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UNITED STATES

FORM 10Q

SECURITIES AND EXCHANGE COMMISSIONWashington, D. C. 20549

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(Mark One)

|ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended June 30, 2002

OR

|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission file number: 0-610

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EQUITY OIL COMPANY(Exact name of registrant as specified in its charter)

COLORADO(State or other jurisdiction of
incorporation or organization)

87-0129795(I.R.S. Employer
Identification No.)Suite 806, 10 West Third South,
Salt Lake City, Utah(Address of principal executive offices)

84101(Zip Code)


(801) 521-3515Registrant's telephone number, including area code

(Former
name, former address and former fiscal year, if changed since last report)

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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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate
by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to
the distribution of securities under a plan confirmed by a
court. Yes o    No o

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date (August 5, 2002): 12,083,661

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PART IFINANCIAL INFORMATION

ITEM I: Financial Statements

EQUITY OIL COMPANY        Statements of Operations        For the six months ended June 30, 2002 and 2001        (Unaudited)

|                                    |                                          | 2002 |            | 2001      
|----------------------------------- | ---------------------------------------- | ---- | ---------- | ----------
|REVENUES                            |                                          |      |            |           
|                                    | Oil and gas sales                        |      | $          | 10,809,276
|                                    | Other                                    |      |            | 99,519    
|                                    |                                          |      |            |           
|                                    |                                          |      | 10,908,795 |           
|                                    |                                          |      |            |           
|EXPENSES                            |                                          |      |            |           
|                                    | Operating costs                          |      |            | 3,731,245 
|                                    | Depreciation, depletion and amortization |      |            | 3,300,000 
|                                    | 3-D Seismic                              |      |            | 14,934    
|                                    | Exploration                              |      |            | 777,817   
|                                    | General and administrative               |      |            | 1,139,388 
|                                    | Interest                                 |      |            | 370,698   
|                                    |                                          |      |            |           
|                                    |                                          |      | 9,334,082  |           
|                                    |                                          |      |            |           
|Income before income taxes          |                                          |      | 1,574,713  |           
|Provision for income taxes          |                                          |      | 671,688    |           
|                                    |                                          |      |            |           
|NET INCOME                          |                                          | $    | 903,025    |           
|                                    |                                          |      |            |           
|Net income per share                |                                          |      |            |           
|                                    | Basic                                    |      | $          | .07       
|                                    | Diluted                                  |      | $          | .07       
|Weighted average shares outstanding |                                          |      |            |           
|                                    | Basic                                    |      |            | 12,573,549
|                                    | Diluted                                  |      |            | 12,721,540

The
accompanying notes are an integral part of these statements.

2

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EQUITY OIL COMPANY        Statements of Comprehensive Income        For the six months ended June 30, 2002 and 2001        (Unaudited)

|                                                                                |  | 2002 |         | 2001
|------------------------------------------------------------------------------- |  | ---- | ------- | ----
|Net income                                                                      |  | $    | 903,025 |     
|Unrealized losses on financial instruments net of $254,654 tax benefit for 2002 |  |      | 434,159 |     
|                                                                                |  |      |         |     
|Comprehensive income                                                            |  | $    | 468,866 |     
|                                                                                |  |      |         |     

The
accompanying notes are an integral part of these statements.

3

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EQUITY OIL COMPANY        Statements of Operations        For the three months ended June 30, 2002 and 2001        (Unaudited)

|                                    |                                          | 2002 |           | 2001      
|----------------------------------- | ---------------------------------------- | ---- | --------- | ----------
|REVENUES                            |                                          |      |           |           
|                                    | Oil and gas sales                        |      | $         | 7,143,550 
|                                    | Other                                    |      |           | 33,309    
|                                    |                                          |      |           |           
|                                    |                                          |      | 7,176,859 |           
|                                    |                                          |      |           |           
|EXPENSES                            |                                          |      |           |           
|                                    | Operating costs                          |      |           | 1,986,966 
|                                    | Depreciation, depletion and amortization |      |           | 2,400,000 
|                                    | 3-D Seismic                              |      |           |          
|                                    | Exploration                              |      |           | 369,733   
|                                    | General and administrative               |      |           | 592,074   
|                                    | Interest                                 |      |           | 319,809   
|                                    |                                          |      |           |           
|                                    |                                          |      | 5,668,582 |           
|                                    |                                          |      |           |           
|Income before income taxes          |                                          |      | 1,508,277 |           
|Provision for income taxes          |                                          |      | 647,088   |           
|                                    |                                          |      |           |           
|NET INCOME                          |                                          | $    | 861,189   |           
|                                    |                                          |      |           |           
|Net income per share                |                                          |      |           |           
|                                    | Basic                                    |      | $         | .07       
|                                    | Diluted                                  |      | $         | .07       
|Weighted average shares outstanding |                                          |      |           |           
|                                    | Basic                                    |      |           | 12,461,285
|                                    | Diluted                                  |      |           | 12,627,124

