UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A1
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-19365
CROWN ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Utah 87-0368981
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
215 South State, Suite 550, Salt Lake City, Utah, 84111
(Address of principal executive offices, zip code)
(801) 537-5610
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 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 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.
There were 10,932,616 shares of $.02 par value common stock outstanding as of
August 13, 1996.
CROWN ENERGY CORPORATION
INDEX
PAGE(S)
PART I. Financial Information
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheet at June 30,
1996 (unaudited) and December 31, 1995 3
Condensed Consolidated Statement of Income for the Three
Months ended June 30, 1996 and 1995 (unaudited)5
Condensed Consolidated Statement of Income for the Six
Months ended June 30, 1996 and 1995 (unaudited)6
Condensed Consolidated Statement of Stockholder's Equity
(unaudited) 7
Condensed Consolidated Statement of Cash Flows for the
Six Months ended June 30, 1996 and 1995 (unaudited)8
Notes to Condensed Consolidated Financial Statements
(unaudited) 10
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 13
PART II. Other Information
ITEM 1. Legal Proceedings 15
ITEM 2. Changes in Securities 15
ITEM 3. Defaults upon Senior Securities 15
ITEM 4. Submission of Matters to a Vote of Security Holders15
ITEM 5. Other Information 15
ITEM 6. Exhibits and Reports on Form 8-K 15
PART III. Signatures 16
PART I-FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CROWN ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<S> <C> <C>
June 30,
1996 December 31,
[unaudited] 1995
CURRENT ASSETS:
Cash $176,300 $97,247
Joint interest and trade accounts
receivable 14,551 37,697
Other current assets 23,209 0
Total Current Assets 214,060 134,944
PROPERTY AND EQUIPMENT 3,770 5,782
(net of accumulated depreciation)
INVESTMENT IN OIL AND GAS PROPERTIES 1,117,158 1,145,214
(full cost method, net of accumulated
depletion)
INVESTMENT IN OIL SAND PROPERTIES 2,855,504 2,733,080
OTHER ASSETS 325,230 325,230
TOTAL ASSETS $4,515,723 $4,344,250
</TABLE>
CROWN ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<S> <C> <C>
June 30,
1996 December 31,
[unaudited] 1995
CURRENT LIABILITIES
Accounts payable $129,159 $244,314
Current portion of long-term debt 54,574 67,372
Other current liabilities 130,442 173,250
Total Current Liabilities 314,175 484,936
LONG TERM DEBT 132,514 231,342
LONG TERM DEBT -- RELATED PARITES 115,969 0
DEFERRED TAX LIABILITY 485,144 563,100
Total Liabilities 1,047,802 1,279,378
STOCKHOLDERS' EQUITY:
Preferred stock, $.005 par value,
1,000,000 shares authorized, no shares
issued and outstanding ----- -----
Common stock, $.02 par value,
50,000,000 shares authorized,
10,932,616 and 9,861,069 issued and
outstanding at 1996 and 1995 218,651 197,220
Capital in excess of par value 5,234,137 4,701,193
Retained earnings (1,984,867) (1,833,541)
Total Stockholders' Equity 3,467,922 3,064,872
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $4,515,723 $4,344,250
</TABLE>
CROWN ENERGY CORPORATION
[Unaudited]
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
For the Three Months Ended
June 30,
<S> <C> <S> <C> <C>
1996 1995
REVENUE:
Oil and gas production $55,441 $50,486
Total Revenue 55,441 50,486
EXPENSES:
Production costs and related taxes 32,953 33,632
General and administrative expenses 109,645 118,631
Depletion, depreciation and amortization 15,880 13,406
Total Expenses 158,478 165,669
OPERATING INCOME (LOSS) (103,037) (115,184)
OTHER INCOME (EXPENSES):
Interest and other income 2,489 528
Gain (loss) on sale of properties 0 0
Interest and other expense (5,410) (4,461)
Total Other Income (Expenses) (2,921) (3,933)
INCOME (LOSS) BEFORE TAX PROVISION ($105,958) ($119,117)
PROVISION FOR TAXES:
Current tax expense (benefit) 0 0
Deferred tax expense (benefit) (36,026) (40,500)
NET INCOME (LOSS) ($69,932) ($78,617)
NET INCOME (LOSS) PER SHARE ($0.01) ($0.01)
</TABLE>
