Glen Rose Petroleum Corp. (GLRP, Financial) filed Amended Quarterly Report for the period ended 2009-09-30.
GLEN ROSE PETROLEUM CORPORATION, formerly United Heritage Corporation, founded in 1981 and based in Dallas, TX, is focused on the development of on-shore oil and gas assets. The company has project covering 10,500 acres in the Wardlaw Field, Edwards County, TX. The field is currently producing oil which is categorized as `medium crude,` at 16-20 API gravity. Management believes its acreage has substantial reserves, and is applying new technology to economically extract the reserves. Glen Rose Petroleum Corp. has a market cap of $2.7 million; its shares were traded at around $0.25 with and P/S ratio of 22.1.
General and administrative expenses decreased $305,764, or approximately 44%, from $697,230 for the six months ended September 30, 2008, to $391,466 for the six months ended September 30, 2009. This decrease in our general and administrative expenses during the current six month period is primarily attributable to reduced stock compensation expense, legal fees accounting and other professional fees. The $697,230 in general and administrative expense incurred during the six months ended September 30, 2008 was net of approximately $251,000 that we were reimbursed through our participation agreement with Wind Hydrogen, Ltd,, which was terminated in January 31, 2009.
Current liabilities also increased from $2,948,077 at March 31, 2009 to $3,223,549 at September 30, 2009, an increase of $275,472 or approximately 9%. Even though we have reduced costs in 2009, our cash inflow during these six-months has been insufficient to meet our overhead costs causing the increased liabilities.We have a working capital deficit of $2,982,684 at September 30, 2009 as compared to a working capital deficit of $2,702,752 at March 31, 2009, an increase of $279,932 or approximately 10%. The increase in our working capital deficit resulted primarily from the increase in our current liabilities due to increases in development and production costs during the quarter ending September 30, 2009.
Our operations used $296,031 of cash in the six months ended September 30, 2009. This is primary due to a net loss of $585,796 adjusted by non-cash activity totaling $289,765. Cash of $109,455 was used in investing activities during the six months ended September 30, 2009, which consisted of $126,092 paid for improvements to our oil and gas properties, $5,900 paid for purchases of property and equipment, net of the $19,937 received from principal repayments on a note receivable from Bowie Operating Company, LLC. In comparison, during the six months ended September 30, 2008 we used $914,667 in cash to improve our oil and gas properties and purchase equipment.
The average sale price of oil produced by our Wardlaw Field wells decreased by $31.28 a barrel, or approximately 38%, from $83.34 a barrel for the six months ended September 30, 2008, to $52.06 a barrel for the six months ended September 30, 2009. Production costs per barrel of oil produced for the three months ended September 30, 2009 decreased $112.43, or approximately 83%, from $135.87 a barrel for the three months ended March 31, 2009, to $23.44 a barrel for the six months ended September 30, 2009.
The Company had option agreements to ex-employees and directors which exercised at $1.50 and $2.91 exercise prices. These options were modified to extend the expiration date to March 31, 2009, to add a put feature where the option holder can put the option back to the Company for the difference between $4.00 per share and the purchase price between April 1, 2008 and April 10, 2008, and to add a call feature whereby the Company can call the option for the difference between $7.50 and the purchase price. Since the put feature does not subject the holder to the normal risks of share ownership, the Company has classified the put options as liability awards and recorded such at fair value. A liability and corresponding expense of $2,727,186 has been recorded in the prior financial statements. A majority of these option puts were exercised. The Company offered the option put holders the same conversion as Walter Mize elected on January 16, 2008. On July 3, 2008, owners of approximately 54% of these options elected to convert the Company s put obligation to restricted common stock at $0.75 per share, subject to a voting trust and first right of refusal to Blackwood Ventures LLC. Approximately 41% elected to continue the option period until December 31, 2009, for consideration of 10% per annum, payable quarterly with a provision for payment in kind. Approximately 5% did not make an election and their units are held as current liability pending resolution. These transactions have not closed, and are contingent upon the completion of the definitive agreements. Should these transactions close, the Company s liabilities would be reduced by $1,166,669.
