QSBA
 
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB/A
Amendment #1

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the First Quarter ended March 31, 2005

Commission File Number: 0-30891


Turner Valley Oil & Gas, Inc.
(Exact name of Registrant as specified in its charter)


Nevada                 91-1980526
(Jurisdiction of Incorporation)        (I.R.S. Employer Identification No.)

6160 Genoa Bay Road, Duncan B.C. Canada         V9L 5Y5
(Address of principal executive offices)              (Zip Code)

Registrant's telephone number, including area code:   (250) 746-1551

Securities registered pursuant to Section 12(g) of the Act: Common Stock

48,535,970 shares off common stock were outstanding as of March 31, 2005.

Transitional Small Business Disclosure Format (check one): yes [  ] no [X]



 
 
Page - 1
 
 
PART I: FINANCIAL INFORMATION

Item 1. Financial Statements.

The financial statements, for the three months ended March 31, 2005, included herein have been prepared by the us, without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnotes disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures are adequate to make the information not misleading.

 
 
The Remainder of this Page is Intentionally left Blank
 
 
Page - 2
 
 
 
Turner Valley Oil & Gas Incorporated
Consolidated Balance Sheets


 
          
   
March 31,
 
December 31,
 
 
 
 
2004
 
 
2004
 
ASSETS
 
 
(Unaudited) 
        
Current Assets
              
Cash
  
$
16,128
  
$
22,191
  
Accounts Receivable (Net of Allowance of $0)
  
$
6,068
  
$
4,809
  
               
Total Current Assets
    
22,196
   
27,000
 
               
Oil and Gas Properties Using Full Cost Accounting
              
Properties not subject to amortization
    
48,942
   
48,942
 
Accumulated Amortization
    
(13,267
)
  
(10,767
)
               
Net Oil and Gas Properties
    
35,675
   
38,175
 
               
Other Assets
              
Investments
    
181,585
   
181,585
 
               
Total Other Assets
    
181,585
   
181,585
 
               
Total Assets
  
$
239,456
  
$
246,760
  
               
LIABILITIES AND STOCKHOLDERS' EQUITY
              
               
Current Liabilities
              
Accounts Payable
  
$
35,937
  
$
19,053
  
Notes Payable - Related Party
    
23,659
   
23,659
 
               
Total Current Liabilities
    
59,596
   
42,712
 
               
Total Liablilities
    
59,596
   
42,712
 
               
               
Stockholders' Equity
              
Common Stock; Par Value $.001 Per Share; Authorized
              
100,000,000 Shares; 48,535,984 and 42,560,984 Shares
              
Issued and Outstanding, respectively
    
48,536
   
48,536
 
Capital in Excess of Par Value
    
3,559,673
   
3,559,673
 
Deficit Accumulated During the Development Stage
    
(3,377,881
)
  
(3,351,326
)
Subscription Receivable
    
(48,750
)
  
(48,750
)
Other Comprehensive Income
    
(1,718
)
  
(4,085
)
               
Total Stockholders' Equity
    
179,860
   
204,048
 
               
Total Liabilities and Stockholders' Equity
  
$
239,456
  
$
246,760
  
 
The accompanying notes are an integal part of theses financial statements.
 
 
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Turner Valley Oil & Gas Incorporated
Consolidated Statements of Operations
(Unaudited)


           
 From
 
 
 
 
 
 
 
 Inception on
 
 
 
 
 
 
 
 April 21, 1999
 
 
 
 
For the Three Months Ended 
 
 
through
 
 
 
 
March 31, 
 
 
March 31,
 
 
March 31,
 
 
 
 
2005
 
 
2004
 
 
2005
  
                     
REVENUE
  
$
1,640
  
$
-
  
$
11,061
  
                     
Total Revenue
  
$
1,640
  
$
-
  
$
11,061
  
                     
EXPENSES
                    
                     
Cost of Production
    
2,565
   
-
   
11,915
 
Depletion
    
2,500
   
-
   
13,267
 
General & Administrative
    
23,130
   
209,302
   
3,334,985
 
                     
Total Expenses
    
28,195
   
209,302
   
3,360,167
 
                     
NET OPERATING LOSS
    
(26,555
)
  
(209,302
)
  
(3,349,106
)
                     
OTHER INCOME (EXPENSES)
                    
                     
Royalty Income
    
-
   
212
     
Abandonment of Oil & Gas Property
    
-
   
-
   
(25,481
)
Interest Expense
    
-
   
(374
)
  
