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, 1998
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 (14,364,500 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, 1998 (based on $.01 bid, $.050 asked) -
$430,935.
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock as of the latest practicable date. May 15, 1998
17,250,000 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. In 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.
The Company is operating in one industry segment, the exploration,
production and sale of oil and gas. See Financial Statements.
The Company is Y2K compliant as of February 28, 1998. The Company believes
its major purchasers and suppliers are also Y2K compliant.
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 an 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, 1998
all located in the state of Wyoming is as follows:
Gross Acres Net Acres
Undeveloped proved and
unproved acres:
Leasehold interest:
Oil and gas 860 800.57
Developed proved acres:
Leasehold interest:
Primarily oil 5,728 2,045
Primarily gas 0 0
Oil and Gas Production. As of February 28, 1998, the Company owns the
following productive wells:
Oil Gas
Gross Net Gross Net
Working Interest 51 23.7669 1 .50
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
1996 13,157 3,558
1997 16,786 2,629
1998 16,081 4,295
The average sales price (including transfers) per unit oil and gas produced
for the years ended the last day of February is as follows:
1998 1997 1996
Oil -- Barrels $18.50 $20.97 $17.00
Gas -- MCF $2.16 $ 2.64 $ 1.43
The average production (lifting) cost per unit of production is as follows:
1998 1997 1996
Oil -- Barrels $13.43 $14.58 $16.96
Gas -- MCF $ 1.25 $ 1.25 $ 1.25
Net Exploratory Wells
Fiscal Year
Drilled Producers Dry Holes Total Wells
1996 0 0 0
1997 0 0 0
1998 0 0 0
Net Development Wells
Fiscal Year
Drilled Producers Dry Holes Total Wells
1996 0 0 0
1997 0 0 0
1998 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)
1996 163,378 86,884
1997 88,197 84,255
1998 127,080 80,867
Proved Developed Oil and Gas Reserves
1996 163,378 86,884
1997 88,197 84,255
1998 127,080 80,867
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, 1989 through February 28, 1990 1 cent 1 cent
March 1, 1990 through February 28, 1991 1 cent 1/2 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, 1996 through February 28, 1997 1 cent 1 cent
March 1, 1997 through February 28, 1998 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, 1998.
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
1998 1997 1996 1995 1994
Revenues:
Operating revenues from
oil and gas sales $306,807 $357,765 $266,227 $293,777 $207,295
Other operating
revenues 19,566 22,039 24,962 32,160 25,852
Earnings (loss) from
continuing operations before
extraordinary items 18,197 ( 9,698) (51,635) (27,147) (396,484)
Extraordinary items -- -- -- -- --
Net earnings (loss) from
continuing operations 18,197 ( 9,698) (51,635) (27,147) (396,484)
Earnings (loss) per share
from continuing operations* * * (.02) *
Cash dividends per
common share -- -- -- -- --
At year end:
Total assets 342,140 242,330 256,806 284,012 414,237
Long-term obligations 86,693 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 1998, net cash decreased by $3,976.
Of this decrease, $112,399 was from the purchase of properties and $3,500 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 1998. Short term
notes payable decreased by $3,500 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.
7
Result of Operations
The Company's oil and gas revenues decreased from $357,765 in fiscal 1997
to $306,807, mainly due to a decrease in oil prices in fiscal 1998. Present
production has the effect of decreasing Wyoming Oil & Minerals reserves,
however, due mainly to doing the waterflood of the Don Thorson #1, total oil and
gas reserves increased significantly for the fiscal year ended February 29,
1998. An independent engineering firm generated a partial reserves analysis
during fiscal year 1998. Crude oil sales stayed approximately the same.
During fiscal 1998, the amount reserved for the depletion of reserves and
the depreciation of equipment was $15,934. Income on operations for the year
was $18,197 due, in part, to the cost of abandoned nonproducing properties being
only $4,842.
Production and operating expenses decreased approximately 19% as a
percentage from fiscal 1997 to 1998, due to less workover costs.
"Total" General and Administrative expenses decreased approximately $5,498
from fiscal 1997 compared to fiscal 1998 due to a decrease in expense for well
logs, maps, etc. of $5,292. 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 1997.
Management anticipates the current low prices for oil will continue
throughout 1999. Therefore management anticipates revenue and expenses will
remain about the same for fiscal year 1999.
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.
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.
8
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.
9
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.
