-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WCQ/YJQflgYghRafuucOU0KAVH1E196rhiJhpeTsSZLf+xK+dZlGN6UkaV/GYIKi U2KJMSxMslwEsqnDxpBCOQ== /in/edgar/work/0000930661-00-002817/0000930661-00-002817.txt : 20001114 0000930661-00-002817.hdr.sgml : 20001114 ACCESSION NUMBER: 0000930661-00-002817 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WISER OIL CO CENTRAL INDEX KEY: 0000107874 STANDARD INDUSTRIAL CLASSIFICATION: [1311 ] IRS NUMBER: 550522128 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-12640 FILM NUMBER: 758177 BUSINESS ADDRESS: STREET 1: 8115 PRESTON RD STE 400 CITY: DALLAS STATE: TX ZIP: 75225 BUSINESS PHONE: 2142650080 MAIL ADDRESS: STREET 1: 8115 PRESTON ROAD STREET 2: SUITE 400 CITY: DALLAS STATE: TX ZIP: 75225 10-Q 1 0001.txt FORM 10-Q (QE 9-30-2000) ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter ended September 30, 2000 Commission file number 0-5426 THE WISER OIL COMPANY A DELAWARE CORPORATION I.R.S. Employer Identification No. 55-0522128 8115 Preston Road, Suite 400 Dallas, Texas 75225 Telephone (214) 265-0080 Former name, former address and former fiscal year, if changed since last report. NONE 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, and (2) has been subject to such filing requirements for the past 90 days. x --- --- Yes No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the period covered by this report. Class Outstanding at September 30, 2000 -------------- --------------------------------- $.01 par value 8,951,965 ================================================================================ The Wiser Oil Company THE WISER OIL COMPANY PART I FINANCIAL INFORMATION Item 1. Financial Statements The consolidated condensed financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. The financial statements reflect all adjustments which are, in the opinion of management, necessary to fairly present such information. Although the Company believes that the disclosures are adequate to make the information presented not misleading, certain information and footnote disclosures, including significant accounting policies, normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report on Form 10-K. 2 The Wiser Oil Company THE WISER OIL COMPANY CONSOLIDATED BALANCE SHEETS (Unaudited)
September 30, December 31, 2000 1999 ----------- ----------- (000's) except share data Assets Current Assets: Cash and cash equivalents..................................................... $ 31,320 $ 21,447 Restricted cash............................................................... 3,977 992 Accounts receivable........................................................... 14,205 9,565 Inventories................................................................... 328 335 Prepaid expenses.............................................................. 958 379 ----------- ----------- Total current assets...................................................... 50,788 32,718 ----------- ----------- Property, Plant and Equipment, at cost: Oil and gas properties (successful efforts method)............................ 288,060 274,760 Other properties.............................................................. 3,998 3,781 ----------- ----------- 292,058 278,541 Accumulated depreciation, depletion and amortization.......................... (131,503) (118,568) ----------- ----------- Net property, plant and equipment............................................. 160,555 159,973 Other Assets................................................................... 3,499 4,035 ----------- ----------- $ 214,842 $ 196,726 =========== =========== Liabilities and Stockholders' Equity Current Liabilities: Accounts payable.............................................................. $ 12,616 $ 11,694 Current portion of long-term debt............................................. 500 500 Dividends payable............................................................. 365 -- Accrued liabilities........................................................... 5,089 2,649 ----------- ----------- Total current liabilities................................................... 18,570 14,843 ----------- ----------- Long Term Debt................................................................. 124,581 124,526 Deferred Benefit Cost.......................................................... -- 216 Deferred Income Taxes.......................................................... -- -- Stockholders' Equity (Note 2): Series C convertible preferred stock - $10 par value; 1,000,000 shares authorized; shares issued and outstanding at September 30, 2000 - 600,000 at $25 liquidation value per share.............. 6,000 -- Common stock - $.01 par value at September 30, 2000 and $3 par value at December 31, 1999; shares authorized - 30,000,000 at September 30, 2000 and 20,000,000 at December 31, 1999; shares issued - 9,128,169; shares outstanding - 8,951,965.................... 91 27,385 Paid-in capital............................................................... 38,201 3,223 Retained earnings............................................................. 29,099 28,234 Foreign currency translation.................................................. 1,029 1,028 Treasury stock; 176,204 shares, at cost....................................... (2,729) (2,729) ----------- ----------- Total stockholders' equity.................................................. 71,691 57,141 ----------- ----------- $ 214,842 $ 196,726 =========== ===========
