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 DECEMBER 31, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 OR THE TRANSITION PERIOD FROM __________ TO
__________
Commission file number 0-8874
Amber Resources Company
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 84-0750506
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
475 17th Street, Suite 1400
Denver, Colorado 80202
(Address of principal (Zip Code)
executive offices)
(303)293-9133
(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 X No
4,666,185 shares of common stock $.0625 par value were outstanding as of
February 7, 2003.
Form 10-Q
2nd Qtr.
FY 2003
INDEX
PART I FINANCIAL INFORMATION PAGE NO.
ITEM 1 FINANCIAL STATEMENTS
Balance Sheets
December 31, 2002 (unaudited)
and June 30, 2002 ................................... 1
Statements of Operations and
Accumulated Deficit for Three and Six
Months Ended December 31, 2002
and 2001 (unaudited) ................................ 2
Statements of Cash Flows:
For the Six Months Ended December 31, 2002
and 2001 (unaudited)................................. 3
Notes to Financial Statements (unaudited) ................ 5
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATIONS ....................................... 8
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk. 12
ITEM 4. Controls and Procedures.................................... 12
PART II OTHER INFORMATION
ITEM 1. Legal Proceedings......................................... 13
ITEM 2. Changes in Securities..................................... 13
ITEM 3. Defaults upon Senior Securities........................... 13
ITEM 4. Submission of Matters to a Vote of
Security Holders....................................... 13
ITEM 5. Other Information......................................... 13
ITEM 6. Exhibits and Reports on Form 8-K.......................... 13
The terms "Amber", "Company", "we", "our", and "us" refer to Amber Resources
Company unless the context suggests otherwise.
i
AMBER RESOURCES COMPANY
BALANCE SHEETS
- -----------------------------------------------------------------------------
December 31, June 30,
2002 2002
------------ ----------
(Unaudited)
ASSETS
Current Assets:
Cash $ 1,000 $ 681
---------- ----------
Total current assets 1,000 681
---------- ----------
Undeveloped offshore California properties 5,006,276 5,006,276
---------- ----------
$5,007,276 $5,006,957
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 926 $ 2,911
---------- ----------
Total current liabilities 926 2,911
---------- ----------
Stockholders' Equity:
Preferred stock, $.10 par value;
authorized 5,000,000 shares of Class A
convertible preferred stock, none issued - -
Common stock, $.0625 par value;
authorized 25,000,000 shares, issued 4,666,185
shares at December 31, 2002 and June 30, 2002 291,637 291,637
Additional paid-in capital 5,755,232 5,755,232
Accumulated deficit (694,621) (644,329)
Advance to parent (345,898) (398,494)
---------- ----------
Total stockholders' equity 5,006,350 5,004,046
---------- ----------
Commitments
$5,007,276 $5,006,957
========== ==========
See accompanying notes to consolidated financial statements.
1
AMBER RESOURCES COMPANY
STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
(Unaudited)
- -----------------------------------------------------------------------------
Three Months Ended
December 31, December 31,
2002 2001
----------- -----------
Revenue:
Gain on sale of oil and gas properties $ - $ 6,164
---------- ----------
Total revenue - 6,164
Operating expenses:
Exploration expenses - 2,000
General and administrative, including
$25,000 in 2002 and 2001 to parent 25,158 25,231
---------- ----------
Total operating expenses 25,158 27,231
---------- ----------
Net loss (25,158) (21,067)
Accumulated deficit at
beginning of the period (669,463) (639,758)
---------- ----------
Accumulated deficit at
end of the period $ (694,621) $ (660,825)
========== ==========
Basic loss per share * *
========== ==========
Weighted average number of common
shares outstanding 4,666,185 4,666,185
========== ==========
* less than $.01 per common share outstanding
See accompanying notes to consolidated financial statements.
2
AMBER RESOURCES COMPANY
STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
(Unaudited)
- -----------------------------------------------------------------------------
Six Months Ended
December 31, December 31,
2002 2001
------------ ------------
Revenue:
Gain on sale of oil and gas properties $ - $ 12,327
---------- ----------
Total revenue - 12,327
Operating expenses:
Exploration expenses - 18,979
General and administrative, including
$50,000 in 2002 and 2001 to parent 50,292 56,609
---------- ----------
Total operating expenses 50,292 75,588
---------- ----------
Net loss (50,292) (63,261)
Accumulated deficit at
beginning of the period (644,329) (597,564)
---------- ----------
Accumulated deficit at
end of the period $ (694,621) $(660,825)
========== ==========
Basic loss per share * *
========== ==========
Weighted average number of common
shares outstanding 4,666,185 4,666,185
========== ==========
* less than $.01 per common share outstanding
See accompanying notes to consolidated financial statements.
