FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter ended June 30, 1997
Commission File No. 0-18774
Spindletop Oil & Gas Co.
(Exact name of registrant as specified in its charter)
Texas 75-2063001
(State or other jurisdiction of (IRS Employer or I.D.#)
incorporation or organization)
9319 LBJ Freeway, Suite 205, Dallas, Texas 75243
(Address of principle executive offices) (Zip Code)
(972)644-2581
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 of 15 (d) of the Securities Exchange Act of 1934
during the preceding twelve 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 ninety (90) days.
YES X NO
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock - $.01 par value 7,488,304
(Title of Class) (Number of shares Outstanding
on August 12,1997)
1
<PAGE>
SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES
FORM 10-Q
June 30, 1997
INDEX
Part I Financial Information: Page No.
Item 1. Financial Statements.
Consolidated Balance Sheets
June 30, 1997 (Unaudited) and December 31, 1996....................3
Consolidated Statements of Income (Unaudited)
Six Months and Three Months Ended June 30, 1997 and 1996...........5
Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended June 30, 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:
Item 6. Exhibits and Reports on Form 8-K...............................9
2
<PAGE>
Part I Financial information
Item 1. Financial statements
SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30 December 31
1997 1996
----------- -----------
(Unaudited)
Assets
Current Assets
<S> <C> <C>
Cash $ 379,000 $ 476,000
Accounts receivable 665,000 399,000
Accounts receivable, related parties 3,000 34,000
Shareholder loans 146,000 34,000
Inventory 9,000 31,000
----------- -----------
Total Current Assets 1,202,000 974,000
----------- -----------
Property and Equipment - at cost
Oil and gas properties (full cost method) 2,618,000 2,522,000
Rental equipment 329,000 329,000
Gas gathering systems 145,000 145,000
Other property and equipment 186,000 178,000
----------- -----------
3,278,000 3,174,000
Accumulated depreciation and amortization (2,171,000) (2,055,000)
----------- -----------
1,107,000 1,119,000
----------- -----------
Other Assets, net of accumulated amortization
of $71,000 and $65,000 at June 30, 1997 and
December 31, 1996 respectively 55,000 61,000
----------- -----------
Total Assets $ 2,364,000 $ 2,154,000
=========== ===========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
----------- -----------
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
<S> <C> <C>
Accounts payable and accrued liabilities $ 734,000 $ 638,000
Notes payable 9,000 12,000
Tax savings benefit payable 94,000 94,000
---------- ----------
Total Current Liabilities 837,000 744,000
---------- ----------
Shareholders' Equity
Common stock,$.01 par value; 100,000,000
shares authorized; 7,488,304 issued
(7,488,304 at December 31, 1996) 75,000 75,000
Additional paid-in capital 727,000 727,000
Retained earnings 725,000 608,000
---------- ----------
1,527,000 1,410,000
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $2,364,000 $2,154,000
========== ==========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
------------------------- ------------------------
1997 1996 1997 1996
----------- ---------- ---------- -----------
Revenues
<S> <C> <C> <C> <C>
Oil and gas revenues $ 689,000 $ 619,000 $ 251,000 $ 343,000
Revenue from lease
operations 94,000 109,000 46,000 54,000
Sale of natural gas 40,000 -- 22,000 --
Gas gathering fees 9,000 10,000 5,000 5,000
Equipment rental 52,000 59,000 28,000 30,000
Interest Income 4,000 2,000 3,000 1,000
Other 2,000 -- 1,000 --
---------- ---------- ---------- ----------
890,000 799,000 356,000 433,000
---------- ---------- ---------- ----------
Expenses
Pipeline and rental
operations 40,000 28,000 19,000 14,000
Gas purchases 28,000 -- 11,000 --
Lease operations 305,000 356,000 123,000 203,000
Depreciation and amortization 122,000 110,000 61,000 52,000
General and administrative 277,000 274,000 139,000 146,000
Interest expense 1,000 2,000 -- --
---------- ---------- ---------- ----------
773,000 770,000 353,000 415,000
---------- ---------- ---------- ----------
Net Income $ 117,000 $ 29,000 $ 3,000 $ 18,000
========== ========== ========== ==========
Net Income Per
Share of Common Stock $ .02 $ 0 $ 0 $ 0
========== ========== ========== ==========
Weighted average shares
outstanding 7,488,304 7,488,304 7,488,304 7,488,304
========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
SPINDLETOP OIL & GAS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1997 1996
----------- -----------
Cash Flows from Operating Activities
<S> <C> <C>
Net income $ 117,000 $ 29,000
Reconciliation of net income to
net cash provided by operating
activities:
Depreciation and amortization 122,000 110,000
(Increase) decrease in accounts receivables (235,000) 4,000
(Increase) decrease in inventory 22,000 (21,000)
Increase (decrease) in accounts payables 96,000 (37,000)
--------- ---------
Net cash provided (used) by operating activities 122,000 85,000
--------- ---------
Cash Flows from Investing Activities
Capitalized acquisition, exploration
and development costs (96,000) (72,000)
Purchase of property and equipment (8,000) (28,000)
Principal collected on note receivable -- --
--------- ---------
Net cash used by investing activities (104,000) (100,000)
--------- ---------
Cash Flows from Financing Activities
Repayment of notes payable (11,000) (6,000)
Proceeds from sale of properties -- 48,000
Proceeds from borrowings 8,000 10,000
Shareholder repayment 25,000 --
Advances to shareholders (137,000) (20,000)
--------- ----------
Net cash provided (used)by financing activites (115,000) 32,000
--------- ----------
Increase(decrease)in cash (97,000) 17,000
Cash at beginning of period 476,000 229,000
--------- ----------
Cash at end of period $ 379,000 $ 246,000
========= ==========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
Spindletop Oil & Gas Co. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)
Note 1. Basis of Presentation
The accompanying financial statements are presented in accordance with the
requirements of Form 10-Q and consequently do not include all of the disclosures
normally required by generally accepted accounting principles or those normally
made in the Company's annual Form 10-K filing. Accordingly, the reader of this
form 10-Q may wish to refer to the Company's Form 10-K for the year ended
December 31, 1996 for further information.
