DD on Anthony Miller: CEO of USEI Portable ste
Post# of 166
DD on Anthony Miller: CEO of USEI
Portable steam generator increases oil production substantially
Oct 27, 1998 01:00 AM
U.S. Crude Ltd. announced preliminary results from the demonstration of its TM-98 Thermo-Gas Repressurization technology.
The TM-98 system, field demonstrated on the Company's oil property in Oklahoma, increased oil production by over 500 %, in that section of the Company-owned oil field where the demonstration was conducted.
Commenting on the results, Anthony K. Miller, president of U.S. Crude, stated, "The results have exceeded all of our expectations.
"These dramatic results are not only a milestone for our Company, but of significant importance to the entire oil industry. The industry needs a portable, low-cost system like ours, that will enhance oil production from older, poorly-producing wells. We anticipate that the results from this demonstration will generate a number of joint venture and other sales opportunities from both major and independent operators."
The TM-98 system is designed to provide needed reservoir pressure to drive crude oil through ground formations, to thewell, and then up to the surface. The Company's target market for this technology is the thousands of gas depleted oil formations world-wide.
The oil and gas industry commonly uses nitrogen, CO2 and natural gas to repressurize the depleted formations.
U.S. Crude's Thermo-Gas system operates on a similar principle, however the TM-98 injects hot gas into the formation, which makes the oil flow more freely, and increases oil recovery. The system is designed to work well with light or heavy oil.
During October the Company began demonstrating the TM-98 Thermo-Gas system on its oil property in Oklahoma. For the first two days of the process, the Company injected steam into the ground using its TM-96 Portable Steam Generator.
The steam injection was followed by the injection of hot gas using the TM-98 Thermo-Gas system. The TM-98 unit can delivery up to 1.3 mm cfpd of hot inert gas into an oil formation. Based on geologist's calculations, the gas was injected into a strategic location in the middle of 160 acres of land (1/4 section) whereby the wells surrounding the point of entry would benefit from the injected gas.
After injecting only 6.5 mm cubic feet of gas, and achieving a 500 % increase in oil production from the surrounding wells, the Company suspended the gas injection process because the formation would not accept the high-volume of gas being delivered. With the Company's consultants, the Company made the decision to constructed a 4,000 foot pipeline designed to delivery the hot gas to two different locations on the property, thus fully utilising the maximum output of the TM-98.
Commenting on the pipeline strategy, Miller said, "The pipeline is almost complete and gas injection should start again later this week. We believe that once we are able to inject the full output of the TM-98 into the formation, the increase in production will exceed the 500 % increase we have already demonstrated."
U.S. Crude Ltd.'s primary goal is to use patent-pending technologies to rekindle marginally producing oil wells to profitable levels. The Company holds the license to the technologies for, and the rights to market, the TM-96 Portable Steam Generator System and the TM-98 Portable Thermo-Gas Repressurizing System.
These units, used in conjunction with each other, or separately, improve the free flow of crude oil, and provide pressure needed to drive the oil through ground formations to the well shaft. Although major oil companies have used steam and gas technology for years, the patent-pending TM series extraction units provide a portability and low cost of operation not previously available.
The company's immediate target market is approximately 500,000 "stripper " wells in the United States which produce less than 10 bpd, some still having as much as 80 % of the oil remaining underground. Many of these wells are owned by some 23,000 independent operators world-wide, for whom previous extraction methods have been uneconomical. Substantial international opportunities also exist for use of thistechnology.
