FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2005.
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________.
Commission File Number: 0 - 7261
CHAPARRAL RESOURCES, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 84-0630863
------------------------------- ------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
2 Gannett Drive, Suite 418
White Plains, New York 10604
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (866) 559-3822
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, and (2) has been subject to such filing requirements for the past 90 days.
YES |X| NO |_|
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
YES |_| NO |X|
As of August 10, 2005 the Registrant had 38,209,502 shares of its common stock, par value $0.0001 per share, issued and outstanding.
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CHAPARRAL RESOURCES, INC.
FORM 10-Q
JUNE 30, 2005
TABLE OF CONTENTS
PAGE
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PART I. FINANCIAL INFORMATION
Item l. Financial Statements
Consolidated Condensed Balance Sheets as of June
30, 2005 and December 31, 2004 1
Consolidated Condensed Statements of Operations for the Three Months Ended June 30, 2005 and 2004 and Consolidated Condensed Statements of Operations for the Six Months Ended June 30, 2005 and 2004 3
Consolidated Condensed Statements of Cash Flows for the Six Months Ended June 30, 2005 and 2004 4
Notes to Consolidated Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 14
Item 3. Quantitative and Qualitative Disclosures About Market Risk 19
Item 4. Controls and Procedures 20
PART II. OTHER INFORMATION
Item 6. Exhibits 21
Signatures 22
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Part I - Financial Information
Item 1 - Financial Statements
Chaparral Resources, Inc.
Consolidated Condensed Balance Sheets
June 30, December 31,
2005 2004
(Unaudited)
--------- ---------
$ 000 $ 000
Assets
Current assets:
Cash and cash equivalents 34,604 9,611
Accounts receivable:
Oil sales receivable 6,731 316
VAT receivable 5,358 2,212
Other receivables from affiliates 2 1,002
Prepaid expenses 4,043 3,472
Current portion of deferred financing charges 1,229 --
Crude oil inventory 1,121 36
--------- ---------
Total current assets 53,088 16,649
Deferred financing charges 571 --
Materials and supplies 6,675 5,238
Other 420 336
Property, plant and equipment:
Oil and gas properties, full cost 165,717 153,001
Other property, plant and equipment 11,287 10,974
--------- ---------
177,004 163,975
Less - accumulated depreciation, depletion and amortization (73,997) (62,495)
--------- ---------
Property, plant and equipment, net 103,007 101,480
--------- ---------
Total assets 163,761 123,703
========= =========
See accompanying notes.
1
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Chaparral Resources, Inc.
Consolidated Condensed Balance Sheets (continued)
June 30, December 31,
2005 2004
(Unaudited)
--------- ---------
$ 000 $ 000
Liabilities and Stockholders' equity
Current liabilities:
Accounts payable 9,107 8,540
Advances received -- 387
Prepaid sales -- 6,590
Accrued liabilities:
Accrued compensation 226 241
Accrued interest payable 553 713
Other accrued liabilities 3,415 1,822
Current income tax liability 4,326 2,052
Current portion of loans payable 30,222 19,778
--------- ---------
Total current liabilities 47,849 40,123
Accrued production bonus 341 299
Loans payable 25,778 12,000
Deferred tax liability 3,276 3,258
Minority interest 19,961 12,099
Asset retirement obligation 1,427 1,232
Stockholders' equity:
Common stock - authorized, 100,000,000
shares of $0.0001 par value; issued and outstanding,
38,209,502 shares as of June 30, 2005 and
December 31, 2004 4 4
Capital in excess of par value 107,226 107,226
Preferred stock - 1,000,000 shares authorized, 925,000 shares
undesignated. Issued and outstanding - none -- --
Accumulated deficit (42,101) (52,538)
--------- ---------
Total Stockholders' equity 65,129 54,692
--------- ---------
Total liabilities and Stockholders' equity 163,761 123,703
========= =========
See accompanying notes.
2
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Chaparral Resources, Inc.
