-----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, B4zB7IxEiaqAC0I2NRn3VEcfCdYFebcYU7QUc8nEMF8hy3ZDh5idIyz1M+FbEjRr osDeIeFYSYNrLAJ53ACiQQ== 0000950134-98-004415.txt : 19980518 0000950134-98-004415.hdr.sgml : 19980518 ACCESSION NUMBER: 0000950134-98-004415 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GULF CANADA RESOURCES LTD CENTRAL INDEX KEY: 0000316456 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 980086499 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-09073 FILM NUMBER: 98622208 BUSINESS ADDRESS: STREET 1: ONE NORWEST CTR STREET 2: 1700 LINCOLN STE 5000 CITY: DENVER STATE: CO ZIP: 80203 BUSINESS PHONE: 3038133800 MAIL ADDRESS: STREET 1: ONE NORWEST CTR STREET 2: 1700 LINCOLN STE 5000 CITY: DENVER STATE: CO ZIP: 80203 10-Q 1 FORM 10-Q FOR QUARTER ENDED MARCH 31, 1998 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1998 OR [ ] TRANSITION PERIOD REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ COMMISSION FILE NUMBER 316456 GULF CANADA RESOURCES LIMITED (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) CANADA (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) 98-0086499 (I.R.S. EMPLOYER IDENTIFICATION NO.) ONE NORWEST CENTER 1700 LINCOLN STREET, SUITE 5000 DENVER, COLORADO 80203-4525 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE) TELEPHONE (303) 813-3800 (REGISTRANT'S TELEPHONE CODE, INCLUDING AREA CODE) 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. [X] YES [ ] NO ON MAY 12, 1998, THERE WERE 348,779,394 ORDINARY SHARES ISSUED AND OUTSTANDING. 2 GULF CANADA RESOURCES LIMITED INDEX
PAGE NO. -------- PART I. FINANCIAL INFORMATION: Item 1. Unaudited Consolidated Financial Statements 3 - 10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 - 13 PART II. OTHER INFORMATION 14 - 15
2 3 PART 1 - FINANCIAL INFORMATION Item 1. Financial Statements GULF CANADA RESOURCES LIMITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
MARCH 31, 1998 Dec. 31, 1997 - --------------------------------------------------------------------------------------------------------------- (millions of Canadian dollars) (UNAUDITED) - --------------------------------------------------------------------------------------------------------------- ASSETS CURRENT Cash and short-term investments $ 199 $ 188 Accounts receivable 270 346 Other 134 121 - --------------------------------------------------------------------------------------------------------------- 603 655 INVESTMENTS, DEFERRED CHARGES AND OTHER ASSETS 204 238 PROPERTY, PLANT AND EQUIPMENT 5,809 5,736 - --------------------------------------------------------------------------------------------------------------- $ 6,616 $ 6,629 =============================================================================================================== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT Short-term loans $ 102 $ 51 Accounts payable 345 420 Current portion of long-term debt 43 29 Current portion of other long-term liabilities 37 37 Other 90 129 - --------------------------------------------------------------------------------------------------------------- 617 666 LONG-TERM DEBT 2,841 2,785 OTHER LONG-TERM LIABILITIES 205 201 DEFERRED INCOME TAXES 270 307 MINORITY INTEREST 217 220 - --------------------------------------------------------------------------------------------------------------- 4,150 4,179 - --------------------------------------------------------------------------------------------------------------- SHAREHOLDERS' EQUITY Share capital Senior preference shares 577 577 Ordinary shares 1,717 1,660 Contributed surplus 35 35 Retained earnings 127 181 Foreign currency translation adjustment 10 (3) - --------------------------------------------------------------------------------------------------------------- 2,466 2,450 - --------------------------------------------------------------------------------------------------------------- $ 6,616 $ 6,629 ===============================================================================================================
The accompanying Notes to Consolidated Financial Statements are an integral part of this statement. 3 4 GULF CANADA RESOURCES LIMITED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) AND RETAINED EARNINGS
