SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended February 28, 1997
Commission File Number 0-7919
WYOMING OIL & MINERALS, INC.
A Wyoming Corporation I.R.S. Employer Identification
Number 83-0217330
330 South Center
Suite 419
Casper, Wyoming 82601
Registrant's telephone number including area code: (307) 234-9638
Securities Registered Pursuant to Section 12(g)
COMMON STOCK
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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
State the aggregate market value of the voting stock held by non-affiliates
of the Registrant (13,864,500 shares). The aggregate market value shall be
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within 60 days prior
to the date of filing. As of May 15, 1997 (based on $.01 bid, $.050 asked) -
$415,935.
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock as of the latest practicable date. May 15, 1997
16,750,000 shares.
DOCUMENTS INCORPORATED BY REFERENCE: None
Item 1. Business
Wyoming Oil & Minerals, Inc. (the Company), a Wyoming Corporation, was
incorporated on February 23, 1973 as Wyoming Coal Corporation. It was organized
primarily to hold and develop state and fee coal leases and secondarily to
acquire oil and gas properties and explore for, develop and produce oil and gas.
As the Company evolved, its emphasis shifted from holding and developing the
coal leases to acquiring oil and gas leases and production. Some of the
Company's coal leases have been explored and found not to contain coal deposits
in commercial quantities and been dropped. As of the date of this report, the
Company's coal properties have all been sold or dropped. Since oil and gas
sales are now the Company's primary revenue source, its name was changed to
Wyoming Oil & Minerals, Inc. at a shareholders meeting held August 10, 1981 to
more accurately reflect the Company's business.
Generally, the economic success of the Company depends on its ability to
locate and purchase oil and gas properties or purchase or lease valuable oil and
gas prospects or mineral deposits. The Company must further operate, sell or
lease these deposits or prospects to others at a profit or develop the
properties itself or in conjunction with others.
To accomplish these goals, the Company will encounter competition from
major oil and mining companies and other independent operators attempting to
acquire prospective oil and gas leases, coal leases, production and other
mineral interest. These sources of competition may be both large and small
energy oriented companies operation in the states in which the Company does
business or may do business in the future. Some of these competitors are major
oil and gas and coal companies with substantial reserves and earnings records.
Others are small independents with varying degrees of stability. Some not only
produce oil and gas, but refine and market petroleum products. Some produce and
market coal. The Company may be in a position of competitive disadvantage with
many of these companies in that they have greater sources of capital, technical
and management personnel, research facilities and sources of information.
Compliance with statutory requirements respecting environmental quality may
necessitate significant capital outlays which may materially effect the earning
power of the Company or may cause material changes in the Company's proposed
business. Inc the past fiscal year, the Company expended less than $1,000 to
comply with environmental regulation. It does not contemplate spending
significant funds incidental to its operation in the present fiscal year to
comply with environmental regulations.
The Company markets its properties or interest in its properties to others
who will develop them with the Company retaining an economic interest. The
Company also drills exploratory oil and gas wells by itself and in joint venture
with others. Additional funds may be needed to engage in these activities and
the Company hopes to finance all or some of its interest in these by having
others pay for the drilling and/or completion of wells in exchange for an
interest in the particular well or prospect.
The business of the Company is seasonal only to the extent that weather
conditions, particularly snow and cold in the winter, impede the ability of the
Company or others who may be developing properties in which the Company has an
interest to conduct exploratory activities, drilling production or mining
operations.
2
The Company employs its President, Jack C. Bradley, Jr., who receives $2000
monthly and reimbursement of his actual and necessary expenses and one
assistant.
The Company is operating in one industry segment, the exploration,
production and sale of oil and gas. See Financial Statements.
Item 2. Properties
The Company rents office space in the Goodstein Building in Casper, Wyoming
at $400 per month.
Oil and Gas Properties. For the following discussion, gross well or acre
is a well or acre in which an interest is owned. The number of gross wells is
the total number of wells in which and interest is owned.
A net well or acre is deemed to exist when the sum of fractional ownership
interest in gross wells or acres equals one. The number of net wells or acres
is the sum of the fractional ownership interests owned in gross wells or acres
as expressed as whole numbers and fractions thereof.
A summary of the Company's oil and gas properties as of February 28, 1997
all located in the state of Wyoming is as follows:
Gross Acres* Net Acres*
Undeveloped proved and
unproved acres:
Leasehold interest:
Oil and gas 360 352
Developed proved acres:
Leasehold interest:
Primarily oil 4,590 1,844
Primarily gas 0 0
* - decrease in acres due to expiration of override leases expired in which
the Company had no basis.
Oil and Gas Production. As of February 28, 1997, the Company owns the
following productive wells:
Oil Gas
Gross Net Gross Net
Working Interest 38 19.2509 0 0
Royalty 36 .1046 0 0
3
From its drilling efforts and from production purchased from others, the
Company's net yearly production of crude oil and gas has been as follows:
Year Ended
the last day
of February Crude Oil in Barrels Gas in MCF
1995 15,970 5,081
1996 13,157 3,558
1997 16,786 2,629
The average sales price (including transfers) per unit oil and gas produced
for the years ended the last day of February is as follows:
1997 1996 1995
Oil -- Barrels $20.97 $17.00 $16.07
Gas -- MCF $ 2.64 $ 1.43 $ 1.47
The average production (lifting) cost per unit of production is as follows:
1997 1996 1995
Oil -- Barrels $14.58 $16.96 $13.63
Gas -- MCF $ 1.25 $ 1.25 $ 1.25
Net Exploratory Wells
Fiscal Year
Drilled Producers Dry Holes Total Wells
1995 0 0 0
1996 0 0 0
1997 0 0 0
Net Development Wells
Fiscal Year
Drilled Producers Dry Holes Total Wells
1995 0 0 0
1996 0 0 0
1997 0 0 0
4
Reserves. The following are reserve estimates as of last day of February:
Proved Oil and Gas Reserves Oil (bbls) Gas (mcf)
1995 69,093 99,916
1996 163,378 86,884
1997 88,197 84,255
Proved Developed Oil and Gas Reserves
1995 69,093 99,916
1996 163,378 86,884
1997 88,197 84,255
The reserve estimates for all properties were computed both by management
and by independent petroleum engineers for areas in which the Company has
interest in certain wells. No reserve figures have been filed with or reported
to any other regulatory authorities or agencies.
