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EX-10.2 - EX102 - DELTA OIL & GAS INCex102.htm
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EX-10.1 - EX101 - DELTA OIL & GAS INCex101.htm
EX-31.2 - EX312 - DELTA OIL & GAS INCex312.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

    x
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
   
 
For the quarterly period ended:  September 30, 2009
   
     o
Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
   
 
For the transition period ___________ to __________
   
 
Commission File Number:  000-52001

Delta Oil & Gas, Inc.
(Exact name of registrant as specified in its charter)

Colorado
91-2102350
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)

Suite 604 – 700 West Pender Street, Vancouver, British Columbia, Canada V6C 1G8
(Address of principal executive offices)

866-355-3644
(Registrant’s telephone number, including area code)
 
_______________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)
 
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 issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   xYes  o  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   ý Yes   ¨ No
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” and “a smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer    o                                                                                           Accelerated filer   o
Non-accelerated filer      o                                                                                           Smaller reporting company  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   o  Yes     xNo

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:
 
Class
 
Outstanding at October 29, 2009
Common Stock, $0.001 par value
 
13,557,107
 


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PART I - FINANCIAL INFORMATION

Item 1.      Financial Statements.

Our unaudited consolidated financial statements included in this Form 10-Q for the three and nine months ended September 30, 2009 are as follows:
 
 
F-1
 
Unaudited Consolidated Balance Sheet as of September 30, 2009 and September 30, 2008;
 
F-2
 
Unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2009 and 2008 and from inception on January 9, 2001 to September 30, 2009;
 
F-3
 
Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2009 and 2008 and from inception on January 9, 2001 to September 30, 2009;
 
F-4
 
Unaudited Consolidated Statement of Changes in Stockholders' Equity from inception on January 9, 2001 to September 30, 2009;
 
 
F-5
 
Notes to Unaudited Consolidated Financial Statements;

These unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-Q.  In the opinion of management, all adjustments considered necessary for a fair presentation have been included.  Operating results for the interim period ended September 30, 2009 are not necessarily indicative of the results that can be expected for the full year.
 


DELTA OIL & GAS, INC.
 
(A Development Stage Company)
 
             
Consolidated Balance Sheets
 
(Stated in U.S. Dollars)
 
             
   
September 30,
   
December 31,
 
   
2009
   
2008
 
ASSETS
 
(Unaudited)
   
(Audited)
 
             
Current
           
Cash and cash equivalents
  $ 465,686     $ 980,562  
Accounts receivable
    48,694       65,614  
Franchise tax prepaid
    1,004       -  
Prepaid expenses
    109,286       11,193  
                 
      624,670       1,057,369  
                 
Natural Gas And Oil Properties
               
Proved property
    1,171,458       892,096  
Unproved property
    706,937       630,376  
                 
      1,878,395       1,522,472  
                 
Capital Assets, Net
    3,456       172  
                 
TOTAL ASSETS
  $ 2,506,521     $ 2,580,013  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
                 
LIABILITIES
               
                 
Current
               
Accounts payable and accrued liabilities
  $ 29,356     $ 26,553  
                 
Long Term
               
Asset retirement obligation
    22,696       23,604  
                 
TOTAL LIABILITIES
    52,052       50,157  
                 
STOCKHOLDERS' EQUITY
               
                 
Share Capital
               
Preferred Shares, 25,000,000 shares authorized of $0.001
               
par value of which none have been issued
               
Common stock, 100,000,000 shares authorized of $0.001
               
par value, 13,557,107 and 9,368,102 shares issued
               
and outstanding, respectively
    13,557       9,368  
Additional paid-in capital
    6,971,313       6,088,272  
                 
Cumulative Other Comprehensive Income/(loss)
    96,538       5,978  
                 
Deficit Accumulated During The Development Stage
    (4,723,053 )     (3,573,762 )
                 
      2,358,355       2,529,856  
                 
Noncontrolling Interest
    96,114       -  
                 
TOTAL STOCKHOLDERS' EQUITY
    2,454,469       2,529,856  
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  $ 2,506,521     $ 2,580,013  
                 
                 
The accompanying notes are an integral part of these consolidated financial statements
         


DELTA OIL & GAS, INC.
(A Development Stage Company)
                               
Consolidated Statements Of Operations
(Stated in U.S. Dollars)
(Unaudited)
                               
