<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
X ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
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THE SECURITIES EXCHANGE, ACT OF 1934
For the fiscal year ended March 31,1996
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
- ------------- THE SECURITIES EXCHANGE ACT OF 1934
_______________________________
Commission File Number 0-7984
Tucker Drilling Company, Inc.
(Name of small business issuer in its charter)
DELAWARE 75-1462136
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 1876
San Angelo, Texas 76902
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (915) 655-6773
SECURITIES REGISTERED UNDER SECTION 12(b) OF THE EXCHANGE ACT:
None None
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Title of each class Name of each exchange on which registered
SECURITIES REGISTERED UNDER TO SECTION 12(g) OF THE EXCHANGE ACT:
COMMON STOCK, $.01 PAR VALUE
----------------------------
(Title of Class)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such
shorter period that the issuer was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
YES X NO
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Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B and no disclosure will be contained in this form, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB. X
------
Issuer's total revenues for the year ended March 31, 1996 were $17,870,000.
The aggregate market value of the voting stock held by non-affiliates of
the issuer on May 24, 1996 was $22,462,000.
The number of shares of Common Stock of the Registrant outstanding on May
24, 1996: 2,103,476.
<PAGE>
PART I
ITEM 1. Description of Business.
General Development of Business
The Company is the successor to a business originally formed in 1951 by
Walter F. Tucker and others to provide contract drilling of oil and gas wells.
In 1958, Mr. Tucker purchased the interests of his partners and formed the
Company's predecessor, Tucker Drilling Company, Inc., a Texas corporation which
was merged into the Company in 1975. The Company incorporated in Delaware in
1974 to merge with its predecessor for the purpose of changing the domicile of
the predecessor corporation. Prior to the merger, the Delaware corporation had
no other operations.
As used herein, the term "Company" or "Registrant" shall refer to Tucker
Drilling Company, Inc., and its predecessors.
The Company is principally engaged in onshore contract oil and gas drilling
operations in Texas, and also engages in oil and gas exploration and development
for its own account and in the production and sale of oil and gas from its net
reserves. Most of the Company's contract drilling activities were conducted in
West and North Texas in the Permian and Hardeman Basins.
Industry Segments
For information on business segments of the Company, see Note G to the
Financial Statements, Page 25.
Narrative Description of Business
Contract Drilling
General. The Company engages in onshore contract drilling of oil and gas
wells for major oil companies, independent oil and gas producers and for its own
account. The Company owns and operates 13 land drilling rigs with depth
capacities to 13,500 feet. Generally, the Company's rigs are operated in the
Permian Basin of West Texas and the Hardeman Basin of North Texas. An onshore
drilling rig consists of engines, drawworks, mast, pumps to circulate the
drilling fluid, blowout preventers, the drillstring and related equipment. The
size and type of rig utilized depend upon well depth and site conditions, among
other factors.
Contracts. All wells drilled by the Company are on the basis of rate
charges determined on a footage, daywork or, turnkey basis or a combination
thereof, with rates dependent on the anticipated complexity of drilling the
well, on-site drilling conditions, the type of equipment to be used, the
Company's estimate of the risks involved and the estimated duration of the work
to be performed, among other considerations. For the two years ended March 31,
1996, the majority of contracts were performed on a footage basis, the
substantial portion of which were in the mid depth range of 6,000 to 9,000 feet.
Drilling contracts are obtained either through competitive bidding or
through direct negotiation. Contracts are usually entered into for short-term
periods covering the drilling of one or more wells and obligate the Company to
advance certain costs and to assume certain expenses in connection with drilling
operations.
Contracts entered into on a footage basis provide for an agreed price per
foot drilled regardless of the time required or the problems involved in
drilling the well, with certain limitations, and related costs of drilling
(i.e., rig mobilization, labor, fuel usage and other costs) are included in the
footage charge. Daywork contracts provide for a fixed charge per day for
drilling the well, and the customer generally bears the major portion of the
related costs of drilling. In other instances, the Company drills wells on a
turnkey basis which normally requires the drilling of a well to a specified
depth at an agreed price. Compared to daywork contracts, footage and turnkey
contracts involve a higher degree of risk to the Company, and accordingly,
normally provide a potential for greater profitability.
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The Company encounters substantial risk of damage to its property and
property to others, personal injury to its employees and others, and loss of
hole, among other risks. Such risks may result in difficulty in predicting
future costs and recovering costs through pricing of contracts.
The following table sets forth for each of the periods indicated the
approximate percentages of contract drilling revenues attributable to each of
the various forms of drilling contracts performed by the Company.
<TABLE>
<CAPTION>
Year Ended March 31,
--------------------
Type of Contract 1996 1995
---- ----
<S> <C> <C>
Footage.......... 61% 95%
Daywork.......... 39% 5%
</TABLE>
Contract drilling operations depend on the availability of drill pipe and
bits, fuel and qualified personnel, some of which have, from time to time, been
in short supply. The Company has not recently experienced any shortage of these
resources.
Market, Customers and Competition. The following table sets forth certain
information regarding the Company's contract drilling activity for the two-year
period ended March 31, 1996.
<TABLE>
<CAPTION>
Number
Of Rigs
Year Number Percentage Operating Rig
Ended Of Wells Of At End Of Utilization
March 31: Drilled (1) Revenues Period Rate (2)
--------- ----------- ---------- --------- -----------
<S> <C> <C> <C> <C>
1996 166 93% 5 52%
1995 281 96% 10 66%
</TABLE>
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(1) Certain contracts were in connection with Company-operated wells in
which the Company assumed its proportionate share of the drilling expenses. The
number of gross wells involved in such contracts in which the Company had
varying percentage interests for the two years ended March 31, 1996 were as
follows: nine in 1996; and five in 1995.
(2) Utilization rates are based on a 365-day year. A rig is considered
utilized when it is operating or being moved, assembled or dismantled under
contract.
The Company's level of drilling rig utilization is influenced primarily by
the perceived level of future oil and gas prices , tax incentives, mineral lease
terms, and past success ratio for drilling in the Company's areas of operations.
The Company encounters substantial competition in its onshore contract
drilling operations from other drilling contractors. The usual method of
competition in the contract drilling industry is on the basis of price, customer
relations, rig availability, performance and condition of equipment used.
Competition can be readily moved into the Company's areas of operations at any
time. Many of such competitors have greater resources and personnel than the
Company.
For the year ended March 31, 1996, the Company drilled a total of 157 wells
for 40 unaffiliated customers, most of whom were independent oil and gas
operators. This compared with 276 wells drilled for 38 unaffiliated customers
for the year ended March 31, 1995. During the year ended March 31, 1996 two
contract drilling customers accounted for 21% and 19%, respectively, of
revenues. During the year ended March 31, 1995 three contract drilling
customers accounted for 17%, 15% and 14%, respectively, of revenues.
Oil and Gas Operations
General. The Company's oil and gas operations consist of the geological
evaluation of prospective oil and gas properties, the acquisition of oil and gas
leases or other mineral interests for the purpose of drilling for its own
account, and the production and sale of oil and gas from its properties. These
operations are principally conducted
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in West Texas.
The Company has one full-time geologist whose services are principally
utilized in the generation and evaluation of oil and gas prospects. From time
to time the Company also utilizes the services of independent consulting
geologists.
The Company participates with other individuals, partnerships and
corporations in its oil and gas operations, as is customary in the industry.
For some of the wells in which it has an interest the Company acted as drilling
contractor and acts as operator through agreements with other interest owners.
These agreements give the Company responsibility for and control of drilling,
completion and operations of the wells.
The Company's agreements involving the drilling of wells with participants
vary but generally provide for a working interest with a proportionate or less
than proportionate share of costs to the Company on the first well drilled on a
prospect to the point a well is determined to be commercially productive or is
otherwise plugged and abandoned. These agreements also provide that all
participants, including the Company, pay their proportionate share of all
subsequent costs. In addition, where the Company is the operator, interest
owners make an additional per well payment to the Company to compensate it for
its administrative and supervisory services.
Substantial capital is required for oil and gas exploration and
development. The Company has financed its oil and gas operations through cash
flows generated from its operations. The extent and the ability of the Company
to participate in oil and gas exploration and development operations in the
future will largely depend on the continued ability to generate such funds.
Market, Customers and Competition. No customer for oil and gas produced by
the Company accounted for 10% or more of the Company's revenues for the fiscal
year ended March 31, 1996.
Oil and gas produced by the Company is marketed under contracts in
accordance with usual industry practice. Oil is sold under short-term
agreements for delivery at the well site, at posted field prices of the oil
produced. Gas is sold under short-term or negotiated long-term supply contracts
for delivery at the well head, with periodic price redetermination clauses. The
price of the Company's gas is not regulated at this time.
Demand and prices for oil and gas in general may depend on domestic
production and consumption, the amount of foreign oil imported and, in the case
of gas, the proximity and capacity of natural gas pipelines and the availability
of alternative fuels. There can be no assurance that current market conditions
will continue to exist, nor can it be determined what effect, if any, future
regulation of the oil and gas industry will have upon the Company's marketing,
operations or production.