The
accompanying notes are an integral part of these statements.

4

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EQUITY OIL COMPANY        Statements of Comprehensive Income        For the three months ended June 30, 2002 and 2001        (Unaudited)

|                                                                                |  | 2002 |         | 2001
|------------------------------------------------------------------------------- |  | ---- | ------- | ----
|Net income                                                                      |  | $    | 861,189 |     
|Unrealized losses on financial instruments net of $254,654 tax benefit for 2002 |  |      | 434,159 |     
|                                                                                |  |      |         |     
|Comprehensive income                                                            |  | $    | 427,030 |     
|                                                                                |  |      |         |     

The
accompanying notes are an integral part of these statements.

5

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EQUITY OIL COMPANY        Balance Sheets        as of June 30, 2002 and December 31,2001        (Unaudited)

|                                                          |                                      | June 30,
2002 |             | December 31,
2001 |  
|--------------------------------------------------------- | ------------------------------------ | ------------- | ----------- | ----------------- | -
|ASSETS                                                    |                                      |               |             |                   |  
|Current assets:                                           |                                      |               |             |                   |  
|                                                          | Cash and cash equivalents            |               | $           | 322,852           |  
|                                                          | Accounts and advances receivable     |               |             | 4,036,600         |  
|                                                          | Income taxes receivable              |               |             | 1,825,545         |  
|                                                          | Deferred income taxes                |               |             | 25,843            |  
|                                                          | Other current assets                 |               |             | 99,407            |  
|                                                          |                                      |               |             |                   |  
|                                                          |                                      |               | 6,310,247   |                   |  
|                                                          |                                      |               |             |                   |  
|Property and equipment                                    |                                      |               | 146,156,527 |                   |  
|Less accumulated depreciation, depletion and amortization |                                      |               | (73,986,668 | )                 |  
|                                                          |                                      |               |             |                   |  
|                                                          |                                      |               | 72,169,859  |                   |  
|                                                          |                                      |               |             |                   |  
|Other assets                                              |                                      |               | 205,569     |                   |  
|                                                          |                                      |               |             |                   |  
|TOTAL ASSETS                                              |                                      | $             | 78,685,675  |                   | $
|                                                          |                                      |               |             |                   |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                      |                                      |               |             |                   |  
|Current liabilities:                                      |                                      |               |             |                   |  
|                                                          | Accounts payable                     |               | $           | 1,661,260         |  
|                                                          | Accrued liabilities                  |               |             | 259,013           |  
|                                                          | Income taxes payable                 |               |             | 199,594           |  
|                                                          |                                      |               |             |                   |  
|                                                          |                                      |               | 2,119,867   |                   |  
|Fair value of financial instruments                       |                                      |               | 688,813     |                   |  
|Revolving credit facility                                 |                                      |               | 37,000,000  |                   |  
|Deferred income taxes                                     |                                      |               | 4,783,370   |                   |  
|                                                          |                                      |               |             |                   |  
|Total liabilities                                         |                                      |               | 44,592,050  |                   |  
|                                                          |                                      |               |             |                   |  
|Stockholders' Equity:                                     |                                      |               |             |                   |  
|                                                          | Common stock                         |               |             | 12,856,661        |  
|                                                          | Paid in capital                      |               |             | 3,738,263         |  
|                                                          | Less cost of treasury stock          |               |             | (1,824,194        | )
|                                                          | Retained earnings                    |               |             | 19,757,054        |  
|                                                          | Accumulated other comprehensive loss |               |             | (434,159          | )
|                                                          |                                      |               |             |                   |  
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                |                                      |               | 34,093,625  |                   |  
|                                                          |                                      |               |             |                   |  
|                                                          |                                      | $             | 78,685,675  |                   | $
|                                                          |                                      |               |             |                   |  

The
accompanying notes are an integral part of these statements.

