-----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, HHr1JULQHqzRazOq5Zj4+idIhaxaggbg0rzHwt3WtZv5+kBMulFdDWGBOE4m2WCW HLSBXhizR7K1AVLUhsFXEQ== 0000033325-98-000012.txt : 19980813 0000033325-98-000012.hdr.sgml : 19980813 ACCESSION NUMBER: 0000033325-98-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980812 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: SEC FILE NUMBER: 000-00610 FILM NUMBER: 98683076 BUSINESS ADDRESS: STREET 1: P O BOX 959 CITY: SALT LAKE CITY STATE: UT ZIP: 84110 BUSINESS PHONE: 8015213515 MAIL ADDRESS: STREET 1: P O BOX 959 CITY: SALT LAKE CITY STATE: UT ZIP: 84110 10-Q 1 2ND QUARTER 1998 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 June 30, 1998 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: 12,615,440 ITEM I: Financial Statements EQUITY OIL COMPANY Statement of Operations For the Six Months Ended June 30, 1998 and 1997 (Unaudited) 1998 1997 ------------ ------------- REVENUES Oil and gas sales ............ $ 6,517,271 $ 8,745,718 Partnership income ........... 15,500 150,000 Interest income .............. 40,326 83,518 Other ........................ 101,705 552,157 ------------ ------------ 6,674,802 9,531,393 EXPENSES Operating costs .............. 3,030,862 3,038,935 Depreciation, depletion and amortization ............... 2,450,000 2,200,000 Equity loss in Symskaya Exploration ....... 319,113 143,837 Leasehold abandonments ....... 164,091 40,952 3D seismic ................... 430,773 -- Exploration .................. 745,882 1,228,047 General and administrative ... 1,097,139 1,108,018 Interest ..................... 569,905 324,172 ------------ ------------ 8,807,765 8,083,961 Income (loss) before income taxes ..... (2,132,963) 1,447,432 Provision (benefit) for income taxes .. (597,229) 505,847 NET INCOME (LOSS) ..................... $(1,535,734) $ 941,585 ============ ============ Basic and diluted net income (loss) per common share $ (0.12) $ 0.07 ============ ============ Weighted average shares outstanding ... 12,612,824 12,704,840 The accompanying notes are an integral part of these statements. EQUITY OIL COMPANY Statement of Operations For the Three Months Ended June 30, 1998 and 1997 (Unaudited) 1998 1997 ----------- ------------ REVENUES Oil and gas sales ............ $ 3,016,811 $ 3,903,440 Partnership income ........... 7,500 75,000 Interest income .............. 6,297 28,592 Other ........................ 66,749 437,357 ------------ ------------ 3,097,357 4,444,389 EXPENSES Operating costs .............. 1,381,932 1,496,167 Depreciation, depletion and amortization ............... 1,200,000 1,100,000 Equity loss in Symskaya Exploration ....... 235,615 58,112 Leasehold abandonments ....... 164,091 22,512 3D seismic ................... 21,030 -- Exploration .................. 355,754 589,630 General and administrative ... 658,561 549,201 Interest ..................... 290,371 173,849 ------------ ------------ 4,307,354 3,989,471 Income (loss) before income taxes ..... (1,209,997) 454,918 Provision (benefit) for income taxes .. (316,269) 293,708 NET INCOME (LOSS) ..................... $ (893,728) $ 161,210 ============ ============ Basic and diluted net income (loss) per common share $ (0.07) $ 0.01 ============ ============ Weighted average shares outstanding ... 12,615,440 12,692,693 The accompanying notes are an integral part of these statements. EQUITY OIL COMPANY Balance Sheet as of June 30, 1998, and December 31, 1997 June 30, December 31, ASSETS 1998 1997 (Unaudited) Current assets: ------------ ------------- Cash and cash equivalents .................. $ 18,274 $ 378,801 Accounts and advances receivable ........... 3,221,261 3,641,535 Income taxes receivable .................... 31,093 88,174 Deferred income taxes ...................... 18,934 18,934 Other current assets ....................... 529,766 514,713 ------------ ------------- 3,819,328 4,642,157 Property and equipment ....................... 115,367,603 113,371,891 Less accumulated depreciation, depletion and amortization .................. 67,199,254 64,846,514 ------------ ------------- 48,168,349 48,525,377 Other assets: Investment in Raven Ridge Pipeline Partnership ..................... 221,640 268,821 Other assets ............................... 84,227 105,284 ------------- ------------- 305,867 374,105 TOTAL ASSETS ................................. $ 52,293,544 $ 53,541,639 ============= ============= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable ........................... $ 1,324,634 $ 1,327,120 Accrued liabilities ........................ 185,533 120,039 Federal, state and foreign income taxes payable ..................... 413,856 354,002 Accrued profit sharing ..................... 96,000 188,973 ------------- ------------- 2,020,023 1,990,134 Revolving credit facility .................... 15,000,000 13,978,830 Deferred income taxes ........................ 4,041,195 4,851,966 ------------- ------------- 19,041,195 18,830,796 Stockholders' Equity: Common stock ............................... 12,780,040 12,761,100 Paid in capital ............................ 3,696,118 3,667,707 Less cost of treasury stock ................ (528,302) (528,302) Retained earnings .......................... 