Principal materials essential for exploration and production of oil and gas
are drilling rigs and related equipment, production and completion equipment and
supplies, tubing, pumps and pump parts, gas transmission lines, storage tanks,
and other related materials and services. In addition, an adequate availability
of prospects and qualified technical personnel are necessary ingredients to
successful exploration efforts. Except for the availability of its own drilling
rigs, the Company must compete for these materials, properties, and services
with other oil and gas operators and with other industries as well. While the
Company has maintained satisfactory long-term associations and contacts with
suppliers of these materials and services and has maintained an active land
department for the acquisition of new properties, the continued availability of
such materials and services and oil and gas prospects is dependent on a number
of factors not within the control of the Company, and such availability cannot
always be assured.
The Company encounters strong competition from major oil and gas companies,
independent oil and gas operators and others in acquiring properties and leases
for exploration. Many of the Company's competitors have financial resources,
technical staffs and facilities substantially greater than those of the Company.
This competition has intensified in recent years due to the shortage of
attractive and available prospects.
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The Effects of Compliance with Environmental Control and Conservation Laws
The production of oil and gas and the exploration for petroleum products in
general are subject to regulation under the conservation laws and environmental
regulations of the majority of the oil and gas producing states as well as the
federal government. These regulations generally govern the allowable rates and
volume of production for oil and gas, the type of equipment used, the spacing of
wells, the treatment of abandoned wells, the anti-pollution measures to be
observed in drilling and production and numerous other matters.
The enforcement of these regulations may have the effect of substantially
increasing the cost of equipment and the conduct of the Company's operations,
particularly with respect to the measures necessary for compliance with existing
environmental control laws. Within the state of Texas where substantially all
of the Company's operations are conducted, these regulations are principally
enforced at the state level by the Texas Railroad Commission and the Texas Water
Commission.
The Company believes that its equipment as currently utilized and its
methods of operations generally conform to the standards of applicable
regulations, and the Company does not anticipate any material or extraordinary
capital expense to comply with these regulations.
Number of Persons Employed by the Company
At March 31, 1996, the Company employed 168 persons all of whom are full
time employees, of which 150 persons were employed in operations, 9 persons were
administrative employees, 8 persons were supervisory personnel, and there was
one technical staff.
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ITEM 2. Description of Properties.
The significant properties of the Company consist of (i) proved developed
oil and gas reserves, (ii) undeveloped mineral leasehold interests, (iii)
machinery and equipment, and (iv) office and support facilities, more
particularly described as follows:
Proved Developed Oil and Gas Reserves
Substantially all of the Company's production of oil and gas and producing
properties are located within the United States, in the State of Texas.
The Company's estimated proved oil and gas reserves at March 31, 1996, as
compared with March 31, 1995:
ESTIMATES OF RESERVES AND PRODUCTION PERFORMANCE ARE SUBJECTIVE AND MAY
CHANGE MATERIALLY AS ACTUAL PRODUCTION INFORMATION BECOMES AVAILABLE.
<TABLE>
<CAPTION>
Net Quantities of Estimated
Proved Reserves (1)(4)(5) Future
------------------------------ Net Revenues
Oil Gas Discounted
Bbls. MCF(2) at 10%
------------------------------ ------------
<S> <C> <C> <C>
Proved developed reserves:(3)
March 31, 1995 130,575 1,287,092 $ 2,179,000
March 31, 1996 151,894 1,298,421 $ 2,437,000
</TABLE>
See Note I, Item 1 of Notes to Financial Statements
___________
(1) "Proved Reserves" are estimated quantities of crude oil and natural gas
which geological and engineering data demonstrate with reasonable certainty to
be recoverable in future years from known reservoirs under existing economic and
operating conditions. Prices for oil and gas control the economic limitations
for the extraction of oil and gas, and the Company has calculated its reserves
on the basis of prices for oil and gas in effect on the dates the estimates were
made. Revisions of prices, either upward or downward, would affect the
estimates of the Company's reserves.
(2) No information is included for any reserves of gas which do not have
access to pipelines. Proved reserves are shown only for properties in those
areas which are now open to production.
(3) Proved developed reserves are the estimated quantities of oil and gas
which can be expected to be recovered through existing wells with existing
equipment and operating methods.
(4) Estimates are based upon studies prepared by Badgwell & Haas,
independent engineers.
(5) Reserves are shown net of other interests or royalties, and include
operated and non-operated properties.
Other than with the Securities and Exchange Commission, the Company has not
filed any oil or gas estimates, nor has it included any such estimates in
reports to federal governmental agencies.
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<PAGE>
The following table sets forth certain information concerning production
from the Company's producing properties for each of the last two fiscal years.
<TABLE>
<CAPTION>
Year Ended March 31,
------------------------
1996 1995
------------ ----------
<S> <C> <C>
Crude Oil Production (in
barrels) (1) 43,891 26,455
Natural Gas Production (in
MCF) (1)(2) 330,469 256,543
Gross Revenues from
Production $1,275,063 $ 852,189
Production and
Processing Costs (3) (334,548) (267,823)
---------- ---------
Net Revenues $ 940,515 $ 584,366
========== =========
Average Sale Price Per Unit:
Oil (barrel) $ 17.79 $ 17.17
---------- ---------
Gas (MCF) $ 1.50 $ 1.55
---------- ---------
Average Production Cost
Per Unit (in barrel
equivalents) (4) $ 3.34 $ 3.87
---------- ---------
</TABLE>
__________
(1) Oil and gas production is shown net of royalties and production
attributable to the interests of others.
(2) Only marketable production of gas on an "as sold" basis is included.
(3) "Production and Processing Costs" are costs directly related to the
extraction of oil or gas, and do not include depreciation, depletion, or
amortization of exploration and development costs. For additional information
relating to production costs, see the information described below with respect
to capital costs and expenses incurred in production operations.
(4) Six MCF of gas is equivalent to one barrel of oil.
At March 31, 1996, the Company had interests in productive wells and
acreage as set forth in the table below.
<TABLE>
<CAPTION>
Productive Wells (1)(4)
-----------------------------------
Oil Gas Developed Acreage (1)
----------------- ---------------- ---------------------
Gross(2) Net(3) Gross(2) Net(3) Gross(2) Net(3)
------- -------- ------- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
43 7.90 29 4.80 7,720 1,290
</TABLE>
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(1) Productive wells are producing wells and wells which are capable of
production. Developed acres are acres which are spaced or assigned to
productive wells.
(2) A gross well or acre is a well or acre in which an interest is owned.
The number of gross wells or acres is the total number of wells or acres in
which an interest is owned.
(3) A net well or acre is deemed to exist when the sum of the fractional
ownership working interests in gross wells or acres equals one.
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(4) The Company had one gross well with multiple completions at March 31,
1996, which is shown in the table above as one well.
During the fiscal years ended March 31, 1996, and 1995, the Company
participated in a total of 16 and 14, respectively, gross new wells for its own
account with the following results:
<TABLE>
<CAPTION>
Year Ended March 31,
--------------------------------
1996 1995
-------------- -------------
Gross Net Gross Net
----- --- ----- ---
<S> <C> <C> <C> <C>
Exploratory Wells:
Oil -- -- -- --
Gas 1 .08 1 .25
Dry Holes 2 .31 7 .68
-- ---- -- ----
TOTAL 3 .39 8 .93
== ==== == ====
Development Wells:
Oil 5 1.72 4 1.09
Gas 2 .36 2 .44
Dry Holes 6 1.30 -- --
-- ---- -- ----
TOTAL 13 3.38 6 1.53
== ==== == ====
</TABLE>
Undeveloped Mineral Leasehold Interests
The Company presently has full or partial interests in oil and gas leases,
oil and gas mineral rights, fee rights or other rights authorizing it to drill
for and produce oil and gas.
At March 31, 1996, the Company owned undeveloped leasehold interests (i.e.,
leases on which wells have not been drilled or completed to the point where
production exists) in approximately 34,000 gross acres and 5,600 net acres,
located principally in the Permian Basin of West Texas. This compares with
approximately 9,000 gross acres and 1,300 net acres held at March 31, 1995.
Leasehold interests in oil and gas properties are generally entered into
for a fixed period of time, such as for three to five years, and are usually
capable of being extended by production or the payment of delay rentals, which
are payments made for the privilege of deferring production or exploration, as
may be required by the terms of the lease. Such interests are also subject to
development and rental requirements, which if not performed may cause the lease
to be terminated. If not extended, a substantial portion of the Company's
undeveloped leasehold interests expire during the next three fiscal years.
Oil and gas properties in general are subject to customary royalty
interests contracted in connection with the acquisition of title, liens incident
to operating agreements, liens for current taxes, and other burdens and minor
encumbrances, easements and restrictions. The Company believes that the
existence of any such burdens does not materially detract from the value of its
leasehold interests.
The Company usually undertakes a comprehensive title examination of its
properties at the time of acquisition, including, in most cases, receiving a
title opinion of legal counsel. Prior to the commencement of drilling
operations, in certain cases, a supplemental updating of title is made,
depending on the date of acquisition and according to the requirements of the
participants in its drilling prospect. The Company believes that the title of
all of its properties is generally good and that any defects which might affect
any particular parcel of property would not be deemed material.
Machinery and Equipment
Principal equipment utilized by the Company in its operations consists of
thirteen land drilling rigs with depth ranges from 5,000 to 13,500 feet, all of
which are in good operating order and are well maintained. Most of the
Company's drilling equipment was acquired as used equipment or was otherwise
assembled in the Company's yard, utilizing both new and used parts.
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The table set forth below summarizes the Company's drilling equipment
available for operations.