Consolidated Condensed Statements of Operations (Unaudited)
For the Three Months Ended For the Six Months Ended
-------------------------- --------------------------
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
----------- ----------- ----------- -----------
$000 (except share data) $000 (except share data)
Revenue 33,160 17,471 57,487 33,080
Costs and expenses:
Transportation costs 4,056 3,067 7,544 6,220
Operating expenses 3,568 1,688 7,393 3,899
Marketing fee 136 39 258 39
Depreciation and depletion 5,829 4,150 10,847 8,536
Management fee 200 25 393 100
Advisory fee -- 100 -- 100
Accretion expense 38 22 74 47
General and administrative 1,625 2,109 3,046 3,757
----------- ----------- ----------- -----------
Total costs and expenses 15,452 11,200 29,555 22,698
----------- ----------- ----------- -----------
Income from operations 17,708 6,271 27,932 10,382
Other income/(expense):
Interest income 57 10 143 55
Interest expense (1,056) (1,265) (2,281) (2,499)
Currency exchange gain/(loss) 9 (77) 17 (157)
Minority interest (5,040) (1,757) (7,862) (2,823)
Loss on disposition of assets (1) -- (1) --
----------- ----------- ----------- -----------
Income before income taxes 11,677 3,182 17,948 4,958
Income tax expense (5,075) (1,882) (7,511) (3,024)
----------- ----------- ----------- -----------
Net income available to common Stockholders 6,602 1,300 10,437 1,934
=========== =========== =========== ===========
Basic earnings per share:
Net income per share $ 0.17 $ 0.03 $ 0.27 $ 0.05
Weighted average number of shares
outstanding (basic) 38,209,502 38,209,502 38,209,502 38,209,502
Diluted earnings per share:
Net income per share $ 0.17 $ 0.03 $ 0.27 $ 0.05
Weighted average number of shares
outstanding (diluted) 39,500,312 38,209,502 39,327,414 38,209,502
See accompanying notes.
3
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Chaparral Resources, Inc.
Consolidated Condensed Statements of Cash Flows (Unaudited)
For the Six Months Ended
------------------------
June 30, June 30,
2005 2004
-------- --------
$ 000 $ 000
Cash flows from operating activities
Net income 10,437 1,934
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation, depletion and amortization 10,847 8,536
Deferred income taxes 18 1,955
Accretion expense 74 47
Amortization of note discount 222 227
Currency exchange (gain)/loss (17) 157
Loss on disposition of assets 1 --
Minority interest 7,862 2,823
Changes in assets and liabilities:
(Increase)/decrease in:
Accounts receivable (8,561) (2,654)
Prepaid expenses (571) 830
Crude oil inventory (406) 103
Increase/(decrease) in:
Accounts payable and accrued liabilities 2,250 2,306
Accrued interest payable (160) (80)
Other liabilities (6,548) 71
-------- --------
Net cash provided by operating activities 15,448 16,255
-------- --------
Cash flows from investing activities
Additions to property, plant and equipment (339) (1,130)
Capital expenditures on oil and gas properties (12,595) (15,517)
Materials and supplies inventory (1,437) --
Other long-term assets -- (911)
-------- --------
Net cash used by investing activities (14,371) (17,558)
-------- --------
4
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Chaparral Resources, Inc.
Consolidated Condensed Statements of Cash Flows (Unaudited) (continued)
For the Six Months Ended
------------------------
June 30, June 30,
2005 2004
-------- --------
$ 000 $ 000
Cash flows from financing activities
Proceeds from loans 37,000 4,000
Payments on loans (13,000) (4,000)
Other long-term assets (84) --
-------- --------
Net cash provided by financing activities 23,916 --
-------- --------
Net increase/(decrease) in cash and cash equivalents 24,993 (1,303)
Cash and cash equivalents at beginning of period 9,611 2,639
-------- --------
Cash and cash equivalents at end of period 34,604 1,336
======== ========
Supplemental cash flow disclosure
Interest paid 2,220 2,302
Income taxes paid 5,068 1,645
Supplemental schedule of non-cash investing and
financing activities
Non-cash additions to oil and gas properties 121 175
See accompanying notes.
0,26 (5,75%)
