UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number: 811-02736
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PETROLEUM & RESOURCES CORPORATION
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(Exact name of registrant as specified in charter)
7 Saint Paul Street, Suite 1140, Baltimore, Maryland 21202
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(Address of principal executive offices) (Zip code)
Lawrence L. Hooper, Jr.
Petroleum & Resources Corporation
7 Saint Paul Street
Suite 1140
Baltimore, Maryland 21202
Registrant's telephone number, including area code: 410-752-5900
Date of fiscal year end: December 31, 2006
Date of reporting period: March 31, 2006
Item 1: SCHEDULE OF INVESTMENTS.
SCHEDULE OF INVESTMENTS
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March 31, 2006
(unaudited)
Shares Value (A)
- --------- ------------
Stocks And Convertible Securities -- 98.2%
Energy -- 86.8%
Internationals -- 22.7%
BP plc ADR 600,000 $ 41,364,000
Chevron Corp. 635,000 36,810,950
Exxon Mobil Corp. 1,140,000 69,380,400
Royal Dutch Shell plc ADR 275,000 17,121,500
Total S.A. ADR 120,000 15,807,600
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180,484,450
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Domestics -- 13.9%
Amerada Hess Corp. 65,000 9,256,000
ConocoPhillips 510,000 32,206,500
Holly Corp. 210,000 15,565,200
Kerr-McGee Corp. 107,647 10,278,136
Marathon Oil Co. 110,000 8,378,700
Murphy Oil Corp. 250,000 12,455,000
Valero Energy Corp. 240,000 14,347,200
Western Refining, Inc. 350,000 7,567,000
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110,053,736
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Producers -- 16.5%
Apache Corp. 165,000 10,809,150
Burlington Resources Inc. 65,000 5,974,149
Devon Energy Corp. 340,000 20,797,800
EOG Resources, Inc. (B) 320,000 23,040,000
Newfield Exploration Co. (C) 175,000 7,332,500
Noble Energy, Inc. 430,000 18,885,600
Occidental Petroleum Corp. 200,000 18,530,000
Pioneer Natural
Resources Co. 175,000 7,743,750
XTO Energy Inc. 400,000 17,428,000
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130,540,949
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Distributors -- 11.4%
AGL Resources Inc. 170,000 6,128,500
Duke Energy Corp. 217,624 6,343,740
Energen Corp. 400,000 14,000,000
Equitable Resources Inc. 450,000 16,429,500
MDU Resources Group, Inc. 250,000 8,362,500
National Fuel Gas Co. 200,000 6,544,000
New Jersey Resources Corp. 200,000 9,050,000
Questar Corp. 200,000 14,010,000
Williams Companies, Inc. 450,000 9,625,500
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90,493,740
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Shares
or Units Value (A)
- -------- ------------
Services -- 22.3%
Baker Hughes, Inc. 130,000 $ 8,892,000
BJ Services Co. 740,000 25,604,000
GlobalSantaFe Corp. 290,000 17,617,500
Grant Prideco Inc. (C) 308,000 13,194,720
Hercules Offshore, Inc. 110,000 3,741,100
Nabors Industries Ltd. (C) 260,000 18,610,800
Noble Corp. 185,000 15,003,500
Precision Drilling Trust (B) 300,000 9,702,000
Schlumberger Ltd. 280,000 35,439,600
TODCO (C) 175,000 6,896,750
Weatherford International,
Ltd. (C) 493,560 22,580,370
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177,282,340
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Basic Industries -- 11.4%
Basic Materials & Other -- 10.9%
Air Products and Chemicals, Inc. 125,000 8,398,750
Aqua America, Inc. 380,000 10,571,600
Arch Coal Inc. 200,000 15,188,000
Consol Energy Inc. 160,000 11,865,600
du Pont (E.I.) de Nemours and Co. 157,500 6,648,075
Florida Rock Industries Inc. 75,000 4,216,500
General Electric Co. 454,800 15,817,944
Martin Marietta Materials, Inc. 30,000 3,210,900
Rohm & Haas Co. 200,000 9,774,000
Tronox Inc. (C) 21,705 368,768
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86,060,137
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Paper & Forest Products -- 0.5%
Smurfit-Stone Container Corp. (C) 300,000 4,071,000
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Total Stocks And Convertible Securities
(Cost $329,624,727) (D) $778,986,352
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9
SCHEDULE OF INVESTMENTS (continued)
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March 31, 2006
(unaudited)
Prin. Amt. Value (A)
- ----------- -----------
Short-Term Investments -- 1.7%
U.S. Government Obligations -- 1.7%
U.S. Treasury Bills,
4.40%, due 5/18/06 $13,500,000 $13,422,391
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Time Deposit -- 0.0%
Citibank, N.A., 4.15%,
due 4/3/06 236,315
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Total Short-Term Investments
(Cost--$13,658,706) $13,658,706
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Value (A)
- ------------
Securities Lending Collateral -- 1.7%
Brown Brothers Investment
Trust, 4.67%, due 4/3/06 $ 13,801,464
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Total Securities Lending
Collateral (Cost--$13,801,464) 13,801,464
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Total Investments -- 101.6%
(Cost--$357,084,897) 806,446,522
Cash, receivables, prepaid
expenses and other
assets, less liabilities -- (1.6)% (12,887,160)
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Net Assets -- 100.0% $793,559,362
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Notes:
(A)See note 1 to financial statements. Securities are listed on the New York
Stock Exchange, the American Stock Exchange, or the NASDAQ.
