<PAGE>
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 June 30, 1996 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
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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 June 30, 1996
- ------------ ----------------------------
$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
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THE WISER OIL COMPANY
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CONSOLIDATED BALANCE SHEET
--------------------------
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
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Thousands of Dollars
<S> <C> <C>
ASSETS:
- -------
Current Assets:
Cash and cash equivalents $ 2,180 $ 1,397
Accounts receivable 10,012 10,426
Inventories 1,426 1,517
Prepaid expenses 753 833
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Total current assets 14,371 14,173
Marketable Securities, at market value 13,053 19,592
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Property, Plant and Equipment, at cost:
Oil and gas properties
(successful efforts method) 282,934 265,692
Other properties 4,579 4,422
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287,513 270,114
Accumulated depreciation, depletion,
and amortization (122,356) (101,025)
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Net property, plant and equipment 165,157 169,089
Other Assets 521 553
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$ 193,102 $ 203,407
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
THE WISER OIL COMPANY
---------------------
CONSOLIDATED BALANCE SHEET
--------------------------
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
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Thousands of Dollars
<S> <C> <C>
LIABILITIES AND
STOCKHOLDERS' EQUITY
- --------------------
Current Liabilities:
Accounts payable $ 10,475 $ 10,143
Accrued income taxes 1,134 1,527
Accrued liabilities 1,703 1,449
Current portion of debt - 20
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Total current liabilities 13,312 13,139
Long Term Debt 75,625 74,171
Deferred Benefit Cost 1,357 1,120
Deferred Income taxes 9,721 12,699
Other Long Term liabilities - 1,146
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Total liabilities 100,015 102,275
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 56,638 61,030
Marketable securities valuation adjustment 7,897 11,684
Foreign currency translation 856 722
Treasury stock of 176,204 shares, at cost (2,729) (2,729)
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Total Stockholders' Equity 93,087 101,132
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$193,102 $203,407
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
THE WISER OIL COMPANY
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CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
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(Unaudited)
<TABLE>
<CAPTION>
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
1996 1995 1996 1995
---------- ---------- ---------- ----------
Thousands of Dollars
(except per share amounts)
<S> <C> <C> <C> <C>
REVENUES
Oil and gas sales $16,239 $12,978 $32,473 $26,473
Dividends and interest 186 320 398 654
Security sale gains 4,827 - 6,832 2,443
Other 111 1,286 227 1,262
------- ------- ------- -------
21,363 14,584 39,930 30,832
COSTS AND EXPENSES:
Production and operating 5,868 5,274 11,491 9,970
Purchased natural gas 289 170 642 320
Depreciation, depletion and amortization 4,896 4,866 9,850 9,971
Impairments 12,112 - 12,112 -
Exploration 929 1,491 2,196 2,625
General and administrative 2,147 2,140 4,940 4,112
Interest expense 1,368 1,417 2,728 2,757
------- ------- ------- -------
27,609 15,358 43,959 29,755
INCOME BEFORE INCOME (LOSS) TAXES (6,246) (774) (4,029) 1,077
PROVISION FOR INCOME TAXES (878) (54) (173) 559
------- ------- ------- -------
NET INCOME (LOSS) (5,368) (720) (3,856) 518
Retained earnings-beginning of period 62,274 62,758 61,030 62,414
Dividends paid (268) (894) (536) (1,788)
------- ------- ------- -------
RETAINED EARNINGS, END OF PERIOD $56,638 $61,144 $56,638 $61,144
======= ======= ======= =======
AVERAGE OUTSTANDING SHARES 8,939 8,939 8,939 8,939
======= ======= ======= =======
EARNINGS PER SHARE $( .60) $( .08) $( .43) $ .06
======= ======= ======= =======
CASH DIVIDENDS PER SHARE $.03 $.10 $.06 $.20
======= ======= ======= =======
</TABLE>
The accompanying notes are 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 Six Months Ended
June 30, June 30,
1996 1995
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Thousands of Dollars
<S> <C> <C>
Cash Flow From Operating Activities:
Net Income (Loss) $ (3,856) $ 518
Adjustments to reconcile net income (Loss) to
operating cash flow-
Depreciation and depletion 9,850 9,971
Deferred income taxes (1,031) 290
Security & property sale gains (before current
income tax expense effect of $858 for 1996
and $269 for 1995) (6,871) (2,880)
Foreign currency translation (14) (31)
Dry hole cost, abandonments and lease
impairments 13,808 1,964
Other Changes:
Accounts receivable 414 3,068
Inventories 91 (279)
Prepaid expenses 80 (453)
Other assets 32 8
Accounts payable 330 (1,565)
Income taxes, net (393) (1,070)
Accrued liabilities 255 (174)
Deferred benefits cost 237 514
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Operating Cash Flow 12,932 9,881
Cash Flow From Investing Activities:
Additions to property, plant and equipment (18,626) (13,972)
Proceeds from sales of property, plant and
equipment 172 1,142
Proceeds from security sales 7,416 2,796
Dry hole cost (857) (1,305)
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Investing Cash Flow (11,895) (11,339)
Cash Flow From Financing Activities:
Long term debt proceeds 14,454 4,000
