UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended: September 30, 2004
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ______ to _______
Commission file number 000-26721
AUSTRALIAN OIL & GAS CORPORATION
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(Exact name of Registrant as Specified in its Charter)
Delaware 84-1379164
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(State or other jurisdiction (IRS Employer Identification Number)
of incorporation of organization)
2480 North Tolemac Way, Prescott, Arizona 86305
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(Address of principal executive offices)
Issuer's Telephone Number: (928) 778 1450 Internet Website: www.ausoil.com
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NOT APPLICABLE
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
27,300,550 shares of common stock, $0.001 par value, as of SEPTEMBER 30, 2004.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [ X ]
INDEX
AUSTRALIAN OIL & GAS CORPORATION
For the Quarterly Period Ended: SEPTEMBER 30, 2004
Part 1. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheet as at September 30, 2004 (Unaudited)
and December 31, 2003 (Audited)
Consolidated Statement of Operations for the nine months ended
September 30, 2004 and 2003(Unaudited) and the three months ended
September 30, 2004 and 2003 (Unaudited) and the cumulative period
from August 6, 2003 (Date of Inception) to September 30, 2004
(Unaudited)
Consolidated Statement of Cash Flows for the nine months ended
September 30, 2004 and 2003 (Unaudited) and the cumulative period
from August 6, 2003 (Date of Inception) to September 30, 2004
Notes to Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis or Plan of Operation
Item 3. Controls and Procedures
Part 11. OTHER INFORMATION
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
Australian Oil & Gas Corporation
(a development stage enterprise)
CONSOLIDATED BALANCE SHEET
September 30, 2004 (Unaudited) and December 31, 2003 (Audited)
ASSETS
(Dollar amounts in thousands) As at 9/30/04 As at 12/31/03
(Unaudited) (Audited)
Current assets:
Cash and cash equivalents 3 2
---- ----
Total Current Assets 3 2
---- ----
Total Assets 3 2
==== ====
LIABILITIES AND STOCKHOLDERS' EQUITY (Deficit)
Current liabilities:
Accounts payable 186 111
---- ----
Total Current Liabilities (Note 3) 186 111
Stockholders' Equity
Common stock, $0.001 par value;75,000,000 shares
authorized 27,300,550 shares issued and outstanding 20 20
Capital in excess of par value 55 55
Deficit accumulated during the development stage (258) (184)
---- ----
Total Stockholders' Equity (Deficit) (183) (109)
Total Liabilities and Stockholders' Equity (Deficit) 3 2
==== ====
The accompanying notes are an integral part of these
consolidated financial statements.
Australian Oil & Gas Corporation
(a development stage enterprise)
CONSOLIDATED STATEMENT OF OPERATIONS
for the three months ended September 30, 2004 (Unaudited)
and the equivalent comparative period for the nine months
ended September 30, 2004 (Unaudited) and the equivalent
comparative period and for the Cumulative period from
August 6, 2003 (Date of Inception) to September 30, 2004 (unaudited)
(Dollar amounts in thousands)
For the three For the three For the nine For the nine Cumulative period
months ended months ended months ended months ended from Aug. 6, 2003
Sept, 30, 2004 Sept, 30, 2003 Sept. 30, 2004 Sept. 30, 2004 (Date of Inception)
to Sept, 30, 2004
Revenues: Nil Nil Nil Nil Nil
Costs and Expenses:
General and administrative 5 10 74 10 119
Merger and reorganisation - 139 - 139 139
--- ---- --- --- ---
5 149 74 149 258
--- ---- --- ---- ----
Net Loss (5) (149) (74) (149) (258)
=== ==== === ==== ====
Basic Loss per Common Share $ (*) $ (*) $ (*) $ (*) $ (.01)
=== === === === ===
Number of Common Shares
Used in Calculation 27,300,550 27,300,550 27,300,550 27,300,550 27,300,550
========== ========== ========== ========== ==========
*Less than $.01 per share
The accompanying notes are an integral part of these
consolidated financial statements.
