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, 2005
Date of reporting period: September 30, 2005
Item 1: SCHEDULE OF INVESTMENTS.
SCHEDULE OF INVESTMENTS
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September 30, 2005
(unaudited)
Shares Value (A)
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Stocks And Convertible
Securities -- 95.6%
Energy -- 85.8%
Internationals -- 23.5%
BP plc ADR ..................... 600,000 $ 42,510,000
Chevron Corp. .................. 635,000 41,103,550
Exxon Mobil Corp. .............. 1,140,000 72,435,600
Royal Dutch Shell plc ADR ...... 275,000 18,051,000
Total S.A. ADR ................. 120,000 16,298,400
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190,398,550
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Domestics -- 11.6%
Alon USA Energy, Inc. (B) ...... 6,000 144,900
Amerada Hess Corp. ............. 65,000 8,937,500
ConocoPhillips ................. 560,000 39,149,600
Holly Corp. .................... 210,000 13,435,800
Kerr-McGee Corp. ............... 107,647 10,453,600
Murphy Oil Corp. ............... 256,400 12,786,668
Valero Energy Corp. ............ 80,000 9,044,800
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93,952,868
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Producers -- 20.4%
Apache Corp. ................... 177,000 13,313,940
Burlington Resources Inc. ...... 246,800 20,069,776
Devon Energy Corp. ............. 355,000 24,367,200
EOG Resources, Inc. (C)......... 345,000 25,840,500
Newfield Exploration Co. (B) ... 175,000 8,592,500
Noble Energy, Inc. (C) ......... 430,000 20,167,000
Occidental Petroleum Corp. ..... 200,000 17,086,000
Pioneer Natural Resources Co. .. 291,000 15,981,720
XTO Energy Inc. ................ 435,000 19,714,200
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165,132,836
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Distributors -- 13.1%
AGL Resources Inc. ............. 197,000 7,310,670
Duke Energy Corp. (C)........... 217,624 6,348,092
Energen Corp. .................. 400,000 17,304,000
Equitable Resources Inc. ....... 450,000 17,577,000
Keyspan Corp. .................. 70,000 2,574,600
MDU Resources Group, Inc. ...... 250,000 8,912,500
National Fuel Gas Co. .......... 200,000 6,840,000
New Jersey Resources Corp. ..... 223,800 10,290,325
Questar Corp. .................. 200,000 17,624,000
Williams Companies, Inc. ....... 450,000 11,272,500
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106,053,687
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Services -- 17.2%
Baker Hughes, Inc. .............. 130,000 $ 7,758,400
BJ Services Co. ................. 740,000 26,632,600
GlobalSantaFe Corp. ............. 290,000 13,229,800
Grant Prideco Inc. (B) .......... 308,000 12,520,200
Nabors Industries Ltd. (B) ...... 260,000 18,675,800
Noble Corp. (B) ................. 185,000 12,665,100
Precision Drilling Corp.
(B) ............................ 200,000 9,840,000
Schlumberger Ltd. ............... 280,000 23,626,400
Weatherford International,
Ltd. (B) ....................... 205,000 14,075,300
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139,023,600
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Basic Industries -- 9.8%
Basic Materials & Other -- 9.4%
Air Products and Chemicals,
Inc. ........................... 125,000 6,892,500
Aqua America, Inc. .............. 315,000 11,976,300
Arch Coal Inc. .................. 160,000 10,800,000
Consol Energy Inc. .............. 158,700 12,104,049
du Pont (E.I.) de Nemours and
Co. ............................ 157,500 6,169,275
General Electric Co. ............ 454,800 15,313,116
Martin Marietta Materials,
Inc. ........................... 60,000 4,707,600
Rohm & Haas Co. ................. 200,000 8,226,000
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76,188,840
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Paper & Forest Products -- 0.4%
Smurfit-Stone Container
Corp. (B) ..................... 300,000 3,108,000
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Total Stocks And Convertible Securities
(Cost $305,540,183) (D) ...................... $ 773,858,381
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9
SCHEDULE OF INVESTMENTS (continued)
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September 30, 2005
(unaudited)
Prin. Amt. Value (A)
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Short-Term Investments -- 4.3%
U.S. Government
Obligations -- 1.8%
U.S. Treasury Bills,
3.39%, due
11/17/05 .................... $ 15,000,000 $ 14,933,613
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Time Deposit -- 0.0%
Brown
Brothers
Harriman &
Co., 3.31%,
due
10/3/05 ..................... 58,355
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Commercial Paper -- 2.5%
American
General
Finance
Corp.,
3.76%, due
10/18/05 .................... 5,000,000 4,991,122
ChevronTexaco
Funding
Corp.,
3.60-3.66%,
due
10/4/05-
10/11/05 .................... 5,900,000 5,897,513
General
Electric
Capital
Corp.,
3.78%, due
11/3/05 ..................... 4,900,000 4,883,022
Toyota Motor
Credit Corp.,
3.70%, due 10/6/05-10/13/05 4,600,000 4,595,406
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20,367,063
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Total Short-Term Investments
(Cost--$35,359,031) ........................ $ 35,359,031
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Securities Lending
Collateral -- 2.7% ......................
