Document/Exhibit Description Pages Size
1: 10QSB Second Quarter Form 10-Qsb 12 40K
2: EX-1 Item 6, Exhibit 10.1, Allonge 2± 10K
3: EX-27 Article 5 Financial Data Schedule 2± 8K
United States
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-14731
HALLADOR PETROLEUM COMPANY
(Exact name of small business issuer as specified in its charter)
COLORADO 84-1014610
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1660 Lincoln St., Suite 2700, Denver, Colorado 80264
(Address of principal executive offices) (Zip Code)
303-839-5504 FAX 303-832-3013
(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 [ ]
As of August 11, 1995 7,661,264 shares of the issuer's common stock were
outstanding.
This report contains 12 pages. Exhibits listed on page 11.
HALLADOR PETROLEUM COMPANY
FORM 10-QSB
INDEX
Page
PART I. Financial Information: No.
Consolidated Balance Sheet - June 30, 1995
and December 31, 1994............................ 3
Consolidated Statement of Operations - three and
six months ended June 30, 1995 and 1994.......... 5
Consolidated Statement of Cash Flows - six months
ended June 30, 1995 and 1994..................... 6
Notes to Financial Statements...................... 7
Management's Discussion and Analysis or Plan of
Operation........................................ 8
PART II. Other Information:
Legal Proceedings.................................. 11
Exhibits and Reports on Form 8-K................... 11
Signature.......................................... 11
Page 2
PART I. Financial Information:
HALLADOR PETROLEUM COMPANY
Consolidated Balance Sheet
(in thousands)
[Download Table]
ASSETS
June 30, December 31,
1995 1994 *
----------- ------------
(unaudited)
Current assets:
Cash and cash equivalents $ 632 $ 438
Accounts receivable-
Oil and gas sales 436 504
Well operations 319 251
Properties sold in July 367
-------- --------
Total current assets 1,754 1,193
-------- --------
Oil and gas properties (full cost
accounting), at cost:
Evaluated properties 39,039 39,352
Less - accumulated depreciation,
depletion, amortization (31,475) (31,154)
-------- --------
7,564 8,198
-------- --------
Other assets 156 156
-------- --------
$ 9,474 $ 9,547
-------- --------
-------- --------
*Derived from the Form 10-KSB.
See accompanying notes.
Page 3
HALLADOR PETROLEUM COMPANY
Consolidated Balance Sheet
(in thousands, except share data)
LIABILITIES AND STOCKHOLDERS' DEFICIT
[Download Table]
June 30, December 31,
1995 1994*
----------- ------------
(unaudited)
Current liabilities:
Accounts payable and
accrued liabilities $ 286 $ 262
Oil and gas sales payable 172 114
Convertible debt to related
parties including accrued
interest of $154 5,115
Debt with recourse only to
the South Cuyama Field 962 826
-------- ---------
Total current liabilities 1,420 6,317
-------- ---------
Convertible debt to related
parties including accrued
interest of $297 5,230
--------
Debt with recourse only to the
South Cuyama Field 6,136 6,497
-------- ---------
Key Employee Bonus Plan 114 102
-------- ---------
Other 65 65
-------- ---------
Stockholders' deficit:
Common stock, $.01 par value;
100,000,000 shares authorized;
7,661,264 shares issued 77 77
Preferred stock, $.10 par value;
10,000,000 shares authorized;
no shares issued
Additional paid-in capital 9,995 9,995
Accumulated deficit (13,563) (13,506)
-------- ---------
(3,491) (3,434)
-------- ---------
$ 9,474 $ 9,547
-------- ---------
-------- ---------
*Derived from the Form 10-KSB.
See accompanying notes.
Page 4
HALLADOR PETROLEUM COMPANY
Consolidated Statement of Operations
(in thousands)
(unaudited)
[Download Table]
Six months ended Three months ended
June 30, June 30,
1995 1994 1995 1994
________ _______ ________ ________
Revenue:
Oil $ 1,875 $ 1,575 $ 991 $ 880
Gas 279 559 129 250
NGLs 258 241 118 106
Interest and other 18 9 10 4
------- ------- ------- -------
2,430 2,384 1,248 1,240
------- ------- ------- -------
Costs and expenses:
Lease operating 1,507 1,328 786 671
Depreciation,
depletion and
amortization 321 332 165 163
General and
administrative 189 236 101 139
Interest 470 502 233 251
------- ------- ------- -------
2,487 2,398 1,285 1,224
------- ------- ------- -------
Net income (loss) $ (57) $ (14) $ (37) $ 16
------- ------- ------- -------
------- ------- ------- -------
Per share amounts
are not meaningful
Weighted average
shares outstanding 7,661 6,488 7,661 6,488
------- ------- ------- -------
------- ------- ------- -------
See accompanying notes.
