STTH March Qtr.. 2010 STRATUM HOLDINGS, INC.
Consolidated Balance Sheets
(Unaudited)
March 31, December 31,
2010 2009
Assets
Current assets:
Cash and cash equivalents $ 191,641 $ 142,703
Restricted cash - 1,613,637
Accounts receivable 4,836,458 2,948,159
Prepaid expenses and other 146,788 132,325
Total current assets 5,174,887 4,836,824
Property and equipment:
Oil and gas properties, evaluated (full cost method) 14,505,792 14,425,950
Other property and equipment 174,676 144,625
14,680,468 14,570,575
Less: Accumulated depreciation, depletion & amortization (8,235,462 ) (8,017,822 )
Net property and equipment 6,445,006 6,552,753
Other assets:
Goodwill (less impairment allowance of $3,400,000) 1,536,313 1,536,313
Other assets 102,678 76,021
Total other assets 1,638,991 1,612,334
Total assets $ 13,258,884 $ 13,001,911
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Current portion of long-term debt - stockholders $ 744,335 $ 1,682,317
Current portion of long-term debt - others 5,404,572 5,226,861
Accounts payable 3,534,802 2,436,846
Accrued liabilities 1,299,578 1,518,698
Fair value of oil and gas derivatives 67,400 88,990
Total current liabilities 11,050,687 10,953,712
Long-term debt, net of current portion 320,000 408,179
Deferred income taxes 1,594,300 1,513,847
Asset retirement obligations 311,981 305,370
Total liabilities 13,276,968 13,181,108
Stockholders’ equity (deficit):
Preferred stock, $.01 par value per share, 1,000,000 shares authorized,
None issued - -
Common stock, $.01 par value per share, 5,000,000 shares authorized,
2,655,738 shares issued and outstanding 26,557 26,557
Additional paid in capital 12,894,489 12,808,867
Accumulated deficit (12,701,709 ) (12,783,790 )
Accumulated foreign currency translation adjustment (237,421 ) (230,831 )
Total stockholders’ equity (deficit) (18,084 ) (179,197 )
Total liabilities and stockholders’ equity (deficit) $ 13,258,884 $ 13,001,911
See accompanying notes to consolidated financial statements.
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STRATUM HOLDINGS, INC.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended March 31,
2010 2009
Revenues:
Energy services $ 5,747,471 $ 5,593,914
Oil and gas sales 594,430 548,931
Other 11,187 42,610
6,353,088 6,185,455
Expenses:
Energy services 5,234,996 5,087,417
Lease operating expense 477,358 549,344
Depreciation, depletion & amortization 168,337 121,809
Impairment of acquisition goodwill - 1,900,000
Workover expense 200,495 39,598
Selling, general and administrative 417,660 562,045
6,498,846 8,260,213
Operating income (loss) (145,758 ) (2,074,758 )
Other income (expense):
Interest expense (190,418 ) (178,463 )
Gain on debt extinguishment 438,967 -
Gain on oil and gas derivatives 21,590 -
Income (loss) from continuing operations before income taxes 124,381 (2,253,221 )
Benefit (provision) for income taxes (42,300 ) 120,100
Net income (loss) from continuing operations 82,081 (2,133,121 )
Discontinued operations, net of tax - (25,419 )
Net income (loss) $ 82,081 $ (2,158,540 )
Net income (loss) per share, basic and diluted
Net income (loss) from continuing operations $ 0.03 $ (0.80 )
Discontinued operations - (0.01 )
Net income (loss) $ 0.03 $ (0.81 )
Weighted average shares outstanding, basic and diluted 2,655,738 2,655,738
See accompanying notes to consolidated financial statements.
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STRATUM HOLDINGS, INC.
Consolidated Statements of Cash Flows
Three Months Ended March 31,
2010 2009
Cash flows provided by (used in) operating activities:
Net income (loss) from continuing operations $ 82,081 $ (2,133,121 )
Adjustments to reconcile net income (loss) from continuing
operations to cash provided by (used in) operations:
Depreciation, depletion & amortization 168,337 121,809
Impairment expense - 1,900,000
Provision (benefit) for income taxes 42,300 (120,100 )
Stock based compensation 11,525 9,441
Gain on debt extinguishment (438,967 ) -
Unrealized gain on oil and gas derivatives (21,590 ) -
Changes in current assets and liabilities (754,172 ) (424,864 )
Other changes, net 22,667 (2,528 )
Net cash flows from continuing operations (887,819 ) (649,363 )
Net cash flows from discontinued operations - (25,419 )
Total cash flows from operating activities (887,819 ) (674,782 )
Cash flows provided by (used in) investing activities:
Decrease in restricted cash from sale of subsidiary 1,613,637 524,954
Purchase of property and equipment (109,893 ) (967 )
Net cash flows from investing activities 1,503,744 523,987
Cash flows provided by (used in) financing activities:
Proceeds from long term debt 877,711 257,745
Payments of long term debt (953,844 ) (85,163 )
Net (payments) proceeds of stockholder advances (490,854 ) (35,000 )
Net cash flows from financing activities (566,987 ) 137,582
Net increase in cash and cash equivalents 48,938 (13,213 )
Cash and equivalents at beginning of period 142,703 203,200
Cash and equivalents at end of period $ 191,641 $ 189,987
Supplemental cash flow data:
Cash paid for interest $ 97,830 $ 118,130
Cash paid for income taxes - 251,875
Supplemental financing activity:
Gain on debt extinguishment - related party $ 74,097 $ -
See accompanying notes to consolidated financial statements.
