-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WjeUINMh5e6iTg/H4gIJZo6t6yBAmU6RG+V/+piE3hvEvsaOxusbyZnn04EnIGlS CR+OidmcZZnNhInDgwzUlw== 0000930661-00-001348.txt : 20000517 0000930661-00-001348.hdr.sgml : 20000517 ACCESSION NUMBER: 0000930661-00-001348 CONFORMED SUBMISSION TYPE: 425 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20000516 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: TITAN EXPLORATION INC CENTRAL INDEX KEY: 0001024645 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 752671582 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 SEC ACT: SEC FILE NUMBER: 000-21843 FILM NUMBER: 637516 BUSINESS ADDRESS: STREET 1: 500 W TEXAS AVE STREET 2: STE 200 CITY: MIDLAND STATE: TX ZIP: 79701 BUSINESS PHONE: 9154988600 MAIL ADDRESS: STREET 1: 500 W TEXAS AVE STREET 2: SUITE 200 CITY: MIDLAND STATE: TX ZIP: 79701 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TITAN EXPLORATION INC CENTRAL INDEX KEY: 0001024645 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 752671582 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 BUSINESS ADDRESS: STREET 1: 500 W TEXAS AVE STREET 2: STE 200 CITY: MIDLAND STATE: TX ZIP: 79701 BUSINESS PHONE: 9154988600 MAIL ADDRESS: STREET 1: 500 W TEXAS AVE STREET 2: SUITE 200 CITY: MIDLAND STATE: TX ZIP: 79701 425 1 [DESCRIPTION] 2000 FIRST QUARTER RESULTS ANNOUNCEMENT Filed by Titan Exploration, Inc. Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-6 of the Securities Exchange Act of 1934 Subject Company: Titan Exploration, Inc. Commission File No. 000-21843 TITAN EXPLORATION ANNOUNCES 2000 FIRST QUARTER RESULTS Midland, Texas, May 15, 2000: Titan Exploration, Inc. (NASDAQ: "TEXP") announced - ----------------------------- $2.3 million ($0.06 per basic share) of net income for the quarter ended March 31, 2000 as compared to approximately $30.0 million ($0.79 per basic share) loss for the comparable 1999 quarter. During the same quarter, Titan generated $12.7 million of earnings before interest, taxes, depreciation, amortization and depletion, exploration expense and other non-cash charges ("EBITDAX") ($0.32 per basic share) as compared to EBITDAX of $7.0 million ($0.18 per basic share) during the comparable 1999 quarter Pure Resources, Inc. Merger On December 13, 1999, Titan announced its agreement to merge Titan and the Permian Basin business unit of Unocal Corporation ("Unocal") into a new company named Pure Resources, Inc. ("Pure Resources"). Pure Resources will be a publicly traded company. The Permian Basin business unit of Unocal includes oil and gas exploration and production assets in the Permian Basin of West Texas and the San Juan Basin in New Mexico and Colorado. Pure Resources will have approximately 50 million shares of common stock outstanding upon completion of the merger. Unocal will hold approximately 65% (32.7 million shares) of Pure Resources. Upon approval by Titan stockholders of the merger, Titan stockholders will receive 0.4302314 shares of Pure Resources common stock for every share held of Titan's common stock and will collectively own approximately 35% of the outstanding common stock of Pure Resources. Pure Resources' proxy materials relating to the proposed transaction were mailed to shareholders holding Titan common stock as of the April 10, 2000 record date. The shareholder meeting to consider the proposed transaction will be held May 24th, 2000 at 10:00 am central standard time in Midland, Texas. Assuming shareholder approval of the transaction, the merger is scheduled to occur on May 25th, 2000 and Pure Resources will begin trading on the NYSE under the symbol, "PRS" on Friday, May 26th, 2000. Pure Resources' first quarter of 2000 financial results are expected to be available upon filing a first quarter financial report on Form 10-Q with the Securities and Exchange Commission in early June 2000. Financial Data During the quarter ended March 31, 2000, Titan spent approximately $11.2 million on oil and gas capital spending activities as compared to $6.9 million for the comparable 1999 quarter. The Company produced approximately 547,000 barrels of oil and condensate and 5.2 billion cubic feet of natural gas during the quarter. Average prices received, excluding the effects of hedging, during the first quarter of 2000 were $26.72 per barrel for crude oil and $2.00 per mcf for natural gas, as compared to $10.64 per barrel and $1.24 per mcf, respectively, during the comparable 1999 quarter. The Company's first quarter 2000 crude oil prices suffered by $5.29 per barrel as a result of its hedging activities. Gas prices for this same period were unaffected by the Company's hedging activities. At March 31, 2000, the Company had oil and gas hedges in place for approximately 1.5 million barrels and 12,315 MMBtu of the Company's production through the remainder