MIDLAND, Texas, Nov. 15 /PRNewswire-FirstCall/ -- United Heritage
Corporation (Nasdaq: UHCP) today announced its financial results for the
three and six months ended September 30, 2007.
On September 26, 2007, Blackwood Ventures LLC (BVL), a limited
liability company organized in the State of Delaware with Blackwood Capital
Limited as its Managing Member, acquired the largest stake in United
Heritage Corporation. BVL intends to actively manage its investment in
United Heritage and its four leases covering 10,500 acres in the Wardlaw
Field located in Edwards County, Texas. Since the change in management that
occurred in September 2007, there has been limited oil production on the
field, which we believe can be improved, and the Company expects to
commence a pilot project on this acreage during first quarter of the 2008
calendar year.
Andrew Taylor-Kimmins, a principal at Blackwood Capital said, "We at
Blackwood have spent the last two months working with United Heritage to
design a pilot project and to establish a management team that we believe
will be able to maximize the opportunities available to United Heritage. We
are hopeful that future results of the Company's operations will reflect
the positive changes that we believe we've made."
Revenues for the three months ended September 30, 2007 decreased over
99%, to $455, as compared to $347,626 for the three months ended September
30, 2006. Revenues for the six month period also decreased over 99% over
the same period in the 2006 fiscal year, from $656,091 for the six months
ended September 30, 2006 to $4,315. The decrease in revenue was due to the
sale of the Company's New Mexico property which, prior to the sale,
accounted for a significant portion of its production and sale of oil and
all of its production and sale of natural gas.
Due to the sale of the New Mexico property, the Company had net income
of $1,140,367 for the three months and $1,258,233 for the six months ended
September 30, 2007 as compared to a net loss of $685,565 for the three
months and a net loss of $1,383,264 for the six months ended September 30,
2006.
Due to the sale of the New Mexico property, income per share was $0.18
for the three months and $0.20 for the six months ended September 30, 2007
as compared with a net loss per share of $0.11 and $0.22 for the same
periods during the 2006 fiscal year.
Total operating costs and expenses for the three months ended September
30, 2007 decreased approximately 65%, from $930,673 for the three months
ended September 30, 2006 to $325,758. Total operating costs and expenses
for the six months ended September 30, 2007 decreased approximately 59%,
from $1,888,748 in 2006 to $769,402. The significant decrease in operating
expenses reported for the six months ended September 30, 2007 as compared
to the same period in 2006 resulted primarily from a decrease in production
and operating costs which resulted from the sale of the Company's New
Mexico property, a decrease in depreciation and depletion expense which
also resulted from the sale of the New Mexico property, and a reduction in
general and administrative expenses. Production and operating expenses
decreased by $438,001, or approximately 94% from $468,478 to $30,477 for
the three months ended September 30, 2007 as compared to the three months
ended September 30, 2006 and by $571,145, or approximately 90%, from
$634,184 to $63,039 for the six months ended September 30, 2007 as compared
to the six months ended September 30, 2006. Depreciation and depletion
decreased by $174,960, or approximately 99% from $175,298 in the three
months ended September 30, 2006 as compared to $338 for the three months
ended September 30, 2007. Depreciation and depletion decreased by $345,996,
or approximately 99% from $346,672 in the six months ended September 30,
2006 as compared to $676 for the six months ended September 30, 2007.
General and administrative expenses decreased by $122,738, or approximately
43%, from $286,897 in the three months ended September 30, 2006 to $164,159
in the three months ended September 30, 2007. General and administrative
expenses decreased by $546,557, or approximately 60%, from $907,892 in the
six months ended September 30, 2006 to $361,335 in the six months ended
September 30, 2007. During the nine months ended September 30, 2007,
general and administrative expenses decreased primarily as a result of
decreases in professional fees, insurance and stock compensation expense.
