Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
NORTH TEXAS ENERGY, INC.
(Exact name of Registrant as specified in its charter)
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Nevada
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1311
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27-4556048
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(State or other jurisdiction of
incorporation or organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer Identification No.)
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5057 Keller Springs Road, Suite 300
Addison, Texas 75001
469-718-5572
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)
Securities Transfer Corporation
2591 Dallas Parkway, Suite 102
Frisco TX 75034
972- 963-0012
(Name, address, including zip code, and telephone number, including area code, of agent for service)
COPIES OF ALL COMMUNICATIONS TO:
North Texas Energy Inc. 5057 Keller Springs Road, Suite 300Addison, Texas 75001, 469-718-5572
Approximate date of commencement of proposed sale to public:
As soon as practicable after this registration statement becomes effective.
_________________
If any of the securities being registered are being offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. x
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
Indicate by a check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accredited filer or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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[ ]
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Accelerated filer
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[ ]
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Non-accelerated filer
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[ ]
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Smaller reporting company
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x
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CALCULATION OF REGISTRATION FEE
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Title of Each Class of Securities to be Registered
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Amount to be Registered
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Proposed Maximum Offering Price Per Share
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Proposed Maximum Aggregate Offering
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Amount of Registration Fee
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Common
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2,000,000
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$1.00
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$ 2,000,000
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$ 229.20
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Total
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2,000,000
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-
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$ 2,000,000
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$ 229.20
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(1) The proposed offering price per share was estimated solely for the purpose of calculating the registration fee pursuant to Rule 457 of Regulation C.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
Page 1
PRELIMINARY PROSPECTUS
Subject to completion, dated November 30, 2011
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
North Texas Energy, Inc.
5057 Keller Springs Road, Suite 300 Addison, Texas 75001
469-718-5572
This prospectus relates to the sale of 2,000,000 shares of the common stock of North Texas Energy, Inc.
Via Direct Public Offering
A Total 2,000,000 Shares of Common Stock Par Value $ 0.00001 per Share
Offered at $1.00 (One Dollar) Per Share
OUR COMMON STOCK IS NOT TRADED ON ANY NATIONAL SECURITIES EXCHANGE AND IS NOT QUOTED ON ANY OVER-THE-COUNTER MARKET. THE PRICES AT WHICH THE STOCK WILL BE SOLD WILL BE DETERMINED BY THE PREVAILING MARKET PRICE FOR THE SHARES (IF OUR COMMON STOCK IS PUBLICLY TRADED AT SUCH TIME) OR IN PRIVATELY NEGOTIATED TRANSACTIONS.
THIS INVESTMENT INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD PURCHASE SHARES ONLY IF YOU CAN AFFORD A COMPLETE LOSS OF YOUR INVESTMENT. SEE “RISK FACTORS” BEGINNING ON PAGE 9 FOR A DISCUSSION OF RISKS APPLICABLE TO US AND AN INVESTMENT IN OUR COMMON STOCK.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE
Page 2
Table of Contents
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FORWARD-LOOKING STATEMENTS
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4
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USE CAUTION WHEN EVALUATING FORWARD LOOKING STATEMENTS
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4
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PROSPECTUS SUMMARY
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4
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HISTORY OF THE ORGANIZATION- NORTH TEXAS ENERGY, INC.
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5
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THE BUSINESS OF THE COMPANY
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5
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DESCRIPTION OF THE OIL AND GAS LEASE RIGHTS AND RESERVES
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6
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THE HAYNESVILLE & EAGLEFORD SHALE FORMATIONS
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6
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Haynesville Shale Formation
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6
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Eagleford Shale Formation
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6
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Information Related to Large Geological Shale Formations and Their Estimated Natural Resources
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6
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Estimated Currently Known Oil Reserves-Technical Report on North Texas Energy Oil & Gas Leases
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7
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Estimated Discounted Cash Value of Oil Reserves Producible in Three Years
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7
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THE COMPANY'S BRIEF OPERATING HISTORY
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7
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THE OFFERING
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7
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Beginning and Cumulative Number of Shares Outstanding Based on Offering Milestones
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7
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SUMMARY CONSOLIDATED FINANCIAL DATA
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8
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RISK FACTORS
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9
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RISKS RELATED TO OUR BUSINESS
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9
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The changing price paid for a barrel of Crude Oil at Market
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9
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Environmental Impact Including New Legislation
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9
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Reliance on Experts
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9
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Our Business as a "Going Concern"
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9
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USE OF PROCEEDS
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10
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MANAGMENT'S DISCUSSION AND ANALYSIS
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10
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Overview
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10
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FINANCIAL CONDITION, CHANGES IN FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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11
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Liquidity
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11
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Results of Operations
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11
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DIRECTORS, OFFICERS AND CONTROL PERSONS
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11
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TRANSACTIONS WITH RELATED PERSONS AND CERTAIN CONTROL PERSONS
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12
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PLAN OF DISTRIBUTION
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12
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RECENT SALES OF UN-REGISTERED SECURTIES
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12
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FINANCIAL STATEMENTS-CONSOLIDATED FINANCIAL STATEMENTS
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12
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TABLE OF CONTENTS-SECTION F
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13
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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S REPORT
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14
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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19
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LITIGATION
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20
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STOCK TRANSFER AGENT
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20
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LEGAL MATTERS
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20
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EXPERTS
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20
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WHERE YOU CAN FIND MORE INFORMATION
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20
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UNDERTAKINGS
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21
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SIGNATURES
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21
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EXHIBIT INDEX
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22
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Page 3
FORWARD-LOOKING STATEMENTS
THIS PROSPECTUS AND RELATED PROSPECTUS SUPPLEMENTS CONTAIN FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF FEDERAL SECURITIES LAW. WORDS SUCH AS “MAY,” “WILL,” “EXPECT,” “ANTICIPATE,” “BELIEVE,” “ESTIMATE,” “CONTINUE,” “PREDICT,” OR OTHER SIMILAR WORDS, IDENTIFY FORWARD-LOOKING STATEMENTS. FORWARD-LOOKING STATEMENTS APPEAR IN A NUMBER OF PLACES IN THIS PROSPECTUS AND INCLUDE STATEMENTS REGARDING OUR INTENT, BELIEF OR CURRENT EXPECTATION ABOUT, AMONG OTHER THINGS, TRENDS AFFECTING THE MARKETS IN WHICH WE OPERATE, OUR BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS, CASH FLOW
AND GROWTH STRATEGIES.