The notes to financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1999 are an integral part of these financial statements. 3 The Wiser Oil Company THE WISER OIL COMPANY CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
For the Three Months For the Nine Months ---------------------- --------------------- Ended September 30, Ended September 30, ---------------------- --------------------- 2000 1999 2000 1999 ------- ------- ------- -------- (000's except per share data) Revenues: Oil and gas sales.......................... $17,585 $12,099 $48,463 $ 34,668 Interest income............................ 535 269 1,231 434 Other...................................... 109 342 559 3,457 ------- ------- ------- -------- 18,229 12,710 50,253 38,559 ------- ------- ------- -------- Costs and Expenses: Production and operating................... 6,150 5,073 17,568 14,927 Purchased natural gas...................... - - - 336 Depreciation, depletion and amortization... 3,803 3,993 11,534 14,081 Property impairments....................... - - 680 - Exploration................................ 638 4,268 2,878 5,643 General and administrative................. 1,687 1,782 6,863 5,073 Interest expense........................... 3,156 3,158 9,500 10,162 ------- ------- ------- -------- 15,434 18,274 49,023 50,222 ------- ------- ------- -------- Income (Loss) Before Income Taxes............ 2,795 (5,564) 1,230 (11,663) Income Tax (Benefit)......................... - (173) - (859) ------- ------- ------- -------- Net Income (Loss)............................ 2,795 (5,391) 1,230 (10,804) Preferred Stock Dividends.................... (265) - (365) - ------- ------- ------- -------- Net Income (Loss) Available to Common Stock.. $ 2,530 $(5,391) $ 865 $(10,804) ======= ======= ======= ======== Weighted Average Outstanding Shares: Basic....................................... 8,952 8,952 8,952 8,952 ======= ======= ======= ======== Diluted..................................... 12,482 8,952 8,952 8,952 ======= ======= ======= ======== Earnings (Loss) Per Share: Basic $ 0.28 ($0.60) $ 0.10 ($1.21) ======= ======= ======= ======== Diluted $ 0.22 ($0.60) $ 0.10 ($1.21) ======= ======= ======= ========
The notes to financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1999 are an integral part of these financial statements. 4 The Wiser Oil Company THE WISER OIL COMPANY CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY For the Nine Months Ended September 30, 2000
Foreign Common Preferred Paid-in Retained Currency Treasury Total Stock Stock Capital Earnings Translation Stock --------- --------- --------- --------- --------- ------------ --------- (000's) December 31, 1999..................... $57,141 $ 27,385 $ -- $ 3,223 $28,234 $1,028 $(2,729) Net (loss) (242) -- -- -- (242) -- -- Other comprehensive income, net of tax....................... 3 -- -- -- -- 3 -- ------- Comprehensive (loss).................. (239) -- -- -- -- -- -- ------- -------- --------- -------- ------- ----------- -------- March 31, 2000........................ 56,902 27,385 -- 3,223 27,992 1,031 (2,729) Net (loss) (1,323) -- -- -- (1,323) -- -- Other comprehensive income, net of tax....................... 33 -- -- -- -- 33 -- ------- Comprehensive (loss).................. (1,290) Issuance of Series C preferred stock Stock - 600,000 shares, net of Issuance costs................... 13,675 -- 6,000 7,675 -- -- -- Issuance of warrants.................. 9 -- -- 9 -- -- -- Change in par value of common stock... -- (27,294) -- 27,294 -- -- -- Dividends - preferred stock........... (100) -- -- -- (100) -- -- ------- -------- --------- -------- ------- ----------- -------- June 30, 2000......................... 69,196 91 6,000 38,201 26,569 1,064 (2,729) Net income 2,795 -- -- -- 2,795 -- -- Other comprehensive income, net of tax....................... (35) -- -- -- -- (35) -- ------- Comprehensive income.................. 2,760 ------- Dividends - preferred stock........... (265) -- -- -- (265) -- -- ------- -------- --------- -------- ------- ----------- -------- September 30, 2000.................... $71,691 $ 91 $ 6,000 $ 38,201 $29,099 $ 1,029 $ (2,729) ======= ======== ========= ======== ======= =========== ========
