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TABLE OF CONTENTS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

Commission file number 0-610

EQUITY OIL COMPANY
[Exact name of registrant as specified in its charter]

        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 ý    No o

        Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein and will not be contained to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ý

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act) Yes o    No ý

        As of March 11, 2003, 12,008,661 common shares were outstanding, and the aggregate market value of voting stock held by non-affiliates of the registrant, based upon the closing price of such stock on June 28, 2002, was approximately $26,400,000.

Documents Incorporated by Reference

        Portions of the definitive proxy statement for the Registrant's 2003 Annual Meeting of Stockholders to be held on May 21, 2003 are incorporated by reference in Part III of this Form 10-K. Such definitive proxy statement will be filed with the Securities and Exchange Commission not later than 120 days subsequent to December 31, 2002.

EQUITY OIL COMPANY
TABLE OF CONTENTS

PART I

ITEM 1. BUSINESS

General

        Equity Oil Company, or Equity, is an independent energy company engaged in oil and natural gas exploration, production and acquisition activities. References in this report to "Equity", "we", "our", or "us" refer to Equity Oil Company. Equity was originally incorporated in the state of Utah in 1923. In 1958, we merged into our subsidiary, Weber Oil Company, a Colorado corporation. The surviving company adopted the name Equity Oil Company.

        We currently conduct business in seven states and two Canadian provinces. Headquartered in Salt Lake City, Utah, we maintain a technical office in Denver, Colorado, and an operations office in Cody, Wyoming. Currently, we have 28 full-time employees.

        Our operations are focused in the following three core areas:

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the Rocky Mountains,



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Northern California's Sacramento Basin, and



•

the Cessford area in Alberta Canada.

        Our executive office in Salt Lake City is responsible for conducting all administrative functions, including strategic planning, direction of exploration and development activities, shareholder relations, and financial and legal services.

        Our technical office in Denver is responsible for the generation and review of exploration prospects, and participates in the planning, where necessary, to drill the prospects. These include prospects developed in-house, as well as those presented by other working interest partners. The office is also responsible for technical interpretation of geological and geophysical data for our development and acquisition activities and all land records for the Company.

        All operated production activities are coordinated through our operations office in Cody, Wyoming. As of December 31, 2002 we operate 64% of our production.

Business Strategy

        Our objective is to enhance shareholder value by increasing our net asset value through the consistent economic growth of our oil and gas reserves, production base and the resulting cash flows. To accomplish this, Equity's corporate strategy includes:

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Operating efficiencies—effective operation and management of our Rocky Mountain production to minimize operating costs and maximize oil production. Most of our oil production from the Rocky Mountain area comes from mature properties and production is on decline. For the properties to remain economic, we continually strive to reduce operating costs while implementing programs to increase the ultimate recovery of the original oil in place.



•

Exploitation of existing reserves—we utilize the latest technology to enhance production from our reserve base. We conduct detailed geologic studies including 3D seismic imaging, hydraulic fracturing and reservoir stimulation techniques as well as water shut-off treatments.



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Development drilling—a portion of our budget is committed to low to medium-risk development drilling. During 2003 we anticipate drilling three development wells in the Sacramento Basin in the area of the properties acquired in 2002.

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•

Focused exploration drilling—we continue to allocate some of our resources to higher-risk focused exploration drilling with higher potential return. We plan to continue pursuing the drilling of another exploration well on our Beaver Creek prospect in North Dakota in 2003.



•

Acquisition of oil and gas properties—we continue to focus on acquiring properties with primarily proved reserves which also have exploitation potential. We were successful this year in closing a major acquisition of gas properties in California.

        Each project, whether development, exploration, acquisition or exploitation, undertaken in our core areas is independently evaluated to ensure that the estimated rate of return from the project is commensurate with the associated risk.

        We work in conjunction with our other working interest owners in producing properties to identify projects that will develop and exploit the productive capacities of existing wells and fields. These projects include development drilling, production enhancement, operating cost reductions and other types of activities.

        When conducting exploration activities, our general practice is to participate in projects on a 25% to 50% working interest basis. Participation varies with each prospect depending on location and the attendant financial and technical risk.

        We also attempt to purchase interests in properties with existing production. During the last five years, we have replaced a significant amount of our production through the purchase of producing properties. These purchases have, in turn, produced additional developmental and enhancement projects, as well as opportunities to implement numerous procedures to increase operating efficiencies.