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GLEN ROSE PETROLEUM CORPORATION, formerly United Heritage Corporation, founded in 1981 and based in Dallas, TX, is focused on the development of on-shore oil and gas assets. The company has project covering 10,500 acres in the Wardlaw Field, Edwards County, TX. The field is currently producing oil which is categorized as `medium crude,` at 16-20 API gravity. Management believes its acreage has substantial reserves, and is applying new technology to economically extract the reserves. Glen Rose Petroleum Corp. has a market cap of $2.7 million; its shares were traded at around $0.25 with and P/S ratio of 22.1.
Highlight of Business Operations:
Our revenues decreased $8,729, or approximately 12%, from $72,871 for the six months ended September 30, 2008, to $64,142 for the six months ended September 30, 2009. The reduction in revenue in 2009 compared to 2008 was caused by us not having any sale from oil production in August 2009 due to reworking our wells. Our total operating costs and expenses decreased $1,026,059 or approximately 64%, from 1,604,254 for the six months ended September 30, 2008, to $578,195 for the six months ended September 30, 2009. The decrease in our operating expenses was primarily attributable to decreases in stock compensation expense and other general and administrative expenses for the six months ended September 30, 2009.General and administrative expenses decreased $305,764, or approximately 44%, from $697,230 for the six months ended September 30, 2008, to $391,466 for the six months ended September 30, 2009. This decrease in our general and administrative expenses during the current six month period is primarily attributable to reduced stock compensation expense, legal fees accounting and other professional fees. The $697,230 in general and administrative expense incurred during the six months ended September 30, 2008 was net of approximately $251,000 that we were reimbursed through our participation agreement with Wind Hydrogen, Ltd,, which was terminated in January 31, 2009.
Current liabilities also increased from $2,948,077 at March 31, 2009 to $3,223,549 at September 30, 2009, an increase of $275,472 or approximately 9%. Even though we have reduced costs in 2009, our cash inflow during these six-months has been insufficient to meet our overhead costs causing the increased liabilities.We have a working capital deficit of $2,982,684 at September 30, 2009 as compared to a working capital deficit of $2,702,752 at March 31, 2009, an increase of $279,932 or approximately 10%. The increase in our working capital deficit resulted primarily from the increase in our current liabilities due to increases in development and production costs during the quarter ending September 30, 2009.
Our operations used $296,031 of cash in the six months ended September 30, 2009. This is primary due to a net loss of $585,796 adjusted by non-cash activity totaling $289,765. Cash of $109,455 was used in investing activities during the six months ended September 30, 2009, which consisted of $126,092 paid for improvements to our oil and gas properties, $5,900 paid for purchases of property and equipment, net of the $19,937 received from principal repayments on a note receivable from Bowie Operating Company, LLC. In comparison, during the six months ended September 30, 2008 we used $914,667 in cash to improve our oil and gas properties and purchase equipment.
The average sale price of oil produced by our Wardlaw Field wells decreased by $31.28 a barrel, or approximately 38%, from $83.34 a barrel for the six months ended September 30, 2008, to $52.06 a barrel for the six months ended September 30, 2009. Production costs per barrel of oil produced for the three months ended September 30, 2009 decreased $112.43, or approximately 83%, from $135.87 a barrel for the three months ended March 31, 2009, to $23.44 a barrel for the six months ended September 30, 2009.
The Company had option agreements to ex-employees and directors which exercised at $1.50 and $2.91 exercise prices. These options were modified to extend the expiration date to March 31, 2009, to add a put feature where the option holder can put the option back to the Company for the difference between $4.00 per share and the purchase price between April 1, 2008 and April 10, 2008, and to add a call feature whereby the Company can call the option for the difference between $7.50 and the purchase price. Since the put feature does not subject the holder to the normal risks of share ownership, the Company has classified the put options as liability awards and recorded such at fair value. A liability and corresponding expense of $2,727,186 has been recorded in the prior financial statements. A majority of these option puts were exercised. The Company offered the option put holders the same conversion as Walter Mize elected on January 16, 2008. On July 3, 2008, owners of approximately 54% of these options elected to convert the Company s put obligation to restricted common stock at $0.75 per share, subject to a voting trust and first right of refusal to Blackwood Ventures LLC. Approximately 41% elected to continue the option period until December 31, 2009, for consideration of 10% per annum, payable quarterly with a provision for payment in kind. Approximately 5% did not make an election and their units are held as current liability pending resolution. These transactions have not closed, and are contingent upon the completion of the definitive agreements. Should these transactions close, the Company s liabilities would be reduced by $1,166,669.
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