-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D5hYWKvoqylGgEhbvYNb2Q1G3qKP2lE3eqDfQcXAoCw1dTx1zcdNmvk0rCnA1/ER 70thizKFr0Dy/WT6Gzt/7Q== 0000950123-96-002394.txt : 19960517 0000950123-96-002394.hdr.sgml : 19960517 ACCESSION NUMBER: 0000950123-96-002394 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ISRAMCO INC CENTRAL INDEX KEY: 0000719209 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 133145265 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-12500 FILM NUMBER: 96565519 BUSINESS ADDRESS: STREET 1: 800 FIFTH AVE STREET 2: STE 21-D CITY: NEW YORK STATE: NY ZIP: 10021 BUSINESS PHONE: 2128880200 10-Q 1 FORM 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For three months ended March 31, 1996 Commission File No. 283574 ISRAMCO, INC. (Exact name of registrant as specified in its charter) DELAWARE 13-3145265 ------------------------------- -------------------------- (State or other jurisdiction of (I.R.S. Employer I.D. No.) incorporation or organization) 800 Fifth Avenue, Suite 21D, New York, New York 10021 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 212-888-0200 NOT APPLICABLE (Former name, former address and formal 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 registrant was required to such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ------- ------- 26,691,198 Common Shares were outstanding as of March 31, 1996. 2 ISRAMCO, INC. INDEX
PAGE NO. -------- Part I. Financial Information Item 1. Financial statements Condensed consolidated balance sheets: - March 31, 1996 (unaudited) - December 31, 1995 1 Condensed consolidated statements of operations (unaudited): - Three months ended March 31, 1996 and 1995 2 Condensed consolidated statements of cash flows (unaudited): - Three months ended March 31, 1996 and 1995 3 Notes to condensed consolidated financial statements 4-6 Item 2. Management's discussion and analysis of financial statements 7-11 Part II. Other information Signatures 12
3 ISRAMCO INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
March 31, December 31, A S S E T S 1996 1995 ----------- ------------ (Unaudited) Current assets: Cash including cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . $16,719,078 $16,506,242 Marketable securities, at market. . . . . . . . . . . . . . . . . . . . . . . . . . 5,845,915 5,767,520 Prepaid expenses and other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258,929 215,588 ----------- ----------- Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,823,922 22,489,350 Equipment, less accumulated depreciation of $109,543 and $101,574 at March 31, 1996 and December 31, 1995, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . 115,097 131,279 ----------- ----------- T O T A L. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $22,939,019 $22,620,629 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . $ 339,033 $ 358,279 ----------- ----------- Shareholders' Equity: Common stock, $.01 par value; authorized 75,000,000 shares; issued and outstanding 26,691,198 shares at March 31, 1996 and at December 31, 1995 . . . . . . . . . . . . . . . . . . . . . 266,912 266,912 Additional paid-in capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,927,635 25,927,635 Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,594,561) (3,932,197) ----------- ----------- 22,599,986 22,262,350 ----------- ----------- T O T A L. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $22,939,019 $22,620,629 =========== ===========
See notes to the consolidated financial statements. - 1 - 4 ISRAMCO INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended March 31, --------------------------------- 1996 1995 ----------- ----------- Revenues: Operator fees from related party. . . . . . . . . . . . . . . . . . . . . . . . . . $ 126,252 $ 762,943 Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307,606 276,242 Gain (loss) on sale of marketable securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165,922 (315,804) Office services to related party and other. . . . . . . . . . . . . . . . . . . . . 132,376 109,570 ----------- ----------- 732,156 832,951 ----------- ----------- Expenses: Interest expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 476 229 Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,135 9,779 Exploration costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,599 136,354 Operator expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162,183 91,219 General and administrative - in part to related party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217,168 193,560 Research and development. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,041) 22,637 ----------- ----------- 394,520 453,778 ------------ ----------- NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 337,636 $ 379,173 ============ =========== Income per common share: Primary and fully diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $.01 $.01 ===== ===== Weighted average number of shares: Primary and fully diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,691,198 26,691,198 ========== ==========
