-----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, T0LrnLn77Q+S73kU1h7/vCA7d15UBUz0a/O2NN2XtzMnVV/MsDFmSxhtjhNrcncP Vj0OUCMndx7GfZwp/STplg== 0000930661-99-002613.txt : 19991115 0000930661-99-002613.hdr.sgml : 19991115 ACCESSION NUMBER: 0000930661-99-002613 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991112 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: 99749679 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 the Quarter ended September 30, 1999 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, 1999 ------------ --------------------------------- $3 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, 1999 1998 ------------ ----------- (000's) except share data Assets Current Assets: Cash and cash equivalents ($3,973 restricted at Sept. 30, 1999).. $ 22,950 $ 2,779 Accounts receivable.............................................. 9,728 9,102 Inventories...................................................... 332 669 Income taxes receivable.......................................... 1,442 1,270 Prepaid expenses................................................. 1,260 1,035 --------- --------- Total current assets.......................................... 35,712 14,855 --------- --------- Property, Plant and Equipment, at cost: Oil and gas properties (successful efforts method)............... 273,179 367,974 Other properties................................................. 3,740 5,523 --------- --------- 276,919 373,497 Accumulated depreciation, depletion and amortization............. (115,128) (160,202) --------- --------- Net property, plant and equipment................................ 161,791 213,295 Other Assets...................................................... 3,474 3,660 --------- --------- $ 200,977 $ 231,810 ========= ========= Liabilities and Stockholders' Equity Current Liabilities: Accounts payable................................................. $ 8,916 $ 10,473 Current portion of long-term debt................................ - 21,000 Accrued liabilities.............................................. 5,499 2,730 --------- --------- Total current liabilities...................................... 14,415 34,203 --------- --------- Long Term Debt.................................................... 125,008 124,452 Deferred Benefit Cost............................................. 353 378 Deferred Income Taxes............................................. - 686 Stockholders' Equity: Common stock - $3 par value; 20,000,000 shares authorized; shares issued - 9,128,169; shares outstanding - 8,951,965....... 27,385 27,385 Paid-in capital.................................................. 3,223 3,223 Retained earnings................................................ 32,286 43,090 Foreign currency translation..................................... 1,036 1,122 Treasury stock; 176,204 shares, at cost.......................... (2,729) (2,729) --------- --------- Total stockholders' equity..................................... 61,201 72,091 --------- --------- $ 200,977 $ 231,810 ========= =========
The notes to financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1998 are an integral part of these financial statements. 3 The Wiser Oil Company THE WISER OIL COMPANY CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (Unaudited)
For the Three Months For the Nine Months -------------------- -------------------- Ended September 30, Ended September 30, -------------------- -------------------- 1999 1998 1999 1998 -------- --------- -------- -------- (000's except per share data) Revenues: Oil and gas sales......................... $12,099 $ 13,338 $ 34,668 $ 45,883 Dividends and interest.................... 269 32 434 244 Other..................................... 342 463 3,457 1,140 ------- -------- -------- -------- 12,710 13,833 38,559 47,267 ------- -------- -------- -------- Costs and Expenses: Production and operating.................. 5,073 7,581 14,927 20,016 Purchased natural gas..................... - 334 336 1,072 Depreciation, depletion and amortization.. 3,993 6,500 14,081 20,162 Exploration............................... 4,268 3,526 5,643 10,533 General and administrative................ 1,782 2,591 5,073 7,570 Interest expense.......................... 3,158 3,387 10,162 9,760 ------- -------- -------- -------- 18,274 23,919 50,222 69,113 ------- -------- -------- -------- Earnings (Loss) Before Income Taxes......... (5,564) (10,086) (11,663) (21,846) Income Tax Expense (Benefit)................ (173) (1,933) (859) (5,462) ------- -------- -------- -------- NET INCOME (LOSS)........................... $(5,391) $ (8,183) $(10,804) $(16,384) ======= ======== ======== ======== Weighted Average Outstanding Shares......... 8,952 8,952 8,952 8,952 ======= ======== ======== ======== Earnings (Loss) Per Share: Basic..................................... ($0.60) ($0.91) ($1.21) ($1.83) ======= ======== ======== ======== Diluted................................... ($0.60) ($0.91) ($1.21) ($1.83) ======= ======== ======== ======== Cash Dividends Per Share.................... $ - $ 0.03 $ - $ 0.09 ======= ======== ======== ========