The notes to financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1999 are an integral part of these financial statements. 5 The Wiser Oil Company THE WISER OIL COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the Nine Months ------------------- Ended September 30, ------------------- 2000 1999 -------- -------- (000's) Cash Flows From Operating Activities: Net Income (Loss)............................................. $ 1,230 $(10,804) Adjustments to reconcile net income to operating cash flows: Depreciation, depletion and amortization.................... 11,534 14,081 Deferred income taxes....................................... - (686) Property sale gains......................................... (11) (3,015) Foreign currency translation................................ 1 (86) Property impairments and abandonments....................... 2,201 3,072 Amortization of other assets................................ 507 438 Other Changes: Restricted cash........................................... (2,985) (3,973) Accounts receivable....................................... (4,640) (798) Inventories............................................... 7 42 Prepaid expenses.......................................... (579) (225) Other assets.............................................. 84 (196) Accounts payable.......................................... 922 (1,557) Accrued liabilities....................................... 2,440 2,769 Deferred benefits cost.................................... (216) (25) -------- -------- Operating Cash Flows................................... 10,495 (963) -------- -------- Cash Flows From Investing Activities: Capital expenditures.......................................... (14,317) (3,339) Proceeds from sales of property, plant and equipment.......... 11 41,000 -------- -------- Investing Cash Flows................................... (14,306) 37,661 -------- -------- Cash Flows From Financing Activities: Payments on long term debt.................................... - (20,500) Preferred stock issued, net of issuance costs................. 13,675 - Warrants for common stock issued.............................. 9 - -------- -------- Investing Cash Flows................................... 13,684 (20,500) -------- -------- Net Increase In Cash............................................. 9,873 16,198 Cash and Cash Equivalents, beginning of period................... 21,447 2,779 -------- -------- Cash and Cash Equivalents, end of period......................... $ 31,320 $ 18,977 ======== ========
The notes to financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1999 are an integral part of these financial statements. 6 The Wiser Oil Company THE WISER OIL COMPANY Notes to Financial Statements Note 1. Hedging Activities As of November 10, 2000 the Company's hedging arrangements were as follows:
Crude Oil: Daily Volume Price per Bbl ---------- ------------ ---------------------------- October 1, 2000 to December 31, 2000 3,300 Bbls $19.78 January 1, 2001 to June 30, 2001 1,750 Bbls $28.10 January 1, 2001 to June 30, 2001 1,000 Bbls $25.00 floor, $32.00 ceiling Natural Gas Daily Volume Price per MMBTU ----------- ------------ ---------------------------- January 1, 2001 to December 31, 2001 10,000 MMBTU $4.00 floor, $6.10 ceiling
During the first nine months of 2000, oil and gas sales were reduced $8.1 million from the Company's hedging activities. Based on September 30, 2000 NYMEX futures prices, the fair value of the Company's hedging arrangements at September 30, 2000 was a loss of $4.1 million. A 10% increase in both the oil price and the gas price would increase this loss by $2.1 million and a 10% decrease in both the oil price and the gas price would decrease this loss by $1.9 million. Note 3. Net Income per Common Share Basic net income per common share is computed based on the weighted average shares of common stock outstanding. Net income per share computations to reconcile basic and diluted net income consist of the following (in thousands, except per share data):
For the Three Months For the Nine Months Ended September 30, Ended September 30, -------------------- -------------------- 2000 1999 2000 1999 -------- -------- -------- -------- Net income (loss) available to common stock......... $ 2,530 $ (5,391) $ 865 $(10,804) Plus Income impact of assumed conversions: Dividends on preferred stock...................... 265 - 365 - -------- -------- -------- -------- Net income (loss) available to common plus assumed conversions............................... $ 2,795 $ (5,391) $ 1,230 $(10,804) ======== ======== ======== ======== Basic weighted average shares....................... 8,952 8,952 8,952 8,952 Effect of dilutive securities: Convertible preferred stock....................... 3,529 - - - Warrants.......................................... - - - - Stock options..................................... 1 - - - -------- -------- -------- -------- Diluted weighted average shares..................... 12,482 8,952 8,952 8,952 ======== ======== ======== ======== Net Income (Loss) per Share: Basic............................................. $ 0.28 $ (0.60) $ 0.10 $ (1.21) Diluted........................................... 0.22 (0.60) 0.10 (1.21)