(Unaudited) Three months ended March 31, (millions of Canadian dollars) 1998 1997 - ----------------------------------------------------------------------------------------------------- EARNINGS (LOSS) REVENUES Net oil and gas $ 282 $ 258 Net gain on asset disposals 5 7 Other 36 24 - ----------------------------------------------------------------------------------------------------- 323 289 - ----------------------------------------------------------------------------------------------------- EXPENSES Operating - production 110 79 - other 20 2 Exploration 43 21 General and administrative 22 16 Depreciation, depletion and amortization 132 91 Finance charges, net 58 45 Income tax expense (12) 23 Minority shareholders' interest (3) 0 - ----------------------------------------------------------------------------------------------------- 370 277 - ----------------------------------------------------------------------------------------------------- EARNINGS (LOSS) FOR THE PERIOD $ (47) $ 12 ===================================================================================================== RETAINED EARNINGS BALANCE, BEGINNING OF PERIOD $ 181 $ 0 Earnings (loss) for the period (47) 12 Dividends declared on preference shares (7) (6) - ----------------------------------------------------------------------------------------------------- BALANCE, END OF PERIOD $ 127 $ 6 ===================================================================================================== PER SHARE INFORMATION (dollars per share) BASIC EARNINGS (LOSS) $(0.16) $ 0.02 ===================================================================================================== Earnings (loss) per share is after deduction of senior preference share dividends (but does not include the special dividends for payment of arrears which have been charged to contributed surplus). This per share amount was calculated based upon the following: Average number of ordinary shares outstanding: 347 265 (millions) =====================================================================================================
The accompanying Notes to Consolidated Financial Statements are an integral part of this statement. 4 5 GULF CANADA RESOURCES LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) Three months ended March 31, (millions of Canadian dollars) 1998 1997 - --------------------------------------------------------------------------------------------------------- OPERATING ACTIVITIES EARNINGS (LOSS) FOR THE PERIOD $ (47) $ 12 NON-CASH ITEMS INCLUDED IN EARNINGS (LOSS): Depreciation, depletion and amortization 132 91 Net gain on asset disposals (5) (7) Amortization of deferred foreign exchange losses 5 3 Exploration expense 43 21 Deferred income taxes (18) 14 Other (5) 6 - --------------------------------------------------------------------------------------------------------- CASH GENERATED FROM OPERATIONS 105 140 Other long-term liabilities 1 2 Changes in non-cash working capital (68) 40 Other, net (3) 1 - --------------------------------------------------------------------------------------------------------- 35 183 - --------------------------------------------------------------------------------------------------------- INVESTING ACTIVITIES Proceeds on asset disposals 75 18 Acquisitions (16) (1,059) Capital expenditures and exploration expenses (265) (244) Changes in non-cash working capital 3 133 Other, net (9) 67 - --------------------------------------------------------------------------------------------------------- (212) (1,085) - --------------------------------------------------------------------------------------------------------- FINANCING ACTIVITIES Proceeds from issue of long-term debt 97 307 Long-term debt repayments (10) 0 Issue of equity 57 235 Regular dividends declared on preference shares (7) (6) Special dividends declared on preference shares 0 (3) Other 0 (10) - --------------------------------------------------------------------------------------------------------- 137 523 - --------------------------------------------------------------------------------------------------------- DECREASE IN CASH AND CASH EQUIVALENTS (40) (379) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 137 (170) - --------------------------------------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD (1) $ 97 $ (549) =========================================================================================================
