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Isramco Inc – ‘10QSB’ for 9/30/97

As of: Friday, 11/14/97 · For: 9/30/97 · Accession #: 1000096-97-880 · File #: 0-12500

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

11/14/97  Isramco Inc                       10QSB       9/30/97    2:28K                                    Mitchell Fi… Printing/FA

Quarterly Report — Small Business — Form 10-QSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10QSB       Quarterly Report -- Small Business                    14     59K 
 2: EX-27       Financial Data Schedule                                1      6K

10QSB — Quarterly Report — Small Business
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Financial statements Legal Proceedings Management's discussion and analysis of financial statements 7-11 Other Information Reports on Form 8-K Submission of Matters to a Vote of Security Holders
1	1st Page - Filing Submission
2	Item 1. Financial statements
"	Item 2. Management's discussion and analysis of financial statements 7-11
14	Item 1. Legal Proceedings
"	Item 4. Submission of Matters to a Vote of Security Holders
"	Item 5. Other Information
"	Item 6. Reports on Form 8-K

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 FORM 10-QSB

QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
 THE SECURITIES EXCHANGE ACT OF 1934

For nine months ended September 30, 1997                                        

Commission File No. 283574                                                      
--------                                  

 ISRAMCO, INC.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

  DELAWARE                                    13-3145265
--------------------------------------------------------------------------------
  (State or other jurisdiction of                   (I.R.S. Employer I.D. No.)
incorporation or organization)                                          

575 Madison Avenue, Suite 1006, New York, New York           10022  
--------------------------------------------------------------------------------
     (Address of principal executive offices)                 (Zip Code)

Registrant's telephone number, including area code: 212-605-0417
                                                    ------------

NOT APPLICABLE
--------------------------------------------------------------------------------
(Former name, former address and formal 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  twelve  months  (or for  such  shorter  period  that the
registrant  was  required  to such  reports),  and (2) has been  subject to such
filing requirements for the past 90 days.                                       

Yes     X             No                    
-----               -----       

26,398,523 Common Shares were outstanding as of September 30, 1997.             

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 ISRAMCO, INC.

 INDEX

                                                                        PAGE NO.
                                                                        --------

Part I.   Financial Information                                                 

Item 1.   Financial statements                                                  

Condensed Consolidated balance sheets:                      

-  September 30, 1997 (unaudited)                     
          -  December 31, 1996                                           1

Condensed Consolidated statements of operations:            

-  Three months ended September 30, 1997              
and 1996 (unaudited)                            
-  Nine months ended September 30, 1997               
             and 1996 (unaudited)                                        2

Condensed Consolidated statements of cash flows:            

          -  Nine months ended September 30, 1997 and 1996 (unaudited)   3

       Notes to condensed consolidated financial statements            4-6

Item 2.   Management's discussion and analysis of financial statements   7-11   

Part II.  Other information                                                     
               Signatures                                               12

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ISRAMCO, INC. AND SUBIDIARIES 
CONDENSED CONSOLIDATED BALANCE SHEETS 

                                                 September 30,    December 31,
                                                 1997             1996
                                                 -----------------------------
                               (Unaudited)
ASSETS
------
Current assets:                                                                 
 Cash including cash equivalents                 $ 10,172,118     $ 15,999,022
Accounts receivable - oil and gas sales              207,699             -- 
 Marketable securities, at market                   9,034,462        6,477,954
 Prepaid expenses and other                           501,142          338,318
                                                 ------------     ------------

    Total current assets                           19,915,421       22,815,294

Oil and gas properties, net                          7,022,382             --   
Equipment, net                                         124,582           65,172 
Covenants not to compete, net                          285,000          382,500 
Other assets                                            82,667             --   
                                                 ------------     ------------

    T O T A L                                    $ 27,430,052     $ 23,262,966
                                                 ============     ============

LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------

Current Liabilities:                                                            
 Accounts payable and accrued expenses           $    484,734     $    334,422
Current portion of long-term debt                    781,200             -- 
                                                 ------------     ------------

    Total current liabilities                       1,265,934          334,422

Long-term debt                                       2,891,534             --   
                                                 ------------     ------------
                                                    4,157,468          334,422

Minority interest                                      189,108             --   
                                                 ------------     ------------
                                                    4,346,576          334,422
Shareholders' equity:                                                           

Common stock, $.01 par value;                                               
authorized 75,000,000 shares;                                             
  issued 26,691,198                                   266,912          266,912
 Additional paid-in-capital                        25,927,635       25,927,635
  Accumulated deficit                               (2,947,173)      (3,102,105)
  Treasury stock; 292,675 shares                      (163,898)        (163,898)
                                                 ------------     ------------

                                                   23,083,476       22,928,544
                                                 ------------     ------------

    T O T A L                                    $ 27,430,052     $ 23,262,966
                                                 ============     ============

See notes to financial statements.

