September 17, 1998 MMS letters, all operators of the
units in which the Company owns non-operating interests
(described below) are currently engaged in studies to develop a
conceptual framework and general timetable for continued
delineation and development of the leases. For delineation, the
operators will outline the mobile drilling unit well activities,
including number and location. For development, the operators'
reports will cover the total number of facilities involved,
including platforms, pipelines, onshore processing facilities,
transportation systems and marketing plans. The Company is
participating with the operators in meeting the MMS schedules
through meetings, and consultations and is sharing in the costs
as invoiced by the operators.
Based on prices of $9.11 per Bbl and $1.41 per Mcf and
applicable regulatory parameters, the Company's aggregate working
interests in these properties had a pre-tax present
value (discounted at 10%) of approximately $7,185,000 as of July
1, 1998 according to a reserve report issued by Forrest A. Garb &
Associates ("Garb"), an independent petroleum engineering
firm in Dallas, Texas. According to Garb's report, Delta's
Offshore California reserves from these units totalled
approximately 69,201,000 Bbls of oil and 74.6 Bcf of gas for an
aggregate equivalent of 81,638,000 BOE.
Year 2000
The Company has completed a review of its computer system and applications
(which began in fiscal 1997) to identify the systems that could be affected by
the "Year 2000" issue. The Year 2000 problem is the result of computer
programs being written using two digits rather than four to define the
applicable year. Any of the Company's programs that have time-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000. This could result in a major system failure or miscalculations.
On the basis of its review, the Company currently believes that the Year
2000 issue will not pose material operational problems for the Company and that
it is adequately prepared for the Year 2000. To the Company's knowledge after
investigation, no "embedded technology" (such as microchips in an electronic
control system) of the Company poses a material Year 2000 concern.
Because the Company believes that it has no material internal Year 2000
problems, the Company has not and does not expect to expend a significant
amount of funds to address Year 2000 issues. It is Company policy to continue
to review its suppliers' Year 2000 compliance and require assurance of Year
2000 compliance from new suppliers; however, such monitoring does not involve a
significant cost to the Company.
In addition to the foregoing, the Company has contacted its major vendors
and has received either oral or written asurances from its major vendors or has
reviewed assurances contained on vendors' web sites that they have no material
Year 2000 problems. The Company believes that its vendors are largely
fungible; therefore, in the event a vendor's representations regarding its
Year 2000 compliance were untrue for any reason, the Company believes that it
could find adequate Year 2000-compliant vendors as substitutes.
The Company has also received either oral or written assurances from its
customers or has reviewed assurances contained on its customers' web sites
that they have no Year 2000 problems which would materially adversely affect
the business or operations of the Company.
The information contained in this Year 2000 discussion is forward-looking
and involves risks and uncertainties that may cause actual results to vary
materially from those projected. Some factors that could significantly impact
Delta's expected Year 2000 compliance and the estimated cost thereof include
internal computer hardware or software problems which have not as yet been
identified by Delta, and currently undisclosed and unanticipated problems
which may be encountered by third parties with whom Delta has business
relationships.
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:
October 16, 1998; Items 5. and 7.
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: December 29, 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.
(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. Filed herewith electronically.
(99) Additional Exhibits. Not applicable.
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