USE CAUTION WHEN EVALUATING FORWARD LOOKING STATEMENTS
ALTHOUGH WE BELIEVE THAT THE EXPECTATIONS REFLECTED IN THESE FORWARD-LOOKING STATEMENTS ARE BASED ON REASONABLE ASSUMPTIONS, FORWARD-LOOKING STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PREDICTED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS INCLUDING THOSE SET FORTH IN THE “RISK FACTORS” SECTION OF THIS PROSPECTUS. IF ANY OF THE EVENTS DESCRIBED IN “RISK FACTORS” OCCUR, THEY COULD HAVE AN ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF OPERATION, CASH FLOW, AND GROWTH STRATEGIES. WHEN CONSIDERING FORWARD-LOOKING STATEMENTS
YOU SHOULD KEEP THESE FACTORS IN MIND AS WELL AS THE OTHER CAUTIONARY STATEMENTS IN THIS PROSPECTUS. YOU SHOULD NOT PLACE UNDUE RELIANCE ON ANY FORWARD-LOOKING STATEMENT. WE ARE NOT OBLIGATED TO UPDATE FORWARD-LOOKING STATEMENTS.
PROSPECTUS SUMMARY
THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION AND DOES NOT CONTAIN ALL THE INFORMATION THAT MAY BE IMPORTANT TO YOU. YOU SHOULD CAREFULLY READ THIS PROSPECTUS, ANY RELATED PROSPECTUS SUPPLEMENT AND THE DOCUMENTS WE HAVE REFERRED YOU TO IN “WHERE YOU CAN FIND MORE INFORMATION” ON 18 BEFORE MAKING AN INVESTMENT IN OUR COMMON STOCK, INCLUDING THE “RISK FACTORS” SECTION BEGINNING ON PAGE 9. IN THIS PROSPECTUS, REFERENCES TO “ THE COMPANY,” “WE,” “US” AND “OUR” AND SO FORTH REFER TO THE MERGED OR COMBINED COMPANIES AS ONE ALTOGETHER SUBSEQUENT TO THE MERGERS AND COMBINATION OF THE RESPECTIVE
BUSINESSES INTO NORTH TEXAS ENERGY, INC. AND ITS SUBSIDIARIES.
Page 4
HISTORY OF THE ORGANIZATION- NORTH TEXAS ENERGY, INC.
North Texas Energy, Inc. was organized in Nevada in January 2011. We are a combination of three companies, each originally founded for same purpose. The predecessors to NTE are Remington Oil and Gas, LLC a Texas Limited Liability Company and Remington Oil and Gas, Inc. a Nevada corporation. During 2009 and prior Remington Oil and Gas, LLC had acquired Oil Field leases in North Texas, in Upshur and Milam counties. In January 2010 Remington Oil and Gas, Inc. acquired all of the outstanding ownership interests of Remington Oil and Gas, LLC. In the process, Remington Oil and Gas, Inc., acquired the oil and gas leases in North Texas that had been previously assigned to Remington Oil and
Gas, LLC. In January 2011 North Texas Energy, Inc. acquired Remington Oil and Gas through a share exchange agreement in which all the shareholders of record of Remington Oil and Gas, Inc. were given equal shares of NTE. Also in 2011, and separately from its equity acquisition, a Purchase and Sale agreement with Remington Oil and Gas, Inc., gave title to the oil and gas leases that were the property of Remington Oil and Gas, Inc. to North Texas Energy, Inc.
THE BUSINESS OF THE COMPANY
North Texas Energy, Inc. (NTE) is a non-traditional Crude Oil and Natural Gas producing company. The company has acquired title to Oil and Natural Gas leases in the state of Texas in Milam and Upshur counties. The company controls 100% of the working interest in the Texas leases. The company also has entered into final negotiations for agreements that will allow for acquisition of additional leases in neighboring Kansas and Oklahoma in the near future. The company will control 100% of the working interest in the Kansas and Oklahoma leases. There is substantial oil exploration and production currently in the areas in which the company holds
ownership rights to the mineral deposits (oil and gas) that the company seeks to bring to market. The company's business is the re-entering oil fields containing formerly producing wells and oil deposits and employ new proven methods to recover proven remaining and probably substantial deposits of crude oil and natural gas. The company has now on its leased property a total of eleven wells that have been drilled and have a substantial amount of well head equipment installed. The well head equipment is that equipment used to bring the deposits of oil and natural gas to the surface and to store it or deliver it to market for sale. The eleven wells are in various states of repair but all are useable subsequent to repair and refurbishment.
The company is an “Enhanced Oil Recovery Company”. Enhanced Oil Recovery (EOR) is a term used to describe a variety of methods by which oil reserves are recovered from existing oil fields that were not completely exhausted using standard methods. We are not an “exploration company” in the sense that our business and our methods do not involve an attempt to explore for new oil deposits but rather to exploit existing known oil fields using other than “standard” recovery methods. In simplified terms, the "standard" methods of producing oil and natural
gas from its location in natural deposits in the earth is to drill a relief (well) into the deposit and allow the deposit's crude oil to surface because of the natural pressure that exists in the deposit structure underground. Once a well is finished and a well casing is in place the oil and natural gas will surface under its own pressure or with a small amount of suction introduced into the well. As the oil surfaces so does the natural gas and the two products are separated and stored or delivered directly to market. Enhanced Oil Recovery methods identify the process(s) by which substantial amounts of oil and gas that remain in a field deposit, after standard recovery methods are exhausted, can be recovered using a variety of methods of enhancing the natural pressure in a deposit or using some other method
to release additional trapped oil in the deposit. Refurbishing and using the same wells that were used originally in using standard methods, EOR allows for the recovery of significantly more oil from the same field by introducing additional pressure or other geological changes in the deposit. The original well, well casing and well head equipment, are used in the process.