See notes to the consolidated financial statements. - 2 - 5 ISRAMCO INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended March 31, ---------------------------------- 1996 1995 ------------ ------------ Cash flow from operating activities: Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 337,636 $ 379,173 Adjustment to reconcile net income to net cash provided by operating activities: Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,135 9,779 Exploration costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,599 136,354 (Gain) loss on sale of marketable securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (165,922) 315,804 Loss (gain) on sale of property . . . . . . . . . . . . . . . . . . . . . . . . 6,587 (400) Changes in assets and liabilities: Prepaid and other current assets. . . . . . . . . . . . . . . . . . . . . . . (43,341) 120,297 Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . (19,246) 255,837 Purchase of marketable securities . . . . . . . . . . . . . . . . . . . . . . (396,876) Proceeds from sale of marketable securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,527 47,363 ----------- ----------- Net cash provided by operating activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218,975 867,331 ----------- ----------- Cash flows from investing activities: Exploration and development costs . . . . . . . . . . . . . . . . . . . . . . . . . (5,599) (136,354) Purchase of equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,000) (631) Proceeds from sale of equipment . . . . . . . . . . . . . . . . . . . . . . . . . . 460 400 ------------ ----------- Net cash (used in) investing activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,139) (136,585) ------------ ----------- NET INCREASE IN CASH AND CASH EQUIVALENTS. . . . . . . . . . . . . . . . . . . . . . . 212,836 730,746 Cash and cash equivalents, beginning of period . . . . . . . . . . . . . . . . . . . . 16,506,242 17,339,105 ------------ ----------- CASH AND CASH EQUIVALENTS, END OF PERIOD . . . . . . . . . . . . . . . . . . . . . . . $16,719,078 $18,069,851 =========== =========== Supplemental disclosure of cash flow information: Cash paid during the year for interest. . . . . . . . . . . . . . . . . . . . . . $ 476 $ 229
See notes to the consolidated financial statements. - 3 - 6 ISRAMCO, INC. AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (Unaudited) (NOTE 1): As used in these financial statements the term "Company" refers to Isramco, Inc. and subsidiaries. (NOTE 2): The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of Management, all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three-month period ended March 31, 1996 are not necessarily indicative of the results that may be expected for the year ended December 31, 1996. For further information, refer to the Consolidated Financial Statements and footnotes thereto incorporated by reference in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1995. (NOTE 3)- Consolidation: The consolidated financial statements include the account of the Company, its direct and indirect wholly owned subsidiaries Isramco Oil & Gas Ltd. ("Oil & Gas") and Isramco Underwriters, Ltd., both Israeli companies, Isramco Resources, Inc., a British Virgin Islands company and an immaterial foreign wholly owned subsidiary. All intercompany balances and transactions have been eliminated. Another wholly owned subsidiary of the Company, Isramco Management (1988) Ltd., an Israeli company, is not included in the consolidation because the Company has no voting rights. This entity serves as the nominee for the unit holders of a Limited Partnership and has no significant assets or operations. (NOTE 4)- Contingencies: A statement of claim filed in Israel in 1990 against the Company and others in connection with an accident which occurred in the Yam 2 well site has been settled. The Company's share of the settlement not covered by insurance is approximately $600. (continued) - 4 - 7 ISRAMCO, INC. AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (Unaudited) (NOTE 4)- Contingencies: (continued) In a Statement of Claim filed in the District Court of Tel-Aviv-Jaffa on December 1, 1993 (the "Claim"), the Company along with Isramco-Negev 2 Limited Partnership, Isramco Oil and Gas Ltd., Dr. Joseph Elmaleh (former Chairman of the Board of the Company), East Mediterranean Oil & Gas Limited, The Trust Company of Kesselman and Kesselman (Trustees 1991) Ltd. and Mr. Danny Toledano (President of the Company) and others have been named Defendants in a lawsuit commenced by Mr. Chaim Chazan (the "Plaintiff"). In the Statement of Claim the Plaintiff alleges damages and loss of profits arising out of his purchase of Participation Units and Warrants pursuant to the fourth and fifth Prospectuses issued by the Limited Partnership in Israel based on alleged misleading statements set forth in each Prospectus, alleged breach of obligations contained in each Prospectus, alleged misleading current reports filed with the Israeli Securities Authority and with the