The Company has annual rental obligations from $0.50 to $1.00 per acre on
all of its leasehold oil and gas on which there is no production. If these
payments are not made when due, the leases terminate. Additionally, the leases
terminate at the end of this term unless production is obtained in which case
the lease continues as long as production continues.
Oil and Gas Operations. The Company follows the successful efforts method
of accounting for oil and gas exploration and development activities. Under
this method of accounting lease acquisition costs, intangible drilling costs and
other costs associated with exploration efforts which result in the discovery of
proved reserves are capitalized. Costs of well equipment, development drilling,
support facilities, major betterments and renewals and other development costs
are capitalized. Capitalized costs are amortized using the units of production
method. For leasehold costs, the basis is total estimated units proved
developed reserves both of which are estimated by independent engineers and
management of the Company. the amortized amounts are charged to depreciation
and depletion expense. The recoverability of costs capitalized related to
proved and unproved acreage is reviewed periodically. Any impairment discovered
is charged to expenses.
Costs of drilling exploratory wells which do not result in the discovery of
proved reserves are charged to expense. Production costs, geological and
geophysical costs, and maintenance and repairs are charged to expense.
Item 3. Legal Proceedings.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
5
PART II
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters.
Bid Prices
High Low
March 1, 1988 through February 28, 1989 1 cent 1 cent
March 1, 1989 through February 28, 1990 1 cent 1 cent
March 1, 1990 through February 28, 1991 1 cent 1 cent
March 1, 1991 through February 28, 1992 1/2 cent 1/2 cent
March 1, 1992 through February 28, 1993 1 cent 1 cent
March 1, 1993 through February 28, 1994 1 cent 1 cent
March 1, 1994 through February 28, 1995 1 cent 1 cent
March 1, 1995 through February 29, 1996 1 cent 1 cent
March 1, 1995 through February 28, 1997 1 cent 1 cent
The source for the over-the-counter quotations is the National Association
of Securities Dealers. Such quotations reflect inter-dealer prices without
retail mark-up, mark-down, or commission and may not necessarily represent
actual transactions.
There were approximately 1,609 holders of record of the Company's common
stock as of May 15, 1997.
No dividends have been declared or paid in the Company's history. Wyoming
law generally provides that dividends may be declared and paid only out of the
unreserved and unrestricted earned surplus of the corporation, except when the
Articles of Incorporation of a corporation engaged in the business of exploiting
natural resources so provide, dividends may be declared and paid out of
depletion reserves.
Wyoming Oil & Minerals, Inc. has no unreserved and unrestricted earned
surplus and its Articles of Incorporation do not provide that dividends may be
paid from depletion reserves.
6
Item 6. Selected Financial Data
Year Ended February 28/29
1997 1996 1995 1994 1993
Revenues:
Operating revenues from
oil and gas sales $357,765 $266,227 $293,777 $207,295 $117,297
Other operating
revenues 22,039 24,962 32,160 25,852 25,187
Earnings (loss) from
continuing operations before
extraordinary items ( 9,698) (51,635) (27,147) (396,484) 9,442
Extraordinary items -- -- -- -- --
Net earnings (loss) from
continuing operations ( 9,698) (51,635) (27,147) (396,484) 9,442
Earnings (loss) per share
from continuing operations * * (.02) * *
Cash dividends per
common share -- -- -- -- --
At year end:
Total assets 242,330 256,806 284,012 414,237 729,758
Long-term obligations 50,000 50,000 50,000 58,703 --
* Less than $.01 per share
Item 7. Management's Discussion and Analysis of
Financial Conditions and Results of Operation
Financial Position
During the Company's fiscal year 1997, net cash decreased by $287. Of this
decrease, $2,913 is the result of operating activities, $800 was from the sale
of properties and $4,000 was principal payments on debt. The Company's emphasis
regarding property additions continues to be toward acquiring existing
production rather than from drilling new wells. No new drilling was done by the
Company in fiscal 1997 and significant costs related to maintaining existing
production. Short term notes payable decreased by $4,000 which was paid in
cash. The Company has financed property acquisitions with debt and continue to
repay such borrowing with the revenues from those properties.
7
During the Company's fiscal year 1997, crude oil prices varied within a
range of approximately $16.81 to $24.98 a barrel. Natural gas prices varied
within a range of approximately $1.17 to $3.68. Revenue from such acquired
properties must not only service debt, but continue to provide positive cash
flow after retirement of that debt.
Result of Operations
The Company's oil and gas revenues increased from $266,227 in fiscal 1996
to $357,765 in fiscal 1997. Present production has the effect of decreasing
Wyoming Oil & Minerals reserves, however, due mainly to not doing the waterflood
of the Don Thorson #1 and the Wade Hill unit, total oil and gas reserves
decreased significantly for the fiscal year ended February 29, 1997. An
independent engineering firm generated a partial reserves analysis during fiscal
year 1997. Crude oil sales increased by approximately 3474 equivalent barrels,
which was mainly due to the Don Thorson #1 and the Wade Hill Unit increasing
production.