Part I: FINANCIAL INFORMATION
U S Crude Ltd
(A Development Stage Company)
Unaudited Balance Sheet
Three Months Ended Year Ended
June 30, 2000 March 31, 2000
ASSETS
Current Assets
Cash $ 31,410 $ 114,219
Accounts Receivable 525,350 500,000
Inventories
Related Party Receivable
--------------- -------------
Total Current Assets 556,760 614,219
Property, Plant & Equipment
Property, Plant & Equipment - Net 1,159,823 1,154,823
Less Accumulated Depreciation (141,446) (120,196)
--------------- -------------
Net Property, Plant & Equipment 1,018,377 1,034,627
Other Assets
Other Assets - Net 1,989,279 1,847,771
Less Accumulated Amortization (123,040) (96,801)
--------------- -------------
Total Other Assets 1,866,239 1,750,970
--------------- -------------
TOTAL ASSETS $3,441,376 $3,399,816
=============== =============
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Accounts Payable $ 450,000 $ 450,000
Other Payables -
Note Payable -
--------------- -------------
Total Current Liabilities 450,000 450,000
Long Term Liabilities
Long Term Debt 273,928 278,662
--------------- -------------
Total Long Term Liabilities 273,928 278,662
Stockholder's Equity
Preferred stock, no par value; 5,000,000 shares issued
and outstanding at June 30, 2000 100,000 100,000
Common stock, no par value; 25,000,000 shares authorized
21,475,303 issued and outstanding at June 30, 2000 3,957,058 3,797,692
Retained Earnings (Deficit) (1,339,610) (1,226,538)
--------------- -------------
Total Stockholder's Equity 2,717,448 2,671,154
--------------- -------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $3,441,376 $3,399,816
=============== =============
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U S CRUDE LTD
(A Development Stage Company)
Unaudited Statement of Operations
Three Months Ending June 30
2000 1999
REVENUES
Sales $ 26,239 $ -
--------------- ---------------
TOTAL REVENUES 26,239 -
COST OF GOODS SOLD
Cost of Sales -
--------------- ---------------
TOTAL COST OF GOODS SOLD - -
Gross Profit 26,239 -
OPERATING COSTS
Administrative & Overhead 139,322 150,532
--------------- ---------------
TOTAL OPERATING COSTS 139,322 150,532
OTHER INCOME (EXPENSE)
Interest Income 11 568
Interest Expense -
--------------- ---------------
TOTAL OTHER INCOME (EXPENSE) 11 568
NET INCOME (LOSS) $ (113,072) $ (149,964)
=============== ===============
Net Loss per Share (0.01) (0.01)
Weighted Average Common Shares 21,475,303 17,451,212
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U S CRUDE LTD
(A Development Stage Company)
UNAUDITED STATEMENT OF CASH FLOWS
Three Months Ended June 30
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (113,072) $(149,964)
Adjustments to reconcile net loss to
cash used in operating activities:
Depreciation 21,250 21,250
Depletion 26,239
(Increase) Decrease in current assets (25,350) (53,170)
Increase (Decrease) in current liabilities
(Increase) Decrease in other assets (141,508) (396,124)
------------- --------------
NET CASH PROVIDED (USED) BY (232,441) (578,008)
OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
(Purchase) Sale of property and equipment (5,000)
Increase (Decrease) in notes payable (4,734) 322,422
Capital received 159,366
------------- --------------
NET CASH FLOWS FROM INVESTING ACTIVITIES 149,632 322,422
NET INCREASE (DECREASE) IN CASH (82,809) (255,586)
CASH AT BEGINNING OF PERIOD 114,219 265,675
CASH AT END OF PERIOD $ 31,410 $ 10,089
============= ==============
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U S CRUDE LTD
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
For the Period from March 31, 1998 to June 30, 2000
Accumulated Total
Common Stock Preferred Stock
Shares Amount Shares Amount Deficit
------- -------- -------- -------- ----------- -----
Balance - March 31, 1998 7,122,260 $1,507,806 1,000,000 $ 100,000 $ (253,178) $1,354,628
Shares issued for cash 731,751 373,804 373,804
Purchase of U S Thermo Tech 3,738,000 847,232 847,232
Net Loss for year - - - (310,037) (310,037)
--------------- -------------- -------------- -------------- --------------- --------------
Balance - March 31, 1999 11,592,011 2,728,842 1,000,000 100,000 (563,215) 2,265,627
--------------- -------------- -------------- -------------- --------------- --------------
Shares issued for cash 6,976,170 742,308 742,308
Shares issued in exchange for 1,000,000 400,000 400,000
lowering debt
Net Loss for year (663,323) (663,323)
--------------- -------------- -------------- -------------- --------------- --------------
Balance - March 31, 2000 19,568,181 3,871,150 1,000,000 100,000 (1,226,538) 2,744,612
--------------- -------------- -------------- -------------- --------------- --------------
Shares issued for cash 1,907,122 85,908 85,908
Net loss for period (122,774) (122,774)
Balance - June 30, 2000 21,475,303 $3,957,058 1,000,000 $ 100,000 (1,349,312) $2,707,746
