ITEM 1. - HISTORY AND BUSINESS OF THE COMPANY
The Company was incorporated in Michigan in 1979 and commenced business in 1980. Originally, the Company was formed as a passive investor in oil and gas drilling ventures with Reef Petroleum Corporation (RPC) which was the operator of the wells drilled. However, in September of 1983, RPC filed a Chapter 11 Petition in the Bankruptcy Court of the Western District of Michigan and since then has liquidated all of its assets in a final bankruptcy action. In 1986, the Company's involvement with RPC was terminated.
During 1987, the Company entered into a Management Agreement with Penteco Corporation to analyze the Company's financial position and provide management services to the Company. The Agreement called for an 18 month option to Penteco to purchase an additional 1,000,000 shares at $.31 per share and a 36 month option to purchase an additional 1,000,000 shares at $.50 per share. In 1990, the Management Agreement was extended for a three year period through September, 1993. Penteco has exercised part of their option for 1,000,000 shares at $.31 per share. Effective January 1993, the Management Agreement with Penteco Corporation was terminated, and those responsible for management duties became salaried employees or advisors to the Company.
In an exchange of shares in 1987, the Company purchased from Penteco a 12% interest in the general partners portion of the 1985-A Limited Partnership (Penteco East Central Pipeline) and from Penteco a 10% interest in Lincoln Gas and Oil Marketing Corporation for a total price of $290,000. Penteco East Central Pipeline is a gas gathering and transmission system located in the area of Southern Kansas and Northern Oklahoma. In 1991, Penteco East Central Pipeline was sold to Consolidated Capital of North America. Penteco received, and is holding for the benefit of the partnership, 450,000 shares of $1.00 preferred stock of Consolidated Capital. In addition, Penteco acquired for the partnership, a 10 percent working interest after debt service in the Tulare Lakes Field from Chevron. Lincoln Gas and Oil Marketing Corporation is located in Boston, Massachusetts and is involved in the development and supply of gas to co-generation facilities. In a restructuring of Lincoln Gas and Oil Marketing, Penteco provided an opportunity for General Energy to increase its holdings to 20 percent of Lincoln Gas and Oil Marketing and also to receive a 10 percent interest in Eastern Pacific Energy Corporation located in Los Angeles, California. During 1989 and 1992, the Company determined the value of these investments have suffered permanent declines of $185,000 and $103,950 respectively. Consequently, these investments are now carried at a value of $1,050.
It is the Company's intention to continue to drill or participate in the drilling of exploratory and development wells in the states of Michigan, Texas, Louisiana, Mississippi and Oklahoma in an effort to develop its oil and gas reserves. In order to facilitate this plan, the Company has purchased an interest in various oil and gas leases.
During 1995, the Company participated in and operated a Niagaran horizontal well in Otsego County. The well tested both oil and gas and plans are to extend the well horizontally to further improve the production rates. The Company has interest in several gas wells that were hooked up in 1995 in South Texas and also acquired and operated a Niagaran gas discovery in Grand Traverse County which was drilled in early 1996.
DESCRIPTION OF BUSINESS OF THE COMPANY
Identification of Prospects and Prospect Acquisition The Company will, as in the past, selectively maintain its lease inventory on the basis of its own information, the interpretation of the Company's seismic, geological and geophysical information and such additional information as may be acquired. The Company also is actively seeking and participating in exploration projects with other companies by purchasing working interest on a selective basis.
The following table provides information as to the expiration of the Company's leases (assuming extension by payment of delay rentals to the extent possible); and is intended to supply information required pursuant to industry Guide 2 Paragraph 5. All of the following leases are located in the state of Michigan.
Acres Years of Expiration Gross Net ___________________ ____________________ 1995 560.000 160.000 1996 332.203 200.000 1997 160.000 40.000 1998 0.000 0.000
Geology - Seismic Testing The Company prefers, where possible, to act on the basis of geophysical as well as geological information. A seismic survey of the areas covered by its inventory of leases is undertaken and evaluated. The Company's Geology Department seeks to utilize both seismic and geological data (primarily the results from nearby drilling) to locate geological traps which may contain hydrocarbons.
Drilling, Completion and Operations of Producing Wells 1. During 1995, the Company participated in 1 wildcat prospect, which was successful. The Company also participated in the recompletion and workover of several wells in our 20 well Tulare Lakes Field in California. 2. The rights and obligations of the Company, as operator, are governed by a Lease Development Agreement (or, in the case of a participation commencing with the acquisition of the lease, a Lease Acquisition and Development Agreement) and a Standard Operating Agreement which provides for the allocation of costs, including specified amounts to defray the Company's nonspecifically identifiable costs based upon the depth of the well and other scheduled factors. 3. During 1995, the Company's Exploration Department supervised the drilling and completion of its wells; which included downhole completion as well as selecting the surface handling facilities to measure and separate out water and gas from oil, providing the connections to the gas pipelines and the storage tanks for oil and installing meters to measure production.
Marketing Production from the Company's royalty and working interests is marketed by the operator of the well, generally to a major oil company or gas utility.
In the twelve month period ending December 31, 1995, the following purchasers accounted for more than 10 percent of the Company's oil and gas revenues:
Chevron 49% Shell Oil 14%
Other purchasers of the Company's oil and gas production include Michigan Consolidated Gas, Total Petroleum, Delta Oil Company, Petrostar Energy and Peninsular Oil and Gas.
Substantially all gas sales are made under long term contracts with the above utilities. These contracts may relate either to the reserves from a specified well or wells or to those to be developed from specified acreage and generally obligate the utility to take or pay for specified annual quantities, typically in amounts sufficient to account for the bulk of the reserves within ten years or less. The contracts normally extend for a term substantially co-extensive with the life of the reserves and provide for periodic price adjustments, which usually involve annual or more frequent price increases on the basis of specified percentage or dollar increments and may also involve provision for increases or price limitations based on the prices paid to others for natural gas or alternative fuels or those permitted generally to be paid for natural gas pursuant to government price regulations. The Company has no reason to believe that any of the contracts for the sale of gas will be voided. Oil is sold under less structured arrangements and at posted prices more immediately responsive to market conditions.
Contracts, Accounting and Related Functions The Company handles the following procedures concerning the drilling of new wells: Contract negotiations, price determinations, government compliance, including, for example, NGPA-FERC gas well filings, maintenance of computerized records providing ownership and revenue distribution data on a well-by- well and owner-by-owner basis. The Company generates and distributes monthly reports containing information as to daily production and sales together with, in the case of working interest owners, operating statements detailing expenses.
Employees The Company began employing certain accounting and operations personnel in March, 1983. The Company presently has employees in the executive, geology and land, data processing, accounting and operations areas. The Company will also utilize third party contractors for needed services. None of the Company's employees are represented by a labor union or collective bargaining agent. Relations with the employees are good. There have been no work stoppages associated with labor disputes or grievances.
As of January 1, 1996, there are six employees of the Company.
Competition The Company competes with major oil companies, independent operators and others in acquiring drilling prospects, in contracting for oil and gas field services and equipment, in selling oil and gas production and in securing trained personnel.
The Company is not a significant factor in the oil and gas business even within the limited geographic area in which its operations are conducted.
ITEM 2.