Tel Aviv Stock Exchange, and for activities as underwriters and/or in any other manner. The dollar amount of the Claim is between $238,000 and $566,000. Plaintiff has requested that the court recognize the Claim as a class action. If so recognized, the Plaintiff values the damages and loss of profits to the class to be between $13,832,000 and $32,880,000. On September 20, 1995 the Plaintiff filed an application to amend his application for approval of the Claim as a class action. In the amendment application, among other things, it was contended that the Defendants concealed from the public information regarding the results of a seismic survey that was conducted in November 1991 and used such information internally to gain a profit. A statement of Defense has not been filed by the defendants in this action. It is the Company's intention to vigorously defend against this claim. Based on the opinion of counsel, management believes that it is too early in the proceedings to determine whether any liability will inure to the Company. (NOTE 5) - Income Taxes: There is no income tax expense for the three months ended March 31, 1996 because the deferred tax asset valuation allowance was reduced by approximately $115,000 primarily for federal income taxes on the income which would have otherwise been provided for. (continued) - 5 - 8 ISRAMCO, INC. AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS (Unaudited) (NOTE 6) - Other Matters: The expiration date of the Company's Class A and Class B warrants is April 16, 1997. In April 1996, Dr. Joseph Elmaleh resigned as Chairman of the Board, Chief Executive Officer and as a director of the Company. Pursuant to a termination agreement, the Company agreed to pay Dr. Elmaleh $123,750 representing the balance of unpaid consulting fees, $270,000 in consideration of a covenant not to compete for a period of three years, and, purchased from Southern Shipping and Energy, Inc., a company which Dr. Elmaleh controls, 292,675 shares of the Company's common stock for $208,238. In connection with this agreement, the Company expects to take a charge to earnings of approximately $190,000 in the second quarter of 1996 and $22,500 in each of the following 11 quarters. - 6 - 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS During the first quarter of 1996 the Company invested mainly in intensive activity of seismic interpretation and subsurface mapping over the areas of the six offshore licenses and the onshore license. During the second quarter of 1996 a comparative examination of the different prospects will be made to determine the order of priority for the contribution of the exploration program. During the three month period ended March 1996, the Company expended $5,599 in oil and gas exploration as compared to $136,354 during the same period in 1995. The difference is mainly due to the drilling of the Yam West 1 well offshore which took place during the quarter ended March 31, 1995. In the three month period ended March 31, 1996 the Company had cash inflow from sales of marketable securities of $87,527 as compared to net cash outflow of $349,513 in the three month period ended March 31, 1995. In the first quarter of 1995 the Company acquired 350,000 shares of J.O.E.L. - Jerusalem Oil Exploration Ltd. (which shares are traded on the Tel Aviv stock market) at a cost of approximately $96,000. The Company financed its operations during the three month periods ended March 31, 1996 and 1995 from its own funds and did not need to use any lines of credit or loans. The Company does not presently have any lines of credit with any institution. The Company believes that it has sufficient funds to fulfill its present capital requirements. The expiration date for the Class A and Class B Warrants is April 16, 1997. Results of Operations The Company reported net income of $337,636 ($0.01 per share) in the three month period ended March 31, 1996 compared to net income of $379,173 ($0.01 per share) in the three month period ended March 31, 1995. The gain in the three month period ended March 31, 1996 is a result of income from operator's fees, interest, gains from a rise in value of marketable securities and office services to a related party. Part of the gain is offset by general and administrative expenses and operator expenses. During the three month period ended March 31, 1996 the Company continued to participate in work programs in the Negev Med Venture, the Yam Carveout Venture and began its participation in the Shederot Venture (as from January 1996). The Company holds a 1.0043% working interest in each of the Petroleum Assets held by the various ventures. - 7 - 10 Negev Med Venture Two seismic surveys and two wells were drilled (the Yam Yafo 1 and the Yam West 1) by the Negev Med Venture since its inception. During 1995 and the beginning of 1996 the activity of seismic interpretation and subsurface mapping over the five licenses of the Venture have been carried out. Following the accumulated data on Authorization for Expenditure (AFEs in the five licenses of the Venture).