<TABLE>
<CAPTION>
Depth Range
Number of Rig Type (in feet)
------------- ------------------ --------------
<S> <C> <C>
Rig # 1 Gardner Denver 700 5,000 - 10,500
Rig # 2 BDW-650 5,000 - 10,000
Rig # 3 Brewster N-55 5,000 - 8,500
Rig #4 BDW-650 5,000 - 8,500
Rig # 5 BDW-650 5,000 - 10,000
Rig # 6 BDW-800 5,000 - 13,500
Rig # 7 Brewster N-45 5,000 - 7,200
Rig # 8 BDW-650 5,000 - 10,500
Rig # 9 BDW-650 5,000 - 8,500
Rig #10 Brewster N-55 5,000 - 8,500
Rig #11 BDW-800 5,000 - 13,500
Rig #12 Gardner Denver 700 5,000 - 10,500
Rig #14 Brewster N-75 5,000 - 10,500
</TABLE>
The Company maintains a substantial inventory of spare drilling rig
components in its yard at San Angelo, Texas. Many of these components have in
the past been part of drilling rigs operated by the Company and may be
interchanged with similar components which are part of drilling rigs currently
being operated by the Company.
The Company also owns and operates miscellaneous vehicles, pick-up trucks,
and eleven tractor trailers.
Office and Support Facilities
The principal offices of the Company, which are owned by the Company, are
located in the Petroleum Building, 14 East Beauregard, in San Angelo, Texas
consisting of approximately 11,000 square feet of office facilities. The Company
owns a warehouse consisting of approximately 9,700 square feet; an equipment
yard, consisting of approximately twenty-three acres; and a rig maintenance
building consisting of approximately 10,000 square feet, all approximately five
miles from the Company's offices.
The Company also owns land and a building at San Angelo, which was formerly
operated as a supply store by the Company.
ITEM 3. Legal Proceedings.
NONE
ITEM 4. Submission of Matters to a Vote of Security Holders.
NONE
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PART II
ITEM 5. Market for Common Equity and Related Stockholder Matters.
The common stock of the Company is traded in the NASDAQ, National Market
System under the symbol TUCK. The following table sets forth the high and low
closing prices for the common stock on a quarterly basis for the past two years.
<TABLE>
<CAPTION>
Closing Prices
-----------------
High Low
------ -------
<S> <C> <C>
Fiscal 1996:
April 1 through June 30, 1995 8 6-1/4
July 1 through September 30, 1995 8-3/4 7
October 1 through December 31, 1995 8-3/4 7-1/4
January 1 through March 31, 1996 10-1/2 7-5/8
Fiscal 1995:
April 1 through June 30, 1994 5 4-3/8
July 1 through September 30, 1994 6-1/8 4-3/4
October 1 through December 31, 1994 6-5/8 5-1/16
January 1 through March 31, 1995 7-1/4 5
</TABLE>
__________
There were approximately 453 stockholders of record on May 24, 1996.
There have been no cash dividends paid on the common stock. The Board of
Directors has historically followed a policy of reinvesting the earnings of the
Company in its business and of not distributing any part thereof as dividends.
The Board of Directors has no present intention to initiate the payment of cash
dividends, and future dividend policy of the Company will depend on the
earnings, capital requirements and financial condition of the Company and other
relevant factors.
ITEM 6. Management's Discussion and Analysis or Plan of Operation.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1996 the Company had cash and cash equivalents in the
amount of $6,877,000 compared to $3,476,000 as of March 31, 1995. For the year
ended March 31, 1996 cash flows from operations were $4,418,000 compared to
$4,164,000 for the year ended March 31, 1995. Although working capital provided
by operations decreased to $3,028,000 from $4,348,000 due primarily to a
decrease in net income, relative changes in accounts receivable balances
resulted in an increase in cash flow from operations in the amount of $1,517,000
for the year ended March 31, 1996. Cash flows used in investing activities was
$1,163,000 for the year ended March 31, 1996 compared to $2,839,000 for the year
ended March 31, 1995. Purchases of property and equipment were $3,381,000 for
the year ended March 31, 1996 (approximately $2,300,000 for drilling equipment
and approximately $1,100,000 for oil and gas properties) compared to $2,233,000
for the year ended March 31, 1995 (approximately $1,300,000 for drilling
equipment and approximately $900,000 for oil and gas properties). Purchases of
drill pipe were approximately $1,400,000 for the year ended March 31, 1996.
This amount was significantly higher than planned, as the Company accelerated
its purchases in anticipation of longer intervals between order and delivery,
and price increases. Proceeds from the sale of property and equipment decreased
to $171,000 from $1,080,000. During the year ended March 31, 1995 the Company
sold its interests in 35 producing oil and gas wells. For the year ended March
31, 1996 net sales of marketable securities were $2,046,000 compared to net
purchases in the amount of $1,686,000 for the year ended March 31, 1995.
Management decided to decrease the average maturity of its investments of excess
cash balances.
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<PAGE>
The Company will continue to incur capital costs necessary to maintain the
efficiency of its drilling rigs and to drill for its own account when necessary
to maintain its leasehold position. Management expects to spend an aggregate of
$1,500,000 to $2,000,000 for these purposes in the year ending March 31, 1997.
RESULTS OF OPERATIONS
Segment Revenues and Operating Income or Loss
For the year ended March 31, 1996 compared to the year ended March 31, 1995
contract drilling revenues decreased 28% as average rig utilization decreased
14%. Revenue from daywork contracts increased to 31% from 5%. Comparing
daywork to footage type contracts, daywork normally results in lower revenues
and costs per day, and lower risk for the contractor. Income from this segment
decreased to $1,030,000 from $3,123,000 due primarily to lower gross profit
resulting from lower rig utilization.
For the year ended March 31, 1996 compared to the year ended March 31, 1995
oil and gas sales increased 50%. Average oil volumes increased 66% to 120
barrels per day and the average price per barrel increased 4% to $17.79.
Average gas volumes increased 29% to 903 MCF per day and the average price of
gas decreased 3% to $1.50 per MCF. There was a loss from this segment of
$169,000 for the year ended March 31, 1996 compared to a loss of $108,000 for
the year ended March 31, 1995. As of March 31, 1996 the Company adopted SFAS
121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of, and accordingly, wrote down the carrying value of
certain of its oil and gas fields, resulting in a charge to expense in the
amount of $159,000 for the year ended March 31, 1996.
For the year ended March 31, 1996 general and administrative expenses
include approximately $150,000 for financial advisory and legal services related
to merger and acquisition activities.
INCOME TAXES
For the year ended March 31, 1996 the Company recognized benefits of
deferred income tax assets, primarily net operating loss and depletion
carryforwards, in the amount of $840,000. Management believes that it is more
likely than not that such carryforwards will be utilized to reduce future
federal income tax liabilities of the Company. No such benefits have been
recognized in prior years.
RECENT ACCOUNTING STANDARDS
In 1995 the Financial Accounting Standards Board issued SFAS 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of", which is effective for years beginning after December 15, 1995.
The Company adopted SFAS 121 as of March 31, 1996 and has determined to group
all of the assets of the contract drilling segment as a whole, and the assets of
the oil and gas segment by field for the purpose of determining whether an asset
is impaired.
SFAS 123, "Accounting for Stock-Based Compensation", which was issued by
the Financial Accounting Standard Board, is effective for years beginning after
December 15, 1995. The Statement defines a fair value based method of
accounting (i.e., using an option pricing model such as Black-Scholes) for
employee stock options or similar equity instrument plans, but also allows an
entity to measure compensation costs for those plans using the intrinsic value
(the amount by which the market price of the underlying stock exceeds the
underlying price of the option) based method of accounting as prescribed by
Accounting Principles Board Opinion No. 25. The Company plans to continue using
the intrinsic value based method.
FUTURE
On April 22, 1996 the Company and Patterson Energy, Inc. (Patterson)
executed a definitive merger agreement whereby, subject to the approval of
stockholders of the Company and Patterson and certain other conditions, the
Company and Patterson will merge through an exchange of common stock with
Patterson being the surviving entity. The merger is expected to be consummated
during the second quarter of the Company's Fiscal Year 1997.
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<PAGE>
ITEM 7. Financial Statements
Financial Statements are filed as a part of this report. See page 12,
Index to Financial Statements.
ITEM 8. Change In and Disagreements with Accountants on Accounting and
Financial Disclosure.
None
-11-
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Report of Independent Public Accountants............................. 14
Financial Statements:
Balance Sheets at March 31, 1996 and 1995.......................... 15
Statements of Operations for the Years Ended
March 31, 1996 and 1995......................................... 17
Statements of Changes in Stockholders' Equity
for the Years Ended March 31, 1996 and 1995..................... 18
Statements of Cash Flows for the Years Ended
March 31, 1996 and 1995......................................... 19
Notes to Financial Statements...................................... 20
-12-
<PAGE>
(This page intentionally left blank.)
-13-
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Board of Directors and Stockholders of
Tucker Drilling Company, Inc.
We have audited the accompanying balance sheets of Tucker Drilling Company,
Inc. ( a Delaware corporation) as of March 31, 1996 and 1995, and the related
statements of operations, changes in stockholders' equity and cash flows for the
years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Tucker Drilling Company,
Inc. as of March 31, 1996 and 1995, and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN LLP
San Antonio, Texas
May 16, 1996
-14-
<PAGE>
TUCKER DRILLING COMPANY, INC.
