UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number: 811-02736
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PETROLEUM & RESOURCES CORPORATION
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(Exact name of registrant as specified in charter)
7 Saint Paul Street, Suite 1140, Baltimore, Maryland 21202
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(Address of principal executive offices) (Zip code)
Lawrence L. Hooper, Jr.
Petroleum & Resources Corporation
7 Saint Paul Street
Suite 1140
Baltimore, Maryland 21202
Registrant's telephone number, including area code: 410-752-5900
Date of fiscal year end: December 31, 2004
Date of reporting period: September 30, 2004
Item 1: SCHEDULE OF INVESTMENTS.
SCHEDULE OF INVESTMENTS
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September 30, 2004
(unaudited)
Prin. Amt.
or Shares Value (A)
---------- ------------
Stocks And Convertible Securities -- 87.4%
Energy -- 76.5%
Internationals -- 25.4%
BP plc ADR 600,000 $ 34,518,000
ChevronTexaco Corp. 540,000 28,965,600
Exxon Mobil Corp. 1,050,000 50,746,500
Royal Dutch Petroleum Co. ADR 400,000 20,640,000
"Shell" Transport and
Trading Co., plc ADR 85,000 3,783,350
Total S.A. ADR (B) 140,000 14,303,800
------------
152,957,250
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Domestics -- 8.2%
Amerada Hess Corp. 100,000 8,900,000
ConocoPhillips 300,000 24,855,000
Kerr McGee Corp. 177,153 10,142,009
Murphy Oil Corp. 65,000 5,640,050
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49,537,059
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Producers -- 14.5%
Apache Corp. 190,000 9,520,900
Burlington Resources Inc. 266,800 10,885,440
Devon Energy Corp. 198,720 14,111,107
EOG Resources, Inc. 180,000 11,853,000
Noble Energy, Inc. 185,000 10,774,400
Occidental Petroleum Corp. 200,000 11,186,000
Pioneer Natural
Resources Co. (C) 316,000 10,895,680
XTO Energy Inc. 250,000 8,120,000
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87,346,527
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Distributors -- 14.6%
AGL Resources Inc. 250,000 7,692,500
Aquila Inc. (B) (C) 2,000,000 6,240,000
Duke Energy Corp. 217,624 4,981,413
Energen Corp. 200,000 10,310,000
Equitable Resources Inc. 250,000 13,577,500
Keyspan Corp. 220,000 8,624,000
MDU Resources Group, Inc. 250,000 6,582,500
National Fuel Gas Co. 200,000 5,666,000
New Jersey Resources Corp. 277,500 11,488,500
Questar Corp. 200,000 9,164,000
Williams Companies, Inc. 9.0%
FELINE PACS due 2005 120,000 1,620,000
Williams Companies, Inc. 200,000 2,420,000
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88,366,413
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Prin. Amt.