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 56, 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 74, 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 1,760,000 (1) 10.2%
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, 1998.
(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, 1998
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, 1998
/s/ Jess A. Tolerton
Jess A. Tolerton
Director and Secretary
DATED: June 11, 1998
WYOMING OIL AND MINERALS, INC.
CASPER, WYOMING
FINANCIAL STATEMENTS
AS OF FEBRUARY 28, 1998 AND FEBRUARY 28, 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, 1998 and 1997 and the related statements of operations,
changes in stockholders' equity and cash flows for the years ended February 28,
1998, February 28, 1997 and February 29, 1996. 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, 1998 and 1997, and the results of its operations and changes
in its stockholders' equity and its cash flow for the years ended February 28,
1998, February 28, 1997 and February 29, 1996, in conformity with generally
accepted accounting principles.
MAURICE M. MORTON
Certified Public Accountant
Casper, Wyoming
May 14, 1998 WYOMING OIL AND MINERALS, INC.
Balance Sheets
ASSETS
February 28, February 28,
1998 1997
Current assets:
Cash $ 3,454 $ 7,430
Accounts receivable 23,391 64,446
Marketable equity securities -
(Note 3) 5,850 5,850
0 Inventory of oilfield equipment and
oil in tanks - at lower of cost (specific identification)
or market 37,485 43,325
Total current assets 70,180 121,051
Property and equipment, at cost under the
successful efforts method of accounting
(Note 4):
Proved oil and gas properties
(Notes 4 & 5) 435,342 268,023
Unproved oil and gas properties - 4,842
Pipeline and drilling equipment 570 570
Office furniture and equipment 3,509 3,509
439,421 276,944
Less accumulated depletion and depreciation (190,324) (174,390)
249,097 102,554
Accounts receivable - non current 22,802 18,664
Other assets 61 61
22,863 18,725
$ 342,140 $ 242,330
(continued)
See accompanying notes to financial statements.
F-2
WYOMING OIL AND MINERALS, INC.
Balance Sheets
(Continued)
Liabilities and Stockholders' Equity
February 28, February 28,
1998 1997
Current liabilities:
Notes payable (Note 5):
Related parties $ 4,500 $ 8,000
Accounts payable 109,268 73,150
Accrued expenses 2,024 -
Current portion of long-term debt (Note 6) 2,778 -
Total current liabilities 118,570 81,150
Long-term debt - related parties (Note 6) 50,000 50,000
Long-term debt - other (Note 6) 36,693 -
86,693 50,000
Stockholders' equity (Note 7):
Common stock, $.01 par value:
Authorized - 25,000,000 shares
Issued - 17,250,000 shares in 1998
and 16,750,000 shares in 1997 172,500 167,500
Additional paid-in capital 1,023,525 1,021,025
Accumulated deficit (1,059,148) (1,077,345)
136,877 111,180
$ 342,140 $ 242,330
See accompanying notes to financial statements.
F-3
WYOMING OIL AND MINERALS, INC.
Statements of Operations
February 28, February 28, February 29,
1998 1997 1996
Operating revenues:
Oil and gas sales (Note 10) $306,807 $ 357,765 $ 266,227
Gain (loss) on sale of oil and
gas properties and equipment - (700) -
Other operating income 19,566 22,039 24,962
Total operating revenues 326,373 379,104 291,189
Operating expenses:
General and administrative 58,901 64,399 64,830
Depreciation and depletion 15,934 17,184 18,501
Oil and gas production costs 221,403 272,681 251,419
Abandoned properties 4,842 28,619 -
Lease rentals 620 1 1,629
Total operating expenses 301,700 382,884 336,379
Operating income (loss) 24,673 (3,780) (45,190)
Other income (expense):
Interest income 44 44 523
Interest expense (6,520) (5,962) (6,968)
Other income (expense), net (6,476) (5,918) (6,445)
(continued)
See accompanying notes to financial statements.
F-4
WYOMING OIL AND MINERALS, INC.