(3,294
)
                     
Total Other Income (Expenses)
    
-
   
(162
)
  
(28,775
)
                     
NET LOSS
  
$
(26,555
)
$
(209,464
)
$
(3,377,881
)
                     
BASIC LOSS PER COMMON SHARE
  
$
(0.00
)
$
(0.00
)
      
                     
WEIGHTED AVERAGE NUMBER OF
                    
SHARES OUTSTANDING
    
48,535,984
   
43,227,055
       
                     
                     
COMPREHENSIVE INCOME
                    
                     
Net Loss
  
$
(26,555
)
$
(209,464
)
$
(3,377,881
)
                     
Other Comprehensive Income:
                    
Foreign Currency Translation
    
2,367
   
(546
)
  
(1,718
)
                     
Comprehensive Income (Loss)
  
$
(24,188
)
$
(210,010
)
$
(3,379,599
)
 
The accompanying notes are an integal part of theses financial statements.
 
 
 
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Turner Valley Oil & Gas Incorporated
Consolidated Statements of Cash Flows

       
 
 
From
 
 
 
 
 
 
 
Inception on
 
 
 
For the three months ended
 
April 21, 1999
 
 
 
 
March 31, 
 
 
March 31, 
 
 
through
 
 
 
 
2005
 
 
2004
 
 
2005
  
                     
CASH FLOWS FROM OPERATING ACTIVITIES:
                    
                     
Net Income (Loss)
  
$
(26,555
)
$
(293,785
)
$
(3,377,881
)
Adjustments to Reconcile Net Loss to Net Cash
                    
Provided by Operations:
                    
Depletion
    
2,500
         
13,267
 
Loss on Abandonment of Property
    
-
   
71,072
     
Common Stock Issued for Services Rendered
   
-
   
186,500
   
2,767,860
 
(Loss) From Sale of Investments
    
-
         
25,481
 
Common Stock Issued for Retirement of Accounts Payable
    
-
   
-
   
326,599
 
Non-cash effect from foreign currency translation
        
(761
)
  
(4,085
)
Change in Assets and Liabilities:
                  
Increase (Decrease) in Accounts Receivable
    
1,259
         
(3,550
)
Increase (Decrease) in Accounts Payable
   
16,733
   
12,955
   
40,392
 
Increase (Decrease) in Interest Payable
    
-
   
374
   
19,053
 
                     
Net Cash Provided(Used) by Operating Activities
    
(6,063
)
  
(23,645
)
  
(192,864
)
                     
CASH FLOWS FROM INVESTING ACTIVITIES:
                    
                     
Proceeds from Sale of investments
                
56,706
 
Expenditures for Oil & Gas Property Development
        
(8,214
)
  
(312,714
)
                     
Net Cash Provided (Used) by Investing Activities
    
-
   
(8,214
)
  
(256,008
)
                     
CASH FLOWS FROM FINANCING ACTIVITIES:
                    
                     
Proceeds from Issuance of Common Stock
    
-
   
-
   
465,000
 
Cash received from Notes Payable-Related Party
        
25,000
     
                     
Net Cash Provided(Used) by Financing Activities
    
-
   
25,000
   
465,000
 
                     
                     
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS
    
(6,063
)
  
(6,859
)
  
16,128
 
                     
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD
    
22,191
   
9,394
   
-
 
                     
CASH AND CASH EQUIVALENTS AT END OF PERIOD
  
$
16,128
  
$
2,535
  
$
16,128
  
                     
Cash Paid For:
                    
Interest
  
$
-
  
$
-
  
$
-
  
Income Taxes
  
$
-
  
$
-
  
$
-
  
                     
                     
                     
Common Stock Issued for Services Rendered
   $  
$
186,500
  
$
2,767,860
  
Common Stock Issued to Retire Accounts Payable
  
$
-
  
$
-
  
$
326,599
  


 
 
The accompanying notes are an integal part of theses financial statements.
 
 
 
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Turner Valley Oil & Gas Incorporated
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 2005


GENERAL

Turner Valley Oil & Gas Incorporated, (the Company) has elected to omit substantially all footnotes to the financial statements for the three months ended March 31, 2005 since there have been no material changes (other than indicated in other footnotes) to the information previously reported by the Company in their Annual Report Form 10-KSB filed for the fiscal year ended December 31, 2004.

