<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter ended September 30, 1995 Commission file number 0-5426
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The Wiser Oil Company
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(Exact name of Registrant as Specified in its Charter)
Delaware 55-0522128
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(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
8115 Preston Road, Suite 400, Dallas, Texas 75225
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(Address of Principal Executive Offices)(Zip Code)
Registrant's telephone number, including area code 214/265-0080
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NONE
----
Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
x
--- ---
Yes No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report.
Class Outstanding at September 30, 1995
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$3 par value 8,939,368
<PAGE>
THE WISER OIL COMPANY
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PART I
FINANCIAL INFORMATION
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Item 1. Financial Statements
The consolidated condensed financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. The financial statements reflect all
adjustments which are, in the opinion of management, necessary to fairly present
such information. Although the Company believes that the disclosures are
adequate to make the information presented not misleading, certain information
and footnote disclosures, including significant accounting policies, normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. It is suggested that these condensed financial statements be read
in conjunction with the financial statements and the notes thereto, included in
the Company's latest annual report on Form 10-K.
2
<PAGE>
THE WISER OIL COMPANY
---------------------
CONSOLIDATED BALANCE SHEET
--------------------------
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- ------------
Thousands of Dollars
<S> <C> <C>
ASSETS
- ------
Current Assets:
Cash and cash equivalents $ 1,232 $ 2,714
Accounts receivable 7,376 10,900
Inventories 1,751 1,144
Prepaid expenses 1,170 852
-------- --------
Total current assets 11,529 15,610
-------- --------
Marketable Securities,
at market value 24,060 27,337
-------- --------
Property, Plant and
Equipment, at cost:
Oil and gas properties
(successful efforts method) 258,660 250,156
Other properties 4,311 5,443
-------- --------
262,971 255,599
Accumulated depreciation,
depletion, and amortization (91,115) (88,228)
-------- --------
Net property, plant,
and equipment 171,856 167,371
-------- --------
Other Assets 491 473
-------- --------
$207,936 $210,791
======== ========
</TABLE>
The accompanying note is an integral part of these financial statements.
3
<PAGE>
THE WISER OIL COMPANY
---------------------
CONSOLIDATED BALANCE SHEET
--------------------------
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- ------------
Thousands of Dollars
<S> <C> <C>
LIABILITIES AND
STOCKHOLDERS' EQUITY
- --------------------
Current Liabilities:
Accounts payable $ 6,472 $ 9,562
Accrued income taxes 910 1,518
Accrued liabilities 2,080 2,139
Current portion of debt 38 78
-------- --------
Total current liabilities 9,500 13,297
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Long Term Debt 78,000 78,013
Deferred Benefit Cost 1,585 1,052
Deferred Income Taxes 13,220 13,002
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Total liabilities 102,305 105,364
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Stockholders' Equity:
Common Stock - $3 par value;
20,000,000 shares authorized;
9,115,572 shares issued 27,347 27,347
Paid-in capital 3,078 3,078
Retained earnings 62,104 62,414
Marketable securities
valuation adjustment 14,274 16,013
Foreign currency translation 1,557 (696)
Treasury stock of
176,204 shares, at cost (2,729) (2,729)
-------- --------
Total Stockholders' Equity 105,631 105,427
-------- --------
$207,936 $210,791
======== ========
</TABLE>
The accompanying note is an integral part of these financial statements.