3
AMBER RESOURCES COMPANY
STATEMENTS OF CASH FLOWS
(Unaudited)
- -----------------------------------------------------------------------------
Six Months Ended
December 31, December 31,
2002 2001
------------ ------------
Cash flows operating activities:
Net loss $ (50,292) $ (63,261)
Adjustments to reconcile net loss to cash
used in operating activities:
Gain on sale of oil and gas properties - (12,327)
Net changes in operating assets and operating
liabilities:
Decrease in trade accounts receivable - 7,855
Decrease in accounts payable trade (1,985) (6,450)
--------- ---------
Net cash used in operating activities (52,277) (74,183)
--------- ---------
Cash flows from financing activities-
Changes in accounts receivable from and
accounts payable to parent 52,596 60,180
--------- ---------
Net (decrease) increase in cash 319 (14,003)
--------- ---------
Cash at beginning of period 681 14,992
--------- ---------
Cash at end of period $ 1,000 $ 989
========= =========
See accompanying notes to consolidated financial statements.
4
AMBER RESOURCES COMPANY
(A Subsidiary of Delta Petroleum Corporation)
Notes to Financial Statements
Three and Six Months Ended December 31, 2002 and 2001
(Unaudited)
- ----------------------------------------------------------------------------
(1) Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-Q and, in accordance with those
rules, do not include all the information and notes required by generally
accepted accounting principles for complete financial statements. As a
result, these unaudited financial statements should be read in conjunction
with Amber Resources Company's ("the Company") audited financial statements
and notes thereto filed with the Company's most recent annual report on Form
10-K. In the opinion of management, all adjustments, consisting only of
normal recurring accruals, considered necessary for a fair presentation of the
financial position of the Company and the results of its operations have been
included. Operating results for interim periods are not necessarily
indicative of the results that may be expected for the complete fiscal year.
For a more complete understanding of the Company's operations and financial
position, reference is made to the financial statements of the Company, and
related notes thereto, filed with the Company's annual report on Form 10-K for
the year ended June 30, 2002, previously filed with the Securities and
Exchange Commission.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Significant estimates include oil and gas reserves, oil and
gas properties, income taxes, derivatives, contingencies and litigation.
Actual results could differ from these estimates.
Liquidity
The Company has incurred losses from operations over the past several
years coupled with significant deficiencies in cash flow from operations for
the same period. As of December 31, 2002, the Company had working capital of
$74. These factors, among others, may indicate that without increased cash
flow from operations, sale of oil and gas properties or additional financing
the Company may not be able to meet its obligations in a timely manner. The
Company believes that it could sell its undeveloped properties or obtain
additional financing, however, there can be no assurance that such financing
would be available in a timely fashion or on acceptable terms.
(2) Recently Issued Accounting Standards and Pronouncements
Statement 145, Recission of FASB Statements No. 4, 44 and 64, Amendment
of FASB Statement No. 13, and Technical Corrections (SFAS No. 145) was issued
in April 2002. This statement rescinds SFAS No. 4, Reporting Gains and Losses
from Extinguishment of Debt, which required all gains and losses from
extinguishment of debt to be aggregated and, if material, classified as an
extraordinary item, net of income taxes. As a result, the criteria in APB 30
5
AMBER RESOURCES COMPANY
(A Subsidiary of Delta Petroleum Corporation)
Notes to Financial Statements
Three and Six Months Ended December 31, 2002 and 2001
(Unaudited)
- ----------------------------------------------------------------------------
will now be used to classify those gains and losses. Any gain or loss on the
extinguishment of debt that was classified as an extraordinary item in prior
periods presented that does not meet the criteria in APB 30 for classification
as an extraordinary item shall be reclassified. The provisions of this
Statement are effective for fiscal years beginning after January 1, 2003. The
Company does not believe this statement will have a material impact to the
Financial Statements.
Statement 146, Accounting for Exit or Disposal Activities (SFAS No. 146),
was issued in June 2002. SFAS No. 146 addresses significant issues regarding
the recognition, measurement and reporting of disposal activities, including
restructuring activities that are currently accounted in EITF Issue No. 94-3,
"Liability Recognition for Certain Employee Termination Activity." SFAS No.
146 will be effective in January 2003. The Company is currently assessing the
impact of SFAS No. 146.
