SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended March 31, 2001
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from --------- to -----------
Commission File Number: 0-9261
KESTREL ENERGY, INC.
(Exact name of registrant as specified in its charter)
Colorado 84-0772451
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
999 18th Street, Suite 2490, Denver, CO 80202
(Address of principal executive offices) (Zip Code)
(720) 921-0600
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
[X] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of common stock, as of March 31, 2001:
7,680,000
KESTREL ENERGY, INC.
AND SUBSIDIARIES
INDEX TO UNAUDITED FINANCIAL STATEMENTS
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 2001
and June 30, 2000 (Unaudited) 3
Consolidated Statements of Operations for the
Three Months and Nine Months Ended
March 31, 2001 and 2000 (Unaudited) 4
Consolidated Statements of Cash Flows for the
Nine Months Ended March 31, 2001 and 2000
(Unaudited) 5
Notes to Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7-9
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Defaults Upon Senior Securities 10
Item 4. Submission of Matters to a Vote of Security
Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports of Form 8-K 10
Signatures 11
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
KESTREL ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2001
AND JUNE 30, 2000
(Unaudited)
March 31, June 30,
ASSETS 2001 2000
------ ----------- ----------
CURRENT ASSETS:
Cash and cash equivalents $ 396,851 $ 502,034
Accounts receivable 340,030 181,075
Due from related party - 524
Other assets 24,656 31,560
----------- -----------
Total current assets 761,537 715,193
----------- -----------
PROPERTY AND EQUIPMENT, AT COST:
Oil and gas properties, successful
efforts method of accounting:
Unproved 311,315 353,027
Proved 12,135,642 10,933,518
Pipeline and facilities 807,851 772,164
Furniture and equipment 143,724 138,970
----------- -----------
13,398,532 12,197,679
Accumulated depreciation and
depletion (2,938,774) (2,833,816)
----------- -----------
Net property and equipment 10,459,758 9,363,863
----------- -----------
Investment in related party 1,463,903 2,191,403
----------- -----------
$ 12,685,198 $12,270,459
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable:
Trade $ 492,532 $ 1,423,788
Related party 20,615 9,399
Accrued liabilities 62,763 30,837
Line of credit, bank 1,859,500 -
----------- -----------
Total current liabilities 2,435,410 1,464,024
----------- -----------
STOCKHOLDERS' EQUITY:
Preferred Stock, $1 par value;
1,000,000 shares authorized,
none issued - -
Common Stock, no par value;
20,000,000 shares authorized,
7,680,000 and 7,680,000 issued
and outstanding at March 31, 2001
and June 30, 2000, respectively 19,048,223 19,044,885
Accumulated deficit (8,070,935) (8,238,450)
Accumulated other comprehensive loss (727,500) -
----------- -----------
Total stockholders' equity 10,249,788 10,806,435
----------- -----------
$ 12,685,198 $12,270,459
=========== ===========
See accompanying notes to consolidated financial statements.
KESTREL ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS AND NINE MONTHS
ENDED MARCH 31, 2001 and 2000
(Unaudited)
Three months ended Nine months ended
March 31, March 31,
2001 2000 2001 2000
------- ------- ------- ------
REVENUE:
Oil and gas sales $ 871,761 $ 234,438 $1,665,031 $ 774,366
Interest 275 9,217 2,681 43,561
Other income (loss) 15,037 (4,238) 50,965 38,766
Gain on sale
of property 7,972 193,254 7,972 193,254
---------- ---------- ---------- ----------
TOTAL REVENUES 895,045 432,671 1,726,649 1,049,947
COSTS AND EXPENSES:
Production and operating
expenses 301,484 96,944 606,195 365,588
Exploration expenses 30,485 145,688 86,933 338,669
Dry holes, abandoned and
impaired properties - - - 25,125
Depreciation and depletion 37,658 31,196 104,959 96,173
General and administrative 196,599 313,229 694,611 811,605
Interest expense 27,533 - 66,436 -
---------- ---------- ---------- ----------
TOTAL COSTS
AND EXPENSES 593,759 587,057 1,559,134 1,637,160
---------- ---------- ---------- ----------
NET INCOME (LOSS) $ 301,286 $(154,386) $ 167,515 $(587,213)
---------- ---------- ---------- ----------
BASIC AND DILUTED
INCOME (LOSS)
PER COMMON SHARE $ .04 $ (0.02) $ 0.02 $ (0.09)
========== ========== ========== ==========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
BASIC 7,680,000 7,295,500 7,680,000 6,518,545
========== ========== ========== ==========
DILUTED 8,068,148 7,295,500 8,100,202 6,518,545
========== ========== ========== ==========
See accompanying notes to consolidated financial statements.