        Symskaya's operations during 2002 were limited primarily to maintaining its license. At the end of 2002, due to the inability to attract a partner to participate in the cost of future development of the license area, it was determined that Symskaya would cease operations of this activity. Any costs incurred in 2003 will be associated with closing down all operations related to Symskaya. Further discussion of this venture can be found in ITEM 2. Properties, under the caption Symskaya Exploration.

Developments since December 31, 2001

        The implementation of our strategy led to the following highlights for the year ended December 31, 2002:

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Acquisition of gas properties. During the second quarter of 2002, the Company purchased working interests in 27 producing and 16 non-producing gas wells and associated undeveloped leaseholds located in Yolo County of the Sacramento Basin of California. The effective date of the acquisition was January 1, 2002 and was closed on April 12, 2002 and the Company assumed operations of the properties on May 1, 2002.



•

Reserve replacement of 2002 production. Taking into account extensions, discoveries, acquisitions and improved recovery and excluding revisions, we added 1.50 million barrels of oil and 24.9 billion cubic feet of gas to our reserve base. This replaces 236% and 594% of our 2002 net oil and gas production.



•

Development well drilling success. We participated in three development wells during 2002. All three wells were completed as gas wells in the Siberia Ridge field of Wyoming.



•

Workover activities. We successfully recompleted eight wells in Yolo County, California from the package of 27 wells that were acquired during the second quarter of 2002.

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•

Production enhancement. The continued implementation of our polymer injection water shut-off treatment program in the Torchlight field in the Big Horn Basin added incremental year-end reserves.



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Financial highlights. We recorded positive net income for the fourth consecutive year. Discretionary cash flow (defined as cash flow before working capital changes plus exploration and 3-D seismic costs) was $10.6 million and EBITDA (earnings before interest, taxes, depletion, abandoned leaseholds, property impairments and Symskaya loss) was $11.1 million. Book value per outstanding share increased from $2.75 to $2.77.

Principal products and markets

        During the last five years, revenues from the sales of crude oil and natural gas have accounted for more than 90% of our total revenues. Remaining revenues have come from other sources, including interest income on invested funds, operating overhead reimbursements, and the sales of various developed and undeveloped properties.

        The majority of our oil production occurs in Colorado, other Rocky Mountain states, and the Canadian provinces of Alberta and British Columbia. We are in the process of divesting some of our Canadian assets. See discussion of subsequent events at Footnote 12 in the financial statements for information related to the divestiture. Our crude oil production is sold under short-term contracts at current posted prices for each geographic area, less applicable quality adjustments, plus negotiated bonuses. Prices are set by oil purchasers, and, while their methods of determining prices are not within our control, it is assumed they are influenced by regional, national and international factors relating to oil supply and demand (see discussion under Major Customers).

        The bulk of our natural gas production occurs in California, Wyoming, and the Canadian province of Alberta. We have historically been able to sell all of our production and expect to be able to continue to do so in the future even though other companies with larger reserves compete in the same areas. Our gas is sold under contracts based upon the daily spot market or marketed under contracts at index prices that change monthly. The contracts are subject to renegotiation on an annual basis.

        In order to finance our acquisition activities we have been required by our lending institution to hedge a portion of our production in order to manage our exposure to oil and gas price volatility. The instruments are placed with counterparties that the Company believes are minimal credit risks, and it is the Company's policy to only enter into derivative contracts with investment grade rated counterparties deemed by management to be competent and competitive market makers. The oil and gas reference prices upon which the price hedging instruments are based reflect various market indices that have a high degree of historical correlation with actual prices received by the Company.

        As of December 31, 2002, the Company had commodity price hedges in place for 1,100 barrels of oil per day thru April 30, 2003 and 6,000 MMBTU of natural gas per day under costless collars (5,000 MMBTU thru April 30, 2004 and an additional 1,000 MMBTU thru December 31, 2003). The oil hedges have a floor of $23.00 and a ceiling of $27.10 and the gas hedges range from $3.00 per MMBTU to $4.915 per MMBTU.

Seasonality

        Net gas sales prices historically have risen during the winter months compared to the rest of the year. With the recent acquisition of the gas properties in California, where change in price during the winter months is less dramatic than other areas, the seasonal impact has been reduced. Therefore, the seasonal impact on total gas sales is not significant.

