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, 2008
Date of reporting period: March 31, 2008
Item 1: SCHEDULE OF INVESTMENTS.
SCHEDULE OF INVESTMENTS
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March 31, 2008
(unaudited)
Shares Value (A)
- --------- ------------
Stocks And Convertible Securities -- 99.3%
Energy -- 92.1%
Integrated -- 35.5%
Chevron Corp. 715,000 $ 61,032,400
ConocoPhillips 556,891 42,440,663
Exxon Mobil Corp. 1,245,000 105,302,100
Hess Corp. 195,000 17,195,100
Marathon Oil Co. 240,000 10,944,000
Murphy Oil Corp. 216,500 17,783,310
Royal Dutch Shell plc ADR 265,000 18,279,700
Suncor Energy 90,000 8,671,500
Total S.A. ADR 390,000 28,863,900
Valero Energy Corp. 425,000 20,871,750
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331,384,423
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Exploration & Production -- 18.4%
Apache Corp. 200,000 24,164,000
Devon Energy Corp. 330,000 34,428,900
EOG Resources, Inc. (B) 230,000 27,600,000
Forest Oil Corp (C) 37,000 1,811,520
Noble Energy, Inc. 340,000 24,752,000
Occidental Petroleum Corp. 400,000 29,268,000
XTO Energy Inc. 487,500 30,156,750
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172,181,170
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Services -- 24.3%
Baker Hughes, Inc. 205,000 14,042,500
BJ Services Co. 202,600 5,776,126
ENSCO International, Inc. 209,150 13,096,973
Grant Prideco Inc. (C) 308,000 15,159,760
Hercules Offshore, Inc. (B) (C) 600,000 15,072,000
Nabors Industries Ltd. (C) 520,000 17,560,400
Noble Corp. 600,000 29,802,000
Schlumberger Ltd. 560,000 48,720,000
Transocean Inc. (C) 237,953 32,171,246
Weatherford International,
Ltd. (C) 493,560 35,768,293
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227,169,298
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Utilities -- 13.9%
AGL Resources Inc. 170,000 5,834,400
Duke Energy Corp. 217,624 3,884,588
Energen Corp. 400,000 24,920,000
Equitable Resources Inc. 450,000 26,505,000
MDU Resources Group, Inc. 375,000 9,206,250
National Fuel Gas Co. 200,000 9,442,000
New Jersey Resources Corp. 300,000 9,315,000
Northeast Utilities 200,000 4,908,000
Questar Corp. 320,000 18,099,200
Spectra Energy Corp. 108,812 2,475,473
Williams Companies, Inc. 450,000 14,841,000
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129,430,911
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Shares/
Prin. Amt. Value (A)
- ---------- ------------
Basic Industries -- 7.2%
Basic Materials & Other -- 7.2%
Air Products and Chemicals,
Inc. 115,000 $ 10,580,000
Aqua America, Inc. (B) 281,000 5,277,180
du Pont (E.I.) de Nemours and Co. 157,500 7,364,700
General Electric Co. 164,000 6,069,640
International Coal Group,
Inc. (B) (C) 3,000,000 19,050,000
Lubrizol Corp. 135,000 7,493,850
Massey Energy Co. 96,879 3,536,084
Rohm & Haas Co. 150,000 8,112,000
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67,483,454
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Total Stocks And Convertible Securities
(Cost $366,034,527) (D) 927,649,256
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Short-Term Investments -- 0.9%
U.S. Government Obligations -- 0.3%
U.S. Treasury Bills,
2.18%, due 5/15/08 $3,000,000 2,992,007
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Time Deposit -- 0.0%
Wachovia Bank,
1.70%, due 4/1/08 218,353
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Commercial Paper -- 0.6%
Chevron Funding Corp.,
2.05%, due 4/3/08 $1,000,000 999,810
General Electric Capital Corp.,
2.28%, due 4/1/08 $2,000,000 2,000,000
Toyota Motor Credit Corp.,
1.79%, due 4/3/08 $2,500,000 2,499,751
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5,499,561
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Total Short-Term Investments
(Cost $8,709,921) 8,709,921
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Total Securities Lending Collateral -- 6.9%
(Cost $64,411,555)
Brown Brothers Investment
Trust, 3.02%, due 4/1/08 64,411,555
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Total Investments -- 107.1%
(Cost $439,156,003) 1,000,770,732
Cash, receivables, prepaid
expenses and other assets, less
liabilities -- (7.1)% (66,153,187)
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Net Assets -- 100% $ 934,617,545
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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 of the shares of this company 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, 2008
covering open call option contracts written was $6,055,800.