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                                              ISRAMCO, INC. AND SUBSIDIARIES                                           
                                     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                                   
                                                          (Unaudited)                                                  

                                                       Three Months Ended                     Nine Months Ended        
                                                           September 30,                        September 30,          
                                                 -------------------------------      -------------------------------- 
                                                      1997               1996              1997               1996     
                                                 -------------------------------      -------------------------------- 
Revenues:                                                                                                              
                                                                                                                       
  Operator fees from related party               $    108,000       $    108,000      $    324,000        $    360,252 
  Oil and gas sales                                   536,565               --           1,576,792                --   
  Interest income                                     263,499            300,056           803,745             870,465 
  Gain (loss) on marketable securities                168,439         (1,038,970)          (67,805)            710,042 
  Office services to affiliates and other             145,364            106,571           401,095             359,041 
                                                 ------------       ------------      ------------        ------------ 
     Total revenue                                  1,221,867           (524,343)        3,037,827           2,299,800 
                                                 ------------       ------------      ------------        ------------ 

Expenses:                                                                                                              
  Interest expense                                     94,048                552           254,206               2,545 
  Depreciation, depletion and amortization             91,261              9,751           396,980              29,813 
  Lease operating expenses                            240,351               --             619,407                --   
  Operator costs                                       77,979            237,008           407,834             590,436 
  General and administrative - in part                                                                                 
   to related parties                                 522,422            242,313         1,189,664             939,763 
  Research and development                               --                 --                --                (1,041)
                                                 ------------       ------------      ------------        ------------ 
                                                    1,026,061           489,624          2,868,091           1,561,516 
                                                 ============       ===========       ============        ============ 
Income (loss) before taxes and                                                                                         
  minority interest                                   195,806         (1,013,967)          169,736             738,284 

Provision (benefit) for income taxes                     --                 --                --                  --   
                                                 ------------       ------------      ------------        ------------ 

Income (loss) from operations before                                                                                   
  minority interest                                   195,806         (1,013,967)          169,736             738,284 

Minority interest                                      15,403               --             (14,804)               --   
                                                 ------------       ------------      ------------        ------------ 

NET INCOME (LOSS)                                $    211,209       $ (1,013,967)     $    154,932        $    738,284 
                                                 ============       ============      ============        ============ 

Earnings (loss) per share                        $       0.01       $      (0.04)     $       0.01        $       0.03 
                                                 ============       ============      ============        ============ 

Weighted average number of shares                  26,398,523         26,398,523        26,398,523          26,527,171 
                                                 ============       ============      ============        ============ 

                                       See notes to financial statements.                                              

                                                       - 2 -                                                           


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                                      ISRAMCO, INC. AND SUBSIDIARIES                                     
                              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                            
                                               (Unaudited)                                               

                                                                            Nine Months Ended            
                                                                              September 30,              
                                                                  -------------------------------------  
                                                                      1997                     1996      
                                                                  -------------------------------------- 
Cash flow from operating activities:                                                                     
                                                                                                         
  Net income (loss)                                               $    154,932              $    738,284 
  Adjustment to reconcile net income (loss) to net                                                       
  cash (used in) operating activites                                                                     
  Depreciation, depletion and amortization                             396,980                    51,795 
  Minority interest                                                     14,804                      --   
  (Gain) loss on marketable securities                                  67,805                  (710,042)
  (Gain) loss on sale of property and equipment                         (2,984)                    6,394 
  Changes in assets and liabilities:                                                                     
     Accounts receivable                                               (86,617)                     --   
     Prepaid expenses and other current assets                         (53,219)                 (343,198)
     Other assets                                                      246,850                  (415,000)
     Accounts payble and accrued expenses                               61,352                   155,744 
     Purchase of marketable securities                              (5,261,030)               (2,851,602)
     Proceeds from sale of marketable securities                     2,636,717                 2,313,173 
                                                                  ------------              ------------ 