KESTREL ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED MARCH 31,
2001 AND 2000
(Unaudited)
2001 2000
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 167,515 $ (587,213)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Dry holes, abandoned and impaired
properties - 24,257
Depreciation and depletion 104,959 96,078
Non cash compensation expense 3,338 2,319
Gain on sale of property and equipment, net (7,972) (193,254)
(Increase) decrease in accounts receivable
relating to operations (158,955) (34,375)
(Increase) decrease in due from related party 524 60,006
(Increase) decrease in other current assets 6,904 5,521
Increase (decrease) in accounts payable, trade (931,256) 47,202
Increase (decrease) in accounts payable,
related party 11,216 4,421
Increase (decrease) in accrued liabilities 31,926 11,320
----------- -----------
Net cash used in operating activities (771,801) (563,718)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures/acquisition of
properties (1,200,854) (4,766,403)
Purchase of short-term investments - (243,000)
-----------
Cash proceeds from sale of property 7,972
-----------
Net cash used in investing activities (1,192,882) (4,523,403)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock,
net of offering costs - 4,842,040
Payments on lease obligations - (6,175)
Costs advanced from related party - 151,270
Net borrowings on line of credit 1,859,500 -
----------- ----------
Net cash provided by financing
activities 1,859,500 4,987,135
----------- ----------
Net increase (decrease) in cash and
cash equivalents (105,183) (99,986)
Cash and cash equivalents
at the beginning of the period 502,034 394,980
----------- ----------
Cash and cash equivalents
at the end of the period $ 396,851 $ 294,994
=========== ==========
Cash paid for interest $ 66,436 $ 494
=========== ==========
See accompanying notes to consolidated financial statements.
KESTREL ENERGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
These condensed financial statements should be read in conjunction
with the audited consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the fiscal
year ended June 30, 2000.
In the opinion of management, the accompanying interim unaudited
financial statements contain all the adjustments necessary to present
fairly the financial position of the Company as of March 31, 2001,
the results of operations for the periods shown in the statements of
operations, and the cash flows for the periods shown in the
statements of cash flows. All adjustments made are of a normal
recurring nature.
The components of total comprehensive earnings for the periods
consist of net income (loss) and unrealized loss on investment in
75,000,000 shares of Victoria Petroleum, NL (VP) common stock are as
follows:
Three months ended Nine months ended
March 31, March 31,
2001 2000 2001 2000
------- ------- ------- -------
Net income (loss) $301,286 $(154,386) $167,515 $(587,213)
Other comprehensive loss (165,000) - (727,500) -
-------- --------- -------- ---------
Total comprehensive
net income (loss) $136,286 $(154,386)$(559,985)$(587,213)
2. Investment in Related Party
On May 5, 2000, the Company sold six international permits with a net
book value of $143,179 for petroleum drilling in Western Australia
and New Guinea to Victoria Petroleum USA, Inc. (VP/USA), a Colorado
corporation and wholly owned subsidiary of VP, in exchange for
8,250,000 shares of VP Common Stock.
Also, on May 5, 2000, Kestrel Energy California, Inc. (KEC), VP and
VP/USA entered into an Agreement and Plan of Merger (Merger
Agreement). Pursuant to the Merger Agreement, on May 12, 2000, the
Company, as sole shareholder of KEC, acquired 66,750,000 shares of VP
Common Stock and VP/USA acquired all of the issued and outstanding
shares of KEC through a merger of KEC into VP/USA, with KEC as the
surviving corporation.
The investment in VP Common Stock is classified as available-for-
sale. Net unrealized gains and losses on the investment are recorded
to other comprehensive income or loss. At March 31, 2001, the
unrealized loss on the investment was $727,500. The Common Stock of
VP was trading for $.04 cents per share in Australian dollars as of
March 31, 2001. The Company applies the exchange rate between the
U.S. dollar and Australian dollar as quoted in the Wall Street
Journal. On March 31, 2001 the exchange rate in dollar terms was
.4868 which resulted in a U.S. dollar share price of $.0195 cents per
share. There were no unrealized losses at June 30, 2000. There were
no proceeds, realized gains, or realized losses from the sales of
investments for the nine months ended March 31, 2001 or 2000.