15,284,470 16,820,204 ------------- ------------- 31,232,326 32,720,709 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ....................... $ 52,293,544 $ 53,541,639 ============= ============= The accompanying notes are an integral part of these statements. EQUITY OIL COMPANY Statement of Cash Flows For the Six Months Ended June 30, 1998 and 1997 (Unaudited) 1998 1997 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) .................... $(1,535,734) $ 941,585 Adjustments Depreciation, depletion and amortization ..................... 2,450,000 2,200,000 Partnership distributions in excess of income ................. 47,181 73,861 (Gain) loss on property dispositions ............ 164,091 (284,105) Decrease in deferred income taxes .. (810,771) (144,790) Equity loss in Symskaya Exploration ......... 319,113 143,837 Change in other assets ......... 21,057 21,057 Common stock issued for services 47,351 29,375 Net cash provided before changes in ---------- ---------- working capital items ............. 702,288 2,980,820 Increase (decrease) from changes in: Accounts and advances receivable . 420,274 363,886 Other current assets ............. (15,053) 61,961 Accounts payable and accrued liabilities .................... 63,008 (972,501) Income taxes receivable/payable .. 116,935 440,473 Accrued profit sharing ........... (92,973) (83,100) ---------- ---------- Net cash provided by operating activities ............ 1,194,479 2,791,539 ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Advances to Symskaya Exploration ..... (319,113) (143,837) Sale of temporary cash investments ... -- 49,802 Proceeds from sale of properties ..... -- 339,384 Capital expenditures ................. (2,257,063) (3,142,196) ---------- ---------- Net cash used in investing activities ......................... (2,576,176) (2,896,847) ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Purchase of treasury stock ........... -- (106,547) Borrowings under revolving credit facility ........... 1,021,170 -- ---------- ---------- Net cash provided by (used in) financing activities .............. 1,021,170 (106,547) ---------- ---------- NET DECREASE IN CASH .................... (360,527) (211,855) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ............... 378,801 787,961 ---------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD ..................... $ 18,274 $ 576,106 ========== ========== The accompanying notes are an integral part of these statements. NOTES TO FINANCIAL STATEMENTS NOTE 1. INTERIM FINANCIAL STATEMENTS The accompanying financial statements of Equity Oil Company ("Equity" or "the Company") have not been audited by independent accountants, except for the Balance Sheet as of December 31, 1997. In the opinion of the Company's management, the financial statements reflect the adjustments, all of which are of a normal and recurring nature, necessary to present fairly the financial position of the Company as of June 30, 1998, and the results of its operations for the three and six month periods ended June 30, 1998 and 1997, and its cash flows for the six month periods ended June 30, 1998 and 1997. 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 1997 Annual Report on Form 10-K, and the Company's Form 10-Q for the first quarter of 1998. The results for the three and six month periods ended June 30, 1998 are not necessarily indicative of future results. NOTE 2. NET INCOME (LOSS) PER SHARE Earnings per share for all periods presented has been restated to reflect the adoption of Statement of Financial Accounting Standards No. 128, EARNINGS PER SHARE ("SFAS 128"). SFAS 128 requires companies to present basic earnings per share, and if applicable, diluted earnings per share, instead of primary and fully diluted earnings per share. Basic earnings per share excludes dilution and is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if options to issue common stock were exercised into common stock. Options to purchase approximately 912,000 shares of common stock at prices of $3.56 to $6.00 per share were outstanding during the first half of 1998, but were not included in the computation of diluted earnings per share because the exercise prices of the options were greater than the average market price of the Company's common shares during the period. Basic and diluted earnings per share are the same for each of the periods presented. PART I ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION RESULTS OF OPERATIONS FINANCIAL RESULTS As a result of continued depressed oil prices, which reached a 12 year low during the second quarter, the Company recorded a net loss for the first six months of 1998 of $(1,535,734), or $(.12) per share, compared to net income of $941,585, or $.07 per share during the same period of 1997. Total revenues of $6,674,802 were 30% lower than total revenues of $9,531,393 recorded in the first half of 1997. The Company also recorded a net loss in the second quarter of 1998 of $(893,728), or $(.07) per share, compared to second quarter 1997 net income of $161,210, or $.01 per share. Second quarter revenues in 1998 of $3,097,357 were 30% lower than the $4,444,389 reported in the second quarter of 1997. OPERATING RESULTS Sharply reduced cash flows have caused the Company to decrease the number of wells drilled in 1998 from the prior year. During the first half of 1998, the Company participated in a total of 8 wells, 6 