During fiscal 1997, the amount reserved for the depletion of reserves and
the depreciation of equipment was $17,184. Loss on operations for the year was
$9,698 due to the cost of abandoned properties of $28,619.
Production and operating expenses decreased approximately 18% as a
percentage from fiscal 1996 to 1997, due to less workover costs.
"Total" General and Administrative expenses remained approximately the same
in fiscal 1996 compared to fiscal 1997. Since fiscal 1985, the Company resolved
to avoid those activities that required additional outside professional services
and to limit operations to the management of existing properties and the
acquisition of additional properties within the Company's ordinary course of
business.
Interest expense remained approximately the same as in fiscal 1996.
Management anticipates higher crude oil and natural gas prices and
therefore, an increase in oil and gas revenues in fiscal year 1998 to fiscal
year 1997 will come from additional production and higher oil and gas prices.
Financial Position
During the Company's fiscal year 1996, net cash decreased by $53,270. Of
this decrease, $33,170 is the result of operating activities, $15,100 was for
the purchase of properties and $5,000 was principal payments on debt. The
Company's emphasis regarding property additions continues to be toward acquiring
existing production rather than from drilling new wells. No new drilling was
done by the Company in fiscal 1996 and significant costs related to maintaining
existing production. Short term notes payable decreased by $5,000 which was
paid in cash. The Company has financed property acquisitions with debt and
continue to repay such borrowing with the revenues from those properties.
During the Company's fiscal year 1996, crude oil prices varied within a
range of approximately $13.07 to $19.10 a barrel. Natural gas prices varied
within a range of approximately $1.03 to $1.50. Revenue from such acquired
properties must not only service debt, but continue to provide positive cash
flow after retirement of that debt.
8
Result of Operations
The Company's oil and gas revenues decreased from $293,777 in fiscal 1995
to $266,227 in fiscal 1996. Present production has the effect of decreasing
Wyoming Oil & Minerals reserves, however, due mainly to the waterflood of the
Don Thorson #1 and the Wade Hill unit, total oil and gas reserves increased
significantly for the fiscal year ended February 29, 1996. An independent
engineering firm generated a partial reserves analysis during fiscal year 1996.
Crude oil sales decreased by approximately 3067 equivalent barrels, which was
mainly due to the Don Thorson #1 being out of operation for a number of months.
During fiscal 1996, the amount reserved for the depletion of reserves and
the depreciation of equipment was $18,501. Loss on operations for the year was
$45,190 due to increased workover costs on the recently acquired producing
properties.
Production and operating expenses did not materially change as a percentage
from fiscal 1995 to 1996, except for the increased workover cost described
above.
"Total" General and Administrative expenses increased $11,546 from $53,284
in fiscal 1995 to $64,830 in fiscal 1996 mainly due to outside service expense
of $9,161 for the year. Since fiscal 1985, the Company resolved to avoid those
activities that required additional outside professional services and to limit
operations to the management of existing properties and the acquisition of
additional properties within the Company's ordinary course of business.
Interest expense remained approximately the same as in fiscal 1995.
Management anticipates higher crude oil and natural gas prices and
therefore, and increase in oil and gas revenues in fiscal year 1997 to fiscal
year 1996 will come from additional production and higher oil and gas prices.
Financial Position
During the Company's fiscal year 1995, net cash decreased by $26,989. Of
this decrease, $50,612 is the result of operating activities, $75,616 is
proceeds from the sale of properties, $2,436 was for the purchase of properties
and $49,557 was principal payments on debt. The Company's emphasis regarding
property additions continues to be toward acquiring existing production rather
than from drilling new wells. No new drilling was done by the Company in fiscal
1995 and significant costs related to maintaining existing production. Short
term notes payable decreased by $7,500 which was paid in cash. The Company has
financed property acquisitions with debt and continue to repay such borrowing
with the revenues from those properties.
During the Company's fiscal year 1995, crude oil prices varied within a
range of approximately $10.55 to $18.10 a barrel. Natural gas prices varied
within a range of approximately $1.08 to $1.82. Revenue from such acquired
properties must not only service debt, but continue to provide positive cash
flow after retirement of that debt.
9
Result of Operations
The Company's oil and gas revenues increased from $207,295 in fiscal 1994
to $293,777 in fiscal 1995. This increase resulted from the purchase of
additional producing properties. Present production has the effect of
increasing Wyoming Oil & Minerals reserves, however, due mainly to the loss of
the Bradbury well and sale of another producing property, total oil and gas
reserves decreased significantly for the fiscal year ended February 28, 1995.
An independent engineering firm generated a partial reserves analysis during
fiscal year 1995. Crude oil sales increased by approximately 1345 equivalent
barrels, which was mainly due to the purchase of producing properties.
During fiscal 1995, the amount reserved for the depletion of reserves and
the depreciation of equipment was $10,467. Loss on operations for the year was
$20,361 due to a loss of $16,519 on the sale of a producing property and
increased workover costs on the newly acquired producing properties.
Production and operating expenses did not materially change as a percentage
from fiscal 1994 to 1995, except for the increased workover cost described
above.
"Total" General and Administrative expenses increased $15,792 from $37,492
in fiscal 1994 to $53,284 in fiscal 1995 mainly due to an increase in salary to
the President of $18,000. Since fiscal 1985, the Company resolved to avoid
those activities that required additional outside professional services and to
limit operations to the management of existing properties and the acquisition of
additional properties within the Company's ordinary course of business.
