<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 September 30, 1996 Commission file number 0-5426
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The Wiser Oil Company
---------------------
(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, 1996
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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
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THE WISER OIL COMPANY
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CONSOLIDATED BALANCE SHEET
--------------------------
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---- ----
Thousands of Dollars
<S> <C> <C>
ASSETS:
Current Assets:
Cash and cash equivalents $ 1,775 $ 1,397
Accounts receivable 11,208 10,426
Inventories 1,468 1,517
Prepaid expenses 603 833
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Total current assets 15,054 14,173
Marketable Securities, at market value 12,030 19,592
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Property, Plant and Equipment, at cost:
Oil and gas properties
(successful efforts method) 293,728 265,692
Other properties 4,696 4,422
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298,424 270,114
Accumulated depreciation, depletion,
and amortization (127,169) (101,025)
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Net property, plant and equipment 171,255 169,089
Other Assets 111 553
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$ 198,450 $ 203,407
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
THE WISER OIL COMPANY
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CONSOLIDATED BALANCE SHEET
--------------------------
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---- ----
Thousands of Dollars
<S> <C> <C>
LIABILITIES AND
STOCKHOLDERS' EQUITY
- --------------------
Current Liabilities:
Accounts payable $ 11,527 $ 10,143
Accrued income taxes 974 1,527
Accrued liabilities 1,504 1,449
Current portion of debt - 20
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Total current liabilities 14,005 13,139
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Long Term Debt 78,171 74,171
Deferred Benefit Cost 1,372 1,120
Deferred Income taxes 10,277 12,699
Other Long Term liabilities - 1,146
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Total liabilities 103,825 102,275
Stockholders' Equity
Common Stock - $3 par value;
20,000,000 shares authorized issued 27,347 27,347
Paid-in Capital 3,078 3,078
Retained Earnings 58,814 61,030
Marketable securities valuation adjustment 7,264 11,684
Foreign currency translation 851 722
Treasury stock of 176,204 shares, at cost (2,729) (2,729)
-------- --------
Total Stockholders' Equity 94,625 101,132
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$198,450 $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
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Three Months Ended Nine Months Ended
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September 30, September 30,
------------- -------------
1996 1995 1996 1995
---- ---- ---- ----
Thousands of Dollars
(Except per share amounts)
<S> <C> <C> <C> <C>
REVENUES
Oil and gas sales $17,713 $13,222 $50,186 $39,695
Dividends and interest 157 319 555 973
Security sale gains 805 4,296 7,637 6,740
Other 793 428 1,020 1,688
------- ------- ------- -------
19,468 18,265 59,398 49,096
COSTS AND EXPENSES:
Production and operating 6,607 5,336 18,097 15,309
Purchased natural gas 272 192 914 511
Depreciation, depletion and 4,922 4,714 14,772 14,684
amortization
Impairment - - 12,112 -
Exploration 806 1,394 3,001 4,018
General and administrative 1,898 1,905 6,840 6,016
Interest Expense 1,392 1,446 4,119 4,203
-------- ------- ------- -------
15,897 14,987 59,855 44,741
INCOME BEFORE INCOME TAXES 3,571 3,278 (457) 4,355
PROVISION FOR INCOME TAXES 1,127 1,424 954 1,983
------- ------- ------- -------
NET INCOME (LOSS) 2,444 1,854 (1,411) 2,372
Retained earnings-beginning of period 56,638 61,144 61,030 62,414
Dividends paid (268) (894) (805) (2,682)
------- ------- ------- -------
RETAINED EARNINGS, END OF PERIOD $58,814 $62,104 $58,814 $62,104
======= ======= ======= =======
AVERAGE OUTSTANDING SHARES 8,939 8,939 8,939 8,939
EARNINGS PER SHARE $ 0.27 $ 0.21 $ (0.16) $ 0.27
======= ======= ======= =======
CASH DIVIDENDS PER SHARE $ 0.03 $ 0.10 $ 0.09 $ 0.30
======= ======= ======= =======
</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 Nine Months Ended
September 30, September 30,
1996 1995
---- ----
Thousands of Dollars
<S> <C> <C>
Cash Flow From Operating Activities:
Net Income (Loss) $ (1,411) $ 2,372
Adjustments to reconcile net income
(Loss) to operating cash flow-
Depreciation and depletion 14,772 14,684
Deferred income taxes (150) 1,107
Security & property sale gains
(before current income tax expense
effect of $1,104 for 1996 and $786
for 1995) (7,752) (7,177)
Foreign currency translation (4) (43)
Dry hole cost, abandonments and
lease impairments 14,350 3,068
Other Changes:
Accounts receivable (782) 3,523
Inventories 48 (607)
Prepaid expenses 230 (318)
Other assets 441 (18)
Accounts payable 1,384 (3,060)
Income taxes, net (553) (607)
Accrued liabilities 56 (59)
Deferred benefits cost 252 534
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Operating Cash Flow 20,881 13,399
