-----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, Sk8GPYNxeoRV7mwsUmwycir6OtMZpCYOyZK8lC1CZ/AbHyK4TMOcwpVRqyuhHNYQ w7iEtWMIR9L9qYgwjcaMqA== 0000930661-98-001193.txt : 19980518 0000930661-98-001193.hdr.sgml : 19980518 ACCESSION NUMBER: 0000930661-98-001193 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: WISER OIL CO CENTRAL INDEX KEY: 0000107874 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [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: 98624411 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 FORM 10-Q ================================================================================ 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 MARCH 31, 1998 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 March 31, 1998 ---------- ----------------------------- $3 par value 8,951,965 ================================================================================ 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 CONSOLIDATED BALANCE SHEETS (UNAUDITED)
MARCH 31, DECEMBER 31, (000's) except share data 1998 1997 ------------------ ----------------- Assets Current Assets: Cash and cash equivalents $ 5,013 $ 13,255 Accounts receivable 12,683 13,765 Inventories 985 1,007 Income taxes receivable 1,672 725 Prepaid expenses 1,134 438 ------------------- ------------------ Total Current Assets 21,487 29,190 ------------------- ------------------ Property, Plant and Equipment, at cost: Oil and gas properties (successful efforts method) 358,986 346,655 Other properties 5,560 5,399 ------------------- ------------------ 364,546 352,054 Accumulated depreciation, depletion and amortization (138,107) (131,346) ------------------- ------------------ Net Property, Plant and Equipment 226,439 220,708 Other Assets 4,531 4,658 ------------------- ------------------ $ 252,457 $ 254,556 =================== ================== Liabilities and Stockholders' Equity Current Liabilities: Accounts payable $ 17,442 $ 18,396 Accrued liabilities 1,601 2,985 ------------------- ------------------ Total current liabilities 19,043 21,381 ------------------- ------------------ Long Term Debt 128,809 124,304 Deferred Benefit Cost 1,280 1,169 Deferred Income Taxes 9,830 10,278 Stockholders' Equity: Common stock - $3 par value 20,000,000 shares authorized; 9,128,169 shares issued at March 31, 1998 and December 31, 1997, respectively; 8,951,965 shares outstanding at March 31, 1998 and December 31, 1997, respectively 27,385 27,385 Paid-in capital 3,223 3,223 Retained earnings 64,806 68,630 Accumulated other comprehensive income - deferred foreign exchange adjustment 810 915 Treasury stock; 176,204 shares, at cost (2,729) (2,729) ------------------- ------------------ Total stockholders' equity 93,495 97,424 ------------------- ------------------ $ 252,457 $ 254,556 =================== ==================
The notes to financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1997 are an integral part of these financial statements. 3 THE WISER OIL COMPANY CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (UNAUDITED)
FOR THE THREE MONTHS -------------------- ENDED MARCH 31, --------------- (000's except per share data) 1998 1997 -------------- --------------- Revenues: Oil and gas sales $ 17,074 $ 23,062 Dividends and interest 145 121 Marketable security sales gains - 1,813 Other 196 579 -------------- --------------- 17,415 25,575 -------------- --------------- Costs and Expenses: Production and operating 6,162 6,802 Purchased natural gas 388 513 Depreciation, depletion and amortization 6,841 5,767 Exploration 3,353 621 General and administrative 2,426 2,378 Interest expense 3,146 1,264 -------------- --------------- 22,316 17,345 -------------- --------------- Income (Loss) Before Income Taxes (4,901) 8,230 Income Tax Expense (Benefit) (1,345) 2,089 -------------- --------------- NET INCOME (LOSS) (3,556) 6,141 Retained Earnings, beginning of period 68,630 66,385 Dividends Paid (268) (268) -------------- --------------- Retained Earnings, end of period $ 64,806 $ 72,258 ============== =============== Weighted Average Outstanding Shares 8,952 8,949 ============== =============== Earnings (Loss) Per Share: Basic $ (0.40) $ 0.69 ============== =============== Diluted $ (0.40) $ 0.69 ============== =============== Cash Dividends Per Share $ 0.03 $ 0.03 ============== ===============
