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Texas Vanguard Oil Company releases 2nd Quarter 2014 Unaudited Interim Financial Statements

August 13, 2014

Austin, TX, Aug. 13, 2014 (GLOBE NEWSWIRE) -- Texas Vanguard Oil Company has prepared its second quarter 2014 Unaudited Finanical Information ending June 30, 2014, and its Condensed Financial Statements are as follows:



Condensed Balance Sheets

  June 30,  December 31, 
  2014  2013 
  (Unaudited)  (Audited) 
Current assets:      
   Cash and cash equivalents (including certificates of deposit of

   $250,000 in 2014 and $1,250,000 pledged in 2013)
 $18,635,524  $12,212,690 
   Trade accounts receivable  94,705   193,395 
   Prepaid expense  89,429   100,813 
   Note receivable  -0-   8,000,000 
   Total current assets  18,819,658   20,506,898 
Property and equipment, at cost:        
   Oil and gas properties - successful efforts method of accounting  3,783,536   3,926,210 
   Office furniture and vehicles  156,871   156,871 
   3,940,407   4,083,081 
   Less accumulated depreciation, depletion and amortization  (1,658,575)  (1,792,771)
   Total property and equipment, net  2,281,832   2,290,310 
Other assets  1,000   1,000 
   TOTAL ASSETS $21,102,490  $22,798,208 
Liabilities and Stockholders' Equity 
Current liabilities:        
  Trade accounts payable  $201,564   $477,528 
   Taxes payable  1,520,510   770,943 
   Deferred federal income tax liability  -0-   1,757,882 
   Asset retirement obligation, current portion  12,750   6,678 
Notes payable  -0-   150,000 
   Total current liabilities  1,734,824   3,163,031 
Asset retirement obligation, less current portion  92,239   93,089 
   Total liabilities  1,827,063   3,256,120 
Stockholders' equity:        
   Common stock, par value $.05; authorized 12,500,000 shares;

    1,416,587 issued and outstanding in 2014 and 2013, respectively
  70,828   70,828 
   Additional paid-in capital  1,888,528   1,888,528 
   Accumulated earnings  17,316,071   17,582,732 
   Total stockholders' equity  19,275,427   19,542,088 

See accompanying notes to condensed financial statements.


Condensed Statements of Earnings


  Three months ended  Six months ended 
  June 30,  June 30, 
  2014  2013  2014  2013 
   Operating revenue $222,312  $1,256,864  $442,572  $2,726,030  
   Other income  2,974   13,444   7,159   26,563  
   Total revenue  225,286   1,270,308   449,731   2,752,593  
Costs and expenses:                 
   Production cost  224,838   755,357   296,842   1,553,846  
   Depreciation, depletion and amortization  52,996   102,359   105,991   204,719  
   General and administrative  192,834   148,504   404,027   310,258  
   Plug and abandonment of oil and gas property  30,401   108,710   46,056   108,710  
   Interest  201   654   849   1,525  
   Doubtful account expense  -0-   59   -0-   18,743  
   Total costs and expenses  501,270   1,115,643   853,765   2,197,801  
   Earnings (loss) before taxes  (275,984)   154,665   (404,034)  554,792  
Federal and state taxes:                 
   Provision for federal income tax (benefit)  (93,835)   50,103   (137,372)   183,248  
   Provision for state margin tax  -0-   7,304   -0-   15,827  
   Net earnings (loss) $(182,149)  $97,258  $(266,662)  $355,717  
Weighted average number of shares outstanding  1,416,587   1,416,587   1,416,587   1,416,587  
Basic earnings (loss) per share $(.13)  $.07  $(.19)  $.25  
Diluted earnings (loss) per share $(.13)  $.07  $(.19)  $.25  


Condensed Statements of Cash Flows


  Six months ended 
  June 30, 
  2014  2013 
Net cash provided by (used in) operating activities $(1,315,917)  $592,263 
Cash flows used in investing activities:        
   Additions to oil and gas properties  (111,249)   (47,450) 
   Proceeds from collection of note receivable  8,000,000   -0- 
Net cash provided by (used in) investing activities  7,888,751   (47,450)
Net cash used in financing activities  (150,000)   --- 
Net change in cash and cash equivalents  6,422,834   544,813 
Cash and cash equivalents at beginning of period  12,212,690   9,036,449 
Cash and cash equivalents at end of period $18,635,524  $9,581,262 

See accompanying notes to condensed financial statements.


Notes to Condensed Financial Statements


June 30, 2014

Note 1:   Basis of Financial Statement Presentation

These unaudited condensed financial statements should be read in the context of the financial statements and notes thereto filed with the Securities and Exchange Commission in the Company's 2013 Annual Report on Form 10-K. 

Note 2:    Oil and Gas Properties

Texas Vanguard Oil Company (the "Company") follows the "successful efforts" method of accounting for oil and gas exploration and production operations. Accordingly, costs incurred in the acquisition and exploratory drilling of oil and gas properties are initially capitalized and either subsequently expensed if the properties are determined not to have proved reserves, or reclassified as a proven property if proved reserves are discovered.  Costs of drilling development wells are capitalized. Geological, geophysical, carrying and production costs are charged to expense as incurred.

The Company performs a periodic review for impairment of proved properties. The Company determines if impairment has occurred through either adverse changes or as a result of its periodic review for impairment. Upon abandonment of properties, the reserves are deemed fully depleted and any unamortized costs are recorded in the statement of income under impairment expense. Upon the sale of oil and gas reserves in place, costs less accumulated amortization of such property are removed from the accounts and resulting gain or loss on sale is reflected in operations. 

Impairment of unproved properties is assessed periodically and any impairment in value is currently charged to expense. Loss is recognized to the extent that such impairment is indicated. When an entire interest in an unproved property is sold, gain or loss is recognized, taking into consideration any recorded impairment.

Depreciation, depletion and amortization of proved oil and gas property costs, including related equipment and facilities, are provided using the units-of-production method.

Note 3:   Income Taxes

The Company uses the "asset and liability method" of income tax accounting, which bases the amount of current and future taxes payable on the events recognized in the financial statements and on tax laws existing at the balance sheet date.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes enactment date.

Note 4:   Statement of Cash Flows

Cash and cash equivalents as used in the Condensed Statements of Cash Flows include cash in banks and certificates of deposits owned.

Note 5:   Recently Issued Accounting Standards

The Company has reviewed the updates issued by the Financial Accounting Standards Board (FASB) during the six-month period ended June 30, 2014, and determined that the updates are either not applicable to the Company or will not have a material impact upon the Company.

Source: Texas Vanguard Oil Company

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