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, 2007
Date of reporting period: September 30, 2007
SCHEDULE OF INVESTMENTS
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September 30, 2007
(unaudited)
Shares Value (A)
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Stocks And Convertible Securities -- 94.0%
Energy -- 87.9%
Integrated -- 36.9%
Chevron Corp. 715,000 $ 66,909,700
ConocoPhillips 556,891 48,878,323
Exxon Mobil Corp. 1,245,000 115,237,200
Hess Corp. (B) 195,000 12,973,350
Marathon Oil Co. 240,000 13,684,800
Murphy Oil Corp. 216,500 15,131,185
Royal Dutch Shell plc ADR 265,000 21,777,700
Suncor Energy 90,000 8,532,900
Total S.A. ADR 390,000 31,601,700
Valero Energy Corp. 425,000 28,551,500
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363,278,358
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Exploration & Production -- 14.4%
Apache Corp. 158,200 14,247,492
Devon Energy Corp. 330,000 27,456,000
EOG Resources, Inc. (B) 230,000 16,635,900
Forest Oil Corp (C) 37,000 1,592,480
Newfield Exploration Co. (C) 175,000 8,428,000
Noble Energy, Inc. 340,000 23,813,600
Occidental Petroleum Corp. 400,000 25,632,000
XTO Energy Inc. 390,000 24,117,600
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141,923,072
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Services -- 23.4%
Baker Hughes, Inc. 205,000 18,525,850
BJ Services Co. 240,000 6,372,000
Bronco Drilling Co., Inc. (B) (C) 240,000 3,552,000
ENSCO International, Inc. 209,150 11,733,315
GlobalSantaFe Corp. 290,000 22,045,800
Grant Prideco Inc. (C) 308,000 16,792,160
Hercules Offshore, Inc. (B) (C) 542,320 14,159,975
Nabors Industries Ltd. (C) 520,000 16,000,400
Noble Corp. 600,000 29,430,000
Schlumberger Ltd. (B) 560,000 58,800,000
Weatherford International,
Ltd. (C) 493,560 33,157,361
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230,568,861
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Shares Value (A)
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Utilities -- 13.2%
AGL Resources Inc. 170,000 $ 6,735,400
Duke Energy Corp. 217,624 4,067,392
Energen Corp. 400,000 22,848,000
Equitable Resources Inc. 450,000 23,341,500
MDU Resources Group, Inc. 375,000 10,440,000
National Fuel Gas Co. (B) 200,000 9,362,000
New Jersey Resources Corp. 200,000 9,918,000
Northeast Utilities 100,000 2,857,000
Questar Corp. 320,000 16,809,600
SEMCO Energy, Inc. (C) 670,300 5,288,667
Spectra Energy Corp. 108,812 2,663,718
Williams Companies, Inc. 450,000 15,327,000
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129,658,277
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Basic Industries -- 6.1%
Basic Materials & Other -- 6.1%
Air Products and Chemicals, Inc. 115,000 11,242,400
Aqua America, Inc. (B) 281,000 6,373,080
du Pont (E.I.) de Nemours and Co. 157,500 7,805,700
General Electric Co. 370,000 15,318,000
Lubrizol Corp. 125,000 8,132,500
Rohm & Haas Co. 200,000 11,134,000
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60,005,680
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Total Stocks And Convertible Securities
(Cost $343,591,848) (D) $925,434,248
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9
SCHEDULE OF INVESTMENTS (continued)
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September 30, 2007
(unaudited)
Prin. Amt. Value (A)
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Short-Term Investments -- 6.1%
U.S. Government Obligations -- 1.5%
U.S. Treasury Bills,
4.29-4.65%, due 11/15/07 $15,000,000 $14,914,163
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Time Deposit -- 0.0%
Citibank, N.A.,
4.37%, due 10/1/07 294,132 294,132
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Commercial Paper -- 4.6%
American Express Credit Corp.,
4.70-5.21%, due 10/9/07-11/1/07 7,000,000 6,980,775
American General Finance, Inc.,
4.78-5.15%, due 10/4/07-
10/18/07 6,400,000 6,391,403
Chevron Funding Corp.,
4.95%, due 10/16/07 4,800,000 4,790,100
Coca-Cola Enterprises Inc.,
4.85%, due 10/22/07 3,600,000 3,589,815
General Electric Capital Corp.,
4.98%, due 10/4/07 2,000,000 1,999,170
General Electric Capital Services
Corp., 4.72%, due 10/23/07 5,000,000 4,985,578
LaSalle Bank Corp.,
5.00%, due 10/11/07 1,500,000 1,497,917
Prin. Amt. Value (A)
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Prudential Funding, LLC,
5.23%, due 10/2/07 $ 5,500,000 $ 5,499,201
Toyota Motor Credit Corp.,
5.14-5.21%, due 10/9/07-
10/11/07 7,000,000 6,990,599
United Parcel Service of
America, Inc.,
4.40%, due 10/30/07 2,300,000 2,291,848
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45,016,406
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Total Short-Term Investments
(Cost $60,224,701) 60,224,701
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Total Securities Lending Collateral -- 6.3%
(Cost $62,045,317)
Brown Brothers Investment
Trust, 5.24%, due 10/1/07 62,045,317
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Total Investments -- 106.4%
(Cost $465,861,866) 1,047,704,266
Cash, receivables, prepaid
expenses and other assets, less
liabilities -- (6.4)% (63,476,698)
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Net Assets -- 100% $ 984,227,568
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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 of the shares of this company are on loan. See note 8 to financial
statements.