The notes to financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1998 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, 1999
Foreign Common Paid-in Retained Currency Treasury Total Stock Capital Earnings Translation Stock ----- ----- ------- -------- ----------- ----- (000's) December 31, 1998............. $72,091 $ 27,385 $ 3,223 $ 43,090 $ 1,122 $ (2,729) Net income (loss) (4,358) -- -- (4,358) -- -- Other comprehensive income (loss), net of tax....... (41) -- -- -- (41) -- ------- Comprehensive income (loss)... (4,399) Dividends paid................ -- -- -- -- -- -- ------- -------- ------- -------- ----------- -------- March 31, 1999................ $67,692 $ 27,385 $ 3,223 $ 38,732 $ 1,081 $ (2,729) Net income (loss) (1,055) -- -- (1,055) -- -- Other comprehensive income (loss), net of tax....... (51) -- -- -- (51) -- ------- Comprehensive income (loss)... (1,106) -- Dividends paid................ -- -- -- -- -- -- ------- -------- ------- -------- ----------- -------- June 30, 1999................. $66,586 $ 27,385 $ 3,223 $ 37,677 $ 1,030 $ (2,729) Net income (loss) (5,391) -- -- (5,391) -- -- Other comprehensive income (loss), net of tax....... 6 -- -- -- 6 -- ------- Comprehensive income (loss)... (5,385) Dividends paid................ -- -- -- -- -- -- ------- -------- ------- -------- ----------- -------- September 30, 1999............ $61,201 $ 27,385 $ 3,223 $ 32,286 $ 1,036 $ (2,729) ======= ======== ======= ======== =========== ========
The notes to financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1998 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, ------------------- 1999 1998 -------- -------- (000's) Cash Flows From Operating Activities: Net Income (Loss)............................................. $(10,804) $(16,384) Adjustments to reconcile net income to operating cash flows: Depreciation, depletion and amortization.................... 14,081 20,162 Deferred income taxes....................................... (686) (4,095) Property sale gains......................................... (3,015) (571) Foreign currency translation................................ (86) 178 Exploration expense......................................... 5,643 10,533 Amortization of other assets................................ 438 418 Other Changes: Accounts receivable....................................... (626) 4,368 Inventories............................................... 42 79 Income taxes receivable................................... (172) (1,345) Prepaid expenses.......................................... (225) (1,000) Other assets.............................................. (196) 578 Accounts payable.......................................... (1,557) (8,094) Accrued liabilities....................................... 2,769 (1,226) Deferred benefits cost.................................... (25) (141) -------- -------- Operating Cash Flows................................... 5,581 3,460 -------- -------- Cash Flows From Investing Activities: Capital and exploration expenditures.......................... (5,910) (37,012) Proceeds from sales of property, plant and equipment.......... 41,000 2,963 -------- -------- Investing Cash Flows................................... 35,090 (34,049) -------- -------- Cash Flows From Financing Activities: Long term debt issued......................................... - 19,486 Payments on long term debt.................................... (20,500) - Dividends paid................................................ - (806) -------- -------- Investing Cash Flows................................... (20,500) 18,680 -------- -------- Net Increase (Decrease) In Cash.................................. 20,171 (11,909) Cash and Cash Equivalents, beginning of period................... 2,779 13,255 -------- -------- Cash and Cash Equivalents, end of period......................... $ 22,950 $ 1,346 ======== ========
The notes to financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1998 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 During 1999, the Company entered into various forward sale agreements to hedge a portion of the Company's oil and gas production. The Company's forward sale agreements at September 30, 1999 were as follows:
Period Daily Volume - Product Price (Floor / Ceiling) (a) ------ ---------------------- --------------------------- October 1999 4,200 Bbls - Crude Oil $16.50 / 20.00 per Bbl November 1999 4,300 Bbls - Crude Oil $16.50 / 20.00 per Bbl December 1999 4,200 Bbls - Crude Oil $16.50 / 20.00 per Bbl January 2000 1,000 Bbls - Crude Oil $18.50 / 26.60 per Bbl February 2000 1,000 Bbls - Crude Oil $18.50 / 26.60 per Bbl March 2000 1,000 Bbls - Crude Oil $18.50 / 26.60 per Bbl