10
SCHEDULE OF OUTSTANDING OPTION CONTRACTS
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March 31, 2008
(unaudited)
Contracts Contract
(100 shares Expiration Appreciation/
each) Security Strike Price Date (Depreciation)
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COVERED CALLS
100 Air Products and Chemicals, Inc. $ 115 Sep 08 $(1,800)
100 ENSCO International, Inc........ 65 Apr 08 (5,290)
100 Equitable Resources Inc......... 65 Jun 08 700
100 Marathon Oil Co................. 55 Apr 08 19,780
100 Marathon Oil Co................. 60 Apr 08 9,200
100 Rohm & Haas Co.................. 55 Apr 08 (1,800)
100 Rohm & Haas Co.................. 60 Apr 08 12,199
100 Suncor Energy................... 125 Jun 08 3,700
100 Suncor Energy................... 135 Sep 08 (800)
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900 $35,889
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(SELECTED) NOTES TO FINANCIAL STATEMENTS (Unaudited)
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1. SIGNIFICANT ACCOUNTING POLICIES
Petroleum & Resources Corporation (the Corporation) is
registered under the Investment Company Act of 1940 as a non-
diversified investment company. The Corporation is an
internally-managed fund emphasizing petroleum and other
natural resource investments. The investment objectives of
the Corporation are preservation of capital, the attainment
of reasonable income from investments, and an opportunity
for capital appreciation.
Security Transactions and Investment Income--Investment
transactions are accounted for on the trade date. Gain or
loss on sales of securities and options is determined on the
basis of identified cost. Dividend income and distributions
to stockholders are recognized on the ex-dividend date, and
interest income is recognized on the accrual basis.
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 which approximates fair value. Purchased and
written options are valued at the last quoted asked price.
The Corporation adopted Financial Accounting Standard Board
Statement of Financial Accounting Standards No. 157, Fair
Value Measurements ("FAS 157"), effective January 1, 2008.
There was no impact on the fair value of assets individually
or in aggregate upon adoption. In accordance with FAS 157,
fair value is defined as the price that the Corporation
would receive upon selling an investment in an orderly
transaction to an independent buyer. FAS 157 established a
three-tier hierarchy to establish classification of fair
value measurements, summarized as follows:
. Level 1 -- fair value is determined based on market
data obtained from independent sources; for example, quoted
prices in active markets for identical investments,
. Level 2 -- fair value is determined using other
assumptions obtained from independent sources; for example,
quoted prices for similar investments,
. Level 3 -- fair value is determined using the
Corporation's own assumptions, developed based on the best
information available in the circumstances.
The Corporation's investments at March 31, 2008 are
classified as follows:
Investment in
securities Written options
-------------- ---------------
Level 1 $ 927,649,256 $78,000
Level 2 73,121,476* --
Level 3 -- --
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Total $1,000,770,732 $78,000
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*Comprised of short-term investments and securities lending
collateral.
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 securities
loaned that may occur during the term of the loan will be
for the account of the Corporation. At March 31, 2008, the
Corporation had securities on loan of $62,377,240 and held
collateral of $64,411,555, 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 30, 2008, 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 30, 2008, 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 30, 2008
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 30, 2008
BY: /s/ Maureen A. Jones
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Maureen A. Jones
Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
Date: April 30, 2008