ITEM 2. - PROPERTIES
Oil and Gas Reserves The Company has not filed estimates of its oil and gas reserves with any Federal Agency other than the Securities and Exchange Commission. The reserve information set forth in this section has been compiled from estimates made by the independent engineering firm of K&A Energy Consultants, Inc., Tulsa, Oklahoma in a report dated January 1, 1992 (and updated January 1, 1996 internally) on an unescalated basis for the Companies most productive 16 wells and from the independent engineering firm of Evan, Carey and Crozier, Bakersfield, California in a report dated July 24, 1989 and revised August 1, 1993 by Basim Ziara, Petroleum Engineering Consultants for the companies production purchase and operations in California. The remaining reserve figures are from a report dated January 1, 1988 and revised January 1, 1996 internally based on 1988 through 1995 production history changes, if any, and the acquisition and sale of production properties. The Company removed all reserve estimates from the Tulare Lakes Field in California and added reserves for the St. Dover & House #1-33A well in Otsego County, Michigan.
Reserve Category - Net to the Appraised Interest Interest Oil Gas Future Net Present Worth Cond. (Mcf) Cash Flow Discounted at (Bbls) 10 Percent _________________________________________________________________ Proved Developed Producing Totals n/a n/a n/a n/a
Oil and Gas Production The Company's net oil and gas production, constituting its share of production from its working and royalty interests for the years ended December 31, 1995, 1994 and 1993 are set forth in the table below: 1995 1994 1993 ____ ____ ____ Oil (Bbls) 11,920 16,634 22,736 Gas (Mcf) 63,342 65,034 65,839
- --All of the Interests and Reserves of the Company are located within Michigan, with the exception of three fields.
Prices and Costs The following tables set forth the average sales price per unit and average lifting cost with respect to the Company's production of oil and gas for the past three years.
Average sales Price per unit 1995 1994 1993 ____ ____ ____ Oil (Per Bbl) 16.73 14.40 16.76 Gas (Per Mcf) 1.97 2.37 2.78
The price per barrel of oil as of March 31, 1996, is $20.50 and the price per mcf of gas as of the same date ranges from $2.00 to $3.50 per mcf.
Average lifting cost (Oil & Gas Combined) 1995 1994 1993 ____ ____ ____ 12.24 9.06 9.44
Lifting costs include monthly operating charges and operating expenses but, do not include severance or windfall profit taxes.
Average lifting cost per sales dollar was $.82
Gross Net Exploratory Wells Net Development Wells _____ _____________________ _____________________ Year Wells Oil Gas Dry Oil Gas Dry ____ _____ ___ ___ ___ ___ ___ ___ 1991 9 .0400 ---- .0450 .00475 .0812 .0200 1992 10 .0400 ---- .3250 .08000 .0812 ---- 1993 5 ---- .0400 .0200 ---- ---- ---- 1994 10 ---- .0050 .0600 ---- ---- ---- 1995 1 .1500 ---- ---- ---- ---- ----
From inception through January 1, 1996, the total gross wells (a well in which a working interest is owned) in which the Company has an interest is 27 and the total net productive wells (the fractional ownership working interests in gross wells equal to one) is 1.49.
As of January 1, 1996, the total gross developed acres (acres spaced or assignable to productive wells) is 7,720.
All working interests and acreage is located within the United States of America.
The Company's total working interest reserves developed during 1995 are as follows: Total Reserves Wells Drilled Developed ______________________ ______________________ Total Successful Dry Disposal Well Oil (Bbls) Gas (Mcf) _____ _________ ___ _____________ __________ _________ 1 1 0 0 24,000 0
ITEM 3.
ITEM 3. - LEGAL PROCEEDINGS
On June 2, 1995, a lawsuit was filed in the Superior Court of the State of California for the County of Kings by Kings County Development Limited, a California Limited Partnership and J.G. Boswell Company, a California corporation as Plaintiffs. This lawsuit is due to a prior dispute between Chevron U.S.A., the previous owner of the field, and the royalty and land owners and was filed against numerous defendants including General Energy Resources and Technology Corporation and G.E.N.Y. Operations Inc., its subsidiary.
The cost of legal defense involving this lawsuit would have been greater than the Company could bear. In addition, General Energy does not have a working interest in the wells and was not a party to the contract with Chevron. The judge in California has left open the future option to consider a malicious prosecution action against the Plaintiffs with regard to the cause of action against General Energy.
Upon recommendation of legal counsel, on March 25, 1996, General Energy and G.E.N.Y. Operations filed petitions for protection under Chapter 11 of the Bankruptcy Code.
To date, all attempts to negotiate a settlement with the California group have been unsuccessful. We hope that a settlement can be reached in the context of these Chapter 11s and are diligently working toward that conclusion.
ITEM 4.
ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The registrant did not submit any matters for a vote of security holders during the fourth quarter of 1995 through the solicitation of proxies or otherwise.
PART II
ITEM 5.
ITEM 5. - MARKET FOR THE REGISTRANTS COMMON STOCK AND RELATED SECURITY HOLDERS MATTERS
As of March 1, 1996, there are 7,991,870 shares of the Company's Common Stock outstanding. The Company has registered the Common Stock under Section 15(d) of the Securities and Exchange Act of 1934. All warrants to purchase common shares expired on April 22, 1986 and there are no longer any warrants outstanding.
The stock is principally traded on the over-the-counter market. The high and low sales prices for the Company's Common Stock, for the following periods were:
Common Stock Common Stock 1995 Bid Asked 1994 Bid Asked ____ ____________ ____ ____________ December 31 1/16 1/4 December 31 1/16 1/4 September 30 1/16 1/4 September 30 1/16 1/4 June 30 1/16 1/4 June 30 1/16 1/4 March 31 1/16 1/4 March 31 1/16 1/4
The number of holders of record of the Common Stock as of March 1, 1996 totaled approximately 1,000. No dividends, either cash or stock, have been declared as of December 31, 1995, and there is no present intention on the part of the Company to declare dividends in the foreseeable future.
ITEM 7. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity/Capital Resources Net cash from operating activities for the Company as of the three most recent year-ends is as follows:
1995 1994 1993 ____ ____ ____ Cash Flows 333,180 (89,695) (88,643)
The Company has generated cash flow from operations, bank borrowings and the funds derived from its initial public offering in 1981, which yielded $3.7 million. Private sales from stock and the exercise of options have provided additional working capital.
In June 1989, one of the Company's major trade creditors, Mosbacher Energy Company (MEC), filed an operator's lien against various properties in which the Company owns a working interest and for which the Company owed MEC operating expenses. The liens resulted in the curtailment of revenue from these properties. A repayment plan was negotiated and on June 1, 1990, the Company signed a $292,814 promissory note with MEC for the amount owed MEC by General Energy Corporation for well operations as of May 7, 1990. The note is secured by the Company's interest in eleven producing properties operated by MEC and bears interest at 7 1/4 percent per annum. The terms of the agreement call for a monthly payment to Mosbacher Energy Company of the lesser of $20,000 or one months production of the secured properties.
In August of 1991, the Company borrowed $350,000 from Huntington Banks of Michigan. The note was secured by the personal guarantees of H. Terry Snowday and Edgar R. Puthuff, directors of the Company. Interest was payable monthly at one percent over the bank prime rate.