Interest expense increased by $2,170 due to additional borrowing.
Management anticipates higher crude oil and natural gas prices and
therefore, and increase in oil and gas revenues in fiscal year 1996 to fiscal
year 1995 will come from additional production and higher oil and gas prices.
Item 8. Financial Statements and Supplementary Data.
For the financial statements and supplementary data required by Item 8, see
Financial Statements, Unaudited Supplemental Financial Information and
Schedules.
Item 9. Disagreements on Accounting and Financial Disclosure.
Not applicable
10
PART III
Item 10. Directors and Executive Officers
of the Registrant.
The following are the present directors and executive officers of the
Company and the director-nominees for the coming year.
Jack C. Bradley Jr., age 55, has been president and a director of the
Company since February 23, 1973. Bradley also is the president, a director, and
the majority shareholder of Manx Oil Corporation, Casper, Wyoming since 1969;
vice-president, director and shareholder on Manewal-Bradley Oil Company,
Newcastle, Wyoming since 1962; and, secretary, director and shareholder of
Econoservice, Inc., Casper, Wyoming since 1986 -- all of which are engaged in
the oil and gas exploration or production business.
Since 1970, he has been owner of Zephyr Exploration which is a sole
proprietorship engaged in the oil and gas exploration and production business
and real estate investments.
Jess A. Tolerton, age 73, has been secretary, treasurer and director since
February 12, 1974. Tolerton was a practicing attorney in Cheyenne, Wyoming from
1966 to 1968 and from January 1974 to December 31, 1990. He is now retired from
practice.
There is no family relationship between any of the officers and directors
of the Company. The term of the officers expire at the annual directors
meeting.
Item 11. Executive Compensation
No director or officer of the Company received enumeration which exceeded
$60,000 in the past fiscal year.
The Company has never granted any options to any of its officers or
directors to purchase any of the Company's securities. The Company has adopted
a key employee stock option plan designed to qualify under Section 422 of the
Internal Revenue Code of 1954, as amended; however, no options have been granted
pursuant to the plan. At the present time, no officer or director holds any
options granted by the Company to purchase any on the Company's securities.
Item 12. Security Ownership of Certain
Beneficial Owners and Management.
Amount and Nature
of Beneficial Percent of
Name and Address Ownership Class
The Hawks Company 1,260,000 (1) 7.5%
P.O. Box 2493
Casper, WY 82601
11
(1) Owned of record
The following are shares owned by management:
Amount and Nature
of Beneficial Percent of
Director Ownership Class
Jack C. Bradley, Jr. 2,135,500 (1) 12.7%
P.O. Box 3560
Casper, WY 82602
Jess A. Tolerton 650,000 3.9%
All directors and
officers as a group 2,785,500 16.6%
(1) Of this total 2,085,500 shares are owned by record by Jack C. Bradley, Jr.,
and 50,000 are owned by Manx Oil Corporation of which Bradley is the president,
a director, and owner of a majority of its outstanding common shares.
Item 13. Certain Relationships and Related Transactions.
Not applicable.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K.
(a) See attached Financial Statements,
Unaudited Supplemental Financial Information and Schedules.
(b) No reports of Form 8-K were filed in the fourth quarter of the fiscal year
ended February 28, 1997.
(c) Exhibits required by Item 601 of Regulation SK: None
12
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, hereunto duly authorized.
WYOMING OIL & MINERALS, INC.
A Wyoming Corporation
By: /s/ Jack C. Bradley, Jr.
Jack C. Bradley, Jr., President
and Principal Financial Officer
DATED: June 11, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following person on behalf of the Registrant
and in the capacities and on the dates indicated.
/s/ Jack C. Bradley, Jr.
Jack C. Bradley, Jr., Director
and President
DATED: June 11, 1997
/s/ Jess A. Tolerton
Jess A. Tolerton
Director and Secretary
DATED: June 11, 1997
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Wyoming Oil and Minerals, Inc.
Casper, Wyoming
I have audited the accompanying balance sheets of Wyoming Oil and Minerals,
Inc., as of February 28, 1997 and February 29, 1996 and the related statements
of operations, changes in stockholders' equity and cash flows for the years
ended February 28, 1997, February 29, 1996 and February 28, 1995. These
financial statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based on
my audits.
I conducted my audits in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audits 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.
I believe that my audits provide a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Wyoming Oil and Minerals, Inc. as
of February 28, 1997 and February 29, 1996, and the results of its operations
and changes in its stockholders' equity and its cash flow for the years ended
February 28, 1997, February 29, 1996 and February 28, 1995, in conformity with
generally accepted accounting principles.
MAURICE M. MORTON
Certified Public Accountant
Casper, Wyoming
May 15, 1997
WYOMING OIL AND MINERALS, INC.
Balance Sheets
ASSETS
February 29, February 28,
1997 1996
Current assets:
Cash $ 7,430 $ 7,717
Accounts receivable 83,110 43,316
Marketable equity securities -
(Note 3) 5,850 5,850
Inventory of oilfield equipment and
oil in tanks - at lower of cost (specific identification)
or market 43,325 50,005
Total current assets 139,715 106,888
Property and equipment, at cost under the
successful efforts method of accounting
(Note 4):
Proved oil and gas properties
(Notes 4 & 5) 268,023 298,142
Unproved oil and gas properties 4,842 4,842
Pipeline and drilling equipment 570 570
Office furniture and equipment 3,509 3,509
276,944 307,063
Less accumulated depletion and depreciation
(174,390) (157,206)
102,554 149,857
Other assets 61 61
$ 242,330 $ 256,806
(continued)
See accompanying notes to financial statements.