Statements of Operations
(Continued)
February 28, February 28, February 29,
1998 1997 1996
Earnings (loss) before income taxes:$ 18,197 $ (9,698) $ (51,635)
Current taxes - - -
Net earnings (loss) $ 18,197 $ (9,698) $ (51,635)
Weighted average number of shares
outstanding $17,000,000 $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
Shares Amount Capital Deficit Total
Balance at Feb 28, 1995 16,750,000 $167,500 $1,021,025 $(1,016,012) 172,513
Net loss - - - (51,635) (51,635)
Balance at Feb 29, 1996 16,750,000 167,500 1,021,025 (1,067,647) 120,878
Net loss - - - (9,698) (9,698)
Balance at Feb 28, 1997 16,750,000 167,500 1,021,025 (1,077,345) 111,180
Shares issued for properties500,000 5,000 2,500 - 7,500
Net income - - - 18,197 18,197
Balance at Feb 28, 1998 17,250,000 $172,500 $1,023,525 $ 1,059,148 $136,877
See accompanying notes to financial statements.
F-6
WYOMING OIL AND MINERALS, INC.
Statements of Cash Flows
February 28, February 28, February 29,
1998 1997 1996
Cash flows from operating activities:
Cash received from customers $ 369,130 $ 340,010 $ 294,067
Cash paid to suppliers and employees (244,806) (329,374) (322,597)
Interest income 44 44 523
Interest expense (4,493) (7,767) (5,163)
Net cash provided by (used in)
operating activities 119,875 2,913 (33,170)
Cash flows from investing activities:
Purchase of oil and gas properties
and equipment (120,351) - (15,100)
Proceeds from sale of oil and gas
properties and equipment - 800 -
Net cash provided by (used in)
investing activities (120,351) 800 (15,100)
Cash flows from financing activities:
Principal payments (3,500) (4,000) (5,000)
Net cash provided by (used in)
financing activities (3,500) (4,000) (5,000)
Net increase (decrease) in cash and
cash equivalents (3,976) (287) (53,270)
Cash and cash equivalents at
beginning of year 7,430 7,717 60,987
Cash and cash equivalents at end of year$3,454 $ 7,430 $ 7,717
(continued)
See accompanying notes to financial statements.
F-7
WYOMING OIL AND MINERALS, INC.
Statements of Cash Flows
(Continued)
February 28, February 28, February 29,
1998 1997 1996
Reconciliation of net income to net cash provided
by (used in) operating activities
Net earnings (loss) $ 18,197 $ (9,698) $ (51,635)
Adjustments to reconcile net income to cash
provided by (used in) operating activities:
Depreciation and depletion 15,934 17,184 18,501
(Increase) decrease in
accounts receivable 36,917 (39,794) 2,878
(Increase) decrease in inventory 5,840 6,680 (32,343)
Increase (decrease) in
accounts payable 36,121 1,027 27,624
Increase (decrease) in
accrued expenses 2,024 (1,805) 1,805
Abandoned properties 4,842 28,619 -
Gain (loss) on sale of oil and gas properties
and equipment - 700 -
Net cash provided by (used in)
operating activities $ 119,875 $ 2,913 $ (33,170)
Supplemental schedule of non cash investing and financing activities
For the year ended February 28, 1998, the Company purchased properties with a
cost of $46,971 in exchange for stock and a note payable.
See accompanying notes to financial statements.
F-8
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 28, 1998 and February 28, 1997 and February 29, 1996
0
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, 1998 and February 28, 1997 and February 29, 1996
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.
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, 1998 and February 28, 1997 and February 29, 1996
2. FOURTH QUARTER ADJUSTMENTS
During the fourth quarter of the year ended February 28, 1998, the Company
recorded an additional $46,971 in the purchase price of two oil and gas
leases.
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.
3. MARKETABLE EQUITY SECURITIES
Marketable equity securities are summarized below:
February 28, February 28, February 29,
1998 1997 1996
Available-for-sale securities, at cost $ 48,702 $ 48,702 $ 48,702
Less: Valuation allowance 42,852 42,852 42,852
Fair Value $ 5,85 0 $ 5,850 $ 5,850
There were no significant unrealized gains or losses.
4. OIL AND GAS PROPERTIES
During fiscal 1998, the Company purchased a 13.333% working interest in a
producing lease in Hot Springs County, Wyoming and a 45% working interest in
another producing lease in the same County. Both leases were purchased from a
related party.
During fiscal 1998, the Company purchased a 50% working interest in two
producing leases in Hot Springs County, Wyoming for $54,471. Both leases were
purchased from a related party.
During fiscal 1998, the Company expended $99,264 for a major betterment
workover on the Wade Hill Unit. The expenditures were to a related party.
This amount is not being depleted as the results of the workover on production
is not known at this time.