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EQUITY OIL COMPANY        Statements of Cash Flows        For the six months ended June 30, 2002 and 2001        (Unaudited)

|                                                 |                                                     | 2002                                     |           | 2001        |           
|------------------------------------------------ | --------------------------------------------------- | ---------------------------------------- | --------- | ----------- | ----------
|CASH FLOWS FROM OPERATING ACTIVITIES:            |                                                     |                                          |           |             |           
|                                                 | Net income                                          |                                          | $         | 903,025     |           
|                                                 | Adjustments                                         |                                          |           |             |           
|                                                 |                                                     | Depreciation, depletion and amortization |           |             | 3,300,000 
|                                                 |                                                     | Loss on property sales                   |           |             | 3,478     
|                                                 |                                                     | Change in other assets                   |           |             | 79,140    
|                                                 |                                                     | Equity loss in Symskaya Exploration      |           |             | 74,452    
|                                                 |                                                     | Change in deferred income taxes          |           |             | 513,123   
|                                                 |                                                     |                                          |           |             |           
|                                                 |                                                     |                                          | 4,873,218 |             |           
|                                                 | Increase (decrease) from changes in:                |                                          |           |             |           
|                                                 |                                                     | Accounts and advances receivable         |           |             | (1,106,604
|                                                 |                                                     | Other current assets                     |           |             | (67,613   
|                                                 |                                                     | Accounts payable and accrued liabilities |           |             | (1,292,363
|                                                 |                                                     | Income taxes receivable/payable          |           |             | 120,741   
|                                                 |                                                     |                                          |           |             |           
|                                                 | Net cash (used in) provided by operating activities |                                          |           | 2,527,379   |           
|                                                 |                                                     |                                          |           |             |           
|CASH FLOWS FROM INVESTING ACTIVITIES:            |                                                     |                                          |           |             |           
|                                                 | Capital expenditures                                |                                          |           | (33,302,653 | )         
|                                                 | Advances to Symskaya Exploration                    |                                          |           | (74,452     | )         
|                                                 |                                                     |                                          |           |             |           
|                                                 | Net cash used in investing activities               |                                          |           | (33,377,105 | )         
|                                                 |                                                     |                                          |           |             |           
|CASH FLOWS FROM FINANCING ACTIVITIES             |                                                     |                                          |           |             |           
|                                                 | Proceeds from exercise of stock options             |                                          |           | 7,500       |           
|                                                 | Treasury stock purchase, 608,400 shares at cost     |                                          |           | (1,295,892  | )         
|                                                 | Credit facility borrowing                           |                                          |           | 37,000,000  |           
|                                                 | Payments on credit facility                         |                                          |           | (5,500,000  | )         
|                                                 |                                                     |                                          |           |             |           
|                                                 | Net cash used in financing activities               |                                          |           | 30,211,608  |           
|                                                 |                                                     |                                          |           |             |           
|NET (DECREASE) INCREASE IN CASH                  |                                                     |                                          | (638,118  | )           |           
|CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |                                                     |                                          | 960,970   |             |           
|                                                 |                                                     |                                          |           |             |           
|CASH AND CASH EQUIVALENTS AT END OF PERIOD       |                                                     | $                                        | 322,852   |             | $         
|                                                 |                                                     |                                          |           |             |           

The
accompanying notes are an integral part of these statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Interim Financial Statements

In the opinion of the Company's management, the financial statements reflect the necessary adjustments, all of which are of a normal and recurring nature, to
present fairly the financial position of Equity Oil Company (the Company) as of June 30, 2002, and the results of its operations and its cash flows for the three and six month periods ended
June 30, 2002 and 2001.

The
financial statements and the accompanying notes to financial statements have been prepared according to rules and regulations of the Securities and Exchange Commission. Accordingly,
certain notes and other information have been condensed or omitted from the interim financial statements presented in this Quarterly Report on Form 10-Q. These financial statements
should be read in conjunction with the Company's 2001 Annual Report on Form 10-K, and the Company's Form 10-Q for the first quarter of 2002.

The
results for the three and six month periods ended June 30, 2002 are not necessarily indicative of future results.

Note 2. Net Income Per Share

Basic net income per share is computed using the weighted average number of common shares outstanding during the period. Diluted net income per share is computed
using the weighted average number of common and, if dilutive, common equivalent shares outstanding during the period. Common equivalent shares consist of the incremental common shares issuable upon
the exercise of stock options (using the treasury stock method).