or Shares Value (A)
---------- ------------
Services -- 13.8%
Baker Hughes, Inc. (B) 130,000 $ 5,683,600
BJ Services Co. (C) 370,000 19,391,700
GlobalSantaFe Corp. 200,000 6,130,000
Grant Prideco Inc. (C) 308,000 6,310,920
Nabors Industries Ltd. (C) 175,000 8,286,250
Noble Corp. (C) 185,000 8,315,750
Schlumberger Ltd. 280,000 18,846,800
Weatherford International,
Ltd. (C) 205,000 10,459,100
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83,424,120
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Basic Industries -- 10.9%
Basic Materials & Other -- 8.4%
Air Products and Chemicals, Inc. 125,000 6,797,500
Aqua America, Inc. 315,000 6,964,650
Arch Coal Inc. 156,000 5,536,440
du Pont (E.I.) de Nemours and Co. 175,000 7,490,000
General Electric Co. 454,800 15,272,185
Rohm & Haas Co. 200,000 8,594,000
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50,654,775
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Paper and Forest Products -- 2.5%
Boise Cascade Corp. 7.5% ACES
due 2004 51,000 2,534,700
Boise Cascade Corp. 205,000 6,822,400
Smurfit-Stone Container
Corp. (C) 300,000 5,811,000
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15,168,100
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Total Stocks And Convertible Securities
(Cost $273,689,140) (D) $527,454,244
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SCHEDULE OF INVESTMENTS (continued)
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September 30, 2004
(unaudited)
Prin. Amt. Value (A)
----------- -----------
Short-Term Investments --11.6%
U.S. Government Obligations -- 1.7%
U.S. Treasury Bills,
1.38%, due 11/18/04 $10,000,000 $ 9,980,933
-----------
Commercial Paper -- 9.9%
American General Finance Corp.,
1.66-1.76%,
due 10/19/04-10/26/04 7,000,000 6,993,249
Caterpillar Financial Services
Corp., 1.69%, due 10/13/04 4,000,000 3,997,747
ChevronTexaco Funding
Corp., 1.46-1.72%,
due 10/7/04-11/9/04 6,435,000 6,427,820
Coca-Cola Corp., 1.72%,
due 11/4/04 3,395,000 3,389,485
Coca-Cola Enterprises Inc.,
1.76%, due 10/19/04 3,605,000 3,601,828
General Electric Capital Corp.,
1.59-1.77%, due
10/7/04-11/16/04 6,595,000 6,586,439
GMAC New Center Asset Trust,
1.40-1.42%, due 10/5/04-10/7/04 7,000,000 6,995,847
Nestle Capital Corp., 1.72%,
due 11/2/04 4,670,000 4,662,860
Proctor & Gamble Co., 1.71%,
due 11/4/04 6,310,000 6,299,809
Toyota Motor Credit Corp.,
1.59-1.71%, due 10/7/04-10/28/04 8,280,000 8,275,102
Unilever Capital Corp., 1.69%,
due 10/18/04 2,690,000 2,687,853
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59,918,039
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Total Short-Term Investments
(Cost $69,898,972) $69,898,972
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Value (A)
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Securities Lending Collateral -- 1.4%
Money Market Fund
BNY Institutional Cash Reserves
Fund, 1.79%, due 10/1/04 $ 8,703,281
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Total Securities Lending Collateral
(Cost $8,703,281) 8,703,281
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Total Investments -- 100.4%
(Cost $352,291,393) 606,056,497
Cash, receivables and other
assets, less liabilities -- (0.4)% (2,583,031)
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Net Assets -- 100.0% $603,473,466
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Notes:
(A) See note 1 to financial statements. Securities are listed on the New York
Stock Exchange, the American Stock Exchange, or the NASDAQ.
(B) Some or all of these securities are on loan. See note 7 to financial
statements.
(C) Presently non-dividend paying.
(D) The aggregate market value of stocks held in escrow at September 30, 2004
covering open call option contracts written was $8,347,400. In addition,
the aggregate market value of securities segregated by the Corporation's
custodian required to collateralize open put option contracts written was
$7,587,500.
SCHEDULE OF OUTSTANDING OPTION CONTRACTS
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September 30, 2004
(unaudited)
Contracts Contract
(100 shares Strike Expiration Appreciation/
each) Security Price Date (Depreciation)
----------- -------- ------ ---------- --------------
COVERED CALLS
100 Amerada Hess Corp. $ 85 Nov 04 $ (45,800)
150 Amerada Hess Corp. 90 Jan 05 (47,761)
250 Boise Cascade Corp. 40 Nov 04 24,249
200 Burlington Resources Inc. 40 Jan 05 (37,601)
200 ConocoPhillips 80 Jan 05 (72,601)
150 Royal Dutch Petroleum Co. 55 Jan 05 1,900
100 Total S.A. 105 Nov 04 2,200
100 Total S.A. 105 Feb 05 (11,300)
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1,250 (186,714)
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COLLATERALIZED PUTS
200 Baker Hughes, Inc. 30 Oct 04 21,549
100 ConocoPhillips 70 Jan 05 5,200
150 du Pont (E.I.) de Nemours and
Co. 37.50 Oct 04 13,050
72 Murphy Oil Corp. 50 Oct 04 5,544
135 Murphy Oil Corp. 75 Nov 04 2,340
100 Murphy Oil Corp. 60 Jan 05 6,600
135 Murphy Oil Corp. 65 Jan 05 966
100 Noble Energy, Inc. 50 Jan 05 6,200
250 Precision Drilling Corp. 45 Mar 05 18,099
100 Schlumberger Ltd. 50 Nov 04 18,099
150 Schlumberger Ltd. 50 Jan 05 11,550
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1,492 109,197
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$ (77,517)
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(SELECTED) NOTES TO FINANCIAL STATEMENTS (Unaudited)
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Petroleum & Resources Corporation (the Corporation) is
registered under the Investment Company Act of 1940 as a non-
diversified investment company. The Corporations investment
objectives as well as the nature and risk of its investment
transactions are set forth in the Corporations registration
statement.