3. Line of Credit
On February 21, 2000, the Company entered into a $2,000,000 Line of
Credit agreement with Wells Fargo Bank West N.A., which provided the
Company with an initial borrowing base of $600,000 with interest at
Wells Fargo prime rate plus 2.5%. On September 27, 2000, the Company
and Wells Fargo amended the Line of Credit Agreement to provide the
Company a borrowing base of $2,000,000 and reduced the interest rate
to 1.5% over the Wells Fargo prime rate. The increase in borrowing
base resulted from the substantial increase in the Company's proved
reserves as of the June 30, 2000 reserve report. The line of credit
is due October 31, 2001, and is secured by Deeds of Trust on various
oil and gas-producing properties held by the Company. As of March
31, 2001, $1,859,500 was outstanding on the line of credit.
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 2001, the Company had a working capital deficit of
$1,673,873. This compares to the Company's working capital deficit of
$748,831 as of June 30, 2000. The increase in working capital deficit of
$925,042 was a result of borrowings on the Company's line of credit less
amounts expended on drilling and completion of the Turner 1-23 and 3-14
wells in Oklahoma and the re-completion of the Greens Canyon 27-3 well in
Wyoming. The Company anticipates a substantial reduction in the working
capital deficit to occur over the next several months. As a result of the
investments made by the Company in re-completing the Greens Canyon 27-3
well in Wyoming, the completion of the two Turner wells in Oklahoma, and
the workover of the Pierce Unit in Wyoming, based on currently prevailing
oil and gas prices, the Company anticipates positive cash flow from
operations sufficient to cover the Company's operating expenses for the
foreseeable future and to reduce existing current liabilities.
Additionally, the Company has taken a number of actions during the quarter
to reduce its cost structure as discussed more fully under Results of
Operations. The Company may also seek to strengthen its cash position
through the sale of petroleum or other assets or by raising additional
debt or equity capital.
Net cash used by operating activities was $771,801 for the nine months
ending March 31, 2001, an increase of $208,083 over cash used by
operations of $563,718 for the same period in 2000. Operating cash flows
decreased during the nine months ended March 31, 2001, due to the payment
of accounts payable previously incurred. The Company's accounts
receivable increased $158,955, or 88%, to $340,030 during the period as
compared to an increase of $34,375, or 31%, for the same period in 2000.
The increase in receivables for the nine month period is primarily due to
an accrual of gas revenue on the Turner 1-23 and 3-14 wells completed in
October 2000 and higher natural gas prices received during the period. The
Company's accounts payable trade decreased $931,256, or 65%, to $492,532
during the nine months ended March 31, 2001, versus an increase of
$47,202, or 99%, a year ago. Accounts payable related party increased
$11,216 to $20,615 during the nine months ended March 31, 2001. The
increase was a result of a cash advance from the related party which the
Company will offset with overhead charges and expenses for the use of
Company office space and personnel. Accrued expenses increased $31,926 to
$62,763 during the period. The increase was primarily due to revenue and
production taxes payable as of March 31, 2001.
Net cash used by investing activities was $1,192,882 for the period ended
March 31, 2001, versus cash used of $4,523,403 for the same period in
2000. Capital expenditures during the period included $333,000 to drill
and complete the Turner 3-14 well and $243,000 to drill and complete the
Turner 1-23 well; both wells were completed successfully and began
production during the fourth quarter of 2000. The wells are located in
Amber County, Oklahoma. In January 2001, the Company re-completed the
Greens Canyon 27-3 well in Wyoming at an approximate cost of $437,000.
The re-completion was undertaken in an effort to enlarge the productive
zone and stimulate gas production. The gas volumes produced by the well
have improved since the re-completion and the Company is optimistic that
further volume improvement can be achieved.
Additional costs included $132,000 for completion costs on the Poitevent
and Greens Canyon 29-2 wells in Greens Canyon, Wyoming. The Company also
expended $36,000 to finish the flow line located on the Greens Canyon
Property and $15,000 to complete various coal bed methane wells in the
Hilight Field in Wyoming. Furniture, computers and software accounted for
approximately $5,200 of capital expenditures during the period. The
Company received $7,972, during the nine months ended March 31, 2001, for
the sale of a partial interest in the shallow rights on the Oxbow Prospect
in Campbell County, Wyoming.
Cash provided by financing activities was $1,859,500 for the current
quarter. The increase in cash from financing activities was a result of
the Company accessing its line of credit at Wells Fargo Bank West, N.A. to
fund working capital during the period.
RESULTS OF OPERATIONS
The Company reported income of $301,286, or 4 cents per share, for the
three month period ended March 31, 2001. This compares with a loss of
$154,386, or 2 cents per share, for the same period a year ago. The
income in the current period is a result of higher oil and gas revenues
resulting from increased gas production and higher oil and gas prices as
well as lower general and administrative expenses.
