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 September 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 incorporation (IRS Employer or I.D.#)
or organization)
9319 LBJ Fry., #205, Dallas, TX 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 November 12, 1998)
1
<PAGE>
Spindletop Oil & Gas Co. and Subsidiaries
FORM 10-Q September 30, 1998
INDEX
Part I Financial Information: Page No.
Item 1. Financial Statements.
Consolidated Balance Sheets
September 30, 1998 (Unaudited) and December 31,1997...............3
Consolidated Statements of Operations (Unaudited)
Nine Months and Three Months Ended September 30, 1998 and 1997.. .5
Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended September 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>
September 30 December 31
1998 1997
---------- ---------
(Unaudited)
Assets
Current Assets
<S> <C> <C>
Cash $ 220,000 $ 448,000
Accounts receivable 335,000 414,000
Accounts receivable, related parties 5,000 40,000
Receivable from shareholder 8,000 3,000
Inventory - 8,000
---------- ---------
Total Current Assets 568,000 913,000
---------- ---------
Property and Equipment - at cost
Oil and gas properties (full cost method) 3,087,000 2,881,000
Rental equipment 342,000 329,000
Gas gathering systems 145,000 151,000
Other property and equipment 202,000 199,000
--------- ---------
3,776,000 3,560,000
Accumulated depreciation and amortization (2,458,000) (2,300,000)
----------- ----------
1,318,000 1,260,000
Other Assets, net of accumulated amortization
of $86,000 and $77,000 at September 30, 1998
and December 31, 1997 respectively 43,000 52,000
---------- ----------
Total Assets $ 1,929,000 $ 2,225,000
========== =========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
Spindletop Oil & Gas Co. and Subsidiaries
Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
---------- ---------
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
<S> <C> <C>
Accounts payable and accrued liabilities $ 379,000 $ 628,000
Current portion of long-term debt - 1,000
Tax savings benefit payable 97,000 97,000
---------- --------
Total Current Liabilities 476,000 726,000
---------- --------
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 645,000 691,000
---------- ----------
1,453,000 1,499,000
---------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,929,000 $ 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>
Nine Months Ended Three Months Ended
September 30, September 30,
----------------------- --------------------
1998 1997 1998 1997
---------- ---------- --------- ---------
Revenues
<S> <C> <C> <C> <C>
Oil and gas revenues $ 731,000 $ 936,000 $ 199,000 $ 247,000
Revenue from lease
operations 115,000 140,000 42,000 46,000
Sale of natural gas 35,000 65,000 11,000 25,000
Gas gathering fees 11,000 15,000 4,000 6,000
Equipment rental 67,000 83,000 26,000 31,000
Interest Income 6,000 6,000 1,000 2,000
Other 33,000 2,000 33,000 -
----------- ---------- ---------- ---------
998,000 1,247,000 316,000 357,000
----------- ----------- ---------- ---------
Expenses
Pipeline and rental
operations 65,000 56,000 19,000 16,000
Gas purchases 21,000 46,000 8,000 18,000
Lease operations 390,000 492,000 122,000 187,000
Depreciation and amortization 167,000 187,000 51,000 65,000
General and administrative 401,000 409,000 126,000 132,000
Interest expense - 1,000 - -
----------- ---------- --------- ---------
1,044,000 1,191,000 326,000 418,000
----------- ---------- --------- ---------
Net Income (loss) $ (46,000) $ 56,000 $ (10,000) $ (61,000)
========== ========= ========= ==========
Net Income Per Share of
Common $ (.01) $ .01 $ - $ (.01)
========== ========= ========== =========
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 Co. and Subsidiaries
Consolidated Statements Of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-----------------------
1998 1997
--------- ---------
Cash Flows from Operating Activities
<S> <C> <C>
Net Income $ (46,000) $ 56,000
Reconciliation of net income to net cash
provided by operating activities:
Depreciation and amortization 167,000 187,000
(Increase) decrease in accounts receivable 114,000 (209,000)
(Increase) decrease in inventory 8,000 22,000
Increase (decrease) in accounts payable (249,000) 153,000
--------- ---------
Net cash provided (used) by operating activities (6,000) 209,000
Cash Flows from Investing Activities
Capitalized acquisition, exploration
and development (206,000) (313,000)
Purchase of property and equipment (10,000) (13,000)
--------- ---------
Net cash used by investing activities (216,000) (326,000)
--------- ---------
Cash Flows from Financing Activities
Repayment of notes payable (1,000) (13,000)
Proceeds from borrowings - 8,000
Advances to shareholder (5,000) (137,000)
Repayment of shareholder loans - 170,000
--------- ---------
Net cash provided (used) by financing activities (6,000) 28,000
--------- ---------
Increase (Decrease) in cash (228,000) (89,000)
Cash at beginning of period 448,000 476,000
--------- ---------
Cash at end of period $ 220,000 $ 387,000
========= =========
</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
Nine months ended September 30, 1998 compared with 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.
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. In August 1998 sold this pipeline. Therefore both gas
purchases and natural gas sales increased in 1997.
Three months ended September 30, 1998 compared to 1997
Oil and gas revenues decreased due a decrease in production and because of a
decrease in oil gas prices.
Gas purchases and sale of natural gas decreased due to the sale of the pipeline
system described above.
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
September 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: November 16, 1998 By: /s/ Paul E. Cash
------------------------
Paul E. Cash
President
DATE: November 16, 1998 By: /s/ Gary D. 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> 9-MOS
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-START> Jan-1-1998
<PERIOD-END> Sep-30-1998
<EXCHANGE-RATE> 1
<CASH> 220,000
<SECURITIES> 0
<RECEIVABLES> 338,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 568,000
<PP&E> 3,776,000
<DEPRECIATION> 2,458,000
<TOTAL-ASSETS> 1,929,000
<CURRENT-LIABILITIES> 476,000
<BONDS> 0
0
0
<COMMON> 75,000
<OTHER-SE> 1,378,000
<TOTAL-LIABILITY-AND-EQUITY> 2,001,000
<SALES> 731,000
<TOTAL-REVENUES> 998,000
<CGS> 0
<TOTAL-COSTS> 390,000
<OTHER-EXPENSES> 654,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (46,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (46,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (46,000)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