Security Valuation-Investments in securities traded on
national security exchanges are valued at the last reported
sale price on the day of valuation. Over-the-counter and
listed securities for which a sale price is not available
are valued at the last quoted bid price. Short-term
investments (excluding purchased options) are valued at
amortized cost. Purchased and written options are valued at
the last quoted asked price.
7 . PORTFOLIO SECURITIES LOANED
The Corporation makes loans of securities to brokers,
secured by cash deposits, U.S. Government securities, or
bank letters of credit. The Corporation accounts for
securities lending transactions as secured financing and
receives compensation in the form of fees or retains a
portion of interest on the investment of any cash received
as collateral. The Corporation also continues to receive
interest or dividends on the securities loaned. The loans
are secured at all times by collateral of at least 102% of
the fair value of the securities loaned plus accrued
interest. Gain or loss in the fair value of securities
loaned that may occur during the term of the loan will be
for the account of the Corporation. At September 30, 2004,
the Corporation had securities on loan of $7,357,118 and
held collateral of $8,703,281, consisting of a money market
fund.
Item 2. CONTROLS AND PROCEDURES.
Conclusions of principal officers concerning controls and
procedures:
(a) As of November 11, 2004, an evaluation was performed
under the supervision and with the participation of the
officers of Petroleum & Resources Corporation (the
Corporation), including the principal executive officer
(PEO) and principal financial officer ("PFO"), of the
effectiveness of the Corporation's disclosure controls and
procedures. Based on that evaluation, the Corporation's
officers, including the PEO and PFO, concluded that, as of
November 11, 2004, the Corporation's disclosure controls and
procedures were reasonably designed so as to ensure: (1)
that information required to be disclosed by the Corporation
on Form N-Q is recorded, processed, summarized and reported
within the time periods specified by the rules and forms of
the Securities and Exchange Commission; and (2) that
material information relating to the Corporation is made
known to the PEO and PFO as appropriate to allow timely
decisions regarding required disclosure.
(b) There have been no significant changes in the
Corporations internal control over financial reporting (as
defined in Rule 30a-3(d) under the Investment Company Act of
1940 (17 CFR 270.30a-3(d)) that occurred during the
Corporation's last fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the
Corporation's internal control over financial reporting.
Item 3. EXHIBITS.
The certifications of the principal executive officer and
principal financial officer pursuant to Rule30a-2(a) under
the Investment Company Act of 1940 are attached hereto as
Form N-Q Certifications.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934 and the Investment Company Act of 1940, the
registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
PETROLEUM & RESOURCES CORPORATION
BY: /s/ Douglas G. Ober
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Douglas G. Ober
Chief Executive Officer
Date: November 11, 2004
Pursuant to the requirements of the Securities Exchange Act
of 1934 and the Investment Company Act of 1940, this report
has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates
indicated.
BY: /s/ Douglas G. Ober
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Douglas G. Ober
Chief Executive Officer
(Principal Executive Officer)
Date: November 11, 2004
BY: /s/ Maureen A. Jones
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Maureen A. Jones
Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
Date: November 11, 2004