CROWN ENERGY CORPORATION
[Unaudited]
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
For the Six Months Ended
June 30,
<S> <C> <C> <C>
1996 1995
REVENUE:
Oil and gas production $99,993 $104,608
Total Revenue 99,993 104,608
EXPENSES:
Production costs and related taxes 62,824 68,467
General and administrative expenses 230,820 191,732
Depletion, depreciation and amortization 30,068 28,427
Total Expenses 323,712 288,627
OPERATING INCOME (LOSS) (223,719) (184,019)
OTHER INCOME (EXPENSES):
Interest and other income 5,104 935
Gain (loss) on sale of properties 0 0
Interest and other expense (10,666) (9,006)
Total Other Income (Expenses) (5,562) (8,070)
INCOME (LOSS) BEFORE TAX PROVISION ($229,281) ($192,089)
PROVISION FOR TAXES:
Current tax expense (benefit) 0 0
Deferred tax expense (benefit) (77,956) (65,310)
NET INCOME (LOSS) ($151,325) ($126,779)
NET INCOME (LOSS) PER SHARE ($0.01) ($0.01)
</TABLE>
CROWN ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENT
OF STOCKHOLDERS' EQUITY
[Unaudited]
FOR THE SIX MONTHS ENDED JUNE 30, 1996
<TABLE>
Common Stock Capital in
Excess of Retained
Shares Amount Par Value (Deficit) Total
BALANCE,
DECEMBER 31,
<C> <C> <C> <C> <C> <C>
1995 9,861,069 $197,220 $4,701,193 ($1,833,541) $3,064,872
Net Income (loss)
for the six
months ended
June 30, 1996 --- --- --- (151,325) (151,325)
Shares issued for
cash at $.50 per
share in private
placement net of
placement costs 800,000 16,000 319,000 --- 335,000
Shares issued for
commissions 80,000 1,600 38,000 --- 40,000
Shares issued for
services at $.79
to $1.00 per
share 191,547 3,831 175,544 --- 179,375
BALANCE,
June 30,
1996 10,932,616 $218,651 $5,234,137 ($1,984,867) $3,467,922
</TABLE>
CROWN ENERGY CORPORATION
[Unaudited]
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
For the Six Months Ended
June 30,
1996 1995
<S> <C> <C> <C>
Cash Flows From (To) Operating Activities:
Net income (loss) ($151,325) ($126,779)
Adjustments to reconcile net loss to
net cash used by operating activities:
Amortization, depreciation and depletion 30,067 28,427
Non-cash (income) expense 0 0
Change in assets and liabilities:
Joint interest and accounts receivable 23,146 51,583
Other assets (23,209) (458)
Accounts Payable (115,155) (4,365)
Other current liabilities 46,567 53,868
Deferred tax liability (77,956) (65,310)
Total adjustments (116,540) 63,745
Net Cash Used by Operating
Activities (267,865) (63,034)
Cash Flows From (To) Investing Activities:
Additions to oil sand properties (32,424) (23,662)
Net Proceeds from sale of oil and gas
properties 0 0
Net Cash Provided (Used) in
Investing Activities (32,424) (23,662)
Cash Flows From (To) Financing Activities:
Increase in long-term debt 4,343 18,130
Principal payments on long-term debt 0 (14,670)
Net proceeds from sale of common stock 375,000 90,000
Net Cash Provided by Financing
Activities $379,343 $93,460
Net Increase (Decrease) in Cash: $79,054 $6,764
Cash at Beginning of Period $97,247 $30,592
Cash at End of Period $176,300 $37,356
Supplemental Disclosure of Cash Flow Information
Cash paid during the period:
Interest --- $3,104
Income taxes --- ---
</TABLE>
Supplemental Schedule of Non-cash Investing and Financing Activities:
For the period ended June 30, 1996:
The Company issued 191,547 shares of common stock in payment of $179,375
in consulting fees.
The Company issued 10,000 shares of common stock to restructure an oil
sand lease.
The Company converted accrued interest of $8,121 into notes payable.
For the period ended June 30, 1995:
The Company converted accrued interest of $15,154 into notes payable.
CROWN ENERGY CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements have been prepared by the
Company without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of
operations and changes in stockholders' equity and cash flows at
June 30, 1996 and for all periods presented have been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is
suggested that these condensed financial statements be read in
conjunction with the financial statements and notes thereto included
in the Company's December 31, 1995 audited financial statements.