Total Accumulated Expenses from Inception date Expended in of Licenses License AFE January-March 1996 (May 1, 1993) Company's Share - ------- --- ------------------ ------------- --------------- Med Tel Aviv $39,082,500 $ 28,269 $38,418,121 $385,833 Med Yavne 24,854,500 105,695 23,477,498 235,785 Med Hasharon 1,372,000 28,567 1,230,163 12,355 Med Hadera 824,500 31,659 716,693 7,198 Med Ashdod 762,000 29,603 721,607 7,247 ---------- -------- ---------- -------- $66,895,500 $ 223,793 $64,564,082 $648,417
For information regarding the proposed work program for the continuation of the exploration in the Med Venture's licenses - see below. The Yam Carveout Venture (within the Negev Ashquelon License) The participants in the Yam Carveout Venture previously approved the drilling of the Yam 3 well to a target depth of approximately 19,300 feet, subject to obtaining all governmental approvals at the estimated cost of $25 million for a dry hole plus $3 to $4 million for testing, if required. Authorizations for Expenditure (AFE) in the amount of $2.9 million have been approved for preparatory work and for the purchase of casing and wellhead equipment. The Company's share is 1.0043%. Since no approval has been obtained from the Ministry of Defense to drill the Yam 3 during 1993/1994 no major preparation work has been performed. During the three month period ended March 31, 1996 the Yam Carveout expenses were $42,699. The Company's share is 1.0043% or $429. In December 1995 the Negev Ashquelon license (including the Yam Carveout within its area) was extended to January 30, 1998. The Oil Commissioner's letter extending the license period stipulated that a well of up to 1,500 meters in depth would have to be spudded by October 1, 1996 and that a deeper well would have to be spudded by April 1, 1997. These terms of the license are now being renegotiated to fit them to the proposed work program outlined below. - 8 - 11 The failure to commence drilling in the stipulated time periods may be regarded as a breach of the terms of the license and the Commissioner has the power to rescind the granting of the license to the participants. The participants are required to pre-coordinate their activities in the license area on a "timely" basis with a number of government authorities. Should this coordination not be attainable within the license term the license may expire without the Yam 3 well being drilled. As of this date the Ministry of Defense has rejected all applications to drill the Yam 3 well. For information regarding the proposed work program for the continuation of the exploration in this license - see below. Shederot Venture During the three month period ended March 31, 1996 the work program in the Shederot license consisted of seismic interpretation of pre-existing data and preliminary mapping, reprocessing of selected seismic section and design of new seismic field acquisition project which is scheduled to be carried out in the second quarter of 1996. During the three month period ended March 31, 1996 the Shederot Venture expended $75,361. The Company's share is 1.0043% or $757. The Proposed Work Program for the Continuation of the Offshore Exploration The Company as Operator has recommended to the participants in the Licenses that the following prospects be focused on during the next three years: (a) the testing of the Yam structure by deepening the Yam 2 well by an addition of approximately 1,000 feet and retesting the source in which oil was discovered at the time and carrying out additional production tests, if justified, in the additional section to be drilled. The carrying out the activities in the Yam 2 well depends on two factors: (i) receiving positive results from the engineering analysis of the well which will determine whether the planned activity in the existing well is feasible and, (ii) receiving an implementable approval form the Defense Authorities. The results of reentering the Yam 2 well, if carried out, will be a basis for considering the drilling of Yam 3 which was planned at the time and not approved then by the Defense Authorities. Isramco, Inc. as Operator will carry out the engineering analysis in the next few months and will start negotiations with the Defense Authorities for obtaining a principal authorization to carry out the work. If these actions will result in positive answers then the deepening of the well and the production tests will be carried out when a drilling rig becomes available during the year 1997. The cost of reentering and deepening the well and the production tests, if carried out, are estimated at $12 million. - 9 - 12 (b) examination of the possible structure located some 3 to 4.5 miles off the shore between the cities of Netanya and Herzlia. The level of the seismic knowledge on this structure is still insufficient for a drilling decision and therefore plans are made to cover the structure with complementary seismic survey. Shooting of this survey is scheduled for the end of 1996 and depends on the availability of suitable seismic vessel in the region. If the survey will be carried out according to schedule then it appears that a drilling decision, if at all, can be made at the beginning of next year. Actual drilling can begin, based on the availability of a suitable drilling rig during the years 1997-1998. The cost of the seismic survey, if carried out, is approximately $1 million and costs of drilling and production tests, if both carried out, are estimated at $30 million. (c) examination of two deep water anticlinal structures (water depth