In December 2002, the Financial Accounting Standards Board issued SFAS
No. 148, "Accounting for Stock-Based Compensation-Transition and Disclosure an
amendment of FASB statement No. 123." SFAS No. 148 amends FASB statement No.
123, "Accounting for Stock-Based Compensation," to provide alternative methods
of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, this statement
amends the disclosure requirement of Statement 123 to require prominent
disclosures in both annual and interim financial statements about the method
of accounting for stock-based employee compensation and the effect of the
method used on reported results. The statement is effective for fiscal years
beginning after December 15, 2002, however earlier application is encouraged.
The Company is currently assessing the impact of SFAS No. 148.
In November 2002, the FASB issued FIN No. 45, "Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantee of
Indebtedness of Others," which requires that a guarantor disclose and
recognize in its financial statements its obligations relating to guarantees
that it has issued. Liability recognition is required at the inception of the
guarantee, whether or not payment is probable. The Company will apply the
recognition and measurement provisions of FIN No. 45 on a prospective basis
and, as such does not expect it to have an initial material impact on its
financial statements upon adoption.
(3) Unproved Undeveloped Offshore California Properties
The Company has ownership interests ranging from 87% to 6.97% in three
unproved undeveloped offshore California oil and gas properties with aggregate
carrying values of $5,006,000 at December 31, 2002. These property interests
are located in proximity to existing producing federal offshore units near
Santa Barbara, California and represent the right to explore for, develop and
produce oil and gas from offshore federal lease units. Preliminary exploration
efforts on these properties have occurred and the existence of substantial
6
AMBER RESOURCES COMPANY
(A Subsidiary of Delta Petroleum Corporation)
Notes to Financial Statements
Three and Six Months Ended December 31, 2002 and 2001
(Unaudited)
- ----------------------------------------------------------------------------
quantities of hydrocarbons has been indicated. The recovery of the Company's
investment in these properties will require extensive exploration and
development activities (and costs) that cannot proceed without certain
regulatory approvals that have been delayed and is subject to other
substantial risks and uncertainties.
Based on indications of levels of hydrocarbons present from drilling
operations conducted in the past, the Company believes the fair values of its
property interests are in excess of their carrying values at December 31, 2002
and June 30, 2002 and that no impairment in the carrying values have occurred.
Pursuant to a ruling in California v. Norton, later affirmed by the 9th
Circuit Court of Appeals, the U.S. Government is required to make a
consistency determination relating to our 1999 lease suspension requests under
a 1990 amendment to the Coastal Zone Management Act. In the event that there
is some future adverse ruling under the Coastal Zone Management Act that we
decide not to appeal or that we appeal without success, it is likely that some
or all of our interests in these leases would become impaired and written off
at that time. It is also possible that other events could occur during the
Coastal Zone Management Act review or appellate process that would cause our
interests in the leases to become impaired, and we will continuously evaluate
those factors as they occur.
7
ITEM 2. MANAGEMENT'S ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
Forward Looking Statements
The statements contained in this report which are not historical fact are
"forward looking statements" that involve various important risks,
uncertainties and other factors which could cause the Company's actual results
to differ materially from those expressed in such forward looking statements.
These factors include, without limitation, the risks and factors included in
the following text as well as other risks previously disclosed in the
Company's annual report on Form 10-K.
Critical Accounting Policies and Estimates
------------------------------------------
The discussion and analysis of the Company's financial condition and
results of operations were based upon the consolidated financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States. The preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts
of assets, liabilities, revenues and expenses. Our significant accounting
policies are described in Note 1 to our consolidated financial statements. In
response to SEC Release No. 33-8040, "Cautionary Advise Regarding Disclosure
About Critical Accounting Policies," we have identified certain of these
policies as being of particular importance to the portrayal of our financial
position and results of operations and which require the application of
significant judgment by management. We analyze our estimates, including those
related to oil and gas reserves, bad debts, oil and gas properties, marketable
securities, income taxes, derivatives, contingencies and litigation, and base
our estimates on historical experience and various other assumptions that we
believe reasonable under the circumstances. Actual results may differ from
these estimates under different assumptions or conditions. We believe the
following critical accounting policies affect our more significant judgments
and estimates used in the preparation of the Company's financial statements.
