0000914760-95-000086.txt : 19950815 0000914760-95-000086.hdr.sgml : 19950815 ACCESSION NUMBER: 0000914760-95-000086 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950814 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAYNARD OIL CO CENTRAL INDEX KEY: 0000063528 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 751362284 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-05704 FILM NUMBER: 95563062 BUSINESS ADDRESS: STREET 1: 8080 N CENTRAL EXPWY STE 660 CITY: DALLAS STATE: TX ZIP: 75206 BUSINESS PHONE: 2148918880 MAIL ADDRESS: STREET 1: 8080 N CENTRAL EXPWY STE 660 CITY: DALLAS STATE: TX ZIP: 75206 FORMER COMPANY: FORMER CONFORMED NAME: HOMA OIL & GAS CO DATE OF NAME CHANGE: 19710902 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ending June 30, 1995 Commission File #0-5704 ------------------- ------- MAYNARD OIL COMPANY ----------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 75-1362284 ----------------------------------------------------------------------- (State or other jurisdic- (IRS Employer tion of incorporation) Identification No.) 8080 N. Central Expressway, Suite 660, Dallas, Texas 75206 ----------------------------------------------------------------------- Registrant's telephone number, including area code: (214) 891-8880 -------------- 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. Yes X No ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of August 8, 1995. 4,890,142 shares of common stock, par value $0.10 ------------------------------------------------- MAYNARD OIL COMPANY AND SUBSIDIARIES Index to Consolidated Financial Statements and Schedules Page Part I. Financial Information Consolidated Balance Sheets June 30, 1995 and December 31, 1994 Consolidated Statements of Operations Six Months and Three Months ended June 30, 1995 and 1994 Consolidated Statements of Shareholders' Equity Six Months ended June 30, 1995 Consolidated Statements of Cash Flows Six Months ended June 30, 1995 and 1994 Notes to Consolidated Financial Statements Management's Discussion and Analysis of Financial Condition and Results of Operations Part II. Other Information and Reports on Form 8-K Item 4. Submission of Matters to a Vote of Security Holders Item 6. Exhibits and Reports on Form 8-K Signatures MAYNARD OIL COMPANY AND SUBSIDIARIES Consolidated Balance Sheets June 30, December 31, ---------- ------------ 1995 1994 ---- ---- (Unaudited) (Audited) ASSETS Current assets: Cash and cash equivalents $ 9,054,645 $ 5,836,389 Accounts receivable, trade 3,415,007 2,411,451 Recoverable income taxes 320,500 320,500 Inventories 220,940 261,959 Prepaid expenses and other current assets 57,944 199,628 ----------- ----------- Total current assets 13,069,036 9,029,927 ----------- ----------- Property and equipment, at cost: Oil and gas properties, successful efforts method 94,284,392 81,863,254 Other property and equipment 837,221 670,110 ----------- ----------- 95,121,613 82,533,364 Less accumulated depreciation and amortization (46,471,382) (43,492,197) ----------- ----------- Net property and equipment 48,650,231 39,041,167 ----------- ----------- $61,719,267 $48,071,094 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current installments of long-term debt $ 3,125,000 $ 1,750,000 Accounts payable 4,920,149 2,611,209 Accrued expenses 1,058,567 590,138 Income taxes payable 404,369 -- ----------- ----------- Total current liabilities 9,508,085 4,951,347 ----------- ----------- Deferred income taxes 1,882,510 1,732,510 Long-term debt 12,500,000 5,250,000 Shareholders' equity: Preferred stock of $.50 par value. Authorized 1,000,000 shares; none issued -- -- Common stock of $.10 par value. Authorized 20,000,000 shares; 4,890,442 and 4,891,379 shares issued and outstanding at June 30, 1995 and December 31, 1994, respectively 489,044 489,138 Additional paid-in capital 18,725,538 18,725,538 Retained earnings 18,614,090 16,922,561 ----------- ----------- Total shareholders' equity 37,828,672 36,137,237 ----------- ----------- Commitments $61,719,267 $48,071,094 =========== =========== See accompanying Notes to Consolidated Financial Statements. MAYNARD OIL COMPANY AND SUBSIDIARIES Consolidated Statements of Operations Six Months ended Three Months ended June 30, June 30, ----------------- ------------------ 1995 1994 1995 1994 ---- ---- ---- ---- Revenues: Oil and gas sales and royalties $10,148,324 $6,506,492 $5,884,593 $3,306,282 ----------- ---------- ---------- ---------- Costs and expenses: Operating expenses 4,018,963 2,451,647 2,223,488 1,245,329 Dry holes and abandonments 84,388 494,395 17,549 474,792 Lease rentals and seismic 22,593 259,454 12,578 150,120 General and administrative 434,815 930,182 184,485 477,021 Depreciation and amortization 3,234,907 2,911,649 1,779,000 1,509,565 --------- --------- --------- --------- 7,795,666 7,047,327 4,217,100 3,856,827 --------- --------- --------- --------- Operating profit (loss) 2,352,658 (540,835) 1,667,493 (550,545) --------- --------- --------- --------- Other income (deductions): Interest income 193,922 211,278 112,344 113,580 Interest expense (440,032) (74,926) (310,700) (34,011) Gain (loss) on disposition of assets 140,401 