BALANCE SHEETS
ASSETS
------
<TABLE>
<CAPTION>
March 31,
--------------------------
1996 1995
------------ ------------
<S> <C> <C>
Current assets
Cash and cash equivalents....................................... $ 6,877,012 $ 3,475,677
Marketable securities, partially restricted as to use (Note C).. 524,323 2,570,459
Accounts receivable, net of allowance for doubtful
accounts of $17,757 in 1996 and 1995........................... 2,073,988 2,792,795
Insurance refund receivable..................................... --- 756,946
Equipment inventory............................................. 8,628 25,703
Costs of uncompleted drilling contracts
in excess of related billings.................................. 227,269 415,471
Prepaid expenses................................................ 176,991 168,892
Deferred tax assets............................................. 444,380 ---
----------- -----------
Total current assets......................................... 10,332,591 10,205,943
----------- -----------
Property and equipment, at cost
Drilling rigs and equipment..................................... 22,363,721 20,505,968
Producing oil and gas properties, based on
successful efforts accounting.................................. 5,573,617 4,944,323
Unproved properties, based on successful
efforts accounting............................................. 251,500 338,032
Automotive equipment............................................ 2,392,183 1,987,932
Buildings....................................................... 1,218,445 1,225,594
Office furniture................................................ 520,411 511,814
Land............................................................ 96,622 96,622
Other........................................................... 481,942 439,602
----------- -----------
32,898,441 30,049,887
Less accumulated depreciation, depletion
and amortization............................................ 25,125,040 23,305,968
----------- -----------
7,773,401 6,743,919
----------- -----------
Deferred tax assets.............................................. 396,043 ---
----------- -----------
Other assets..................................................... 590,432 646,468
----------- -----------
Total assets.................................................. $19,092,467 $17,596,330
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-15-
<PAGE>
TUCKER DRILLING COMPANY, INC.
BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<TABLE>
<CAPTION>
March 31,
------------------------
1996 1995
----------- -----------
<S> <C> <C>
Current liabilities
Accounts payable......................................... $ 1,013,315 $ 1,016,303
Accrued insurance expenses............................... 120,076 237,198
Accrued payroll and other accrued expenses............... 264,184 307,902
Royalties payable........................................ 91,215 70,844
Income taxes payable..................................... 51,810 46,384
Billings on uncompleted drilling contracts in excess of
related costs........................................... --- 45,000
----------- -----------
Total current liabilities 1,540,600 1,723,631
----------- -----------
Deferred liabilities...................................... 376,746 324,650
----------- -----------
Commitments and Contingencies
Stockholders' equity
Preferred stock, $.01 par value
Authorized - 500,000 shares............................. --- ---
Common stock, $.01 par value
Authorized shares - 5,000,000
Issued and outstanding shares - 2,097,476 in 1996
and 2,072,476 in 1995.................................. 20,975 20,725
Capital in excess of par value........................... 4,946,384 4,799,509
Retained earnings........................................ 12,207,762 10,727,815
----------- -----------
17,175,121 15,548,049
----------- -----------
Total liabilities and stockholders' equity $19,092,467 $17,596,330
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-16-
<PAGE>
TUCKER DRILLING COMPANY, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended March 31,
----------------------------
1996 1995
------------- -------------
<S> <C> <C>
Revenues
Contract drilling.................................... $16,594,979 $23,189,704
Oil and gas.......................................... 1,275,063 852,189
----------- -----------
17,870,042 24,041,893
----------- -----------
Costs and expenses
Contract drilling.................................... 13,140,272 17,743,859
Oil and gas exploration and production............... 334,548 294,711
Depreciation, depletion and amortization............. 2,184,236 1,942,899
Writedown due to impairment of long-lived assets..... 159,403 ---
Dry holes and abandonments........................... 108,624 185,968
General and administrative........................... 1,697,510 1,784,360
----------- -----------
17,624,593 21,951,797
----------- -----------
Income from operations................................ 245,449 2,090,096
----------- -----------
Other income (expense)
Net gain on sale of property and equipment........... 64,280 357,390
Interest income...................................... 399,689 215,528
Other................................................ 23,032 (39,032)
----------- -----------
487,001 533,886
----------- -----------
Income before income taxes............................ 732,450 2,623,982
Income taxes (benefits)
Current.............................................. 92,926 47,887
Deferred............................................. ( 840,423) ---
----------- -----------
Net income............................................ $ 1,479,947 $ 2,576,095
=========== ===========
Net income per common share........................... $.71 $1.25
=========== ===========
Weighted average number of common shares outstanding.. 2,084,925 2,065,177
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-17-
<PAGE>
TUCKER DRILLING COMPANY, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common stock Capital in
------------------------ excess of Retained
Shares Amount par value earnings
------------ ---------- ----------- ------------
<S> <C> <C> <C> <C>
Balance at March 31, 1994 2,065,076 $20,651 $4,756,133 $ 8,151,720
Exercising of stock options 7,400 74 43,376 ---
Net income --- --- --- 2,576,095
--------- ------- ---------- -----------
Balance at March 31, 1995 2,072,476 20,725 4,799,509 10,727,815
Exercising of stock options 25,000 250 146,875 ---
Net income --- --- --- 1,479,947
--------- ------- ---------- -----------
Balance at March 31, 1996 2,097,476 $20,975 $4,946,384 $12,207,762
========= ======= ========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-18-
<PAGE>
TUCKER DRILLING COMPANY, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended March 31,
-----------------------------
1996 1995
------------- --------------
<S> <C> <C>
Cash flows from operating activities
Net income................................................. $ 1,479,947 $ 2,576,095
Adjustments to reconcile net income
to net cash provided by operating activities
Depreciation, depletion and amortization................. 2,184,236 1,942,899
Writedown due to impairment of long lived-assets......... 159,403 ---
Dryholes and abandonments................................ 108,624 185,968
Net gain on sales of property and equipment.............. (64,280) (357,390)
Deferred income tax benefit.............................. (840,423) ---
Decrease in other assets................................... 56,036 126,809
Increase in deferred liabilities........................... 52,096 182,701
Changes in current assets and liabilities
(Increase) decrease in accounts receivable............... 1,475,753 (41,529)
(Increase) decrease in equipment inventory............... 17,075 (3,168)
(Increase) decrease in costs of uncompleted drilling
contracts in excess of related billings................ 188,202 (184,168)
Increase in prepaid expenses............................. (8,009) (21,458)
Decrease in payables and accrued expenses................ (345,978) (287,343)
Increase (decrease) in billings on uncompleted drilling
contracts in excess of related costs................... (45,000) 45,000
------------ ------------
Net cash provided by operating activities.................. 4,417,592 4,164,416
------------ ------------
Cash flows from investing activities
Net sales (purchases) of marketable securities............. 2,046,136 (1,685,929)
Proceeds from the sale of property and equipment........... 171,334 1,079,973
Purchases of property and equipment........................ (3,380,852) (2,233,232)
------------ ------------
Net cash used in investing activities...................... (1,163,382) (2,839,188)
------------ ------------
Cash flows from financing activities
Proceeds from the exercise of stock options................ 147,125 43,450
------------ ------------
Net increase in cash and cash equivalents.................. 3,401,335 1,368,678
Cash and cash equivalents at beginning of year............. 3,475,677 2,106,999
------------ ------------
Cash and cash equivalents at end of year................... $ 6,877,012 $ 3,475,677
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
-19-
<PAGE>
TUCKER DRILLING COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
Years Ended March 31, 1996 and 1995
NOTE A - Summary of Accounting Policies
1. Description of business and management estimates
Tucker Drilling Company, Inc. (Company) engages in onshore contract drilling
of oil and gas wells for major oil companies, independent oil and gas producers
and for its own account. The Company owns 13 drilling rigs with depth
capacities to 13,500 feet which generally operate in the Permian Basin of West
Texas and the Hardeman Basin of North Texas. The Company is also engaged in oil
and gas operations, primarily in West Texas.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported revenues and expenses for the reporting period. Actual results
could differ from those estimates.
2. Equipment inventory
Equipment inventory consists of oil field equipment to be used in
conjunction with the Company's oil and gas producing activities and expendable
parts to be used in the Company's drilling activities. The inventory is stated
at the lower of cost or market. Cost is determined by the average cost method.
3. Drilling operations
The Company follows the completed contract method of accounting for contract
drilling operations. Under this method, all drilling advances, direct costs
and appropriate portions of indirect costs (including maintenance, repairs and
depreciation) related to the contracts in progress are deferred and recognized
as revenues and expenses in the period the contracts are completed; however,
provisions for losses are made on incomplete contracts when significant losses
are anticipated.
4. Oil and gas sales
The Company recognizes oil and gas sales when the oil and gas is delivered
into facilities owned by the purchaser.
5. Property and equipment
(a) Oil and gas properties
The Company follows the successful efforts method of accounting, using the
field as its accumulation center for capitalized costs. Under the successful
efforts method of accounting, costs which result directly in the discovery of
oil and gas reserves, all development costs and estimated restoration and
abandonment costs in excess of estimated salvage value are capitalized.
Exploration costs which do not result directly in discovering oil and gas
reserves are charged to expense in the year of determination. The capitalized
costs, consisting of lease acquisition costs, intangible development costs,
lease and well equipment and estimated restoration and abandonment costs in
excess of estimated salvage value are depreciated, depleted and amortized on the
unit-of-production method, based on petroleum engineer estimates of recoverable
proved developed oil and gas reserves of each respective field.