         Net cash (used in) operating activities                    (1,824,410)               (1,054,452)

Cash flows from investing activities:                                                                    
  Purchase of oil and gas properties                                (5,476,878)                  (21,982)
  Purchase of equipment                                                (71,738)                   (2,542)
  Proceeds from sale of equipment                                        5,616                     4,653 
  Purchase of Jay Petroleum LLP from                                                                     
   affiliate, net of cash acquired                                  (1,035,673)                     --   
  Other                                                                 27,360                      --   
                                                                  ------------              ------------ 

         Net cash (used in) investing activities                    (6,551,313)                  (19,871)
                                                                  ------------              ------------ 

Cash flows from financing activities:                                                                    
  Purchase of treasury stock                                              --                    (163,898)
  Proceeds of borrowings, net                                        2,590,234                      --   
  Payment of loan cost                                                 (41,415)                     --   
                                                                  ------------              ------------ 

         Net cash provided by (used in)                                                                  
          financing activities                                       2,548,819                  (163,898)
                                                                  ------------              ------------ 

NET INCREASE (DECREASE) IN CASH AND CASH                                                                 
  EQUIVALENTS                                                       (5,826,904)               (1,238,221)

Cash and cash equivalents, beginning of period                      15,999,022                16,506,242 
                                                                  ------------              ------------ 

CASH AND CASH EQUIVALENTS, END OF PERIOD                          $ 10,172,118              $ 15,268,021 
                                                                  ============              ============ 

Supplemental disclosure of cash flow information:                                                        
  Cash paid during the period for interest                        $    254,206              $      2,545 

                                      See notes to financial statements.                                 

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 NOTES TO CONDENSED FINANCIAL STATEMENTS
 (Unaudited)

(NOTE 1):                                                                       

     As used in  these  financial  statements,  the  term  "Company"  refers  to
Isramco, Inc. and subsidiaries.                                       

(NOTE 2):                                                                       

     The accompanying unaudited condensed consolidated financial statements have
     been prepared in accordance with generally accepted  accounting  principles
     for interim financial information and with the instructions to Form 10-QSB.
     Accordingly,  they do not  include  all of the  information  and  footnotes
     required by generally accepted accounting principles for complete financial
     statements.  In the opinion of Management,  all adjustments  (consisting of
     only  normal  recurring  adjustments)   considered  necessary  for  a  fair
     presentation  have been  included.  Operating  results  for the nine  month
     period  ended  September  30, 1997 are not  necessarily  indicative  of the
     results  that may be expected for the year ended  December  31,  1997.  For
     further  information,  refer to the consolidated  financial  statements and
     footnotes thereto  incorporated by reference in the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1996.             

(NOTE 3) - Consolidation:                                                       

     The consolidated  financial statements include the accounts of the Company,
     its direct and indirect wholly owned  subsidiaries,  Isramco Oil & Gas Ltd.
     ("Oil & Gas")  and  Isramco  Underwriters  Ltd.,  both  Israeli  companies,
     Isramco  Resources  Inc., a British  Virgin Islands  company,  its majority
     owned  subsidiary,  Jay  Petroleum  LLC ("Jay") and an  immaterial  foreign
     wholly owned  subsidiary.  All intercompany  balances and transactions have
     been eliminated.  Another wholly owned  subsidiary of the Company,  Isramco
     Management  (1988)  Ltd.,  an  Israeli  company,  is  not  included  in the
     consolidation  because the Company has no voting rights. This entity serves
     as the nominee  for the unit  holders of a limited  partnership  and has no
significant assets or operations.                                     