Options
to purchase approximately 1,833,800 shares of common stock at prices of $1.06 to $5.50 per share were outstanding at June 30, 2002, of which, 165,839 and 147,991 of these
options were included in the computation of diluted net income per share for the second quarter and first half of 2002, respectively. Options to purchase approximately 1,793,000 shares of common stock
at prices of $1.06 to $5.50 per share were outstanding at June 30, 2001, of which, 297,613 and 327,286 of were included in the computation of diluted net income per share for the second quarter
and first half of 2001, respectively.

Note 3. Hedging Activities

The Company periodically enters into oil and gas financial instruments to manage its exposure to oil and gas price volatility. The instruments are usually placed
with counterparties that the Company believes are minimal credit risks. 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.

The
financial instruments are accounted for in accordance with Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities", which
established new accounting and reporting requirements for derivative instruments and hedging activities. SFAS No. 133, as amended by SFAS No. 138, requires that all derivative
instruments subject to the requirements of the statement be measured at fair value and recognized as assets or liabilities in the balance sheet. The accounting for changes in the fair value of a
derivative depends on the intended use of the derivative and the resulting designation is generally established at the inception of a derivative. For derivatives designated as cash flow hedges and
meeting the effectiveness guidelines of SFAS No. 133, changes in fair value, to the extent effective, are recognized in other comprehensive income

8

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until the hedged item is recognized in earnings. Hedge effectiveness is measured at least quarterly based on the relative changes in fair value between the derivative contract and the hedged item
over time. Any change in fair value of a derivative resulting from ineffectiveness or an excluded component of the gain/loss is recognized immediately as operating costs in the statement of
operations.

As
of June 30, 2002, the Company had commodity price hedges in place for 1,100 barrels of oil per day and 8,000 MMBTU of natural gas per day under costless collars. The oil hedges
had a floor of $23.00 and a collar of $27.10 and the gas hedges ranged from $3.00 per MMBTU to $4.57 per MMBTU. The settlement price of each of the contracts was within the range of the collars for
each month during the quarter. Therefore no cash payments were made or received as a result of these hedges. The fair value of the hedges at June 30, 2002 was ($688,813). This amount is shown
on the balance sheet as a long term liability.

Note 4. Acquired Properties

During the second quarter of 2002 the Company purchased 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 acquisition was completed on April 12, 2002. The interests acquired are working interests and the Company assumed operations of
the properties on May 1, 2002. The total consideration paid for the properties was $32.0 million. The acquisition was financed through borrowings from the Company's new
$75 million credit facility with an initial borrowing base of $40 million. Production from the properties for the quarter ended June 30, 2002 was 1.202 billion cubic feet
of natural gas and was sold at an average price of $2.55 per Mcf.

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ITEM 2 Management's Discussion and Analysis of Financial Condition and Results of Operations

RESULTS OF OPERATIONS

Financial Results

Higher oil and natural gas prices and the effects of the recent Sacramento Basin gas acquisition resulted in higher oil and gas revenues for the second quarter of
2002 as compared to the first quarter of 2002. Oil and gas sales were 95% higher in the second quarter of 2002 as compared to the first quarter 2002. Total revenues for the three month period ended
June 30, 2002 were $7,176,859, compared to $3,731,936 during the first quarter of 2002. The Company recorded net income for the 2002 second quarter of $861,189, or $.07 per share. This compares
to net income for the first quarter of 2002 of $41,836, or $.00 per share.

During
the first six months of 2002, the Company recorded net income of $903,025, or $.07 per basic share, compared to net income of $3,379,543 during the corresponding period of 2001,
or $.27 per basic share. Total revenues of $10,908,795 during the first half of 2002 compare to first half 2001 revenues of $13,722,150.

During
the second quarter we acquired 608,400 shares of our common stock from an institutional investor in a private block transaction for $2.10 per share, reducing the total outstanding
shares to 12.07 million at the end of the second quarter.

Operating Results

During the second quarter of 2002 the Company purchased 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 acquisition was completed on April 12, 2002. The interests acquired are working interests and the Company assumed operations of
the properties on May 1, 2002. The total consideration paid for the properties was $32.0 million. The acquisition was financed through borrowings from the Company's new
$75 million credit facility which has an initial borrowing base of $40 million. Production from the properties for the quarter ended June 30, 2002 was 1.202 billion cubic
feet of natural gas and was sold at an average price of $2.55 per Mcf.

