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acquisition of others." The Agreement to sell the <br />Company': oil and gas properties to Victoria <br />Exploration N.L. of Perth, Western Australia was <br />announcecl on Friday, February 27, 1987. <br />With Royz~l Resources becoming a pure gold company, <br />the name change will cause Royal Resources' <br />wholly-oMrned subsidiary, Royal Gold, Inc., to give <br />up its name to its parent company. <br />The increase in capitalization anticipates that <br />some of t:he future acquisition of gold properties <br />will be for the common stock of the public company. <br />Additional shares of common stock may also be <br />issued for cash in a private placement. <br />Royal Resources reported a loss of S4.5 million or <br />$.72 per share on revenues of S608,000 for the <br />second fiscal quarter ended December 31, 1986 <br />compared to a loss of S9.1 million or S1.48 per <br />share on revenues of 51.3 million for the same <br />period last year and a $286,000 loss or $.05 per <br />share on revenues of $836,000 for the preceding <br />quarter. Mr. Michael Owen, said "The loss reported <br />in the quarter reflects the continued depressed <br />state of the oil and gas industry and is primarily <br />due to a write-down of the Company's oil and gas <br />properties." <br />The decrs~ase in revenue this year as compared to <br />last yeax• is primarily the result of lower oil and <br />gas prics~s and, to a lesser degree, lower <br />production. The Company recorded a S4.0 million <br />write-doc,rn of its oil and gas properties during the <br />quarter. The Company had reported an oil and gas <br />property write-down of $14.4 million during the <br />second gciarter of fiscal 1986. The write-down <br />attributable to U.S. properties for the current <br />quarter occurred because of lower prices of certain <br />of the Company's future gas production as well as <br />lower reserve values at the Tulare Lake Field due <br />to declining production, higher operating costs and <br />unsuccessful work-over efforts. Additionally, the <br />Company v,rrote down the remaining carrying value of <br />its Austx•alian properties to recognize the <br />Company's; decision not to continue to fund these <br />exploration costs in Australia. <br />The Company sold approximately 45,500 equivalent <br />barrels of oil in the current quarter at an average <br />(MORE) <br />