In the opinion of management, the accompanying interim financial statements
contain all material adjustments, consisting only of normal recurring
adjustments necessary to present fairly the financial condition, the results of
operations and changes in cash flows of the Company and its consolidated
subsidiary for the interim periods.
Note 2. Subsequent events
Stock Split
In December 1996 the Board of Directors declared a 1-for-6 reverse stock split
on the Company's common stock. The record date was January 31, 1997. All share
and per share data as appropriate, reflect this split. The effect of the split
is presented retroactively within stockholder's equity at December 31, 1996 by
transferring the par value for the additional shares issued from additional
paid-in capital to the common stock accounts.
7
<PAGE>
Spindletop Oil & Gas Co. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)
Item 2.Management's Discussion and Analysis
of Financial Condition and Results of Operations
Results of Operations
Six months ended June 30, 1997 compared to 1996
Oil and gas revenues increased in 1997 primarily due to a sharp increase in
January and February oil and gas prices. Although prices rose sharply during the
winter, these prices did not remain strong during the the second quarter of
1997.
In December 1996 the Company expanded its current pipeline system by acquiring,
at no cost, a pipeline system in Hood County, Texas. The Company began
purchasing natural gas of other producers and reselling this gas to a pipeline
marketing affiliate. Therefore both gas purchases and natural gas sales
increased in 1997.
Lease operating expenses decreased in 1997 due to an overall decrease in the
workovers and repairs on existing wells.
Three months ended June 30, 1997 compared to 1996
Oil and gas revenues decreased during the second quarter of 1997 due primarily
to a decrease in gas prices.
Gas purchases and sale of natural gas increased due to the acquistion of the
pipeline system described above.
Lease operating expenses decreased in 1997 due to an overall decrease in the
workovers and repairs on existing wells.
Financial Condition and Liquidity
The Company's operating capital needs, as well as its capital spending program
are generally funded from cash flow generated by operations. Because future cash
flow is subject to a number of variables, such as the level of production and
the sales price of oil and natural gas, the Company can provide no assurance
that its operations will provide cash sufficient to maintain current levels of
capital spending. Accordingly, the Company may be required to seek additional
financing from third parties in order to fund its exploration and development
programs.
8
<PAGE>
Spindletop Oil & Gas Co. and Subsidiaries
June 30, 1997
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits -
27 Financial Data Schedule
(b) Reports on Form 8-K - None
9
<PAGE>
Signature
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.
SPINDLETOP OIL & GAS CO.
(Registrant)
DATE: August 13, 1997 By: /s/ Paul E. Cash
-------------------
Paul E. Cash
President
DATE: August 13, 1997 By: /s/ Gary Goodnight
--------------------
Gary Goodnight
Controller
10
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-START> Jan-1-1997
<PERIOD-END> Jun-30-1997
<EXCHANGE-RATE> 1
<CASH> 379,000
<SECURITIES> 0
<RECEIVABLES> 668,000
<ALLOWANCES> 0
<INVENTORY> 9,000
<CURRENT-ASSETS> 1,196,000
<PP&E> 3,278,000
<DEPRECIATION> 2,171,000
<TOTAL-ASSETS> 2,364,000
<CURRENT-LIABILITIES> 837,000
<BONDS> 0
0
0
<COMMON> 75,000
<OTHER-SE> 1,452,000
<TOTAL-LIABILITY-AND-EQUITY> 1,524,000
<SALES> 689,000
<TOTAL-REVENUES> 890,000
<CGS> 0
<TOTAL-COSTS> 305,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,000
<INCOME-PRETAX> 117,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 117,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 117,000
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0
</TABLE>
