UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

x

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

 

For the quarterly period ended July 31, 2007

 

o

 

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: 0-8877

CREDO PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)

Colorado

 

84-0772991

(State or other jurisdiction of incorporation or organization)

 

(IRS Employer Identification No.)

 

 

 

1801 Broadway, Suite 900, Denver, Colorado

 

80202

(Address of principal executive offices)

 

(Zip Code)

 

303-297-2200
(Registrant’s telephone number, including area code)

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 (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        No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  (See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Act.)

Large accelerated filer  o    Accelerated filer  x    Non-accelerated filer  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  o     No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, net of treasury stock, as of the latest practicable date.

Date

 

Class

 

Outstanding

 

Sept. 10, 2007

 

Common stock, $.10 par value

 

9,329,000

 

 

 




CREDO PETROLEUM CORPORATION AND SUBSIDIARIES

Quarterly Report on Form 10-Q For the Period Ended July 31, 2007

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

 

 

 

Item 1.

 

Financial Statements

 

 

 

 

 

 

 

Consolidated Balance Sheets
As of July 31, 2007 (Unaudited) and October 31, 2006

 

 

 

 

 

Consolidated Statements of Operations
For the Three and Nine Months Ended July 31, 2007 and 2006 (Unaudited)

 

 

 

 

 

Consolidated Statement of Stockholders’ Equity and Comprehensive Income (Loss)
For the Nine Months Ended July 31, 2007 (Unaudited)

 

 

 

 

 

Consolidated Statements of Cash Flows
For the Nine Months Ended July 31, 2007 and 2006 (Unaudited)

 

 

 

 

 

Notes to Consolidated Financial Statements (Unaudited)

 

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

 

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

 

 

 

 

 

 

PART II - OTHER INFORMATION

 

 

 

Item 1.

 

Legal Proceedings

 

 

 

 

 

 

 

Item 1A.

 

Risk Factors

 

 

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

 

 

 

 

 

 

Item 3.

 

Defaults Upon Senior Securities

 

 

 

 

 

 

 

Item 4.

 

Submission of Matters to a Vote of Security Holders

 

 

 

 

 

 

 

Item 5.

 

Other Information

 

 

 

 

 

 

 

Item 6.

 

Exhibits

 

 

 

 

 

 

 

Signatures

 

 

 

The terms “CREDO”, “Company”, “we”, “our”, and “us” refer to CREDO Petroleum Corporation and its subsidiaries unless the context suggests otherwise.

2




PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

CREDO PETROLEUM CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

 

 

July 31,

 

October 31,

 

 

 

2007

 

2006

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

6,702,000

 

$

4,577,000

 

Short-term investments

 

6,301,000

 

5,624,000

 

Receivables:

 

 

 

 

 

Accrued oil and gas sales

 

1,783,000

 

1,963,000

 

Trade

 

406,000

 

777,000

 

Derivative Assets

 

1,320,000

 

897,000

 

Other current assets

 

229,000

 

71,000

 

Total current assets

 

16,741,000

 

13,909,000

 

 

 

 

 

 

 

Long-term assets:

 

 

 

 

 

Oil and gas properties, at cost, using full cost method:

 

 

 

 

 

Unevaluated oil and gas properties

 

9,071,000

 

7,060,000

 

Evaluated oil and gas properties

 

48,200,000

 

43,588,000

 

Less: accumulated depreciation, depletion and amortization of oil and gas properties

 

(21,417,000

)

(18,556,000

)

Net oil and gas properties, at cost, using full cost method

 

35,854,000

 

32,092,000

 

 

 

 

 

 

 

Exclusive license agreement, net of amortization of $466,000 in 2007 and $431,000 in 2006

 

216,000

 

268,000

 

 

 

 

 

 

 

Compressor and tubular inventory to be used in development

 

1,137,000

 

1,293,000