4
<PAGE>
THE WISER OIL COMPANY
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CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
------------------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
For the For the
Three Months Ended Nine Months Ended
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September 30, September 30,
------------------ -----------------
1995 1994 1995 1994
-------- -------- -------- -------
Thousands of Dollars
(except per share amounts)
<S> <C> <C> <C> <C>
REVENUES:
Oil and condensate $ 8,858 $ 9,561 $26,552 $23,529
Natural gas liquids 895 352 1,565 995
Natural gas 3,469 4,697 11,578 14,725
Dividend and interest 319 421 973 1,209
Security sale gains 4,296 - 6,740 -
Other 428 316 1,688 980
------- ------- ------- -------
18,265 15,347 49,096 41,438
------- ------- ------- -------
COSTS AND EXPENSES:
Production and operating 5,336 4,911 15,309 15,782
Purchased natural gas 192 182 511 594
Depreciation, depletion, and
amortization 4,714 5,428 14,684 13,806
Abandonments - 27 - 217
Exploration 1,394 1,246 4,018 2,194
General and administrative 1,905 1,310 6,016 4,505
Interest expense 1,446 1,327 4,203 2,498
------- ------- ------- -------
14,987 14,431 44,741 39,596
------- ------- ------- -------
INCOME (LOSS) BEFORE INCOME TAXES 3,278 916 4,355 1,842
PROVISION (BENEFIT) FOR INCOME TAXES 1,424 239 1,983 260
------- ------- ------- -------
NET INCOME (LOSS) 1,854 677 2,372 1,582
Retained earnings -
beginning of period 61,144 56,119 62,414 57,002
Dividends paid (894) (894) (2,682) (2,682)
------- ------- ------- -------
RETAINED EARNINGS END OF PERIOD $62,104 $55,902 $62,104 $55,902
======= ======= ======= =======
AVERAGE OUTSTANDING SHARES 8,939 8,939 8,939 8,939
======= ======= ======= =======
EARNINGS (LOSS) PER SHARE $ .21 $ .08 $ .27 $ .18
======= ======= ======= =======
CASH DIVIDENDS PER SHARE $ .10 $ .10 $ .30 $ .30
======= ======= ======= =======
</TABLE>
The accompanying note is an integral part of these financial statements.
5
<PAGE>
THE WISER OIL COMPANY
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CONSOLIDATED STATEMENT OF CASH FLOW
-----------------------------------
(Unaudited)
<TABLE>
<CAPTION>
For the Nine Months Ended
----------------------------
September 30, September 30,
------------- -------------
1995 1994
------------- -------------
Thousands of Dollars
<S> <C> <C>
Cash Flow From Operating Activities:
Net income $ 2,372 $ 1,582
Adjustments to reconcile net income
to operating cash flow -
Depreciation and depletion 14,684 13,806
Deferred income taxes 1,107 (910)
Security & property sale gains
(before current income tax
expense effect of $786) (7,177) -
Foreign currency translation (43) -
Dry hole cost, abandonments and
lease impairments 3,068 1,790
-------- --------
Other Changes:
Accounts receivable 3,523 (1,521)
Inventories (607) (317)
Prepaid expenses (318) (274)
Other assets (18) 7
Accounts payable (3,060) 1,212
Income taxes, net (607) 1,118
Accrued liabilities (59) 778
Deferred benefit cost 534 827
-------- --------
Operating Cash Flow 13,399 18,098
-------- --------
Cash Flow From Investing Activities:
Additions to property, plant
and equipment (18,791) (62,964)
Proceeds from sales of property,
plant, and equipment 1,142 3,086
Proceeds from security sales 7,503 -
Dry hole cost (2,012) (820)
-------- --------
Investing Cash Flow (12,158) (60,698)
-------- --------
Cash Flow From Financing Activities:
Long term debt issued 8,000 55,600
Payment on long term debt (8,041) (6,848)
Dividends paid (2,682) (2,682)
-------- --------
Financing Cash Flow (2,723) 46,070
-------- --------
Net Increase (Decrease) in Cash (1,482) 3,470
Cash and Cash Equivalents at the
beginning of the period 2,714 3,499
-------- --------
Cash and Cash Equivalents at the
end of the period $ 1,232 $ 6,969
======== ========
</TABLE>
The accompanying note is an integral part of these financial statements.
6
<PAGE>
THE WISER OIL COMPANY
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Notes to Financial Statements
1) Certain reclassifications have been made to the 1994 financial
statements to conform with current year presentation.
2) On June 24, 1994, the Company acquired certain oil and gas
properties from Eagle Resources Ltd. for approximately $53 million
(U.S.). The purchase was funded with proceeds from the Company's
revolving credit agreement, and with existing cash and cash equivalents.
The purchase method of accounting has been followed with respect to the
acquisition. Results of the Eagle properties' operations have been
included in the Company's results of operations as of June 30, 1994.
For additional information see the Form 8-K issued on July 11, 1994.
Unaudited pro forma results of operations, as if the acquisition
took place at the beginning of 1994 are as follows (000's):
Nine Months Ended
-----------------
September 30, 1994
------------------
Revenues $47,382
Expenses 46,172
-------
Net Income $ 1,210
=======
Earnings per share $ .14
=======
3) On January 1, 1995 The Wiser Oil Company adopted Statement of
Financial Accounting (SFAS) No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of". The
adoption of SFAS No. 121 did not have a material effect on the results
of operations.