(a) These are "collar" hedges whereby the Company will receive the actual market price if the actual market price is between the floor price and the ceiling price. If the actual market price is below or above the floor or ceiling prices, the price received by the Company will be limited to the floor price or ceiling price, respectively. Oil and gas sales were reduced by $1.0 million in the third quarter of 1999 and by $1.5 million in the first nine months of 1999 from the Company's hedging activities. At September 30, 1999, the Company's outstanding forward sale agreements had a fair value loss of $1.7 million. The aggregate effect of a hypothetical 10% change in oil price would result in a change of $0.9 million in the fair value of these instruments at September 30, 1999. 7 The Wiser Oil Company THE WISER OIL COMPANY Notes to Financial Statements (continued) Note 2. Long-Term Debt On May 10, 1999, the Company entered into a Restated Credit Agreement ("BankOne Revolver") with Bank One, Texas, N.A. The Company repaid in full the outstanding principal balance under the Credit Agreement with Bank of America (formerly NationsBank of Texas, N.A.) ("Credit Agreement") and the Credit Agreement was terminated. The BankOne Revolver provides the Company with up to a $25 million line of credit through April 30, 2001. The amounts available for borrowing are based on the Company's oil and gas reserves and the Company's Borrowing Base at September 30, 1999 was $8 million. Available loan and interest options are (i) Prime Rate Loans, at the bank's prime interest rate and (ii) Eurodollar Loans, at LIBOR plus 2.5%, 2.75% or 3% depending on the percentage of the Borrowing Base actually borrowed by the Company. The commitment fee on the unused Borrowing Base is 0.5%. The BankOne Revolver imposes certain restrictions on sales of assets, payment of dividends and incurrence of indebtedness and requires the Company to, among other things, maintain certain financial ratios and make monthly escrow deposits of $990,000 to fund the semi-annual interest payments on the 9 1/2% Senior Subordinated Notes. At September 30, 1999, cash and cash equivalents included $3,973,000 of escrow deposits which are restricted to fund the November 15, 1999 interest payment on the 9 1/2% Senior Subordinated Notes. 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 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. 8 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 Canada(1) Inc. Company Total ---------- -------- --------- -------- (000's) Revenues - -------- For the quarter ended September 30,1999...... $ 3,792 $ - $ - $ 3,792 For the quarter ended September 30, 1998..... 3,014 - 493 3,507 For the nine months ended September 30,1999.. 10,565 - 523 11,088 For the nine months ended September 30,1998.. 10,573 1 1,593 12,167 Income (Loss) Before Income Taxes - -------------------------------- For the quarter ended September 30,1999...... $ (235) $ - $ - $ (235) For the quarter ended September 30, 1998..... (1,530) (6) 27 (1,509) For the nine months ended September 30,1999.. (400) - 68 (332) For the nine months ended September 30,1998.. (3,016) (14) 183 (2,847) Net Income (Loss) - ----------------- For the quarter ended September 30,1999...... $ (235) $ - $ - $ (235) For the quarter ended September 30, 1998..... (1,071) (4) 19 (1,056) For the nine months ended September 30,1999.. (400) - 68 (332) For the nine months ended September 30,1998.. (2,111) (10) 128 (1,993) Current Assets - -------------- September 30,1999............................ $ 4,704 $ 3 $ - $ 4,707 December 31, 1998............................ 3,782 3 213 3,998 Total Assets - ------------ September 30,1999............................ $48,283 $ 3 $ - $48,286 December 31, 1998............................ 50,797 3 526 51,326 Current Liabilities - ------------------- September 30,1999............................ $ 3,805 $ - $ - $ 3,805 December 31, 1998............................ 4,806 - 361 5,167 Noncurrent Liabilities - ---------------------- September 30,1999............................ $18,676 $ - $ - $18,676 December 31, 1998............................ 17,846 - - 17,846 Stockholder's Equity - -------------------- September 30,1999............................ $25,802 $ 3 $ - $25,805 December 31, 1998............................ 28,145 3 165 28,313