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Cash Flow From Investing Activities:
Additions to property, plant and
equipment (29,954) (18,791)
Proceeds from sales of property,
plant and equipment 264 1,142
Proceeds from security sales 8,284 7,503
Dry hole cost (1,121) (2,012)
-------- --------
Investing Cash Flow (22,527) (12,158)
Cash Flow From Financing Activities:
Long term debt issued 19,000 8,000
Payments on long term debt (16,171) (8,041)
Dividends paid (805) (2,682)
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Financing Cash Flow 2,024 (2,723)
Net Increase (Decrease) in Cash 378 (1,482)
Cash and cash equivalents at
beginning of period 1,397 2,714
-------- --------
Cash and cash equivalents at end of
period $ 1,775 $ 1,232
======== ========
</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 September 30, 1996 were $19.5
million as compared to $18.3 million for the same period of 1995. Hedging had an
unfavorable impact of $1.9 million compared to a favorable impact of $.2 million
for the same time period last year. U.S. oil hedging had a negative impact of
$1.0 million compared to a positive impact of $.1 million for last year. The
impact on 1996 revenues from Canadian oil hedging was a negative $.3 million
compared to a positive impact of $.1 million in 1995. Oil and condensate
revenues of $12.2 million in 1996 rose $3.4 million from $8.9 million in 1995 or
38%. U. S. operations increased its oil and condensate revenue $2.6 million
while Canadian operations recorded a $.8 million increase for the same time
period. Oil and condensate prices rose $2.40 per barrel (BBL) in the U.S. and
$1.27 per barrel (BBL) in Canada as volumes also increased 88,000 and 32,000
barrels, respectively. Hedging on natural gas contracts for the three months
ending September 30, 1996 had a negative impact of $.6 million. No hedging on
gas contracts occurred in the Canadian operations during 1996 or for the same
time period last year. Natural gas sales increased this quarter by $.8 million
or 24% over the same three month period of the previous year. Pricing was the
most affected variable in the equation with an increase of $.34 per MCF in the
U.S. and $.21 per MCF in Canada while volumes reported a slight decrease of
4,000 MCF's. For the three month period ending September 30, 1996, natural gas
liquids (NGL) increased $.3 million from $.9 million in 1995. NGL volumes as
compared to the same period of 1995, remained flat during the third quarter of
1996. 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 of those transactions. Security sale gains
were $.8 million for this quarter as compared to $4.3 million during the same
period of last year.
For the three months ended September 30, 1996 costs and expenses were
$15.9 million with $15.0 million being reported for the same period one year
ago. Production and operating expenses were $6.6 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 supply and
the cost per MCF. Depletion, depreciation and amortization (DD&A) for the three
month period ending September 30, 1996 realized an increase of $208,000 or 4%.
The DD&A rate per barrel of oil equivalent (BOE) for the current period was
$4.08 versus $4.28 for the third quarter of 1995. The primary reason for this
decrease was that the rate of increased production versus the increased rate of
DD&A was significantly higher. Exploration expense declined $.6 million this
quarter or 42% resulting from increased development drilling. General and
Administrative (G&A) expense was flat at $1.9 million with the previous year.
Interest expense of $1.4 million for the current quarter was $54,000 lower in
1996 than in the same period of 1995.
The Company realized a net income of $2.4 million in 1996 compared to a
net income of $1.9 million for the three month period ending September 30, 1995.
Dividends paid per share for the period were $.03 and $.10 for 1996 and 1995,
respectively.
7
<PAGE>
THE WISER OIL COMPANY
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NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH THE SAME PERIOD IN THE
PREVIOUS YEAR.
Revenues for the nine months ended September 30, 1996 were $59.4
million, an increase of 21%. Oil and condensate sales increased 22% to $32.4
million in 1996 as the Maljamar area units more than doubled its revenue
compared to the previous year while still in development stages. Hedging on oil
and gas contracts had an unfavorable impact of $4.5 million as compared to a
positive $.1 million for 1995. Hedging on U.S. and Canadian oil contracts had a
negative impact of $2.0 million and $.7 million, respectively, compared to an
overall favorable impact of $.1 million in 1995. Oil and condensate revenues
also increased 10% at the Company's 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 nine months ending September
30, 1996 were 1.8 million barrels compared to 1.6 million barrels in 1995, an
increase of 13%. Crude oil pricing was very volatile for the first nine months
of 1996 as compared with the same period one year ago, resulting in an increase
of $1.38 per barrel or 8%. Hedging on U.S. gas contracts had an unfavorable
impact of $1.8 million on revenue while having virtually no effect in 1995.