Proceeds from this note were loaned to American Barter Petroleum, Inc. to be used in a production property purchase in California. Interest is due at one percent over prime and principal is paid back out of production according to a predetermined schedule. In exchange for this loan, the Company received a 25 percent interest in net revenue.
Both notes were paid in full in October, 1992.
In 1991, the Company recorded approximately $875,500 of long-term debt on the Tulare Lakes Field. This represents a 25% share of the outstanding debt on the field. This is a non recourse debt. General Energy is not a party to the purchase contract between Chevron, Penteco and American Barter. The Company's 25% interest was to be paid from Penteco Corporation's working interest percentage, net of expenses. As of December 31, 1995, the total revenue from the field continued to be less than the total expenses with no expectation of improvement within the next twelve months. Management determined the asset and liability to be unrealistically presented on the financial statements and the outstanding debt balance of $908,410 which included accrued interest and the asset balance of $717,288, net of accumulated DD&A, were written off.
The Company has been able to satisfy its long-term debt commitments. The balance of accounts payable however, has increased to $692,031 at December 31, 1995 compared to $434,937 at December 31, 1994. A large portion of the accounts payable are for services provided by companies that have been very tolerant regarding timing of payment for these services.
The monthly operating cost for direct obligations for rent of the Company's office space will be $775.00. Management is aware that it has limited capital resources available with which to continue a lease acquisition/exploration program. Evaluation of various investment alternatives will continue to be made on a case-by- case and/or well-by-well basis, and commitments will be made as funds permit.
Management believes cash flow from the sale of its currently producing oil and gas properties as well as the two projects being completed in 1996, should be sufficient to pay current operating liabilities and to amortize the current portion of the long-term debt.
Management has developed contingency plans to obtain additional capital by the issuance of debt or sale of equities to the extent that these actions become necessary in the future.
The price that the Company received for oil during 1995 ranged from $15.26 to $18.75. The posted price for crude oil is at $20.50 per barrel as of March 31, 1996. There is uncertainty as to the price of oil over the next twelve months.
While the sale of gas remains subject to NGPA regulated pricing policies, it is recognized that certain concessions must be made as to contractual pricing to insure that the Company's gas reserves remain a competitive alternative fuel.
Results of Operations _____________________ Revenues Oil and gas sales Working interest $ 277,027 $ 333,805 $ 412,239 Royalty interest 57,007 71,268 91,108 Gain (loss) on sale of turnkey working interests and oil properties 29,456 31,970 22,808 Repromotional income 5,739 1,743 14,321 Consulting income 59,198 0 0 Administrative overhead 25,700 21,000 10,500 Gain on write-off 299,164 0 0 Other income 3 832 5,574 _________ _________ _________ Total Revenues 753,294 460,618 556,550 Net Earnings (loss) $ 191,588 $ (146,250) $ (467,877) ========= ========= =========
The Company's total revenues increased $292,676 from $460,618 at December 31, 1994 to $753,294 at December 31, 1995 and the Company's operating loss decreased $337,838 from $(146,250) at December 31, 1994 to $191,588 at December 31, 1995.
A major factor contributing to the Company's year end earnings was a gain of $299,164 resulting from the write-off of a producing oil and gas property and its liability.
The cost incurred in oil and gas property acquisitions, exploration and development activities for the year ended December 31, 1995 totaled $29,117 and capitalized costs related to oil and gas producing activities as of December 31, 1995 totaled $338,551 as compared to $42,111 and $1,087,239 respectively in 1994.
ITEM 8. - FINANCIAL STATEMENTS
Consolidated Balance Sheets. . . . . . . . . . . . . . 15 Consolidated Statements of Operations. . . . . . . . . . 17 Consolidated Statements of Cash Flows. . . . . . . . . . 19 Consolidated Statements of Stockholders' Equity. . . . . 21 Notes to Consolidated Financial Statements . . . . . . . 22 Supplemental Schedules . . . . . . . . . . . . . . . . . 31
General Energy Resources and Technology Corporation and Subsidiary Consolidated Balance Sheets, December 31, 1995 and 1994
ASSETS 1995 1994 ____ ____ CURRENT ASSETS Cash $ 136,108 $ 55,923 Accounts Receivable Trade 592,224 381,522 Less Allowance for Doubtful Accounts (8,698) (8,698) Prepaid Expenses 437 313 _________ _________ Total Current Assets 720,071 429,060
PROPERTY AND EQUIPMENT, AT COST Proved Oil and Gas Properties, Successful Efforts Method of Accounting 2,891,901 3,724,331 Unproved Leasehold and Minerals 85,106 85,106 Drilling Contracts in Progress 12,213 11,253 _________ _________ 2,989,220 3,820,690 Less Accumulated Depreciation, Depletion, and Amortization 2,650,669 2,733,451 _________ _________ Net Property and Equipment 338,551 1,087,239
OTHER ASSETS Investments (net of unrealized loss of $288,950) 1,050 1,050 _________ _________ $1,059,672 $1,517,349 ========= =========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES Current Portion Long-Term Debt $ 3,000 $ 54,749 Account Payable Trade 692,031 434,937 Notes Payable 111,000 111,000 Joint Interest Prepayment 135,371 108,583 Salaries Payable 54,923 40,000 Stock Options Payable 25,603 25,603 _________ _________ Total Current Liabilities 1,021,928 774,872
LONG-TERM DEBT 55,429 951,750
STOCKHOLDERS' EQUITY Common Stock ($.10 Par Value, 18,000,000 Shares Authorized, 7,991,870 Shares Issued and Outstanding) 799,187 799,187 Additional Paid-in Capital 7,435,012 7,435,012 Deficit (8,251,884) (8,443,472) _________ _________ Total Stockholders' Equity (17,685) (209,273) ========= ========= Total Liabilities and Stockholders' Equity $1,059,672 $1,517,349 ========= =========
See Accompanying Notes to Financial Statements
General Energy Resources and Technology Corporation and Subsidiary Consolidated Statements of Operations For the Years Ending December 31, 1995, 1994 and 1993
1995 1994 1993 ____ ____ ____ REVENUES Oil and Gas Sales Working Interest $ 277,027 $ 333,805 $ 412,239 Royalty Interest 57,007 71,268 91,108 Gain(Loss) on Turnkey Working Interests and Oil Properties 29,456 31,970 22,808 Promotional Income 5,739 1,743 14,321 Consulting Income 59,198 0 0 Administrative Overhead 25,700 21,000 10,500 Gain on write-off 299,164 0 0 Other Income 3 832 5,574 _________ _________ _________ Total Revenues 753,294 460,618 556,550
COSTS AND EXPENSES Lease and Operating Expenses 275,189 248,987 318,290 Taxes Other Than Income 10,634 11,782 17,432 Dry Holes and Abandonments 929 24,312 326,372 Depreciation, Depletion And Amortization 41,175 45,515 60,853 General and Administrative 229,568 191,612 189,948 Interest Expense, Net of Capitalized Interest 4,211 84,660 111,532 _________ _________ _________ Total Costs and Expenses 561,706 606,868 1,024,427 _________ _________ _________ NET EARNINGS (LOSS) BEFORE TAXES 191,588 (146,250) (467,877)