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Major Customers

        All of the Company's oil and gas produced in the U.S. or Canada is sold to unaffiliated pipeline companies, refining companies or crude oil trading companies. These companies may be the operators of the fields where the product is produced, owners of the pipelines which transport the products, or other third-party purchasers.

        During 2002, sales to two purchasers, Teppco Crude Oil, L.P. and Calpine Producer Services, L.P. accounted for 41% and 33%, respectively, of Equity's total oil and gas production revenue. While these entities each purchase more than 10% of our oil and gas production, previous changes in purchasers have not had a material adverse effect on our business.

Competition

        The oil and gas industry is highly competitive. Competition is particularly intense in the acquisition of prospective oil and natural gas properties and oil and gas reserves. Equity's competitive position depends on our geological, geophysical and engineering expertise, our financial resources, and our ability to select, acquire and develop proved reserves.

        We believe the locations of our leasehold acreage, our exploration, drilling and production capabilities, and the experience of our management and that of our industry partners generally enable us to compete effectively in our core operating areas. However, we compete with a substantial number of major and independent oil and gas companies having larger technical staffs and greater financial and operational resources. Securing drilling rigs and other equipment necessary for drilling and completion of wells may be in short supply from time to time due to this competition.

Environmental and Other Regulations

        Our drilling activities are regulated by several governmental agencies in the United States, both federal and state, including the Environmental Protection Agency, Forest Service, Department of Wildlife and Bureau of Land Management, as well as state oil and gas commissions for those states in which we have operations. Canadian operations are subject to similar requirements.

        Equity is committed to conducting its operations in a manner that protects the health and safety of its employees, contractors, and the public. Environmental, health and safety protection are integral parts of all of our business activities.

        Although environmental, health and safety requirements do have a substantial impact upon the energy industry, generally these requirements do not affect us to any greater or lesser extent than other companies who operate in our core geographic areas and in the domestic oil and gas industry, as a whole. We believe that compliance with environmental laws and regulations will not have a material adverse effect on our operations or financial condition. However, there can be no assurances made that changes in, or additions to, laws or regulations regarding the protection of the environment will not have such an impact in the future.

        Equity maintains insurance coverage that we believe is customary in the industry. We are not aware of any environmental claims existing as of December 31, 2002 that would have a material impact upon our financial position, results of operations, or liquidity.

Financial Information About Foreign Operations

        Foreign operations are currently conducted in the Canadian provinces of Alberta and British Columbia. Financial information concerning these operations can be found in Footnotes 6 and 10 to the financial statements. See also Footnote 12 in the financial statements for a discussion of subsequent events related to the divestiture of our Canadian assets. For financial reporting purposes, we do not

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allocate any general and administrative expenses to our Canadian operations, nor are they burdened with indirect exploration overhead expenses. Direct exploration expenses are charged to the geographic area in which they occur. Because the majority of our exploration efforts occur in the United States, very little exploration expenses are allocated to the Canadian operations. As a result of these and other factors, the operating profit of the Canadian operations is significantly greater than the operating profit in the United States. We do not believe that our Canadian operations are attended with any more risk than those in the United States.

ITEM 2. Properties

        Equity's principal properties consist of developed and undeveloped oil and gas leasehold interests. Developed leases are comprised of properties with existing production, where lease terms continue as long as oil and/or gas is produced. Undeveloped leases include unproven acreage on both public and private lands. The leases have set terms and terminate at the time specified in each lease unless oil and/or gas in commercial quantities are discovered prior to that time. Undeveloped leaseholds at December 31, 2002 have a remaining life of one to five years.

        Equity's exploration, development and acquisition activities are focused in the Big Horn Basin (WY), other Rocky Mountain states, the Sacramento Basin (CA), and Canada. We announced in September 2002 our intent to sell a portion of our Canadian oil and gas assets. See discussion of subsequent events at Footnote 12 in the financial statements for information related to the divestiture.

        We finance our activities through cash flows from operations and through borrowings under our credit facility. In accordance with our credit facility, core properties are mortgaged as security for the amounts borrowed under the facility. Set forth below is summary information as of and for the year ended December 31, 2002 concerning exit rate average net daily production, net producing wells, proved reserve quantities and net present value in our major areas of operations.

Big Horn Basin

        The Big Horn Basin of northwestern Wyoming has been a focus area for Equity since 1997. Our operations are managed by our Cody, WY office which includes 12 employees.