Australian Oil & Gas Corporation
(a development stage enterprise)
CONSOLIDATED STATEMENT OF CASH FLOWS
for the nine months ended September 30, 2004 (Unaudited)
(Dollar amounts in thousands)
For the nine For the nine Cumulative period
months ended months ended from August 6, 2003
September 30, 2004 September 30, 2003 (Date of Inception)
to Sept. 30, 2004
Cash flows from operating activities:
Net loss (74) (149) (258)
Adjustments to reconcile net loss to net cash
used in operating activities:
Change in assets and liabilities:
Increase in accounts payable 75 74 186
--- --- ---
Total adjustments 75 74 186
--- --- ---
Net cash provided by (used in) operating activities 1 (75) (72)
Cash flows from financing activities:
Proceeds from the sale of common stock - net - 75 75
--- --- ---
Net cash provided by financing activities - 75 75
--- --- ---
Increase in cash 1 - 3
Cash and cash equivalents at beginning of period 2 - -
--- --- ---
Cash and cash equivalents at end of period 3 - 3
=== === ===
Supplemental disclosure of non-cash financing activities.
Great Missenden Holdings Pty Ltd charged:-
Administration Fees (Note 2) 71 - 71
Interest 7 - 7
The accompanying notes are an integral part of these
consolidated financial statements.
Australian Oil & Gas Corporation
(a development stage enterprise)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
The accompanying interim financial statements of Australian Oil & Gas
Corporation are unaudited. However, in the opinion of management, the interim
data includes all adjustments, consisting of only normal recurring adjustments,
necessary for a fair presentation of the results for the interim period. The
results of operations for the period ended September 30, 2004 are not
necessarily indicative of the operating results for the entire year. The interim
financial statements should be read in conjunction with our Annual Report on
Form 10-KSB for the year ended December 31, 2003.
Note 1: Organization
Australian Oil & Gas Corporation (the Company) was incorporated on August 6,
2003, and began operations on August 11, 2003 pursuant to the terms of a Plan of
Reorganization (`Plan') of Synergy Technologies Corporation ("Synergy") and is
considered to be a crude petroleum and natural gas company in the exploratory
stage and a development stage company as defined by SFAS No. 7, and since
inception, has been engaged in the assessment of oil and gas exploration
properties.
The authorized capital stock of the Australian Oil & Gas Corporation consists of
75,000,000 shares of common stock, $0.001 par value.
Note 2: Related Party Transactions
Mr. E Geoffrey Albers is a director and shareholder of Great Missenden Holdings
Pty Ltd. For the quarterly period ending September 30, 2004, Great Missenden
Holdings charged the Company administration fees of $3,750, granted a further
loan to the Company of $6,000, charged interest of $3,073 on the aggregate
outstanding balance.
At September 30, 2004 an aggregate amount of $185,714 remained payable to Great
Missenden Holdings Pty Ltd on three months notice, bearing interest at 7% per
annum. The Company also has the use of premises in Australia at Level 25, 500
Collins Street, Melbourne, Victoria. The office space is taken on a nonexclusive
basis, with no rent payable, but the usage of the premises is included in the
charges Great Missenden Holdings Pty Ltd makes in respect to the administration
of the Company.
With regard to the interest in exploration permit AC/P33 (formerly known as
AC02-1), Mr. E. Geoffrey Albers is a director and shareholder in the co-owners;
namely Natural Gas Corporation Pty Ltd and Auralandia N.L. With regard to the
interest in the Browse Joint Venture, Mr. E. Geoffrey Albers is a director and
shareholder in each of Batavia Oil & Gas Pty Ltd, Hawkestone Oil Pty Ltd, Alpha
Oil & Natural Gas Pty Ltd and he is a shareholder in Goldsborough N.L., which is
the parent of Goldsborough Energy Pty Ltd. All of these companies are the
holders of the Browse Joint Venture.
