-----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, UZuiwzYah34CIiC0uDacZVxyMOHWaLpNlMBj4zVU+h/8G64/iSrFX5UMDu7pMA9D cFa+GqRJC0SaE2Yl2WWqRQ== 0000033325-97-000007.txt : 19970425 0000033325-97-000007.hdr.sgml : 19970425 ACCESSION NUMBER: 0000033325-97-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970424 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: EQUITY OIL CO CENTRAL INDEX KEY: 0000033325 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 870129795 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-00610 FILM NUMBER: 97586381 BUSINESS ADDRESS: STREET 1: 10 W THIRD S STE 806 CITY: SALT LAKE CITY STATE: UT ZIP: 84101 BUSINESS PHONE: 8015213515 MAIL ADDRESS: STREET 1: P O BOX 959 CITY: SALT LAKE CITY STATE: UT ZIP: 84110 10-Q 1 FIRST QUARTER 1997 FORM 10-Q FORM 10Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 0-610 EQUITY OIL COMPANY (Exact name of registrant as specified in its charter) COLORADO 87-0129795 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Suite 806, #10 West Third South, Salt Lake City, Utah 84101 (Address of principal executive offices) (Zip Code) (801) 521-3515 Registrant's telephone number, including area code (Former name, former address and former fiscal year, if changed since last report) 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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 12,704,100 1 ITEM I: FINANCIAL STATEMENTS EQUITY OIL COMPANY Statement of Operations For the three months ended March 31, 1997 and 1996 (Unaudited) 1997 1996 ---------- ---------- REVENUES Oil and gas sales ................... $ 4,842,278 $ 3,658,346 Partnership income .................. 75,000 75,000 Interest income ..................... 54,926 38,749 Other ............................... 114,800 60,577 ----------- ----------- 5,087,004 3,832,672 EXPENSES Operating costs ..................... 1,542,768 1,333,996 Depreciation, depletion and amortization ...................... 1,100,000 900,000 Leasehold abandonments .............. 18,440 10,000 Equity loss in Symskaya Exploration .............. 85,725 -- Exploration ......................... 638,417 810,597 General and administrative .......... 558,817 621,009 Interest ............................ 150,323 -- ----------- ----------- 4,094,490 3,675,602 Income before income taxes ................... 992,514 157,070 Provision for income taxes ................... 212,139 51,363 ----------- ----------- NET INCOME ................................... $ 780,375 $ 105,707 =========== =========== Net income per common share .................. $ 0.06 $ 0.01 =========== =========== Cash dividends per share declared ............ $ .00 $ .00 =========== =========== Weighted average shares outstanding .......... 12,717,311 12,714,350 The accompanying notes are an integral part of these statements. 2 EQUITY OIL COMPANY Balance Sheet as of March 31, 1997, and December 31, 1996 March 31, December 31, ASSETS 1997 1996 - ------ ---------- ---------- (Unaudited) Current assets: Cash and cash equivalents .............. $ 941,253 $ 787,961 Temporary cash investments ............. -- 49,802 Accounts and advances receivable ....... 3,672,082 3,660,670 Income taxes receivable ................ 256,108 311,393 Deferred income taxes .................. 31,053 31,053 Other current assets ................... 337,402 372,701 ------------- ------------- 5,237,898 5,213,580 Property and equipment ................... 107,575,852 106,147,145 Less accumulated depreciation, depletion and amortization .............. 62,812,210 61,732,014 ------------- ------------- 44,763,642 44,415,131 Other assets: Investment in Raven Ridge Pipeline Partnership ................. 363,920 405,328 Other assets ........................... 136,869 147,398 ------------- ------------- 500,789 552,726 TOTAL ASSETS ............................. $ 50,502,329 $ 50,181,437 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable ....................... $ 1,482,607 $ 1,880,420 Accrued liabilities .................... 148,148 153,467 Federal, state and foreign income taxes payable ................. 455,872 191,509 Accrued profit sharing ................. 48,000 179,100 ------------- ------------- 2,134,627 2,404,496 Revolving credit facility ................ 8,878,830 8,878,830 Deferred income taxes .................... 5,433,006 5,565,973 ------------- ------------- 14,311,836 14,444,803 Stockholders' Equity Common stock ........................... 12,751,100 12,751,100 Paid in capital ........................ 3,648,333 3,648,333 Less cost of treasury stock ............ (155,300) (98,653) Retained earnings ...................... 17,811,733 17,031,358 ------------- ------------- 34,055,866 33,332,138 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ................... $ 50,502,329 $ 50,181,437 ============= ============= The accompanying notes are an integral part of these statements. 3 EQUITY OIL COMPANY Statement of Cash Flows For the three months ended March 31, 1997 and 1996 (Unaudited) 1997 1996 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income ................................. $ 780,375 $ 105,707 Adjustments Depreciation, depletion and amortization .......................... 