Successful Efforts Method of Accounting
---------------------------------------
We account for its natural gas and crude oil exploration and development
activities utilizing the successful efforts method of accounting. Under this
method, costs of productive exploratory wells, development dry holes and
productive wells and undeveloped leases are capitalized. Gas and oil lease
acquisition costs are also capitalized. Exploration costs, including
personnel costs, certain geological and geophysical expenses and delay rentals
for gas and oil leases, are charged to expense as incurred. Exploratory
drilling costs are initially capitalized, but charged to expense if and when
the well is determined not to have found reserves in commercial quantities.
The sale of a partial interest in a proved property is accounted for as a cost
recovery and no gain or loss is recognized as long as this treatment does not
significantly affect the unit-of-production amortization rate. A gain or loss
is recognized for all other sales of producing properties.
8
The application of the successful efforts method of accounting requires
managerial judgment to determine that proper classification of wells
designated as developmental or exploratory which will ultimately determine the
proper accounting treatment of the costs incurred. The results from a
drilling operation can take considerable time to analyze and the determination
that commercial reserves have been discovered requires both judgment and
industry experience. Wells may be completed that are assumed to be productive
and actually deliver gas and oil in quantities insufficient to be economic,
which may result in the abandonment of the wells at a later date. Wells are
drilled that have targeted geologic structures that are both developmental and
exploratory in nature and an allocation of costs is required to properly
account for the results. Delineation seismic incurred to select development
locations within an oil and gas field is typically considered a development
costs and capitalized but often these seismic programs extend beyond the
reserve area considered proved and management must estimate the portion of the
seismic costs to expense. The evaluation of gas and oil leasehold acquisition
costs requires managerial judgment to estimate the fair value of these costs
with reference to drilling activity in a given area. Drilling activities in
an area by other companies may also effectively condemn leasehold positions.
The successful efforts method of accounting can have a significant
impact on the operational results reported when the Company is entering a new
exploratory area in hopes of finding a gas and oil field that will be the
focus of future development drilling activity. The initial exploratory wells
may be unsuccessful and will be expensed. Seismic costs can be substantial
which will result in additional exploration expenses when incurred.
Reserve Estimates
-----------------
We do not currently own any reserves and we do not currently have any
estimates of any gas or oil reserves.
Impairment of Gas and Oil Properties
------------------------------------
We review its gas and oil properties for impairment whenever events and
circumstances indicate a decline in the recoverability of their carrying
value. We estimate the expected future cash flows of its gas and oil
properties and compares such future cash flows to the carrying amount of the
gas and oil properties to determine if the carrying amount is recoverable. If
the carrying amount exceeds the estimated undiscounted future cash flows, we
will adjust the carrying amount of the gas and oil properties to their fair
value. The factors used to determine fair value include, but are not limited
to, estimates of proved reserves, future commodity pricing, future production
estimates, anticipated capital expenditures, and a discount rate commensurate
with the risk associated with realizing the expected cash flows projected.
Given the complexities associated with gas and oil reserve estimates and
the history of price volatility in the gas and oil markers, events may arise
that would require the Company to recorded an impairment of the recorded book
values associated with gas and oil properties. As a result of its review, the
Company did not record an impairment during the six months ended December 31,
2002 and 2001.
9
Recently Issued Accounting Standards and Pronouncements
Statement 145, Recission of FASB Statements No. 4, 44 and 64, Amendment
of FASB Statement No. 13, and Technical Corrections (SFAS No. 145) was issued
in April 2002. This statement rescinds SFAS No. 4, Reporting Gains and Losses
from Extinguishment of Debt, which required all gains and losses from
extinguishment of debt to be aggregated and, if material, classified as an
extraordinary item, net of income taxes. As a result, the criteria in APB 30
will now be used to classify those gains and losses. Any gain or loss on the
extinguishment of debt that was classified as an extraordinary item in prior
periods presented that does not meet the criteria in APB 30 for classification
as an extraordinary item shall be reclassified. The provisions of this
Statement are effective for fiscal years beginning after January 1, 2003. The
Company does not believe this statement will have a material impact to the
Financial Statements.
Statement 146, Accounting for Exit or Disposal Activities (SFAS No. 146),
was issued in June 2002. SFAS No. 146 addresses significant issues regarding
the recognition, measurement and reporting of disposal activities, including
restructuring activities that are currently accounted in EITF Issue No. 94-3,
"Liability Recognition for Certain Employee Termination Activity." SFAS No.
146 will be effective in January 2003. The Company is currently assessing the
impact of SFAS No. 146.
In December 2002, the Financial Accounting Standards Board issued SFAS
No. 148, "Accounting for Stock-Based Compensation-Transition and Disclosure an
amendment of FASB statement No. 123." SFAS No. 148 amends FASB statement No.