NTE intends initially to use an EOR method called "microbial injection" to induce pressure in its oil field deposits and allow for the remaining oil deposits to be recovered. Microbial injection is the process by which nutrients or compounds are injected into an oil field to allow for the natural enhancement of the movement and release of the oil out of the deposit. Commonly, as much as two-thirds of the original oil recovered in a deposit can be recovered using some kind of Enhanced Oil Recovery method. The concept is to use natural environmental reactions to improve the recovery of oil trapped in porous media in the deposit or
without sufficient pressure to allow the oil and gas to be expressed normally from the deposit to above ground. In each different oil field, the method by which EOR can be successful is dependent on the oil field and deposit structure. The uniqueness of each field may involve unique EOR methods which can be any combination of methods involving the use of expertise in the disciplines of geology, chemistry, and microbiology as well as fluid mechanics and a variety of engineering applications.
The company relies on the science and practice of qualified petroleum engineers to identify oil deposits and reserves in oil fields that we wish to enter and begin producing operations (see “Petroleum Engineer's Report” in the supplemental information attached to this prospectus). Additionally, NTE will rely on state-of-the-art oil deposit identification methods such as seismic analysis and interpretation. We rely on engineering analysis and written reports that indicate (based on professional opinion) the character and type of oil deposits that may be in any particular oil field (See the section on “Risk Factors” for more information). Once NTE identifies an attractive
field, we attempt to enter into an agreement to acquire lease title to the field and begin the process of producing oil and natural gas from the field using currently known effective EOR methods.
Page 5
DESCRIPTION OF THE OIL AND GAS LEASE RIGHTS AND RESERVES
In order to determine the cost-effectiveness and feasibility of the company’s plan to produce oil from its leased oil and gas properties a professional petroleum engineer’s Technical Report was commissioned by the company to determine the estimated reserves of hydrocarbon deposits in the geological structures under the ground leases. That report is included in this prospectus in the exhibit section and provides analytical data and conclusions that make estimates of the reserves the company holds title to in two separate geological formations that are known to be rich in hydrocarbon deposits including oil and natural gas. The
formations are referred to as ”Shale” formations for their type of geological composition underground. These types of formations have commonly been the focus of oil and natural gas exploration and production companies because they have been proven to contain significant amounts of recoverable crude oil and natural gas. The Technical Report in the exhibits to this prospectus gives detailed information about the location and structure of the geology contained in the leases. The leases are recorded in the counties that they exist in and are on record and identified in the records of the Texas Railroad Commission who has regulatory management authority over oil and gas leases in the state of Texas.
THE HAYNESVILLE & EAGLEFORD SHALE FORMATIONS
Haynesville Shale Formation
The company has property rights in two different established oil fields. In East Texas (Upshur County), the company holds leases in the East Texas Oil Field, within the “Haynesville Shale”. The Haynesville Shale is a geological formation that underlies parts of Arkansas, Louisiana and East Texas. The East Texas Oil Field (located in the Haynesville Shale formation) has been producing oil and natural gas for some time now and the company will focus its initial efforts in the East Texas Oil Field on implementing Enhanced Oil Recovery techniques. The company’s East
Texas oil field leases would be the quickest wells to bring on-line and produce crude oil for sale. As production begins from the shallow existing wells the process of deep lateral well drilling and fracturing at significantly deep locations in the geological structure will begin. Production of oil in Upshur County (referred to as the Haynesville Shale formation) will begin with the process of refurbishing eleven existing wells. Once those wells are clean and operational, the enhanced oil recovery technique called microbial injection will begin. The process should give the company access to the estimated 5 million barrels of recoverable crude oil in the structure.
Eagleford Shale Formation
The company also has leased property in Milam County Texas in a geological formation referred to as the “Eagleford Shale Formation”. The Eagleford Shale Formation underlies much of South and East Texas and is also a hydrocarbon rich underground geological formation in which a significant amount of crude oil and natural gas exists. The formation is estimated to contain as much as 3 billion barrels of producible crude oil. The company plans to conduct deep horizontal drilling and fracturing activities on its leases in the Eagleford Shale. Many already producing deep horizontal wells exist in the formation and the formation was
the most active in the U.S. in 2010 for drilling permits.
Information Related to Large Geological Shale Formations and Their Estimated Natural Resources
A great deal of information is published and available from a variety of sources in the public domain and from private sources that detail the geology and hydrocarbon (crude oil and natural gas) producing activities and resources in both the Eagleford and Haynesville Shale Formations. A substantial amount is available via the World Wide Web (The Internet).
THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK
Page 6
Estimated Currently Known Oil Reserves-Technical Report on North Texas Energy Oil & Gas Leases
On its owned leases the company has estimated reserves in standard barrels of oil (42 gallons) identified by the Technical Report as follows:
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Description of Lease
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Proved Developed Reserves
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Proved Un-Developed Reserves
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Probable Reserves
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Balch
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496,585
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Northrock
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882,000
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1,102,500
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The company has negotiated additional leases which it has not formalized yet that if finalized would add an additional estimated 2,100,000 barrels of Proved Developed reserves and 164,000 barrels of Proved Un-developed reserves. (See the Petroleum Engineer’s report in the exhibits to this prospectus)
Estimated Discounted Cash Value of Oil Reserves Producible in Three Years
The following table shows the estimated discounted cash gross value of production of Crude Oil for the next three years (generalized in annual receipts) for the production and sale of Light Sweet Crude Oil at the Western Intermediate Average Price of $74 Per Barrel from the company’s known Proved Developed, Proved Un-Developed and Probable Reserves. The company estimates that from the gross receipts it will pay approximately 22% of the gross receipts in royalties and severance taxes.
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Year of Production
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Gross Receipts
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Discount Rate %
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Discounted Value
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Year One
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$ 3,000,000
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4.0
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$ 45,200,852
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Year Two
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$ 15,000,000
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5.0
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$ 44,105,388
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Year Three
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$ 32,000,000
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6.0
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$ 43,047,952
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Total
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50,000,000
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7.0
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$ 42,026,952
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THE COMPANY'S BRIEF OPERATING HISTORY
The company had basically no field operations or activity in 2009 and has not had any in 2011. Although the company is not currently operating in the field, it had brief field operations during 2010. Beginning in 2010, the company obtained funding from the private sale of its common stock (see the section "Recent Sales of Unregistered Securities" for more information). Along with the use of those funds and trade credit, the company began refurbishing and repairing the wells existing on the leased property for production and use.
Working capital in the form of approximately $206,000 in cash from unregistered common stock sales along with trade credit from suppliers and contractors of $98,000 was used in the process. The complete comprehensive financial information covering the company's entire relevant operating history follows after this section (see the sections "Management's Discussion and Analysis" and "Financial Statements") Other than during 2010, no significant financial or operational activity has occurred.