(NOTE 4) - Acquisition of Oil and Gas Properties:                               

     On February 5, 1997 the Company  acquired an 82.9%  membership  interest in
     Jay at an aggregate cost of $1.2 million;  $677,500 for a 50% interest from
     NIR Resources  Inc.  ("NIR"),  $363,750 for a 25% interest  from  Stonewall
     Resources  LLC,  and $132,650 as a capital  contribution  to Jay for a 7.9%
     interest.  The Company's  share of profits after recovery of its investment
     is 70.06%.  NIR is a wholly owned  subsidiary of Naphtha  Israel  Petroleum
     Corporation   Limited,   holder  of  approximately  37%  of  the  Company's
outstanding common stock.                                             

(continued)                                                                     

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     On February  13, 1997 Jay  acquired  from  Snyder Oil  Corporation  of Fort
     Worth,  Texas,  various operated and non-operated  interests in oil and gas
     wells in  Louisiana,  Texas and  Wyoming  for a cost of $3.1  million.  The
     acquisition  was financed  primarily  with bank  financing  obtained by Jay
     through a $10 million  Master Note  Facility  with  Comerica  Bank - Texas,
     Houston,  Texas.  Isramco,  Inc. is not a borrower or guarantor  under this
Master Note Facility.                                                 

     The  acquisitions  have been accounted for as purchases.  Accordingly,  the
     consolidated  financial  statements  include the operations of the acquired
entities from the dates of acquisition.                               

     In  September  1997 the  Company  acquired a 50%  participation  in a joint
     venture  that holds two  permits  offshore  of the Congo for $2.7  million;
     $150,000  for the Marine III  Exploration  permit  which has a term of four
     years  with an  extension  right of three  years,  and  $2,550,000  for the
     Tilapia  Exploration  permit to develop the Tilapia Field, which has a term
of ten years with an extension right of five years.                   

     The joint  venture  holds 100% of the rights under the  production  sharing
     contract  for the  Tilapia  permit and 50% of the rights with regard to the
     production sharing contract in the Marine III permit. The other participant
     in the joint venture is Naphtha Israel Petroleum Corp. Ltd., an approximate
     37% owner of Isramco.  Work programs for the two permits are being prepared
     by the operator,  Naphtha Congo Ltd., a wholly owned  subsidiary of Naphtha
Israel Petroleum Corp. Ltd.                                           

     The joint venture's right in the production sharing contract on the Tilapia
     permit is subject to a 12.5%  carried  interest  after  payout of the joint
     venture's  investment  costs not including the purchase price.  Levdan Ltd.
has a 50% participation interest in the Marine III permit.            

     The Company  acquired its  participation  in the joint venture from Equital
     Ltd., an affiliated  company  (formerly known as Pass-port Ltd.) subject to
     an 8% carried  interest after payout in its rights regarding the production
     sharing contract on the Tilapia permit.  The Company received a fair market
     valuation of the two permits from Forrest A. Garb & Assoc. Inc.,  petroleum
consultants, Dallas, Texas.                                           

(NOTE 5) - Income Taxes:                                                        

     The  provision  (benefit)  for income taxes  (current or deferred)  for the
     three and nine month  periods  presented  was fully offset by a decrease or
increase in the valuation allowance.                                  

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(NOTE 6) - Long-term Debt:                                                      

     At September 30, 1997, Jay has outstanding indebtedness of $3,673,000 under
     a bank loan facility of $10 million.  The loan bears interest at prime plus
     1.5% with monthly payments of $65,000 plus interest and matures in February
     2000.  The loan is secured by oil and gas  properties and cannot exceed the
   "Borrowing Base", as defined, which is subject to annual redetermination.

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 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
 AND RESULTS OF OPERATIONS

Statements in this "Management's  Discussion and Analysis of Financial Condition
and Results of  Operation"  and elsewhere in this document as well as statements
made in press releases and oral statements that may be made by the Company or by
officers,  directors or employees of the Company acting on the Company's  behalf
that are not  statements  of  historical  or current  fact  constitute  "forward
looking  statements"  within the  meaning of the Private  Securities  Litigation
Reform Act of 1995. Such  forward-looking  statements  involve known and unknown
factors  that could  cause the actual  results of the  Company to be  materially
different  from the historical  results or from any future results  expressed or
implied by such forward looking statements.                                     

During the nine month period ended  September 30, 1997, the Company  invested in
certain oil and gas  activities in the United  States  through Jay Petroleum LLC
("Jay"),  in the Congo  through a joint  venture with  Naphtha and  continued to
participate in work programs in the Negev Med Venture,  the Yam Ashdod  Carveout
and the Shederot Venture in Israel as hereinafter discussed.                    

The consolidated  financial statements for the nine month period ended September
30, 1997 include the operations of Jay from the date of acquisition.            