The effect of the convertible preferred stock for the nine months ended September 30, 2000 was antidilutive. Note 4. Recent Accounting Pronouncements In June 1998, the Financial Accounting Standards Board issued SFAS 133 "Accounting for Derivative Instruments and Hedging Activities" which, as amended, is effective for all fiscal years beginning after June 15, 2000 (January 1, 2001 for the Company). SFAS No. 133 requires that derivatives be reported on the balance sheet at fair value and, if the derivative is not designated as a hedging instrument, changes in fair value must be recognized in earnings in the period of change. If the derivative is designated as a hedge and to the extent such hedge is determined to be effective, changes in fair value are either offset by the change in fair value of the hedged asset or liability (if applicable) or reported as a component of other comprehensive income in the period of change, and subsequently recognized in earnings when the offsetting hedged transaction occurs. The ineffective portion of cash flow hedges will be recognized in earnings under SFAS No. 133. The definition of derivatives has also been expanded to include contracts that require physical delivery of oil and gas if the contract allows for net cash settlement. The Company currently uses derivatives to hedge oil and gas price risk and gains or losses on such derivatives are recorded as adjustments to oil and gas sales. Accordingly, adoption of SFAS No. 133 should not have a significant impact on reported earnings, but could have a material impact on comprehensive income and the reported financial position of the Company. Note 5. Convertible Preferred Stock On December 13, 1999, the Board of Directors approved the sale of not less than 600,000 shares and not more than 1,000,000 shares of Series C Cumulative Convertible Preferred Stock ("Preferred Stock") through a private placement to Wiser Investment Company, LLC ("WIC") for $25 million. The sale of Preferred Stock was approved by the Company's shareholders' on May 16, 2000, and 600,000 shares were issued to WIC on May 26, 2000 for $15 million, or $25 per share. WIC has the option, until November 25, 2000, to purchase up to an additional 400,000 shares of Preferred Stock for $10.0 million, or $25 per share. The Preferred Stock is convertible at the option of the holder into shares of the Company's common stock at a conversion price of $4.25 per common share, subject to customary adjustments. The Preferred Stock pays dividends in cash or in shares of the Company's common stock, at the option of the Company, at an annual rate of 7%. The holders of the Preferred Stock have the same voting rights as the holders of the Company's common stock with each share of the Preferred Stock having one vote for each share of common stock into which it is convertible. The Company received $13.7 million in net proceeds from the sale of Preferred Stock to WIC. 7 The Wiser Oil Company THE WISER OIL COMPANY Notes to Financial Statements (continued) Any shares of Preferred Stock not previously converted will convert automatically to common stock on May 26, 2003, or whenever the market price of the Company's common stock exceeds $10.00 per share for a period of 60 consecutive trading days. In addition, WIC acquired warrants to purchase 445,030 shares of the Company's common stock at $4.25 per share. If WIC fully exercises its option to purchase an additional 400,000 shares of Preferred Stock, WIC would be issued warrants to purchase an additional 296,686 shares of the Company's common stock at $4.25 per share. The purchase price of the warrants is $0.02 per warrant. The warrants are not exercisable for two years and will expire after seven years. In connection with the sale of the Preferred Stock, the Board of Directors has been changed to include four of the existing directors and three new directors designated by WIC. The transaction also affected the employment agreements for all four of the officers of the Company. If an officer's employment with the Company is terminated by either the Company or the officer within one year after the transaction, the Company will be required to make a lump-sum termination payment, as defined in the employment agreement, to the terminated officer. The total amount of such termination payments for all of the Company's officers is estimated to be in the range of $2.9 million to $3.1 million. In the second quarter of 2000, three of the Company's four officers were terminated and the Company recognized $2.2 million of expense related to such terminations which is included in general and administrative expense in the Consolidated Statements of Income. In May 2000, the Company also adopted an amended and restated certificate of incorporation which increased the number of authorized shares of common stock from 20,000,000 to 30,000,000, and the number of authorized shares of preferred stock from 300,000 shares to 1,3000,000 shares. The par value of the common stock was also decreased from $3.00 per share to $.01 per share. Note 3. Summary of Guaranties of 9 1/2% Senior Subordinated Notes In May 1998, the Company issued $125 million aggregate principal amount of its 9 1/2% Senior Subordinated Notes due 2007 pursuant to an offering exempt from registration under the