(B)Some or all of these securities are on loan. See note 8 to financial
statements.
(C)Presently non-dividend paying.
(D)The aggregate market value of stocks held in escrow at March 31, 2006
covering open call option contracts written was $16,686,831. In addition,
the aggregate market value of securities segregated by the Corporation's
custodian required to collateralize open put option contracts written was
$12,827,500.
10
SCHEDULE OF OUTSTANDING OPTION CONTRACTS
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March 31, 2006
(unaudited)
Contracts Contract
(100 shares Strike Expiration Appreciation/
each) Security Price Date (Depreciation)
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COVERED CALLS
59 Air Products and Chemicals, Inc. $ 70 Sep 06 $ (6,962)
100 Apache Corp..................... 75 Apr 06 13,700
100 Apache Corp..................... 85 Jul 06 9,700
150 Aqua America, Inc............... 30 Jun 06 4,959
100 Arch Coal Inc................... 90 Jul 06 6,199
200 ConocoPhillips.................. 75 May 06 18,399
150 Consol Energy Inc............... 90 Oct 06 (25,700)
100 EOG Resources, Inc.............. 90 Apr 06 10,699
50 Kerr-McGee Corp................. 100 Apr 06 5,599
100 Kerr-McGee Corp................. 105 Jul 06 (3,301)
100 Murphy Oil Corp................. 50 Apr 06 2,200
100 Murphy Oil Corp................. 55 Jul 06 (800)
100 Newfield Exploration Co......... 45 Jun 06 (7,800)
200 Newfield Exploration Co......... 50 Jun 06 4,975
200 Newfield Exploration Co......... 50 Sep 06 (14,134)
100 Pioneer Natural Resources Co.... 45 Jun 06 (17,800)
100 Pioneer Natural Resources Co.... 50 Jun 06 (800)
20 Total S.A....................... 155 May 06 3,840
250 Total S.A....................... 150 Aug 06 (5,750)
100 XTO Energy Inc.................. 45 May 06 (3,300)
100 XTO Energy Inc.................. 45 Aug 06 (10,800)
100 XTO Energy Inc.................. 50 Aug 06 (3,800)
100 XTO Energy Inc.................. 55 Aug 06 8,700
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2,679 (11,977)
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COLLATERALIZED PUTS
250 Arch Coal Inc................... 60 Jul 06 12,999
100 Baker Hughes, Inc............... 55 Jul 06 7,699
75 Baker Hughes, Inc............... 60 Jul 06 (2,850)
250 Exxon Mobil Corp................ 52.50 Apr 06 22,999
150 Exxon Mobil Corp................ 50 Jul 06 13,799
100 Florida Rock Industries Inc..... 50 Jun 06 1,199
100 Florida Rock Industries Inc..... 45 Sep 06 (2,300)
100 Grant Prideco Inc............... 40 Apr 06 8,699
100 Grant Prideco Inc............... 35 Jul 06 4,199
100 Marathon Oil Co................. 65 Apr 06 10,699
65 Marathon Oil Co................. 70 May 06 (845)
200 Marathon Oil Co................. 60 Jul 06 19,399
75 Marathon Oil Co................. 65 Jul 06 10,649
100 Marathon Oil Co................. 55 Oct 06 5,699
100 Martin Marietta Materials, Inc.. 65 Apr 06 22,445
150 Noble Corp...................... 65 Jun 06 13,484
70 TODCO........................... 30 Jun 06 5,039
150 Valero Energy Corp.............. 45 Jun 06 11,099
150 Valero Energy Corp.............. 47.50 Jun 06 7,049
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2,385 171,160
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$159,183
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12
(SELECTED) NOTES TO FINANCIAL STATEMENTS (Unaudited)
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Petroleum & Resources Corporation (the Corporation) is
registered under the Investment Company Act of 1940 as a non-
diversified investment company. The Corporation's investment
objectives as well as the nature and risk of its investment
transactions are set forth in the Corporation's registration
statement.