Liquidity and Capital Resources                                                 

The  decrease  in the  Company's  consolidated  cash  and  cash  equivalents  of
$5,826,904  from December 31, 1996 to  $10,172,118  at September 30, 1997 is the
result of net cash outflows of $6,551,313 from investing activities,  $1,824,410
from operating activities and $2,548,819 cash inflows from financing activities.
The investing  activities  consist  principally of (i) approximately  $1,000,000
used  by  the  Company  to  purchase  its  membership   interest  in  Jay,  (ii)
approximately  $2,770,000  used by Jay to acquire from Snyder Oil Corporation of
Fort Worth, Texas ("Snyder") various operated and non-operated  interests in oil
and gas wells in Louisiana,  Texas and Wyoming, and (iii) $2,700,000 used by the
Company to acquire its 50% participation in the Congo. The financing  activities
relate to non-recourse bank financing of the Snyder acquisition.  Isramco,  Inc.
is not a borrower or guarantor under this bank financing.                       

In the nine month periods ended  September 30, 1997 and 1996 the Company had net
cash outflow from the purchase and sale of  marketable  securities of $2,624,313
and $538,429,  respectively. As of September 30, 1997, the Company owned 5.5% of
the issued shares of J.O.E.L.  - Jerusalem Oil Exploration  Ltd.  ("JOEL"),  the
controlling  shareholder of Naphtha Israel Petroleum  Company Ltd.  ("Naphtha").
Naphtha  through  a  wholly  owned  subsidiary  holds  approximately  37% of the
Company's outstanding common stock. Shares of JOEL and Naphtha are traded on the
Tel Aviv Stock Market.                                                          

Jay has  outstanding  indebtedness  of $3,673,000  under a credit  facility with
Comerica  Bank - Texas,  Houston,  Texas.  The credit  facility  provides for an
interest  rate of prime plus  1.25%  with  payments  of  $65,000  plus  interest
monthly.  The loan is due on February 5, 2000.  Additional  draw downs under the
Comerica Bank Credit  Facility  require bank approval and the loan is subject to
an annual borrowing base redetermination review.                                

The Company believes that it has sufficient funds to fulfill its present capital
requirements.                                                                   

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Results of Operations                                                           

United States                                                                   

During the second  quarter Jay  completed  the  installation  of the water flood
project in Jack County,  Texas.  Jay is monitoring the response of the producing
wells to the  water  injection.  Drilling  of the gas well in  Garfield  County,
Oklahoma,  which was originally  scheduled for the fourth quarter was delayed to
the second  quarter of 1998. A work over will take place in the first quarter of
1998 in the  Kirkendall  well in Harden County,  Texas.  This work over is being
done to enhance the gas production for this well.                               

                                    Three Months Ended   Nine Months Ended
                                       September 30, 1997   September 30, 1997
                                       ---------------------------------------
Oil Volume Sold (Barrels)                                                       

Farmers                                   3,741                12,662     
Synder                                    7,367                16,778     
Total                                    11,108                29,440     

Gas Volume sold (MC)                                                            

Farmers                                  73,748               196,575     
Snyder                                  139,185               328,508     
Total                                   212,933               525,083     

Oil Sales ($)                                                                   

Farmers                                  91,227               278,078     
Snyder                                  114,137               300,835     
Total                                   205,364               578,913     

Gas Sales ($)                                                                   

Farmers                                 134,062               400,298     
Snyder                                  197,139               597,381     
Total                                   331,201               997,879     

Average Unit Price                                                              

Oil ($/Bbl)*                            $18.49                 $19.66     
Gas ($/MCF)**                           $ 1.56                 $ 1.90     

*   Bbl - Stock Market Barrel equivalent to 42 U.S. Gallons                   
**   MCF - 1,000 Cubic Feet                                                     

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Israel                                                                          
Negev Med Venture                                                               
-----------------                                                               

During the nine month  period  ended  September  30,  1997 the Negev Med Venture
expended  $262,711  previously on  administration  costs. The Company's share is
1.0043% or $2,638. The expenditures were primarily for administrative expenses. 

Yam Ashdod Venture (within the Med Ashdod License)                              

During the nine month period ended  September  30, 1997 the Yam Ashdod  Carveout
Venture expended $164,849. The Company's share is 1.0043% or $1,656.            