Brown Brothers
Investment Trust,
3.75%, due
10/3/05 .............................. $ 21,931,392
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Total Securities Lending
Collateral (Cost--
$21,931,392) ............................ 21,931,392
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Total Investments -- 102.6%
(Cost--$362,830,606) .................... 831,148,804
Cash, receivables, prepaid
expenses and other
assets, less liabilities -- 2.6% (21,446,088)
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Net Assets -- 100.0% $ 809,702,716
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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) Presently non-dividend paying.
(C) Some or all of these securities are on loan. See note 8 to financial
statements.
(D) The aggregate market value of stocks held in escrow at September 30, 2005
covering open call option contracts written was $16,195,940. In addition,
the aggregate market value of securities segregated by the Corporation's
custodian required to collateralize open put option contracts written was
$5,050,000.
10
SCHEDULE OF OUTSTANDING OPTION CONTRACTS
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September 30, 2005
(unaudited)
Contracts Contract
(100 shares Strike Expiration Appreciation/
each) Security Price Date (Depreciation)
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COVERED CALLS
100 EOG Resources, Inc. .................... $ 85 Jan 06 $ (801)
150 EOG Resources, Inc. .................... 70 Oct 05 (72,452)
100 EOG Resources, Inc. .................... 70 Jan 06 (70,801)
100 Kerr-McGee Corp. ....................... 80 Oct 05 (152,301)
200 Kerr-McGee Corp. ....................... 95 Oct 05 (48,041)
200 Martin Marietta Materials, Inc. ........ 70 Oct 05 (143,601)
40 Martin Marietta Materials, Inc. ........ 75 Oct 05 (9,320)
100 Martin Marietta Materials, Inc. ........ 75 Jan 06 (60,300)
200 Murphy Oil Corp. ....................... 60 Oct 05 7,700
250 Pioneer Natural Resources Co............ 50 Dec 05 (146,001)
250 Royal Dutch Shell plc ADR .............. 70 Jan 06 (8,251)
150 Schlumberger Ltd. ...................... 100 Jan 06 7,799
50 Total S.A. ADR ......................... 135 Oct 05 (3,351)
100 Total S.A. ADR ......................... 140 Oct 05 2,699
50 Total S.A. ADR ......................... 140 Nov 05 (4,150)
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2,040 (701,172)
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COLLATERALIZED PUTS
200 Exxon Mobil Corp. ...................... 50 Oct 05 24,398
150 Exxon Mobil Corp. ...................... 55 Oct 05 16,800
150 Exxon Mobil Corp. ...................... 55 Jan 06 15,299
100 Martin Marietta Materials, Inc. ........ 65 Jan 06 7,949
100 Valero Energy Corp. .................... 90 Oct 05 8,825
100 Valero Energy Corp. .................... 85 Dec 05 5,199
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800 78,470
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$ (622,702)
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This report, including the financial statements herein, is transmitted to the
stockholders of Petroleum & Resources Corporation for their information. It is
not a prospectus, circular or representation intended for use in the purchase or
sale of shares of the Corporation or of any securities mentioned in the report.
The rates of return will vary and the principal value of an investment will
fluctuate. Shares, if sold, may be worth more or less than their original cost.
Past performance is not indicative of future investment results.
12
(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.
For federal income tax purposes, the identified cost of
securities at September 30, 2005 was $340,869,391 and net
unrealized appreciation aggregated $468,348,021, of which
the related gross unrealized appreciation and depreciation
were $473,122,258 and $4,774,237 respectively.
8. 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 the securities
loaned that may occur during the term of the loan will be
for the account of the Corporation. At September 30, 2005,
the Corporation had securities on loan of $21,424,366 and
held collateral of $21,931,392, consisting of an investment
trust fund which may invest in money market instruments,
commercial paper, repurchase agreements, U.S. treasury
bills, and U.S. agency obligations.
Item 2. CONTROLS AND PROCEDURES.
Conclusions of principal officers concerning controls and
procedures:
(a) As of November 15, 2005, 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 15, 2005, 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 15, 2005
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 15, 2005
BY: /s/ Maureen A. Jones
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Maureen A. Jones
Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
Date: November 15, 2005