(C) Presently non-dividend paying.
(D) The aggregate market value of stocks held in escrow at September 30, 2007
covering open call option contracts written was $1,925,180. In addition,
the aggregate market value of securities segregated by the Corporation's
custodian required to collateralize open put option contracts written was
$3,895,000.
10
PORTFOLIO SUMMARY
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September 30, 2007
(unaudited)
TEN LARGEST PORTFOLIO HOLDINGS
Market Value % of Net Assets
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Exxon Mobil Corp. $115,237,200 11.7%
Chevron Corp. 66,909,700 6.8
Schlumberger Ltd. 58,800,000 6.0
ConocoPhillips 48,878,323 5.0
Weatherford International, Ltd. 33,157,361 3.3
Total S.A. ADR 31,601,700 3.2
Noble Corp. 29,430,000 3.0
Valero Energy Corp. 28,551,500 2.9
Devon Energy Corp. 27,456,000 2.8
Occidental Petroleum Corp. 25,632,000 2.6
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Total $465,653,784 47.3%
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SECTOR WEIGHTINGS
[CHART]
Integrated 36.9%
Exploration & Production 14.4%
Services 23.4%
Utilities 13.2%
Basic Materials & Other 6.1%
Short-Term Investments 6.1%
11
SCHEDULE OF OUTSTANDING OPTION CONTRACTS
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September 30, 2007
(unaudited)
Contracts Contract
(100 shares Strike Expiration Appreciation/
each) Security Price Date (Depreciation)
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COVERED CALLS
240 Marathon Oil Co....... $62.50 Oct 07 $ 5,640
100 Rohm & Haas Co........ 55 Oct 07 (4,037)
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340 1,603
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COLLATERALIZED PUTS
150 GlobalSantaFe Corp.... 60 Oct 07 12,300
100 Lubrizol Corp......... 55 Dec 07 4,700
100 Lubrizol Corp......... 60 Dec 07 (5,800)
180 Noble Corp............ 40 Dec 07 1,529
150 Total S.A. ADR........ 75 Nov 07 (4,200)
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680 8,529
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$10,132
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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 Corporation is an
internally-managed fund emphasizing petroleum and other
natural resource investments. The investment objectives of
the Corporation are preservation of capital, the attainment
of reasonable income from investments, and an opportunity
for capital appreciation.
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, 2007 was $465,832,043 and net
unrealized appreciation aggregated $581,872,223, of which
the related gross unrealized appreciation and depreciation
were $583,698,982 and $1,826,759, 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 securities
loaned that may occur during the term of the loan will be
for the account of the Corporation. At September 30, 2007,
the Corporation had securities on loan of $60,681,454 and
held collateral of $62,045,317, 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 October 17, 2007, 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
October 17, 2007, 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
Corporation's internal control over financial reporting (as
defined in Rule 30 a-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 have materially
affected, or are 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 Rule 30 a-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: October 22, 2007
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: October 22, 2007
BY: /s/ Maureen A. Jones
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Maureen A. Jones
Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer)
Date: October 22, 2007