Payments on long term debt (14,172) (3,035)
Dividends paid (536) (1,788)
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Financing Cash Flow (254) (823)
Net Increase (Decrease) in Cash 783 (2,281)
Cash and cash equivalents at beginning of period 1,397 2,714
-------- --------
Cash and cash equivalents at end of period $ 2,180 $ 433
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<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
Revenues for the three month period ending June 30, 1996 were $21.4
million as compared to $14.6 million for the same period of 1995. Oil and
condensate revenues of $10.6 million in 1996 rose $1.7 million from $8.9
million in 1995 or 20%. U. S. operations increased its oil and condensate
revenue $1.1 million while Canadian operations recorded a $.6 million increase
for the same time period. Oil and condensate prices rose $0.81 per barrel (BBL)
in the U.S. and $1.39 in Canada as volumes also increased 48,000 and 20,000
barrels, respectively. Natural gas sales increased this quarter $.8 million or
20% over the three month period of the previous year. Pricing was the most
affected variable in the equation with an increase of $.30 in the U.S. and $.14
in Canada while volumes reported a slight increase of 22,000 (MCF) thousand
cubic feet of gas. For the three month period ending June 30, 1996, natural gas
liquids (NGL) increased $.7 million from $.2 million in 1995. Increased natural
gas liquids of 55,000 BBLs during the current quarter was due to the Company's
Wellman Plant in Terry County, Texas which came on-line during the third quarter
of 1995. Dividend and interest income for the current period was $.2 million as
compared to $.3 million for the same period of 1995. The Company continues to
sell its stock portfolio while taking advantage of its Sections 29 credits to
reduce the tax liability on the gains from those transactions. Security sale
gains were $4.8 million for 1996 as the Company did not sell any of its stock
during the same period of last year.
For the three months ended June 30, 1996 costs and expenses were $27.6
million with $15.4 million being reported for the same period one year ago.
Production and operating expenses were $5.9 million in 1996 compared to $5.3
million in 1995. This increase was mainly due to increased production activity
in the Maljamar area in Lea County, New Mexico. Purchased gas expense of $.3
million increased $.1 million as improved pricing increased demand and the cost
per MCF. Depletion, depreciation and amortization (DD&A) for the three month
period ending June 30, 1996 realized only a small increase of $30,000 or 1%.
The DD&A rate for the current period was $4.16 versus and $4.69 for the second
quarter of 1995. In December 1995, Wiser adopted Statement of Financial
Accounting Standards No 121, "Accounting for the Impairment of Long-Lived Assets
and Long-Lived Assets to be disposed of" (SFAS 121). As a result of reserve
revisions the Company recognized a non-cash charge of $12.1 million against
June 30, 1996 earnings, in both the U.S. and Canadian operations. Exploration
expense declined $.6 million this quarter or 38% resulting from increased
development drilling. General and Administrative (G&A) expense was flat at $2.1
million for both periods. Interest expense of $1.4 million for the current
quarter was $49,000 lower in 1996 than in the same period of 1995.
The Company realized a net loss of $5.4 million 1996 compared to a net
loss of $.7 million for the three month period ending June 30, 1995. Dividends
paid for the period were $.03 and $.10 for 1996 and 1995, respectively.
7
<PAGE>
THE WISER OIL COMPANY
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SIX MONTHS ENDED JUNE 30, 1996 COMPARED WITH THE SAME PERIOD IN THE
PREVIOUS YEAR.
Revenues for the six months ended June 30, 1996 were $39.9 million, an
increase of 30%. Oil and condensate sales increased 10% to $20.2 million in
1996 as the Maljamar area units, while still in developement stages, doubled its
revenue compared to the previous year. The Company also realized increases of
13% in oil and condensate revenues at its Wellman property. These increases
were offset slightly by reductions in revenues at secondary recovery projects in
Michigan, as well as reduction in revenues in the Brahaney field due to a shut-
in salt water disposal well. Oil volumes for the six months ending June 30,
1996 were 1.1 million barrels compared to 1.0 million barrels in 1995, an
increase of 8%. Pricing was volatile for the first half of 1996 as compared
with the same period one year ago resulting in an increase of $1.00 per barrel
or 6%. Natural gas revenues were $10.3 million for 1996 and $8.1 million for
1995, comparatively. The Company received a full six months of revenue on
properties purchased during the second quarter of 1995 in West Virginia, and
therefore, increased revenues for the current period to $.4 million. Also,
Kentucky gas operations increased its revenue input by $1.2 million, up from
$1.7 million in 1995 an increase of 70%. The affected variable in Kentucky was
a 65% increase in pricing, or $1.18 per MCF, as well as volume increases of
23,000 MCF. Natural gas liquids revenues increased $1.3 million for the period
ending June 30, 1996 which was a direct result of the Wellman Plant in Terry
County, Texas coming on-line during the third quarter of 1995. Dividend and
interest income declined this period over last as the Company continues its long
range plans to liquidate its stock portfolio. Security sale gains were $6.8
million in 1996 compared to $2.4 million in 1995. The Company currently plans
to completely liquidate the portfolio in 1997 while using its Section 29 Credits
to substantially reduce the taxes payable on the gains.