Securities Act of 1933. The notes are unsecured obligations of the Company, subordinated in right of payment to all existing and any future senior indebtedness of the Company. The notes rank pari passu with any future senior subordinated indebtedness and senior to any future junior subordinated indebtedness of the Company. The notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured, senior subordinated basis by certain wholly owned subsidiaries of the Company (the "Subsidiary Guarantors"). At the time of the initial issuance of the notes, Wiser Oil Delaware, Inc., The Wiser Marketing Company, Wiser Delaware LLC, T.W.O.C., Inc. and The Wiser Oil Company of Canada were the Subsidiary Guarantors (the "Initial Subsidiary Guarantors"). Except for two wholly owned 8 The Wiser Oil Company THE WISER OIL COMPANY Notes to Financial Statements (continued) subsidiaries that are inconsequential to the Company on a consolidated basis, the Initial Subsidiary Guarantors comprise all of the Company's direct and indirect subsidiaries. Sections 13 and 15(d) of the Securities Exchange Act of 1934 require presentation of the following unaudited summarized financial information of the Subsidiary Guarantors. The Company has not presented separate financial statements and other disclosures concerning each Subsidiary Guarantor because such information is not material to investors. There are no significant contractual restrictions on distributions from each of the Subsidiary Guarantors to the Company. Wiser T.W.O.C. Consolid Consolidated (000's) Canada(1) Inc. Entries Total --------- ------- -------- ------------ Revenues - -------- For the quarter ended September 30, 2000...... $ 6,678 $ - $ - $ 6,678 For the quarter ended September 30, 1999...... 3,792 - - 3,792 For the nine months ended September 30,1999... 18,333 - - 18,333 For the nine months ended September 30, 1999.. 10,565 - 523 11,088 Income (Loss) Before Income Taxes - --------------------------------- For the quarter ended September 30, 2000...... 3,670 - - 3,670 For the quarter ended September 30, 1999...... (235) - - (235) For the nine months ended September 30, 2000.. 6,958 - - 6,958 For the nine months ended September 30, 1999.. (400) - 68 (332) Net Income (Loss) - ----------------- For the quarter ended September 30, 2000...... 3,670 - - 3,670 For the quarter ended September 30, 1999...... (235) - - (235) For the nine months ended September 30, 2000.. 6,958 - - 6,958 For the nine months ended September 30, 1999.. (400) - 68 (332) Cash Flows from Operating Activities - ------------------------------------ For the quarter ended September 30, 2000...... 4,823 - - 4,823 For the quarter ended September 30, 1999...... 1,440 - - 1,440 For the nine months ended September 30, 2000.. 11,077 - - 11,077 For the nine months ended September 30, 1999.. 3,548 - 68 3,616 Cash Flows from Investing Activities - ------------------------------------ For the quarter ended September 30, 2000...... (2,470) - - (2,470) For the quarter ended September 30, 1999...... (210) - - (210) For the nine months ended September 30, 2000.. (8,370) - - (8,370) For the nine months ended September 30, 1999.. (2,248) - - (2,248)
9 The Wiser Oil Company THE WISER OIL COMPANY Notes to Financial Statements (continued)
THE WISER OIL COMPANY Subsidiary Guarantors ----------------------------------------------------- The Wiser Wiser T.W.O.C. Marketing Combined (000's) Canada(1) Inc. Company Total --------- ------- --------- -------- Cash Flows from Financing Activities - ------------------------------------ For the quarter ended September 30, 2000............ $ - $ - $ - $ - For the quarter ended September 30, 1999............ - - - - For the nine months ended September 30, 2000........ - - - - For the nine months ended September 30, 1999........ - - - - Net Increase (Decrease) in Cash - ------------------------------- For the quarter ended September 30, 2000............ 2,353 - - 2,353 For the quarter ended September 30, 1999............ 1,230 - - 1,230 For the nine months ended September 30, 2000........ 2,707 - - 2,707 For the nine months ended September 30, 1999........ 1,300 - 68 1,368 Current Assets - -------------- September 30, 2000.................................. 9,366 2 - 9,368 December 31, 1999................................... 5,357 3 - 5,360 Total Assets - ------------ September 30, 2000.................................. 54,294 2 - 54,296 December 31, 1999................................... 47,953 3 - 47,956 Current Liabilities - ------------------- September 30, 2000.................................. 6,563 - - 6,563 December 31, 1999................................... 5,116 - - 5,116 Noncurrent Liabilities - ---------------------- September 30,2000................................... 17,471 - - 17,471 December 31, 1999................................... 17,851 - - 17,851 Stockholder's Equity - -------------------- September 30,2000................................... 30,260 2 - 30,262 December 31, 1999................................... 24,986 3 - 24,989