Natural gas revenues were $14.6 million for 1996 and $11.6 million for 1995,
comparatively. The Company received a full nine months of revenue on properties
purchased during the first nine months of 1995 in West Virginia, and therefore,
increased revenues for the current period by $.6 million. Also, Kentucky gas
operations increased its revenues by $1.2 million, up from $2.8 million in 1995,
an increase of 43%. The affected variable in Kentucky was a 56% increase in
pricing, or $.98 per MCF, offset somewhat by a volume decrease of 138,000 MCF's.
NGL revenues increased $1.6 million for the period ending September 30, 1996 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 $7.6 million in 1996 compared to $6.7
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. Other income of $1.0 million is down $.7 million
primarily due to marginal property sales in 1995.
Costs and Expenses for the nine months ending September 30, 1996 of
$59.9 million increased $15.0 million or 34%. Production and operating expenses
of $18.1 million for the first nine months of 1996 increased from $15.3 million
in 1995 or 18%. Increased operating and production expenses of $1.5 million were
associated with increased activity on the Maljamar properties coupled with
increased expenses on the Wellman property of $.7 million, which was partially
offset by reduced operating expenses of $.5 million in Kentucky and $.2 million
on other Texas properties. Purchased natural gas increased $.4 million during
the first nine months of 1996 with pricing being the main contributing factor as
spot markets kept prices high. Depreciation, depletion and amortization expense
was $14.8 million as compared to $14.7 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 its June 30, 1996
earnings. The majority of the impairment, $7.3 million, was related to certain
properties in Michigan whose economic life was much shorter than previously
8
<PAGE>
estimated. The Company's Canadian subsidiary, which was acquired in September
1994, also recognized a non-cash charge of $4.8 million as pricing mixed with
midyear reserve revisions are the main cause of the impairment. Exploration
expenses for the period ending September 30, 1996 were $3.0 million as compared
to $4.0 million for 1995, a reduction of 25%. General and administrative
expenses for the first nine months of 1996 were $6.8 million while for the same
period of 1995 they were $6.0 million, an increase of 14%. This increase is
mainly due to increased payroll expenses paid in 1996. Interest expense held
flat this nine month period at $4.1 million.
The Company realized a net loss of $1.4 million or $.16 per share
for the first nine months of 1996 as compared to net profit of $2.4 million for
the same period of 1995. U.S. operations recorded $4.8 million of net income
while Canadian operations reported a net loss of $6.2 million for the period
ending September 30, 1996.
Cash flow from operations increased to $20.9 million for the nine months
ending September 30, 1996 which was in sharp contrast to $13.4 million for the
previous year. The increase is primarily due to increased volumes and pricing
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
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PART II - OTHER INFORMATION
---------------------------
Items 1 through 6 under Part II are not applicable to the quarter ended
September 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 November 13, 1996 /s/ ANDREW J. SHOUP, JR.
--------------------- ----------------------------------------
Andrew J. Shoup, Jr.
President and
Chief Executive Officer
Date November 13, 1996 /s/ LAWRENCE J. FINN
--------------------- ------------------------------------------
Lawrence J. Finn
Vice President, Finance and
Chief Financial Officer
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,775
<SECURITIES> 12,030
<RECEIVABLES> 11,208
<ALLOWANCES> 0
<INVENTORY> 1,468
<CURRENT-ASSETS> 15,054
<PP&E> 298,424
<DEPRECIATION> 127,169
<TOTAL-ASSETS> 198,450
<CURRENT-LIABILITIES> 14,005
<BONDS> 78,171
0
0
<COMMON> 27,347
<OTHER-SE> 67,278
<TOTAL-LIABILITY-AND-EQUITY> 198,450
<SALES> 58,843
<TOTAL-REVENUES> 59,398
<CGS> 19,011
<TOTAL-COSTS> 44,742
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,119
<INCOME-PRETAX> (457)
<INCOME-TAX> (954)
<INCOME-CONTINUING> (1,411)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,411)
<EPS-PRIMARY> (.16)
<EPS-DILUTED> (.16)
</TABLE>