F-2
WYOMING OIL AND MINERALS, INC.
Balance Sheets
(Continued)
Liabilities and Stockholders' Equity
February 28, February 29,
1997 1996
Current liabilities:
Notes payable (Note 5):
Related parties $ 8,000 $ 12,000
Accounts payable 73,150 72,123
Accrued expenses - 1,805
Total current liabilities 81,150 85,928
Long-term debt - related parties (Note 6) 50,000 50,000
Stockholders' equity (Note 7):
Common stock, $.01 par value:
Authorized - 25,000,000 shares
Issued - 16,750,000
shares in 1997 and 1996 167,500 167,500
Additional paid-in capital 1,021,025 1,021,025
Accumulated deficit (1,077,345) (1,067,647)
111,180 120,878
$ 242,330 $ 256,806
See accompanying notes to financial statements.
F-3
WYOMING OIL AND MINERALS, INC.
Statements of Operations
February 28, February 29, February 28,
1997 1996 1995
Operating revenues:
Oil and gas sales (Notes 5 & 10)$ 357,765 $ 266,227 $ 293,777
Gain (loss) on sale of oil and
gas properties and equipment (700) - (16,519)
Other operating income 22,039 24,962 32,160
Total operating revenues 379,104 291,189 309,418
Operating expenses:
General and administrative 64,399 64,830 53,284
Depreciation and depletion 17,184 18,501 10,467
Oil and gas production costs 272,681 251,419 250,316
Abandoned properties 28,619 - 15,006
Lease rentals 1 1,629 706
Total operating expenses 382,884 336,379 329,779
Operating income (loss) (3,780) (45,190) (20,361)
Other income (expense):
Interest income 44 523 239
Interest expense (5,962) (6,968) (7,025)
Other income (expense), net (5,918) (6,445) (6,786)
(continued)
See accompanying notes to financial statements.
F-4
WYOMING OIL AND MINERALS, INC.
Statements of Operations
(Continued)
February 28, February 29, February 28,
1997 1996 1995
Earnings (loss) before income taxes: $ (9,698) $ (51,635) $ (27,147)
Current taxes - - -
Net earnings (loss) $ (9,698) $ (51,635) $ (27,147)
Weighted average number of shares
outstanding 16,750,000 16,750,000 16,750,000
Net earnings (loss ) per
common share:
Primary and fully diluted:
Net earnings (loss) $ * $ * $ *
*Less than $.01 per share
See accompanying notes to financial statements.
F-5
WYOMING OIL AND MINERALS, INC.
Statements of Stockholders' Equity
Common Stock Additional
.01 Par Value Paid-in Accumulated Treasury Stock
Shares Amount Capital Deficit Shares Amount Total
Bal at 02/28/94 16,750,000 $167,500 $1,021,025 $(988,865) - $ - $199,660
Net loss - - - (27,147) - - (27,147)
Bal at 02/28/95 16,750,000 167,500 1,021,025(1,016,012) - - 172,513
Net loss - - - (51,635) - - (51,635)
Bal at 02/29/96 16,750,000 167,500 1,021,025(1,067,647) - - 120,878
Net loss - - - (9,698) - - (9,698)
Bal at 02/28/97 16,750,000 $167,500 $1,021,025$(1,077,345) - $ - $111,180
See accompanying notes to financial statements.
F-6
WYOMING OIL AND MINERALS, INC.
Statements of Cash Flows
February 28, February 29, February 28,
1997 1996 1995
Cash flows from operating activities:
Cash received from customers $ 340,010 $ 294,067 $ 314,001
Cash paid to suppliers and employees(329,374) (322,597) (357,714)
Interest income 44 523 239
Interest expense (7,767) (5,163) (7,138)
Net cash provided by (used in) operating activities
2,913 (33,170) (50,612)
Cash flows from investing activities:
Purchase of oil and gas properties and equipment
- (15,100) (2,436)
Proceeds from sale of oil and gas properties and
equipment 800 - 75,616
Net cash provided by (used in) investing activities
800 (15,100) 73,180
Cash flows from financing activities:
Principal payments (4,000) (5,000) (49,557)
Net cash provided by (used in) financing activities
(4,000) (5,000) (49,557)
Net increase (decrease) in cash and cash equivalents
(287) (53,270) (26,989)
Cash and cash equivalents at beginning of year
7,717 60,987 87,976
Cash and cash equivalents at end of year $ 7,430 $ 7,717 $ 60,987
(continued)
See accompanying notes to financial statements.
F-7
WYOMING OIL AND MINERALS, INC.
Statements of Cash Flows
(Continued)
February 28, February 29, February 28,
1997 1996 1995
Reconciliation of net income to net cash provided
by (used in) operating activities
Net earnings (loss) $ (9,698) $ (51,635) $ (27,147)
Adjustments to reconcile net income to cash provided
by (used in) operating activities:
Depreciation and depletion 17,184 18,501 10,467
(Increase) decrease in accounts receivable
(39,794) 2,87 (13,678)
(Increase) decrease in inventory 6,680 (32,343) 1,742
Increase (decrease) in accounts payable
1,027 27,624 (53,408)
Increase (decrease) in accrued expenses
(1,805) 1,805 (113)
Abandoned properties 28,619 - 15,006
Gain (loss) on sale of oil and gas properties
and equipment 700 - 16,519
Net cash provided by (used in) operating activities
$ 2,913 $ (33,170) $ (50,612)
Supplemental schedule of non cash investing and financing activities
None
See accompanying notes to financial statements.