7
<PAGE>
THE WISER OIL COMPANY
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Item 2. Management's Discussion and Analysis of Financial Conditions and
Results of Operations
CURRENT QUARTER COMPARED WITH THE SAME QUARTER OF THE PREVIOUS YEAR
Third quarter revenues for 1995 were $18.3 million as compared to $15.3
million in 1994, an increase of 20%. Oil and condensate sales of $8.9
million in 1995 declined slightly from $9.6 million in 1994. U.S. operations
decreased $0.9 million and our Canadian operations increased $0.2 million in
1995. Oil and condensate volumes decreased 9% in 1995; however, pricing
increased 2% or $0.28 per barrel. Canadian operations added 1,000 barrels
while U.S. operations declined 52,000 barrels, due to property sales which
occurred during the fourth quarter of 1994. Natural gas liquids sales
increased from $0.5 million to $0.9 million for the third quarter of 1995, as
compared to the 1994. The increase was due to the Wellman Plant, located in
Terry County, Texas, coming on stream. Natural gas sales of $3.5 million in
the third quarter of 1995 were down from $4.7 million in 1994 or 26% for the
quarter. Natural gas volumes remained the same at 2,840,000 MCF for the
period, but were offset by a significant drop in spot market pricing of 26%
or $0.43 per MCF during the third quarter of 1995. Canadian operations
decreased 50,000 MCF while U.S. operations increased 50,000 MCF. The U.S.
operations increase was due mainly to an increase in Kentucky and West
Virginia gas sales, reduced by property sales which occurred during the
fourth quarter of 1994. Dividends and interest income reflected a decline of
24% as the Company has liquidated some of its stock portfolio. Other income
of $0.4 million in the third quarter of 1995 increased $0.1 million over the
third quarter of 1994. The increase is due to an increase in lease bonus
income.
Costs and expenses of $15.0 million compared to $14.4 million in the
same quarter of 1994 increased 4%. U.S. operations costs and expenses
increased $0.2 million or 2%, while the Canadian operations expenses
increased $0.4 million or 10%. Production and operating expenses of $5.3
million in the third quarter of 1995 increased $0.4 million from $4.9 million
in 1994. The Company is realizing the efforts of the disposal of high-
operating expense, marginal U.S. properties which are being offset by
increases in our Canadian operations; also from the third quarter of 1995
acquisition of the Skelly Waterflood Unit located in Lea County, New Mexico
and the start up of the Wellman Plant located in Terry County, Texas.
Purchased gas expense increased 5% during the period as demand for volumes
have increased slightly. Depreciation, depletion and amortization (DD&A) was
$4.7 million in 1995 as compared to $5.4 million in 1994. DD&A for U.S.
operations actually declined 26% for the period; however, the decline was
offset slightly by increased DD&A from our Canadian operations. Exploration
expenses increased $0.1 million in 1995 as dry hole expense increased
exploratory drilling. General and administrative (G&A) expenses of $1.9
million have increased from $1.3 million or 46%. The increase in costs were
mainly due to legal fees incurred during the quarter. The Company considers
these costs as non recurring. Interest expense rose $0.1 million in 1995
from $1.3 million in 1994.
8
<PAGE>
The Company realized net income of $1.9 million for the third quarter of
1995 as compared to net income of $0.7 million for 1994. Our U.S.
operations, net of security sales gains and income taxes, recorded a net
profit of $0.1 million for the period, but was negatively impacted by a net
loss from our Canadian subsidiary of $1.1 million. Results in Canada reflect
three primary factors: substantial interest expenses associated with the
100% financing of the acquired assets, high initial depreciation, depletion,
and amortization charges that include amortization of acquisition costs
associated with items such as probable reserves that can not yet be recorded
as assets, as well as tax and other benefits which will be realized in the
future.