1,100,000 900,000 Partnership distributions in excess of income ................... 41,408 36,930 Property dispositions ................... 18,440 10,000 Common stock issued for services ........ -- 33,312 Change in other assets .................. 10,529 10,528 Equity loss in Symskaya Exploration ..... 85,725 -- Decrease in deferred income taxes ....... (132,967) (59,435) Net cash provided before changes in ----------- ----------- working capital items ................... 1,903,510 1,037,042 Increase (decrease) from changes in: ----------- ----------- Accounts and advances receivable ....... (11,412) (40,839) Other current assets ................... 35,299 25,071 Accounts payable and accrued liabilities ......................... (403,132) 216,996 Income taxes receivable/payable ........ 319,648 (28,163) Accrued profit sharing ................. (131,100) (100,771) ----------- ----------- Net cash provided by operating activities ................. 1,712,813 1,109,336 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ....................... (1,466,951) (1,303,344) Advances to Symskaya Exploration ........... (85,725) (815,678) Sale of temporary cash investments ......... 49,802 702,766 ---------- ---------- Net cash used in investing activities ...... (1,502,874) (1,416,256) ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Purchase of treasury stock ................. (56,647) -- Increase in other assets ................... -- -- Proceeds from revolving credit facility .... -- 300,000 Payments on long term debt ................. -- -- ---------- ---------- Net cash provided by (used in) financing activities ............... (56,647) 300,000 ---------- ---------- NET INCREASE (DECREASE) IN CASH .............. 153,292 (6,920) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ..................... 787,961 511,252 ---------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD ........................... $ 941,253 $ 504,332 ========== ========== CASH, CASH EQUIVALENTS AND TEMPORARY CASH INVESTMENTS AT END OF PERIOD ........................... $ 941,253 $ 757,533 ========== ========== The accompanying notes are an integral part of these statements. 4 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. INTERIM FINANCIAL STATEMENTS The accompanying consolidated financial statements of Equity Oil Company (the Company) have not been audited by independent accountants, except for the Balance Sheet at December 31, 1996. In the opinion of the Company's management, the financial statements reflect the necessary adjustments, all of which are of a normal and recurring nature, to present fairly the financial position of the Company as of March 31, 1997, and the results of its operations and its cash flows for the three month periods ended March 31, 1997 and 1996. The financial statements and the accompanying notes to financial statements have been prepared according to rules and regulations of the Securities and Exchange Commission. Accordingly, certain notes and other information have been condensed or omitted from the interim financial statements presented in this Quarterly Report on Form 10-Q. These financial statements should be read in conjunction with the Company's 1996 Annual Report on Form 10-K. The results for the three month period ended March 31, 1997 are not necessarily indicative of future results. NOTE 2. NET INCOME PER SHARE Net income per share is based on the weighted average number of common shares outstanding during the period. Primary and fully diluted earnings per share are essentially the same. NOTE 3. RECLASSIFICATIONS Certain balances in the March 31, 1996 financial statements have been reclassified to conform with the current year presentation. These changes had no effect on the previously reported net income, total assets, liabilities or stockholders' equity. 5 PART I ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Increases in oil and gas production combined with stronger oil prices to help the Company record a 33% increase in revenues during the first quarter of 1997. Total revenues for the period were $5,087,004, compared to $3,832,672 during the first quarter of 1996. Net income for the first quarter of 1997 was $780,375, or $.06 per share, compared to $105,707, or $.01 per share, during the first quarter of 1996. The Company recorded increases in both oil and gas production. Oil production of 161,000 barrels was up 3% from 156,000 barrels in 1995. Gas production increased of 502,000 Mcf produced in 1997 from 496,000 Mcf produced during the first quarter of 1997. Averages prices received for oil during the first quarter of 1997 were $20.30 per barrel, an increase of 12% over the $18.14 per barrel received during the same period of 1996. Gas prices also increased during 1997, averaging $2.68 per Mcf, compared to $1.42 per Mcf received during the first quarter of 1996. Increases in oil and gas sales were augmented by higher other income. Other income in 1997 includes approximately $70,000 received from the sale of certain mineral rights. There was no similar transaction during the first quarter of 