14,152 (5,777) 7,920 --------- --------- --------- ------- (105,709) 150,504 (204,133) 87,489 --------- --------- --------- ------- Net income (loss) before income taxes 2,246,949 (390,331) 1,463,360 (463,056) Income tax expense (benefit) 550,000 (90,000) 350,000 (116,000) --------- --------- --------- -------- Net income (loss) $1,696,949 $(300,331)$1,113,360 $(347,056) ========== ========= ========== ========= Weighted average number of common shares outstanding 4,891,252 4,891,745 4,891,132 4,891,743 ========== ========= ========= ========= Net income (loss) per common share $ .35 $(.06) $ .23 $(.07) ===== ===== ===== ===== See accompanying Notes to Consolidated Financial Statements. MAYNARD OIL COMPANY AND SUBSIDIARIES Consolidated Statements of Shareholders' Equity Six Months Ended June 30, 1995 (Unaudited) Common Stock Additional ------------ Paid-in Capital Retained Shares Amount Amount Earnings Total ------ ------ ------ -------- ----- Balance at December 31, 1994 4,891,379 $489,138 $18,725,538 $16,922,561 $36,137,237 Net income -- -- -- 1,696,949 1,696,949 Purchase of common stock (937) (94) -- (5,420) (5,514) --------- -------- ----------- ----------- ---------- Balance at June 30, 1995 4,890,442 $489,044 $18,725,538 $18,614,090 $37,828,672 ========= ======== =========== =========== =========== See accompanying Notes to Consolidated Financial Statements. MAYNARD OIL COMPANY AND SUBSIDIARIES Consolidated Statements of Cash Flows Six Months Ended June 30, 1995 1994 ------------------------- Cash flows from operating activities: Net income $1,696,949 $(300,331) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,234,907 2,911,649 Deferred income taxes 150,000 (90,000) Dry holes and abandonments 84,388 494,395 Current year costs of dry holes and abandonments (84,388) (494,395) (Gain) on disposition of assets (140,401) (14,152) (Increase) decrease in current assets: Accounts receivable (1,003,556) 346,873 Inventories 41,019 (30,249) Prepaid expenses and other current assets 141,684 29,845 Increase (decrease) in current liabilities: Accounts payable 2,308,940 2,624 Accrued expenses 468,429 104,117 Income taxes payable 404,369 (500,000) ----------- ---------- Net cash provided by operating activities 7,302,340 2,460,376 ----------- ---------- Cash flows from investing activities: Proceeds from disposition of assets 297,610 25,857 Additions to property and equipment (13,001,180) (1,890,400) ----------- ---------- Net cash used by investing activities (12,703,570) (1,864,543) ----------- ---------- Cash flows from financing activities: Proceeds from issuance of long-term debt 9,500,000 -- Purchase of common stock (5,514) (62,075) Exercise of stock options -- 53,935 Principal payments on long-term debt (875,000) (1,000,000) ----------- ---------- Net cash provided (used) by financing activities 8,619,486 (1,008,140) ----------- ---------- Net increase (decrease) in cash and cash equivalents 3,218,256 (412,307) Cash and cash equivalents at beginning of year 5,836,389 12,404,197 ----------- ---------- Cash and cash equivalents at end of period $ 9,054,645 $11,991,890 =========== =========== See Accompanying Notes to Consolidated Financial Statements. MAYNARD OIL COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements June 30, 1995 1. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments, consisting of all recurring adjustments, necessary to present fairly the Company's financial position as of June 30, 1995 and December 31, 1994, the results of operations for the six months ended June 30, 1995 and 1994 and changes in cash and cash equivalents for the six months ended June 30, 1995 and 1994. The accounting policies followed by the Company are set forth in Note 1 to the Company's financial statements in the 1994 Annual Report to Shareholders. 2. Net income for the six months ended June 30, 1995 is not necessarily indicative of the results of the operations of Maynard Oil Company and Subsidiaries for the year ending December 31, 1995, and is subject to audit adjustments at year-end. 3. Net income (loss) per common share is based on the weighted average number of shares outstanding in each period, which was 4,890,442 and 4,891,379 shares at June 30, 1995 and 1994, respectively. The difference between primary and fully diluted earnings per share, which assumes the exercise of stock options, is not significant. 4. Effective January 1, 1995, the Company purchased interests in approximately 200 producing wells in eight West Texas counties from Pennzoil Exploration and Production Company for a gross purchase price of $10.5 million, which has been added to oil and gas properties on the Consolidated Balance Sheet. This amount was adjusted for the results of operations from January 1, 1995 through March 29, 1995, the closing date for this transaction. The funds to acquire these properties were provided from the Company's cash resources and additional bank borrowings (See Note 5 below). 