                           
CUMULATIVE PERIOD
 
                           
FROM INCEPTION
 
                           
JANUARY 9, 2001
 
   
THREE MONTHS ENDED
   
NINE MONTHS ENDED
   
TO
 
   
SEPTEMBER 30,
   
SEPTEMBER 30,
   
SEPTEMBER 30,
 
   
2009
   
2008
   
2009
   
2008
   
2009
 
Revenue
 
 
   
 
   
 
   
 
   
 
 
                               
Natural gas and oil sales
  $ 101,491     $ 190,076     $ 233,582     $ 773,216     $ 2,618,612  
Gain on sale of natural gas and oil properties
    -     $ 719,146       142,481       719,146       2,271,087  
                                         
      101,491       909,222       376,063       1,492,362       4,889,699  
Costs And Expenses
                                       
                                         
Natural gas and oil operating costs
    25,495       48,516       98,671       179,626       656,052  
General and administrative
    147,141       158,457       439,363       344,090       3,480,040  
Accretion
    815       3,354       2,363       10,062       9,768  
Depreciation and depletion
    5,739       39,820       31,443       200,767       1,470,401  
Impairment of natural gas and oil properties
    7,867       -       210,353       388,702       3,337,466  
Loss on sale of natural gas and oil properties
    -       -       750,305       -       750,305  
                                         
      187,057       250,147       1,532,498       1,123,247       9,704,032  
                                         
Net Operating Income (Loss)
    (85,566 )     659,075       (1,156,435 )     369,115       (4,814,333 )
                                         
Other Income And (Expense)
                                       
                                         
Forgiveness of debt
    -       -       -       -       39,933  
Interest income
    2,160       1,213       7,832       1,465       76,026  
Interest expense
    -       (1,598 )     -       (5,016 )     (5,016 )
                                         
      2,160       (385 )     7,832       (3,551 )     110,943  
                                         
Income (Loss) Before Income Taxes
    (83,406 )     658,690       (1,148,603 )     365,564       (4,703,390 )
                                         
Income taxes
    -       -       5,205       -       24,180  
                                         
Net Income (Loss)
    (83,406 )     658,690       (1,153,808 )     365,564       (4,727,570 )
                                         
Less: Net loss attributable to the noncontrolling interest
    196       -       4,517       -       4,517  
                                         
Net Income (Loss) Attributable to Delta Oil and Gas, Inc.
  $ (83,210 )   $ 658,690     $ (1,149,291 )   $ 365,564     $ (4,723,053 )
                                         
Basic And Diluted Loss Per Common Share
  $ (0.00 )   $ 0.01     $ (0.02 )   $ 0.01          
                                         
Weighted Average Number Of
                                       
Common Shares Outstanding
    13,557,107       9,368,102       12,246,684       9,219,634          
                                         
                                         
Consolidated Statement of Comprehensive Income/(Loss)
                                       
                                         
Comprehensive (Loss)
                                       
                                         
Net Loss
  $ (83,406 )   $ 658,690     $ (1,153,808 )   $ 365,564     $ (4,727,570 )
                                         
Other Comprehensive Loss
                                       
Foreign Currency Translation
    58,366       (7,412 )     90,560       (17,664 )     96,538  
                                         
Comprehensive (Loss)
  $ (25,040 )   $ 651,278     $ (1,063,248 )   $ 347,900     $ (4,631,032 )
                                         
                                         
The accompanying notes are an integral part of these consolidated financial statements



DELTA OIL & GAS, INC.
(A Development Stage Company)
                   
Consolidated Statements Of Cash Flows
(Stated in U.S. Dollars)
(Unaudited)
               
CUMULATIVE PERIOD
 
               
FROM INCEPTION
 
               
JANUARY 9, 2001
 
   
NINE MONTHS ENDED
   
TO
 
   
SEPTEMBER 30,
   
SEPTEMBER 30,
 
   
2009
   
2008
   
2009
 
Cash Flows From Operating Activities:
                 
                   
Net loss for the period
  $ (1,149,291 )   $ (217,194 )   $ (4,723,053 )
                         
Adjustments to reconcile net loss to net cash
                       
  used in operating activities:
                       
