-----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, KWVoYUbKpwtquwuQwO/tNNAkVOV8OfrcuOHRkwLfTmy0TDku9w/jVG5lArGHDHsj P95POuXe8Y64veGieFrDvA== 0000914760-96-000105.txt : 19960515 0000914760-96-000105.hdr.sgml : 19960515 ACCESSION NUMBER: 0000914760-96-000105 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 SROS: NASD 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: 96563255 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 March 31, 1996 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 May 7, 1996. 4,889,795 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 March 31, 1996 and December 31, 1995 Consolidated Statements of Operations Three Months ended March 31, 1996 and 1995 Consolidated Statements of Shareholders' Equity Three Months ended March 31, 1996 Consolidated Statements of Cash Flows Three Months ended March 31, 1996 and 1995 Notes to Consolidated Financial Statements Management's Discussion and Analysis of Financial Condition and Results of Operations Signatures MAYNARD OIL COMPANY AND SUBSIDIARIES Consolidated Balance Sheets
March 31, December 31, 1996 1995 (Unaudited) (Audited) ASSETS Current assets: Cash and cash equivalents $ 7,733,514 $ 6,138,903 Accounts receivable, trade 4,154,021 3,297,933 Other current assets 439,611 465,426 ------------ ------------ Total current assets 12,327,146 9,902,262 ------------ ------------ Property and equipment, at cost: Oil and gas properties, successful efforts method 111,852,212 111,473,388 Other property and equipment 514,905 507,953 ------------ ------------ 112,367,117 111,981,341 Less accumulated depreciation and amortization (51,448,040) (49,045,024) ------------ ------------ Net property and equipment 60,919,077 62,936,317 ------------ ------------ $ 73,246,223 $ 72,838,579 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current installments of long-term debt $ 5,000,000 $ 4,812,500 Accounts payable 4,098,527 4,126,013 Accrued expenses 1,153,592 920,653 Income taxes payable 454,695 412,695 ------------ ------------ Total current liabilities 10,706,814 10,271,861 ------------ ------------ Deferred income taxes 2,292,510 2,212,510 Long-term debt 20,000,000 21,250,000 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; 4,889,870 and 4,889,970 shares issued and outstanding 488,987 488,997 Additional paid-in capital 18,831,138 18,831,138 Retained earnings 20,926,774 19,784,073 ------------ ------------ Total shareholders' equity 40,246,899 39,104,208 ------------ ------------ Contingencies and commitments $ 73,246,223 $ 72,838,579 ============ ============ See accompanying Notes to Consolidated Financial Statements.
MAYNARD OIL COMPANY AND SUBSIDIARIES Consolidated Statement of Operations
Three Months ended March 31, 1996 1995 Revenues: Oil and gas sales $7,266,765 $4,230,329 Interest and other 64,316 114,980 Gain on sale of assets 661 146,178 ---------- ---------- 7,331,742 4,491,487 ---------- ---------- Costs and expenses: Operating expenses 2,471,241 1,795,475 Exploration, dry holes and abandonments 100,748 76,854 General and administrative 256,487 250,330 Depreciation and amortization 2,425,774 1,455,907 Interest 454,038 129,332 ---------- ---------- 5,708,288 3,707,898 ---------- ---------- Income before income taxes 1,623,454 783,589 Income tax expense 480,000 200,000 ---------- ---------- Net income $1,143,454 $ 583,589 ========== ========== Weighted average number of common shares outstanding 4,889,951 4,891,379 ========== ========== Net income per common share $ .23 $ .12 ===== =====
MAYNARD OIL COMPANY AND SUBSIDIARIES Consolidated Statements of Shareholders' Equity Three Months Ended March 31, 1996 (Unaudited)
Additional Common Stock Paid-in ---------------- Capital Retained Shares Amount Amount Earnings Total ------ ------ ------ -------- ----- Balance at December 31, 1995 4,889,970 $488,997 $18,831,138 $19,784,073 $39,104,208 Net income -- -- -- 1,143,454 1,143,454 Purchase of common stock (100) (10) -- (753) (763) --------- -------- ----------- ----------- ----------- Balance at March 31, 1996 4,889,870 $488,987 $18,831,138 $20,926,774 $40,246,899 ========= ======== =========== =========== =========== See accompanying Notes to Consolidated Financial Statements.
MAYNARD OIL COMPANY AND SUBSIDIARIES Consolidated Statements of Cash Flows
Three Months Ended March 31, 1996 1995 ---- ---- Cash flows from operating activities: Net income $1,143,454 $ 583,589 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,425,774 1,455,907 Deferred income taxes 80,000 150,000 Dry holes and abandonments 95,627 66,839 Current year costs of dry holes and abandonments (5,918) (66,839) (Gain) on sale of assets (661) (146,178) (Increase) decrease in current assets: Accounts receivable (856,088) (396,604) Prepaid expenses and other current assets 25,815 72,788 Increase (decrease) in current liabilities: Accounts payable (27,486) 183,491 Accrued expenses 232,939 176,502 Income taxes payable 42,000 50,000 ---------- ---------- Net cash provided by operating activities 3,155,456 2,129,495 ---------- ---------- Cash flows from investing activities: Proceeds from disposition of assets 10,031 303,386 Additions to property and equipment (507,613) (10,847,916) ---------- --------- Net cash used by investing activities (497,582) (10,544,530) ---------- ---------- Cash flows from financing activities: Proceeds from issuance of long-term debt -- 9,500,000 Principal payments on long-term debt (1,062,500) (437,500) Purchase of common stock (763) -- ---------- ---------- Net cash provided (used) by financing activities (1,063,263) 9,062,500 ---------- ---------- Net increase in cash and cash equivalents 1,594,611 647,465 Cash and cash equivalents at beginning of year 6,138,903 5,836,389 ---------- ---------- Cash and cash equivalents at end of period $7,733,514 $6,483,854 ========== ========== See Accompanying Notes to Consolidated Financial Statements.