UNAUDITED INFORMATION

The information furnished herein was taken from the books and records of the Company without audit. However, such information reflects all adjustments which are, in the opinion of management, necessary to properly reflect the results of the interim period presented. The information presented is not necessarily indicative of the results from operations expected for the full fiscal year.



 
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Item 2. Discussion and Analysis or Plan of Operation.


(A)  
PLAN OF OPERATION.

The Company changed its plan of operations to a sole focus on; exploration for, development drilling for, and transmission facilities for the production and sale of oil and gas. To reflect this change, the Company changed its name to Turner Valley Oil & Gas Corporation, and incorporated a wholly owned Canadian subsidiary named T.V Oil & Gas Canada Limited. This Company is a Federal Canadian Registered Company and complies with all applicable laws within Canada.

Our financial statements contain the following additional material notes:

(Note 2-Going Concern) The Company’s financial statements have been prepared assuming that the Company will continue as a going concern. The Company is dependent upon raising capital to execute its business plan. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. It is management's plan to raise capital in order to execute their business plan, thus creating necessary operating revenues.

(Note 3-Development Stage Company) The Company is a development stage company as defined in Financial Accounting Standards Board Statement 7. It is concentrating substantially all of its efforts in raising capital and developing its business operations in order to generate operating revenues.

(B) DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.


During the quarter ended March 31, 2005 the Company had royalty revenues of $1,640, which were received from its working interest in the Strachan property. The Company has not added any further working interests in oil and gas producing properties during the quarter ended March 31, 2005. All the Company’s properties are geologically and physically independent of one another. They are all located in the Western Canadian Geologic Basin centred in Alberta, Canada.

The Strachan Property

On August 20, 2003, the Company entered into a purchase agreement to acquire 1% interest in a producing gas well, located at 2-2-38-9W5 Red Deer, Alberta, Canada. The gas production rate at the time of the acquisition fluctuated between 1.5 and 2 MMCF/Day (million cubic feet of gas per day). The Company’s senior management has set out a rework program for this well. The rework program calls for an acid wash and acid stimulation of the producing formation. The Company has agreed to participate in the program. The program was completed on October 15, 2003 and as of October 20, 2003, the new production rates have stabilized at 2.66 MMCF/Day, representing a 40% increase over initial production rates.
 
 
Page - 7
 

 
In addition to the preceding acquisition, the Company entered into a purchase agreement to acquire 0.5% interest in 10 Sections (6,400 acres) of drilling rights offsetting Sct. 22-38-9W-5. These offsetting sections have identified seismic anomalies in multiple cretaceous pay zones. The purchase price of the property was $45,114

During the quarter ended March 31, 2005, the Company received $1,640 in oil and gas fees from this property.

The Karr Property

On September 29, 2003, the Company entered into a purchase agreement to acquire 10% of a cased gas-well in the northwest of Alberta. The Company will earn 8% before initial payout (BPO) of its investment and 4% after the initial (APO) investment has been paid. The well was drilled in 1999 by Poco Petroleums and ceased after initial testing. Burlington Resources acquired Poco Petroleums.

Following negotiations with Burlington the lease was assigned to another operator in consideration of a gross overriding royalty and the new operator has prepared a re-completion program to be carried out prior to the expiration of the lease. This re-completion work is entering phase 2 which is to equip the well with full production facilities. The gross estimated cost of these facilities is $250,000 Canadian. The 10% participation will earn 8% BPO and 4% APO. The purchase price of the property was $44,430.

Following extensive internal reviews by the Company, Management decided to exit from this property due to the uncertainty of the economic recovery of the ongoing costs of participation and the costs already incurred on this project. The costs of exiting from this property were $4,480.

The Turner Valley Project

On October 10, 2003, the Company entered into a purchase agreement to acquire 10% of a cased gas-well south west of Calgary. The Company will earn 10% after the initial investment has been paid (APO). The gas well was drilled in 1969 by Shell Oil for deep oil potential in the Turner Valley Formation (drill depth 10,803 feet). An oil pay zone was encountered but watered out after 5 years of production and was subsequently abandoned by Shell Oil. The Company has a 7.5% working interest in 7 sections (4480 acres) of offset land. The purchase price of this property was $18,427.

Following extensive any internal reviews by the Company, Management decided to exit from this property due to the uncertainty of the economic recovery of the ongoing costs of participation and the costs already incurred on this project. The costs of exiting from this property were $3,734.
 