Accretion
    2,363       11,993       9,768  
Depreciation and depletion
    31,443       365,971       1,470,401  
Impairment of natural gas and oil properties
    210,353       711,563       3,337,466  
Loss on sale of natural gas and oil properties
    750,305       -       750,305  
Stock-based compensation expense
    13,750       123,724       621,833  
Shares issued to President & CEO for servicess rendered
    30,000       26,500       516,500  
Shares issued to CFO for services rendered
    12,000       21,200       170,700  
Shares issued to Investor Relations Services Inc for services rendered
    -       -       40,800  
Realized foreign exchange loss
    90,560       (20,170 )     93,326  
Net loss attributable to the noncontrolling interest
    (4,517 )     -       (4,517 )
Gain on sale of natural gas and oil properties
    (142,481 )     (719,146 )     (2,271,087 )
                         
Changes in operating assets and liabilities:
                       
GIC
    -       236,112       -  
Accounts receivable
    16,920       (48,260 )     (48,694 )
Accounts payable and accrued liabilities
    2,803       (115,176 )     (86,667 )
Due to related party
    -       19,559       -  
Franchise tax prepaid
    (1,004 )     -       (1,004 )
Prepaid expenses
    (98,093 )     (63,045 )     (109,286 )
                         
Net Cash Generated/(Used) In Operating Activities
    (234,889 )     333,631       (233,209 )
                         
Cash Flows From Investing Activities:
                       
                         
Purchase of other equipment
    (4,886 )     -       (9,369 )
Sale proceeds of natural gas and oil working interests
    407,629       1,309,826       3,217,455  
Investment in natural gas and oil working interests
    (634,685 )     (729,402 )     (7,264,704 )
                         
Net Cash Generated /(Used) In Investing Activities
    (231,942 )     580,424       (4,056,618 )
                         
Cash Flows From Financing Activities:
                       
 
                       
Registration of shares under Form S-4
    -       (95,414 )     -  
Share issue expenses
    (48,045 )     -       (180,334 )
Proceeds from issuance of common stock
    -       25,000       4,935,847  
                         
Net Cash Provided/(Used) By Financing Activities
    (48,045 )     (70,414 )     4,755,513  
                         
Net Increase/(Decrease) In Cash And Cash Equivalents
    (514,876 )     843,641       465,686  
                         
Cash And Cash Equivalents At Beginning Of Period
                       
(Excess Of Deposits Over Checks Issued)
    980,562       238,351       -  
                         
Cash And Cash Equivalents At End Of Period
  $ 465,686     $ 1,081,992     $ 465,686  
                         
Supplemental Disclosures Of Non-Cash Financing Activities
                       
200,000 shares issued to the President & CEO as part of their
  $ 30,000     $ 26,500     $ 516,500  
compensation package
                       
                         
80,000 shares issued to the CFO for services rendered
  $ 12,000     $ 21,200     $ 170,700  
                         
10,000 shares issued to Investor Relations Services Inc.,
                       
for services rendered.
  $ -     $ -     $ 40,800  
                         
3,909,005 shares issued for the acquisition of Oil and Gas properties
  $ 879,526     $ -     $ 879,526  
                         
Supplemental Disclosures Of Non-Cash Transactions
                       
Income taxes paid
  $ 5,205     $ -     $ 24,180  
                         
Investment in natural gas and oil working interests included in
  $ -     $ -     $ 116,023  
accounts payable
                       
                         
The accompanying notes are an integral part of these consolidated financial statements


DELTA OIL & GAS INC.
(A Development Stage Company)
                                                       
Consolidated Statement Of Changes In Stockholders' Equity
Period From Inception, January 9, 2001, to September 30, 2009
(Stated in U.S. Dollars)
(Unaudited)
                                                       
                                 
DEFICIT
                   
   
COMMON STOCK
   
ACCUMULATED
                   
   
NUMBER
               
SHARE
   
SHARE
   
DURING THE
   
CUMULATIVE
   
 
       
   
OF COMMON
   
PAR
   
ADDITIONAL
   
SUBSCRIPTIONS
   
SUBSCRIPTIONS
   
DEVELOPMENT
   
COMPREHENSIVE
   
NONCONTROLLING
       
   
SHARES VALUE
   
VALUE
   
PAID-IN CAPITAL
   
RECEIVED
   
RECEIVABLE
   
STAGE
   
INCOME/(LOSS)
   