(1) Includes the accounts of Wiser Oil Delaware, Inc., Wiser Delaware LLC and The Wiser Oil Company of Canada. See other notes to financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1999. 10 The Wiser Oil Company THE WISER OIL COMPANY Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Comparison of Quarters Ended September 30, 2000 and September 30, 1999 Revenues for the third quarter of 2000 increased $5.5 million or 43% from the third quarter of 1999, due to significantly higher oil and gas prices received in the third quarter of 2000. Oil sales for the third quarter of 2000 were $1.4 million higher than the third quarter of 1999 as the average price received for oil sales in the third quarter of 2000 was $21.42 per barrel, up $4.35 per barrel or 25% from the third quarter of 1999. Net oil production for the first quarter of 2000 was 370,000 barrels, down 9,000 barrels or 2% from 379,000 barrels in the third quarter of 1999. Gas sales for the third quarter of 2000 were $3.8 million higher than the third quarter of 1999 due to higher realized prices. The average price received for gas sales in the third quarter of 2000 was $3.66 per Mcf, an increase of $1.62 per Mcf or 79% from the third quarter of 1999. Net gas production for the third quarter of 2000 was 2,333 MMCF, up slightly from 2,320 MMCF in the third quarter of 1999. The Company's hedging activities reduced oil and gas sales by $4.1 million in the third quarter of 2000 and by $1.0 million in the third quarter of 1999. Production and operating expense for the third quarter of 2000 increased $1.1 million or 21% from the third quarter of 1999 and, on a BOE basis, production and operating expense in the third quarter of 2000 increased to $7.66 per BOE or 24% from $6.17 per BOE during the third quarter of 1999. The increase in production and operating expense was attributable primarily to the Maljamar and Wellman fields which were $0.6 million higher in the third quarter of 2000 than the third quarter of 1999. The higher production and operating expense at the Maljamar and Wellman fields in the third quarter of 2000 was attributable to well repairs and maintenance at both fields and higher CO2 injection at Wellman. In addition, production taxes in the third quarter of 2000 were $0.4 million higher than the third quarter of 1999 due to higher realized oil and gas prices. Depreciation, depletion and amortization, ("DD&A") for the third quarter of 2000, decreased $0.2 million or 5% from the third quarter of 1999 due primarily to lower oil production. Exploration expense for the third quarter of 2000 was $0.6 million, down $3.7 million from the third quarter of 1999 due to reduced exploration activities in the third quarter of 2000. Exploration expense in the third quarter of 1999 included $3.8 million of unproved lease expense and dry hole expense related to the Bison Ridge, West Vidauri and Wild River prospects. General and administrative expense in the third quarter of 2000 was $1.7 million, down slightly from $1.8 million in the third quarter of 1999. Interest expense during the third quarter of 2000 was even with the third quarter of 1999. 11 The Wiser Oil Company THE WISER OIL COMPANY Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Comparison of Quarters Ended September 30, 2000 and September 30, 1999 (continued) At December 31, 1999, the Company had a net operating loss carryforward for Federal income tax purposes of $13.9 million. The tax benefits of carryforwards are recorded as an asset to the extent that management assesses the future utilization of such carryforwards as "more likely than not". When the future utilization of some portion of the carryforwards is determined not to be "more likely than not", a valuation allowance is provided to reduce the recorded tax benefits from such assets. At September 30, 2000 and 1999, a valuation allowance was provided to reduce deferred tax assets to an amount equal to deferred tax liabilities. Accordingly, no income tax expense was recognized in the third quarter of 2000 and income tax benefits were recognized in the third quarter of 1999 only to the extent of the Company's existing deferred income tax liability. The Company realized net income available for common stock of $2.5 million and net earnings per share of $0.28 in the third quarter of 2000 compared to a net loss available for common stock of $5.4 million and net loss per share of $0.60 during the third quarter of 1999. Comparison of Nine Months Ended September 30, 2000 and September 30, 1999 Revenues for the first nine months of 2000 increased $11.7 million or 30% from the first nine months of 1999, due to significantly higher oil and gas prices received in the first nine months of 2000 which was offset by lower oil and gas production. Oil sales for the first nine months of 2000 were $6.4 million higher than the first nine months of 1999 as the average price received for oil sales in the first nine months of 2000 was $22.26 per barrel, up $8.17 per barrel or 57% from the first nine months of 1999. Net oil production for the first nine