of 2000 and the first half of 2001. The hedges will allow the Company to realize, at a minimum, a price of $16.86 per barrel of oil and $2.64 per MMBtu on the volumes hedged. The increase in General and Administrative ("G&A") expense levels during the 2000 first quarter over the comparable 1999 quarter is principally attributable to expenses associated with increased staff in non-synergy areas in anticipation of the merger and increased staff and related costs associated with the Company's new activities in the Central Gulf Coast region of Texas. As the Company assumes responsibility for the Unocal properties and its Central Gulf Coast activities result in additional production, the G&A expenses on a per unit basis are anticipated to decline to the levels Titan experienced during 1999. The increase in production tax levels is attributable to the significant increases in the level of commodity prices over the comparable 1999 quarter. Titan has mailed a proxy statement/prospectus concerning the merger to its shareholders, and the document has been filed by Pure Resources with the United States Securities and Exchange Commission as part of its Form S-4. WE URGE INVESTORS TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION, BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors may obtain these documents free of charge at the Securities and Exchange Commission's website, www.sec.gov. FORWARD LOOKING STATEMENTS Statements in this press release, filings with the Securities and Exchange Commission and other written and oral statements regarding estimated future net revenues from oil and natural gas reserves and the present value thereof, planned capital expenditures (including the amount and nature thereof), increases in oil and gas production, the number of wells Titan anticipates drilling, potential reserves and Titan's financial position, business strategy and other plans and objectives for future operations are "forward looking statements" within the meaning of the Securities Litigation Reform Act. Although Titan believes that the expectations reflected in these forward looking statements are reasonable, there can be no assurance that the actual results or developments anticipated by Titan will be realized or, even if substantially realized, that they will have the expected effects on its business or operations. Among the factors that could cause actual results to differ materially from Titan's expectations are general economic conditions, inherent uncertainties in interpreting engineering data, operating hazards, delays or cancellations of drilling operations for a variety of reasons, competition, fluctuations in oil and gas prices, government regulations and other factors set forth in Titan's Annual Report on Form 10-K. All subsequent oral and written forward looking statements attributable to Titan or persons acting on its behalf are expressly qualified in their entirety by these factors. ## Contact Bill White or Jack Harper ## (Financial Results Attached) Titan Exploration, Inc. Consolidated Balance Sheets (in thousands)
ASSETS March 31, December 31, 2000 1999 ----------- ----------- (Unaudited) Current assets: Cash and cash equivalents $ 1,535 $ 1,310 Accounts receivable: Oil and gas 12,181 10,365 Other 70 252 Inventories 595 732 Prepaid expenses and other current assets 971 549 ----------- ----------- Total current assets 15,352 13,208 ----------- ----------- Property, plant and equipment, at cost: Oil and gas properties, using the successful efforts method of accounting: Proved properties 354,259 345,349 Unproved properties 14,964 13,438 Accumulated depletion, depreciation and amortization (132,973) (128,686) ----------- ----------- 236,250 230,101 ----------- ----------- Other property and equipment, net 4,458 4,188 Deferred income taxes 19,348 20,612 Other assets, net of accumulated amortization 1,138 689 ----------- ----------- $ 276,546 $ 268,798 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities: Trade $ 4,430 $ 7,858 Accrued interest 1,096 959 Other 11,104 8,303 ----------- ----------- Total current liabilities 16,630 17,120 ----------- ----------- Long-term debt 96,000 90,000 Other liabilities 852 827 Stockholders' equity: Preferred stock, $01 par value, 10,000 shares authorized; none issued and outstanding at March 31, 2000 and December 31, 1999, respectively - - Common stock, $01 par value, 60,000 shares authorized; 43,994 shares issued and outstanding at March 31, 2000 and December 31, 1999, respectively 440 440 Additional paid-in capital 285,265 285,265 Notes receivable - officers and employees (8,864) (8,729) Treasury stock, at cost (25,764) (25,764) Accumulated deficit (88,013) (90,361) ----------- ----------- Total stockholders' equity 163,064 160,851 ----------- ----------- $ 276,546 $ 268,798 =========== ===========