(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, 1998. 9 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, 1999 and September 30, 1998 In April and May of 1999, the Company sold certain oil and gas properties for $41 million which represented approximately 19% of the Company's total proved oil and gas reserves at December 31, 1998. The Company recognized a gain of $3.0 million from the property sales in the first nine months of 1999. Revenues for the third quarter of 1999 decreased $1.1 million or 8% from the third quarter of 1998, due primarily to lower oil and gas sales. Oil sales for the third quarter of 1999 were $0.2 million lower than the third quarter of 1998 as net oil production for the third quarter of 1999 was 379,000 barrels, down 32% from 556,000 barrels in the third quarter of 1998. The decrease in oil production in the third quarter of 1999 was attributable to declining production at the Maljamar field in New Mexico and the Evi and Provost fields in Canada combined with the oil and gas property sales discussed above. The average price received for oil sales in the third quarter of 1999 was $17.07 per barrel, up $5.11 per barrel or 43% from the third quarter of 1998. Gas sales for the third quarter of 1999 were $1.2 million lower than the third quarter of 1998 as net gas production for the third quarter of 1999 was 2,320 MMCF, down 1,196 MMCF or 34% from the third quarter of 1998. The decrease in gas production was due primarily to the sale of oil and gas properties discussed above. The average price received for gas sales in the third quarter of 1999 was $2.04 per Mcf, an increase of $0.35 per Mcf or 21% from the third quarter of 1998. During the third quarter of 1999, oil and gas sales were reduced by $1.0 million from the Company's hedging activities. There were no adjustments to oil and gas sales for hedging activities in the third quarter of 1998. Production and operating expense for the third quarter of 1999 decreased $2.5 million or 33% as a result of the oil and gas property sales discussed above and cost cutting measures implemented at the Maljamar and Wellman fields. On a BOE basis (excluding 137 MMCF of gas purchased for resale during the third quarter of 1998), production and operating expense during the third quarter of 1999 decreased to $6.17 per BOE or 3% from $6.33 per BOE during the third quarter of 1998. Depreciation, depletion and amortization, ("DD&A") for the third quarter of 1999, decreased $2.5 million or 39% from the third quarter of 1998 due primarily to the oil and gas property sales discussed above. Exploration expense for the third quarter of 1999 was $4.3 million, up $0.7 million from the third quarter of 1998 and included $2.8 million of unproved lease expense for the Bison Ridge and West Vidauri prospects. In addition, the Company recognized $1.0 million of dry hole costs in the third quarter of 1999 related to the deep portion of the Wild River 6-33 well in Canada. General and administrative expense in the third quarter of 1999 was $1.8 million, down $0.8 million from the third quarter of 1998 due to substantial reductions in office staff that were made in December 1998. Interest expense during the third quarter of 1999 was $3.2 million, down $0.2 million or 7% from the third quarter of 1998 due to lower long-term debt in the third quarter of 1999 compared to the third quarter of 1998. 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, 1999 and September 30, 1998 (continued) The Company recognized an income tax benefit of $0.2 million in the third quarter of 1999 for additional federal income tax refund receivable associated with the carryback of the Company's 1998 tax loss to prior years. The Company's income tax receivable of $1.4 million was collected in October 1999. The net loss before income taxes of $5.6 million in the third quarter of 1999 will generate additional income tax benefits only if the net loss can be carried forward and applied against future taxable income. Since full realization of the future income tax benefits associated with the net loss is not more likely than not assured at this time, no income tax benefits for 1999 net losses were recognized in the third quarter of 1999. The Company realized a net loss of $5.4 million and net loss per share of $0.60 in the third quarter of 1999 compared to a net loss of $8.2 million and net loss per share of $0.91 during the third quarter of 1998. Comparison of Nine Months Ended September 30, 1999 and September 30, 1998 Revenues for the first nine months of 1999 decreased $8.7 million or 18% from the first nine months of 1998, due primarily to lower oil and gas sales. Oil sales for the first nine months of 1999 were $5.1 million lower than the first nine months of 1998 as net oil production for the first nine months of 1999 was 1,310,000 barrels, down 28% from 1,831,000 barrels in the first nine months of 1998. The decrease in oil production in the first nine months of 1999 was attributable to declining production at the Maljamar field in New Mexico and the Evi and Provost fields in Canada combined with the oil and gas property sales discussed above. The average price received for oil sales in the first nine months of 1999 was $14.09 per barrel, up $1.22 per barrel or 9% from the first