CURRENT INCOME TAXES 0 0 0 _________ _________ _________ NET EARNINGS (LOSS) $ 191,588 $ (146,250) $ (467,877) ========= ========= ========= Per Share of Common Stock, Weighted Average Method Income Before Extraordinary Items $ .02 $ (.018) $ (.059) ========= ========= ========= Net Income $ .02 $ (.018) $ (.059) ========= ========= ========= Weighted Average Number of Shares Outstanding 7,991,870 7,991,870 7,925,203 ========= ========= =========
See Accompanying Notes to Financial Statements
General Energy Resources and Technology Corporation and Subsidiary Consolidated Statements of Cash Flows For the Years Ending December 31, 1995, 1994 and 1993
1995 1994 1993 ____ ____ ____ CASH FLOWS FROM OPERATING ACTIVITIES Net Income (Loss) $ 191,588 $ (146,250) $ (467,877) Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities Depreciation, Depletion and Amortization 41,175 45,515 60,853 Abandonments, Expired and Surrendered Leases 3,555 36,175 364,905 (Gain)Loss on Sale of Turnkey Working Interest and Oil and Gas Properties 8,883 0 (11,918) Permanent Decline in Valuation of Investment 0 0 0 (Increase)Decrease in Current Assets: Trade Accounts Receivable (210,702) (228,875) (109,873) Prepaid Expenses (124) 125 1,324 Increase(Decrease) in Current Liabilities: Trade Accounts Payable 257,094 163,615 73,943 Salaries Payable 14,923 40,000 0 Joint Interest Prepayments 26,788 0 0 _________ _________ _________ NET CASH FROM OPERATING ACTIVITIES 333,180 (89,695) (88,643)
CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of Property and Equipment (22,907) (15,714) (31,506) Proceeds from Sale of Property and Equipment 694 0 10,000 Write-off of Oil & Gas Property 717,288 0 0 _________ _________ _________ NET CASH FROM INVESTING ACTIVITIES 695,075 (15,714) (21,506)
CASH FLOWS FROM FINANCING ACTIVITIES Acquisition of Short-Term Debt 0 100,000 11,000
Acquisition of Long- Term Debt 0 78,091 181,293 Reduction of Long-Term Debt (39,660) (57,495) (92,749) Write-off of Long-Term debt (908,410) 0 0 Proceeds from Issuance of Stock 0 0 20,000 _________ _________ _________ NET CASH FROM FINANCING ACTIVITIES (948,070) 120,596 119,544 _________ _________ _________ NET INCREASE(DECREASE) IN CASH 80,185 15,187 9,395
CASH AT BEGINNING OF PERIOD 55,923 40,736 31,341 _________ _________ _________ CASH AT END OF PERIOD $ 136,108 $ 55,923 $ 40,736 ========= ========= =========
See Accompanying Notes to Financial Statements
Stock Option Plan There is no current Stock Option Plan in effect.
Amounts owed to officers and directors for excess payments under a previously existing Stock Option Plan amount to $25,603 and are included in current liabilities.
In 1986, one of the former officers returned his option stock to the Company. These 15,000 shares were held in treasury by the Company and recorded at par value. The Company reissued all treasury stock in 1992.
Stock Option Agreement The Company entered into a Stock Option Agreement with Penteco Corporation (Penteco). Penteco had an option to purchase 1,000,000 shares at a price of $.31 per share and an option to purchase another 1,000,000 shares at a price of $.50 per share at various times. That option was renewed by the Board to extend through September, 1993. Penteco exercised part of their option for the 1,000,000 shares at $.31. Effective January 1993, Penteco's Stock Option Agreement was terminated as a result of the termination of the Company's Management Agreement with Penteco Corporation. The Company had an outstanding Stock Option Agreement with an employee to purchase 100,000 shares of General Energy stock for $.25 per share. This Agreement expired on January 5, 1993.
ITEM 12. - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides information with respect to the shares of common stock of the Company beneficially owned by each beneficial owner of more than 5% of such shares, each director and officer of the Company, and all directors and officers as a group as of December 31, 1995.
Number of Shares Percent of Common Name Of Common Stock Stock Outstanding ____ _______________ _________________ H. Terry Snowday, Jr. 366,596 4.58% Robert M. Andrews 548,765 6.86% 12683 S. Marina Village Dr. Traverse City, MI 49684 Richard E. Calvert 449,935 5.62% P.O. Box 368 Perrinton, MI 48871-0368 Leslie L. Guernsey 6,700 (4) Armond Hansen 502,118 6.28% P.O. Box 6007 Mesa, AZ 85216-6007 Rosalie A. Newman 10,309 (4) Edgar R. Puthuff 941,998 (1) 11.78% John G. Ross 75,649 (2) (4) Charles W. Taylor 1,102,146 (3) 13.79% Edward A. Ward II 65,149 (4)
all directors and officers as a group (7 in the group) 2,568,547 32.13%
(1) Includes 10,000 shares owned by Edgar Puthuff & William Miller Trust of the Miller Puthuff Associates, Inc. Employees Pension Profit Sharing Plan, 17,649 shares owned by Edgar R. Puthuff Trust Miller Puthuff Associates Employees Pension Plan, 575,015 shares owned by Miller Puthuff Associates Pension Plan Profit Sharing Plan Profit Sharing Plan Trust and 100,000 shares owned by Edgar Puthuff Tr of the Miller Puthuff Associates Employees Pension Profit Sharing Plan.
(2) Includes 35,649 shares held by Patricia E. Ross, his wife.
(3) Includes 1,102,146 shares held by Penteco Corporation.
(4) Less than 1%
The above list includes officers and directors who have a beneficial ownership in the securities of the Company. All officers and directors are voting FOR on all proposals. It is not known how the other 5% shareholders intend to vote their proxies.
ITEM 13. - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There are no family relationships between the officers and/or directors of the Company other than Edward A. Ward II is a brother-in-law of H. Terry Snowday.
Director Charles W. Taylor is President, Chairman of the Board and Chief Executive Officer of Penteco Corporation and Chairman of the Board of Lincoln Gas and Oil Marketing Corporation.
In 1987, the Company entered into a Management Agreement with Penteco Corporation to analyze the Company's financial position and provide management services to the Company. Mr. Charles Taylor, a director of the Company, owns 25% of the outstanding shares of Penteco and is a director and officer of that Company. Director's Snowday, Puthuff and Ward are minority investors in Penteco Corporation. Mr. Taylor abstained from voting for the Management Agreement considering his position with Penteco. Effective January 1993, the Management Agreement with Penteco Corporation was terminated and those responsible for management duties became salaried employees or advisors to the Company.
In July of 1990, Penteco Corporation agreed to accept 1,891,182 shares of General Energy Resources and Technology Corporation stock as payment for management fees for the period November, 1987 to May, 1990 totaling $94,559.10. The Company had a two year buy-back option and in September 1992, the Company repurchased the 1,891,182 shares of General Energy Corporation stock at $.06 per share. The Company then issued 886,040 shares at $.20 to replace the shares purchased and as payment for additional management fees accrued through August, 1992.
As of December 31, 1995, the Company has a liability to Penteco of $13,262 for management fees and out-of-pocket costs.