With regard to the interest in the National Gas Consortium, Mr. E. Geoffrey
Albers is a director and shareholder in each of Australis Finance Mining Pty
Ltd, National Oil & Gas Pty Ltd, Australian Natural Gas Pty Ltd and Nations
Natural Gas Pty Ltd. Mr D. B. Hill is a director of National Oil & Gas Pty Ltd.
All of these companies are participants in the National Gas Consortium.
Note 3: Current Liabilities
At September 30, 2004 the Company recorded a liability to Great Missenden
Holdings Pty Ltd of $185,714 as set out in Note 2 Related Party Transaction.
Item 2. Management's Discussion and Analysis or Plan of Operation
Forward-looking statements
This quarterly report contains certain statements that may be deemed
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended (Securities Act), and Section 21E of the United Stated
Securities Exchange Act of 1934, as amended (Exchange Act). Readers of this
quarterly report are cautioned that such forward-looking statements are not
guarantees of future performance and that actual results, developments and
business decisions may differ from those envisaged by such forward-looking
statements.
All statements, other than statements of historical facts, so included in
this quarterly report that address activities, events or developments that the
Registrant intends, expects, projects, believes or anticipates will or may occur
in the future, including, without limitation: statements regarding the
Registrant's business strategy, plans and objectives and statements expressing
beliefs and expectations regarding the ability of the Registrant to successfully
raise the additional capital necessary to meet its obligations, the ability of
the Registrant to secure the leases necessary to facilitate anticipated drilling
activities and the ability of the Registrant to attract additional working
interest owners to participate in the exploration and development of oil and gas
reserves, are forward-looking statements within the meaning of the Act. These
forward-looking statements are and will be based on management's then-current
views and assumptions regarding future events.
Plan of Operation
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General
Australian Oil & Gas Corporation is an independent energy company
focused on exploration and development of oil and natural gas reserves. Our core
business is directed at the acquisition of interests in oil and gas prospects in
the offshore areas of Australia's territorial waters. We rely on the
considerable experience in the oil and gas industry of our President, Mr. E.
Geoffrey Albers and our consultants to identify and conduct initial analyses of
properties in which we may acquire an interest. We devote essentially all of our
resources to the identification of high quality oil and gas properties and seek
to keep our overheads at a minimum level through the retention of carefully
selected consultants, contractors and service companies. We use proven
technologies to evaluate prospects before acquiring a working interest.
Generally, we expect to invest in projects at different levels of participation.
We plan to maintain as high a percentage of participation as can be prudently
managed. We will focus on areas considered to have significant near term
potential for oil or medium term potential for gas, or which can be farmed out
and/or developed in conjunction with other industry players. We intend to
consistently minimize our financial outlay requirements, wherever possible,
through promoted farm-out transactions to provide maximum leverage for
shareholders at minimal cost.
Since August 2003, when current management began operating the company, we
have not conducted any substantive business operations. Accordingly, we have no
results of operation to report.
In June 2004, we entered into a preliminary, non binding agreement to
acquire 100% of the outstanding shares of Alpha Oil & Natural Gas Pty Ltd
(Alpha), a company incorporated in Australia. The acquisition of Alpha is being
made to cost-effectively acquire a 20% interest in the permits of the Browse
Joint Venture, being permits WA-332-P, WA-333-P, WA-341-P and WA-342-P
("Permits"). The shareholders of Alpha shall, upon conclusion of formal
documentation and satisfaction of all conditions, be entitled to receive
2,000,002 shares of common stock of AOGC as consideration for Alpha.
The Permits of the Browse Joint Venture are contiguous and are located in
the offshore Browse Basin, a part of the North West Shelf of Australia. They
cover a total area of 11,080 sqkms (2,726,760 acres).