of 2,300 feet and more), the first, at a distance of approximately 19 miles northwest of Tel Aviv and the second, approximately 19 miles northwest of Ashdod. Isramco as Operator applied on behalf of the partners to the Oil Commissioner at the Ministry of Energy and Infrastructure, to extend the duration of the offshore licenses held by the group and to adjust the work obligations stipulated in the licenses to fit the work program as outlined above, taking into consideration the tough offshore rig market. Operator's Fees In the three month period ended March 31, 1996, the Company earned $126,000 which was based on the minimum monthly compensation of $42,000 per month. In the three month period ended March 31, 1995, the Company earned Operator's fees of $636,943 above the minimum monthly compensation (which was $42,000 per month for three months or $126,000), primarily from the Yam West 1 well. The Company believes that Operator's fees during April - December 1996 will be based mainly on the minimum monthly compensation which at present is $42,000 per month ($6,000 x 7 licenses). Interest Income Interest income increased in the three month period ended March 31, 1996 compared to in the three month period ended March 31, 1995, due to higher average interest rate and/or higher average investment balances. Gain on Marketable Securities In the three month period ended March 31, 1996 the Company had gains from marketable securities of $165,922 comprised of $163,561 from unrealized holding gains and $2,361 from realized gains. Increase or decrease in the gains or losses from marketable securities are dependent on the market prices in general and the composition of the portfolio of the Company. - 10 - 13 Exploration Cost As described above the three month period ended March 31, 1996 was mainly used for seismic interpretation and subsurface mapping, the Company expended on oil and gas exploration less than in the previous period in 1995 by $130,755 when the drilling of the Yam West 1 well took place. Operator's Expenses Operator's expenses increased in the three month period ended March 31, 1996 as compared to the three month period ended March 31, 1995, as a result of less manpower costs which the Company could charge the various ventures and less income from foreign currency exchange. General and Administrative Expenses General and Administrative expenses during the three month period ended March 31, 1996 were similar to those during the three month period ended March 31, 1995. Directors fees, president's salary and professional fees during the three month period ended March 31, 1996 were more than during the same period ended March 31, 1995. The expenses during the three month period ended March 31, 1995 included tax payments which were higher than the tax payments in the same period ended March 31, 1996. Condition Subsequent On April 17, 1996, Dr. Joseph Elmaleh resigned as the Chairman of the Board, Chief Executive Officer and as a Director of Isramco, Inc. (the "Company") pursuant to a Termination Agreement entered into between the Company and Dr. Joseph Elmaleh (the "Termination Agreement"). Pursuant to the terms of the Termination Agreement: (i) the Company terminated the July 1995 Consulting Agreement with Dr. Joseph Elmaleh and paid to Dr. Elmaleh the sum of $123,750 representing the balance of the unpaid consulting fees otherwise due to Dr. Elmaleh through the remaining term of the Consulting Agreement; (ii) Dr. Joseph Elmaleh covenanted that for a term of three (3) years not to directly or indirectly either on behalf of himself or on behalf of any business venture, as an employee, agent, broker, consultant, partner, principal, stockholder, officer or otherwise compete with the Company in connection with the exploration for oil and gas in the State of Israel or in the territorial waters offshore Israel or in territories currently under the control of the State of Israel. The Company paid to Dr. Joseph Elmaleh the sum of $270,000 in consideration of his covenant not to compete as set forth in the Termination Agreement; and, (iii) the Company purchased from Southern Shipping and Energy Inc. ("SSE"), a company controlled by Dr. Elmaleh, 292,675 shares of the common stock of the Company held by SSE for a purchase price of $208,238.21. The terms and conditions of the Termination Agreement are fully set forth in Exhibit A to Form 8-K filed by the Company for the month of April, 1996. In connection with this agreement, the Company expects to take a charge to earnings of approximately $190,000 in the second quarter of 1996 and $22,500 in each of the following 11 quarters. - 11 - 14 ISRAMCO, INC. PART II. OTHER INFORMATION Item 6. Reports on Form 8-K Form 8-K for the month of January, 1996 dated January 18, 1996; Form 8-K for the month of April, 1996 dated April 1, 1996; Form 8-K for the month of April, 1996 dated April 17 1996. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ISRAMCO, INC. -------------------------------------------------- (Registrant) Date: May 15, 1996 By: s/Haim Tsuff ---------------------------------------------- (Signature) Haim Tsuff Chairman of the Board and Principal Financial Officer
- 12 - 15 EXHIBIT INDEX Exhibit 27 - Financial Data Schedule EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-1996 JAN-01-1996 MAR-31-1996 16,719,078 5,845,915 0 0 0 22,823,922 224,640 109,543 22,939,019 339,033 0 0 0 266,912 22,333,074 22,939,019 0 732,156 0 162,183 232,337 0 476 337,636 0 0 0 0 0 337,636 .01 .01
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