Under the Company's method of accounting prior to March 31, 1996, the
aggregate amount of capitalized costs should not exceed the present value
(discounted at 10%) of the estimated net future cash flows from the
-20-
<PAGE>
proved developed oil and gas reserves based on year end pricing. Accordingly,
it has been the Company's policy to charge to expense, in the year of
determination, capitalized costs in excess of such value. As of March 31, 1996
the Company adopted SFAS 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed of, and accordingly will charge to
expense, in the year of determination, capitalized costs in excess of the
present value of the estimated net future cash flows from the proved developed
oil and gas reserves for each field. For the year ended March 31, 1996 the
Company wrote down the carrying value of certain of its oil and gas fields in
the amount of approximately $159,000.
(b) Other property and equipment
Depreciation of property and equipment (other than oil and gas properties)
is provided principally on the straight-line method over estimated useful lives
as follows:
<TABLE>
<CAPTION>
Lives (years)
-------------
<S> <C>
Drilling rigs and equipment.. 2-15
Automotive equipment......... 2- 6
Buildings.................... 5-20
Office furniture............. 5-10
Other........................ 3- 7
</TABLE>
As of March 31, 1996 the Company adopted SFAS 121 and accordingly will charge
to expenses, in the year of determination, capitalized costs in excess of the
present value of future net cash flows from the contract drilling segment as a
whole. There was no impairment of contract drilling assets recognized as of
March 31, 1996.
(c) Unproved leaseholds and royalties
The costs of acquiring unproved properties are capitalized and carried in the
accounts until the property is capitalized as a producing oil and gas property,
or is surrendered or otherwise disposed of, at which time the full amount is
charged to operations. Unproved leaseholds and royalties are assessed annually
for impairment of value. As of March 31, 1996 and 1995, $55,989 and $313,440,
respectively, were reserved for impairment and included in accumulated
depreciation, depletion and amortization.
6. Maintenance and repairs
Maintenance and repairs are charged to operations. Renewals and betterments
which extend the life of or improve existing properties are capitalized.
7. Income per common share
Income per share of common stock is based on the weighted average number of
shares outstanding during the year and common stock equivalents for the year, if
any. Common stock equivalents are excluded when their effect is antidilutive.
8. Statement of cash flows
For purposes of reporting cash flows, cash and cash equivalents include cash
on hand and investments with original maturities of three months or less.
9. Income taxes
Income taxes are recorded in accordance with Statement of Financial
Accounting Standards No. 109 (SFAS No. 109). SFAS No. 109 requires recognition
of deferred tax liabilities and assets for the expected future tax consequences
of events that have been included in the financial statements or tax returns.
Deferred tax liabilities and assets are determined based on the difference
between the financial statement and tax bases of assets and liabilities using
enacted regular tax rates for the year in which the asset is recovered or the
liability is settled.
-21-
<PAGE>
10. Impairment of Value
Management continually evaluates the recoverability of the carrying value of
the Company's assets and provides for any impairment of such assets on a
quarterly basis based on assumptions that Management determines to be reasonable
in light of the current business environment.
11. Reclassification
Certain reclassifications have been made to the financial statements as of
March 31, 1995 and for the year then ended in order for them to conform to the
presentation as of March 31, 1996 and for the year then ended. The
reclassifications had no effect on net income or stockholders' equity for that
year.
NOTE B - Certain Banking Relationships
During the year ended March 31, 1995, the Company had a director who was also
a director of a subsidiary of the bank holding company in which a portion of the
Company's cash was deposited. During such year the Company was not indebted to
such bank and a substantial amount of the Company's cash and cash equivalents
were and continue to be invested in U.S. Treasury securities or accounts
collaterized by U.S. Treasury securities. Substantially all of the Company's
interest income is derived from its cash and cash equivalents. As of January,
1995 the Company terminated its relationship with such bank.
NOTE C - Letter of Credit
As of March 31, 1996 the Company has established a letter of credit in the
amount of $475,000 with a bank for the benefit of an insurance company as
collateral for retrospective premiums and retained losses which could become
payable under the terms of the Company's insurance contract. The Company pays a
fee in the amount of one percent per annum on the unused balance and the letter
of credit expires on November 30, 1996 with provision for an indefinite number
of annual extensions of the expiration date. As of March 31, 1996, no amounts
have been drawn under such letter of credit.
The Company has pledged as collateral a U.S. Treasury bill which matures on
November 14, 1996 with a book value of $524,323 as of March 31, 1996 against the
letter of credit.
NOTE D - Supplemental Executive Retirement Plan
Effective April 1, 1991, the Company established the Tucker Drilling Company,
Inc. Supplemental Executive Retirement Plan for officers and key employees.
Pursuant to agreements with participants, the Company is obligated to pay each
participant or his beneficiaries a lump sum at such participant's death,
disability or retirement. These obligations are unsecured general liabilities
of the Company. As of March 31, 1996 there were seven participants in the plan
and benefits will accrue to the participants in equal annual amounts over ten
years of service beginning April 1, 1991. Fully-vested benefits are, in the
aggregate, $1,498,000. The estimated present value of future benefits as of
April 1, 1991 will be accrued over the same ten year period as benefits vest.
As of March 31, 1996, $237,037 has been accrued as a liability, and for the year
ended March 31, 1996, $44,188 has been expensed. As of March 31, 1995, $192,849
had been accrued as a liability, and for the year then ended, $50,900 was
expensed under the plan.
The Company, through a grantor trust of which it is beneficiary, owns life
insurance policies on the participants, and an annuity from which future
premiums on the life insurance policies will be paid. As of March 31, 1996,
these assets are included as Other Assets at a book value of approximately
$568,000. As of March 31, 1995, Other Assets included approximately $528,000 of
these assets.
The insurance company which is the issuer of the life insurance and annuity
contracts owned by the Company is currently under the supervision of the
Michigan Commissioner of Insurance pursuant to an Order of Rehabilitation.
Although the insurance company has continued to pay death benefits and scheduled
annuity benefits, cash surrender values reflected above may be subject to change
and access to such cash surrender values may be limited pending the negotiation
of assumption reinsurance agreements.
-22-
<PAGE>
NOTE E - Employee Stock Option Plan
In March 1983, the Board of Directors approved and implemented an Incentive
Stock Option Plan (including stock appreciation rights) which was amended in
1988 to allow for granting of nonqualified stock options, and in 1991 was
further amended to eliminate stock appreciation rights. The purpose of the Plan
is to attract and retain key employees and directors to the Company and to
provide such persons with a proprietary interest in the Company through the
granting and exercise of stock options. The maximum number of shares of Common
Stock which may be granted under the Plan is 171,500 shares. The proceeds from
the sale of Common Stock pursuant to the Plan will be added to the general funds
of the Company and used for general corporate purposes.
In June 1994 the Board of Directors adopted the Tucker Drilling Company, Inc.
1994 Non Qualified Stock Option Plan. Officers and directors of the Company are
not eligible to receive options from this plan. The maximum number of shares
available for issuance under the plan is 28,000 shares. The Plans provide that
options may be granted to purchase shares at prices not less than the fair
market value at date of grant. The exercise period is governed by option
agreements, but in no event may the exercise period extend beyond ten years from
date of grant.
Stock option activity for the years ended March 31, 1996 and 1995 was as
follows:
<TABLE>
<CAPTION>
Price per
Shares Share Aggregate
---------- ---------- ----------
<S> <C> <C> <C>
Balance, March 31, 1994.. 158,500 $5.75-6.38 $ 941,125
Granted.................. 12,000 6.13 73,500
Exercised................ (7,400) 5.75-6.13 (43,450)
Surrendered.............. (600) 6.13 (3,675)
------- ---------- ---------
Balance, March 31, 1995.. 162,500 $5.75-6.38 $ 967,500
Granted.................. --- --- ---
Exercised................ (25,000) 5.89 (147,125)
Surrendered.............. (2,400) 6.13 (14,700)
------- ---------- ---------
Balance, March 31, 1996.. 135,100 $5.75-6.38 $ 805,675
======= ========== =========
</TABLE>
Outstanding options are exercisable in equal annual installments over five
or ten year periods and expire in February 2001. Options for 125,500 shares are
exercisable at March 31, 1996, at an average exercise price of $5.96 per share.
SFAS 123, "Accounting for Stock-Based Compensation", which is effective for
years beginning after December 15, 1995, defines a fair value based method of
accounting for employee stock options or similar plans (i.e., using an option
pricing model such as Black-Scholes). The Statement also allows an entity to
measure compensation costs for those plans using intrinsic value (the amounts by
which the market price of the underlying stock exceeds the underlying price of
the options) based accounting method as prescribed by Accounting Principles
Board Opinion No. 25. The Company plans to continue to use the intrinsic value
based method.
-23-
<PAGE>
NOTE F - Income Taxes
All components of income before income taxes are derived within the
United States.
The effective income tax rate varies from the Federal statutory rate as
follows:
<TABLE>
<CAPTION>
Years ended March 31,
------------------------
1996 1995
------------- ---------
<S> <C> <C>
Statutory tax rate................ 34.0% 34.0%
Net operating loss carryforward... (34.0) (34.0)
Alternative minimum taxes......... 0.3 1.8
State franchise taxes............. 12.3 ---
Reduction of valuation allowance.. (114.7) ---
------ -----
Effective tax rate (102.1%) 1.8%
====== =====
</TABLE>
As of March 31, 1996 and 1995, the Company had deferred tax assets
totaling $1,545,000 and $1,613,000, respectively; deferred tax liabilities
totaling $705,000 and $799,000, respectively. As of March 31, 1996 the Company
did not provide a valuation allowance as a reduction of its deferred tax assets.