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, 1998 and February 28, 1997 and February 29, 1996
5. NOTES PAYABLE
The Company had outstanding notes payable as follows:
Other 1998 1997
Note to individual (related party) due on demand, interest
at 1% over the prime rate (9.50% at February 28, 1998)
secured by a producing well. $ 4,500 $ 8,000
Other information regarding short-term notes payable is as follows:
1998 1997 1996
Average aggregate short-term
borrowings $ 6,250 $ 10,000 $ 14,500
Maximum aggregate short-term borrowings
at any month-end $ 8,000 $ 12,000 $ 17,000
Weighted average interest rate 9.50% 9.25% 9.0%
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:
1998 1997
Note payable to a partnership, due in monthly
payments of $500 including imputed interest
at 9%, maturity date February 12, 2007, original
face amount of note was $60,000. $ 39,471 $ -
Notes payable to two individuals (related parties), due
December 1, 1999, interest at 2% over the prime rate
(10.50% at February 28, 1998), unsecured 50,000 50,000
89,471 50,000
Less current portion (2,778) -
$ 86,693 $ 50,000
F-12
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 28, 1998 and February 28, 1997 and February 29, 1996
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, February 29
1998 1997 1996
Pretax income per books $ 25,075 $ (9,698) $ (51,635)
Timing differences:
Depletion on intangible drilling costs 200 2,000 2,000
Taxable income (loss) $ 25,275 $ (7,698) $ (49,635)
Deferred tax (assets) liabilities are comprised of the following, computed
using a tax rate of 15%:
Tax effects of temporary differences for: 1998 1997 1996
Accounting for oil and gas properties $ 575 $ 306 $ 606
Accounting for securities held for sale (6,428) (6,428) (6,428)
(5,853) (6,122) (5,822)
Tax loss carryforwards (56,199) (92,382) (107,216)
(62,052) (98,504) (113,038)
Valuation allowance 62,052 98,504 113,038
Net deferred tax $ - $ - $ -
F-13
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 28, 1998 and February 28, 1997 and February 29, 1996
8. INCOME TAXES (Continued)
At February 28, 1998, the Company had net operating loss carryforwards
available of $374,662 and unused investment credit carryforwards available
of $4,222. Such carryforwards expire as follows:
Net
Operating Investment
Expiration Loss Credits
1999 $ - $ 498
2000 44,322 3,724
2001 20,035 -
2002 127,905 -
2009 115,412 -
2010 8,006 -
2011 49,540 -
2012 9,442 -
$374,662 $ 4,222*
* subject to limitations
The Company also has long-term capital loss carryover of $94,940.
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 $252,552, to
Manewal-Bradley Oil Company, Inc. were $4,202 and to Econoservice, Inc.
were $2,231 for the year ended February 28, 1998. Amounts received from
Manx Oil Corporation were $3,401 for lease operating expenses.
Oil and gas revenue received from Manx Oil Corporation were $275,740 and
oil and gas revenue paid were $3,039. The Company owed Manx Oil
Corporation $76,504 at February 28, 1998 and $57,466 at February 28, 1997.
Manx Oil Corporation owed the Company $11,241 at February 28,
1998 and $47,815 at February 28, 1997. See Note 4 also.
F-14
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 28, 1998 and February 28, 1997 and February 29, 1996
10. MAJOR PURCHASERS AND CONCENTRATION OF RISK
Substantially all of the Company's accounts receivable at February 28, 1998
and February 28, 1997 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 collateralized. One single
joint interest receivable comprises 56% of total noncurrent accounts
receivable at February 28, 1998.
The following customers each contributed 10% or more of the revenues derived
from oil and gas sales as follows:
February 28, February 28, February 29,
1998 1997 1996
Eighty-Eight Oil $ 218,696 $ 162,606 $ 132,678
Texaco $ 47,141 $ 43,464 $ 33,707
JN Petroleum $ 65,293 $ 92,509 $ 59,620
11. SUPPLEMENTARY OIL AND GAS INFORMATION (Unaudited)
Capitalized Costs
Capitalized costs relating to the Company's oil and gas producing activities
as of February 28, 1998, February 28, 1997 and February 29, 1996 are as
follows:
1998 1997 1996
Proved properties $ 435,342 $ 268,023 $ 298,142
Unproved properties - 4,842 4,842
$ 435,342 $ 272,865 $ 302,984
Support equipment $ 570 $ 570 $ 570
Accumulated depreciation
and depletion $ 179,937 $ 170,881 $ 153,697
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, 1998,
February 28, 1997 and February 29, 1996 (all in the United States):
1998 1997 1996
Property acquisition costs:
Proved properties $ 68,055 $ - $ 15,100
Unproved properties $ - $ - $ -
Exploration costs $ 620 $ 1 $ 1,629
Development costs $ 99,264 $ - $ -
F-15
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 28, 1998 and February 28, 1997 and February 29, 1996
11. SUPPLEMENTARY OIL AND GAS INFORMATION (Unaudited) (continued)
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, 1998, February 28, 1997 and
February 29, 1996 (all in the United States):
1998 1997 1996
Revenues $ 306,807 $ 357,765 $ 266,227
Production costs 221,403 272,681 251,419
Exploration costs 620 1 1,629
Depreciation and depletion 15,934 17,184 18,501
$ 68,850 $ 67,899 $ (5,322)
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.