of which have been completed as oil and gas wells. During the first half of 1997, the Company participated in 16 wells, 11 of which were completed as producing wells. Despite the smaller number of wells drilled in 1998, the wells drilled and completed have added measurably to the Company's reserves. Included in the 1998 well count is an exploratory well drilled in California on the Company's 16 square mile Merlin 3-D seismic project. The #1-15 Henning, located in Glenn County, California, tested at a rate of 1.4 million cubic feet per day from perforations at 5,565 - 5,568 feet in the Cretaceous Forbes formation and 5.9 million cubic feet per day from 5,518 to 5,556 feet. The well is currently on production at a rate of 2.3 MMCFD. Equity operates and has a 50% working interest in the well and the Merlin project. A second consecutive gas discovery on the Merlin project, the Equity #1-22 Otto Lohse tested 2.4 million cubic feet per day from perforations at 5,525-5,540 feet, in the Cretaceous Forbes formation. In addition, a second Forbes reservoir from 5,414 - 5,463 feet, which drill stem tested 6.5 million cubic feet per day, represents proved behind pipe reserves. This well is currently on production at a rate of 1.8 MMCFD. At the Company's Davis Ranch prospect, also located in the Sacramento Basin, the Equity #1-8 Westcott drill stem tested 7.5 million cubic feet per day from the Cretaceous Forbes formation at a depth of 7,507-7,524 feet. This well will go on production during August of 1998. The Company has a 60% working interest at Davis Ranch. Slawson Exploration production tested the #1-18 Armstrong at 4 million cubic feet of gas per day from a Forbes perforation interval at 8,574-8,583 feet. Equity is a 25% working interest participant in the well and the 16 square mile West Orion Sacramento Basin 3D project, where the well was drilled. This well is also scheduled to go on production in August. Following the successful production testing of a second pay zone in the Westport Oil and Gas Company #24-15 Beaver Creek in Golden Valley County, North Dakota, the well produced at an average rate of 1,150 barrels of oil per day during the month of June. Equity has a 32.5% working interest in the well. Westport Oil and Gas Company operates the well and holds the remaining working interest. The Company also participated in an additional successful development well in 1998 at its Siberia Ridge field in Sweetwater County, Wyoming. The well was placed on production at a rate of 700 MMCFD. The Company has a 50% interest in the well. The Company is continuing to pursue additional outside financing for its Symskaya project in Russia. The Company recently announced that its 50% owned subsidiary, Symskaya Exploration, Inc. has entered into a Bottom Hole Contribution Agreement with the Committee for Natural Resources of the Krasnoyarsk Krai in Eastern Siberia to support the drilling of the Averinskaya - 150 well, an exploratory well that is being drilled near the town of Yeniseysk. The well is adjacent to the southern block of acreage that Symskaya holds as part of its 1.1 million acre exploration, development and production License. The well is being drilled to evaluate the oil and gas potential of the same geologic section that Symskaya targeted in the drilling of its Lemok No. 1 well on the northern acreage block of its License area. In exchange for a nominal payment, Symskaya will receive all pre-drilling data from the well, drilling data acquired during the drilling of the well, and all final reports on the well including logs, test results, core and drill cutting samples, and samples of any oil, water or gas recovered during drilling. In addition, Symskaya personnel will have complete access to the drill site during drilling, the right to collect drill cuttings and other samples, and the right to witness all coring and testing. The well is currently drilling below 4,000 feet, and is projected to be drilled to a total depth of 11,500 feet. CAPITAL RESOURCES AND LIQUIDITY Cash and cash equivalents totaled $18,274 as of June 30, 1998, a decrease of $360,527 since year-end 1997. Working capital at June 30, 1998 was $1,799,305, compared to $2,652,023 at December 31, 1997. The Company's ratio of current assets to current liabilities was 1.89 to 1 at June 30, 1998, compared to 2.33 to 1 at December 31, 1997. Cash provided by operating activities, negatively impacted by low oil prices, was $1,194,479 in the first six months of 1998, 57% lower than the $2,791,539 recorded during the same period of 1997. Investment in property and equipment for the first six months of 1998 of $2,257,063 was 28% lower than the investment made during the first half of 1997, reflecting the Company's decreased drilling activity. As a result of the severely depressed oil prices, and their negative effects on cash flows, the Company has reduced its 1998 capital budget to ensure that the bulk of its projects will be paid from discretionary cash flows. The Company has high-graded both exploratory and development projects based on their assumed risks and rewards, and balanced this with projects that have specific lease related drilling commitments. Other projects have been delayed or deferred until oil prices strengthen and cash flows increase. The Company purchased 35,000 shares of