The results of operations for the period ended June 30, 1996 are not
necessarily indicative of the operating results for the full year.
ORGANIZATION
Crown Energy Corporation ["Crown"], a Utah corporation, was
organized on March 17, 1981. Crown's primary activities have been
the acquisition and development of oil and gas leases.
BuenaVentura Resources Corporation ["BVRC"], a Utah corporation, was
organized October 24, 1985. BVRC is active in the mining and
development of oil sand deposits and owns the rights to a newly
patented technology for the extraction of oil from oil sands. Crown
acquired 100% of BVRC on September 30, 1992.
Gavilan Petroleum, Inc. ["Gavilan"], a Utah corporation, was
organized on September 9, 1985. Gavilan is engaged in the
production and selling of oil and gas from leases it operates in the
state of Utah. Gavilan became a 100% subsidiary of Crown on January
24, 1991.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All significant
intercompany transactions have been eliminated in consolidation.
OIL AND GAS PROPERTIES
Oil and gas properties are accounted for on the full cost method,
whereby all costs associated with acquisition, exploration and
development of oil and gas properties are capitalized on a country-
CROWN ENERGY CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
by-country, cost center basis. All oil and gas revenues are derived
from reserves located in the state of Utah. Amortization of such
costs is determined by the ratio of current period production to
estimated proved reserves. Estimated proved reserves are based upon
reports of petroleum engineers.
The net carrying value of oil and gas properties is limited to the
lower of amortized costs or the cost center ceiling [defined as the
sum of the present value [10% discount rate] of estimated,
unescalated future net cash flows from proved reserves, plus the
lower of cost or estimated fair value of unproved properties, giving
effect to income taxes].
OIL SAND PROPERTIES
The Company's investment in oil sand properties, including
acquisition and development costs, are being capitalized and will be
amortized by the unit-of-production method once commercial
production commences, projected to be early 1997. The Company
reviews its investment in oil sand properties for impairment
whenever events or changes in circumstance indicate that the
carrying amount of the investment may not be recoverable. The
Company's basis of determining the recoverability of its investment
is based on estimated future cash flows expected to result from the
extraction and production of products from the oil sands. The
Company is unaware of any events or changes in circumstance that
would merit a review for impairment, however the Company's estimated
future cash flows from its investment in oil sands exceeds the
carrying value of the investment, thus there is no current impact
from the adoption of SFAS 121.
INCOME (LOSS) PER SHARE
The computation of income (loss) per share of common stock is based
on the weighted average number of shares outstanding during the
periods presented.
NOTE 2 - SIGNIFICANT CUSTOMERS
The Company sells substantially all of its oil production to one
purchaser. If this purchaser stopped buying products from the
Company, the Company would then contract with other purchasers
available in the areas where the oil is produced. The effect of
this purchaser pulling out of the area would at least put a
temporary downward pressure on prices in the area, but it is not
currently possible for the Company to estimate how the Company would
be affected. Management believes that its oil is a commodity that
is readily marketable and that the marketing methods it follows is
typical of similar companies in the industry.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULT OF OPERATIONS
RESULTS OF OPERATIONS
For the three month period ended June 30, 1996, compared to the three months
ended June 30, 1995.
Oil and gas revenue increased from $50,486 for the three months ended June
30, 1995 to $55,441 for the three months ended June 30, 1996, an increase of
$4,955 (10%). This increase was due to higher production and oil prices for the
period. Total production increased from 2,380 barrels for the three months
ended June 30, 1995 to 2,475 barrels for the same period in 1996, an increase
of 4%. Average oil prices increased from $17.68 for the three months ended
June 30, 1995 to $20.32 for the same period in 1996.
Oil and gas production costs decreased from $33,632 for the three months
ended June 30, 1995 to $32,953 for the three months ended June 30, 1996, an
immaterial change of $679 (2%).
General and administrative expenses decreased from $118,631 for the three
months ended June 30, 1995 to $109,645 for the three months ended June 30, 1996,
a decrease of $8,986 (8%). This change was primarily due to a decrease in
consulting expenses.
Depletion, depreciation and amortization increased from $13,406 for the
three months ended June 30, 1995 to $15,880 for the three months ended June 30,
1996, an increase of $2,474 (18%). This change was due to an increase in the
depletion unit rate for 1996.