The Company's revenues for the three months ended March 31, 2001 were
$895,045 compared to $432,671 during the same period of 2000, an increase
of $462,374, or 107%. Revenues from oil and gas sales were $871,761 for
the three months ended March 31, 2001, an increase of $637,323, or 272%,
as compared to $234,438 for the same period in 2000. The increase in oil
and gas revenues is attributable to gas production from the Turner 3-14
and 1-23 wells in Oklahoma, gas production from the Greens Canyon wells in
Wyoming and higher gas and oil prices compared to a year ago. Interest
income decreased $8,942, or 97%, to $275 from $9,217 a year ago. The
decrease in interest income is attributable to the reduction in short-term
investments from prior year levels. Other income for the three months
ended March 31, 2001 increased $19,275 to $15,037 versus a loss of $4,238
a year ago. Other income represents overhead charged to a related party
for use of the Company's office space and personnel. For the three and
nine months ended March 31, 2001, gain on sale of property decreased
$185,282 to $7,972 from $193,254 a year ago. In the year 2000, the
Company sold its interest in 16 wells located on the Porcupine leasehold
in Wyoming for $243,000, which resulted in a gain of $193,254.
The Company's total revenues for the nine month period ended March 31,
2001 were $1,726,649 as compared to $1,049,947 during the same period in
2000, an increase of $676,702, or 64%. Revenue from oil and gas sales was
$1,665,031 for the nine months ended March 31, 2001, an increase of
$890,665, or 115%, as compared to sales of $774,366 a year ago. The
increase in oil and gas sales was attributable to significantly higher oil
and gas prices and higher gas volumes as a result of the production from
the Greens Canyon properties and the two Turner wells recently completed.
Interest income declined to $2,681 for the nine months ended March 31,
2001 versus $43,561 a year ago. The decrease of $40,880, or 94%, is
attributable to the reduction of short-term investments, as investments
have been liquidated to meet cash flow requirements. Other income
increased $12,199, or 31%, to $50,965 for the nine months ended March 31,
2001 as compared to $38,766 a year ago.
The Company's total expenses for the third quarter ended March 31, 2001
increased $6,702, or 1%, to $593,759 as compared to $587,057 a year ago.
The increase in expenses was attributable to higher operating expenses and
interest expense on the bank line of credit, offset by lower exploration
and general and administrative expenses.
Total expenses for the nine months ended March 31, 2001 decreased $78,026,
or 5%, to $1,559,134 from $1,637,160 a year ago. The reduction in overall
expenses is a result of lower exploration expenses, dry hole costs and
general and administrative expenses despite significantly higher
production and operating expenses. The Company has taken several steps to
reduce its cost structure. These include a reduction in engineering
staff, lowering investor relation expenses, reducing accounting department
salaries, and reducing exploration and related expenses.
Production and operating expenses for the three month period increased
$204,540, or 211%, to $301,484 versus $96,944 for the same period a year
ago. The increase in production and operating expenses was due to
workover costs on the Pierce and Burditt properties approximating $100,000
during the quarter, higher lease operating expenses on the Greens Canyon,
coal bed methane and Turner wells, and significantly higher production
taxes attributable to the higher oil and gas revenues reported by the
Company.
For the nine months ended March 31, 2001, production and operating
expenses rose $240,607, or 66%, to $606,195 as compared to $365,588 a year
ago. Attributing to this increase are the various expenses discussed
above.
Exploration expenses for the quarter ended March 31, 2001 decreased
$115,203, or 79%, to $30,485 from $145,688 a year ago. The decrease is
attributable to a reduction of the Company's emphasis on exploration. The
costs incurred for the quarter reflect delay rentals paid to maintain
leasehold interests.
For the nine months ended March 31, 2001, exploration expenses decreased
$251,736, or 74%, to $86,933 versus $338,669 a year ago. The decrease in
exploration expenses reflects the Company's emphasis on the Greens Canyon
development rather than exploration of unproved properties.
Dry holes, abandoned and impaired properties expensed for the nine months
ended March 31, 2001 declined $25,125, or 100%, from $25,125 a year ago.
The decrease during the nine month period is attributable to lower
impairment expense.
Depletion expense for the three months ended March 31, 2001 was $37,658
versus $31,196 a year ago. Depletion expense for the nine months ended
March 31, 2001 was $104,959 versus $96,173 a year ago. The increase in
depletion for both the three and nine month periods ended March 31, 2001
is attributable to higher capitalized costs on the Greens Canyon and
Turner wells.