123, "Accounting for Stock-Based Compensation," to provide alternative methods
of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, this statement
amends the disclosure requirement of Statement 123 to require prominent
disclosures in both annual and interim financial statements about the method
of accounting for stock-based employee compensation and the effect of the
method used on reported results. The statement is effective for fiscal years
beginning after December 15, 2002, however earlier application is encouraged.
The Company is currently assessing the impact of SFAS No. 148.
In November 2002, the FASB issued FIN No. 45, "Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantee of
Indebtedness of Others," which requires that a guarantor disclose and
recognize in its financial statements its obligations relating to guarantees
that it has issued. Liability recognition is required at the inception of the
guarantee, whether or not payment is probable. The Company will apply the
recognition and measurement provisions of FIN No. 45 on a prospective basis
and, as such does not expect it to have an initial material impact on its
financial statements upon adoption.
Liquidity and Capital Resources.
Liquidity is a measure of a company(s ability to access cash. At
December 31, 2002, we had working capital of $74 compared to a working capital
deficit of $2,230 at June 30, 2002. Our current liabilities include normal
trade debt.
10
We do not currently have a credit facility with any bank and we have not
determined the amount, if any, that we could borrow against our existing
properties.
We believe that proceeds from the sale of properties, the repayment of
advances from our parent, and other sources of funds will be adequate to fund
our operating expenses and satisfy our other current liabilities over the next
year or longer.
Unproved Undeveloped Offshore California Properties
On January 9, 2002, we and several other plaintiffs filed a lawsuit in
the United States Court of Federal Claims in Washington, D.C. alleging that
the U.S. Government has materially breached the terms of forty undeveloped
federal leases, some of which are part of our Offshore California properties.
The suit seeks compensation for the lease bonuses and rentals paid to the
Federal Government, exploration costs and related expenses, or alternatively,
for the amount the lessees would have received if the leases had not been
breached. The total amount claimed by all lessees for bonuses and rentals
exceeds $1.2 billion, with additional amounts for exploration costs and
related expenses. Our claim (including the claim of our subsidiary Amber
Resources Company) for lease bonuses and rentals paid by us and our
predecessors is in excess of $152,000,000. In addition, our claim for
exploration costs and related expenses will also be substantial.
The Complaint is based on allegations by the collective plaintiffs that
the United States has materially breached the terms of certain of their
Offshore California leases by attempting to deviate significantly from the
procedures and standards that were in effect when the leases were entered
into, and by failing to carry out its own obligations relating to those leases
in a timely and fair manner. More specifically, the plaintiffs have alleged
that the judicial determination in the California v. Norton case that a 1990
amendment to the Coastal Zone Management Act required the Government to make a
consistency determination prior to granting lease suspension requests in 1999
constitutes a material change in the procedures and standards that were in
effect when the leases were issued. The plaintiffs have also alleged that the
United States has failed to afford them the timely and fair review of their
lease suspension requests which has resulted in significant, continuing and
material delays to their exploratory and development operations.
As noted, our pending litigation against the United States is in part
predicated on the ruling in California v. Norton that a 1990 amendment to the
Coastal Zone Management Act required the Government to make a consistency
determination prior to granting lease suspension requests in 1999, a ruling
which the United States appealed to the 9th Circuit Court of Appeals. The 9th
Circuit has affirmed the lower court's decision and made legal findings
consistent with our claims in our pending litigation against the United
States.
The forty undeveloped leases are located in the Offshore Santa Maria
Basin off the coast of Santa Barbara and San Luis Obispo counties, and in the
Santa Barbara Channel off Santa Barbara and Ventura counties. None of our
interests in these leases is currently impaired, but in the event that there
is some future adverse ruling under the Coastal Zone Management Act that we
decide not to appeal or that we appeal without success, it is likely that some
11
or all of our interests in these leases would become impaired and written off
at that time, although we would undoubtedly proceed with our litigation. It is
also possible that other events could occur during the Coastal Zone Management
Act review or appellate process that would cause our interests in the leases
to become impaired, and we will continuously evaluate those factors as they
occur, although once again we would undoubtedly proceed with our litigation.
Results of Operations
Net loss. We reported net losses of $25,158 and $50,292 for the three
and six months ended December 31, 2002. Compared to net losses of $21,067 and
$63,261 for the three and six months ended December 31, 2001.
