Annual report pursuant to section 13 and 15(d)

INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY (AMAK) (Tables)

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INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY (AMAK) (Tables)
12 Months Ended
Dec. 31, 2012
INVESTMENT IN AL MASANE AL KOBRA MINING COMPANY ("AMAK") [Abstract]  
Initial Investment in AMAK
The Company accounted for its contribution of these assets to AMAK, net of the $11 million liability, as the contribution of non-monetary assets to a joint venture, and recorded the transfer based on the lower of the cost or market value of the transferred assets. The Company determined that cost was less than market value, with market value being based on the contribution of cash of $60 million by the other investors in AMAK in exchange for their 50% interest.  In addition, the Company confirmed that market value was greater than cost based on the cash flow projections based on the proven reserves and market mineral prices. The Company's initial investment in AMAK was comprised of the following:
 
   
(thousands of dollars)
 
Accumulated costs of mineral Interests in Saudi Arabia
  $ 40,290  
Contribution of AMAK organization costs
    3,712  
Loan payable assumed by AMAK
    (11,000 )
Net initial investment in AMAK
  $ 33,002  
Summarized Results of Operation and Financial Position for AMAK
The summarized results of operation and financial position for AMAK are as follows:

Results of Operations

   
Years Ended December 31,
 
   
2012
   
2011
   
2010
 
   
(Restated – see Note 3)
             
   
(Thousands of Dollars)
 
Sales
  $ 15,594     $ -     $ -  
Gross Profit
    3,825       -       -  
General, administrative and other expenses
    6,328       2,621       2,130  
Net Income (loss)
  $ (2,503 )   $ (2,621 )   $ (2,130 )
 
Financial Position

   
December 31,
 
   
2012
   
2011
 
   
(Thousands of Dollars)
 
Current assets
  $ 32,827     $ 26,489  
Noncurrent assets
    261,620       241,977  
Total assets
  $ 294,447     $ 268,466  
                 
Current liabilities
  $ 135,111     $ 69,352  
Long term liabilities
    9,260       46,536  
Shareholders' equity
    150,076       152,578  
    $ 294,447     $ 268,466  
Equity in Income or Loss of AMAK Reflected on Consolidated Statement Of Operation
The equity in the income or loss of AMAK reflected on the consolidated statement of operations for the years ended December 31, 2012, 2011, and 2010, is comprised of the following:

   
2012
   
2011
   
2010
 
Company's share of loss reported by AMAK
  $ 885   $ 1,018     $ 874  
Amortization of difference between Company's investment in AMAK
                       
  and Company's share of net assets of AMAK
    (674     -       -  
Equity in loss of AMAK
  $ 211   $ 1,018     $ 874