1996. Total expenses in 1997 increased 11% over 1996 first quarter levels. Lease operating costs increased 16%, primarily as a result of increased production and higher revenue-based production taxes. Depreciation, depletion and amortization (DD&A) increased 22%, primarily due to increased production in 1997 and the new properties added to the depletion base during 1996. The decrease in exploration expense was primarily due to reduced geological and geophysical expenses in 1997, the bulk of which consisted of lower 3-D seismic expenses. General and administrative expenses decreased by 10% from 1996 first quarter levels. The decrease was mainly due to reduced compensation expense during 1997. During the first quarter of 1997, the Company participated in the drilling of 4 wells, compared to 5 during the same time period of 1996. Of the 4 wells drilled this year, 2 wells have been completed as producers, and 2 wells were plugged and abandoned. During the first quarter of 1996, 4 wells were completed as producers, and 1 well was plugged and abandoned. Included in the 1997 well count are 3 exploratory wells drilled in California on the Company's 3-D seismic projects. Two of those wells were dry holes. Despite the dry holes, the Company is continuing to develop additional prospects through its use of 3-D seismic data. The Company recently completed processing of a seismic shoot at its Davis Ranch prospect, a 17 square mile survey, and the first well has been staked. The Company has a total capital investment program of $7.9 million outlined for 1997. The program includes 29 exploration projects and 26 development and exploitation projects. The bulk of the Company's drilling should occur during the third and fourth quarters of the year. The Company is continuing to pursue additional outside financing for its Symskaya project in Russia. Costs associated with the project are expected to be minimal during 1997. 6 CAPITAL RESOURCES AND LIQUIDITY Cash, cash equivalents, and temporary cash investments totaled $941,253 as of March 31, 1997, up from $837,763 at year-end 1996. Working capital at March 31, 1997 was $3,103,271, compared to working capital of $2,809,084 at December 31, 1996. For the first three months of 1997, net cash provided by operating activities increased 54% over the same period of 1996, primarily due to the increase in net income discussed earlier. Investment in property and equipment for the first three months of 1997 totaled $1,466,951, a 13% increase from the amount recorded during the corresponding three months of 1996. The increase reflects higher lease acquisition costs during 1997. In the first 3 months of 1996, the Company advanced approximately $816,000 to Symskaya Exploration in connection with the drilling of the Lemok #1 well in Russia, compared to $85,725 during the same period of 1997. During the three months ended March 31, 1997, the Company purchased 18,000 shares of Treasury Stock for a total price of $56,600. During the first quarter of 1996, the Company borrowed $300,000 on its credit facility, primarily for working capital purposes. The Company did not draw down any funds on its line of credit during the first quarter of 1997. The Company believes that existing cash balances, cash flow, and the borrowing capacity available under the Company's credit facility will provide adequate resources to meet all of its current capital and exploration spending objectives. OTHER ITEMS In March 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, Earnings per Share. This statement establishes standards for computing and presenting earnings per share ("EPS") and applies to entities with publicly-held common stock or potential common stock. This statement simplifies the standards for computing EPS and makes them comparable to international EPS standards. This statement is effective for financial statements for both interim and annual periods ending after December 15, 1997. The Company is currently evaluating the impact of the recently issued statement and will adopt the requirements for the year ending December 31, 1997. The Company has reviewed all other recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on the results of operations or financial position of the Company. Based on that review, the Company believes that none of these pronouncements will have a significant effect on current or future earnings or operations. 7 PART II OTHER INFORMATION The answers to items listed under Part II are inapplicable or negative. 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. EQUITY OIL COMPANY (Registrant) DATE: April 24, 1997 By /s/ Paul M. Dougan ---------------------- ------------------- Paul M. Dougan, President DATE: April 24, 1997 By /s/ Clay Newton ----------------------- ---------------- Clay Newton, Treasurer 8 EX-27 2 ARTICLE 5 FDS FOR 1ST QUARTER 1997 10-Q
5 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 941,523 0 3,672,082 0 0 5,237,898 107,575,852 62,812,210 50,502,329 2,134,627 0 0 0 12,751,100 0 50,502,329 4,842,278 5,087,004 0 3,944,167 0 0 150,323 992,514 212,139 780,375 0 0 0 780,375 .06 .06
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