=============== ============== ============== ============== =============== ==============
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U.S. CRUDE LTD. & SUBSIDIARY
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - NATURE OF OPERATIONS AND SIGNIFICANT POLICIES: U.S. CRUDE LTD. & SUBSIDIARY ("The Company), was incorporated in California on May 22, 1996. It is in the development stage, (as defined by Financial Accounting Standards Board Statement No. 7). The Company's primary business is to utilize its proprietary portable steam generator technology to stimulate oil production in marginally producing wells across America. The Company on July 27, 1998 entered into a merger with U.S. Thermo-Tech, Inc. U.S. Thermo- Tech Inc. was incorporated on May 8, 1997 and is also in the development stage. U.S. Thermo-Tech, Inc.'s primary business is to utilize its patent pending thermal gas injector system (the "TM-98") to rekindle marginally producing oil wells. This merger was accounted for using the pooling of interest method of accounting. This method combines the income statements from the beginning of the year of acquisition.
Since inception, the Company's efforts have been devoted to the development of its product and raising capital. The Company began oil production in January of 1999. Accordingly, the Company is in the development stage and the accompanying financial statements represent those of a development stage enterprise. As such the Company has incurred net operating losses since inception of $1,349,312 and does not have sufficient working capital to fund its planned operations during the next twelve months. Although sufficient funds are available to meet general and administrative expenses, additional funding will be required to complete the Company's expansion plans. These circumstances raise substantial doubt about the Company's ability to continue as a going concern. In order to meet the Company's continued financial needs, management of the Company intends to raise working capital through the sale of common stock or other financings.
The Company has also acquired a 49% interest in 54 oil producing properties encompassing 960 acres in the state of Oklahoma. The wells were acquired through a joint venture with a company called Crude Oil Recovery, a California Corporation. All revenue produced through this venture has been returned back into oil producing property to build up the infrastructure of the property.
The Company has received exclusive rights to develop, market, sell and utilize the TM-96, TM-98 as well as three other innovative steam qenerating technologies from Wave technology Inc. The Company issued Wave Technology 3,160,000 shares of the Company's common stock and 1,000,000 shares of the Company's Preferred stock in return for the rights.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents.
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PROPERTY AND EQUIPMENT AND DEPRECIATION
Property and equipment are carried at cost. Maintenance, repairs and minor renewals are expensed as incurred. When assets are retired, or otherwise disposed of, the related costs and accumulated depreciation are removed from the respective accounts and any gain or loss on disposition is reflected in the statement of operations.
Depreciation is calculated using the straight-line method, for the Machinery and Equipment and ACRS for the Truck, over the following estimated useful lives;
Machinery and equipment 7 years Truck 5 years
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In March of 1995, the Financial Accounting Standards Board issued standard No. 121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be disposed of." The Company has adopted standard No. 121 as of January 1, 1996. The effect on the financial statements of adopting standard No. 121 was not material.
In October 1995, the Financial Accounting Standards Board issued standard No. 123, "Accounting for Stock-Based Compensation". The accounting or disclosure requirements of this statement are effective for the Company's fiscal year-end 1996 financial statements. The Company has adopted standard No. 123 as of January 1, 1996. The effect on the financial statements of adopting standard No. 123 was not material.
In February 1997 SFAS No 128. "Earnings per share" was issued effective for periods ending after December 15, 1997. There is no impact on the Company's financial statements from adoption of SFAS No. 128.
RESEARCH AND DEVELOPMENT OF OIL PROPERTIES
The Company follows the full cost method to acc6unt for its oil and gas research and Development costs. Under this method, all costs incurred which are directly related to Research and development of its oil properties are capitalized and subject to depletion. Depletable costs also include estimates of future development costs of proven reserves.