In 1991, the Company loaned $350,000 to American Barter. American Barter agreed to repay this loan, with interest at the Company's borrowing rate and to assign a 25% working interest in the Tulare Lakes Field. The Tulare Lakes Field was purchased from Chevron by Penteco and American Barter in 1991. The agreement between Chevron and Penteco and American Barter states that the note owed to Chevron will be repaid from production from the Tulare Lakes Field. If production does not cover debt payments, General Energy is not liable to Chevron or other third parties. The Company booked 25% of the purchase price as proved oil and gas properties, approximately $875,900. The Company also recorded 25% of the liabilities for Penteco and American Barter's purchase of the field along with 25% of American Barter's $350,000 debt to General Energy, borrowed for costs of revitalizing the field. During 1992, and 1993, additional debt has been recorded for Society Bank loans used to pay off the original $350,000 and for operating expenses and accrued interest. In 1993, the Company sold a 1% interest to a company shareholder for $10,000. The Company's 25% interest was to be paid from Penteco Corporation's working interest percentage, net of expenses. As of December 31, 1995, the total revenue from the field continued to be less than the total expenses with no expectation of improvement within the next twelve months. Management determined the asset and liability to be unrealistically presented on the financial statements and the outstanding debt balance of $908,410 which included accrued interest and the asset balance of $717,288, net of accumulated DD&A, were written off.
During 1991, the Company organized the sale of 306,410 shares of privately held General Energy stock. The Company did not purchase the stock, only brought together the buyers and sellers. The Company earned approximately $18,000 from this sale. These funds were applied to pay other obligations and settlements due the seller of the shares and costs related to the transaction.
During 1992, the Company repurchased a 5% interest in the Fons- Jacob well from a Company director in exchange for 504,015 shares of restricted stock issued at $.20 per share.
During 1993, the Company sold 200,000 shares of restricted stock to Company shareholders at $.10 per share. One of these shareholders also loaned $11,000 to the Company through its subsidiary, which is expected to be repaid in 1996.
The Company sold several turnkey working interests to major shareholders and directors during 1995. Accounts receivable from these related parties totaled $50,094 at December 31, 1995 while related party accounts payable amounted to $7,476. No interest has been accrued on any of the above amounts.
Pursuant to the requirements of Section 13, or 15(d) 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, on the 12th day of April, 1996.
GENERAL ENERGY RESOURCES AND TECHNOLOGY CORPORATION
By: H.TERRY SNOWDAY, JR. _____________________________ H. Terry Snowday, Jr. President
Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following person(s) on behalf of the registrant and in the capacities and on the date(s) indicated.
Signature Title Date _________ _____ ____
H. TERRY SNOWDAY, JR. President, Chairman of the 05/07/96 _____________________ Board, Chief Executive H. Terry Snowday, Jr. Officer and Director
ROSALIE A. NEWMAN Chief Financial Officer and 05/07/96 _____________________ Treasurer Rosalie A. Newman
EDGAR R. PUTHUFF Director 05/07/96 _____________________ Edgar R. Puthuff
JOHN G. ROSS Director 05/07/96 _____________________ John G. Ross
CHARLES W. TAYLOR Director 05/07/96 _____________________ Charles W. Taylor
EDWARD A. WARD Director 05/07/96 _____________________ Edward A. Ward
ITEM 7. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity/Capital Resources Net cash from operating activities for the Company as of the three most recent year-ends is as follows:
1995 1994 1993 ____ ____ ____ Cash Flows 333,180 (89,695) (88,643)
The Company has generated cash flow from operations, bank borrowings and the funds derived from its initial public offering in 1981, which yielded $3.7 million. Private sales from stock and the exercise of options have provided additional working capital.
In June 1989, one of the Company's major trade creditors, Mosbacher Energy Company (MEC), filed an operator's lien against various properties in which the Company owns a working interest and for which the Company owed MEC operating expenses. The liens resulted in the curtailment of revenue from these properties. A repayment plan was negotiated and on June 1, 1990, the Company signed a $292,814 promissory note with MEC for the amount owed MEC by General Energy Corporation for well operations as of May 7, 1990. The note is secured by the Company's interest in eleven producing properties operated by MEC and bears interest at 7 1/4 percent per annum. The terms of the agreement call for a monthly payment to Mosbacher Energy Company of the lesser of $20,000 or one months production of the secured properties.
In August of 1991, the Company borrowed $350,000 from Huntington Banks of Michigan. The note was secured by the personal guarantees of H. Terry Snowday and Edgar R. Puthuff, directors of the Company. Interest was payable monthly at one percent over the bank prime rate.
Proceeds from this note were loaned to American Barter Petroleum, Inc. to be used in a production property purchase in California. Interest is due at one percent over prime and principal is paid back out of production according to a predetermined schedule. In exchange for this loan, the Company received a 25 percent interest in net revenue.
Both notes were paid in full in October, 1992.
In 1991, the Company recorded approximately $875,500 of long-term debt on the Tulare Lakes Field. This represents a 25% share of the outstanding debt on the field. This is a non recourse debt. General Energy is not a party to the purchase contract between Chevron, Penteco and American Barter. The Company's 25% interest was to be paid from Penteco Corporation's working interest percentage, net of expenses. As of December 31, 1995, the total revenue from the field continued to be less than the total expenses with no expectation of improvement within the next twelve months. Management determined the asset and liability to be unrealistically presented on the financial statements and the outstanding debt balance of $908,410 which included accrued interest and the asset balance of $717,288, net of accumulated DD&A, were written off.
The Company has been able to satisfy its long-term debt commitments. The balance of accounts payable however, has increased to $692,031 at December 31, 1995 compared to $434,937 at December 31, 1994. A large portion of the accounts payable are for services provided by companies that have been very tolerant regarding timing of payment for these services.
The monthly operating cost for direct obligations for rent of the Company's office space will be $775.00. Management is aware that it has limited capital resources available with which to continue a lease acquisition/exploration program. Evaluation of various investment alternatives will continue to be made on a case-by- case and/or well-by-well basis, and commitments will be made as funds permit.
Management believes cash flow from the sale of its currently producing oil and gas properties as well as the two projects being completed in 1996, should be sufficient to pay current operating liabilities and to amortize the current portion of the long-term debt.
Management has developed contingency plans to obtain additional capital by the issuance of debt or sale of equities to the extent that these actions become necessary in the future.
The price that the Company received for oil during 1995 ranged from $15.26 to $18.75. The posted price for crude oil is at $20.50 per barrel as of March 31, 1996. There is uncertainty as to the price of oil over the next twelve months.
While the sale of gas remains subject to NGPA regulated pricing policies, it is recognized that certain concessions must be made as to contractual pricing to insure that the Company's gas reserves remain a competitive alternative fuel.
Results of Operations _____________________ Revenues Oil and gas sales Working interest $ 277,027 $ 333,805 $ 412,239 Royalty interest 57,007 71,268 91,108 Gain (loss) on sale of turnkey working interests and oil properties 29,456 31,970 22,808 Repromotional income 5,739 1,743 14,321 Consulting income 59,198 0 0 Administrative overhead 25,700 21,000 10,500 Gain on write-off 299,164 0 0 Other income 3 832 5,574 _________ _________ _________ Total Revenues 753,294 460,618 556,550 Net Earnings (loss) $ 191,588 $ (146,250) $ (467,877) ========= ========= =========
The Company's total revenues increased $292,676 from $460,618 at December 31, 1994 to $753,294 at December 31, 1995 and the Company's operating loss decreased $337,838 from $(146,250) at December 31, 1994 to $191,588 at December 31, 1995.