As we sold all of our producing properties to our parent on July 1, 2001,
the only revenue during the periods was $6,164 and $12,327 of gains recognized
on the sale of the properties for the three and six month periods ended
December 31, 2001. Also, because of the sale of the properties, there were no
lease operating expenses or depletion. During the three and six months ended
December 31, 2002, exploration expenses were $2,000 and $18,979 for the three
and six month periods ended December 31, 2001 and zero in the 2002 periods.
General and administrative expenses for three and six months ended December
31, 2002 were $25,158 and $50,292 compared to $25,231 and $56,609 for the
three and six months ended December 31, 2001. The majority of the expense in
both years( periods is a management fee paid to our parent of $25,000 and
$50,000 for the three and six month periods of each year.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
Market risk is the potential loss arising from adverse changes in market
rates and prices, such as foreign currency exchange and interest rates and
commodity prices. We do not use financial instruments to any degree to manage
foreign currency exchange and interest rate risks and do not hold or issue
financial instruments to any degree for trading purposes. All of our revenue
and related receivables are payable in U.S. dollars.
ITEM 4. Controls and Procedures
Under the supervision and with the participation of our management,
including our principal executive officer and principal financial officer, we
have evaluated the effectiveness of the design and operation and our
disclosure controls and procedures within 90 days of the filing date of this
quarterly report, and, based upon their evaluation, our principal executive
officer and principal financial officer have concluded that these controls and
procedures are effective. There were no significant changes in our internal
controls or in other factors that could significantly affect these controls
subsequent to the date of their evaluation.
12
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.
On January 9, 2002, we filed a lawsuit along with several other companies
in the United States Court of Federal Claims in Washington, D.C. alleging that
the U.S. Government materially breached the terms of forty undeveloped federal
leases, some of which are part of our Offshore California properties. The
Complaint is based on our collective claims that post-leasing amendments to a
federal statute governing offshore activities have now been interpreted to
alter significantly our rights and abilities to move forward with further
exploration and development activities, and that the Government has failed to
carry out its own obligations under the leases which has resulted in
substantial delays and interference in our exploration and development
efforts. The forty undeveloped leases are located in the Offshore Santa Maria
Basin off the coast of Santa Barbara and San Luis Obispo counties, and in the
Santa Barbara Channel off Santa Barbara and Ventura counties.
The suit seeks compensation for the lease bonuses and rentals paid to the
Federal Government, exploration costs, and related expenses. The total amount
claimed by all of the collective plaintiffs for bonuses and rentals exceeds
$1.2 billion, with additional amounts for exploration costs and related
expenses. The U.S. Government has not yet filed an answer to our claim.
ITEM 2. Changes in Securities. None.
ITEM 3. Defaults Upon Senior Securities. None.
ITEM 4. Submission of Matters to a Vote of Security Holders. None
ITEM 5. Other Information. None
ITEM 6. Exhibits and Reports on Form 8-K.
Exhibits: None
Reports on Form 8-K: None.
13
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
AMBER RESOURCES COMPANY
(Registrant)
Date: February 12, 2003 /s/ Roger A. Parker
-----------------------------------
Roger A. Parker
President\CEO
Date: February 12, 2003 /s/ Kevin K. Nanke
-----------------------------------
Kevin K. Nanke, Chief Financial
Officer and Treasurer
14
CERTIFICATIONS PURSUANT TO RULE 13a-14 AND 15d-14 UNDER
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Roger A. Parker, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Amber Resources
Company;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for
the registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Date: February 12, 2003 /s/ Roger A. Parker
-----------------------------------
Name: Roger A. Parker
Title: Chief Executive Officer
15
CERTIFICATIONS PURSUANT TO RULE 13a-14 AND 15d-14 UNDER
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Kevin K. Nanke, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Amber Resources
Company;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for
the registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
Date: February 12, 2003 /s/ Kevin K. Nanke
------------------------------------
Name: Kevin K. Nanke
Title: Chief Financial Officer
16
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
AND CHIEF FINANCIAL OFFICER OF
AMBER RESOURCES COMPANY
PURSUANT TO 18 U.S.C. SECTION 1350
We certify that, to the best of our knowledge, the Quarterly Report on
Form 10-Q of Amber Resources Company for the period ending Date: December 31,
2002:
(1) complies with the requirements of Section 13(a) or 15(d) of the
Securities and Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of Amber
Resources Company.
/s/ Roger A. Parker /s/ Kevin K. Nanke
- ---------------------------- ---------------------------------
Roger A. Parker Kevin K. Nanke
Chief Executive Officer Chief Financial Officer
February 12, 2003 February 12, 2003
17