Page 5
HALLADOR PETROLEUM COMPANY
Consolidated Statement Of Cash Flows
(in thousands)
(unaudited)
[Download Table]
Six months ended
June 30,
---------------------
1995 1994
--------- ---------
Cash flows from
operating activities $ 473 $ 375
------- -------
Cash flows from investing activities:
Additions to oil and gas properties (54) (94)
------- -------
Cash flows from financing activities:
Repayments of debt (225) (321)
------- -------
Net increase (decrease) in cash and
cash equivalents 194 (40)
Cash and cash equivalents,
beginning of period 438 369
------- -------
Cash and cash equivalents,
end of period $ 632 $ 329
------- -------
------- -------
See accompanying notes.
Page 6
HALLADOR PETROLEUM COMPANY
NOTES TO FINANCIAL STATEMENTS
(unaudited)
1. The interim financial data is unaudited; however, in the opinion of
management, the interim data includes all adjustments, consisting only
of normal recurring adjustments necessary for a fair statement of the
results for the interim periods. The financial statements included
herein have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principals have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures
included herein are adequate to make the information presented not
misleading.
The organization and business of the Company, accounting policies
followed by the Company and other information are contained in the
notes to the Company's financial statements filed as part of the
Company's December 31, 1994 Form 10-KSB. This quarterly report should
be read in conjunction with such annual report.
2. As previously reported in 1992, the Company was named a defendant in an
action styled KENNETH EUGENE HAHN, ET AL. V. LOVE PROCESS ENGINEERING,
INC., ET AL (CASE NUMBER SM074020) filed in the Santa Barbara Superior
Court, North County Santa Maria Branch, Santa Maria, California. This
matter has been settled with no material monetary affect to the
Company.
Page 7
HALLADOR PETROLEUM COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
During second quarter 1995, the Company reached an agreement to extend
the debt with its majority shareholder, the Robert C. Hardie family, and
certain other investors in the original bridge loan from December 16, 1994
to December 31, 1997. The notes, bearing 6% interest per annum, are
collateralized (second to TCW, see below) by the Company's interest in its
California property. The notes are convertible into the Company's common
stock at a price of $.15 per share, which approximated fair market value at
the time of the agreement. Interest is payable, at the option of the
Company, either in cash or common stock using a fixed price of $.15 per
share. Warrants previously issued in conjunction with the notes to purchase
5,000,000 shares of common stock were extended to September 30, 1998. The
exercise price of the warrants was lowered to $.20 from $.25. Approximately
35,000,000 new common shares would be issued assuming total conversion of
the bridge loan plus interest through August 11, 1995.
TCW DEBT
--------
The South Cuyama Field (the "Field"), the Company's primary asset which
accounts for approximately 97% of the Company's revenue and reserves, is
pledged by non-recourse debt to Trust Company of the West (TCW). The Company
owns 92% of Santa Barbara Partners (SBP), an Oklahoma general partnership,
which in turn owns an 84% working interest (69% net revenue interest) in the
Field subject to an 18% net profits interest. Eighty-five percent of SBP's
cash flow from the property is used to service the TCW debt. Interest at 9%
on the TCW debt is paid monthly. The other 15% of SBP's cash flow from the
Field is distributed monthly to SBP's partners.
Page 8
PROPERTIES SOLD IN JULY
-----------------------
In July the Company sold its interest in certain non-operated Texas
properties for $367,000 cash. Lease operating expenses (LOE) for each of the
six-month periods ended June 30, 1995 and 1994 were approximately $44,000.