A major factor contributing to the Company's year end earnings was a gain of $299,164 resulting from the write-off of a producing oil and gas property and its liability.
The cost incurred in oil and gas property acquisitions, exploration and development activities for the year ended December 31, 1995 totaled $29,117 and capitalized costs related to oil and gas producing activities as of December 31, 1995 totaled $338,551 as compared to $42,111 and $1,087,239 respectively in 1994.
ITEM 8.
ITEM 8. - FINANCIAL STATEMENTS
Consolidated Balance Sheets. . . . . . . . . . . . . . 15 Consolidated Statements of Operations. . . . . . . . . . 17 Consolidated Statements of Cash Flows. . . . . . . . . . 19 Consolidated Statements of Stockholders' Equity. . . . . 21 Notes to Consolidated Financial Statements . . . . . . . 22 Supplemental Schedules . . . . . . . . . . . . . . . . . 31
General Energy Resources and Technology Corporation and Subsidiary Consolidated Balance Sheets, December 31, 1995 and 1994
ASSETS 1995 1994 ____ ____ CURRENT ASSETS Cash $ 136,108 $ 55,923 Accounts Receivable Trade 592,224 381,522 Less Allowance for Doubtful Accounts (8,698) (8,698) Prepaid Expenses 437 313 _________ _________ Total Current Assets 720,071 429,060
PROPERTY AND EQUIPMENT, AT COST Proved Oil and Gas Properties, Successful Efforts Method of Accounting 2,891,901 3,724,331 Unproved Leasehold and Minerals 85,106 85,106 Drilling Contracts in Progress 12,213 11,253 _________ _________ 2,989,220 3,820,690 Less Accumulated Depreciation, Depletion, and Amortization 2,650,669 2,733,451 _________ _________ Net Property and Equipment 338,551 1,087,239
OTHER ASSETS Investments (net of unrealized loss of $288,950) 1,050 1,050 _________ _________ $1,059,672 $1,517,349 ========= =========
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES Current Portion Long-Term Debt $ 3,000 $ 54,749 Account Payable Trade 692,031 434,937 Notes Payable 111,000 111,000 Joint Interest Prepayment 135,371 108,583 Salaries Payable 54,923 40,000 Stock Options Payable 25,603 25,603 _________ _________ Total Current Liabilities 1,021,928 774,872
LONG-TERM DEBT 55,429 951,750
STOCKHOLDERS' EQUITY Common Stock ($.10 Par Value, 18,000,000 Shares Authorized, 7,991,870 Shares Issued and Outstanding) 799,187 799,187 Additional Paid-in Capital 7,435,012 7,435,012 Deficit (8,251,884) (8,443,472) _________ _________ Total Stockholders' Equity (17,685) (209,273) ========= ========= Total Liabilities and Stockholders' Equity $1,059,672 $1,517,349 ========= =========
See Accompanying Notes to Financial Statements
General Energy Resources and Technology Corporation and Subsidiary Consolidated Statements of Operations For the Years Ending December 31, 1995, 1994 and 1993
1995 1994 1993 ____ ____ ____ REVENUES Oil and Gas Sales Working Interest $ 277,027 $ 333,805 $ 412,239 Royalty Interest 57,007 71,268 91,108 Gain(Loss) on Turnkey Working Interests and Oil Properties 29,456 31,970 22,808 Promotional Income 5,739 1,743 14,321 Consulting Income 59,198 0 0 Administrative Overhead 25,700 21,000 10,500 Gain on write-off 299,164 0 0 Other Income 3 832 5,574 _________ _________ _________ Total Revenues 753,294 460,618 556,550
COSTS AND EXPENSES Lease and Operating Expenses 275,189 248,987 318,290 Taxes Other Than Income 10,634 11,782 17,432 Dry Holes and Abandonments 929 24,312 326,372 Depreciation, Depletion And Amortization 41,175 45,515 60,853 General and Administrative 229,568 191,612 189,948 Interest Expense, Net of Capitalized Interest 4,211 84,660 111,532 _________ _________ _________ Total Costs and Expenses 561,706 606,868 1,024,427 _________ _________ _________ NET EARNINGS (LOSS) BEFORE TAXES 191,588 (146,250) (467,877)
CURRENT INCOME TAXES 0 0 0 _________ _________ _________ NET EARNINGS (LOSS) $ 191,588 $ (146,250) $ (467,877) ========= ========= ========= Per Share of Common Stock, Weighted Average Method Income Before Extraordinary Items $ .02 $ (.018) $ (.059) ========= ========= ========= Net Income $ .02 $ (.018) $ (.059) ========= ========= ========= Weighted Average Number of Shares Outstanding 7,991,870 7,991,870 7,925,203 ========= ========= =========
See Accompanying Notes to Financial Statements
General Energy Resources and Technology Corporation and Subsidiary Consolidated Statements of Cash Flows For the Years Ending December 31, 1995, 1994 and 1993
1995 1994 1993 ____ ____ ____ CASH FLOWS FROM OPERATING ACTIVITIES Net Income (Loss) $ 191,588 $ (146,250) $ (467,877) Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities Depreciation, Depletion and Amortization 41,175 45,515 60,853 Abandonments, Expired and Surrendered Leases 3,555 36,175 364,905 (Gain)Loss on Sale of Turnkey Working Interest and Oil and Gas Properties 8,883 0 (11,918) Permanent Decline in Valuation of Investment 0 0 0 (Increase)Decrease in Current Assets: Trade Accounts Receivable (210,702) (228,875) (109,873) Prepaid Expenses (124) 125 1,324 Increase(Decrease) in Current Liabilities: Trade Accounts Payable 257,094 163,615 73,943 Salaries Payable 14,923 40,000 0 Joint Interest Prepayments 26,788 0 0 _________ _________ _________ NET CASH FROM OPERATING ACTIVITIES 333,180 (89,695) (88,643)
CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of Property and Equipment (22,907) (15,714) (31,506) Proceeds from Sale of Property and Equipment 694 0 10,000 Write-off of Oil & Gas Property 717,288 0 0 _________ _________ _________ NET CASH FROM INVESTING ACTIVITIES 695,075 (15,714) (21,506)
CASH FLOWS FROM FINANCING ACTIVITIES Acquisition of Short-Term Debt 0 100,000 11,000
Acquisition of Long- Term Debt 0 78,091 181,293 Reduction of Long-Term Debt (39,660) (57,495) (92,749) Write-off of Long-Term debt (908,410) 0 0 Proceeds from Issuance of Stock 0 0 20,000 _________ _________ _________ NET CASH FROM FINANCING ACTIVITIES (948,070) 120,596 119,544 _________ _________ _________ NET INCREASE(DECREASE) IN CASH 80,185 15,187 9,395
CASH AT BEGINNING OF PERIOD 55,923 40,736 31,341 _________ _________ _________ CASH AT END OF PERIOD $ 136,108 $ 55,923 $ 40,736 ========= ========= =========
See Accompanying Notes to Financial Statements
Stock Option Plan There is no current Stock Option Plan in effect.
Amounts owed to officers and directors for excess payments under a previously existing Stock Option Plan amount to $25,603 and are included in current liabilities.
In 1986, one of the former officers returned his option stock to the Company. These 15,000 shares were held in treasury by the Company and recorded at par value. The Company reissued all treasury stock in 1992.
Stock Option Agreement The Company entered into a Stock Option Agreement with Penteco Corporation (Penteco). Penteco had an option to purchase 1,000,000 shares at a price of $.31 per share and an option to purchase another 1,000,000 shares at a price of $.50 per share at various times. That option was renewed by the Board to extend through September, 1993. Penteco exercised part of their option for the 1,000,000 shares at $.31. Effective January 1993, Penteco's Stock Option Agreement was terminated as a result of the termination of the Company's Management Agreement with Penteco Corporation. The Company had an outstanding Stock Option Agreement with an employee to purchase 100,000 shares of General Energy stock for $.25 per share. This Agreement expired on January 5, 1993.
ITEM 12. - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides information with respect to the shares of common stock of the Company beneficially owned by each beneficial owner of more than 5% of such shares, each director and officer of the Company, and all directors and officers as a group as of December 31, 1995.
Number of Shares Percent of Common Name Of Common Stock Stock Outstanding ____ _______________ _________________ H. Terry Snowday, Jr. 366,596 4.58% Robert M. Andrews 548,765 6.86% 12683 S. Marina Village Dr. Traverse City, MI 49684 Richard E. Calvert 449,935 5.62% P.O. Box 368 Perrinton, MI 48871-0368 Leslie L. Guernsey 6,700 (4) Armond Hansen 502,118 6.28% P.O. Box 6007 Mesa, AZ 85216-6007 Rosalie A. Newman 10,309 (4) Edgar R. Puthuff 941,998 (1) 11.78% John G. Ross 75,649 (2) (4) Charles W. Taylor 1,102,146 (3) 13.79% Edward A. Ward II 65,149 (4)
all directors and officers as a group (7 in the group) 2,568,547 32.13%
(1) Includes 10,000 shares owned by Edgar Puthuff & William Miller Trust of the Miller Puthuff Associates, Inc. Employees Pension Profit Sharing Plan, 17,649 shares owned by Edgar R. Puthuff Trust Miller Puthuff Associates Employees Pension Plan, 575,015 shares owned by Miller Puthuff Associates Pension Plan Profit Sharing Plan Profit Sharing Plan Trust and 100,000 shares owned by Edgar Puthuff Tr of the Miller Puthuff Associates Employees Pension Profit Sharing Plan.
(2) Includes 35,649 shares held by Patricia E. Ross, his wife.
(3) Includes 1,102,146 shares held by Penteco Corporation.
(4) Less than 1%
The above list includes officers and directors who have a beneficial ownership in the securities of the Company. All officers and directors are voting FOR on all proposals. It is not known how the other 5% shareholders intend to vote their proxies.
ITEM 13. - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There are no family relationships between the officers and/or directors of the Company other than Edward A. Ward II is a brother-in-law of H. Terry Snowday.
Director Charles W. Taylor is President, Chairman of the Board and Chief Executive Officer of Penteco Corporation and Chairman of the Board of Lincoln Gas and Oil Marketing Corporation.
In 1987, the Company entered into a Management Agreement with Penteco Corporation to analyze the Company's financial position and provide management services to the Company. Mr. Charles Taylor, a director of the Company, owns 25% of the outstanding shares of Penteco and is a director and officer of that Company. Director's Snowday, Puthuff and Ward are minority investors in Penteco Corporation. Mr. Taylor abstained from voting for the Management Agreement considering his position with Penteco. Effective January 1993, the Management Agreement with Penteco Corporation was terminated and those responsible for management duties became salaried employees or advisors to the Company.
In July of 1990, Penteco Corporation agreed to accept 1,891,182 shares of General Energy Resources and Technology Corporation stock as payment for management fees for the period November, 1987 to May, 1990 totaling $94,559.10. The Company had a two year buy-back option and in September 1992, the Company repurchased the 1,891,182 shares of General Energy Corporation stock at $.06 per share. The Company then issued 886,040 shares at $.20 to replace the shares purchased and as payment for additional management fees accrued through August, 1992.
As of December 31, 1995, the Company has a liability to Penteco of $13,262 for management fees and out-of-pocket costs.
In 1991, the Company loaned $350,000 to American Barter. American Barter agreed to repay this loan, with interest at the Company's borrowing rate and to assign a 25% working interest in the Tulare Lakes Field. The Tulare Lakes Field was purchased from Chevron by Penteco and American Barter in 1991. The agreement between Chevron and Penteco and American Barter states that the note owed to Chevron will be repaid from production from the Tulare Lakes Field. If production does not cover debt payments, General Energy is not liable to Chevron or other third parties. The Company booked 25% of the purchase price as proved oil and gas properties, approximately $875,900. The Company also recorded 25% of the liabilities for Penteco and American Barter's purchase of the field along with 25% of American Barter's $350,000 debt to General Energy, borrowed for costs of revitalizing the field. During 1992, and 1993, additional debt has been recorded for Society Bank loans used to pay off the original $350,000 and for operating expenses and accrued interest. In 1993, the Company sold a 1% interest to a company shareholder for $10,000. The Company's 25% interest was to be paid from Penteco Corporation's working interest percentage, net of expenses. As of December 31, 1995, the total revenue from the field continued to be less than the total expenses with no expectation of improvement within the next twelve months. Management determined the asset and liability to be unrealistically presented on the financial statements and the outstanding debt balance of $908,410 which included accrued interest and the asset balance of $717,288, net of accumulated DD&A, were written off.
During 1991, the Company organized the sale of 306,410 shares of privately held General Energy stock. The Company did not purchase the stock, only brought together the buyers and sellers. The Company earned approximately $18,000 from this sale. These funds were applied to pay other obligations and settlements due the seller of the shares and costs related to the transaction.
During 1992, the Company repurchased a 5% interest in the Fons- Jacob well from a Company director in exchange for 504,015 shares of restricted stock issued at $.20 per share.
During 1993, the Company sold 200,000 shares of restricted stock to Company shareholders at $.10 per share. One of these shareholders also loaned $11,000 to the Company through its subsidiary, which is expected to be repaid in 1996.
The Company sold several turnkey working interests to major shareholders and directors during 1995. Accounts receivable from these related parties totaled $50,094 at December 31, 1995 while related party accounts payable amounted to $7,476. No interest has been accrued on any of the above amounts.
Pursuant to the requirements of Section 13, or 15(d) 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, on the 12th day of April, 1996.
GENERAL ENERGY RESOURCES AND TECHNOLOGY CORPORATION
By: H.TERRY SNOWDAY, JR. _____________________________ H. Terry Snowday, Jr. President
Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following person(s) on behalf of the registrant and in the capacities and on the date(s) indicated.
Signature Title Date _________ _____ ____
H. TERRY SNOWDAY, JR. President, Chairman of the 05/07/96 _____________________ Board, Chief Executive H. Terry Snowday, Jr. Officer and Director
ROSALIE A. NEWMAN Chief Financial Officer and 05/07/96 _____________________ Treasurer Rosalie A. Newman
EDGAR R. PUTHUFF Director 05/07/96 _____________________ Edgar R. Puthuff
JOHN G. ROSS Director 05/07/96 _____________________ John G. Ross
CHARLES W. TAYLOR Director 05/07/96 _____________________ Charles W. Taylor
EDWARD A. WARD Director 05/07/96 _____________________ Edward A. Ward
ITEM 12. - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides information with respect to the shares of common stock of the Company beneficially owned by each beneficial owner of more than 5% of such shares, each director and officer of the Company, and all directors and officers as a group as of December 31, 1995.
Number of Shares Percent of Common Name Of Common Stock Stock Outstanding ____ _______________ _________________ H. Terry Snowday, Jr. 366,596 4.58% Robert M. Andrews 548,765 6.86% 12683 S. Marina Village Dr. Traverse City, MI 49684 Richard E. Calvert 449,935 5.62% P.O. Box 368 Perrinton, MI 48871-0368 Leslie L. Guernsey 6,700 (4) Armond Hansen 502,118 6.28% P.O. Box 6007 Mesa, AZ 85216-6007 Rosalie A. Newman 10,309 (4) Edgar R. Puthuff 941,998 (1) 11.78% John G. Ross 75,649 (2) (4) Charles W. Taylor 1,102,146 (3) 13.79% Edward A. Ward II 65,149 (4)
all directors and officers as a group (7 in the group) 2,568,547 32.13%
(1) Includes 10,000 shares owned by Edgar Puthuff & William Miller Trust of the Miller Puthuff Associates, Inc. Employees Pension Profit Sharing Plan, 17,649 shares owned by Edgar R. Puthuff Trust Miller Puthuff Associates Employees Pension Plan, 575,015 shares owned by Miller Puthuff Associates Pension Plan Profit Sharing Plan Profit Sharing Plan Trust and 100,000 shares owned by Edgar Puthuff Tr of the Miller Puthuff Associates Employees Pension Profit Sharing Plan.
(2) Includes 35,649 shares held by Patricia E. Ross, his wife.
(3) Includes 1,102,146 shares held by Penteco Corporation.
(4) Less than 1%
The above list includes officers and directors who have a beneficial ownership in the securities of the Company. All officers and directors are voting FOR on all proposals. It is not known how the other 5% shareholders intend to vote their proxies.
ITEM 13.
ITEM 13. - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There are no family relationships between the officers and/or directors of the Company other than Edward A. Ward II is a brother-in-law of H. Terry Snowday.
Director Charles W. Taylor is President, Chairman of the Board and Chief Executive Officer of Penteco Corporation and Chairman of the Board of Lincoln Gas and Oil Marketing Corporation.
In 1987, the Company entered into a Management Agreement with Penteco Corporation to analyze the Company's financial position and provide management services to the Company. Mr. Charles Taylor, a director of the Company, owns 25% of the outstanding shares of Penteco and is a director and officer of that Company. Director's Snowday, Puthuff and Ward are minority investors in Penteco Corporation. Mr. Taylor abstained from voting for the Management Agreement considering his position with Penteco. Effective January 1993, the Management Agreement with Penteco Corporation was terminated and those responsible for management duties became salaried employees or advisors to the Company.
In July of 1990, Penteco Corporation agreed to accept 1,891,182 shares of General Energy Resources and Technology Corporation stock as payment for management fees for the period November, 1987 to May, 1990 totaling $94,559.10. The Company had a two year buy-back option and in September 1992, the Company repurchased the 1,891,182 shares of General Energy Corporation stock at $.06 per share. The Company then issued 886,040 shares at $.20 to replace the shares purchased and as payment for additional management fees accrued through August, 1992.
As of December 31, 1995, the Company has a liability to Penteco of $13,262 for management fees and out-of-pocket costs.
In 1991, the Company loaned $350,000 to American Barter. American Barter agreed to repay this loan, with interest at the Company's borrowing rate and to assign a 25% working interest in the Tulare Lakes Field. The Tulare Lakes Field was purchased from Chevron by Penteco and American Barter in 1991. The agreement between Chevron and Penteco and American Barter states that the note owed to Chevron will be repaid from production from the Tulare Lakes Field. If production does not cover debt payments, General Energy is not liable to Chevron or other third parties. The Company booked 25% of the purchase price as proved oil and gas properties, approximately $875,900. The Company also recorded 25% of the liabilities for Penteco and American Barter's purchase of the field along with 25% of American Barter's $350,000 debt to General Energy, borrowed for costs of revitalizing the field. During 1992, and 1993, additional debt has been recorded for Society Bank loans used to pay off the original $350,000 and for operating expenses and accrued interest. In 1993, the Company sold a 1% interest to a company shareholder for $10,000. The Company's 25% interest was to be paid from Penteco Corporation's working interest percentage, net of expenses. As of December 31, 1995, the total revenue from the field continued to be less than the total expenses with no expectation of improvement within the next twelve months. Management determined the asset and liability to be unrealistically presented on the financial statements and the outstanding debt balance of $908,410 which included accrued interest and the asset balance of $717,288, net of accumulated DD&A, were written off.
During 1991, the Company organized the sale of 306,410 shares of privately held General Energy stock. The Company did not purchase the stock, only brought together the buyers and sellers. The Company earned approximately $18,000 from this sale. These funds were applied to pay other obligations and settlements due the seller of the shares and costs related to the transaction.
During 1992, the Company repurchased a 5% interest in the Fons- Jacob well from a Company director in exchange for 504,015 shares of restricted stock issued at $.20 per share.
During 1993, the Company sold 200,000 shares of restricted stock to Company shareholders at $.10 per share. One of these shareholders also loaned $11,000 to the Company through its subsidiary, which is expected to be repaid in 1996.
The Company sold several turnkey working interests to major shareholders and directors during 1995. Accounts receivable from these related parties totaled $50,094 at December 31, 1995 while related party accounts payable amounted to $7,476. No interest has been accrued on any of the above amounts.
Pursuant to the requirements of Section 13, or 15(d) 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, on the 12th day of April, 1996.
GENERAL ENERGY RESOURCES AND TECHNOLOGY CORPORATION
By: H.TERRY SNOWDAY, JR. _____________________________ H. Terry Snowday, Jr. President
Pursuant to the requirements of the Securities and Exchange Act of 1934, this report has been signed below by the following person(s) on behalf of the registrant and in the capacities and on the date(s) indicated.
Signature Title Date _________ _____ ____
H. TERRY SNOWDAY, JR. President, Chairman of the 05/07/96 _____________________ Board, Chief Executive H. Terry Snowday, Jr. Officer and Director
ROSALIE A. NEWMAN Chief Financial Officer and 05/07/96 _____________________ Treasurer Rosalie A. Newman
EDGAR R. PUTHUFF Director 05/07/96 _____________________ Edgar R. Puthuff
JOHN G. ROSS Director 05/07/96 _____________________ John G. Ross
CHARLES W. TAYLOR Director 05/07/96 _____________________ Charles W. Taylor
EDWARD A. WARD Director 05/07/96 _____________________ Edward A. Ward