F-8
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 28, 1997 and February 29, 1996 and February 28, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
Wyoming Oil and Minerals, Inc. engages principally in the exploration,
development and production of oil and gas which is mainly in Wyoming.
Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles require 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 amount of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Accounts receivable
The Company uses the direct write off method for bad debts which expenses
uncollectible accounts in the year they become uncollectible. Any
difference between this method and the allowance method is not material.
Marketable equity securities
Marketable equity securities are classified as available-for-sale securities
and are carried at fair value at the balance sheet date.
When securities are sold, the cost is based on the first-in, first-out
method.
Oil and gas properties
The Company follows the successful efforts method of accounting for oil and
gas exploration and development activities. Under this method of
accounting, lease acquisition costs, intangible drilling costs and other
costs associated with exploration efforts, which result in the discovery of
proved reserves, are capitalized. Costs of well equipment, development
drilling, support facilities, major betterment and renewals and other
development costs are also capitalized. Capitalized acquisition costs of
proved properties are amortized using the unit-of-production method on the
basis of total estimated units of proved oil and gas reserves. Other
capitalized costs are amortized using the unit-of-production method on the
basis of total estimated units of proved developed reserves. The amortized
amounts are charged to depreciation and depletion expense. The
recoverability of costs capitalized both for proved and unproved properties
is reviewed periodically. Any impairment discovered is charged to expense.
Costs of drilling exploratory wells which do not result in the discovery of
proved reserves are charged to expense. Production costs, geological and
geophysical costs, and maintenance and repairs are charged to expense when
incurred.
F-9
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 28, 1997 and February 29, 1996 and February 28, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Other property and equipment
The Company's pipeline and drilling equipment and office furniture and
equipment are depreciated utilizing the straight-line method to apportion
costs over an estimated useful life of five years.
Income taxes
Investment tax credits are recorded in the year in which they are utilized
to reduce income taxes.
Earnings (loss) per common share
Earnings or loss per common share is based on the weighted average number of
shares of the Company's $.01 par value common stock outstanding during the
year. Outstanding warrants have been excluded because the exercise price is
substantially higher than the trading price of the Company's stock.
Statement of cash flows
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or
less to be cash equivalents.
Reclassifications
Certain reclassifications have been made to financial statements of prior
years to be comparative with the current year presentation.
Off-Balance-Sheet Risk
Sale of oil and gas are made to domestic petroleum purchasing and refining
companies with payment normally received within thirty to sixty days of
sale. Billings to joint interest holders are normally received within
thirty to sixty days of billing.
F-10
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 28, 1997, February 29, 1996 and February 28, 1995
2. FOURTH QUARTER ADJUSTMENTS
During the fourth quarter of the year ended February 28, 1997 the Company
wrote off a proved undeveloped lease. Cost was decreased $28,619 and a loss
was recorded of $28,619.
During the fourth quarter of the year ended February 29, 1996, the Company
recorded an increase of $32,893 in the amount of oil inventory stored in
tanks. Oil and gas income also increased $32,893.
During the fourth quarter of the year ended February 28, 1995, the Company
wrote off a proved undeveloped lease. Cost was decreased $86,441, accounts
payable was decreased $71,435 and a loss was recorded of $15,006.
3. MARKETABLE EQUITY SECURITIES
Marketable equity securities are summarized below:
February 28, February 29, February 28,
1997 1996 1995
Available-for-sale securities, at cost $ 73,411 $ 73,411 $ 73,411
Less: Valuation allowance 67,561 67,561 67,561
Fair Value $ 5,850 $ 5,850 $ 5,850
There were no significant unrealized gains or losses.
4. OIL AND GAS PROPERTIES
During fiscal 1997, the Company sold its interest in a producing lease in
Campbell County, Wyoming for $800.
Effective May 1, 1995, the Company purchased 20% of seven producing leases in
Converse and Campbell Counties, Wyoming from a related party for $15,100.
During fiscal year 1995, the Company sold its interest in producing wells in
Campbell County, Wyoming to an independent party for $4,181 and recognized a
loss of $16,519.
See Note 2, also.
F-11
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 28, 1997, February 29, 1996 and February 28, 1995
5. NOTES PAYABLE
The Company had outstanding notes payable as follows:
Other 1997 1996
Note to individual (related party), due on demand, interest
at 1% over the prime rate, (9.25% at February 29, 1996)
unsecured. $ - $ 500
Note to individual (related party) due on demand, interest
at 1% over the prime rate (9.25% at February 28, 1997)
secured by a producing well. 8,000 11,500
$ 8,000 $12,000
Other information regarding short-term notes payable is as follows:
1997 1996 1995
Average aggregate short-term borrowings $ 10,000 $ 14,500 $ 20,750
Maximum aggregate short-term borrowings
at any month-end $ 12,000 $ 17,000 $ 24,500
Weighted average interest rate 9.25% 9.0% 8.0%
The weighted average interest rate was computed by dividing interest expense
by the weighted average of such borrowings outstanding.
6. LONG-TERM DEBT
The Company had long-term debt as follows:
1997 1996
Notes payable to two individuals (related parties), due
December 1, 1999, interest at 2% over the prime rate
(10.25% at February 28, 1997), unsecured $ 50,000 $ 50,000
Long-term debt maturities are as follows:
Year Ended February 28, Amount
1999 $ 50,000
F-12
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 28, 1997, February 29, 1996 and February 28, 1995
7. STOCKHOLDERS' EQUITY
The Company has adopted a key-employee stock option plan. The plan provides
for a maximum of 1,000,000 shares of the Company's common stock available to
be optioned. The fair market value of the shares, as determined by the Board
of Directors at the time the option is granted, will be the exercise price.
