Business Context and Reporting Period
Company: Calcasieu Real Estate & Oil Co., Inc. (Note: Input metadata referenced "CKX Lands, Inc." but the filing text identifies Calcasieu Real Estate & Oil Co., Inc.)
Filing Type: Form 10-Q
Reporting Period: Quarter and six months ended June 30, 2002
Business Overview: The company derives revenue primarily from oil and gas properties, agriculture, and timber. As of June 30, 2002, 1,955,044 shares of Common Stock were issued and outstanding.
Key Financial Metrics
| Metric | Six Months Ended June 30, 2002 |
Six Months Ended June 30, 2001 |
Quarter Ended June 30, 2002 |
Quarter Ended June 30, 2001 |
|---|---|---|---|---|
| Total Revenue | $680,078 | $821,542 | $452,990 | $348,510 |
| Net Income | $354,375 | $457,821 | $264,384 | $191,000 |
| Net Income Per Share | $0.18 | $0.23 | $0.13 | $0.09 |
| Operating Cash Flow | $474,763 | $388,589 | $344,080 | $73,384 |
| Cash & Equivalents (End) | $572,556 (as of June 30, 2002) | |||
| Total Assets | $6,509,063 (as of June 30, 2002) | |||
| Total Liabilities | $158,201 (Current only; no long-term debt listed) |
Material Changes vs. Prior Period
- Net Income Trends: Net income for the six months ended June 30, 2002, decreased 22.6% compared to the same period in 2001. However, net income for the quarter ended June 30, 2002, increased 38.4% compared to the second quarter of 2001.
- Revenue Drivers:
- Oil & Gas: Income from the North English Bayou Field decreased and is now depleted; wells have been plugged. Conversely, income from the North Gordon Field increased monthly in 2002.
- Agriculture & Timber: Combined income from these sectors increased 13.2% for the first six months of 2002 compared to 2001.
- Expenses: Total expenses decreased for the first six months of 2002 compared to 2001, primarily due to a reduction in legal fees following the settlement of a lawsuit at no further expense to the company.
- Liquidity: Cash and cash equivalents decreased from $1,419,084 at December 31, 2001, to $572,556 at June 30, 2002, largely due to a net decrease in cash of $846,528 over the six-month period driven by investing activities (purchase of securities) and financing activities (dividends).
Outlook, Risks, and Management Commentary
- Production Outlook: Management believes income from the North Gordon Field has reached its maximum potential and will begin decreasing in the near future.
- Liquidity Position: Management believes current revenues are sufficient to meet existing and anticipated future operational needs. No material additional liabilities are anticipated.
- Risks: The primary operational risk identified is the depletion of oil and gas fields (specifically North English Bayou) and the expected decline in production from the North Gordon Field.
- Unusual Items: The filing notes a gain on the sale of land of $4,991 for the quarter and six months ended June 30, 2002.
Key Facts for Investor Verification
- Verify the timeline for the expected decline in production from the North Gordon Field.
- Confirm the status of the North English Bayou Field depletion and the impact on future oil and gas revenue streams.
- Review the composition of "Securities Available for Sale" ($1,389,431), which increased significantly from $377,732 in the prior year-end, and assess the associated market risks.
- Monitor the company's cash burn rate relative to dividend payments ($285,424 paid in the first six months of 2002) given the reduction in cash reserves.