nine months of 1998. Gas sales for the first nine months of 1999 were $6.0 million lower than the first nine months of 1998 as net gas production for the first nine months of 1999 was 8,133 MMCF, down 2,581 MMCF or 24% from the first nine months of 1998. The decrease in gas production was due primarily to the sale of oil and gas properties discussed above. The average price received for gas sales during the first nine months of 1999 was $1.72 per Mcf, a decrease of $0.15 per Mcf or 8% from the first nine months of 1998. During the first nine months of 1999, oil and gas sales were reduced by $1.5 million from the Company's hedging activities. There were no adjustments to oil and gas sales for hedging activities in the first nine months of 1998. 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 Nine Months Ended September 30, 1999 and September 30, 1998 (continued) Production and operating expense for the first nine months of 1999 decreased $5.1 million or 25% from the first nine months of 1998 primarily as a result of the oil and gas property sales discussed above and cost cutting measures implemented at the Maljamar and Wellman fields. On a BOE basis (excluding 148 MMCF and 442 MMCF of gas purchased for resale during the first nine months of 1999 and 1998, respectively), production and operating expense during the first nine months of 1999 decreased to $5.27 per BOE from $5.29 per BOE during the first nine months of 1998. DD&A for the first nine months of 1999, decreased $6.1 million or 30% from the first nine months of 1998 due primarily to the oil and gas property sales discussed above. Exploration expense for the first nine months of 1999 was $5.6 million, down $4.9 million from the first nine months of 1998 due primarily to substantially reduced exploration activities in 1999. General and administrative expense in the first nine months of 1999 was $5.1 million, down $2.5 million from the first nine months of 1998 due to substantial reductions in office staff that were made in December 1998. Interest expense during the first nine months of 1999 was $10.2 million, up $0.4 million or 4% from the first nine months of 1998 due to the issuance of $125 million of Senior Subordinated Notes in May 1998 and fees associated with refinancing the Credit Agreement with the Restated Credit Agreement in the second quarter of 1999. The effective income tax rate during the first nine months of 1999 was 7% compared to 25% in the first nine months of 1998. The net loss before income taxes of $11.7 million in the first nine months of 1999 will generate income tax benefits only if the net loss can be carried forward and applied against future taxable income. Since full realization of the future income tax benefits associated with the net loss is not more likely than not assured at this time, income tax benefits were recorded in the first nine months of 1999 only to the extent of the Company's existing deferred income tax liability of $0.7 million. The Company realized a net loss of $10.8 million and net loss per share of $1.21 in the first nine months of 1999 compared to net loss of $16.4 million and net loss per share of $1.83 during the first nine months of 1998. 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, 1999 and September 30, 1998 (continued) Operating cash flows during the first nine months of 1999 were $5.6 million, up $2.1 million from the first nine months of 1998. Operating cash flows before changes in working capital for the first nine months of 1999 were $4.7 million lower than the first nine months of 1998 due primarily to lower oil and gas sales which were offset in part by lower production and operating expense and lower general and administrative expense. Changes in working capital during the first nine months of 1999 provided $6.8 million more operating cash flow than changes in working capital during the first nine months of 1998. Capital and exploration expenditures during the first nine months of 1999 were $5.9 million, down $31.1 million from the first nine months of 1998. The Company has reduced its capital and exploration budget for 1999 to a range of $8 million to $10 million. The Company received $41.0 million in net sales proceeds from the sale of oil and gas properties during the first nine months of 1999 compared to $3.0 million in proceeds received during the first nine months of 1998. In April 1999, the Company used $10 million of proceeds from the sale of oil and gas properties to reduce the outstanding balance under the Credit Agreement to $11 million. On May 10, 1999, the Company entered into a Restated Credit Agreement ("BankOne Revolver") with Bank One, Texas, N.A. The Company borrowed $11 million under the BankOne Revolver and repaid in full the outstanding principal balance of $11 million under the Credit Agreement and the Credit Agreement was terminated. Also in