The options will expire on the earlier of five years after being granted or
two months after termination of employment. Since the adoption of the plan,
no options have been granted.
No dividends have ever been declared or paid.
8. INCOME TAXES
Net income and losses differ from taxable income (loss) because certain
revenues and expenses are reported in the financial statements in periods
which differ for those in which they are subject to taxation. The principal
timing differences are intangible drilling costs, which are deducted as
incurred for tax purposes, but capitalized and depleted for proven properties
for financial statement purposes; and unrealized losses on marketable
securities, which are recognized for financial statement purposes currently,
but not until realized for tax purposes. Deferred income taxes are not
recognized on the timing differences as it is not likely that all net
operating loss carryforwards will be used.
February 28,
1997 1996 1995
Pretax income per books $ (9,698) $ (51,635) $ (27,147)
Timing differences:
Depletion on intangible drilling costs
2,000 2,000 3,000
Basis difference on sale of oil and
gas properties - - 18,402
Taxable income (loss) $ (7,698) $ (49,635) $ (5,745)
As discussed above, the Company adopted SFAS No. 109 as of February 28, 1994.
Deferred tax (assets) liabilities are comprised of the following at February
28, computed using a tax rate of 15%:
F-13
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 29, 1997, February 28, 1996 and February 28, 1995
8. INCOME TAXES (Continued)
Tax effects of temporary differences for: 1997 1996 1995
Accounting for oil and gas properties $ 306 $ 606 $ 905
Accounting for securities held for sale (6,428) (6,428) (6,428)
(6,122) (5,822) (5,523)
Tax loss carryforwards (92,382) (107,216) (107,606)
(98,504) (113,038) (113,129)
Valuation allowance 98,504 113,038 113,129
Net deferred tax $ - $ - $ -
At February 29, 1997, the Company had net operating loss carryforwards
available of $615,880 and unused investment credit carryforwards available of
$9,190. Such carryforwards expire as follows:
Net
Operating Investment
Expiration Loss Credits
1998 217,687 4,968
1999 8,275 498
2000 61,322 3,724
2001 20,035 -
2002 127,905 -
2003 115,412 -
2004 8,006 -
2005 49,540 -
2006 7,698 -
$ 615,880 $ 9,190*
* subject to limitations
The Company also has long-term capital loss carryover of $94,940.
F-14
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 28, 1997, February 29, 1996 and February 28, 1995
9. RELATED PARTY TRANSACTIONS
The Company is related to the following companies by common ownership and/or
management:
Manx Oil Corporation
Manewal-Bradley Oil Company, Inc.
Zephyr Exploration
Econoservice, Inc.
Lease operating expenses paid to Manx Oil Company were $206,621, to Manewal-
Bradley Oil Company, Inc. were $4,067 and to Econoservice, Inc. were $13,911
for the year ended February 28, 1997. Amounts received from Manx Oil
Corporation were $3,504 for lease operating expenses. Oil and gas revenue
received from Manx Oil Corporation were $245,254 and oil and gas revenue paid
were $1,629. The Company owed Manx Oil Corporation $57,466 at February 28,
1997, $49,088 at February 29, 1996 and $14,818 at February 28, 1995. Manx Oil
Corporation owed the Company $47,815 at February 28, 1997 and $16,045 at
February 29, 1996.
10. MAJOR PURCHASERS
Substantially all of the Company's accounts receivable at February 28, 1997
and February 29, 1996 result from oil and gas sales to other companies in the
oil and gas industry or joint industry billings to other interest holders.
This concentration of customers may impact the Company's overall credit risk,
either positively or negatively, in that these entities may be similarly
affected by industry - wide changes in economic or other conditions.
Such receivables are generally not collaterized.
The following customers each contributed 10% or more of the revenues derived
from oil and gas sales as follows:
February 28, February 29, February 28,
1997 1996 1995
Eighty-Eight Oil $ 162,606 $ 132,678 $ 165,570
Texaco $ 43,464 $ 33,707 $ 27,131
JN Petroleum $ 92,509 $ 59,620 $ 54,744
F-15
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 29, 1997, February 28, 1996 and February 28, 1995
12. SUPPLEMENTARY OIL AND GAS INFORMATION (Unaudited)
Capitalized Costs
Capitalized costs relating to the Company's oil and gas producing activities
as of February 28, 1997, February 29, 1996 and February 28, 1995 are as
follows:
1997 1996 1995
Proved properties $268,023 $298,142 $283,042
Unproved properties 4,842 4,842 4,842
$272,865 $302,984 $287,884
Support equipment $ 570 $ 570 $ 570
Accumulated depreciation and depletion $170,881 $153,697 $135,196
Costs incurred in oil and gas property acquisition, exploration and
development activities
Costs incurred in oil and gas property acquisition, exploration and
development activities, including capital expenditures, are summarized as
follows for the years ended February 28, 1997, February 29, 1996 and February
28, 1995 (all in the United States):
1997 1996 1995
Property acquisition costs:
Proved properties $ - $ 15,100 $ 2,436
Unproved properties $ - $ - $ -
Exploration costs $ 1 $ 1,629 $ 706
Development costs $ - $ - $ -
Results of operations for oil and gas producing activities
The results of operations for oil and gas producing activities, excluding
capital expenditures and corporate overhead and interest costs, are as follows
for the years ended February 28, 1997, February 29, 1996 and February 28, 1995
(all in the United States):
1997 1996 1995
Revenues $357,765 $266,227 $293,777
Production costs 272,681 251,419 250,316
Exploration costs 1 1,629 706
Depreciation and depletion 17,184 18,501 10,467
$ 67,899 $ (5,322) $ 32,288
F-16
<PAGE>
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 28, 1997, February 29, 1996 and February 28, 1995
12. SUPPLEMENTARY OIL AND GAS INFORMATION (Unaudited) (Continued)
Oil and Gas Reserve Quantities
The estimates of proved reserves and related valuations were determined both
by management and by independent petroleum engineers. Estimates of proved
reserves are inherently imprecise and are continually subject to revision
based on production history, results of additional exploration and development
and other factors.