Conditions of the Offshore Licenses                                             
-----------------------------------                                             

In   November   1997  the  Oil   Commissioner   at  the   Ministry  of  National
Infrastructures  amended the  conditions  of the  licenses  held by the offshore
venture participants as follows:                                                

1.   A  seismic  survey  of at least 186  miles to be  conducted  no later  than
     February 1, 1998,  which will assist in the  upgrading of the  prospects in
the Med Ashdod license.                                               

2.   Three wells at least 3,000 meters  (approximately 9,800 feet) deep shall be
     drilled on the  licenses  held by Isramco and the  participants.  The first
     well shall be drilled no later than  January 1, 1999.  The  drilling of the
     second  well shall  begin  before June 1, 1999 and the third shall begin no
     later than  December  1, 1999.  Deepening  of any of the old wells shall be
     considered  as a new well.  In this regard,  the Company,  as the operator,
     issued a request to the  participants in the Yam Ashdod Carveout Venture to
     approve an AFE  (authorization  for  expenditure) in the amount of $980,000
for the above mentioned seismic survey.                               

Shederot Venture                                                                
----------------                                                                

During the nine month  period  ended  September  30, 1997 the  Shederot  Venture
expended  $126,320.  The Company's share is 1.0043% or $1,269.  These funds were
primarily   expended  for  the   preparation   for  the  Gevim-1  well  and  for
administrative expenses.                                                        

The onshore well,  the Gevim-1 is planned to be spud in the beginning of January
1998. The drilling contractor  requested an extension from the original spudding
target  during  November  1997  because it is engaged in the  drilling  of other
wells.  The  Gevim-1 is planned for a depth of  approximately  14,700 feet at an
estimated  cost of  approximately  $6.6  million.  Drilling  is expected to take
approximately three to four months. The Company's share is 1.0043% or $66,000.  

The Company expects to receive a revenue of approximately $373,000 as operator's
fees from the Gevim-1 well.                                                     

Operator's Fees                                                                 
---------------                                                                 

In the nine month periods ended  September 30, 1997 and 1996, the Company earned
$324,000 and  $360,252,  respectively,  which were based on the minimum  monthly
compensation for each period.                                                   

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Oil and Gas Revenues                                                            
--------------------                                                            

In the nine month and three month periods ended  September 30, 1997, the Company
had oil and gas revenues of $1,576,792 and $536,565, respectively. There were no
oil and gas revenues for the comparable period.                                 

Lease Operating Expenses                                                        
------------------------                                                        

In the nine month period ended September 30, 1997, the oil and gas expenses were
mainly in  connection  with oil and gas  fields in the  United  States,  and the
purchase of the Marine III  Exploration  permit in the Congo, as compared to the
same  period in 1996 in which  all these  expenses  were  mainly in the  various
ventures in Israel and are included in depreciation,  depletion and amortization
expenses.  Oil and gas lease operating expenses in the United States in the nine
and three month periods ended September 30, 1997 were approximately $620,000 and
$240,000, respectively.                                                         

Interest Income                                                                 
---------------                                                                 

Interest  income  decreased in the nine and three month periods ended  September
30, 1997  compared to interest  income in the nine and three month periods ended
September 30, 1996 mainly due to lower average investment balances.             

Loss on Marketable Securities                                                   
-----------------------------                                                   

In the nine month period ended  September  30, 1997 the Company had net realized
and unrealized  loss of $67,805  compared to gain of $710,042 in the same period
in 1996. In the three month period ended  September 30, 1997 the Company had net
realized and unrealized  gain of $168,439  compared to loss of $1,038,970 in the
three month  period ended  September  30,  1996.  The loss for 1997  includes an
unrealized  loss of $195,164 from the Company's  investment in JOEL (in the nine
month period ended  September  30, 1996 - unrealized  gain of  $916,835).  As of
November 12, 1997 that loss  increased by  approximately  $17,000 as a result of
the change in the dollar rate exchange to the Israeli shekel.                   