(1) COMPRISES CASH AND SHORT-TERM INVESTMENTS, NET OF SHORT-TERM LOANS The accompanying Notes to Consolidated Financial Statements are an integral part of this statement. 5 6 GULF CANADA RESOURCES LIMITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The interim financial information and notes thereto should be read in conjunction with the Company's latest annual report to the shareholders. The unaudited financial statements contained herein are prepared in accordance with Canadian generally accepted accounting principles. The results of operations for the three-month period ended March 31, 1998 are not necessarily indicative of results to be expected for the entire year. 2. CONTINGENCIES AND OTHER MATTERS As part of Gulf's upstream operations and as a result of certain discontinued downstream operations, Gulf has ongoing site restoration and remediation responsibilities. Site restoration costs within upstream operations involve the surface clean-up and reclamation of wellsites and field production facilities to ensure that they can be safely returned to appropriate alternative land uses. In addition, over the long-term, certain plant facilities will require decommissioning which will involve dismantling of facilities as well as the decontamination and reclamation of these lands. Total anticipated future costs, given Gulf's current inventory of wells and facilities, are in the order of $470 million over the next twenty years. Gulf has accrued $113 million ($11 million as current) for future upstream site restoration costs and continues to accrue these costs on a consistent basis. There have been no other significant subsequent developments relating to the downstream potential liabilities since year-end, and as such the estimated costs and associated accrual have not changed materially since year-end. Gulf is involved in various litigation, regulatory and other environmental matters in the ordinary course of business. In management's opinion, an adverse resolution of these matters would not have a material impact on operations or financial position. 6 7 3. RECLASSIFICATIONS Certain amounts for 1997 have been reclassified to conform with the presentation adopted for 1998. 4. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES ("U.S. GAAP") AND ADDITIONAL DISCLOSURES REQUIRED BY U.S. GAAP If U.S. GAAP had been followed, the earnings (loss) and loss per ordinary share would have been as follows:
THREE MONTHS ENDED MARCH 31 --------------------------- 1998 1997 ------ ------ (MILLIONS OF DOLLARS) EARNINGS (LOSS) FOR THE PERIOD, as reported $ (47) $ 12 Adjustments: Interest rate swap (b) (2) (2) New asset values (a)(i) (58) (8) Foreign exchange (c) 20 (8) Restructuring charges (e) (7) 0 Income tax (expense) recovery 45 (16) ------ ------ LOSS, as adjusted (49) (22) Cumulative dividends on senior preference shares (7) (6) ------ ------ LOSS TO ORDINARY SHAREHOLDERS $ (56) $ (28) ====== ====== PER ORDINARY SHARE, as adjusted (DOLLARS) - Loss $(0.16) $(0.11)
The Consolidated Statements of Cash Flows presented under Canadian GAAP comply with International Accounting Standard 7, except as noted in (g) below. 7 8 If U.S. GAAP were followed, amounts on the Consolidated Statements of Financial Position would be increased (decreased) as follows:
MARCH 31, DECEMBER 31, 1998 1997 ------------------------------------------------- (MILLIONS OF DOLLARS) (MILLIONS OF DOLLARS) ASSETS Accounts receivable (b) $ 9 $ 2 Current deferred income taxes (a)(ii) 5 6 Investments, deferred charges and other assets (b)(c) 82 61 Property, plant and equipment (a)(i) 1,238 1,313 ------- ------- $ 1,334 $ 1,382 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current portion of other long-term liabilities (b) $ (12) $ (12) Other current liabilities (a)(i)(b) 15 (1) Long-term debt (b) 200 200 Other long-term liabilities (b)(d)(e)(f) 36 39 Deferred income taxes (a)(i)(ii)(b)(c)(f) 1,315 1,374 Share capital, ordinary shares (a)(i) (89) (89) Deficit (131) (129) ------- ------- $ 1,334 $ 1,382 ======= =======
The financial statements have been prepared in accordance with accounting principles generally accepted in Canada which, in the case of Gulf, conform in all material respects with those in the United States except that: (a) The financial statements would reflect the following effects of adopting Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109). (i) SFAS 109 requires a restatement, to pre-tax amounts, of the new asset values reflected in the accounts in connection with the change of control in 1986 of Gulf Canada Limited and the acquisition of new subsidiaries. This restatement, along with differences between the tax bases and recorded amounts of other asset transfers, would result in property, plant and equipment (PP&E) and deferred income taxes both being $1,238 million higher than under Canadian generally accepted accounting principles ("Canadian GAAP") at March 31, 1998 (December 31, 1997 - $1,313 million). These differences are amortized to earnings over the lives of the related assets. The application of previous accounting standards at the time of the change in control results in ordinary share capital being lower by $89 million. 