THE OFFERING
This prospectus refers to the sale of 2,000,000 shares of the company's common stock in a Direct Public Offering of the securities. The company has outstanding common stock totaling 5,831,000 shares and intends to issue another 2,000,000 shares to the public in the offering. The offering is a Direct Public Offering. Subject to the approval of the registration statement, the company will take measures to meet the criteria and regulations that allow the stock to be quoted on the OTC Bulletin Board stock quotation system.
It is likely that not all of the stock offered will be sold to investors immediately. It is likely that a delayed sale of the securities will take place over an extended period of time. The following table shows the possible outcomes for computing the company's outstanding stock given partial sales of the total offering given in percentage intervals.
Beginning and Cumulative Number of Shares Outstanding Based on Offering Milestones
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Prior to Offering
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25% Sold
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50% Sold
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75% Sold
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100% Sold
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5,831,000
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6,331,000
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6,831,000
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7,331,000
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7,831.000
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Gross Proceeds
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$ 500,000
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$ 1,000,000
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$ 1,500,000
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$ 2,000,000
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Page 7
Of the total number of shares outstanding prior to the offering of 5,831,000 approximately 5,000,000 are held by “control persons”. Those shares are restricted until March 24, 2013. The remaining 831,000 shares are held by private investors who acquired their stock via the stock exchange between Remington Oil and Gas Inc. and North Texas Energy Inc. on January 12, 2011. Those shares will remain restricted until no sooner than January 12, 2012.
SUMMARY CONSOLIDATED FINANCIAL DATA
We have prepared the following summary of our consolidated financial statements. The summary of our consolidated financial data set forth below should be read together with our Consolidated Financial Statements and the notes thereto, as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this prospectus.
NORTH TEXAS ENERGY INC. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
BALANCE SHEETS
AT DECEMBER 31, 2009 AND 2010 & SEPTEMBER 30, 2010 AND 2011
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12/31/2010
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12/31/2009
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9/30/2011
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9/30/2010
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Current Assets
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Cash
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- | - | - | - | ||||||||||||
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Total Current Assets
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- | - | - | - | ||||||||||||
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Property, Plant & Equipment
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Well Head Equipment
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$ | 89,410 | $ | 89,410 | $ | 89,410 | $ | 89,410 | ||||||||
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Total Assets
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$ | 89,410 | $ | 89,410 | $ | 89,410 | $ | 89,410 | ||||||||
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Total Liabilities
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$ | 148,174 | $ | 144,368 | $ | 148,174 | $ | 148,174 | ||||||||
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Total Stockholder’s Equity
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$ | (58,764 | ) | $ | (54,956 | ) | $ | (58,764 | ) | $ | (58,764 | ) | ||||
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Total Liabilities & Stockholder’s Equity
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$ | 89,410 | $ | 89,410 | $ | 89,410 | $ | 89,410 | ||||||||
NORTH TEXAS ENERGY INC. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
INCOME STATEMENTS
FOR THE TWEVE MONTHS ENDED DECEMBER 31, 2009 AND 2010
AND THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2011
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12/31/2009
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9/30/2011
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9/30/2010
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Oil and Gas Producing Income
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- | - | - | - | ||||||||||||
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General Operating Expenses
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$ | (209,833 | ) | $ | (54,957 | ) | - | $ | (209,833 | ) | ||||||
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Net Income (Loss)
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$ | (209,833 | ) | $ | (54,957 | ) | - | $ | (209,833 | ) | ||||||
NORTH TEXAS ENERGY INC. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
STATEMENT OF CASH FLOWS
FOR THE TWEVE MONTHS ENDED DECEMBER 31, 2009 AND 2010
AND THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2011
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12/31/2010
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12/31/2009
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9/30/2011
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9/30/2010
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Net Income from Operations
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$ | (209,833 | ) | $ | (54,957 | ) | - | $ | (209,833 | ) | ||||||
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Adjustments to Reconcile Net Income
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To Net Cash From Operations
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Increase in Current Liabilities
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$ | 3,806 | $ | 144,367 | - | $ | 3,806. | |||||||||
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Investing Activities
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- | $ | (89,410 | ) | - | - | ||||||||||
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Financing Activities
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Sale of Common Stock
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$ | 206,027 | - | - | $ | 206,027 | ||||||||||
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Net Cash Change for the Period
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- | - | - | - | ||||||||||||
Page 8
RISK FACTORS
An investment in our common stock is speculative and involves a high degree of risk and uncertainty. You should carefully consider the risks described in this section of the prospectus together with all the other information contained in this prospectus including our consolidated financial statements and the notes to the financial statements that are included with them before deciding to invest in our common stock. The risks described in this section and in the prospectus do not represent the only risks associated with an investment in our common stock. Additional risks that we have not discovered or presented here because we consider them immaterial may
also adversely affect our Company. If any of the following risks and their negative affects happen to occur, our business financial condition and results of operations and the value of our common stock could be materially and adversely affected in a manner that could completely devalue your investment. Great care should be taken to evaluate the risk and any decision to invest should come with an accompanying concern that all of your investment could be lost.
RISKS RELATED TO OUR BUSINESS
The changing price paid for a barrel of Crude Oil at Market
The most significant risk factor directly affecting our business is the price of crude oil at market. The market price at which the company delivers oil to market is the price as stated for “Western Intermediate Light Sweet Crude Oil”. Since a low price of about thirty dollars ($30) per barrel was reached in 2008, the average price per barrel has fluctuated greatly but averaged about seventy-four dollars ($74) per barrel. In our plans for recovering oil from the reserves that we probably have in our deposits, we will need the price of crude oil at market to stay above the price averaged at about twenty dollars ($20) per barrel. Below the price of twenty dollars per barrel, we will
have to carefully evaluate the timing and the methods we use for recovery of oil and natural gas in order to make the process profitable.