 
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Triangle Lands

On November 28, 2003, the Company entered into a purchase agreement to acquire 25% interest in leases containing 9287 gross acres (5350 net acres) within 17 sections of land extending along a regional structural trend in the southwest Alberta Foothills Belt for approximately 30 miles. Based on geologic and seismic surveys, the leases are located on Triangle shaped structures that have prospective gas reserves. Acquisition of this property amounted to $192,700.

The Company is currently engaged in a significant independent evaluation being conducted by a very prominent Oil and Gas Evaluation Firm in Calgary, Alberta, Canada. It is expected that this confidential report will be available to the company in early April 2004 and the Company will be making its drilling intentions public soon thereafter. Our internal evaluations indicate significant potential for Turner Valley Oil and Gas and it is Management’s position that it intends to focus the Company’s attention on this area. There will be a substantial requirement for the Company to capitalize a drilling program in the second Quarter of 2004, should the Company proceed with the proposed exploration plans. The Company expects to announce its intentions regarding this financing plan, next following the completion of Management’s internal reviews of all data currently being assessed.

General and administrative costs for the quarter ended March 31, 2004 decreased by 94% to $18,355, when compared to $315,653, for the same period last year. The decreases in costs were caused by a reduction in services provided by legal and accounting professionals.

Liquidity

The Company’s net working capital for the quarter ended March 31, 2004 was a negative $(12,583), compared to $9,095 for the year ended December 31, 2003. The decrease in working capital was due to costs associated with abandonment of oil and gas properties and costs relating to the operations of the Company..
 
To date, we have not invested in derivative securities or any other financial instruments that involve a high level of complexity or risk. We expect that in the future, any excess cash will continue to be invested in high credit quality, interest-bearing securities.
 
 
We believe cash from operating activities, and our existing cash resources may not be sufficient to meet our working capital requirements for the next 12 months. We will likely require additional funds to support the Company’s business plan. Management intends to raise additional working capital through debt and equity financing. There can be no assurance that additional financing will be available on acceptable terms, if at all. If adequate funds are not available, we may be unable to take advantage of future opportunities, respond to competitive pressures, and may have to curtail operations.
 
 
Page - 9
 
 
There are no legal or practical restrictions on the ability to transfer funds between parent and subsidiary companies.
 
There are no known trends or uncertainties excepting those herein disclosed, that will have a material impact on revenues.

 
PART II: OTHER INFORMATION

Item 1. Legal Proceedings. None.

Item 2. Changes in Securities. None.

Item 3. Defaults on Senior Securities. None

Item 4. Submission of Matters to Vote of Security Holders. None.

Item 5. Other Information. None.

Item 6. Exhibits and Reports on Form 8-K. 

Exhibit 31. Section 302 Certification

Exhibit 32. Certification Pursuant TO 18 USC Section 1350
 

 
The Remainder of this Page is Intentionally left Blank
 

 
Page - 10
 


 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this Form 10-Q Report for the Quarter ended March 31, 2005, has been signed below by the following persons on behalf of the Registrant and in the capacity and on the date indicated.



  
Turner Valley Oil and Gas, Inc.

Dated: May 16, 2005 
 
by

 
/s/Christopher Paton-Gay
  
 /s/Donald Jackson Wells
  
/s/Joseph Kane
Christopher Paton-Gay
president director
  
Donald Jackson Wells
director
  
Joseph Kane
director
 



 
Page - 11
 
 
 

 
Exhibit 31

Section 302 Certification




 
 
Page - 12
 
 
 
CERTIFICATIONS PURSUANT TO SECTION 302
I, Christopher Paton-Gay, president/director, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of March 31, 2005;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
 
Dated: August 5, 2005                        /s/ Christopher Paton-Gay
Christopher Paton-Gay
president director



 
 
Page - 13
 




Exhibit 32

CERTIFICATION PURSUANT TO 18 USC SECTION 1350


 
Page - 14
 



 
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
 
 
In connection with the Quarterly Report of Turner Valley Oil & Gas, Inc., a Nevada corporation (the "Company"), on Form 10-QSB for the quarter ended March 31, 2005 as filed with the Securities and Exchange Commission (the "Report"), I, Christopher Paton-Gay, president/director of the Company, certify, pursuant to 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350), that to my knowledge:
 
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
Dated: August 5, 2005                        /s/ Christopher Paton-Gay
Christopher Paton-Gay
president director
 
 
Page - 15