The Browse Basin region, off the coast of Western Australia, has a 40-year
history of exploration. It is an established petroleum sub-province and it forms
a part of the extensive series of continental margin sedimentary basins that,
together, comprise the North West Shelf hydrocarbon province of Australia. The
Browse Basin has been host to a series of major gas, gas condensate and oil
discoveries which began with the 1971 discovery at Scott Reef No.1. The first
discovery at Scott Reef-1 was followed, over the years, by major discoveries at
Brewster, Brecknock, and Brecknock South. In a later phase of exploration, oil
discoveries were made at Gwydion and Cornea. The latest major discoveries in the
Browse Basin have been made at Dinichthys, Titanichthys and Gorganichthys (the
Ichthys Gas/Condensate Fields). The latter, a giant 556.02 MMBL condensate and
10.7 TCF gas field is approximately 50 kilometers to the west of the Permits.
The Permits lie up-dip of these major central Browse Basin gas, and
gas/condensate discoveries. For the most part they lie on trend with the Crux
Field and with basin margin oil and gas accumulations at Gwydion and the Cornea.
The permits are presently lightly explored. There is one well on the boundary of
WA-332-P (Prudhoe-1), one well in WA-333-P (Rob Roy-1), two wells-Heywood-1 and
Buccaneer-1 in WA-341-P, and a total of fourteen wells in WA-342-P, mostly
associated with the undeveloped Cornea oil and gas accumulation. In the first
three year term of the Permits, the Browse Joint Venture has committed to obtain
available open file reports and basic 2D and 3D seismic data acquired by earlier
efforts of previous explorers. This includes approximately 1,100 sqkms of high
quality 3D seismic known as the Cornea 3D survey which is held by the Browse
Joint Venture. The data sets will be integrated and subjected to extensive
interpretational effort before the acquisition and processing of a further 1900
kilometres of new 2D seismic data to infill the existing grid of data, with lead
specific coverage. Should the Browse Joint Venture so decide, it can elect to
enter a second three year permit term and in which it has indicated it will
drill one well in each permit. Preliminary geological and geophysical evaluation
of the Permits has commenced.
Our wholly owned subsidiary, Gascorp, Inc (Gascorp), with other affiliated
joint venturers, was granted by the Australian Government, a petroleum
exploration permit, AC/P33, for an initial 6-year term. Gascorp holds a 20%
interest in the permit, in joint venture with its affiliates; Natural Gas
Corporation Pty Ltd (40%) and Auralandia N.L. (40%), the designated Operator.
AC/P33 is part of a sector of the eastern margin of the Vulcan Sub-basin;
one of a number of proven petroliferous sub-basins which together comprise the
North West Shelf hydrocarbon province of Australia. AC/P33 includes the
undeveloped Oliver oil and gas accumulation. AC/P33 comprises five graticular
blocks, totaling approximately 400 square kilometers (98,800 acres). In the
first three years of the initial 6-year term of permit AC/P33, the joint venture
participants plan to obtain a range of pertinent existing reports and open file
seismic data, and with this data, to map, interpret and revise analyses and
concepts which presently exist for the area. The joint venture has committed to
the enhancement of existing seismic data around the Oliver and the Oliver NE
feature, and will examine various techniques for their potential use as direct
hydrocarbon indicators. In the third year, the joint venture will acquire 80
square kilometers (19,760 acres) of new enhanced parameter 3D seismic survey. It
is intended that the survey will be conducted over the Oliver and Oliver NE
features. Should the joint venture so decide, it can elect to enter the second
three years of the initial permit and drill one exploration well and perform
further interpretational work. Preliminary geological and geophysical evaluation
of the permit has commenced.
In September 2004, we entered into a preliminary, non binding agreement to
acquire all of the outstanding shares of Nations Natural Gas Pty Ltd (Nations),
with the exception of 100,000 shares held by Alpha Oil & Gas Pty Ltd (Alpha),
which is intended to become a subsidiary of the Company. The acquisition of
Nations is being made to cost-effectively acquire a 30% interest in the permits
of the National Gas Consortium, being permits NT/P62, NT/P63, NT/P64, and NT/P65
("Permits"). The shareholders of Nations shall, upon conclusion of formal
documentation and satisfaction of all conditions, be entitled to receive
2,100,001 shares of common stock of AOGC as consideration for Nations.