The
Company participated in the drilling of two wells during the quarter. The BTA #1B Equity Redtail, an exploratory well on the Beaver Creek proprietary 3-D seismic project
in the Williston Basin of North Dakota was drilled by BTA Oil Producers. The well was completed in June with an initial flowing potential of 230 barrels of oil per day and is currently producing 140
barrels per day. The Company has a 50.0% working interest in this well that is operated by BTA.

The
second well, the Anadarko #28-1 is a development gas well drilled in the Siberia Ridge Field of Southwestern Wyoming by Anadarko Petroleum Corporation. The well went on
production in June at an initial rate of 800 MCF per day. Equity has a 50% non-operated working interest in this well.

The
Company continued its polymer injection water-shut-off treatment program in the Big Horn Basin by treating three additional wells during the quarter in the
Torchlight Field. To determine the success of the treatments production testing on the wells will take place during the third quarter.

At
the end of the quarter two additional wells, an exploratory well in the Williston Basin and another development well in the Siberia Ridge field were in process.

Oil
production in the 2002 second quarter was 159,000 barrels, compared to 163,000 in the prior 2002 quarter. The decrease from quarter to quarter is attributable to the normal
production declines of our properties as they mature. Gas production increased significantly as a result of our recent Sacramento Basin acquisition. Gas production for the quarter increased to
1.49 billion cubic feet from 311 million cubic feet in the first quarter of 2002.

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CAPITAL RESOURCES AND LIQUIDITY

Increased production from recently acquired assets mostly offset lower oil and gas prices when comparing 2002 first half of the year to the first half of 2001.
The Company's cash balances decreased 66% from December 31, 2001. Cash flow from operating activities before working capital changes in the first half of 2002 decreased $344,916 from $5,218,134
at June 30, 2001 to $4,873,218 at June 30, 2002.

Investment
in property and equipment for the six months of 2002 totaled $33,302,653 compared to $2,561,805 during the same period of 2001. Approximately $30.7 million (total
purchase price of $32 million less proceeds from effective date, January 1, 2002, to closing date, April 12, 2002) of the current year expenditures are attributable to the
acquisition of the Sacramento Basin assets.

Debt
outstanding at June 30, 2002 was $37 million, an increase of $31.5 million from year-end 2001 amounts. We secured a new $75 million credit
facility in April, 2002 with an initial borrowing base commitment of $40 million. The new facility was used to acquire gas properties in the Sacramento Basin and repay borrowings outstanding on
the old credit facility. After the transaction, we had approximately $3.0 million of remaining availability under the current commitment on the facility.

We
believe that existing cash balances, cash flow from operating activities, and funds available under the Company's credit facility will provide adequate resources to meet our capital
and exploration spending objectives for 2002.

COMPARISON OF SECOND QUARTER 2002 WITH SECOND QUARTER 2001

Total revenues for the period increased 10% to $7,176,859 for the second quarter of 2002 compared to $6,554,192 during the same period of 2001. The increase is
attributable to the additional production volumes from the recently acquired assets.

The
average crude oil price received in the second quarter this year was $23.23 per barrel, compared to $24.42 per barrel received during the same period of 2001. Gas prices decreased
more dramatically in the second quarter of 2002, averaging $2.48 per Mcf, compared to $6.51 per Mcf received during the second quarter of 2001. Presently oil prices have remained constant to slightly
higher. However, gas prices have moderated recently to levels lower than were received in the second quarter of 2002.

As
of June 30, 2002, the Company had commodity price hedges in place for 1,100 barrels of oil per day and 8,000 MMBTU of natural gas per day under costless collars. The oil hedge
has a floor of $23.00 and a collar of $27.10 and runs from May 2002 through April 2003. One gas hedge for 5,000 MMBTU has a floor of $3.00 and a ceiling of $4.43 per MMBTU for the period May 2002
through April 2004. The second gas hedge, for 3,000 MMBTU, has a floor of $3.25 and a ceiling of $4.57 per MMBTU and runs from June 2002 through December 2002. The settlement price of each of the
contracts was within the range of the collars for each month during the quarter. Therefore no cash payments were made or received as a result of these hedges. The fair value of the hedges as computed
by the counterparty at June 30, 2002 was ($688,813). This amount is shown on the balance sheet as a long term liability.