9
<PAGE>
THE WISER OIL COMPANY
---------------------
NINE MONTHS ENDED SEPTEMBER 30, 1995 COMPARED WITH THE SAME PERIOD IN THE
PREVIOUS YEAR
Revenues for nine months ended September 30, 1995 were $49.1 million, an
increase of 18%. Revenues from U.S. operations increased 2% to $38.6
million. The increase of $0.6 million was caused by security sales gains of
$6.7 million, offset by the effect of property sales that occurred during the
fourth quarter of 1994. Our Canadian subsidiary accounted for an additional
$7.0 million in revenue for the same period, as its revenues had no impact
for six months ended June 30, 1994. Oil and condensate sales of $26.6
million were on the rise from $23.5 million a year ago. The U.S. operations
realized a $2.5 million reduction in oil and condensate revenue while the
Canadian subsidiary contributed an additional $5.6 million. Canadian
operations added 327,000 barrels, while U.S. operations declined 302,000
barrels, due to property sales during the fourth quarter of 1994. Natural
gas sales fell in 1995 to $11.6 million from $14.7 million in 1994. U.S.
natural gas operations fell $4.4 million while our Canadian subsidiary added
another $1.3 million. Canadian operations added 1,372,000 MCF, while U.S.
operations declined 663,000 MCF, which was due mainly to property sales
during the fourth quarter of 1994. Dividend and interest income decreased
$0.2 million as the Company continues its long range plans to liquidate its
stock portfolio. Security sale gains were $6.7 million in 1995. Other
income rose $0.7 million from $1.0 million in 1994.
Cost and expenses for the nine months ending September 30, 1995 rose to
$44.7 million as compared to $39.6 million in 1994. Production and operating
expenses declined $0.5 million from 1994 as U.S. operating expenses declined
$2.3 million or 15% and Canada added $1.8 million as its operating expenses
had no impact for the six months ended June 30, 1994. Purchased natural gas
declined $0.1 million for the time period as demand and pricing fell.
Depreciation, depletion and amortization (DD&A) of $14.7 million increased 6%
or $0.9 million over the previous year. U.S. operations recorded a 31%, or
$3.6 million, drop in DD&A during the first nine months of 1995 while our
Canadian operations contributed an additional $4.5 million. Increases in
exploration expenses of $1.8 million were mainly due to increased surrendered
lease expenses in the U.S. of $0.2 million and dry hole expenses of $0.9
million, and in Canada an increase of $0.3 million in dry hole expense.
General and administrative expenses rose $1.5 to $6.0 million. The increase
in costs were due to increased staffing for Wiser's Canadian subsidiary,
which accounted for $0.8 million and $0.6 million from legal fees incurred in
Wiser's U.S. operations. The Company considers these costs as non recurring.
The Company's $1.7 million rise in interest expense is mainly due to the
additional funds borrowed for the Canadian purchase.
Net income of $2.4 million for the first nine months of 1995 rose $0.8
million as compared to 1994. U.S. operations recorded a $0.9 million profit
from operations before security sales gains and income taxes for the period
while our Canadian subsidiary recorded a $3.2 million loss. Results in
Canada reflect three primary factors: substantial interest expenses
10
<PAGE>
associated with the 100% financing of the acquired assets, high initial
depreciation, depletion, and amortization charges that include amortization
of acquisition costs associated with items such as probable reserves that can
not yet be recorded as assets, as well as tax and other benefits which will
be realized in the future.
11
<PAGE>
THE WISER OIL COMPANY
---------------------
PART II - OTHER INFORMATION
---------------------------
Items 1 through 6 under Part II are not applicable to the quarter ended
September 30, 1995.
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.
THE WISER OIL COMPANY
---------------------------------------------
(Registrant)
Date November 10, 1995 ANDREW J. SHOUP, JR. (SIGNED)
--------------------- ---------------------------------------------
Andrew J. Shoup, Jr.
President and
Chief Executive Officer
Date November 10, 1995 LAWRENCE J. FINN (SIGNED)
--------------------- ---------------------------------------------
Lawrence J. Finn
Vice President Finance and
Chief Financial Officer
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 1,232
<SECURITIES> 24,060
<RECEIVABLES> 7,376
<ALLOWANCES> 0
<INVENTORY> 1,751
<CURRENT-ASSETS> 11,529
<PP&E> 262,971
<DEPRECIATION> 91,115
<TOTAL-ASSETS> 207,936
<CURRENT-LIABILITIES> 9,500
<BONDS> 78,000
<COMMON> 27,347
0
0
<OTHER-SE> 349
<TOTAL-LIABILITY-AND-EQUITY> 207,936
<SALES> 39,695
<TOTAL-REVENUES> 49,096
<CGS> 30,504
<TOTAL-COSTS> 40,538
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,203
<INCOME-PRETAX> 4,355
<INCOME-TAX> 1,983
<INCOME-CONTINUING> 2,372
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,372
<EPS-PRIMARY> .27
<EPS-DILUTED> .27
</TABLE>
