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, 1998 Commission File No. 0-18774
Spindletop Oil & Gas Co.
(Exact name of registrant as specified in its charter)
Texas 75-2063001
(State or otherjurisdiction of (IRS Employer or I.D.#)
incorporation 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 7,525,804
(Title of Class) (Number of shares Outstanding
on May 10, 1998)
1
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SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES
FORM 10-Q March 31, 1998
INDEX
Part I Financial Information: Page No.
Item 1. Financial Statements.
Consolidated Balance Sheets
March 31, 1998 (Unaudited) and December 31, 1997.... ..............3
Consolidated Statements of Income (Unaudited)
Three Months Ended March 31, 1998 and 1997.........................5
Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended March 31, 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>
March 31 December 31
1998 1997
------------ -----------
(Unaudited)
Assets
Current Assets
<S> <C> <C>
Cash $ 411,000 $ 448,000
Accounts receivable 457,000 414,000
Accounts receivable, related parties 4,000 40,000
Shareholder loans 8,000 3,000
Inventory - 8,000
--------- --------
Total Current Assets 880,000 913,000
--------- --------
Property and Equipment - at cost
Oil and gas properties (full cost method) 2,978,000 2,881,000
Rental equipment 329,000 329,000
Gas gathering systems 151,000 151,000
Other property and equipment 199,000 199,000
---------- ----------
3,657,000 3,560,000
Accumulated depreciation and amortization (2,356,000) (2,300,000)
----------- -----------
1,301,000 1,260,000
---------- ----------
Other Assets, net of accumulated amortization
of $80,000 and $77,000 at March 31,1998 and
December 31, 1997 respectively 49,000 52,000
---------- ----------
Total Assets $ 2,230,000 $ 2,225,000
========== ==========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
SPINDLETOP OIL & GAS CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
----------- -----------
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
<S> <C> <C>
Accounts payable and accrued liabilities $ 599,000 $ 628,000
Notes payable - 1,000
Tax savings benefit payable 97,000 97,000
---------- -----------
Total Current Liabilities 696,000 726,000
---------- -----------
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 726,000 691,000
----------- ----------
1,534,000 1,499,000
----------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,230,000 $ 2,225,000
=========== ===========
</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,
-------------------------
1998 1997
---------- ----------
Revenues
<S> <C> <C>
Oil and gas revenues $ 353,000 $ 438,000
Revenue from lease operations 45,000 48,000
Gas gathering fees 4,000 4,000
Equipment rental 31,000 24,000
Sale of natural gas 10,000 18,000
Interest Income 3,000 1,000
Other - 1,000
---------- ----------
446,000 534,000
---------- ----------
Expenses
Pipeline and rental operations 19,000 21,000
Lease operations 179,000 182,000
Purchase of natural gas 5,000 17,000
Depreciation and amortization 59,000 61,000
General and administrative 149,000 138,000
Interest expense - 1,000
---------- ----------
411,000 420,000
---------- ----------
Net Income $ 35,000 $ 114,000
========= ==========
Net Income Per Share of Common Stock $ - $ .015
========== ==========
Weighted average shares outstanding 7,525,804 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,
----------------------------
1998 1997
------------ ------------
Cash Flows from Operating Activities
<S> <C> <C>
Net Income $ 35,000 $ 114,000
Reconciliation of net income to net
cash provided by operating activities:
Depreciation and amortization 59,000 61,000
(Increase) decrease in accounts receivable (7,000) (73,000)
(Increase) decrease in inventory 8,000 22,000
Increase (decrease) in accounts payable (29,000) (44,000)
---------- ---------
Net cash provided (used) by operating activities 66,000 80,000
---------- ---------
Cash Flows from Investing Activities
Capitalized acquisition, exploration and
development costs (97,000) (27,000)
Purchase of property and equipment - (8,000)
Principal collected on note receivable - -
--------- ---------
Net cash used by investing activities (97,000) (35,000)
--------- ---------
Cash Flows from Financing Activities
Repayment of notes payable (1,000) (6,000)
Proceeds from borrowings - 8,000
Advances to shareholder (5,000) (137,000)
---------- ---------
Net cash provided (used) by financing activities (6,000) (135,000)
---------- ---------
Decrease in cash (37,000) (90,000)
Cash at beginning of period 448,000 476,000
---------- ---------
Cash at end of period $ 411,000 $ 386,000
========= =========
</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 Operation
Results of Operations
1998 Compared to 1997
Oil and gas revenues decreased in 1998 primarily due to a decrease in gas
prices.
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.
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
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Spindletop Oil & Gas Co. and Subsidiaries
March 31, 1998
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, 1998 By: /s/Paul E. Cash
------------------
Paul E. Cash
President
DATE: May 13, 1998 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> 3-MOS
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-START> Jan-1-1998
<PERIOD-END> Mar-30-1997
<EXCHANGE-RATE> 1
<CASH> 411,000
<SECURITIES> 0
<RECEIVABLES> 461,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 880,000
<PP&E> 3,657,000
<DEPRECIATION> 2,356,000
<TOTAL-ASSETS> 2,230,000
<CURRENT-LIABILITIES> 696,000
<BONDS> 0
0
0
<COMMON> 75,000
<OTHER-SE> 1,459,000
<TOTAL-LIABILITY-AND-EQUITY> 2,230,000
<SALES> 353,000
<TOTAL-REVENUES> 446,000
<CGS> 0
<TOTAL-COSTS> 179,000
<OTHER-EXPENSES> 232,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 35,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 35,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35,000
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