Operating
expenses were slightly higher in 2002 than 2001. Exploration, and general and administrative costs, were lower this period when compared to the prior year. Lease operating
costs increased from $1,961,371 in 2001 to $1,986,966 in 2002, a 1% increase. We continue to seek operating efficiencies in our operated properties, particularly the high water cut oil wells in the
Big Horn Basin. We were successful this quarter in holding constant or reducing these operating costs on several of the properties we operate.

11

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Higher
interest costs in 2002 reflect the increased balance of the debt outstanding under the Company's credit facility. Our current average interest rate on debt outstanding is
approximately 4.10%.

COMPARISON OF FIRST HALF 2002 WITH FIRST HALF 2001

Lower oil and natural gas prices were partially offset by the increase in natural gas production during the second quarter of the year attributable to our recent
Sacramento Basin acquisition. Total revenues for the period were $10,908,795, compared to $13,722,150 during the first six months of 2001.

Average
oil prices received by the Company in the first six months of 2002, were $20.17 per barrel, compared to $24.99 per barrel during the same period of 2001. Average gas prices
received during the first six months of 2002 were significantly lower at $2.38 per Mcf compared to the $6.92 per Mcf received in 2001. For the first six months of 2002, oil production of 322,000 was
up slightly from 2001 production of 321,000 barrels. Natural gas production increased from 786,000 Mcf in 2001 to 1.8 Bcf in 2002.

Operating
costs were unchanged from year to year although our well count increased due to the recent acquisition. The acquired wells are all gas wells and thus have lower operating costs
per well as compared to our high water cut mature oil wells in the Rocky Mountains. We continue to strive to
implement operating costs efficiencies for these wells to reduce operating costs and extend the economic life of these properties. Additionally, lower commodity prices, particularly natural gas
prices, resulted in lower value-based production taxes for the period.

Depreciation,
depletion and amortization costs were substantially higher in 2002 when compared to 2001. The increase is attributable to depletion on the recently acquired gas properties.
The total capitalized cost of $30.7 million is being depleted at rates faster than our other properties. The life of the acquired gas fields is five to seven years as compared to 20 to
30 years for some of our oil properties.

General
and administrative expenses decreased from 2001 first half levels. In 2001 we incurred higher compensation costs for amounts related to the exercise of employee incentive stock
options and fees paid to an employee search firm for services rendered in connection with the hiring of a new vice president of corporate development. No similar expenses or fees were incurred in
2002.

Higher
interest rate charges are related to the higher amount outstanding under our credit facility. Funds were borrowed during the second quarter of 2002 to finance the Sacramento Basin
gas property acquisition. Our current average interest rate on debt outstanding is approximately 4.10%.

Other
comprehensive loss for the period includes the fair value of our commodity hedges that were in place at June 30, 2002. As a requirement of our new credit facility we were
required to hedge certain amounts of our production in an effort to remove commodity price volatility from our cash flow. During the first half of the year each months contracts settled at prices
within our collars. The counterparty valued the hedges at June 30, 2002 at ($688,813). Therefore, a liability was recorded and the tax effected net loss is included in other comprehensive loss.
At the end of July prices have softened and the fair market value of our hedges has increased over June 30, 2002 amounts.

OTHER ITEMS

In June 2001, the Financial Accounting Standards Board (FASB) issued Statements of Financial Accounting Standards (SFAS) No. 141 (SFAS 141),
"Business Combinations", and No. 142 (SFAS 142), "Goodwill and Other Intangible Assets". Under SFAS 141, the purchase method of accounting must be used for business combinations
initiated after June 30, 2001. Under SFAS 142 (effective for Equity beginning January 1, 2002) goodwill and certain intangibles are no longer amortized but will be subject

12

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to annual impairment tests. Adoption of these new standards did not have a significant impact on the Company's financial statements.

In
August 2001, the FASB issued SFAS No. 143 (SFAS 143), "Accounting for Asset Retirement Obligations". SFAS 143 is effective for the Company beginning
January 1, 2003. The most significant impact of this standard on the Company will be a change in the method of accruing for site restoration costs. Under SFAS 143, the fair value of
asset retirement obligations will be recorded as liabilities when they are incurred, which are typically at the time the assets are installed. Amounts recorded for the related assets will be increased
by the amount of these obligations. Over time, the liabilities will be accreted for the change in their present value and the initial capitalized costs will be depreciated over the useful lives of the
related assets. The Company is evaluating the impact of adopting SFAS 143.