Proved reserves are reserves judged to be economically producible in future
years from known reservoirs under existing economic and operating conditions;
i.e., prices and costs as of the date the estimate is made and assuming
continuation of current regulatory practice using conventional production
methods and equipment. Proved developed reserves are those expected to be
recovered through existing wells with existing equipment and operating
methods.
Presented below is a summary of the changes in estimated proved reserves of
the Company, all of which are located in the United States, for the years
ended February 28, 1997 and February 29, 1996 and February 28, 1995:
1997 1996 1995
Oil Gas Oil Gas Oil Gas
(bbls.) (mcf) (bbls.) (mcf) (bbls.) (mcf)
Proved reserves:
Beginning of year 163,378 86,884 69,093 99,916 128,216 489,108
Improved Recovery -
Water Flood (63,384) - 94,278 - - -
Revisions of previous
estimates 4,989 - 826 (9,474) (36,867) 89
Purchase of minerals
in place - - 12,338 - - -
Production (16,786) (2,629) (13,157) (3,558) (15,970) (5,081)
Sales of minerals in
place - - - - (6,286)(384,200)
End of year 88,197 84,255 163,378 86,884 69,093 99,916
Proved developed reserves:
Beginning of year 163,378 86,884 69,093 99,916 124,116 224,108
End of year 88,197 84,255 163,378 86,884 69,093 99,916
Standardized measure of discounted future net cash flows and changes therein
relating to proved oil and gas reserves
Statement of Financial Accounting Standards No. 69 prescribes guidelines for
computing a standardized measure of future net cash flows and changes therein
relating to estimated proved reserves. The Company has followed those
guidelines which are briefly discussed below.
F-17
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 28, 1997, February 29, 1996 and February 28, 1995
12. Supplementary Oil and Gas Information (Unaudited) (Continued)
Oil and Gas Reserve Quantities (Continued)
Future cash inflows and future production and development costs are determined
by applying year-end prices and costs to the estimated quantities of oil and
gas to be produced. Estimated future income taxes are computed using year-end
statutory income tax rates, including consideration for previously legislated
future statutory depletion rates and investment tax credits. The resulting
future net cash flows are reduced to present value amounts by applying a 10%
annual discount factor.
The assumptions used to compute the standardized measure are those prescribed
by the Financial Accounting Standards Board and, as such, do not necessarily
reflect the Company's expectations of actual revenues to be derived from those
reserves or their present worth. The limitations inherent in the reserve
quantity estimation process, as discussed previously, are equally applicable
to the standardized measure computations since these estimates are the basis
for the valuation process.
Presented below are the standardized measure of discounted future net cash
flows and changes therein relating to proved reserves as of and for the years
ended February 28, 1997 and February 29, 1996 and February 28, 1995.
1997 1996 1995
Future cash inflows $ 1,901,220 $ 2,922,401 $ 1,240,670
Future production and
development costs (955,275) (1,398,293) (642,010)
Future income tax expenses (64,735) (196,596) -
Future net cash flows 881,210 1,327,512 598,660
10% annual discount for
estimated timing of cash flows (344,608) (517,858) (179,506)
Standard measure of discounted
future net cash flows $ 536,602 $ 809,654 $ 419,154
F-18
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 28, 1997, February 29, 1996 and February 28, 1995
12. Supplementary Oil and Gas Information (Unaudited) (Continued)
Oil and Gas Reserve Quantities (Continued)
The following are the principal sources of changes in the standardized measure
of discounted future net cash flows:
February 28, February 29, February 28,
1997 1996 1995
Sales and transfers of oil and gas
produced, net of production costs $ (85,084) $ (14,808) $ (43,461)
Net changes in prices and production
costs 414,851 (13,554) 469,084
Improved Recovery - Water Flood (515,701) 515,701 -
Revisions of previous quantities
estimates 25,294 (4,119) (175,213)
Net change in purchases and sales
of minerals in place - - (600,886)
Accretion of discount 80,965 41,915 62,278
Net changes in income taxes 131,861 (196,596) 51,327
Other - mainly change in
production costs (325,238) 61,961 33,249
Net increase (decrease) (273,052) 390,500 (203,622)
Estimated standardized measures:
Beginning of year 809,654 419,154 622,776
End of year $ 536,602 $809,654 $ 419,154
F-19
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> FEB-28-1997
<PERIOD-END> FEB-28-1997
<CASH> 7,430
<SECURITIES> 5,850
<RECEIVABLES> 83,110
<ALLOWANCES> 0
<INVENTORY> 43,325
<CURRENT-ASSETS> 139,715
<PP&E> 276,944
<DEPRECIATION> (174,390)
<TOTAL-ASSETS> 242,330
<CURRENT-LIABILITIES> 81,150
<BONDS> 0
<COMMON> 167,500
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 242,330
<SALES> 357,765
<TOTAL-REVENUES> 379,104
<CGS> 272,681
<TOTAL-COSTS> 382,884
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,962
<INCOME-PRETAX> (5,918)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,918)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