NET LOSS PER SHARE
Net loss per share is calculated using the weighted average number of shares outstanding during the periods presented. The Company had stock equivalents at March 31, 2000 which are listed in note 6. These stock equivalents effect the earnings per share.
ESTIMATES USED IN FINANCIAL STATEMENT PRESENTATION
The presentation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
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DEPLETION
Because of the difficulty in estimating the Depletable oil reserves in the ground the Company has adopted the percentage depletion method. This method uses a flat percentage to deplete the capitalized costs of research, drilling and oil production. This method is limited to 100% of the taxable income before the depletion allowance.
REVENUE RECOGNITION
The Company is on an accrual basis: thus all sales are booked when earned and all expenses are expensed when incurred. The Company only recently began drilling and selling oil so the majority of the sales came from a one time sale of a TM-96 machine for $500,000 or interest income.
NOTE 2 - INCOME TAXES: Deferred taxes relate to differences between the basis of assets and liabilities for financial and tax reporting purposes. Deferred tax assets and liabilities represent the future tax consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes also are recognized for net operating losses that are available to offset future taxable income. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax assets will not be realized.
NOTE 3 - STOCKHOLDERS' EOUITY: The Company is authorized to issue up to 70,000,000 shares of common stock, no par value. Each holder of common stock is entitled to one vote for each Share held on all mattes properly submitted to the shareholders for their vote. Cumulative voting is not authorized. At June 30, 2000 21,475,303 shares of common stock are outstanding.
The Company is authorized to issue up to 5,000,000 shares of Preferred Stock, no par value. At June 30, 2000 1,000,000 shares of preferred shares were owned by Wave Tech Inc. These Preferred shares have super voting rights of 10 votes per each share.
As previously discussed in note 1, The Company merged with U.S. Thermo-Tech, Inc. on July 27, 1998. In this Merger the remaining Company (U.S. Crude Ltd. issued a half share of its stock for each share of U.S. Thermal-Tech, Inc. share. The result was that 3,738,000 shares of the company's shock is now owned by U.S. Thermo-Tech Inc. (now a 100% owned subsidiary).
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NOTE 4 - STOCK OPTION PLAN:
The Company currently has approximately 3,638,000 outstanding options to purchase the Company's common stock. Of these outstanding shares 2,650,000 are owned by directors and officers of the company and the remaining 988,000 options were granted to various individuals for work they did on behalf of the company. The options owned by the directors and officers were issued on January 01, 1997 and can be exchanged for one share of common stock at a dollar a share. These options must be exercised by December 31, 2006. The breakdown of the shares is as follows:
Anthony Miller-President 750,000 options
Catherine Njie--Secretary 250,000 options
Thomas Meeks-Director 1,000,000 options
Thomas Hobson-Director 650,000 options
Others 988,000 options
NOTE 5 - LEASES: The Company leases office and shop space in Colton, California. The lease term is one year, with an annual renewal option for one-year periods. The company has no lease deposit and The current Office rent is $1,000 a month.
The Company currently has 27 different lease contracts outstanding. These leases cover 8,700 acres of land and 300 oil and natural gas wells. These leases cost approximately $340,000 to acquire and are almost completely paid for. All of the leases are perpetual leases (meaning they last until the oil and natural gas dry's up and the wells are abandoned). The Company has a current certified geology report that state these leases have approximately 76,630,908 barrel of proven oil and 34,400,000 which are recoverable. The cost of these leases have been capitalized under prepaid oil production costs.
NOTE 6 - RELATED PARTY TRANSACTIONS: In 1999 & 1998 the company paid approximately $1,000,000 to Wave Technologies Inc. for the purchase of a portable thermos gas injector system (the "TM-98") and a portable steam generator (the "TM-96). The company entered into an agreement with Wave Technology Inc. to purchase this equipment along with the exclusive rights to develop, market, sell and utilize these machines. The company agreed to pay Wave Technology Inc. $1,000,000 for the Equipment and gave them another 3,160,000 shares of common stock and 1,000,000 shares of Preferred stock for the exclusive licensing rights to develop, sell and utilize the equipment as well as other oil recovery technologies. Wave Technology currently owns 4,910,000 shares of common stock and 1,000,000 shares of Preferred stock. This represents approximately 43% of the outstanding Common stock and 100% of the outstanding Preferred stock of the Company.