Based on the Company's recent history of earnings and the outlook for the
Company's future, management believes that it is more likely than not that the
Company will realize the benefits of its deferred tax assets. The Company
recognized a deferred tax benefit in the amount of $840,000 during the year
ended March 31, 1996. As of March 31, 1995, the Company had a valuation
allowance in the amount of $814,000. The valuation allowance was based on the
likelihood that tax benefits would not be realized. As of March 31, 1996 and
1995, the components of deferred tax amounts are as follows (in thousands of
dollars):
<TABLE>
<CAPTION>
Assets (Liabilities)
As of March 31,
--------------------
1996 1995
-------- ------
<S> <C> <C>
Net operating loss carryforward.............. $ 845 $1,041
Depletion carryforward....................... 612 413
Alternative minimum tax credit carryforward.. 78 47
Depreciation, depletion, and amortization.... (705) (799)
Other........................................ 10 112
------ ------
840 814
Valuation allowance.......................... -- (814)
------ ------
$ 840 --
====== ======
</TABLE>
As discussed in Note A, the Federal income tax provisions were calculated in
accordance with SFAS No. 109.
As of March 31, 1996, the Company had net operating loss carryforwards for
regular tax purposes of approximately $2,485,000 which expire in 2003 through
2008, and $327,000 net operating loss carryforwards for alternative minimum tax
purposes which expire in 2005 through 2008. In addition, a statutory depletion
carryforward of approximately $1,801,000 is available to reduce future taxable
income, subject to statutory limitations, and may be carried forward
indefinitely.
The availability of the net operating loss carryforwards to reduce taxable
income is subject to various limitations under the Internal Revenue Code of 1986
(Code), as amended, in the event of an ownership change as defined in Section
382 of the Code.
-24-
<PAGE>
NOTE G - Business Segments
The Company is engaged in contract drilling of oil and gas wells, and oil and
gas exploration, development and production. Total revenues by business segment
include sales to unaffiliated customers.
Information concerning the Company's business segments is as follows:
<TABLE>
<CAPTION>
Year Ended March 31,
----------------------------
1996 1995
------------- -------------
<S> <C> <C>
Revenues
Contract drilling........................ $16,594,979 $23,189,704
Oil and gas.............................. 1,275,063 852,189
----------- -----------
$17,870,042 $24,041,893
=========== ===========
Income (loss) from operations
Contract drilling........................ $ 1,029,702 $ 3,122,927
Oil and gas.............................. (169,053) (107,740)
Other, net............................... (126,542) (121,611)
----------- -----------
734,107 2,893,576
General corporate income (expense)(a)..... (1,657) (269,594)
----------- -----------
Income before income taxes................ $ 732,450 $ 2,623,982
=========== ===========
Identifiable assets
Contract drilling........................ $ 7,597,409 $ 8,334,631
Oil and gas.............................. 2,139,283 1,802,975
Other.................................... 9,355,775 7,458,724
----------- -----------
Total assets.............................. $19,092,467 $17,596,330
=========== ===========
Depreciation, depletion and amortization
Contract drilling........................ $ 1,563,712 $ 1,508,885
Oil and gas.............................. 493,982 312,403
Other.................................... 126,542 121,611
----------- -----------
$ 2,184,236 $ 1,942,899
=========== ===========
Capital expenditures
Contract drilling........................ $ 2,425,812 $ 1,300,829
Oil and gas.............................. 1,068,020 706,783
Other.................................... 42,340 21,718
----------- -----------
$ 3,536,172 $ 2,029,330
=========== ===========
</TABLE>
(a) General corporate income consists primarily of interest income and
unallocated general and administrative expenses.
For the year ended March 31, 1996, two customers who are affiliated with each
other accounted for 25% of revenues, and one other customer accounted for 19% of
revenues.
For the year ended March 31, 1995, two customers who are affiliated with each
other accounted for 19% of revenues, and two other customers accounted for 15%
and 14% of revenue, respectively.
-25-
<PAGE>
NOTE H - Oil And Gas Expenditures
Gross oil and gas expenditures by the Company in the United States are
summarized below:
<TABLE>
<CAPTION>
Year Ended March 31,
-----------------------
1996 1995
---------- ---------
<S> <C> <C>
Property acquisition costs - evaluated properties.... $ 87,585 $ 191,965
unevaluated properties.. 304,582 10,134
Exploration costs.................................... 81,570 250,390
Development costs.................................... 711,802 415,335
---------- ---------
$1,185,539 $ 867,824
========== =========
</TABLE>
The aggregate amount of capitalized costs of oil and gas properties was
comprised of the following:
<TABLE>
<CAPTION>
Year Ended March 31,
------------------------
1996 1995
----------- -----------
<S> <C> <C>
Proved properties..................................... $5,573,617 $4,944,323
Unproved properties................................... 251,500 338,032
---------- ----------
$5,825,117 $5,282,355
========== ==========
Accumulated depreciation, depletion and amortization.. $3,987,198 $3,929,817
========== ==========
</TABLE>
-26-
<PAGE>
NOTE I - Supplementary Oil And Gas Reserve Information And Related Data
(Unaudited)
1. Oil and gas reserve quantities
The following table sets forth information with respect to quantities of net
proved developed oil and gas reserves, and changes in those reserves for the
years ended March 31, 1996, and 1995. The quantities were estimated by an
independent petroleum engineering firm. The Company's proved developed oil and
gas reserves are located entirely within the United States.
ESTIMATES OF RESERVES AND PRODUCTION PERFORMANCE ARE SUBJECTIVE AND MAY
CHANGE MATERIALLY AS ACTUAL PRODUCTION INFORMATION BECOMES AVAILABLE.
<TABLE>
<CAPTION>
Oil Gas
(Bbls) (MCF)
----------- ----------
<S> <C> <C>
Estimated quantity, March 31, 1994........... 153,109 1,241,887
Revision in previous estimates............... (2,409) 107,833
Extensions, discoveries and other additions.. 34,161 424,996
Purchases of reserves in place............... 27,400 181,495
Sales of reserves in place................... (55,231) (412,576)
Production................................... (26,455) (256,543)
-------- ---------
Estimated quantity, March 31, 1995........... 130,575 1,287,092
Revision in previous estimates............... 3,012 137,084
Extensions, discoveries and other additions.. 59,918 164,328
Purchases of reserves in place............... 2,280 40,386
Production................................... (43,891) (330,469)
-------- ---------
Estimated quantity, March 31, 1996........... 151,894 1,298,421
======== =========
</TABLE>
2. Results of operations for oil and gas producing activities
<TABLE>
<CAPTION>
Year Ended March 31,
----------------------
1996 1995
----------- ---------
<S> <C> <C>
Oil and gas revenues........................................ $1,275,063 $852,189
---------- --------
Costs and Expenses..........................................
Production costs........................................... 333,638 267,659
Exploration expenses....................................... 34,795 160,128
Depreciation, depletion and amortization................... 493,982 312,403
Write down due to impairment............................... 159,403 ---
Income tax................................................. 86,103 38,080
---------- --------
1,107,921 778,270
---------- --------
Results of operations for oil and gas producing activities.. $ 167,142 $ 73,919
========== ========
</TABLE>
-27-
<PAGE>
3. Standardized measure of future net cash flows of proved developed oil and
gas reserves, discounted at 10% per annum
<TABLE>
<CAPTION>
Year Ended March 31,
---------------------
1996 1995
-------- -----------
(000's omitted)
<S> <C> <C>
Future gross revenues..................................... $5,312 $4,475
Future development and production costs................... 2,134 1,700
Future income tax expense (a)............................. 123 106
------ ------
Future net cash flows..................................... 3,055 2,669
Discount at 10% per annum................................. (741) (659)
------ ------
Standardized measure of discounted future net cash flows.. $2,314 $2,010
====== ======
</TABLE>
(a) Future income taxes are computed by applying the statutory tax rate to
future net cash flows less the tax basis of the properties and net operating
loss attributable to oil and gas operations and investment tax credit
carryforwards as of year-end; statutory depletion and tax credits applicable to
future oil and gas producing activities are also considered in the income tax
computation.
4. Changes in the standardized measure of net cash flows of proved developed
oil and gas reserves discounted at 10% per annum.
The principal changes in the aggregate standardized measure of discounted
future net cash flows attributable to the Company's proved developed oil and gas
reserves are shown below.
<TABLE>
<CAPTION>
Year Ended March 31,
------------------------
1996 1995
-------- --------
(000's omitted)
<S> <C> <C>
Standardized measure at beginning of year................... $2,010 $1,858
Sales and transfers of oil and gas produced, net of
production costs........................................... (941) (584)
Sale of reserves in place................................... -- (569)
Net changes in sales price and future
production and development costs........................... (8) 24
Extensions, discoveries, improved recovery and purchase of
reserves in place, less related costs...................... 1,128 1,181
Revision of previous quantity estimates..................... 154 91
Accretion of discount....................................... 218 186
Net change in income taxes.................................. (17) (106)
Changes in production rates................................. (264) (142)
Other....................................................... 34 71
------ ------
Standardized measure at end of year......................... $2,314 $2,010
====== ======
</TABLE>
-28-
<PAGE>
NOTE J - Concentrations Of Credit Risk
Financial instruments which potentially subject the Company to concentrations
of credit risk consist primarily of demand deposits, temporary cash investments,
and trade receivables.