8 9 (ii) Measurement and presentation of deferred income taxes according to SFAS 109 would result in recording current and non-current deferred tax assets and liabilities, for a net increase in the deferred tax liability of $90 million at March 31, 1998 (December 31, 1997 - a net increase of $94 million). (b) A special purpose entity has $200 million 11 per cent public debentures issued and outstanding which mature on October 31, 2000, and assets consisting of a $200 million oil indexed debenture maturing on October 31, 2000 and an interest rate swap. These are not included in Gulf's statement of financial position, but under U.S. GAAP would have been included in long-term debt and investments and other assets, respectively. Earnings include amortization of a provision for losses on a related swap agreement of $2 million ($1 million after tax) for the three months ended March 31, 1998 and $2 million ($1 million after tax) for the three months ended March 31, 1997. (c) Unrealized gains or losses arising on translation of long-term liabilities repayable in foreign funds would be included in earnings in the period in which they arise under U.S. GAAP. The balances of such deferred losses were $119 million at March 31, 1998 and $139 million at December 31, 1997. (d) Under U.S. GAAP, the costs of providing all forms of post-retirement benefits to employees would be recognized during the active service lives of the employees rather than expensed as incurred. The accumulated post-retirement benefit obligation at March 31, 1998 is estimated to be $44 million ($26 million after tax) using a discount rate of 7.5 per cent. There is no material difference between the net period service cost under U.S. GAAP and the pay-as-you-go amount under Canadian GAAP for the three-month periods ended March 31, 1998 and 1997. (e) Under U.S. GAAP a liability for non-contractual involuntary employee termination benefits is not incurred until the terms of the termination are communicated to the affected individual employees. Under Canadian GAAP, the liability was recorded when the Company made the termination decision. As such, under U.S. GAAP, the liability recorded prior to employees being notified is reversed and recognized in the year of notification. (f) Under U.S. GAAP, as at March 31, 1998 and December 31, 1997, an additional minimum pension liability of $8 million ($4 million after tax) must be accrued for the deficit between the market value of the Company's pension plan assets and its accumulated benefit obligations. (g) In the Consolidated Statement of Cash Flows, borrowings under short-term loans ($51 million for the three months ended March 31, 1998) would be presented as a financing activity rather than as a reduction of cash and cash equivalents. 9 10 ADDITIONAL DISCLOSURES CHANGES IN ACCOUNTING STANDARDS In June 1997, the Financial Accounting Standards Board released Statement No. 130 (SFAS 130), "Reporting Comprehensive Income" and Statement No. 131 (SFAS 131), "Disclosure about Segments of an Enterprise and Related Information". Both statements become effective for fiscal years beginning after December 15, 1997 with early adoption permitted. SFAS 130 established standards for reporting and display of certain components of changes in equity that arise form non-owner sources. SFAS 131 establishes standards for reporting information about operating segments and related disclosures. Neither section addresses issues of recognition or measurement in the financial statements, and their adoption is not expected to have any effect on the results of operations or financial position of the Company. Gulf will provide this disclosure at December 31, 1998. 10 11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations FORWARD LOOKING STATEMENTS This document includes "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934 ("Exchange Act"). All statements other than statements of historical facts included in this document, including without limitation, statements under "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding Gulf's financial position, estimated quantities and net present values of reserves, business strategy, plans and objectives of management of Gulf for future operations and covenant compliance, are forward-looking statements. Although Gulf believes that the assumptions upon which such forward-looking statements are based are reasonable, it can give no assurances that such assumptions will prove to have been correct. Important factors that could cause actual results to differ materially from Gulf's expectations ("Cautionary Statements") are disclosed below and elsewhere in this document. All subsequent written and