General and administrative costs for the three months ended March 31, 2001
decreased $116,630, or 37%, to $196,599 as compared to $313,229 for the
same period a year ago. The decrease is primarily attributable to lower
accounting and legal costs incurred versus a year ago. The Company is
also benefiting from lower investor relation expenses and a lower salary
structure from prior year levels.
The Company's general and administrative expenses for the nine months
ended March 31, 2001 decreased $116,994, or 14%, to $694,611 from $811,605
a year ago. The primary reasons for the decline in expenses are the same
as discussed above.
Interest expense was $27,533 for the third quarter as a result of the
Company's utilization of its line of credit. For the nine months ended
March 31, 2001, interest expense was $66,436. The interest rate on the
Company's line of credit decreased during the period as a result of the
bank lowering its prime lending rate.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
Until fiscal 2000, the Company did not invest in or hold market risk
sensitive or interest rate sensitive instruments and the only currency
exchange rate risk borne by the Company stemmed from the Company's
obligations to fund its international drilling in Australian dollars. The
Company no longer has currency exchange risk relating to its own
operations, as it no longer participates in international drilling.
As of March 31, 2001, the Company owns 75,000,000 shares of Victoria
Petroleum, NL (VP) Common Stock. The investment in VP Common Stock is
classified as available-for-sale. Net unrealized gains and losses on the
investment are recorded to other comprehensive income or loss. The VP
shares are traded publicly on the Australian stock exchange and the price
for which the Company could sell its VP shares, which are quoted in prices
denominated in Australian dollars, could be higher or lower than the
Company's cost. At March 31, 2001, the unrealized loss on the investment
was $727,500. The Common Stock of VP was trading for $.04 cents
per share in Australian dollars as of March 31, 2001. The Company applies
the exchange rate between the U.S. dollar and Australian dollar as quoted
in the Wall Street Journal. On March 31, 2001 the exchange rate in dollar
terms was .4868 which resulted in a U.S. dollar share price of $.0195
cents per share. There were no unrealized losses at June 30, 2000. There
were no proceeds, realized gains, or realized losses from the sales of
investments for the nine months ended March 31, 2001 or 2000.
FORWARD LOOKING STATEMENTS
This report includes one or more statements, which state or
otherwise indicate the Company's present belief or expectation concerning
future events. Such statements are forward looking statements on which
investors should not rely because they are subject to a wide variety of
contingencies and based on a number of assumptions, which may not prove to
be true. In particular, the Company's future success is highly dependent
on the success of its exploratory drilling efforts, which cannot be safely
predicted. In addition, the Company is highly dependent upon prevailing
prices for petroleum products and properties, the availability of debt and
equity capital to oil and gas companies generally and the Company
particularly, its ability to attract and retain qualified personnel, as
well as other risk factors affecting business generally, such as overall
economic conditions, changes in tax and other laws and the effect of
actions taken by competitors and regulatory authorities.
INFLATION AND CHANGING PRICES
Inflation has not had a significant effect on the Company's results of
operations. However, the constantly fluctuating price of crude oil and
natural gas materially affects the Company's cash flow, either positively
or negatively.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable
ITEM 2. CHANGES IN SECURITIES
On January 24, 2001, the Board of Directors of
the Company agreed to extend the Warrant exercise
period for its Common Stock Purchase Warrants from
February 4, 2001 to February 4, 2002 and to reduce the
exercise price from $3.125 to $2.50. Except as set
forth below, each Warrant, when exercised, entitles
the registered holder to purchase from the Company one
share of Common Stock at a price of $2.50 per share.
The Company filed a registration statement on Form S-
3, which was declared effective by the Securities and
Exchange Commission on March 10, 2000. The Form S-3
registered the subsequent resale of the Warrants and
the sale of the shares of Common Stock underlying the
Warrants. The Warrants will now expire on February 4,
2002, unless earlier redeemed by the Company.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
ITEM 5. OTHER INFORMATION
Not applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(b) Reports on Form 8-K - A Form 8-K under Item 5
dated January 24, 2001 was filed with the
Commission on February 8, 2001.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
KESTREL ENERGY, INC.
(Registrant)
Date: May 21, 2001 /s/TIMOTHY L. HOOPS
Timothy L. Hoops
President, Principal Executive
Officer, and Director
Date: May 21, 2001 /s/MARK A. BOATRIGHT
Mark A. Boatright
Vice President - Finance,
Principal Financial and
Accounting Officer