months of 2000 was 1,117,000 barrels, down 193,000 barrels or 15% from 1,310,000 barrels in the first nine months of 1999. The property sales in the second quarter of 1999 accounted for approximately 55,000 barrels of the decrease and oil production from the Maljamar and Wellman fields in the first nine months of 2000 was approximately 83,000 barrels lower than the first nine months of 1999. Canadian oil production in the first nine months of 2000 was approximately 64,000 barrels lower than the first nine months of 1999 due primarily to declining oil production from the Provost and Evi fields. Gas sales for the first nine months of 2000 were $6.1 million higher than the first nine months of 1999 due to higher realized prices which was partially offset by lower gas production. The average price received for gas sales in the first nine months of 2000 was $2.89 per Mcf, an increase of $1.17 per Mcf or 68% from the first nine months of 1999. Net gas production for the first nine months of 2000 was 6,937 MMCF, down 1,196 MMCF or 15% from the first nine months of 1999. The property sales in the second quarter of 1999 accounted for approximately 1,190 MMCF of the decrease in gas production. NGL sales for the first nine months of 2000 were $1.3 million higher than the first nine months of 1999 as the average price received for NGL 12 The Wiser Oil Company THE WISER OIL COMPANY Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Comparison of Nine Months Ended September 30, 2000 and September 30, 1999 (continued) sales in the first nine months of 2000 was $21.79 per barrel, an increase of $10.30 per barrel or 90% from the first nine months of 1999. The Company's hedging activities reduced oil and gas sales by $8.1 million in the third quarter of 2000 and by $1.0 million in the third quarter of 1999. Interest income of $1.2 million in the first nine months of 2000 was $0.8 million higher than the first nine months of 1999 due to higher average cash balances in the first nine months of 2000. Other revenues in the first nine months of 1999 included a gain of $2.9 million from property sales. Production and operating expense for the first nine months of 2000 increased $2.6 million or 18% from the first nine months of 1999 and, on a BOE basis (excluding 148 MMCF of gas purchased for resale during the first nine months of 1999), increased to $7.21 per BOE or 37% from $5.27 per BOE. The increase in production and operating expense was attributable primarily to the Maljamar and Wellman fields which were $3.6 million higher in the first nine months of 2000 than the first nine months of 1999 due to well repairs and maintenance at both fields and higher CO2 injection at Wellman. In addition, production taxes in the first nine months of 2000 were $0.3 million higher than the first nine months of 1999 due to higher realized oil and gas prices. Production and operating expense in the first nine months of 1999 included approximately $1.2 million associated with the properties sold in the second quarter of 1999. Depreciation, depletion and amortization, ("DD&A") for the first nine months of 2000, decreased $2.5 million or 18% from the first nine months of 1999 due primarily to lower oil and gas production and the property sales in the second quarter of 1999. The Company recognized impairment expense of $0.7 million in the first nine months of 2000 for the Elm field in Canada which was sold in October 2000 at a sales price which was below its carrying value. There was no impairment expense in the first nine months of 1999. Exploration expense for the first nine months of 2000 was $2.9 million, down $2.8 million from the first nine months of 1999 due to decreased exploration activities in the first nine months of 2000. Exploration expense in the first nine months of 1999 included $3.8 million of unproved lease expense and dry hole expense related to the Bison Ridge, West Vidauri and Wild River prospects. General and administrative expense in the first nine months of 2000 was $6.9 million, up $1.8 million from the first nine months of 1999 due primarily to $2.2 million of officer termination expense and offset by reduced payroll expense. Interest expense during the first nine months of 2000 was $9.5 million, down $0.7 million or 7% from the first nine months of 1999 due to reduced borrowings in the first nine months of 2000 compared the first nine months of 1999 and fees in the first nine months of 1999 associated with refinancing the Credit Agreement with NationsBank of Texas, N.A. ("Credit Agreement") with the Restated Credit Agreement with Bank One, Texas, N.A. 13 The Wiser Oil Company THE WISER OIL COMPANY Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Comparison of Nine Months Ended September 30, 2000 and September 30, 1999 (continued) At December 31, 1999, the Company had a net operating loss carryforward for Federal income tax purposes of $13.9 million. The tax benefits of carryforwards are recorded as an asset to the extent that management assesses the future utilization of such carryforwards as "more likely