oral forward-looking statements attributable to Gulf or persons acting on its behalf are expressly qualified by the Cautionary Statements. FINANCIAL REVIEW The following discussion and analysis has been prepared based upon the financial results of operations as presented in this document, which were prepared in accordance with Canadian generally accepted accounting principles. All dollar amounts set forth herein are in Canadian dollars, except where otherwise indicated. Gulf follows the successful efforts method of accounting for oil and gas exploration and development costs. The initial acquisition costs of oil and gas properties and the costs of drilling and equipping successful exploratory wells are capitalized. The costs of unsuccessful exploration wells are charged to earnings. All other exploration costs are charged to earnings as incurred. All development costs, including the costs of liquid injectants used in enhanced oil recovery projects, are capitalized. Maintenance and repairs are charged to earnings; renewals and betterments, which extend the economic life of the assets, are capitalized. Capitalized costs of proved oil and gas properties are amortized using the unit-of-production method based on estimated proved oil and gas reserves. Depreciation of plant and equipment is based on estimated remaining useful lives of the assets using either the straight-line method or the unit-of-production method based on estimated proved oil and gas reserves. Individually insignificant unproved properties are amortized on a group basis at rates determined after considering past experience and lease terms. As changes in circumstances warrant, the net carrying values of proved properties, plant and equipment are assessed to ensure that they do not exceed future cash flows from use. Capitalized costs of significant unproved properties are also assessed regularly to determine whether an impairment in value has occurred. 11 12 Gulf's revenues, cash flow, profitability and future rate of growth are substantially dependent upon prevailing prices for oil and gas. Prices for oil and gas are subject to wide fluctuations in response to relatively minor changes in supply of and demand for oil and gas, market uncertainty and a variety of additional factors that are beyond the control of Gulf. CASH GENERATED FROM OPERATIONS & EARNINGS Net oil and natural gas revenues for the three months ended March 31, 1998 increased to $282 million over revenues of $258 million for the same period in 1997. First quarter sales volumes of 190,800 boe/d, reflecting the full period impact of the Clyde and Stampeder acquisitions net of asset sales, did not compensate for the decline in commodity prices. The price declines were mitigated by Gulf's commodity hedging activity which increased revenues by $15 million in the first quarter of 1998, compared with a net loss of $27 million on hedging activities for the same period in 1997. Gulf's cash generated from continuing operations of $105 million compared with $140 million for the same period in 1997. The Company incurred a net loss of $47 million for the three months ended March 31, 1998 versus earnings of $12 million during the same period last year. The decrease in cash generation and earnings resulted primarily from lower year-over-year liquids prices in the first quarter which averaged $18.55 per barrel after hedging ($17.29 per barrel before hedging) compared to $25.99 per barrel ($27.60 per barrel before hedging) a year earlier. On a segmented basis, North American conventional oil and gas operations generated $93 million of cash for the three months, down $53 million from the prior year due to lower crude oil market prices and divestitures of non-core properties. Gulf's Heavy Oil division and Surmont required a cash outlay of $9 million, as operating costs exceeded revenues resulting from depressed heavy oil market prices. Gulf's Syncrude interest generated cash of $6 million, down $13 million from the first quarter of 1997 as a combined result of an $8.73 per barrel fall in the average realized synthetic crude oil price and accelerated plant maintenance. In Indonesia, three-month cash generation decreased by $2 million to $21 million, as lower crude market prices offset the impact of additional volumes of 3,500 b/d from the Clyde acquisition and lower Indonesian royalties. Cash generated from Gulf's North Sea operations included $27 million from the United Kingdom and $23 million from the Netherlands compared to $13 million and $11 million, respectively, in 1997. Cash generation from Australia was $4 million versus $2 million in 1997. The corporate