Security Valuation-Investments in securities traded on
national security exchanges are valued at the last reported
sale price on the day of valuation. Over-the-counter and
listed securities for which a sale price is not available
are valued at the last quoted bid price. Short-term
investments (excluding purchased options) are valued at
amortized cost. Purchased and written options are valued at
the last quoted asked price.
For federal income tax purposes, the identified cost of
Securities at March 31, 2006 was $357,055,074 and net
unrealized appreciation aggregated $449,391,448, of which
the related gross unrealized appreciation and depreciation
were $452,682,645 and $3,291,197 respectively.
8. PORTFOLIO SECURITIES LOANED
The Corporation makes loans of securities to brokers,
secured by cash deposits, U.S. Government securities, or
bank letters of credit. The Corporation accounts for
securities lending transactions as secured financing and
receives compensation in the form of fees or retains a
portion of interest on the investment of any cash received
as collateral. The Corporation also continues to receive
interest or dividends on the securities loaned. The loans
are secured at all times by collateral of at least 102% of
the fair value of the securities loaned plus accrued
interest. Gain or loss in the fair value of the securities
loaned that may occur during the term of the loan will be
for the account of the Corporation. At March 31, 2006, the
Corporation had securities on loan of $13,483,638 and held
collateral of $13,801,464, consisting of an investment trust
fund which may invest in money market instruments,
commercial paper, repurchase agreements, U.S. Treasury
Bills, and U.S. agency obligations.
Item 2. CONTROLS AND PROCEDURES.
Conclusions of principal officers concerning controls and
procedures:
(a) As of April 21, 2006, an evaluation was performed under
the supervision and with the participation of the officers
of Petroleum & Resources Corporation (the "Corporation"),
including the principal executive officer ("PEO") and
principal financial officer ("PFO"), of the effectiveness of
the Corporation's disclosure controls and procedures. Based
on that evaluation, the Corporation's officers, including
the PEO and PFO, concluded that, as of April 21, 2006, the
Corporation's disclosure controls and procedures were
reasonably designed so as to ensure: (1) that information
required to be disclosed by the Corporation on Form N-Q is
recorded, processed, summarized and reported within the time
periods specified by the rules and forms of the Securities
and Exchange Commission; and (2) that material information
relating to the Corporation is made known to the PEO and PFO
as appropriate to allow timely decisions regarding required
disclosure.
(b) There have been no significant changes in the
Corporation's internal control over financial reporting (as
defined in Rule 30 a-3(d) under the Investment Company Act
of 1940 (17 CFR 270.30a-3(d)) that occurred during the
Corporation's last fiscal quarter that have materially
affected, or are reasonably likely to materially affect, the
Corporation's internal control over financial reporting.
Item 3. EXHIBITS.
The certifications of the principal executive officer and
principal financial officer pursuant to Rule 30 a-2(a) under
the Investment Company Act of 1940 are attached hereto as
Form N-Q Certifications.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934 and the Investment Company Act of 1940, the
registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
PETROLEUM & RESOURCES CORPORATION
BY: /s/ Douglas G. Ober
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Douglas G. Ober
Chief Executive Officer
Date: April 27, 2006
Pursuant to the requirements of the Securities Exchange Act
of 1934 and the Investment Company Act of 1940, this report
has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates
indicated.
BY: /s/ Douglas G. Ober
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Douglas G. Ober
Chief Executive Officer
(Principal Executive Officer)
Date: April 27, 2006
BY: /s/ Maureen A. Jones
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Maureen A. Jones
Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
Date: April 27, 2006