its stock on the open market during the first half of 1997, at an average price of $3.04 per share. No treasury stock was purchased during the first half of 1998. During the first half of 1997, the Company did not increase borrowings under its credit facility, compared to borrowings of $1,021,170 in 1998, which were used to fund investments in property and equipment and for working capital purposes. On March 30, 1998, the Company amended its credit agreement, increasing the current commitment from $15 million to $18 million. In addition, on June 24, 1998, the facility was further amended in order to set the first principal payment date under the facility to July 1, 2001 from July 1, 1999. At June 30, 1998, the Company had approximately $3 million of availability on the facility, and was in compliance with all its covenants. The Company believes that existing cash balances, cash flow, and funds available under the Company's credit facility will provide adequate resources to meet all of its current capital and exploration spending objectives for 1998. COMPARISON OF SECOND QUARTER 1998 WITH SECOND QUARTER 1997 Oil and gas sales in the second quarter of 1998 of $3,016,811 were sharply lower than the $3,903,440 recorded for the same quarter of last year, a result of 1998's depressed oil environment. These lower prices offset increases in both oil and gas production. The average net price for crude oil received by the Company during the quarter was $11.58 per barrel, compared to $18.64 during the second quarter of 1997, a decrease of 38%. Average gas prices received during the second quarter of 1998 were $1.95 per Mcf, compared to $1.85 per Mcf during the second quarter of 1997. Oil production increased from 163,000 barrels in the second quarter of 1997 to 170,000 barrels during the same quarter of 1998, while gas production rose from 526,000 Mcf in 1997 to 550,000 Mcf in 1998. During the second quarter of 1997, the Company recorded a gain on the sale of certain oil and gas properties of approximately $325,000. There was no corresponding event in 1998. Total expenses in 1998 increased 8% over 1997 second quarter levels. Despite higher production levels, lease operating costs declined by 8% over the prior year. This decline was a combination of high-cost, marginal production being shut-in during the quarter due to low prices and lower value-based production taxes. The increase in production did contribute to higher depreciation, depletion, and amortization (DD&A) charges. In addition, DD&A per unit charges increased slightly from $4.50 per BOE to $4.57 per BOE in 1998. The decrease in exploration expense was primarily due to lower dry hole costs in 1998. During the second quarter of 1997, the Company participated in five dry holes, compared to only two dry holes during 1998. General and administrative expenses increased over 1997 second quarter levels due to increased expenses related to the Company's annual meeting, increased compensation expenses, and other fees and expenses. Higher interest costs in 1998 reflect the higher amount of debt outstanding under the Company's credit facility. The Company abandoned certain undeveloped leaseholds during the second quarter of 1998 associated with a Lodgepole prospect that were acquired in 1995 and 1996. The Company did not renew selected leases in the area on their renewal date due to a lack of prospectivity. The equity loss in Symskaya Exploration increased by $177,503 during the second quarter of 1998. This increase included a writedown of approximately $125,000 in interest income on a senior note between Symskaya and the Company that had been accrued in prior periods. In addition, the 1998 increase included the Company's share of a bottom hole contribution discussed earlier. Neither of these two events are recurring. COMPARISON OF FIRST HALF 1998 WITH FIRST HALF 1997 Lower oil prices during the first half of 1998 offset increases in both oil and gas production to produce an 30% decrease in total revenues compared to the same period of 1997. Average oil prices received by the Company during the first half of 1998 were $12.51 per barrel, compared to $19.47 per barrel during the first half of 1997. Average gas prices received during the first half of 1998 were $1.97 per Mcf, which compared to $2.22 per Mcf during the first half of 1997. Oil production of 340,000 barrels was up 5% from 1997 production of 324,000 barrels. Natural gas production increased 14% to 1,170,000 Mcf in 1998 from 1,028,000 Mcf in 1997. During the first half of 1997, the Company recorded a gain on the sale of certain oil and gas properties of approximately $325,000. There was no corresponding event in 1998. Total expenses in 1998 increased 9% over 1997 first half levels. Lease operating costs remained flat, while depreciation, depletion and amortization increased 11%, primarily due to increased oil and gas production in 1998. Exploration expense decreased from 1997 levels due to the smaller number of dry holes drilled in 1998. During the first half of 1997, the Company participated in five dry holes, compared to only two dry holes during 1998. The Company incurred 3D seismic charges of $430,773 in 1998 associated with its Sequoia project in the San Joaquin Basin of California. The initial well at Sequoia is scheduled to drill during