Environmental Impact Including New Legislation
As was discussed earlier in the section “The Business of Our Company”, we are an oil and gas producing company that uses new processes that allow for the production of oil from existing deposits that are residual deposits left after standard methods of relieving oil from known deposits has been exhausted. The new methods involve introducing into the geology of a deposit, materials that have no known undesirable environmental impact on the geological formation we are operating in. If in the future it is found that a not predictable undesirable impact is related to our oil recovery methods, we may be prevented from using methods we now know to be cost effective and safe such as the
methods we now plan to use discussed also in the section “The Business of Our Company”. If in any case the method of recover that we choose is found to have undesirable affects on the environment that we operate in or around, it might prevent us from recovering oil in a cost-effective way. Of specific concern on an on-going basis, is how or if our recovery process has any impact on the aquifer (drinking water) system contained in the geological system we are attempting to recover oil in. Any undesirable impact to the drinking water system would have a serious impact on our ability to continue operations.
Reliance on Experts
As was discussed earlier in the section “The Business of Our Company”, we are entering existing oil fields where proven oil deposits exist. In addition, there are additional “probable” deposits of oil in the field that we intend to recover. The amount and type of deposits we intend to recover are identified and characterized for us by experts in the petroleum business with many years of experience using accepted methods of identifying and characterizing oil deposits in geological formations. We know that previous recovery operations were successful and we know that experts indicate that substantial deposits of crude oil and natural gas remain in the oil
field deposit. What we don't know is how accurate the estimates of the experts are. If in fact the experts' estimates of the amount and characterization of the deposits are that we intend to recover are significantly inaccurate it would have a serious negative impact on our business.
Our Business as a “Going Concern”
In expressing an opinion on our financial statements, our auditor has expressed its opinion as to our business being a “going concern”. Such an opinion indicates that the business lacks sufficient liquidity to remain operating as a business entity. Specifically, if our business fails to raise sufficient capital in order to conduct day-to-day business operations, it will fail to operate completely. At this time, we have no arrangements other than issuing short term debt and this offering to supply working capital needed to conduct day-to-day business. It is possible that additional arrangements can be made above and beyond the offering but those arrangements are not
guaranteed.
Page 9
The company has evaluated its needs and intends to use the proceeds of the offering in following priorities. Actual proceeds would be net of any offering costs or fees.
|
Purpose
|
% of Total Milestone of completion of Offering
|
|||
|
25%
|
50%
|
75%
|
100%
|
|
|
General Operations
|
$100,000
|
$350,000
|
$550,000
|
$625,000
|
|
Well Refurbishment & Preparation
|
$275,000
|
$375,000
|
$475,000
|
$650,000
|
|
Indirect Drilling Costs
|
$100,000
|
$250,000
|
$400,000
|
$625,000
|
|
Working Capital
|
$25,000
|
$25,000
|
$25,000
|
|
|
Lease Acquisitions
|
$50,000
|
$100,000
|
||
|
Total of Offering (Actual Expenditures would be net of any fees or commissions)
|
$500,000
|
$1.000.000
|
$1,500,000
|
$2,000,000
|
After the offering is complete no material other funding aside from that generated by operations is intended to be needed. Aside from reducing current liabilities in the form of existing trade accounts payable, the proceeds are not being use to extinguish any prior debt or to acquire any particular equipment or assets not identified in the prospectus or not used in our normal course of business.
MANAGMENT'S DISCUSSION AND ANALYSIS
Overview
North Texas Energy, Inc. is in its development stage. The results of operations show how capital intensive and profitless the oil and gas production business is at start up. It is predictable that once initial large capital requirements are met, the production of oil and gas from the particular oil and gas leases the company has title to will be productive and profitable. The progress so far has been limited by severely limited access to working capital.
One of the most important economic factors in the U.S economy is the successful exploration and production of crude oil and natural gas. North Texas Energy, Inc. is committing its business and resources to the production of crude oil and natural gas that remains in geological formations in oil fields that have been previously explored and have produced significant amounts of crude oil already. It is the conventional wisdom based on current data and information produced by the petroleum industry and its research that additional significant deposits of crude oil and natural gas remain in fields that were once productive in the past. In recent years and with the price of crude oil steady at about
seventy-four dollars per barrel (since 2008), new production methods have emerged as cost-effective in recovering the substantial remaining oil that has not been recovered using standard methods. North Texas Energy, Inc. entered into the business of recovering oil in previously drilled and producing fields in 2009 by acquiring Oil and Natural Gas Leases in East Texas. The Financial Statements included in this prospectus cover the short period of time in which NTE operated during the year 2010. During that time, the company had access to private capital from sales of common stock to shareholders. The capital from investment by private shareholders was limited and sales were terminated late in 2010. The funds invested at that time were used mainly to begin the process of refurbishing wells and preparing well head installations for re-use. The short operations history will show that
without on-going sources of working capital, the initial cost of getting wells and drill bores functional to begin the process of recovering oil that remains in the geological formation will not be met and significant delays in recovering the remaining oil would occur.
With sufficient capital for the purpose of beginning the process of making ready to pump oil and gas, the company is well situated to recover and market a significant amount of oil and gas reserves now remaining and trapped in the oil fields. It is important to understand that the results of operations indicates that no revenue producing activity took place, significant progress has been made in well site preparation and other preparations to move as quickly as possible to recovering oil and getting it to market.
Page 10
FINANCIAL CONDITION, CHANGES IN FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity
Without additional investment capital from shareholders or other sources, the company has no short term source of liquidity. In order to bring wells on-line and produce crude oil and natural gas to bring to market, significant amounts of working capital will be needed to continue operations. If the offering is successful in any of its milestones, sufficient capital will be available to bring wells on-line and begin producing oil and gas for market. In the event that happens and the price of oil does not fall below thirty dollars per barrel for crude, the company will be able to fund operations from revenue producing activities. The company estimates that its capital requirement to begin pumping
oil and gas and producing income is approximately $250,000. At that level of expenditure, the company could begin producing as little as 200 barrels of oil per day and probably more. The income produced at that level is approximately $450,000 per month on average. At that minimum level of production, the company can rely solely on its production income for liquidity. The company plans to systematically bring wells on-line that have the greatest initial production possibility.
Results of Operations
The company has little or no useful comparative operating data that indicates any obvious trends or isolates any particular reason for any changes in the results in operations. The company had brief operations during 2009 and had net losses of approximately $55,000. In 2010, the company had net losses of approximately $209,000. The losses from the operations are attributed to the start of the process of preparing existing wells for production and preparing well sites for use. During the start up in 2009 and 2010, there was no revenue produced from oil and gas producing activities because of a shortage of working capital. Additional working capital is needed to complete the well preparation phase
of our business plan and begin producing oil for market. We have at this time not identified any source other than the offering for the needed liquidity to begin oil and gas production. The production of oil and natural gas in a developmental stage as in the case of North Texas Energy, Inc. is capital intensive. Significant amounts of capital and strong liquidity are essential to the success of our oil and gas income producing activities. It is no guarantee but it is probable that the liquidity and capital produced by the offering depicted in this prospectus will provide sufficient liquidity to begin successful oil and gas production at a level that would sustain self supplied liquidity depending on the expected production that is estimated in our engineering estimates of reserves. Successful results of operations at this time will depend greatly on our ability to find external sources
of liquidity.
DIRECTORS, OFFICERS AND CONTROL PERSONS
Mr. Kevin Jones – Chairman and CEO-Director
Mr. Jones started as an investor in small privately owned oil and gas ventures. Based upon his previous investments, he realized that building a successful oil and gas company entails intelligent selection and development of the appropriate projects with a professional, experienced, and competent management team. Mr. Jones’ primary mission is to enable North Texas Energy, Inc. (NTE) to acquire high quality properties that possess long-term production opportunities. This mission is achieved through significant Enhanced Oil Recovery (EOR) rework of existing oil and gas wells and considerable drilling and development of new oil and gas
wells. NTE’s business model and employment of state-of-the-art drilling methodologies and EOR techniques will enable the company to maximize the production of commercially viable oil and gas reserves. It is also Mr. Jones’ philosophy that the company’s success not be predicated upon the acquisition of a specific producing property or a specific return on that property. The company’s success is predicated upon successful implementation of strategic plans to advance NTE’s mission and objectives and to promote revenue, profitability, and ultimately maximize the valuation of the company’s assets in the public marketplace. Before becoming Chairman and CEO of North Texas Energy, Inc., Mr. Jones worked 20 plus years in Government and private sector scientific and engineering communities. It is Mr. Jones’ mandate to make professionalism and honesty the
cornerstone of NTE’s foundation.
Sanah Marah – CFO
Mr. Marah is a professional seasoned accountant with over 12 years of experience. He has worked for with publicly traded, private, and non-profit companies. Mr. Marah will assist in the financial assessment of all areas of the company and determine how each area can be optimized to perform as proficiently as possible. Mr. Marah will also be instrumental in determining the best pathways to ensure NTE’s future success. Mr. Marah holds a business and finance degree from the University of London and an accounting degree from Letourneau University. Mr. Marah is a Practicing Certified Management Accountant (CMA). One of
Mr. Marah’s primary responsibilities is to oversee the capital structure of the company by determining the best mixture of debt and equity financing.
TABLE OF OWNERSHIP OF DIRECTORS, OFFICERS AND CERTAIN CONTROL PERSONS GREATER THAN 5%
|
Class of Stock
|
Name & Address of Owner
|
Number of Shares
|
Portion of Class (%)
|
|
Common
|
Kevin Jones-CEO, Director
5057 Keller Springs Road, Suite 300
Addison, Texas 75001
|
5,000,000
|
86%
|
No other person or entity as defined in SEC Rule 13d-3(a) has any right of ownership of common stock by the exercise of any; (1) warrant, option or right (2) conversion of any security agreement (3) power to revoke any trust agreement voluntarily or by automatic function.
Page 11
TRANSACTIONS WITH RELATED PERSONS AND CERTAIN CONTROL PERSONS
No transactions that require disclosure in accordance with Item 404 of Regulation S-K of the Securities Act of 1933 have taken place.
PLAN OF DISTRIBUTION
The company plans on offering its securities to the public by the method of a Direct Public Offering. Subject to the approval of the registration statement, the company intends to meet the criteria for inclusion for quotation on the Financial Industry Regulatory Authority's over the counter bulletin board quotation system. This is not an underwritten offering. The company intends to engage the services of brokerage firms that quote stock prices and make markets in particular types of stock offerings that are members of the regulatory agencies that govern and or control their use and participation in the market quotation and stock selling services industry.
RECENT SALES OF UN-REGISTERED SECURTIES
The company recently sold securities in private transactions to private parties for cash. During the period January through September of 2010 the company sold a total of 831,000 shares to private parties in an offering exempted under Rule 504 Regulation D. The securities were all sold for cash. A complete detailed list of those sales by date and consideration given is found in Exhibit 5 to this prospectus.
FINANCIAL STATEMENTS-CONSOLIDATED FINANCIAL STATEMENTS
Our fiscal year end is December 31. We will provide audited financial statements to our stockholders on an annual basis; as prepared by an Independent Certified Public Accountant.
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Page 12
TABLE OF CONTENTS-SECTION F
Report of Independent Registered Public Accountant of North Texas Energy, Inc.
Consolidated Balance Sheets of North Texas Energy, Inc. As of December 31, 2010 and 2009 Respectively
(Audited)
Consolidated Statements of Income and Operations of North Texas Energy, Inc. for the Twelve Months Ended December 31, 2010 and 2009 Respectively
(Audited)
Consolidated Statements of Cash Flow of North Texas Energy, Inc. for the Twelve Months Ended December 31, 2010 and 2009 Respectively
(Audited)
Consolidated Statement of Retained Earnings, Stockholder's Equity & Accumulated Deficit From Inception As of December 31, 2010 and 2011 Respectively (Audited)
Consolidated Balance Sheets of North Texas Energy, Inc. As of September 30, 2011 and 2010 Respectively
(Not Audited).
Consolidated Statements of Income and Operations of North Texas Energy, Inc. for the Nine Months Ended September 30, 2011 and 2010 Respectively
(Not Audited)
Consolidated Statements of Cash Flow of North Texas Energy, Inc. for the Nine Months Ended September 30, 2011 and 2010 Respectively
(Not Audited)
Consolidated of Retained Earnings, Stockholder's Equity & Accumulated Deficit From Inception As of September 30, 2011 and 2010 Respectively
(Not Audited)
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Page 13
Eugene M Egeberg
Certified Public Accountant
2400 Boston Street, Suite 102
Baltimore, Maryland 21224
(410) 218-1711
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S REPORT
To the Stockholders
North Texas Energy, Inc.
ATTN: Mr. Kevin Jones
5057 Keller Springs Rd, Suite 300
Addison, TX.75001
We have audited the accompanying balance sheets of North Texas Energy, Inc. as of December 31, 2010 and December 31, 2009, and the related statements of operations and changes in stockholder’s deficit and cash flows for the two years then ended. These financial statements are the responsibility of the Company management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with standards required by the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for
our opinion.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company had no revenue for the years 2010 and 2009 and its ability to continue operations is based on the ability to obtain financing. These conditions raise substantial doubt about the ability of the Company to continue as a Going Concern. The 2010 and 2009 consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of North Texas Energy, Inc. as of December 31, 2010 and 2009 and the results of its operations and its cash flows for each of the two years then ended in conformity with U.S. generally accepted accounting principles.
/s/ Eugene M Egeberg
Eugene M Egeberg, CPA
Baltimore, MD
11 August 2011
Page 14
NORTH TEXAS ENERGY INC. CONSOLIDATED FINACIAL STATEMENTS-BALANCE SHEETS
AT DECEMBER 31, 2010 AND 2009 (AUDITED)
|
2010
|
2009
|
|||||||
|
ASSETS
|
||||||||
|
Current Assets
|
||||||||
|
Cash
|
-0- | -0- | ||||||
|
Total Current Assets
|
-0- | -0- | ||||||
|
Property & Equipment (Net of Depreciation)
|
||||||||
|
Well Head & Storage Equipment
|
$ | 89,410 | $ | 89,410 | ||||
|
Total Assets
|
$ | 89,410 | $ | 89,410 | ||||
|
LIABILITIES & EQUITY
|
||||||||
|
Current Liabilities
|
||||||||
|
Accounts Payable
|
$ | 98,174 | $ | 94,368 | ||||
|
Accrued Leasehold Obligation
|
$ | 50,000 | $ | 50,000 | ||||
|
Total Current Liabilities
|
$ | 148,174 | $ | 144,368 | ||||
|
Equity
|
||||||||
|
Common Stock-8,361,000 Shares Issued & Outstanding
|
||||||||
|
Par Value .00001 per Share
|
$ | 2 | -0- | |||||
|
Paid in Capital
|
$ | 206,024 | -0- | |||||
|
Retained Earnings (Deficit)
|
$ | (264,790 | ) | $ | (54,957 | ) | ||
|
Total Liabilities & Equity
|
$ | 89,410 | 89,410 | |||||
NORTH TEXAS ENERGY INC. CONSOLIDATED FINACIAL STATEMENTS-INCOME STATMENTS
AT DECEMBER 31, 2010 AND 2009 (AUDITED)
|
2010
|
2009
|
|||||||
|
Income From Operations
|
-0- | -0- | ||||||
|
General & Administrative Expenses
|
||||||||
|
Salaries & Wages
|
$ | (76,215 | ) | -0- | ||||
|
General Office Expense
|
$ | (28,237 | ) | -0- | ||||
|
Legal & Professional Fees
|
$ | (34,118 | ) | -0- | ||||
|
Repairs & Maintenance
|
$ | (25,110 | ) | -0- | ||||
|
Supplies & Materials
|
$ | (46,151 | ) | $ | (54,957 | ) | ||
|
Total Expenses
|
$ | (209,833 | ) | $ | (54,957 | ) | ||
|
Net Operating Income (Loss)
|
$ | (209,833 | ) | $ | (54,957 | ) | ||
Page 15
NORTH TEXAS ENERGY INC. CONSOLIDATED FINACIAL STATEMENTS-CASH FLOW STATEMENTS
AT DECEMBER 31, 2010 AND 2009 (AUDITED)
|
2010
|
2009
|
|||||||
|
Operating Activities
|
||||||||
|
Net Income From Operations
|
$ | (209,833 | ) | $ | (54,957 | ) | ||
|
Adjustments to Reconcile Net Income to Net Cash Provided by Operations
|
||||||||
|
Increase in Current Liabilities-Accounts Payable
|
$ | 3,806 | $ | 94,368 | ||||
|
Increase in Current Liabilities-Leasehold Obligation
|
-0- | $ | 50,000 | |||||
|
Net Cash Provided From Operating Activities
|
$ | (206,027 | ) | $ | 89,410 | |||
|
Financing Activities
|
||||||||
|
Sale of Common Stock
|
$ | 206,027 | -0- | |||||
|
Investing Activities
|
||||||||
|
Property & Equipment-Well Head Equipment
|
-0- | $ | (89,410 | ) | ||||
|
Net Cash Increase for the Period
|
-0- | -0- | ||||||
|
Cash-Beginning of the Period
|
-0- | -0- | ||||||
|
Cash-End of the Period
|
-0- | -0- | ||||||
|
Accumulated (Deficit) Since Inception of Operations
|
$ | (264,790 | ) | $ | (54,957 | ) | ||
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Page 16
NORTH TEXAS ENERGY INC. CONSOLIDATED FINACIAL STATEMENTS-BALANCE SHEETS
AT SEPTEMBER 30, 2011 AND 2010 (NOT AUDITED)
|
2011
|
2010
|
|||||||
|
ASSETS
|
||||||||
|
Current Assets
|
||||||||
|
Cash
|
-0- | -0- | ||||||
|
Total Current Assets
|
-0- | -0- | ||||||
|
Property & Equipment (Net of Depreciation)
|
||||||||
|
Well Head & Storage Equipment
|
$ | 89,410 | $ | 89,410 | ||||
|
Total Assets
|
$ | 89,410 | $ | 89,410 | ||||
|
LIABILITIES & EQUITY
|
||||||||
|
Current Liabilities
|
||||||||
|
Accounts Payable
|
$ | 98,174 | $ | 98,174 | ||||
|
Accrued Leasehold Obligation
|
$ | 50,000 | $ | 50,000 | ||||
|
Total Current Liabilities
|
$ | 148,174 | 148,174 | |||||
|
Equity
|
||||||||
|
Common Stock-8,361,000 Shares Issued & Outstanding
|
||||||||
|
Par Value .00001 per Share
|
$ | 52 | $ | 2 | ||||
|
Paid in Capital
|
$ | 205,974 | $ | 206,024 | ||||
|
Retained Earnings (Deficit)
|
$ | (264,790 | ) | $ | (264,790 | ) | ||
|
Total Liabilities & Equity
|
$ | 89,410 | 89,410 | |||||
NORTH TEXAS ENERGY INC. CONSOLIDATED FINACIAL STATEMENTS-INCOME STATMENTS
FOR THE NINE MONTHS ENDING SEPTEMBER 30, 2011 AND 2010 (NOT AUDITED)
|
2011
|
2010
|
|||||||
|
Income From Operations
|
-0- | |||||||
|
General & Administrative Expenses
|
||||||||
|
Salaries & Wages
|
-0- | $ | (76,215 | ) | ||||
|
General Office Expense
|
-0- | $ | (28,237 | ) | ||||
|
Legal & Professional Fees
|
-0- | $ | (34,118 | ) | ||||
|
Repairs & Maintenance
|
-0- | $ | (25,110 | ) | ||||
|
Supplies & Materials
|
-0- | $ | (46,151 | ) | ||||
|
Total Expenses
|
$ | (209,833 | ) | |||||
|
Net Operating Income (Loss)
|
-0- | $ | (209,833 | ) | ||||
Page 17
NORTH TEXAS ENERGY INC. CONSOLIDATED FINACIAL STATEMENTS-CASH FLOW STATEMENTS
FOR THE NINE MONTHS ENDING SEPTEMBER 30, 2011 AND 2010 (NOT AUDITED)
|
2011
|
2010
|
|||||||
|
Operating Activities
|
||||||||
|
Net Income From Operations
|
$ | (209,833 | ) | |||||
|
Adjustments to Reconcile Net Income to Net Cash Provided by Operations
|
||||||||
|
Increase in Current Liabilities-Accounts Payable
|
$ | 3,806 | ||||||
|
Increase in Current Liabilities-Leasehold Obligation
|
-0- | |||||||
|
Net Cash Provided From Operating Activities
|
$ | (206,027 | ) | |||||
|
Financing Activities
|
||||||||
|
Sale of Common Stock
|
$ | 50 | $ | 206,027 | ||||
|
Paid-In-Capital
|
$ | (50 | ) | |||||
|
Investing Activities
|
||||||||
|
Property & Equipment-Well Head Equipment
|
-0- | -0- | ||||||
|
Net Cash Increase for the Period
|
-0- | -0- | ||||||
|
Cash-Beginning of the Period
|
-0- | -0- | ||||||
|
Cash-End of the Period
|
-0- | -0- | ||||||
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Page 18
NORTH TEXAS ENERGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 Summary of Significant Accounting Policies
Principles of Consolidation
Our consolidated financial statements include the accounts of all of our wholly owned subsidiaries. Intra-company profits, transactions and balances have been eliminated in consolidation.
Operating Cycle
For the classification of Current Assets and Current Liabilities we use the duration of a period of one year or less.