Increase  or decrease in the gains and losses  from  marketable  securities  are
dependent on the market prices in general and the  composition  of the portfolio
of the Company.                                                                 

Operator Costs                                                                  
--------------                                                                  

Operator's  costs  decreased in the nine and three month periods ended September
30, 1997 as compared to the nine and three month  periods  ended  September  30,
1996,  primarily as a result of lower  manpower  costs and reduced rent payments
for the Company offices in Israel.                                              

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General and Administrative Expenses                                             
-----------------------------------                                             

General and  administrative  expenses  increased during the nine and three month
periods  ended  September  30,  1997 as  compared  to the same  periods of 1996.
General and administrative expenses in the nine month period ended September 30,
1997  includes  approximately  $181,000  added  from the  operations  of Jay and
approximately   $42,000  of  charges  resulting  from  non-compete   agreements.
Directors' fees and officers'  salaries  decreased  during the nine month period
ended  September  30, 1997 as compared to the same period of 1996.  Tax payments
during the nine month  period ended  September  30, 1997 were higher than in the
same period ended September 30, 1996.                                           

Minority Interest                                                               
-----------------                                                               

Minority  interest for the nine month and three month period ended September 30,
1997 represents the minority share (17.1%) of Jay's net income.                 

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 ISRAMCO, INC.

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings                                                      
-----------------                                             

               Effective  October  27,  1997,  Reuven  Hollo was  removed by the
          Company as Manager of Jay  Petroleum and Jay  Management.  The Company
          has appointed J. Monroe Cutler, an experienced  Petroleum Engineer, as
          the new Manager of Jay Petroleum and N.I.R.  Resources  (subsidiary of
Naphtha) as Manager of Jay Management.                      

               In  parallel  to the  removal of Reuven  Hollo,  as Manger of Jay
          Petroleum and Jay Management, the Company commenced a law suit against
          Reuven Hollo which  proceeding  has been stayed pending the resolution
          of an arbitration  proceeding commenced by Reuven Hollo.  According to
          Jay Petroleum's regulation, disputes between members are to be decided
          by arbitration.  Reuven Hollo has entered a counterclaim  and asserted
          causes of action for wrongful termination,  usurpation of opportunity,
          breach of contract,  and  defamation.  Because no  discovery  has been
          conducted at this time,  counsel for the Company has indicated that it
is impossible to state the merits of these counterclaims.   

Item 4.  Submission of Matters to a Vote of Security Holders                    
---------------------------------------------------           

                  At the Annual Meeting of  Shareholders  held October 24, 1997,
         the  following  matters  were voted on and approved (i) the election of
         Daniel Avner,  Avihu  Ginzburg,  Tina Maimon  Arckens and Haim Tsuff as
         directors of the Company; and (ii) the appointment of Richard A. Eisner
 & Company, LLP as independent auditors of the Company for 1997.

Item 5.  Other Information                                                      
-----------------                                             

None.                                       

Item 6.  Reports on Form 8-K                                                    
-------------------                                           

                  Form 8-K for the month of July, 1997 dated July 23, 1997; Form
                 8-K for the month of September, 1997 dated September 9, 1997.

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 hereunto duly authorized.                                           

       ISRAMCO, INC.

        (Registrant)
Date:   November 13, 1997                                                       

                  By:  /sS  HAIM TSUFF
                                  ----------------------------
                 (Signature)
                  Haim Tsuff
                             Chairman of the Board
                                   and Chief Executive Officer

                   By: /S/  DANIEL AVNER
                                  ----------------------------
                 (Signature)
                  Daniel Avner
                          President, Secretary
                                      and Principal Accounting Officer

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘10QSB’ Filing	Date	First	Last	Other Filings

	2/5/00	9
	12/1/99	11
	6/1/99	11
	1/1/99	11
	2/1/98	11
	12/31/97	6		10KSB
	11/19/97
Filed on:	11/14/97
	11/13/97	14
	11/12/97	12
	10/27/97	14
	10/24/97	14		8-K, DEF 14A
For Period End:	9/30/97	1	13
	9/9/97	14
	7/23/97	14		8-K
	2/13/97	7
	2/5/97	6
	12/31/96	6	9	10-K
	9/30/96	2	13	10-Q, DEF 14A
				List all Filings

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Filing Submission 0001000096-97-000880 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Isramco Inc – ‘10QSB’ for 9/30/97

As of: Friday, 11/14/97 · For: 9/30/97 · Accession #: 1000096-97-880 · File #: 0-12500

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Quarterly Report — Small Business — Form 10-QSBFiling Table of Contents

10QSB — Quarterly Report — Small BusinessDocument Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Quarterly Report — Small Business — Form 10-QSB
Filing Table of Contents

10QSB — Quarterly Report — Small Business
Document Table of Contents