        Our Big Horn Basin properties are typically long-lived high water cut oil fields which benefit from our expertise in lift optimization. We operate 93 wells in the basin producing 800 barrels of oil per day. Our working interest in these wells range from 30% to 100%.

        Our most significant asset in the Big Horn Basin is our 100% working interest in the Torchlight Field. During 2002, we continued our water shut-off treatment program in the field, successfully treating three wells during 2002. Since 1997 when we completed acquisition of the 100% working interest in the field and took over operations, through a combination of these water shut-off treatments, development drilling and other workovers we have increased production in the field by 37%

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to its current daily rate of 280 barrels of oil per day and reserves have increased 2.7 million barrels at year-end 2002. We expect to perform six additional water shut-off treatments during 2003.

Other Rocky Mountain States

        Williston Basin, North Dakota: In 2002 we drilled our first wildcat on the Beaver Creek 3-D prospect area, the BTA #1B Equity Redtail. This was a new field discovery in the Williston Basin. The well is a Red River "C" discovery, drilled to a 12,720 foot true vertical depth. Initial gross flow rate was 232 barrels of oil per day. Equity has a 50% working interest in the well.

        On our Roosevelt Creek seismic project, a 24 mile 3-D survey was completed in the fourth quarter and is being interpreted. The project covers approximately 14,500 acres. With interpretation, we believe several drillable prospects may be generated in the area. The project is adjacent to our Beaver Creek acreage and extends to 63 square miles the amount of propriety 3-D seismic that we have acquired in this prolific Red River-Nisku trend.

        Siberia Ridge, Southwestern Wyoming: We participated in the drilling of three development wells in this field in 2002. Two of the wells were drilled and completed by Anadarko Petroleum. The first, completed in May 2002 was completed at an initial gross rate of 775 Mcf per day. The second was being completed at year-end. We have a 50% working interest in both of these wells. The third well in which we have a 75% working interest was drilled by Samson Resources, it was also being completed at year-end and has a projected initial production rate of 1.1 Bcf per day with production anticipated to begin in March 2003.

        Other: We have a fee interest in 6,996 net acres of oil shale lands in the Piceance Basin of Colorado. These properties have not generated significant revenue for the Company.

Sacramento Basin

        During the second quarter of 2002, we purchased interests in 27 producing and 16 non-producing gas wells and associated undeveloped leaseholds located in Yolo County, California. This Sacramento Basin acquisition was closed on April 12, 2002 with an effective date of January 1, 2002. The interests acquired are working interests and we assumed operations of the properties on May 1, 2002. The total consideration for the properties was $32.0 million. Net proceeds from the effective date to the date of closing were netted against the purchase price and thus approximately $30.0 million was paid at closing.

        The Yolo County properties now represent our largest core area. At year-end 2002, the Yolo County properties had proven gas reserves of 21.7 billion cubic feet with an SEC 10 net present value of $50.7 million. The year-end SEC value was computed using a net price of $4.56 per MMBTU. During 2002, we completed eight behind-pipe recompletions, initiating the validation of the behind-pipe component of the acquisition. We own a 100% working interest in most of the wells. We expect to recomplete another twelve wells in 2003 and a similar number per year for the next several years.

        We also have interpreted 3-D seismic data covering the Yolo county properties acquired from the previous owner. The 3-D data has and will continue to assist the Company in refining our geological and geophysical model for drilling in 2003 and future years. Our 2003 budget includes drilling one exploration well, three development wells and the twelve behind-pipe recompletions mentioned above.

Canada

        We announced in September 2002 our intent to sell a portion of our Canadian assets. At December 31, 2002 our Canadian properties were producing approximately 340 barrels of oil equivalent per day. This represented about 9% of our daily production. The sale of these assets will allow us to further focus on growth in our other core operating areas of the Rocky Mountains and the Sacramento

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Basin. See discussion of subsequent events in footnote 12 to the financial statements for the status of this divestiture.

Reserves

        There are numerous uncertainties inherent in estimating quantities of proved reserves and in projecting future rates of production and timing of exploitation expenditures. The data in the following tables represent estimates only. Oil and natural gas reserve engineering is inherently a subjective process of estimating underground accumulations of hydrocarbons that cannot be measured exactly, and estimates of other engineers might differ materially from those shown above. The accuracy of any reserve estimate is a function of the quality of available data and engineering and geological interpretation and judgement. Results of drilling, testing and production after the date of the estimate may justify revisions. Accordingly, reserve estimates may vary from the quantities of oil and natural gas that are ultimately recovered.

