Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended December 31, 2009 | |
o | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from ______________to ______________. | |
REOSTAR ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
3880 Hulen Street, Suite 500, Fort Worth, Texas 76107
(Address of principal executive offices)
(817) 989-7367
(Registrant's telephone number, including area code)
(Exact name of registrant as specified in its charter)
Nevada | 20-8428738 | |||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
3880 Hulen Street, Suite 500, Fort Worth, Texas 76107
(Address of principal executive offices)
(817) 989-7367
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer o | Accelerated filer o | |||
Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Class | Outstanding at February 11, 2010 |
Common Stock, par value $0.001 per share | 81,643,912 |
TABLE OF CONTENTS
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PART I - FINANCIAL INFORMATION
Table of Contents
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
ReoStar Energy Corporation
Consolidated Balance Sheets
Consolidated Balance Sheets
December 31, 2009 (unaudited) | March 31, 2009 | |||||
ASSETS | ||||||
Current Assets: | ||||||
Cash | $ | 619,986 | $ | 426,430 | ||
Accounts Receivable: | ||||||
Oil & Gas - Related Party | 672,660 | 337,879 | ||||
Related Party | 285,397 | 1,107,854 | ||||
Other | 6,407 | 15,760 | ||||
Inventory | 3,397 | 7,514 | ||||
Hedging Account | 6,317 | 6,317 | ||||
Total Current Assets | 1,594,164 | 1,901,754 | ||||
Note Receivable | 112,991 | 553,536 | ||||
Oil and Gas Properties - successful efforts method | 26,696,331 | 25,254,777 | ||||
Less Accumulated Depletion and Depreciation | (7,864,825 | ) | (6,206,558 | ) | ||
Oil & Gas Properties (net) | 18,831,506 | 19,048,219 | ||||
Other Depreciable Assets: | 2,352,855 | 2,171,654 | ||||
Less Accumulated Depreciation | (483,579 | ) | (315,093 | ) | ||
Other Depreciable Assets (net) | 1,869,276 | 1,856,561 | ||||
Leasehold Held for Sale | - | 150,000 | ||||
Total Assets | $ | 22,407,937 | $ | 23,510,070 | ||
LIABILITIES | ||||||
Current Liabilities: | ||||||
Accounts Payable | $ | 132,317 | $ | 22,033 | ||
Payable to Related Parties | 61,451 | 148,550 | ||||
Accrued Expenses | 114,236 | 106,141 | ||||
Accrued Expenses - Related Party | 99,061 | 130,870 | ||||
Hedging Liabilities - Current | 130,958 | - | ||||
Current Portion of Long Term Debt | 3,200,000 | - | ||||
Total Current Liabilities | 3,738,023 | 407,594 | ||||
Notes Payable | 10,201,305 | 8,955,202 | ||||
Notes Payable - Related Parties | 3,518,924 | 3,518,924 | ||||
Less Current Portion of Notes Payable | (3,200,000 | ) | - | |||
Total Long-Term Debt | 10,520,229 | 12,474,126 | ||||
Asset Retirement Obligation | 368,810 | 344,079 | ||||
Hedging Liability - Noncurrent | - | - | ||||
Deferred Tax Liability | 703,470 | 1,702,782 | ||||
Total Liabilities | 15,330,532 | 14,928,581 | ||||
Commitments & Contingencies: | - | - | ||||
Stockholders' Equity | ||||||
Common Stock, $.001 par,200,000,000 shares authorized and 81,643,912 shares outstanding on December 31, 2009 and 80,353,912 shares outstanding on March 31, 2009 | 81,643 | 80,353 | ||||
Additional Paid-In-Capital | 11,812,650 | 10,959,965 | ||||
Retained Deficit | (4,816,888 | ) | (2,458,829 | ) | ||
Total Stockholders' Equity | 7,077,405 | 8,581,489 | ||||
Total Liabilities & Stockholders' Equity | $ | 22,407,937 | $ | 23,510,070 | ||
See Accompanying Notes to Consolidated Financial Statements
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Table of Contents
ReoStar Energy Corporation
Consolidated Statements of Operations
Consolidated Statements of Operations
Three Months Ended | Nine Months Ended | ||||||||||||||
December 31, 2009 (unaudited) | December 31, 2008 (unaudited) | December 31, 2009 (unaudited) | December 31, 2008 (unaudited) | ||||||||||||
Revenues | |||||||||||||||
Oil & Gas Sales | $ | 975,933 | $ | 904,494 | $ | 2,150,145 | $ | 5,939,289 | |||||||
Sale of Leases | 173,420 | - | 311,097 | 18,005 | |||||||||||
Other Income | 79,856 | 124,194 | 253,438 | 333,178 | |||||||||||
1,229,209 | 1,028,688 | 2,714,680 | 6,290,472 | ||||||||||||
Costs and Expenses | |||||||||||||||
Oil & Gas Lease Operating Expenses | 436,640 | 709,047 | 1,480,038 | 2,094,314 | |||||||||||
Workover Expenses | 27,830 | 35,862 | 71,828 | 196,269 | |||||||||||
Severance & Ad Valorem Taxes | 121,486 | 103,617 | 186,681 | 389,854 | |||||||||||
Expired Leases and Abandonments | 45,348 | 9,925 | 45,348 | 9,925 | |||||||||||
Depletion & Depreciation | 827,021 | 453,736 | 2,222,948 | 1,236,372 | |||||||||||
ARO Accretion | 10,222 | - | 32,003 | - | |||||||||||
General & Administrative: | |||||||||||||||
Salaries & Benefits | 261,056 | 133,284 | 664,551 | 454,744 | |||||||||||
Legal & Professional | 120,921 | 44,481 | 897,751 | 358,272 | |||||||||||
Other General & Administrative | 106,019 | 173,336 | 378,390 | 384,738 | |||||||||||
Interest, net of capitalized interest of $129,357 and $170,196 for the three months ended 12/31/09 and 12/31/08, respectively and $383,630 and $482,494 for the nine months ended 12/31/09 and 12/31/08, respectively | - | 880 | - | 3,780 | |||||||||||
1,956,543 | 1,664,168 | 5,979,538 | 5,128,268 | ||||||||||||
Other Income (Expense) | |||||||||||||||
Interest Income | (9,467 | ) | 4,966 | 18,437 | 66,211 | ||||||||||
Loss on Equity Method Investments | - | - | - | (142,395 | ) | ||||||||||
Hedging Gain (Loss) | (7,307 | ) | - | (110,950 | ) | (6,746 | ) | ||||||||
Income (Loss) from continuing operations before income taxes | (744,108 | ) | (630,514 | ) | (3,357,371 | ) | 1,079,274 | ||||||||
Income Tax Benefit (Expense) | 307,324 | 220,290 | 999,312 | (412,651 | ) | ||||||||||
Net Income (Loss) | $ | (436,784 | ) | $ | (410,224 | ) | $ | (2,358,059 | ) | $ | 666,623 | ||||
Basic & Diluted Loss per Common Share | $ | (0.01 | ) | $ |