F-16
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 28, 1998 and February 28, 1997 and February 29, 1996
11. SUPPLEMENTARY OIL AND GAS INFORMATION (Unaudited) (continued)
Oil and Gas Reserve Quantities
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, 1998 and February 28, 1997 and February 29, 1996:
1998 1997 1996
Oil Gas Oil Gas Oil Gas
(bbls.) (mcf) (bbls.) (mcf) (bbls.) (mcf)
Proved reserves:
Beginning of year 88,197 84,255 163,378 86,884 69,093 99,916
Improved Recovery -
Water Flood - - (63,384) - 94,278 -
Revisions of previous
estimates 40,963 907 4,989 - 826 (9,474)
Purchase of minerals
in place 14,000 - - - 12,338 -
Production (16,080) (4,295) (16,786) (2,629) (13,157) (3,558)
Sales of minerals
in place - - - - - -
End of year 127,080 80,867 88,197 84,255 163,378 86,884
Proved developed reserves:
Beginning of year 88,197 84,255 163,378 86,884 69,093 99,916
End of year 127,080 80,867 88,197 84,255 163,378 86,884
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.
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.
F-17
WYOMING OIL AND MINERALS, INC.
Notes to Financial Statements
February 28, 1998, February 28, 1997 and February 29, 1996
11. Supplementary Oil and Gas Information (Unaudited) (Continued)
Oil and Gas Reserve Quantities (Continued)
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, 1998 and February 28, 1997 and February 29, 1996.
1998 1997 1996
Future cash inflows $2,213,824 $1,901,220 $2,922,401
Future production and
development costs (1,047,014) (955,275) (1,398,293)
Future income tax expenses (164,009) (64,735) (196,596)
Future net cash flows 1,002,801 881,210 1,327,512
10% annual discount for
estimated timing of cash flows (385,486) (344,608) (517,858)
Standard measure of discounted
future net cash flows $ 617,315 $ 536,602 $ 809,654
The following are the principal sources of changes in the standardized measure
of discounted future net cash flows:
February 28, February 28, February 29,
1998 1997 1996
Sales and transfers of oil and gas
produced, net of production costs $(85,404) $(85,084) $ (14,808)
Net changes in prices and
production costs (832,487) 414,851 (13,554)
Improved Recovery - Water Flood - (515,701) 515,701
Revisions of previous quantities
estimates 662,797 25,294 (4,119)
Net change in purchases and sales
of minerals in place 346,920 - -
Accretion of discount 53,660 80,965 41,915
Net changes in income taxes (99,274) 131,861 (196,596)
Other - mainly change in
production costs 34,501 (325,238) 61,961
Net increase (decrease) 80,713 (273,052) 390,500
Estimated standardized measures:
Beginning of year 536,602 809,654 419,154
End of year $ 617,315 $ 536,602 $ 809,654
F-18
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-END> FEB-28-1998
<CASH> 3,454
<SECURITIES> 5,850
<RECEIVABLES> 23,391
<ALLOWANCES> 0
<INVENTORY> 37,485
<CURRENT-ASSETS> 70,180
<PP&E> 439,421
<DEPRECIATION> (190,324)
<TOTAL-ASSETS> 342,140
<CURRENT-LIABILITIES> 118,570
<BONDS> 0
<COMMON> 172,500
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 342,140
<SALES> 306,807
<TOTAL-REVENUES> 326,373
<CGS> 242,799
<TOTAL-COSTS> 301,700
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,520
<INCOME-PRETAX> 0
<INCOME-TAX> 0
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<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,197
<EPS-PRIMARY> 0
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