For the six month period ended June 30, 1996, compared to the six months ended
June 30, 1995.
Oil and gas revenue decreased from $104,608 for the six months ended June
30, 1995 to $99,993 for the six months ended June 30, 1996, a decrease of $4,615
(4%). This decrease was due to lower production due to normal production
declines. Total production decreased from 5,132 barrels for the six months
ended June 30, 1995 to 4,668 barrels for the same period in 1996, a decrease
of 9%. This decrease was partially offset by an increase in average oil
prices from $17.13 for the six months ended June 30, 1995 to $19.22 for the
same period in 1996.
Oil and gas production costs decreased from $68,467 for the six months
ended June 30, 1995 to $62,824 for the six months ended June 30, 1996, a
decrease of $5,643 (8%). This change was due to lower production for the
period.
General and administrative expenses increased from $191,732 for the six
months ended June 30, 1995 to $230,820 for the six months ended June 30, 1996,
an increase of $39,088 (20%). This change was primarily due to an increase in
general overhead expenses relating to the Asphalt Ridge Oil Sand Project.
Depletion, depreciation and amortization increased from $28,427 for the six
months ended June 30, 1995 to $30,068 for the six months ended June 30, 1996, an
increase of $1,641 (6%). This change was due to an increase in the depletion
unit rate for 1996.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1996, the Company had cash and other current assets of $214,060
as compared to cash and other current assets of $134,944 at December 31, 1995.
The increase of $79,116 was primarily due to net proceeds from an equity
financing of $400,000 completed in February, 1996. The increase was partially
offset by a loss from operations and pre-construction capital and permitting
costs incurred on the Asphalt Ridge Oil Sand Project.
Total debt increased from $231,342 in long-term debt and $67,372 in current
portion of long-term debt at December 31, 1995 to $248,483 in long-term debt and
$54,574 in current portion of long-term debt at June 30, 1996. This increase
was primarily due to accrued interest being converted into notes payable.
The Company's primary objective is to complete financing for construction
of its full-scale, 1,000 barrel per day commercial asphalt production facility.
The Company is seeking approximately $9,000,000 for construction costs and
approximately $4,500,000 for start-up and working capital and is evaluating
financing alternatives with several investor groups. No assurance can be given
that additional financing will be available or, if available, that it will be
available on acceptable terms. If additional funds are raised by issuing equity
securities, further dilution to then-existing stockholders may result. If such
additional funds are raised through the issuance of debt securities, the
Company's cash flows will be required to be devoted to service such debt. If
adequate funds are not available, the Company may be required to significantly
curtail or cease its operations. The Company believes that its existing cash
balances will be sufficient to meet current working capital requirements.
PART II. - OTHER INFORMATION
ITEM 1. Legal Proceedings
None.
ITEM 2. Changes in Securities
None.
ITEM 3. Defaults upon Senior Securities
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
None.
ITEM 5. Other Information
None.
ITEM 6. Exhibits and Reports on Form 8-K
None.
PART III. - SIGNATURES
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.
CROWN ENERGY CORPORATION
(Registrant)
Date: December 13, 1996 By: /s/JAY MEALEY
Jay Mealey, President
Date: December 13, 1996 By: /s/RICHARD S. RAWDIN
Richard S. Rawdin, Vice President of
Finance
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000876528
<NAME> CROWN ENERGY CORPORATION
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1996
<CASH> 176,300
<SECURITIES> 0
<RECEIVABLES> 14,551
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 214,060
<PP&E> 66,546
<DEPRECIATION> 62,775
<TOTAL-ASSETS> 4,515,723
<CURRENT-LIABILITIES> 314,175
<BONDS> 248,483
0
0
<COMMON> 218,651
<OTHER-SE> 3,249,271
<TOTAL-LIABILITY-AND-EQUITY> 4,515,723
<SALES> 55,441
<TOTAL-REVENUES> 55,441
<CGS> (32,953)
<TOTAL-COSTS> (158,478)
<OTHER-EXPENSES> (2,489)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (5,410)
<INCOME-PRETAX> (105,958)
<INCOME-TAX> 36,026
<INCOME-CONTINUING> (69,932)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (69,932)
<EPS-PRIMARY> (0.01)
<EPS-DILUTED> 0
</TABLE>
