SEC Company Response from CASTLE ENERGY CORP (CIK 0000709355) — Mar 21, 2005
CASTLE ENERGY CORP (CIK 0000709355)
Date: March 21, 2005 · CIK: 0000709355 · Accession: 0000950116-05-001080
AI Filing Summary & Sentiment
Letter
<PAGE> CASTLE ENERGY CORPORATION 375 SOUTH GULPH ROAD SUITE 260 KING OF PRUSSIA, PA 19406 610-992-9900 March 21, 2005 Ms. Sandy Eisen Securities and Exchange Commission 450 Fifth Street, NW Washington, DC 20549
Dear Ms. Eisen:
In response to your questions concerning whether audited financial statements were required concerning the Appalachian oil and gas properties acquired by Castle Energy Corporation in March 2004, I enclose related questions and answers and calculations supporting the acquisition not meeting any of the 20% criteria requiring an audit.
If you have any questions, please do not hesitate to call.
Sincerely yours,
/s/ RICHARD E. STAEDTLER
-------------------------------------
Richard E. Staedtler
Chief Financial Officer
Show Raw Text
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>
<PAGE>
CASTLE ENERGY CORPORATION
375 SOUTH GULPH ROAD
SUITE 260
KING OF PRUSSIA, PA 19406
610-992-9900
March 21, 2005
Ms. Sandy Eisen
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
Dear Ms. Eisen:
In response to your questions concerning whether audited financial statements
were required concerning the Appalachian oil and gas properties acquired by
Castle Energy Corporation in March 2004, I enclose related questions and answers
and calculations supporting the acquisition not meeting any of the 20% criteria
requiring an audit.
If you have any questions, please do not hesitate to call.
Sincerely yours,
/s/ RICHARD E. STAEDTLER
-------------------------------------
Richard E. Staedtler
Chief Financial Officer
RES/sp
Attachment
<PAGE>
CASTLE ACQUISITION OF PROPERTIES
SEC QUESTIONS AND ANSWERS
I. Background
In March 2004 Castle made an acquisition from Delta as follows:
Acquired 100% of Delta's Appalachian properties (140 wells interests) for
$8,000,000 cash. Effective date = January 1, 2004, closing date = April 1,
2004. Expected cash flow from the effective date till closing is $450,000,
which would reduce the purchase price to $7,550,000.
A. What tests determine if audited financials and pro formas need to be
filed?
1. The significant subsidiary tests. If any of the three significant
subsidiary criteria exceed 20%, pro formas and audited financials
will be required. The minimum criterion for both pro formas and at
least one year of audited financials is the same - at least one of
the 3 significant subsidiary criteria must exceed 20%.
B. Does this acquisition reach the 20% criterion on any of the three
significant subsidiary criteria?
No - as follows:
<TABLE>
<CAPTION>
ESTIMATED FINAL
PURCHASE PURCHASE
REFERENCE CRITERION PRICE 3/31/04 PRICE 9/30/04
--------- --------- ------------- -------------
<S> <C> <C> <C>
SEC 1 SX 210.1-02 (W)(1) $ 8,000 = 16.1% $ 7,782 = 15.6%
------- -------
$49,808(2) $49,808 N/A
SEC 2 SX 210.1-02 (W) N/A N/A
SEC 3 SX 210.1-02 (W)(3) $1,041(1) = 19.3% 12.5%-19.3%
------
$5,375(3)
</TABLE>
----------------------
(1) Delta has paid for and Castle must assume (although perhaps reduce) cost of
the Pittsburgh office; if this is factored in, pre-tax income is
approximately $675 and percentage is 12.5%.
(2) Castle consolidated assets at September 30, 2003 = latest annual audited
balance sheet.
(3) 9/30/03 - ($2,350) ignored = loss)*
9/30/02 - ($759) ignored = loss)*
9/30/01 - $2,097
9/30/00 - $2,778 $16,127/3 = $5,375
9/30/99 - $11,272
* Losses are ignored in computation.
</TEXT>
</DOCUMENT>