The Company believes that it places its demand deposits and temporary cash
investments with high credit quality financial institutions. At March 31, 1996
and 1995, the Company's demand deposits and temporary cash investments consisted
of the following:
<TABLE>
<CAPTION>
As of March 31,
---------------------------
1996 1995
---------- ----------
<S> <C> <C>
Deposits in FDIC-insured institutions
at or below $100,000 and cash on hand............... $ 109,293 $ 153,534
Deposits in FDIC-insured institutions over $100,000.. 103,685 ---
Investment in U.S. Treasury securities............... --- 985,875
Mutual fund collaterized by U.S. Treasury
obligations and repurchase agreements which are
collaterized by U.S. Treasury obligations........... 6,664,034 2,336,268
---------- ----------
Cash and Cash equivalents............................ 6,877,012 3,475,677
Investment in U.S. Treasury securities
(at cost as of March 31)............................ 524,323 2,570,459
---------- ----------
$7,401,335 $6,046,136
========== ==========
</TABLE>
Concentrations of credit risk with respect to trade receivables are
primarily focused on contract drilling receivables. The concentration is
mitigated by the diversification of customers for which the Company provides
drilling services. No significant credit losses from individual contracts were
experienced during each of the two years ended March 31, 1996.
The carrying values of cash and cash equivalents, marketable securities and
trade receivables approximate fair value due to the short-term maturity of these
assets.
NOTE K - Subsequent Events
On April 22, 1996 the Company and Patterson Energy, Inc. (Patterson) executed
a definitive merger agreement whereby, subject to the approval of stockholders
of the Company and Patterson and certain other conditions, the Company and
Patterson will merge through an exchange of common stock with Patterson being
the surviving entity. The merger is expected to be consummated during the
second quarter of the Company's Fiscal Year 1997.
-29-
<PAGE>
PART III
ITEM 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
With Section 16 (a) of the Exchange Act.
A brief description of each director and executive officer of the Company
is provided below. Executive officers are elected by the Board of Directors
at its annual meeting and hold office at the pleasure of the Board of Directors
or until the next annual meeting or until their successors are elected and
qualified.
Larry J. Tucker, 48, has served as Chairman of the Board of Directors since
May 1988, as President of the Company since May 1980 and as Chief Executive
Officer since February 1986. He served as Vice President-Exploration of the
Company for more than five years prior thereto. Since May 1, 1996 he has been
on temporary leave of absence due to personal illness.
Charles B. Middlekauf, 49, has served as Executive Vice President of the
Company since August 1984. He also has served as Secretary of the Company since
March 1984 and as Treasurer of the Company since May 1980.
T. Mark Tucker, 42, has served as Vice President-Land of the Company since
March 1983 and as landman for the Company since October 1981. Since May 1, 1996
he has been Acting Chairman of the Board and President.
Bruce L. Fly, 70, served as Chairman of the Board of Directors of the Company
from December 1981 until his retirement in May 1988, and he served as Chief
Executive Officer from May 1982 to February 1986. Mr. Fly served as Vice
Chairman of the Board of Directors of the Company from May 1980 to December 1981
and as President of the Company for more than five years prior thereto.
Marcus H. Cheaney, 72, has served as a Director of Texas Commerce Bank-San
Angelo since February 1973, and as Senior Chairman of the Board of Directors of
that bank from 1979 until his retirement in February 1986.
W.P. Carr, Jr., 55, has been an independent oil and gas operator for more
than five years.
Ronald L. Scandolari, 46, has served as Vice President-Contract Drilling of
the Company since February 1986. Mr. Scandolari served as Contract
Representative for the Company from December 1981 to February 1986.
Larry J. Tucker and T. Mark Tucker are brothers.
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
officers and directors of the Company and persons who beneficially own more than
ten percent of the Company's common stock to file reports of securities
ownership and changes in such ownership with the Securities and Exchange
Commission (the "SEC"). Officers, directors and greater than ten-percent
beneficial owners also are required by rules promulgated by the SEC to furnish
the Company with copies of all Section 16(a) forms they file.
Based solely upon a review for reportable transactions, it has been
determined that for the year ended March 31, 1996 all reports required to be
filed were timely filed.
-30-
<PAGE>
ITEM 10. Executive Compensation.
Tables
The following tables set forth information relating to officers of the
Company whose total annual salary and bonus from the Company exceeded $100,000
for the year ended March 31, 1996.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term Compensation
---------------------------------------
Annual Compensation Awards Payouts
------------------------------------------------ ---------------------------------------
Other Restricted Number of All
Name and Annual Stock Securities LTIP Other
Principal Fiscal Compensation Award(s) Underlying Payouts Compensation
Position Year Salary ($) Bonus ($) ($)(1) ($) Options/SARS(#) ($) ($)
- ------------------- ------ ------------ ---------- ---------- --------- --------------- ------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Larry J. Tucker 1996 150,000 2,880 --- --- --- --- 41,600 (2)
Chairman of 1995 147,917 43,750 --- --- --- --- 41,600 (2)
the Board 1994 137,500 2,000 --- --- --- --- 41,600 (2)
and President
</TABLE>
(1) Mr. Tucker was provided certain non-cash compensation and personal
benefits. However, the aggregate amount of such other compensation did not
exceed $50,000 or 10% of the compensation paid to him.
(2) Represents the amount that became vested during the year pursuant to
the Tucker Drilling Company, Inc. Supplemental Executive Retirement Plan.
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year End Option/SAR Values
<TABLE>
<CAPTION>
Value of
Number of Securities Unexercised
Underlying Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End (#) FY-End ($)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise (#) Value Realized Unexercisable Unexerciseable
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Larry J. Tucker --- --- 20,000 Exercisable $ 76,375
</TABLE>
-31-
<PAGE>
Severance Pay Agreements
The Company and five of its officers and/or key employees are parties to
severance pay agreements pursuant to which amounts would be payable to such
persons upon a change in control of the Company followed by such person's
termination, significant reduction of job responsibilities, reduction of such
person's salary, or required relocation of such person. As of March 31, 1996,
Larry J. Tucker would be entitled to $300,000 under a severance pay agreement
upon occurrence of the above mentioned events.
Compensation Pursuant To Stock Option Plan
In March, 1983 the Board of Directors of the Company adopted the Tucker
Drilling Company, Inc. 1983 Incentive Stock Option Plan (the "Option Plan")
which was amended and restated in January 1988. The Option Plan was approved by
the stockholders of the Company at the Company's 1983 Annual Meeting of the
Stockholders and the amendment and restatement were approved by the stockholders
of the Company at the Company's 1988 Annual Meeting of the Stockholders. The
amendment and restatement provided for: the granting of non-qualified options as
well as incentive stock options; both employees and directors to be eligible to
receive non-qualified options; an option holder to tender payment of the
exercise price in cash, shares of previously owned Common Stock, or a
combination of both; and payments upon exercise of stock appreciation rights to
be made in shares of Common Stock, cash, or a combination of both. The Board of
Directors further amended the Option Plan in August 1991, to eliminate stock
appreciation rights. The Option Plan is administered by the Compensation
Committee of the Board of Directors.
The price at which options are granted must be not less than 100% of the
fair market value at the time the option is granted. The option period may not
be longer than ten years from the date the option is granted. No options may be
granted under the Option Plan after January 31, 1993; however, options granted
before the termination date continue to be effective and subject to the terms of
the Option Plan.
For the year ended March 31, 1996, no options were granted, 25,000 options
were exercised and 2,400 options were terminated. As of March 31, 1996 there
were 19 participants in the Option Plan to whom options for an aggregate of
123,100 shares have been granted and were outstanding at an average option price
of $5.95 per share.
In June, 1994 the Board of Directors of the Company adopted the Tucker
Drilling Company, Inc. 1994 Non Qualified Stock Option Plan. Officers and
directors of the Company are not eligible to receive options. The maximum
number of shares available for issuance under the plan is 28,000 shares. The
price at which options are granted must not be less than 100% of the fair market
value of the stock at the time the option is granted and the option period may
not be longer than ten years from the date the option is granted. No options
may be granted under the plan after January 31, 1999. Options for 12,000 shares
at an average option price of $6.13 per share have been granted as of March 31,
1996 (of which 2,400 shares were exercisable).
Compensation Pursuant to Supplemental Executive Retirement Plan
Effective April 1, 1991, the Company established the Tucker Drilling
Company, Inc. Supplemental Executive Retirement Plan. Pursuant to agreements
with participants, the Company is obligated to pay each participant or his
beneficiaries a lump sum at such participant's death, disability, or retirement.
These obligations are unsecured general liabilities of the Company and are
unfunded except to the extent of available death benefits or accumulated cash
value of related life insurance policies. Eligible participants and benefits
are determined by the Compensation Committee of the Board of Directors of the
Company. As of March 31, 1996, there were seven participants in the plan.
Benefits accrue to the participants and vest in equal annual amounts over ten
years of service beginning April 1, 1991, and the estimated present value of
future benefits as of April 1, 1991 are expensed over the same ten year period.
The Company, through a grantor trust of which it is beneficiary, owns life
insurance policies on the participants, proceeds from which benefits will be
paid. Premiums on the life insurance policies either have been paid or will be
paid from an annuity contract owned by the grantor trust. There have been no
benefits paid to participants since inception of the plan. Larry J. Tucker's
fully-vested benefits (at death or normal retirement at age 65) are $416,000,
50% of which was vested as of March 31, 1996.