Titan Exploration, Inc. Unaudited Consolidated Statements of Operations (in thousands, except per share data)
Three months ended March 31, ------------------------ 2000 1999 -------- -------- Revenues: Gas sales $ 10,369 $ 8,411 Oil sales 11,720 6,369 -------- -------- Total revenues 22,089 14,780 -------- -------- Expenses: Oil and gas production 5,159 4,953 Production and other taxes 1,753 1,207 General and administrative 2,544 2,169 Amortization of stock option awards - 1,263 Exploration and abandonment 2,731 2,545 Depletion, depreciation and amortization 4,567 4,826 Impairment of long-lived assets - 25,900 -------- -------- Total expenses 16,754 42,863 -------- -------- Operating income (loss) 5,335 (28,083) -------- -------- Other income (expense): Equity in net loss ofaffiliates - (115) Interest income 137 11 Interest expense (1,769) (2,551) Gain on sale of assets - 202 Other (91) 533 -------- -------- Income (loss) before income taxes 3,612 (30,003) Income tax expense (1,264) - -------- -------- Net income (loss) $ 2,348 $(30,003) ======== ======== Net income (loss) per share $ 0.06 $ (0.79) ======== ======== Net income (loss) per share - assuming dilution $ 0.06 $ (0.79) ======== ======== Weighted average common shares outstanding 40,190 37,935 ======== ========
Titan Exploration, Inc. Unaudited Consolidated Statements of Cash Flows (in thousands)
Three months ended March 31, ------------------------- 2000 1999 ----------- ----------- Cash flows from operating activities: Net income (loss) $ 2,348 $ (30,003) Adjustment to reconcile net income (loss) to net cash provided by operating activities: Depletion, depreciation and amortization 4,567 4,826 Impairment of long-lived assets - 25,900 Amortization of stock option awards - 1,263 Exploration and abandonments 2,194 2,015 Equity in net loss of affiliates - 115 Gain on sale of assets - (202) Deferred income taxes 1,264 - Other items - 137 Changes in assets and liabilities: Accounts receivable (1,633) 3,461 Prepaid expenses and other current assets (288) (195) Other assets (128) (2) Accounts payable and accrued liabilities (1,933) (4,158) ----------- ----------- Total adjustments 4,043 33,160 ----------- ----------- Net cash provided by operating activities 6,391 3,157 ----------- ----------- Cash flows from investing activities: Investing in oil and gas properties (11,159) (6,920) Additions to other property and equipment (470) (13) Other investing activities - (615) Capital contribution in equity investments - 805 Notes Receivable - officers and employees (535) - ----------- ----------- Net cash used in investing activities (12,164) (6,743) Cash flows from financing activities: Proceeds from debt 6,000 4,100 Other financing activities (2) (38) ----------- ----------- Net cash provided by financing activities 5,998 4,062 ----------- ----------- Net increase in cash and cash equivalents 225 476 Cash and cash equivalents, beginning of period 1,310 610 ----------- ----------- Cash and cash equivalents, end of period $ 1,535 $ 1,086 =========== ===========
Titan Exploration, Inc. Unaudited Selected Financial and Operating Results (in thousands, except per share data, average daily production and per unit information)
Three months ended March 31, ----------------------- 2000 1999 -------- -------- FINANCIAL RESULTS: Revenues $ 22,089 $ 14,780 Expenses (excluding income taxes) $ 18,477 $ 44,985 Net income (loss) $ 2,348 $(30,003) Net income (loss) per share $ 0.06 $ (0.79) Net income (loss) per share - assuming dilution $ 0.06 $ (0.79) Weighted average common shares outstanding 40,190 37,935 Net cash provided by operating activities before working capital adjustments $ 10,373 $ 4,051 EBITDAX (a) $ 12,679 $ 6,995 OPERATING RESULTS: Production: Oil (MBbls) 547 598 Gas (MMcf) 5,175 6,192 Total (MBOE) 1,409 1,630 Average Daily Production: Oil (Bbl) 6,009 6,644 Gas (Mcf) 56,869 68,800 Total (BOE) 15,487 18,111 Average Sales Price Per Unit (excluding effects of hedging): Oil (per Bbl) $ 26.72 10.64 Gas (per Mct) $ 2.00 1.24 Total (per BOE) $ 17.71 8.64 Average Sales Price Per Unit (including effects of hedging): Oil (per Bbl) $ 21.43 10.64 Gas (per Mcf) $ 2.00 1.36 Total (per BOE) $ 15.67 9.07 Expenses Per BOE: Production costs, excluding production and other taxes $ 3.66 3.06 Production and other taxes $ 1.24 0.72 General and administrative expenses $ 1.81 1.32 Depletion, depreciation and amortization $ 3.24 2.94
- -------------------- (a) EBITDAX is calculated by adding interest expense, income taxes, depletion, depreciation, and amortization, impairment of long-lived assets, amortization of stock option awards, restructuring charge, exploration and abandonment costs, gain (loss) on sale ofassets and equity in net loss ofaffiliates to net income (loss). -----END PRIVACY-ENHANCED MESSAGE-----