5. Long-term debt at June 30, 1995 is summarized as follows: June 30, 1995 -------- Amended term note due in 20 equal quarterly installments commencing July 1, 1995, plus one payment of $437,500 due April 1, 1995. Interest paid quarterly at varying rates. Secured by certain oil and gas properties. $15,625,000 Less current installments 3,125,000 ----------- Long-term debt $12,500,000 =========== Effective March 29, 1995, the Company amended its loan agreement with Bank One, Texas to increase its outstanding loan from $6,562,500 to $16,062,500 in connection with the acquisition of the Pennzoil properties discussed in Note 4 above. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Six Months Ended June 30, 1995 Compared to Six Months Ended June 30, 1994 ------------------------------------------------------------------------- The Company reported net income of $1,696,949, or thirty-five cents per share, on revenues of $10,148,324 for the six months ended June 30, 1995 compared with a loss of $300,331, or six cents per share, on revenues of $6,506,492 for the same period a year ago. Earnings for the 1995 period were favorably impacted by the results of operations on the two property acquisitions consummated over the last six months. Oil volumes rose 188,579 barrels during the current period with 73% of the increase coming from the newly acquired properties. Oil pricing increases also helped current period results; the average price received during the 1994 period was $14.45 compared to $17.43 per barrel during the 1995 period, a 21% increase. Gas volumes improved 132,210 mcf (thousand cubic feet) of gas because of the property acquisitions, but failed to offset the gas pricing decline of 51 cents per mcf. Expense categories are difficult to compare because of the two property acquisitions. Lease operating expense and depreciation and amortization expense have increased, as would be expected with additional properties. However, general and administrative expenses are $495,367 less than the same period a year ago, in spite of the addition of the new properties referred to above. The Company's accounting procedure offsets the monies earned from being operator of oil and gas properties against general and administrative expenses. There were approximately 200 properties acquired in December, 1994 on which the Company is now the operator, thus lowering the overall general and administrative costs. Dry hole expense and lease rentals and seismic are $646,868 less in 1995 than 1994 due to a slowing of the Company s exploration activities. Other income (deductions) have also been impacted by the Company s property acquisitions. The utilization of cash to acquire the properties reduced interest income in 1995, and the bank financing of the properties increased interest expense in 1995; additionally, a gain was generated when one of the newly acquired properties was sold. Thus, in 1994, $150,504 was added to net income while $105,709 was charged against earnings in 1995. Quarter Ended June 30, 1995 Compared with Quarter Ended June 30, 1994 --------------------------------------------------------------------- For the quarter ended June 30, 1995, the Company earned $1,113,360, or twenty-three cents per share, compared with a loss of $347,056, or a loss of seven cents per share, for the same quarter a year ago. The current quarter s results improved because of the property acquisitions discussed above and the related revenue increases. Liquidity and Capital Resources ------------------------------- The Company ended its first six months of 1995 with working capital of approximately $3,500,000 and a current ratio of 1.4 to 1, compared to working capital of approximately $9,144,000 and a current ratio of 2.7 to 1 a year ago. The decline in working capital between the current period and a year ago, $5,644,000, was caused by the $20 million acquisition of producing properties for cash and additional bank financing. At June 30, 1995 the Company's total debt was $15,625,000. The Company believes that it has sufficient cash being generated from operating activities or additional borrowing capacity to fund its planned development and exploratory work. PART II. OTHER INFORMATION ITEM 4. Submission of Matters to a Vote of Security Holders --------------------------------------------------- At the Annual Meeting of Stockholders held on May 17, 1995, the stockholders elected Ralph E. Graham, Robert B. McDermott, and James G. Maynard to serve as directors of the corporation for a term expiring in 1996. 4,354,750 shares were cast for the election and 23,000 were withheld. ITEM 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibit 27 - Financial Data Schedule. (b) On April 13, 1995, the Registrant filed its Current Report on Form 8-K with the Securities and Exchange Commission reporting the acquisition of certain producing oil and gas properties which closed on March 29, 1995. SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MAYNARD OIL COMPANY By: /s/ Glenn R. Moore ---------------------------- Glenn R. Moore President By: /s/ Kenneth W. Hatcher ----------------------------- Kenneth W. Hatcher Vice President of Finance Dated: August 9, 1995 EX-27 2
5 1,000 6-MOS DEC-31-1995 JUN-30-1995 9,055 0 3,778 43 221 13,069 95,122 46,471 61,719 9,508 0 489 0 0 37,339 61,719 10,148 10,148 4,019 7,796 (334) 0 440 2,247 550 1,697 0 0 0 1,697 0.35 0.35