The notes to financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1997 are an integral part of these financial statements. 4 THE WISER OIL COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, ------------------------------------- (000's) 1998 1997 Cash Flows From Operating Activities: ---- ---- Net income (loss) $ (3,556) $ 6,141 Adjustments to reconcile net income to operating cash flows: Depreciation, depletion and amortization 6,841 5,767 Deferred income taxes (448) 1,350 Marketable securities & property sale gains (22) (2,283) Amortization of debt issuance costs 146 - Foreign currency translation (105) 11 Exploration expense 3,353 621 Other Changes - Accounts receivable 1,082 631 Inventories 22 (223) Prepaid expenses (696) (982) Other assets - (148) Accounts payable (954) (3,637) Income taxes receivable (947) 523 Accrued liabilities (1,384) (164) Deferred benefits cost 111 123 ------------- ------------- Operating Cash Flows 3,443 7,730 ------------- ------------- Cash Flows From Investing Activities: Capital and exploration expenditures (17,184) (13,101) Proceeds from sales of property, plant and equipment 1,281 1,558 Proceeds from marketable security sales - 1,929 ------------- ------------- Investing Cash Flows (15,903) (9,614) ------------- ------------- Cash Flows From Financing Activities: Long term debt issued 4,486 22,163 Payments on long term debt - (23,909) Common stock issued - 144 Dividends paid (268) (268) ------------- ------------- Financing Cash Flows 4,218 (1,870) ------------- ------------- Net Increase In Cash (8,242) (3,754) Cash and Cash Equivalents, beginning of year 13,255 5,870 ------------- ------------- Cash and Cash Equivalents, end of period $ 5,013 $ 2,116 ============= =============
The notes to financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1997 are an integral part of these financial statements. 5 THE WISER OIL COMPANY Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS COMPARISON OF QUARTERS ENDED MARCH 31, 1998 AND MARCH 31, 1997 Revenues for the first quarter of 1998 decreased $8.2 million or 32% from the first quarter of 1997, due primarily to lower oil and gas prices and the absence of marketable security sale gains in the first quarter of 1998. Oil sales for the first quarter of 1998 were $3.8 million lower than the first quarter of 1997 as the average price received for oil sales in the first quarter of 1998 was $14.08 per barrel, down $5.52 per barrel or 28% from the first quarter of 1997. Net oil production for the first quarter of 1998 was 683,000 barrels, down slightly from 687,000 barrels in the first quarter of 1997. Gas sales for the first quarter of 1998 were $1.6 million lower than the first quarter of 1997 as the average price received for gas sales was $1.96 per mcf, a decrease of $0.67 per mcf or 25% from the first quarter of 1997. Net gas production for the first quarter of 1998 was 3,428 MMCF, up 257 MMCF or 8% from the first quarter of 1997 due primarily to production from the Welder Ranch field in South Texas which was acquired in June 1997. During the first quarter of 1998, there were no adjustments to oil and gas sales from the Company's hedging activities compared to a reduction of $1.0 million in oil and gas sales in the first quarter of 1997. The Company liquidated its remaining portfolio of marketable securities during 1997. Accordingly, there were no sales of marketable securities in the first quarter of 1998 compared to a pretax gain of $1.8 million from the sale of marketable securities in the first quarter of 1997. Production and operating expense for the first quarter of 1998 decreased $0.6 million or 9% primarily as a result of the sale of properties in Michigan in the first quarter of 1997. On a BOE basis (excluding 165 MMCF and 168 MMCF of gas purchased for resale during the first quarter of 1998 and 1997, respectively), production and operating expense during the first quarter of 1998 decreased to $4.73 per BOE or 12 % from $5.35 per BOE during the first quarter of 1997. Depreciation, depletion and amortization, ("DD&A") for the first quarter of 1998, increased $1.1 million or 19% over the first quarter of 1997 due primarily to higher DD&A from the Maljamar field in New Mexico. Exploration expense for the first quarter of 1998 was $3.4 million, up $2.7 million from the first quarter of 1997 due primarily to higher dry hole and seismic expense in the U.S. General and administrative expense in the first quarter of 1998 was $2.4 million, up 2% from the first quarter of 1997. Interest expense during the first quarter of 1998 was $3.1 million or 149% higher than the first quarter of 1997 due to the increase in long term debt associated with the issuance of $125 million of Senior Subordinated Notes in May 1997. The effective income tax rate during the first quarter of 1998 was 27% compared to 25% in the first quarter of 1997. The Company realized a net loss of $3.6 million and net loss per share of $0.40 per share in the first quarter of 1998 compared to net income of $6.1 million and earnings per share of $0.69 during the first quarter of 1997. The Company's Canadian operations incurred a net loss of $0.7 million during the first quarter of 1998 compared to a net loss of $0.9 million during the first quarter of 1997. Operating cash flows during the first quarter of 1998, were $3.4 million, down $3.9 million from the first quarter of 1997 primarily as a result of decreased oil and gas sales. Capital and exploration expenditures during the first quarter of 1998 were $17.2 million, up $4.5 million from the first quarter of 1997 primarily attributable to development of the Portage field in Canada. 