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, 1998
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 7,525,804
(Title of Class) (Number of shares Outstanding
on August 12,1998)
1
<PAGE>
SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES
FORM 10-Q
June 30, 1998
INDEX
Part I Financial Information: Page No.
Item 1. Financial Statements.
Consolidated Balance Sheets
June 30, 1998 (Unaudited) and December 31, 1997....................3
Consolidated Statements of Income (Unaudited)
Six Months and Three Months Ended June 30, 1998 and 1997...........5
Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended June 30, 1998 and 1997............................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
1998 1997
---------- ----------
(Unaudited)
Assets
Current Assets
<S> <C> <C>
Cash $ 210,000 $ 448,000
Accounts receivable 459,000 414,000
Accounts receivable, related parties 4,000 40,000
Shareholder loans 8,000 3,000
Inventory - 8,000
--------- --------
Total Current Assets 681,000 913,000
--------- --------
Property and Equipment - at cost
Oil and gas properties (full cost method) 2,999,000 2,881,000
Rental equipment 333,000 329,000
Gas gathering systems 151,000 151,000
Other property and equipment 201,000 199,000
---------- ----------
3,684,000 3,560,000
Accumulated depreciation and amortization (2,410,000) (2,300,000)
----------- -----------
1,274,000 1,260,000
---------- ----------
Other Assets, net of accumulated amortization
of $83,000 and $77,000 at June 30, 1998 and
December 31, 1997 respectively 46,000 52,000
---------- ----------
Total Assets $ 2,001,000 $ 2,225,000
========== ==========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
---------- ---------
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
<S> <C> <C>
Accounts payable and accrued liabilities $ 441,000 $ 628,000
Notes payable - 1,000
Tax savings benefit payable 97,000 97,000
--------- --------
Total Current Liabilities 538,000 726,000
--------- --------
Shareholders' Equity
Common stock, $.01 par value;
100,000,000 shares authorized;
7,525,804 issued (7,525,804 at December
31,1997) 75,000 75,000
Additional paid-in capital 733,000 733,000
Retained earnings 655,000 691,000
--------- ---------
1,463,000 1,499,000
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,001,000 $ 2,225,000
========= =========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
--------------------------- -----------------------
1998 1997 1998 1997
------------ ----------- ----------- ---------
Revenues
<S> <C> <C> <C> <C>
Oil and gas revenues $ 532,000 $ 689,000 $ 179,000 $ 251,000
Revenue from lease
operations 73,000 94,000 28,000 46,000
Sale of natural gas 24,000 40,000 14,000 22,000
Gas gathering fees 7,000 9,000 3,000 5,000
Equipment rental 41,000 52,000 10,000 28,000
Interest Income 5,000 4,000 2,000 3,000
Other - 2,000 - 1,000
-------- ---------- --------- --------
682,000 890,000 236,000 356,000
-------- ---------- --------- --------
Expenses
Pipeline and rental
operations 46,000 40,000 27,000 19,000
Gas purchases 13,000 28,000 8,000 11,000
Lease operations 268,000 305,000 89,000 123,000
Depreciation and
amortization 116,000 122,000 57,000 61,000
General and
administrative 275,000 277,000 126,000 139,000
Interest expense - 1,000 - -
-------- --------- --------- --------
718,000 773,000 307,000 353,000
-------- --------- --------- --------
Net Income (Loss) $ (36,000) $ 117,000 $ (71,000) $ 3,000
========== ========== ========== ========
Net Income (Loss) Per
Share of Common Stock $ 0 $ 0 $ (.01) $ 0
======== ======== ======== ========
Weighted average shares
outstanding 7,525,804 7,488,304 7,525,804 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,
--------------------------
1998 1997
---------- ---------
Cash Flows from Operating Activities
<S> <C> <C>
Net Income $ (36,000) $ 117,000
Reconciliation of net income to net
cash provided by operating activities:
Depreciation and amortization 116,000 122,000
(Increase) decrease in accounts receivable (4,000) (235,000)
(Increase) decrease in inventory 8,000 22,000
Increase (decrease) in accounts payable (192,000) 96,000
---------- ---------
Net cash provided(used) by operating activities (108,000) 122,000
---------- ---------
Cash Flows from Investing Activities
Capitalized acquisition, exploration
and development costs (118,000) (96,000)
Purchase of property and equipment (6,000) (8,000)
Principal collected on note receivable - -
--------- ---------
Net cash used by investing activities (124,000) (104,000)
--------- ---------
Cash Flows from Financing Activities
Repayment of notes payable (1,000) (11,000)
Proceeds from borrowings - 8,000
Repayments from shareholder - 25,000
Advances to shareh (5,000) (137,000)
---------- ---------
Net cash provided(used) by financing activities (6,000) (115,000)
---------- ---------
Increase(decrease)in cash (238,000) (97,000)
Cash at beginning of period 448,000 476,000
----------- ----------
Cash at end of $ 210,000 $ 379,000
=========== ==========
</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, 1997 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.
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, 1998 compared to 1997
Oil and gas revenues decreased in 1998 due a decrease in production combined
with a decrease in oil and gas prices.
Revenue from lease operations decreased in 1998. The company lowered its
overhead charge on marginal wells.
Three months ended June 30, 1998 compared to 1997
Oil and gas revenues decreased in the second quarter of 1998 due a decrease in
production combined with a decrease in oil prices.
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, 1998
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, 1998 By: /s/Paul E. Cash, President
--------------------------
Paul E. Cash, President
DATE: August 13, 1998 By: /s/ Gary Goodnight, Controller
-----------------------------
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-31-1998
<PERIOD-START> Jan-1-1998
<PERIOD-END> Jun-30-1998
<EXCHANGE-RATE> 1
<CASH> 210,000
<SECURITIES> 0
<RECEIVABLES> 463,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 681,000
<PP&E> 3,684,000
<DEPRECIATION> 2,410,000
<TOTAL-ASSETS> 2,001,000
<CURRENT-LIABILITIES> 538,000
<BONDS> 0
0
0
<COMMON> 75,000
<OTHER-SE> 1,388,000
<TOTAL-LIABILITY-AND-EQUITY> 2,001,000
<SALES> 532,000
<TOTAL-REVENUES> 682,000
<CGS> 0
<TOTAL-COSTS> 268,000
<OTHER-EXPENSES> 450,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (36,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (36,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (36,000)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