Costs and Expenses for the six months ending June 30, 1996 of $44.0
million increased $14.2 million or 48%. Production and operating expenses of
$11.5 million for the first half of 1996 increased from $10.0 million in 1995 or
15%. Increased operating and production expenses of $1.0 million were due to
increased activity on the Maljamar properties coupled with increased expenses on
the Wellman property of $.4 million and slightly offset by reduced operating
expenses in Kentucky. Purchased natural gas increased $.3 million during the
first half of 1996 with pricing the main contributing factor as spot markets
kept prices high. Depreciation, depletion and amortization expense was $9.9
million as compared to $10.0 million for the previous year. In December 1995
the Company implemented Statement of Financial Accounting Standards No
121,"Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to
be disposed of" (SFAS 121). As a result of this statement the Company
recognized a non-cash charge of $12.1 million against June 30, 1996 earnings.
The majority of the impairment, $7.3 million, is related to certain properties
in Michigan whose economic life is much shorter than previously estimated. The
Company's Canadian subsidiary, which was acquired in June 1994, is also
recognizing a non-cash charge of $4.8 million as pricing mixed with mid-year
reserve revisions are the main cause of the impairment. Exploration expenses
for the period ending June 30, 1996 were $2.2 million as compared to $2.6
million for 1995, a reduction of 16%. General and administrative expenses for
the first half of 1996 were $4.9 million while for the same period of 1995 they
were $4.1 million, an increase of 20%. This increase is mainly due to legal
fees for defense of a lawsuit that resulted in a favorable judgement for the
Company in the first quarter of this year. Interest expense held flat this six
month period at $2.8 million.
8
<PAGE>
The Company realized a net loss of $3.9 million or $.43 per share this
for the first half of 1996 as compared to net income of $518,000 for the same
period of 1995. U.S. operations recorded $2.0 million of net income while
Canadian operations reported a net loss of $5.9 million for the period ending
June 30, 1996.
Cash flow from operations increased to $12.9 million for the six
months ending June 30, 1996 which was in sharp contrast to $9.9 million for the
previous year. The increase is primarily due to increased volumes coupled
with increased pricing which was offset by slightly increased production and
operating costs.
9
<PAGE>
THE WISER OIL COMPANY
---------------------
Notes to Financial Statements
1) See notes to financial statements included in the Company's 1995 Annual
Report on Form 10-K.
10
<PAGE>
THE WISER OIL COMPANY
PART II - OTHER INFORMATION
Items 1 through 6 under Part II are not applicable to the quarter ended June 30,
1996.
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE WISER OIL COMPANY
----------------------------------------
(Registrant)
Date August 9, 1996 ANDREW J. SHOUP, JR. (SIGNED)
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Andrew J. SHOUP, Jr.
President and
Chief Executive Officer
Date August 9, 1996 LAWRENCE J. FINN (SIGNED)
-------------- ----------------------------------------
Lawrence J. Finn
Vice President, Finance and
Chief Financial Officer
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> MAR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 2,180
<SECURITIES> 13,053
<RECEIVABLES> 10,012
<ALLOWANCES> 0
<INVENTORY> 1,426
<CURRENT-ASSETS> 14,371
<PP&E> 287,513
<DEPRECIATION> 122,356
<TOTAL-ASSETS> 193,102
<CURRENT-LIABILITIES> 13,312
<BONDS> 75,625
0
0
<COMMON> 27,347
<OTHER-SE> 65,740
<TOTAL-LIABILITY-AND-EQUITY> 193,102
<SALES> 39,532
<TOTAL-REVENUES> 39,930
<CGS> 12,133
<TOTAL-COSTS> 29,098
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,728
<INCOME-PRETAX> (4,029)
<INCOME-TAX> (173)
<INCOME-CONTINUING> (3,856)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,856)
<EPS-PRIMARY> (.43)
<EPS-DILUTED> (.43)
</TABLE>