Wave Technology Inc. is 100% owned by Tom Meek's wife. He is also a director and executive officer of U.S. Crude LTD. Other directors and executive officers of U.S. Crude LTD own approximately 2.3% of the outstanding Common stock of U.S. Crude LTD. This means that the directors and executive officers of U.S. Crude LTD. own as a group approximately 45% of the Company.
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NOTE 7 - NOTE PAYABLE: In March of 1999 the company received $450,000 from an investor. In return for this money this investor received 500,000 shares at ten cents a share and an option to purchase another 1,000,0000 shares. This option was for one year. In March of 2000 in exchange for relieving this $400,000 Note the company issued the note holder 1,000,000 shares of common stock. This note included interest at 8%. 11 monthly interest only payments of $3,000 were made on this note during the year ended March 31, 2000.
NOTE 8 - NOTE PAYABLE-KERN COUNTY OIL LEASE: During the prior year the Company purchased an oil lease in Kern County, California. This lease is a perpetual lease. The cost of the lease was $240,000 and is to be paid off from proceeds from oil production. This note does not bear any interest. No payments were made on this note as of June 30, 2000. The Company did not start production of oil on this lease until May of 2000.
NOTE 9 - NOTE PAYABLE ASSOCIATES BANK: In April of 1999 the Company purchased a large compressor for $84,000. Approximately $32,000 was paid as a down payment and a 33 month note was taken out to pay the remaining balance. Monthly payments are made at the rate of $1,577 per month.
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ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR QUARTER ENDED JUNE 30, 2000 COMPARED TO SAME QUARTER IN 1999
The Company has experienced expenses for the three month period of $139,322 in 2000 compared $150,532 in 1999. The Company had revenues of $26,239 in the quarter in 2000 and no revenues in 1999. The Company had a net loss of ($113,072) for the quarter in 2000 and a net loss of ($149,964) for the same period in 1999. The Company losses will continue at a similar rate until sufficient income can be achieved to offset expenses of operations. While the Company is seeking capital sources for continuing operations; there is no assurance that sources can be found. The loss per share was ($.01) in the period in both 2000 and 1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company had $31,410 in cash and $525,350 in receivables at the end of the quarter. The Company had $450,000 in current liabilities and $273,928 in long term liabilities at the end of the quarter. The Company will need to either borrow or make private placements of stock in order to fund operations. No assurance exists as to the ability to achieve loans or to make private placements of stock.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULT UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. 8-K filed on May 11, 2000 (incorporated herein by reference)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: December 8, 2000
US CRUDE LTD.
/s/ Anthony Miller
-------------------------------------------
Anthony Miller, President
ARTICLE 5
PERIOD TYPE 3 MOS
FISCAL YEAR END MAR 31 2000
PERIOD END JUN 30 2000
CASH 31,410
SECURITIES 0
RECEIVABLES 525,350
ALLOWANCES 0
INVENTORY 0
CURRENT ASSETS 556,760
PP&E 1,159,823
DEPRECIATION 141,446
TOTAL ASSETS 3,441,376
CURRENT LIABILITIES 450,000
BONDS 0
PREFERRED MANDATORY 0
PREFERRED 100,000
COMMON 3,957,058
OTHER SE (1,339,610)
TOTAL LIABILITY AND EQUITY 3,441,376
SALES 26,239
TOTAL REVENUES 26,250
CGS 0
TOTAL COSTS 0
OTHER EXPENSES 139,322
LOSS PROVISION 0
INTEREST EXPENSE 0
INCOME PRETAX (113,072)
INCOME TAX 0
INCOME CONTINUING (113,072)
DISCONTINUED 0
EXTRAORDINARY 0
CHANGES 0
NET INCOME (113,072)
EPS BASIC (0.01)
EPS DILUTED (0.01)
(0)
(0)