INTEREST
   
TOTAL
 
                                                       
Shares issued for cash at $0.00018
    2,750,000     $ 2,750     $ (250 )   $ -     $ -     $ -     $ -     $ -     $ 2,500  
                                                                         
Shares issued for cash at $0.0036
    5,500,000       5,500       94,500       -       -       -       -       -       100,000  
                                                                         
Shares issued for cash at $0.045
    9,350       9       2,116       -       -       -       -       -       2,125  
                                                                         
Net (loss) for the period ended
    -       -       -       -       -       (184,407 )     -       -       (184,407 )
                                                                         
Balance, December 31, 2001
    8,259,350       8,259       96,366       -       -       (184,407 )     -       -       (79,782 )
                                                                         
Net (loss) for the year
    -       -       -       -       -       (62,760 )     -       -       (62,760 )
                                                                         
Balance, December 31, 2002
    8,259,350       8,259       96,366       -       -       (247,167 )     -       -       (142,542 )
                                                                         
Net (loss) for the year
    -       -       -       -       -       (24,423 )     -       -       (24,423 )
                                                                         
Balance, December 31, 2003
    8,259,350       8,259       96,366       -       -       (271,590 )     -       -       (166,965 )
                                                                         
Share subscriptions received
    -       -       -       160,000       -       -       -       -       160,000  
                                                                         
Net (loss) for the year
    -       -       -       -       -       (31,574 )     -       -       (31,574 )
                                                                         
Balance, December 31, 2004
    8,259,350       8,259       96,366       160,000       -       (303,164 )     -       -       (38,539 )
                                                                         
Units issued for cash at $1.00, net of share issuance cost
    496,797       497       2,483,228       (160,000 )     -       -       -       -       2,323,725  
                                                                       
Options exercised for cash at $0.8
    49,000       49       195,951       -       (16,000 )     -       -       -       180,000  
                                                                         
Stock-based compensation
    -       -       370,267       -       -       -       -       -       370,267  
                                                                         
Net (loss) for the year
    -       -       -       -       -       (570,050 )     -       -       (570,050 )
                                                                         
Balance, December 31, 2005
    8,805,147       8,805       3,145,812       -       (16,000 )     (873,214 )     -       -       2,265,403  
                                                                         
Subscriptions receivable
    -       -       -       -       16,000       -       -       -       16,000  
                                                                         
Options exercised for cash at $0.8
    61,000       61       243,939       -       -       -       -       -       244,000  
                                                                         
Options exercised for cash at $1.00
    2,500       3       12,498       -       -       -       -       -       12,501  
                                                                         
Shares issued for cash at $2.75,
    145,455       145       1,849,850       -       -       -       -       -       1,849,995  
net of finders fee
                                                                       
                                                                         
Stock-based compensation
    -       -       195,719       -       -       -       -       -       195,719  
                                                                         
Net (loss) for the year
    -       -       -       -       -       (234,763 )     -       -       (234,763 )
                                                                         
Balance, December 31, 2006
    9,014,102       9,014       5,447,818       -       -       (1,107,977 )     -       -       4,348,855  
                                                                         
Options exercised for cash at $0.75
    12,000       12       44,988       -       -       -       -       -       45,000  
                                                                         
Shares issued to President & CEO as
part of his
compensation package
at $0.92
    100,000       100       459,900       -       -       -       -       -       460,000  
                                                                         
Shares issued to Investor Relations
Services, Inc. as part of the agreement
    12,000       12       40,788       -       -       -       -       -       40,800  
 
                                                                       
Shares issued to CFO for services rendered
    50,000       50       137,450       -       -       -       -       -       137,500  
                                                                         
Stock-based compensation
    -       -       42,097       -       -       -       -       -       42,097  
                                                                         
Comprehensive Income/(loss):
                                                                       
Cumulative translation adjustment
    -       -       -       -       -       -       187,348       -       187,348  
Net (loss) for the year
    -       -       -       -       -       (2,249,959 )     -       -       (2,249,959 )
Comprehensive (loss)
                                                                    (2,062,611 )
                                                                         
Balance, December 31, 2007
    9,188,102       9,188       6,173,041       -       -       (3,357,936 )     187,348       -       3,011,641  
                                                                         
Shares issued to President & CEO & CFO as part of their compensation package at $0.053
    180,000       180       47,520       -       -       -       -       -       47,700