6 THE WISER OIL COMPANY Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS COMPARISON OF QUARTERS ENDED MARCH 31, 1998 AND MARCH 31, 1997 Continued On May 11, 1998, the Company borrowed $7.5 million under the Credit Agreement to refinance certain short term obligations and for general corporate purposes. Accordingly, $4.5 million of short term obligations were classified as long term debt at March 31, 1998. YEAR 2000 ISSUE The Company has assessed and continues to assess the impact of the "year 2000" issue on its reporting systems and operations. The "year 2000" issue exists because many computer systems and applications currently use two-digit date fields to designate a year. As the century date occurs, two-digit date systems will recognize the year 2000 as 1900 or not at all. This inability to recognize the year 2000 may cause systems to process critical financial and operational information incorrectly. The Company anticipates that all its significant computer systems and software will be year 2000 compliant during 1998. Management does not estimate future expenditures related to the year 2000 exposure to be material. NOTES TO FINANCIAL STATEMENTS NOTE 1. COMPREHENSIVE INCOME Effective January 1, 1998, the Company adopted Statement of Financial Accounting Standards No. 130 "Reporting Comprehensive Income" ("SFAS 130") which establishes standards for reporting and display of comprehensive income and its components in a full set of general purpose financial statements. Comprehensive income includes net income and other comprehensive income, which includes, but is not limited to, unrealized gains for marketable securities and future contracts, foreign currency translation adjustments and minimum pension liability adjustments. The impact of adopting SFAS No. 130 on the periods ended March 31, 1998 and March 31, 1997 is as follows: March 31, March 31, 1998 1997 --------- --------- Net Income (Loss) $ (3,556) $ 6,141 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments (105) 11 Unrealized gains on marketable securities - (866) --------- --------- Comprehensive income (loss) $ (3,661) $ 5,286 --------- --------- NOTE 2. SUMMARY OF GUARANTIES OF 9 1/2% SENIOR SUBORDINATED NOTES In May 1997, 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 one wholly owned subsidiary that is 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. 7
THE WISER OIL COMPANY SUBSIDIARY GUARANTORS ================================================================ (000's) THE WISER WISER T.W.O.C MARKETING COMBINED CANADA(1) INC. COMPANY TOTAL ---------------------------------------------------------------- Revenues For the Quarter Ended March 31, 1998 $ 3,780 $ 1 $559 $ 4,340 For the Quarter Ended March 31, 1997 4,081 1,860 676 6,617 INCOME (LOSS) BEFORE INCOME TAXES For the Quarter Ended March 31, 1998 $ (709) $ (3) $ 66 $ (646) For the Quarter Ended March 31, 1997 (907) 1,856 67 1,016 NET INCOME (LOSS) For the Quarter Ended March 31, 1998 $ (518) $ (2) $ 48 $ (472) For the Quarter Ended March 31, 1997 (840) 1,726 62 948 CURRENT ASSETS March 31, 1998 $ 4,717 $ 25 $565 $ 5,307 December 31, 1997 4,808 44 165 5,017 TOTAL ASSETS March 31, 1998 $57,327 $ 40 $565 $57,932 December 31, 1997 52,083 44 492 52,619 CURRENT LIABILITIES March 31, 1998 $11,603 $ - $377 $11,980 December 31, 1997 6,646 - 250 6,896 NONCURRENT LIABILITIES March 31, 1998 $ - $ - $ - $ - December 31, 1997 9,474 - - 9,474 STOCKHOLDER'S EQUITY (DEFICIT) March 31, 1998 $45,724 $ 40 $188 $45,952 December 31, 1997 35,963 44 242 36,249
(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, 1997. 8 THE WISER OIL COMPANY PART II - OTHER INFORMATION 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. 9 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: May 15, 1998 /s/ ANDREW J. SHOUP, JR. ---------------------------- Andrew J. Shoup, Jr. President and Chief Executive Officer Date: May 15, 1998 /s/ LAWRENCE J. FINN ---------------------------- Lawrence J. Finn Vice President, Finance and Chief Financial Officer 10 THE WISER OIL COMPANY INDEX TO EXHIBITS Exhibit Number Exhibit - ------ ------- 27 Financial Data Schedule 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM QUARTERLY REPORT ON 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 5,013 0 14,355 0 985 21,487 364,546 138,107 252,457 19,043 128,809 0 0 27,385 66,110 252,457 17,074 17,415 6,550 22,316 0 0 3,146 (4,901) (1,345) (3,556) 0 0 0 (3,556) (.40) (.40)
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