than not". When the future utilization of some portion of the carryforwards is determined not to be "more likely than not", a valuation allowance is provided to reduce the recorded tax benefits from such assets. At September 30, 2000 and 1999, a valuation allowance was provided to reduce deferred tax assets to an amount equal to deferred tax liabilities. Accordingly, no income tax expense was recognized in the first nine months of 2000 and income tax benefits were recognized in the first nine months of 1999 only to the extent of the Company's existing deferred income tax liability. The Company realized net income available for common stock of $0.9 million and net earnings per share of $0.10 in the first nine months of 2000 compared to a net loss available for common stock of $10.8 million and net loss per share of $1.21 during the first nine months of 1999. Operating cash flows during the first nine months of 2000 were $10.5 million, up $11.5 million from the first nine months of 1999 primarily as a result of increased oil and gas sales which were offset in part by higher production and operating expense and higher general and administrative expense. Capital expenditures during the first nine months of 1999 were $14.3 million, up $11.0 million from the first nine months of 1999. The Company's capital and exploration budget for 2000 is approximately $23 million. The Company received $40.9 million in net sales proceeds from the sale of oil and gas properties during the first nine months of 1999 compared to $0.01 million in proceeds received during the first nine months of 2000. On a cash basis, the Company paid $6.0 million in interest expense in the first nine months of 2000 and no income taxes were paid in the first nine months of 2000. Item 3. Quantitative and Qualitative Disclosures About Market Risk See Note 1 "Hedging Activities". 14 The Wiser Oil Company THE WISER OIL COMPANY PART II - OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (a) The annual meeting of stockholders of The Wiser Oil Company was held in Dallas, Texas, at 3:00 p.m., local time, on August 14, 2000. (b) Proxies were solicited by the Board of Directors of The Wiser Oil Company pursuant to Regulation 14A under the Securities Exchange Act of 1934. There was no solicitation in opposition to the Board of Directors' nominees as listed in the proxy statement and all of such nominees were duly elected. (c) Out of a total of 12,481,376 votes, representing one vote per share in respect to the 8,951,965 shares of Common Stock issued and outstanding and 3,529,411 votes with respect to the 600,000 shares of Convertible Preferred Stock issued and outstanding as of the June 26, 2000 record date, 11,753,202 votes were present in person or by proxy, representing approximately 94 percent of the total number of votes. The only matter voted on by the stockholders, as fully described in the proxy statement for the annual meeting, was the election of C. Frayer Kimball, III and Scott W. Smith to serve three-year terms on the Board of Directors of The Wiser Oil Company. The results of voting were as follows:
Nominee Number of Votes Number of Votes for Re-election FOR Election WITHHOLDING AUTHORITY as Director as Director for Election as Director ---------------------- ------------------- -------------------------------- C. Frayer Kimball, III 11,385,365 367,837 Scott W. Smith 11,423,103 330,099
The following individuals continued their respective terms of service as Directors of The Wiser Oil Company following the meeting: George K. Hickox, Jr.- Chairman Lorne H. Larson Jon L. Mosle, Jr. A. W. Schenck, III Richard R. Schreiber 15 The Wiser Oil Company Item 6. Exhibits and Reports on Form 8-K (a) Exhibits -------- The information required by this Item 6 (a) is set forth in the Index to Exhibits accompanying this quarterly report and is incorporated herein by reference. (b) Reports on Form 8-K ------------------- None 16 The Wiser Oil Company 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. THE WISER OIL COMPANY -------------------------------------- (Registrant) Date: November 13, 2000 /s/ George K. Hickox, Jr. -------------------------------------- George K. Hickox, Jr. Chairman of the Board and Chief Executive Officer Date: November 13, 2000 /s/ Richard S. Davis -------------------------------------- Richard S. Davis Vice President of Finance 17 The Wiser Oil Company THE WISER OIL COMPANY Index to Exhibits Exhibit Number Exhibit - ------ ------- 27* Financial Data Schedule * Filed herewith. 18 EX-27.1 2 0002.txt ARTICLE 5 FDS
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS 9-MOS DEC-31-2000 DEC-31-2000 JUL-01-2000 JAN-01-2000 SEP-30-2000 SEP-30-2000 35,297 35,297 0 0 14,205 14,205 0 0 328 328 50,788 50,788 292,058 292,058 131,503 131,503 214,842 214,842 18,570 18,570 124,581 124,581 0 0 6,000 6,000 91 91 65,600 65,600 214,842 214,842 17,585 48,463 18,229 50,253 6,150 17,568 15,434 49,023 0 0 0 0 3,156 9,500 2,530 865 0 0 2,530 865 0 0 0 0 0 0 2,530 865 .28 .10 .22 .10
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