MAYNARD OIL COMPANY AND SUBSIDIARIES Notes to Consolidated Financial Statements March 31, 1996 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 March 31, 1996 and December 31, 1995, the results of operations for the three months ended March 31, 1996 and 1995 and changes in cash and cash equivalents for the three months ended March 31, 1996 and 1995. The accounting policies followed by the Company are set forth in Note 1 to the Company's financial statements in the 1995 Annual Report to Shareholders. 2. Net income for the three months ended March 31, 1996 is not necessarily indicative of the results of the operations of Maynard Oil Company and Subsidiaries for the year ending December 31, 1996, and is subject to audit adjustments at year-end. 3. Net income per common share is based on the weighted average number of shares outstanding in each period, which was 4,889,951 and 4,891,379 shares at March 31, 1996 and 1995, respectively. 4. In March 1995, the Financial Accounting Standards Board ( FASB ) issued Statement of Financial Accounting Standards ( SFAS ) No. 121, Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of. This statement requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. No. 121 establishes guidelines for determining recoverability based on future net cash flows from the use of the asset and for the measurement of the impairment loss. Impairment loss under SFAS 121 is calculated as the difference between the carrying amount of the asset and its fair value. Any impairment loss is recorded in the period in which the recognition criteria are first applied and met. Under the successful efforts method of accounting for oil and gas operations, the Company periodically assessed its proved properties for impairments by comparing the aggregate net book carrying amount of all proved properties with their aggregate future net cash flows. At December 31, 1995, the future net cash flows of these proved properties was $86.47 million as compared to the net book carrying amount of $62.67 million. The new statement requires the impairment review be performed at the lowest level of asset groupings for which there are identifiable cash flows. In the case of the Company, this results in a field by field impairment review. The Company adopted SFAS 121 on January 1, 1996 recognizing a $57,000 impairment loss which is included in depreciation and amortization expense on the Consolidated Statement of Operations for the three months ended March 31, 1996. The loss was recorded as the difference between the asset book carrying amounts and future cash flow projections, giving consideration to recent prices, pricing trends, probable and possible reserve recoveries, and discount rates. These projections represent the Company s best estimate of fair value based on the information available. 5. The provision for income taxes consists of the following (thousands of dollars): Three Months Ended March 31 ------------------ 1996 1995 ---- ---- Federal: Current $ 400 $ 50 Deferred (benefit) 80 150 $ 480 $ 200 6. Certain reclassification of 1995 accounts have been made to conform to the 1996 presentation. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Quarter Ended March 31, 1996 Compared to Quarter Ended March 31, 1995 --------------------------------------------------------------------- The Company reported net income of $1,143,454, or twenty-three cents per share, on revenues of $7,331,742 for the quarter ended March 31, 1996 compared with net income of $583,589, or twelve cents per share, on revenues of $4,491,487 for the same quarter a year ago. Results for the first quarter of 1996 were favorably impacted by operations on the two producing property acquisitions completed in 1995. Oil volumes rose 114,227 barrels during this first quarter with 94% of the increase coming from these new properties. Oil pricing increases also helped the current period results; the average price received during the 1995 quarter was $16.70 compared to $18.51 per barrel during the 1996 quarter, an 11% increase. Gas volumes and pricing also improved over a year ago, rising 234,893 thousand cubic feet (mcf) and twenty-three cents per mcf. The other two revenue categories reflected declines from a year ago. Interest income dropped 44% as the Company utilized a portion of its cash to acquire properties, and the gain on the sale of assets fell almost 100% as no producing properties were disposed of during 1996. On a dollar basis, operating expenses reflected an increase of $675,766. However, when converted to a net equivalent barrel basis ( NEB , conversion of 6 mcf equal to 1 NEB), the amounts actually reflect a reduction from 1995 levels - $5.54 per NEB during 1996 compared to $6.14 per NEB in 1995. During 1995 this category included workover expenses on properties acquired in late 1994 which were not recurring during the current period. Exploration costs, which include dry holes and abandonments, climbed 31% from the first quarter of 1995 to the first quarter of 1996 as the Company impaired a portion of its undeveloped leasehold associated with its three- dimensional seismic programs. Depreciation and amortization expense, which includes an impairment of $57,000 related to the adoption of SFAS 121 (see Note 4 to the Consolidated Financial Statements), rose from $4.98 per NEB in 1995 to $5.44 per NEB in 1996, a 7% increase. Interest expense increased from $129,332 in the 1995 quarter to $454,038 in the current year period, reflecting the increase in bank debt from $16,062,500 a year ago to $25,000,000 currently. Liquidity and Capital Resources ------------------------------- The Company ended its first quarter with working capital of approximately $1,620,000 and a current ratio of 1.2 to 1, compared to working capital of approximately $3,606,000 and a current ratio of 1.6 to 1 a year ago. The decline in working capital between the current quarter and a year ago, $1,986,000, was related to the acquisition of producing properties for cash and additional bank financing during the first and fourth quarters of 1995. At March 31, 1996 the Company's total debt was $25,000,000. 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 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 27 Financial Data Schedule, filed herewith. (b) No reports were filed on Form 8-K since the last report. 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. 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: May 10, 1996 EX-27 2
5 1,000 3-MOS DEC-31-1996 MAR-31-1996 7,734 0 4,197 43 0 12,327 112,367 51,448 73,246 10,707 0 0 0 489 39,758 73,246 7,267 7,332 2,471 5,708 0 0 454 1,623 1,143 1,143 0 0 0 1,143 0.23 0.23
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