-32-
<PAGE>
ITEM 11. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth, as of May 24, 1996, information concerning
the beneficial ownership of Common Stock of the Company by each Director of the
Company and by each person known to the Company to be the beneficial owner of
more than 5% of the outstanding shares of the Company's Common Stock.
<TABLE>
<CAPTION>
Number of Shares Percent
Name and Address Beneficially Owned (1) Of Class
- ------------------------------------ ----------------------- ---------
<S> <C> <C>
Dimensional Fund Advisors, Inc.. 149,600 (2) 7.11%
1229 Ocean Ave., Suite 650
Santa Monica, California 90401
Larry J. Tucker................. 116,732 (3) (4) 5.50%
P.O. Box 1876
San Angelo, Texas 76902
Stavisky Family................. 114,500 (5) 5.44%
c/o Reid & Priest
40 West 57th Street
New York, New York 10019
T. Mark Tucker.................. 66,804 (6) 3.15%
3226 Ridgecrest
San Angelo, Texas 76904
Charles B. Middlekauf........... 16,000 (7) 0.75%
3209 Clearview
San Angelo, Texas 76904
Bruce L. Fly.................... 9,505 (8) 0.45%
3102 San Antonio
San Angelo, Texas 76901
Marcus H. Cheaney............... 8,000 (8) 0.38%
3706 Inglewood
San Angelo, Texas 76904
W. P. Carr, Jr.................. 8,000 (8) 0.38%
8333 Douglas, Suite 950
Dallas, Texas 75225
All officers and directors as a group
(7 persons) 231,741 10.61%
</TABLE>
__________
(1) Unless otherwise indicated, each person has sole voting and dispositive
power with respect to the shares set forth opposite his name.
(2) According to Dimensional Fund Advisors Inc. ("Dimensional"), a
registered investment adviser, Dimensional is deemed to have beneficial
ownership of 149,600 shares of Common Stock as of March 31, 1996, all of which
shares are held in portfolios of DFA Investment Dimensions Group Inc., a
registered open-end investment company, or in
-33-
<PAGE>
series of the DFA Group Trust, a Delaware business trust, or the DFA
Participation Group Trust, investment vehicles for qualified employee benefit
plans, for both of which Dimensional serves as investment manager. Dimensional
disclaims beneficial ownership of all such shares.
(3) Excludes 1,100 shares held by Mrs. Larry J. Tucker; Larry J. Tucker
disclaims any beneficial interest in all of such shares.
(4) Includes 26,332 shares held by children of Larry J. Tucker. Includes
20,000 shares issuable upon exercise of options granted by the Company.
(5) Theresa Stavisky, Aron Stavisky and Nellie Stavisky have sole voting
and dispositive power over 10,000; 23,000; and 13,000 shares, respectively.
Hedva Stavisky-Weiss, Jeremy Stavisky and Abigail Stavisky-Lipner share voting
power, and Eugene Roshwalb, Trustee for Halva Stavisky-Weiss, Jeremy Stavisky
and Abigail Stavisky-Lipner, has sole dispositive power, over 68,500 shares.
(6) Includes 16,000 shares issuable upon exercise of options granted by the
Company.
(7) Includes 14,800 shares issuable upon exercise of options granted by the
Company.
(8) Includes 8,000 shares issuable upon exercise of options granted by the
Company.
ITEM 12. Certain Relationships and Related Transactions.
W.P. Carr, Jr., a director of the Company, individually owns or did own
during the fiscal year interests in oil and gas properties which have been
developed or are operated by the Company or in which the Company has invested.
The Company bills Mr. Carr as other owners of interests in properties are billed
(on a current basis), or he is billed by operators of properties in which the
Company has invested, for his proportionate share of the development costs and
operating expenses of such properties. The aggregate indebtedness to the
Company of Mr. Carr did not exceed $60,000 at any time during the year ended
March 31, 1996.
W.P. Carr, Jr., a director of the Company, or entities in which Mr. Carr
has a direct material interest, participated with the Company in certain oil
and gas exploration and production activities. Amounts paid to the Company by
Mr. Carr or entities in which Mr. Carr has a direct material interest for
property and services were not material to the Company. The Company
participated in exploration and production activities with entities in which
W.P. Carr, Jr. has a direct material interest. Amounts paid by the Company to
entities in which Mr. Carr has a direct material interest for property and
services were not material to such entities.
The Board of Directors has a policy as to participation by officers and
directors in oil and gas prospects with the Company. Under such policy, the
Company will limit participation of officers and directors to 25% in the
aggregate for each well, unless a higher participation has been approved by a
committee of disinterested directors, the majority of whom are not employees of
the Company. In addition, any such participation by officers and directors
other than W.P. Carr, Jr. in any Company well will be offered only on the same
terms as those offered to persons other than officers and directors. W.P. Carr,
Jr. will be offered participation on the same terms as those of the Company.
Also, officers and directors are not permitted to compete with the Company for
the acquisition, exploration and development of oil and gas properties.
During the fiscal year ended March 31, 1987, the Company entered into
indemnification agreements with each of the directors and officers of the
Company pursuant to which the Company agreed to indemnify each of the directors
and officers to the full extent permitted by Delaware law.
-34-
<PAGE>
ITEM 13. Exhibits and Reports on Form 8-K.
Exhibits
3.1 -Articles of Incorporation, incorporated by reference to Exhibit
3.1(d) of the Company's annual report on Form 10-K for the year
ended March 31, 1988.
3.2 -Amended By-Laws dated April 15, 1986, incorporated by reference
to Exhibit 3.1(e) of the Company's annual report on Form 10-K
for the year ended March 31, 1988.
10.1 -Severance Pay Agreement effective August 3, 1988 incorporated by
reference to the Company's Proxy Statement dated June 23, 1988.
10.2 -Tucker Drilling Company, Inc. Incentive Stock Option Plan,
incorporated by reference to Exhibit 10.1 of the Company's
annual report on Form 10-K for the year ended March 31, 1988.
10.2 -Tucker Drilling Company, Inc. 1994 Non Qualified Stock Option
Plan, incorporated by reference to the Registration Statement
on Form S-8 filed with the SEC on December 1, 1994.
10.3 -Supplemental Executive Retirement Plan and Supplemental
Executive Retirement Trust Agreements effective April, 1991,
incorporated by reference to the Company's annual report on
Form 10-K for the year ended March 31, 1992.
11.1- Statement re computation of per share earnings, filed herewith.
Reports on Form 8-K
None
-35-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
TUCKER DRILLING COMPANY, INC.
By /s/T. Mark Tucker
------------------------------------
T. Mark Tucker
Acting President
Dated: May 30, 1996
Pursuant the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on May 30, 1996.
SIGNATURE TITLE
/s/T. Mark Tucker Acting President
- --------------------------------------- (Acting Principal Executive Officer)
T. Mark Tucker and Director
/s/Charles B. Middlekauf Executive Vice President, Secretary
- --------------------------------------- and Treasurer (Principal Financial
Charles B. Middlekauf Officer, and Principal Accounting
Officer) and Director
/s/Larry J. Tucker President
- --------------------------------------- (Principal Executive Officer)
Larry J. Tucker and Director
/s/Bruce L. Fly Director
- ---------------------------------------
Bruce L. Fly
/s/Marcus H. Cheaney Director
- ---------------------------------------
Marcus H. Cheaney
/s/W.P. Carr, Jr. Director
- ---------------------------------------
W.P. Carr, Jr.
-36-
<PAGE>
EXHIBIT 11.1
Tucker Drilling Company, Inc.
Statement Re Computation of Per Share Earnings
<TABLE>
<CAPTION>
Year Ended
March 31, 1996
--------------
<S> <C>
Earnings per Share Assuming No Dilution
Net income.................................................. $1,479,947
==========
Weighted average number of shares outstanding.................. 2,084,925
==========
Net income per share assuming no dilution................. $.709832
==========
Assuming Full Dilution
Net income.................................................. $1,479,947
==========
Shares:
Weighted average number of shares outstanding....... 2,084,925
Add - Effect of outstanding options (as determined
by application of the treasury stock method)..... 51,394
----------
Weighted average number of shares outstanding,
as adjusted...................................... 2,136,319
==========
Net income per share: Assuming full dilution.............. $ .692756(a)
============
</TABLE>
(a) This calculation is submitted in accordance with Regulation S-K item
601 (b)(11) although not required by APB Opinion No. 15 because it results
in dilution of less than 3%.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> APR-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 6,877,012
<SECURITIES> 524,323
<RECEIVABLES> 2,091,745
<ALLOWANCES> 17,757
<INVENTORY> 8,628
<CURRENT-ASSETS> 10,332,591
<PP&E> 32,898,441
<DEPRECIATION> 25,125,040
<TOTAL-ASSETS> 19,092,467
<CURRENT-LIABILITIES> 1,540,600
<BONDS> 0
0
0
<COMMON> 20,975
<OTHER-SE> 17,154,146
<TOTAL-LIABILITY-AND-EQUITY> 19,092,467
<SALES> 17,870,042
<TOTAL-REVENUES> 17,870,042
<CGS> 15,927,083
<TOTAL-COSTS> 17,624,593
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 732,450
<INCOME-TAX> (747,497)
<INCOME-CONTINUING> 1,479,947
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,479,947
<EPS-PRIMARY> .71
<EPS-DILUTED> 0
</TABLE>