The Permits of the National Gas Consortium are located in the Australian
eastern Timor Sea region of the Bonaparte Basin, offshore Northern Territory,
and cover a total area of approximately 14,875 square kilometers. The Timor Sea
covers a huge area over a million square kilometers, underlain by sedimentary
basins with potential for new hydrocarbon discoveries. The region has a long
history of oil discovery dating back to the Jabiru-1 discovery in 1983, which
alerted the (Australian) domestic and international petroleum industries to the
significant oil potential of the region. Since that time there have been
numerous oil and wet gas discoveries in the northern Bonaparte Basin, which
hosts the Laminaria, Corallina and Bayu-Undan fields, and the giant gas fields
of Greater Sunrise and Evans Shoal.
The Bonaparte Gulf is a major emerging oil and gas province, with a
developing emphasis in gas processing for the export market. Discoveries made
over the past few years are expected to lead to the area providing substantial
gas production and revenue, through value-added gas projects covering a wide
spectrum of gas to liquids processes and technologies. In the first three year
term of the Permits, the National Gas Consortium has committed to reprocess 750
kms of 2D seismic data and shoot 500 kms of new 2D seismic survey within each
permit. Preliminary geological and geophysical evaluation of the Permits has
commenced.
It should be noted that provided all work commitments are carried out,
Australian petroleum exploration permits may be renewed for two further 5-year
terms, upon relinquishment of 50% of the area of a permit at the end of the
first 6-year term, and again at the end of the second 5-year permit term. Any
Retention Lease or Production License is excluded from the calculation of the
area to be relinquished. Permits therefore, have a potential 16-year life,
subject to these requirements.
As a development stage enterprise, the Company relies on infusions of cash
through the advances of Great Missenden Holdings Pty Ltd. When the Company
requires further funds for its programs, then it is the Company's intention that
the additional funds would be raised in a manner deemed most expedient by the
Board of Directors at the time, taking into account budgets, share market
conditions and the interest of industry in co-participation in the Company's
programs. When additional funds for exploration are required, it is the
Company's plan that they could be raised by any one or a combination of the
following manners: stock placements, pro-rata issue to stockholders, and/or a
further issue of stock to the public. Should these methods not be considered to
be viable, or in the best interests of stockholders, then it would be the
Company's intention to meet its obligations by either partial sale of the
Company's interests or farm out, the latter course of action being part of the
Company's overall strategy. Should funds be required for appraisal or
development purposes the Company would, in addition, look to project loan
finance.
Item 3. Controls and procedures
As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the
"Exchange Act"), we carried out an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures as of September 30,
2004. This evaluation was carried out under the supervision and with the
participation of our Chief Executive. Based upon that evaluation, our Chief
Executive and Financial Officer concluded that our disclosure controls and
procedures are effective in timely alerting management to material information
relating to us required to be included in our periodic SEC filings. There have
been no significant changes in our internal controls subsequent to the date we
carried out our evaluation.
Disclosure controls and procedures are controls and other procedures that are
designed to ensure that information required to be disclosed in our reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed in our reports filed under the Exchange Act is
accumulated and communicated to management, including our Chief Executive, to
allow timely decisions regarding required disclosure.
Part 11. OTHER INFORMATION
Item 5. Other Information
Since the end of the period covered by this report, the website of the Company
has been changed to www.ausoil.com.
Item 6. Exhibits and Reports on Form 8-K
List of Exhibits
31.1 Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
Reports on Form 8-K
During the quarter ended September 30, 2004, we filed one report on Form
8K.
On September 10, 2004, the Company filed a Report on Form 8K relating to
the preliminary agreement to acquire all of the outstanding shares of
Nations Natural Gas Pty Ltd, a company incorporated in Australia.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
AUSTRALIAN OIL & GAS CORPORATION
By: /s/ E. Geoffrey Albers
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E. Geoffrey Albers,
Chief Executive Officer and
Chief Financial Officer
17th November, 2004