May 1999, the Company used $10.5 million of proceeds from the sale of oil and gas properties to reduce the BankOne Revolver balance to $0.5 million. The BankOne Revolver provides the Company with up to a $25 million line of credit through April 30, 2001. The amounts available for borrowing are based on the Company's oil and gas reserves and the Company's Borrowing Base at September 30, 1999 was $8 million. Available loan and interest options are (i) Prime Rate Loans, at the bank's prime interest rate and (ii) Eurodollar Loans, at LIBOR plus 2.5%, 2.75% or 3% depending on the percentage of the Borrowing Base actually borrowed by the Company. The commitment fee on the unused Borrowing Base is 0.5%. The BankOne Revolver imposes certain restrictions on sales of assets, payment of dividends and incurrence of indebtedness and requires the Company to, among other things, maintain certain financial ratios and make monthly escrow deposits of $1.0 million to fund the semi-annual interest payments on the 9 1/2% Senior Subordinated Notes. 13 The Wiser Oil Company THE WISER OIL COMPANY Year 2000 Issue The Company has assessed and continues to assess the impact of the "year 2000" ("Y2K") issue on its reporting systems and operations. The Y2K 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 or properly treat the year 2000 may cause systems to process critical financial and operational information incorrectly. In 1998 and the first quarter of 1999, the Company's U.S. and Canadian computerized accounting systems were upgraded to versions which are Y2K compliant. These upgrades were completed at a nominal cost to the Company. In addition, the Company's personal computer systems were analyzed for Y2K compliance during 1998 and certain components were upgraded at a nominal cost to the Company. Virtually all of the Company's personal computer systems are currently Y2K compliant. Wiser is currently reviewing computer-controlled oil field equipment for Y2K compliance and expects the suppliers of such equipment to provide upgrades or modifications, if necessary, before the end of 1999 at a nominal cost to the Company. Wiser is also in the process of surveying its primary business partners, suppliers and vendors to seek assurances that they will be Y2K compliant during 1999. Despite these efforts to seek assurances, the Company cannot provide assurance that all significant business partners, suppliers and vendors will achieve Y2K compliance in a timely manner. If there is a high risk that a business partner, supplier or vendor will not be Y2K compliant in a timely manner, an alternate business partner, supplier or vendor will be used to minimize the Y2K risk. 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 None. 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. 15 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 12, 1999 /s/ Andrew J. Shoup, Jr. -------------------------------- Andrew J. Shoup, Jr. President and Chief Executive Officer Date: November 12, 1999 /s/ Lawrence J. Finn -------------------------------- Lawrence J. Finn Vice President, Finance and Chief Financial Officer 16 The Wiser Oil Company THE WISER OIL COMPANY Index to Exhibits Exhibit Number Exhibit - ------ ------- (10.4d)* Fourth Amendment to Employment Agreement dated August 4, 1994 between the Company and Alan J. Simus dated June 1, 1999. (10.5d)* Third Amendment to Employment Agreement dated July 1, 1991 between the Company and Andrew J. Shoup, Jr. dated June 1, 1999. (10.8d)* Fourth Amendment to Employment Agreement dated November 1, 1993 between the Company and Lawrence J. Finn dated June 1, 1999. (10.9d)* Fourth Amendment to Employment Agreement dated January 24, 1994 between the Company and A. Wayne Ritter dated June 1, 1999. 27* Financial Data Schedule * Filed herewith. 17 EX-10.4D 2 EMPLOYMENT AGREEMENT ALAN J. SIMUS Exhibit 10.4d FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT THAT EMPLOYMENT AGREEMENT made as of the 1st day of August, 1994, by and between THE WISER OIL COMPANY OF CANADA, a Canadian corporation, and ALLEN J. SIMUS (as heretofore amended, the "Agreement") is hereby amended in the following respects only: Section 1.02 of the Agreement is hereby amended by restatement in its entirety to read as follows: 1.02. Term. Subject to the terms and provisions of Article II ---- hereof, Employee's employment hereunder shall be extended and shall continue through the close of business on June 1, 2000; provided, however, that commencing on June 1, 1999 and on each day thereafter (such date and each day thereafter herein called a "Renewal Date"), Employee's employment hereunder shall be automatically extended so as to terminate at the close of business on the first anniversary of such Renewal Date. IN WITNESS WHEREOF, this Amendment has been executed and is effective as of June 1, 1999. ALLEN J. SIMUS THE WISER OIL COMPANY OF CANADA By ------------------------------- Name: -------------------------- Title: ------------------------- EX-10.5D 3 EMPLOYMENT AGREEMENT ANDREW J. SHOUP, JR. Exhibit 10.5d THIRD AMENDMENT TO EMPLOYMENT AGREEMENT THAT EMPLOYMENT AGREEMENT made as of the 1st day of July, 1991, by and between THE WISER OIL COMPANY, a Delaware corporation, and ANDREW J. SHOUP, JR. (as heretofore amended, the "Agreement") is hereby amended in the following respects only: FIRST: Section 1.02 of the Agreement is hereby amended by restatement in ----- its entirety to read as follows: 1.02. Term. Subject to the terms and provisions of Article II ---- hereof, Employee's employment hereunder shall be extended and shall continue through the close of business on June 1, 2000; provided, however, that commencing on June 1, 1999 and on each day thereafter (such date and each day thereafter herein called a "Renewal Date"), Employee's employment hereunder shall be automatically extended so as to terminate at the close of business on the first anniversary of such Renewal Date; provided further that Employee may terminate his employment hereunder at any time for any reason. SECOND: Section 1.08 of the Agreement is hereby amended by restating ------ subsection (a) thereof in its entirety to read as follows: (a) If Employee's employment with Wiser is terminated by Wiser or by Employee for any reason (other than by Wiser for Cause or by reason of the death of Employee) within twelve months following a Change of Control of Wiser, Employee shall be paid, within 30 days following such termination, an amount in cash equal to the sum of: (i) an amount equal to the product of (A) the amount equal to 12 times the highest monthly base salary paid or payable, including any base salary that has been earned but deferred, to Employee by Wiser and its subsidiaries in respect of the 60-month period immediately preceding the month in which his employment terminated, multiplied by (B) three, plus (ii) the amount equal to the premium cost or other amount paid by Wiser during the one-year period preceding Employee's termination of employment to provide Employee with (A) life, health and disability insurance benefits, and (B) the use of an automobile for such year, plus (iii) the amount of the additional payment, if any, determined pursuant to Section 1.09. THIRD: Section 1.08(b) is hereby amended to add a new paragraph (6) to the ----- end thereof to read as follows: (6) "Cause" shall mean a termination of Employee's employment pursuant to Section 2.03 on the basis of actual fraud or embezzlement by Employee in respect of Wiser or its subsidiaries. FOURTH: Section 2.01 of the Agreement is hereby amended by restating the ------ last sentence thereof in its entirety to read as follows: Upon delivery to Employee of such notice, together with payment of any Base Salary accrued to the date of termination under Section 1.03 hereof, Employee's employment and all obligations of Wiser under Article I hereof (other than its obligations, if any, under Sections 1.08 and 1.09) shall forthwith terminate. FIFTH: Section 2.03 of the Agreement is hereby amended by restating the ----- last sentence thereof in its entirety to read as follows: Upon such termination, Employee shall be entitled to any Base Salary accrued under Section 1.03 hereof and any award under Section 1.04 hereof previously earned by Employee but not paid, and all of Wiser's obligations under Article I hereof (other than its obligations, if any, under Sections 1.08 and 1.09) shall forthwith terminate. SIXTH: Article II of the Agreement is hereby amended to add a new Section ----- 2.05 to the end thereof to read as follows: 2.05. Severance Payment. If Wiser terminates Employee's employment ----------------- hereunder other than pursuant to Sections 2.01 and 2.03 hereof, and Employee is not entitled to a payment under the provisions of Section 1.08(a) hereof in connection with such termination, then Wiser shall pay to Employee, within 30 days following such termination, as severance pay, an amount in cash equal to 12 times the highest monthly base salary paid or payable, including any base salary that has been earned but deferred, to Employee by Wiser and its subsidiaries in respect of the 60-month period immediately preceding the month in which his employment terminated. Such severance pay shall be in addition to any compensation that Wiser otherwise agrees to pay Employee in connection with any services rendered by Employee as a consultant or otherwise to Wiser or its subsidiaries following the termination of his employment. -2- IN WITNESS WHEREOF, this Amendment has been executed and is effective as of June 1, 1999. ANDREW J. SHOUP, JR. THE WISER OIL COMPANY By ------------------------- Name: ------------------- Title: ------------------ EX-10.8D 4 EMPLOYMENT AGREEMENT LAWRENCE J. FINN Exhibit 10.8d FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT THAT EMPLOYMENT AGREEMENT made as of the 1st day of November, 1993, by and between THE WISER OIL COMPANY, a Delaware corporation, and LAWRENCE J. FINN (as heretofore amended, the "Agreement") is hereby amended in the following respects only: FIRST: Section 1.02 of the Agreement is hereby amended by restatement in ----- its entirety to read as follows: 1.02. Term. Subject to the terms and provisions of Article II ---- hereof, Employee's employment hereunder shall be extended and shall continue through the close of business on June 1, 2000; provided, however, that commencing on June 1, 1999 and on each day thereafter (such date and each day thereafter herein called a "Renewal Date"), Employee's employment hereunder shall be automatically extended so as to terminate at the close of business on the first anniversary of such Renewal Date; provided further that Employee may terminate his employment hereunder at any time for any reason. SECOND: Article II of the Agreement is hereby amended to add a new Section ------ 2.05 to the end thereof to read as follows: 2.05. Severance Payment. If the Company terminates Employee's ----------------- employment hereunder other than pursuant to Sections 2.01 and 2.03 hereof, and Employee is not entitled to a payment under the provisions of Section 1.05(a) hereof in connection with such termination, then the Company shall pay to Employee, within 30 days following such termination, as severance pay, an amount in cash equal to Employee's Base Salary at the time of his termination of employment. Such severance pay shall be in addition to any compensation that the Company otherwise agrees to pay Employee in connection with any services rendered by Employee as a consultant or otherwise to the Company or its subsidiaries following the termination of his employment. IN WITNESS WHEREOF, this Amendment has been executed and is effective as of June 1, 1999. LAWRENCE J. FINN THE WISER OIL COMPANY By ---------------------------- Name: ---------------------- Title: --------------------- EX-10.9D 5 EMPLOYMENT AGREEMENT A. WAYNE RITTER Exhibit 10.9d FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT THAT EMPLOYMENT AGREEMENT made as of the 24th day of January, 1994, by and between THE WISER OIL COMPANY, a Delaware corporation, and A. WAYNE RITTER (as heretofore amended, the "Agreement") is hereby amended in the following respects only: FIRST: Section 1.02 of the Agreement is hereby amended by restatement in ----- its entirety to read as follows: 1.02. Term. Subject to the terms and provisions of Article II ---- hereof, Employee's employment hereunder shall be extended and shall continue through the close of business on June 1, 2000; provided, however, that commencing on June 1, 1999 and on each day thereafter (such date and each day thereafter herein called a "Renewal Date"), Employee's employment hereunder shall be automatically extended so as to terminate at the close of business on the first anniversary of such Renewal Date; provided further that Employee may terminate his employment hereunder at any time for any reason. SECOND: Article II of the Agreement is hereby amended to add a new Section ------ 2.05 to the end thereof to read as follows: 2.05. Severance Payment. If the Company terminates Employee's ----------------- employment hereunder other than pursuant to Sections 2.01 and 2.03 hereof, and Employee is not entitled to a payment under the provisions of Section 1.05(a) hereof in connection with such termination, then the Company shall pay to Employee, within 30 days following such termination, as severance pay, an amount in cash equal to Employee's Base Salary at the time of his termination of employment. Such severance pay shall be in addition to any compensation that the Company otherwise agrees to pay Employee in connection with any services rendered by Employee as a consultant or otherwise to the Company or its subsidiaries following the termination of his employment. IN WITNESS WHEREOF, this Amendment has been executed and is effective as of June 1, 1999. A. WAYNE RITTER THE WISER OIL COMPANY By ---------------------------- Name: ---------------------- Title: --------------------- EX-27 6 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM QTRLY REPORT ON 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS 9-MOS DEC-31-1999 DEC-31-1999 JUL-01-1999 JAN-01-1999 SEP-30-1999 SEP-30-1999 22,950 22,950 0 0 11,750 11,750 0 0 332 332 35,712 35,712 276,919 276,919 115,128 115,128 200,977 200,977 14,415 14,415 125,008 125,008 0 0 0 0 27,385 27,385 33,816 33,816 200,977 200,977 12,099 34,668 12,710 38,559 5,073 15,263 18,274 50,222 0 0 0 0 3,158 10,162 (5,564) (11,663) (173) (859) (5,391) (10,804) 0 0 0 0 0 0 (5,391) (10,804) (.60) (1.21) (.60) (1.21)
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