the second half of 1998. The Company did not participate in any 3D seismic programs during the first half of 1997. The Company abandoned certain undeveloped leaseholds during the first half of 1998 associated with a Lodgepole prospect that were acquired in 1995 and 1996. This resulted in a charge to expense of $164,091. The Company did not renew selected leases in the area on their renewal date due to a lack of prospectivity. Higher interest costs in 1998 reflect the higher amount of debt outstanding under the Company's credit facility. The equity loss in Symskaya Exploration increased by $175,276 during the first half of 1998. This increase included a writedown of approximately $125,000 in accrued interest income on a senior note between Symskaya and the Company that had been recognized in prior periods. In addition, the 1998 increase included the Company's share of a bottom hole contribution discussed earlier. Neither of these two events are recurring. OTHER ITEMS In June of 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 130, REPORTING COMPREHENSIVE INCOME. The Statement establishes standards for reporting and display of comprehensive income and its components (revenues, expenses, gains, and losses) in a full set of general-purpose financial statements. This Statement is effective for fiscal years beginning after December 15, 1997. The adoption of this Statement did not have a material effect on the Company's financial statements. The Company has reviewed all 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. YEAR 2000 The Company uses computers principally for processing and analyzing geophysical and geological data, map making, and administrative functions such as word processing, accounting, and financial reporting. The Company's principal computer systems have been purchased since December 31, 1995. The Company has an ongoing program to ensure that its operational and financial systems will not be adversely affect by year 2000 software failures. While the Company believes it is taking all appropriate steps to assure year 2000 compliance, it is dependent substantially on vendor compliance. The Company intends to modify or replace those systems that are not year 2000 compliant. The Company is requiring its systems and software vendors to represent that the services and products provided are, or will be, year 2000 compliant, and has planned a program to test compliance. The Company anticipates completing that test no later than year-end 1998. The Company estimates that the cost to redevelop, replace, or repair its technology will not be material. FORWARD LOOKING STATEMENTS Forward-looking statements in this Form 10-Q, future filings by the Company with the Securities and Exchange Commission, the Company's press releases and oral statements by authorized officers of the Company are intended to be subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainty, including without limitation, the risk of a significant natural disaster, the inability of the Company to ensure against certain risks, the adequacy of its loss reserves, fluctuations in commodity prices, the inherent limitations in the inability to estimate oil and gas reserves, changing government regulations, as well as general market conditions, competition and pricing. The Company believes that forward-looking statements made by it are based upon reasonable expectations. However, no assurances can be given that actual results will not differ materially from those contained in such forward-looking statements. The words "estimate", "anticipate", "expect","predict", "believe" and similar expressions are intended to identify forward-looking statements. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. The answers to items listed under Item 3 are inapplicable or negative. PART II OTHER INFORMATION The answers to items listed under Part II are inapplicable or negative, except as shown below. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. At the Company's annual meeting, held on May 13, 1998, three Directors were elected to the staggered board to serve three year terms, expiring in 2001, and one Director was elected to serve a two year term, expiring in 2000. Paul M. Dougan, Douglas W. Brandrup, and Joseph C. Bennett were elected to three year terms. William P. Hartl, appointed to the Board in November of 1997, was elected to a two year term. The following votes were recorded. Dougan Brandrup Affirmative votes 9,758,776 9,756,955 Withhold authority 140,074 141,895 Bennett Hartl Affirmative votes 9,735,555 9,727,661 Withhold authority 163,295 171,189 Each director nominee received at least 98% of the shares voted at the meeting. 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: August 12, 1998 By /s/ Paul M. Dougan ---------------------- ------------------ Paul M. Dougan, President DATE: August 12, 1998 By /s/ Clay Newton ---------------------- --------------- Clay Newton, Treasurer Principal Accounting Officer EX-27 2 FINANCIAL DATA SCHEDULE
5 6-MOS DEC-31-1998 JAN-01-1998 JUN-30-1998 18,274 0 3,221,261 0 0 3,819,328 115,367,603 67,199,254 52,293,544 2,020,023 0 0 0 12,780,040 0 52,293,544 6,517,271 6,674,802 0 8,237,860 0 (1,563,058) 569,905 (2,132,963) (597,229) (1,535,734) 0 0 0 (1,535,734) (.12) (.12)
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