LOE for each of the three-month periods ended June 30, 1995 and 1994 were
approximately $21,000. Sales volumes and values for these properties are set
forth in the following tables:
[Download Table]
Six Months Sales
--------------------------------------------
1995 1994
--------------------- ---------------------
Volume Value Volume Value
---------- --------- ---------- ---------
Oil - barrels 2,955 $50,713 3,452 $50,805
Gas - MCF 34,486 56,391 37,933 88,988
[Download Table]
Second Quarter Sales
--------------------------------------------
1995 1994
--------------------- ---------------------
Volume Value Volume Value
---------- --------- ---------- ---------
Oil - barrels 1,366 $24,400 1,830 $29,502
Gas - MCF 16,729 27,327 18,167 40,206
RESULTS OF OPERATIONS
---------------------
YEAR-TO-DATE COMPARISON
-----------------------
Revenue increased slightly due primarily to higher prices for oil and
NGLs offset by declining gas production and declining gas prices. As
reported in the Company's 1994 Form 10-KSB, gas reserves were reduced by
approximately 40%. Since current gas production is less than expected,
management decided to further reduce the gas reserves by 20%. This reduction
equates to 716 MMCF net to the Company. Average product prices and volumes
are set forth in the following table:
[Download Table]
1995 1994
-------------------------- --------------------------
Sales Volume Average Price Sales Volume Average Price
------------ ------------- ------------ -------------
Oil - barrels 114,990 $16.30 119,074 $13.23
Gas - MCF 193,210 1.45 291,262 1.92
NGLs- barrels 22,280 11.59 25,258 9.53
LOE increased due to fractionation costs of approximately $168,000 for
five wells during the period. The Company expenses fractionation costs
as opposed to capitalizing such costs.
Page 9
QUARTER-TO-DATE COMPARISON
--------------------------
Revenue for the 1995 quarter, as compared to the 1994 quarter, were
approximately the same for the reasons discussed above. The table below
provides sales data and average prices for the two periods.
[Download Table]
1995 1994
-------------------------- --------------------------
Sales Volume Average Price Sales Volume Average Price
------------ ------------- ------------ -------------
Oil - barrels 58,485 $16.94 59,000 $14.92
Gas - MCF 90,939 1.43 140,400 1.78
NGLs- barrels 11,010 10.73 12,356 8.58
LOE increased due to fractionation costs of approximately $120,000 for
three wells during the quarter.
OUTLOOK FOR REMAINDER OF 1995
-----------------------------
FRACTIONATION PROJECT
---------------------
The Company initiated a study to fractionate(frac) certain wells in the
Field as reported in the 1994 Form 10-KSB. Through June 30, 1995 five wells
have been fractionated. Although the results from the first frac job are
encouraging; the results from the additional four frac jobs have not been
encouraging. The Company continues to evaluate frac opportunities in the
Field and current plans are to frac two additional wells during the remainder
of 1995 at an estimated total net cost of $45,000.
HEDGING
-------
The Company continues to evaluate hedging strategies for its oil
production. There are several strategies available that may be implemented
when the price of oil, as reflected in the futures market, is higher. As of
August 11, 1995, the Company is receiving $15.15 per barrel for its
California production as compared to an average price of $16.93 during the
second quarter of 1995.
Currently, the Company is receiving approximately $1.42/MCF for its
California gas production which is less than the average price received of
$1.46 during the first quarter 1995.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
Cash from operations is expected to enable the Company to meet its
obligations as they become due through the next 12 months.
Management is exploring various capital infusion alternatives to enhance
the Company's liquidity which would result in the Company engaging in the
trading of non-producing oil and gas mineral leases in addition to its oil
and gas exploration and production activities.
Page 10
FUTURE RESULTS OF OPERATIONS
----------------------------
Assuming stable production and prices, a small profit is expected for the
remainder of the year.
STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS NOT YET ADOPTED
------------------------------------------------------------
In March 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
The Company will have to implement SFAS No. 121 by the quarterly period
ending March 31, 1996. The provisions will require the Company to review
long-lived assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. If it
is determined that an impairment loss has occurred based on expected future
cash flows, then the loss should be recognized in the income statement and
certain disclosures regarding the impairment should be made in the financial
statements. The Company has not yet had sufficient time to evaluate the
impact, if any, of the provisions of SFAS No. 121.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
__________________________
As previously reported in 1992, the Company was named a defendant in an
action styled Kenneth Eugene Hahn, et al. v. Love Process Engineering, Inc.,
et al (Case Number SM074020) filed in the Santa Barbara Superior Court, North
County Santa Maria Branch, Santa Maria, California. This matter has been
settled with no material monetary affect to the Company.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
_________________________________________
(a) Exhibits
10.1 -- Allonge to First Amended Loan Agreement dated
September 30, 1992 with certain related parties
(filed with 1992 Form 10-KSB).
No reports on Form 8-K were filed by the Company during the quarter
ended June 30, 1995.
Page 11
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
HALLADOR PETROLEUM COMPANY
Date: August 11, 1995 By: \S\ Victor P. Stabio
Victor P. Stabio
Chief Executive Officer and
Chief Financial Officer
Signing on behalf of the
registrant and as principal
financial and accounting officer.
Page 12
Dates Referenced Herein and Documents Incorporated by Reference
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