In
August 2001, the FASB issued SFAS No. 144 (SFAS 144), "Accounting for the Impairment or Disposal of Long-Lived Assets". SFAS 144 is effective
for fiscal years beginning after December 15, 2001, and interim periods within those fiscal years. The Company adopted this statement on January 1, 2002. This statement addresses
financial accounting and reporting for the impairment or disposal of long-lived assets. Although SFAS 144 supersedes SFAS No. 121 (SFAS 121), "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," it retains the fundamental provisions of SFAS 121 for the recognition and measurement of
the impairment for long-lived assets. There was no financial statement impact from adopting SFAS 144.

The
Company has reviewed all other recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on the results of operations or financial
position of the Company. Based on that review, the Company believes that none of these pronouncements will have a significant effect on current or future earnings or operations.

FORWARD LOOKING STATEMENTS

The preceding discussion and analysis should be read in conjunction with the consolidated financial statements, including the notes thereto, appearing in the
Company's annual report on Form 10-K. Except for the historical information contained herein, the matters discussed in this report contain forward-looking statements within the
meaning of Section 27a of the Securities Act of 1933, as amended, and Section 21e of the Securities Exchange Act of 1934, as amended, that are based on management's beliefs and
assumptions, current expectations, estimates, and projections. Statements that are not historical facts, including without limitation statements which are preceded by, followed by or include the words
"believes", "anticipates", "plans", "expects", "may", "should" or similar expressions are forward-looking statements. Many of the factors that will determine the Company's future results are beyond
the ability of the Company to control or predict. These statements are subject to risks and uncertainties and, therefore, actual results may differ materially. All subsequent written and oral
forward-looking statements attributable to the Company, or persons acting on its behalf, are expressly qualified in their entirety by these cautionary statements. The Company disclaims any obligation
to update any forward-looking statements whether as a result of new information, future events or otherwise.

Important
factors that may effect future results include, but are not limited to: drilling success, the availability of equipment and contract services, environmental risks and
impediments, geologic hazards, the risk of a significant natural disaster, the inability of the Company to insure against certain risks,
fluctuations in commodity prices, the inherent limitations in the ability to estimate oil and gas reserves, changing government regulations, as well as general market conditions, competition and
pricing, and other risks detailed from time to time in the Company's SEC reports, copies of which are available upon request from the Company's investor relations department.

ITEM 3 Quantitative and Qualitative Disclosures about Market Risk

The answers to items listed under Item 3 are inapplicable or negative except for items related to interest rate risk.

Our
credit facility has variable interest rates and any fluctuation in interest rates will increase or decrease our interest expense.

We
have market risk exposure related to the prices received for the sale of crude oil and natural gas. We periodically enter into hedge contracts to manage the commodity price risk.

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PART II        OTHER INFORMATION

The answers to items one through five listed under Part II are inapplicable or negative, except as shown below

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

At our annual meeting, held on May 8, 2002, shareholders were asked to elect Mr. Philip J. "Jack" Bernhisel, and Mr. W. Durand Eppler to the
staggered board to serve three year terms expiring in 2005. Based upon the votes received, each director nominee was elected to the board. The following votes were recorded for each director.

Each
director nominee received at least 97% of the shares voted at the meeting.

|                   |  | Bernhisel  |  | Eppler    
|------------------ |  | ---------- |  | ----------
|Affirmative votes  |  | 10,804,083 |  | 10,808,583
|Withhold authority |  | 315,628    |  | 311,128   

ITEM 6. Exhibits and Reports on Form 8-K



Filing Date

ContentsApril 26, 2002

Acquisition of Sacramento Basin gas properties.May 8, 2002

Financial Projection for Full Year 2002 to Reflect Acquired Assets. Provided under Item 9 Reg. FD.June 19, 2002

Amended Form 8-K to Included Financial Statements of Acquired Assets.


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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
there unto duly authorized.

|      |  |                |  | EQUITY OIL COMPANY(Registrant)
|----- |  | -------------- |  | ------------------------------
|DATE: |  | August 6, 2002 |  | By                            
|DATE: |  | August 6, 2002 |  | By                            

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