The Company ended the period with cash of $5,463 as compared to cash of
$1,671,672 for the same period in the prior fiscal year. The Company's
operations used $1,484,739 of cash in the six months ended September 30,
2007. Cash was used primarily for accounts payable and accrued expenses,
which totaled $1,433,461 offset, in part, by accounts receivable of
$432,808. The Company used $2,699 in investing activities during the
period. The Company's total liabilities at September 30, 2007 were
$3,704,399 as compared to $9,179,582 at March 31, 2007, the end of the
prior fiscal year. The significant decrease in the Company's total
liabilities related primarily to decreases in accounts and notes payable.
The primary component of the Company's current liabilities is comprised of
$2,866,642 in accrued put option liability.
The Company's Texas property does not produce significant levels of oil
and the Company currently has no source of cash for operations. The Company
intends to seek financing to develop its Texas property, however there is
no guarantee that it will be successful.
The Company's financial statements have been prepared on a going
concern basis which contemplates the realization of assets and the
liquidation of liabilities in the ordinary course of business. The Company
has incurred substantial losses from its operations and it has a working
capital deficit which raises substantial doubt about its ability to
continue as a going concern. For the six month periods ended September 30,
2007 and September 30, 2006, the Company had operating revenues of $4,315
and $656,091 and operating costs and expenses of $769,402 and $1,888,748,
respectively. The Company has a working capital deficit of $3,529,361 at
September 30, 2007. Unless the Company is able to obtain the financing it
needs to develop its properties, it will not be able to continue as a going
concern.
Safe Harbor
All statements in this press release that are not statements of
historical fact are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 as codified in Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934, including any projections of earnings, revenue, cash or other
financial items, any statements of the plans, strategies, and objectives of
management for future operations, any statements regarding future economic
conditions or performance, statements of belief and any statements of
assumptions underlying any of the foregoing. These statements are based on
expectations and assumptions as of the date of this press release and are
subject to numerous risks and uncertainties, which could cause actual
results to differ materially from those described in the forward-looking
statements. The risks and uncertainties include our limited capital
resources and limited access to financing and our ability to overcome
negative publicity relating to the restatement of our proved reserves.
United Heritage Corporation assumes no obligation to update these
forward-looking statements to reflect future events or actual outcomes and
does not intend to do so.
UNITED HERITAGE CORPORATION
Consolidated Condensed Statements of Income (Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
September 30, September 30,
2007 2006 2007 2006
OPERATING REVENUES
Oil and gas sales $455 $347,626 $4,315 $ 656,091
TOTAL OPERATING REVENUES 455 347,626 4,315 656,091
OPERATING COSTS AND EXPENSES
Production and operating 30,477 468,478 63,039 634,184
Depreciation and depletion 338 175,298 676 346,672
Accretion of asset
retirement obligation 1,244 -- 2,488 --
General and
administrative 164,159 286,897 361,335 907,892
Bad debt expense 59,812 -- 202,408 --
Put option expense 69,728 -- 139,456 --
TOTAL OPERATING COSTS AND
EXPENSES 325,758 930,673 769,402 1,888,748
LOSS FROM OPERATIONS (325,303) (583,047) (765,087) (1,232,657)
OTHER INCOME (EXPENSE)
Gain on forgiveness
of debt 1,466,838 -- 1,780,710 --
Gain on sale of
investments -- -- 303,155 --
Gain on sale of property
and equipment 8,351 -- 8,351 --
Interest expense (9,519) (99,518) (67,896) (150,607)
Gain (Loss) before
income tax 1,140,367 (682,565) 1,259,233 (1,383,264)
INCOME TAX BENEFIT -- -- -- --
NET INCOME (LOSS) $1,140,367 $(685,565) $1,259,233 $(1,383,264)
Income (Loss)
per share (basic) $0.18 $(0.11) $0.20 $(0.22)
Weighted average
number of shares (basic) 6,446,850 6,446,850 6,446,850 6,446,850
UNITED HERITAGE CORPORATION
Consolidated Condensed Balance Sheets
September 30, 2007 March 31, 2007
(UNAUDITED)
ASSETS
CURRENT ASSETS
Cash $5,463 $1,671,672
Accounts receivable 37,862 470,670
Inventory 29,057 31,417
Prepaid expenses 17,226 34,909
Total current assets 89,608 2,208,668
INVESTMENT in Cano Petroleum common stock,
at fair value (restricted) -- 1,827,000
OIL AND GAS PROPERTIES, accounted for
Using the full cost method, net of accumulated
depletion and depreciation of $0 at
September 30 and March 31, 2007
Proved -- --
Unproved 5,864,587 5,864,587
5,864,587 5,864,587
PROPERTY AND EQUIPMENT, at cost
Equipment, furniture and fixtures 2,699 74,244
Vehicles 6,752 158,452
9,451 232,696
Less accumulated depreciation (4,803) (149,392)
4,648 83,304
TOTAL ASSETS $5,958,843 $9,983,559
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $284,254 $1,835,148
Accounts payable, related party 124,323 797,088
Accrued expenses 343,750 343,750
Accrued interest, related party -- 451,485
Accrued put option liability 2,866,642 --
Total current liabilities 3,618,969 3,427,471
LONG-TERM LIABILITIES
Asset retirement obligation 85,430 82,942
Note payable, related parties -- 2,941,983
Accrued put option liability -- 2,727,186
Deferred tax liability -- --
Total liabilities 3,704,399 9,179,582
SHAREHOLDERS' EQUITY
Preferred stock, $.001 par value, -- --
5,000,000 shares authorized, none issued
Common stock, $.001 par value,
125,000,000 shares authorized;
6,446,850 shares issued and outstanding: 6,447 6,447
Additional paid-in capital 43,987,910 43,796,676
Accumulated deficit (41,739,913) (42,999,146)
Total Shareholders' Equity 2,254,444 803,977
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $5,958,843 $9,983,559
UNITED HERITAGE CORPORATION
Consolidated Condensed Statements of Cash Flows (Unaudited)
SIX MONTHS ENDED
September 30,
2007 2006
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $1,259,233 $(1,383,264)
Adjustments to reconcile net loss
To net cash provided by (used in)
operating activities:
Depreciation and depletion 676 346,672
Accretion of asset retirement obligation 2,488 --
Gain on sale of investments (303,155) --
Gain on forgiveness of debt (1,780,710)
Gain on sale of property and equipment (8,351) --
Realization of stock options issued 191,234 276,474
Put option expense 139,456 --
Changes in assets and liabilities:
Accounts receivable 432,808 (54,534)
Inventory 2,360 (4,533)
Other current assets 17,683 29,175
Deferred tax - --
Accounts payable and accrued expenses (1,438,461) 1,702,523
Net cash (used in) provided by operating
activities (1,484,739) 912,513
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to oil and gas properties -- (4,155,783)
Additions to equipment (2,699) (182,845)
Net cash used in investing activities (2,699) (4,338,628)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings, related party 153,218 3,371,113
Payments on note payable, related party (331,989) --
Net cash provided by (used in) financing
activities (178,771) 3,371,113
(Decrease) increase in cash and cash
equivalents (1,666,209) (55,002)
Cash at beginning of period 1,671,672 76,366
Cash at end of period $5,463 $21,364
Non-cash Investing and Financing Activities
Investment applied to note payable and
accrued interest-related party 2,130,155 --
Proceeds from sale of equipment applied
to accounts payable-related party 94,030 --
Contact: Joseph "Chip" Langston
432.687.1131
1310 West Wall Suite A
Midland, Texas 79701
| |
SOURCE United Heritage Corporation
 back to top
CONTACT:
Joseph "Chip" Langston of United Heritage
Corporation, +1-432-687-1131
| |
|