        Future prices received for production and costs may vary, perhaps significantly, from the prices and costs assumed for purposes of these estimates. The present value shown should not be construed as the current market value of the reserves. The 10% discount factor used to calculate present value, which is mandated by the Securities and Exchange Commission rules, is not necessarily the most appropriate discount rate. The present value, no matter what discount rate is used, is materially affected by assumptions as to timing of future production, which may prove to be inaccurate.

        At December 31, 2002, we evaluated our oil and gas properties and our evaluation was audited by the outside engineering firm of Fred S. Reynolds and Associates. The PV-10 values (future estimated net revenues discounted at 10%) shown in the following table are prepared in accordance with SEC guidelines and are not intended to represent the current market value of the estimated net oil and gas reserves owned by Equity Oil Company. Neither prices nor operating costs have been escalated in this evaluation.

        The following table sets forth summary information with respect to the estimates of our net reserves for each of the years in the three-year period ended December 31, 2002:

(a)

Thousands of barrels

(b)

Thousands of mcf

(c)

Gas converted at a ratio of 6,000 mcf per barrel

(d)

Year end reserves divided by annual production

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        The present value of estimated future net revenues before income taxes of our reserves was $146 million as of December 31, 2002. This present value is based on a benchmark of prices in effect at that date of $31.20 per barrel of oil and $4.79 per MCF of gas. Both of these prices are then adjusted for transportation and basis differential for each property resulting in net average prices for the Company of $27.01 per barrel of oil and $4.09 per MCF of natural gas at year-end. These prices were 57 percent and 86 percent higher, than prices in effect at the end of 2001.

        Proved developed reserves are proved reserves that are expected to be recovered from existing wells with existing equipment and operating methods. Proved undeveloped reserves are proved reserves that are expected to be recovered from new wells drilled to known reservoirs on undrilled acreage for which the existence and recoverability of such reserves can be estimated with reasonable certainty, or from existing wells where a relatively major expenditure is required to establish production.

        No estimates of reserves have been filed with or included in any report to any other federal agency during 2002.

Production

        The following table sets forth Equity's production, average sales prices and average lifting costs by geographic area for 2002, 2001 and 2000:

*

—includes the effect of hedging costs.

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Productive Wells and Acreage

        The location and quantity of our productive wells and acreage as of December 31, 2002 are as follows:

Undeveloped Leasehold Acreage

        The following table sets forth Equity's undeveloped oil and gas leasehold acreage as of December 31, 2002 by geographic area:

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Drilling Activity

        During 2002, we participated in the drilling of 8 gross wells. Of this total, 4 were completed as producing oil and gas wells, 2 were waiting on completion at year-end and 2 were plugged and abandoned as dry holes.

Symskaya Exploration

        At the end of 2002 we continued to hold our 50% ownership position in Symskaya Exploration Inc. In 1993 Symskaya was issued a 25 year, 1.1 million acre license to explore for, develop and produce hydrocarbons in the Krasnoyarsk Krai in Russia. Since 1997 we have made extensive efforts to attract investors to commit funding for additional exploration on the Symskaya license area. These efforts have been unsuccessful, and in December of 2002 Symskaya determined they would cease operations in Russia as of December 31, 2002. The second half of the 2002 land use fee required under the license was not paid nor was an installment of a newly imposed exploration fee. Costs associated with this prospect in 2003 will be associated with closing down all operations and interest in Russia and, if possible, the transfer of Symskaya to another entity that may choose to pursue further exploration on the license area. If such a transfer should occur, the Company will endeavor to retain some form of interest in possible future production from the project.

Delivery Commitments

        Equity is not obligated to provide any fixed or determinable quantities of oil or gas in the future under any existing contracts or agreements.

ITEM 3. Legal Proceedings

        No material legal proceedings were settled or pending.

ITEM 4. Submission of Matters to a Vote of Security Holders

        No items were submitted during the fourth quarter of the fiscal year covered by this Form 10-K to a vote of our security holders, through the solicitation of proxies or otherwise.

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PART II

ITEM 5. Market for the Company's Common Stock and Related Stockholder Matters

        Equity's common stock is traded on the over-the-counter market and quoted over the NASDAQ National Market System under the symbol EQTY. The range of high and low closing prices for the quarterly periods in 2002 and 2001, as reported by NASDAQ is set forth below: