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 March 31, 1997 Commission File No. 0-18774
Spindletop Oil & Gas Co.
(Exact name of registrant as specified in its charter)
Texas 75-2063001
(State or ther jurisdiction of incorporation (IRS Employer or I.D.#)
or organization)
9319 LBJ, Frwy., #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 May 10, 1997)
1
<PAGE>
SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES
FORM 10-Q March 31, 1997
INDEX
Part I Financial Information: Page No.
Item 1. Financial Statements.
Consolidated Balance Sheets
March 31, 1997 (Unaudited) and December 31, 1996...............3
Consolidated Statements of Income (Unaudited)
Three Months Ended March 31, 1997 and 1996.....................5
Consolidated Statements of Cash Flows (Unaudited)
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:
Item 6. Exhibits and Reports on Form 8-K...........................9
2
<PAGE>
Part I Financial information
Item 1. Financial statements
<TABLE>
<CAPTION>
SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31 December 31
1997 1996
----------- -----------
(Unaudited)
<S> <C> <C>
Assets
Current Assets
Cash $ 386,000 $ 476,000
Accounts receivable 503,000 399,000
Accounts receivable, related parties 3,000 34,000
Shareholder loans 171,000 34,000
Inventory 9,000 31,000
----------- -----------
Total Current Assets 1,072,000 974,000
----------- -----------
Property and Equipment - at cost
Oil and gas properties (full cost method) 2,549,000 2,522,000
Rental equipment 329,000 329,000
Gas gathering systems 145,000 145,000
Other property and equipment 186,000 178,000
----------- -----------
3,209,000 3,174,000
Accumulated depreciation and amortization (2,113,000) (2,055,000)
----------- -----------
1,096,000 1,119,000
Other Assets, net of accumulated
amortization of $68,000 and $65,000 at
March 31, 1997 and December 31, 1996
respectively
58,000 61,000
----------- -----------
Total Assets $ 2,226,000 $ 2,154,000
=========== ===========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1997 1996
----------- -----------
(Unaudited)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued
liabilities $ 594,000 $ 638,000
Notes payable 14,000 12,000
Tax savings benefit payable 94,000 94,000
----------- -----------
Total Current Liabilities 702,000 744,000
----------- -----------
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 722,000 608,000
------------ -----------
1,524,000 1,410,000
------------ -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,226,000 $ 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>
Three Months Ended
March 31,
-------------------------
1997 1996
---------- ----------
Revenues
<S> <C> <C>
Oil and gas revenues $ 438,000 $ 276,000
Revenue from lease operations 48,000 55,000
Gas gathering fees 4,000 5,000
Equipment rental 24,000 29,000
Sale of natural gas 18,000 -
Interest Income 1,000 1,000
Other 1,000 -
---------- ----------
534,000 366,000
---------- ----------
Expenses
Pipeline and rental operations 21,000 14,000
Lease operations 182,000 153,000
Purchase of natural gas 17,000 -
Depreciation and amortization 61,000 58,000
General and administrative 138,000 128,000
Interest expense 1,000 2,000
---------- ----------
420,000 355,000
---------- ----------
Net Income $ 114,000 $ 11,000
========== ==========
Net Income Per Share of
Common Stock $ .015 $ 0
========== ==========
Weighted average shares outstanding 7,488,304 7,488,304
========== ==========
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------
1997 1996
----------- -----------
Cash Flows from Operating Activities
<S> <C> <C>
Net Income $ 114,000 $ 11,000
Reconciliation of net income to net cash
provided by operating activities:
Depreciation and amortization 61,000 57,000
(Increase) decrease in accounts receivable (73,000) 13,000
(Increase) decrease in inventory 22,000 (12,000)
Increase (decrease) in accounts payable (44,000) (9,000)
---------- ---------
Net cash provided (used) by operating activities 80,000 60,000
---------- ---------
Cash Flows from Investing Activities
Capitalized acquisition, exploration and
development costs (27,000) (41,000)
Purchase of property and equipment (8,000) (25,000)
Principal collected on note receivable - -
---------- ---------
Net cash used by investing activities (35,000) (66,000)
---------- ---------
Cash Flows from Financing Activities
Repayment of notes payable (6,000) (2,000)
Proceeds from borrowings 8,000 10,000
Advances to shareholder (137,000) (10,000)
---------- ---------
Net cash provided (used) by financing activities (135,000) (2,000)
---------- ---------
Decrease in cash (90,000) (8,000)
Cash at beginning of period 476,000 229,000
---------- ---------
Cash at end of period $ 386,000 $ 221,000
========== =========
</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.
Note2. 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 Operation
Results of Operations
1997 Compared to 1996
Oil and gas revenues increased in 1997 primarily due to a sharp increase in oil
and gas prices. Although prices rose sharply during the winter, these prices are
not expected to remain strong. Gas production also increased primarily the
result of an existing well that was brought back into production. This well, not
in production in 1996, accounted for approximately $35,000 of oil and gas
revenues during the first 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 increased in 1997. This was due to an increase in
severance taxes from higher oil and gas prices and also due to an increase in
repairs and maintenance on existing wells.
1996 Compared to 1995
Oil and gas revenues increased approximately 18% in 1996 due to an increase in
oil prices and due to acquisitions of a number of oil and gas properties in
1995. Accordingly, lease operating expenses also increased.
General and administrative costs increased in 1996 primarily because of an
increase in staffing requirements.
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
March 31, 1997
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None
(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: May 13, 1997 By:/s/ Paul E. Cash
-----------------
President
DATE: May 13, 1997 By:/s/ 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> 3-MOS
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-1-1996
<PERIOD-END> Mar-31-1997
<EXCHANGE-RATE> 1
<CASH> 386,000
<SECURITIES> 0
<RECEIVABLES> 677,000
<ALLOWANCES> 0
<INVENTORY> 9,000
<CURRENT-ASSETS> 1,072,000
<PP&E> 3,209,000
<DEPRECIATION> 2,113,000
<TOTAL-ASSETS> 2,226,000
<CURRENT-LIABILITIES> 702,000
<BONDS> 0
0
0
<COMMON> 75,000
<OTHER-SE> 1,449,000
<TOTAL-LIABILITY-AND-EQUITY> 1,524,000
<SALES> 438,000
<TOTAL-REVENUES> 534,000
<CGS> 0
<TOTAL-COSTS> 420,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,000
<INCOME-PRETAX> 114,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 114,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 114,000
<EPS-PRIMARY> 0.015
<EPS-DILUTED> 0
</TABLE>