segment, which includes general and administrative charges, hedging gains and losses, and taxes, required cash of $60 million during the first quarter of 1998 compared to $74 million in 1997. The increase in other revenues and other operating expenses reflect additional activity in Gulf's contract drilling services. Production operating costs for the first three months of 1998 increased to $110 million from $79 million during the same period last year. However, prior to the inclusion of 12 13 Gulf's Heavy Oil division and the $4 million impact of Syncrude's accelerated plant maintenance, operating costs on a boe basis decreased by three per cent. Exploration expenses increased primarily due to an additional $12 million of dry hole costs related to exploration wells in Indonesia. General and administrative expenses increased $6 million, primarily related to the acquisition of Clyde and Stampeder operations and increased building lease costs. Depreciation, depletion and amortization expenses were $41 million higher in the first quarter of 1998 than 1997. Of this amount, Gulf's Heavy Oil division incurred charges of $15 million with the remainder being largely a result of the full period impact of the Clyde acquisition. Net finance charges increased to $58 million in the first quarter of 1998 from $45 million in the same period of 1997. The increase reflects the impact of an additional $6 million of interest expense associated with the US$225 million debentures issued in March of 1997 and a $6 million increase reflecting the financing costs associated with the acquisition of Clyde and Stampeder. NET CASH FLOW AND FINANCIAL POSITION In the first three months of 1998 Gulf spent $265 million on capital expenditures and exploration expenses -- $167 million in North America, $60 million in Indonesia and $38 million on international and corporate activities. Gulf's total capital cost for the Corridor Block Gas Project is expected to be US$374 million, of which $US299 million has been spent to March 31, 1998. At March 31, 1998, the Company had drawn US$189 million from the Corridor Facility, including US$39 million during the first quarter of 1998. By the end of the first quarter of 1998, the Company had agreements in place to receive over $700 million in proceeds from asset sales, of which $75 million had been received as of March 31, 1998. The largest component of these transactions is the announced sale of its United Kingdom North Sea interests for proceeds of $590 million, which will be used to pay down debt. Proceeds of $57 million were received from the exercise of 9.9 million warrants for ordinary shares at a strike price of $5.75. The $217 million minority interest reflected in the statement of financial position relates to that portion of Gulf Indonesia ($186 million) and the SGS Limited Partnership ($31 million) not owned by the Company. Since the beginning of 1998, Gulf has increased its foreign exchange hedges for 1998. At March 31, 1998 the Company's total forward sales of U.S. dollars for the remainder of this year were US$386 million at an average rate of US$0.70. 13 14 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None. ITEM 2. CHANGES IN SECURITIES None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 5: OTHER INFORMATION None. ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K a. Exhibits The following exhibits are filed with this Form 10-Q and they are identified by the number indicated. Exhibit (10) Material Contracts 10.1 Shareholder Rights Plan dated as of February 19, 1998 between the Registrant and Montreal Trust Company of Canada (incorporated herein by reference to Exhibit 1 to the Registrant's Form 8-A filed on March 11, 1998) (27) Financial Data Schedule b. Reports on Form 8-K. None. 14 15 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 thereunto duly authorized. GULF CANADA RESOURCES LIMITED DATE: MAY 15, 1998 BY: /s/ CRAIG GLICK CRAIG GLICK SENIOR VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND SECRETARY (DULY AUTHORIZED OFFICER AND PRINCIPLE FINANCIAL OFFICER) 15 16 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION - ------- ----------- 27 Financial Data Schedule
EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED STATEMENT OF FINANCIAL POSITION AND CONSOLIDATED STATEMENT OF EARNINGS AND RETAINED EARNINGS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10-Q 1,000,000 CANADIAN DOLLARS 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 .71 199 0 270 0 0 603 7,769 1,960 6,616 617 2,841 0 577 1,717 385 6,616 282 323 0 305 19 0 58 (59) (12) (47) 0 0 0 (47) (0.16) (0.16)
-----END PRIVACY-ENHANCED MESSAGE-----