Revenue Recognition
The company has not recognized any income at this point. The company will recognize income from the production of natural resources that it produces from its wells at the time the product is delivered to a buyer. The company has no current purchase commitments from buyers.
Income Taxes
The company has no income tax liability. Recording of an income tax liability in the future will be net of any accumulated tax benefits including the application of any Net Loss Carry Forward.
Property and Equipment
Property and equipment when acquired are recorded at the lower of cost or market value and depreciated over their useful life usually seven years. The equipment is reported net of accumulated depreciation.
Page 19
LITIGATION
The company has not been a party to any legal action. Further, the company is not aware of any impending legal action that would have any significant impact on the company’s business operations or liquidity.
STOCK TRANSFER AGENT
Our stock transfer agent is: Securities Transfer Corporation, 2591 Dallas Parkway, Suite 102, Frisco TX 75034. The contact numbers are: Office (972) 963-0012 and FAX (972) 633-0088. The website is: stctransfer.com.
LEGAL MATTERS
The validity of the securities offered hereby has been passed upon for us by securities counsel Mintz & Fraade, P.C. as shown in Exhibit 3.
EXPERTS
Our consolidated comparative financial statements for the years ended December 31, 2010 and December 31, 2009 are included in this prospectus and in the registration statement and have been audited by Eugene Egeberg Certified Public Accountant an independent registered public accounting firm, as stated in their report appearing herein.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act of 1933 with respect to the Common Stock offered hereby. This prospectus, which constitutes a part of the registration statement, does not contain all of the information in the registration statement and the exhibits of the registration statement. For further information with respect to us and the shares being offered under this prospectus, we refer you to the registration statement, including the exhibits and schedules thereto.
You may read and copy the registration statement of which this prospectus is a part at the SEC Public Reference Room, which is located at 100 F Street, N.E., Washington, D.C. 20549. You can request copies of the registration statement by writing to the SEC and paying a fee for the copying cost. Please call the SEC at 1-800-SEC-0330 for more information about the operation of the SEC Public Reference Room. In addition, the SEC maintains an Internet web site, which is located at www.sec.gov which contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. You may access the registration statement of which this prospectus is a
part at the SEC Internet web site. We are subject to the information reporting requirements of the Securities Exchange Act of 1934, and we will file reports, proxy statements and other information with the SEC.
|
1.
|
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
|
|
|
(i)
|
To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
|
|
|
(ii)
|
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
|
|
|
(iii)
|
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any change to such information in the registration statement.
|
|
|
2.
|
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
|
|
|
3.
|
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
|
|
|
4.
|
For the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: the undersigned registrant undertakes that in a primary offering of the securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
|
|
|
(i)
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Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
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(ii)
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Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
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Page 20
UNDERTAKINGS
The undersigned registrant hereby undertakes:
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(iii)
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The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
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(iv)
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Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
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5.
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Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by itself is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Dallas, State of Texas, on November 30, 2011.
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North Texas Energy, Inc.
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||
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By:
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/s/ Kevin Jones
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Kevin Jones
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Chairman and Chief Executive Officer
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NORTH TEXAS ENERGY, INC.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities indicated on the 30th day of November, 2011.
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Signature
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Title
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Date
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||
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/s/ Kevin Jone
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Chairman and Chief Executive Officer
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November 30, 2011
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Kevin Jones
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(Principal Executive Officer)
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Page 21
EXHIBIT INDEX
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EXHIBIT NUMBER
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DESCRIPTION OF EXHIBIT
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2.1
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Schedule of Un-Registered Sales of North Texas Energy Stock
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3.1
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Articles of Incorporation of North Texas Energy, Inc.
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3.2
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By-Laws of North Texas Energy, Inc.
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23.1
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Opinion of Legal Counsel-Issuance of Stock
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99.1
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Technical Report of Petroleum Engineer Regarding Oil and Gas Reserves
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Page 22