-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, nJLpsPcwk8oZNoAVbbppQQmZ4EJSeis1nA8UpWmoW4c693A23XDobw27IHJ6IwA5 YsB5XCJRU4LlPMGheCmURQ== 0000899243-95-000244.txt : 19950511 0000899243-95-000244.hdr.sgml : 19950511 ACCESSION NUMBER: 0000899243-95-000244 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950509 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: PLAINS RESOURCES INC CENTRAL INDEX KEY: 0000350426 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-PETROLEUM & PETROLEUM PRODUCTS (NO BULK STATIONS) [5172] IRS NUMBER: 132898764 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10454 FILM NUMBER: 95535813 BUSINESS ADDRESS: STREET 1: 1600 SMITH ST STE 1500 CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7136541414 MAIL ADDRESS: STREET 1: 1600 SMITH STREET STREET 2: SUITE 1500 CITY: HOUSTON STATE: TX ZIP: 77002 10-Q 1 FORM 10-Q 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, 1995 [ ] 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: 0-9808 PLAINS RESOURCES INC. (Exact name of registrant as specified in its charter) DELAWARE 13-2898764 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1600 SMITH STREET HOUSTON, TEXAS 77002 (Address of principal executive offices) (Zip Code) (713) 654-1414 (Registrant's telephone number, 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. YES [x] NO ------ ---- 11,593,457 shares of common stock $.10 par value, issued and outstanding at May 8, 1995. PLAINS RESOURCES INC. AND SUBSIDIARIES TABLE OF CONTENTS
PAGE PART I. FINANCIAL INFORMATION CONDENSED CONSOLIDATED FINANCIAL STATEMENTS: Condensed Consolidated Balance Sheets: March 31, 1995 and December 31, 1994................................ 3 Condensed Consolidated Statements of Operations: For the three months ended March 31, 1995 and 1994.................. 4 Condensed Consolidated Statements of Cash Flows: For the three months ended March 31, 1995 and 1994.................. 5 Notes to Condensed Consolidated Financial Statements................. 6 MANAGEMENT'S DISCUSSION AND ANALYSIS................................... 7 PART II. OTHER INFORMATION............................................ 10
2 PLAINS RESOURCES INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data)
- ------------------------------------------------------------------------------------------ MARCH 31, DECEMBER 31, 1995 1994 ----------- ------------- (unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 7,735 $ 1,291 Cash in compensating balance account 1,500 1,500 Accounts receivable and other 40,141 33,370 Inventory 5,380 5,525 --------- --------- Total current assets 54,756 41,686 --------- --------- PROPERTY AND EQUIPMENT Oil and natural gas properties - full cost method: Subject to amortization 267,203 265,123 Not subject to amortization 36,754 35,779 Crude oil terminal and storage facility 30,584 30,576 Other property and equipment 7,954 7,780 --------- --------- 342,495 339,258 Less allowance for depreciation, depletion and amortization (125,379) (121,656) --------- --------- 217,116 217,602 --------- --------- OTHER ASSETS 8,570 7,616 --------- --------- $ 280,442 $ 266,904 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and other current liabilities $ 44,410 $ 36,282 Interest payable 7,092 3,617 Royalties payable 4,899 4,702 Notes payable and other current obligations 1,552 1,550 --------- --------- Total current liabilities 57,953 46,151 BANK DEBT 47,800 45,100 SUBORDINATED DEBT 100,000 100,000 OTHER LONG-TERM LIABILITIES 7,503 8,254 --------- --------- 213,256 199,505 --------- --------- SERIES C CUMULATIVE CONVERTIBLE PREFERRED STOCK, STATED AT LIQUIDATION PREFERENCE 20,937 20,937 --------- --------- NON-REDEEMABLE PREFERRED STOCK, COMMON STOCK AND OTHER STOCKHOLDERS' EQUITY Preferred stock, stated at liquidation preference 481 481 Common stock, $.10 par value, 50,000,000 shares authorized; issued and outstanding 11,593,457 shares at March 31, 1995 and December 31, 1994 1,159 1,159 Additional paid-in capital 89,274 89,274 Accumulated deficit (44,665) (44,452) --------- --------- 46,249 46,462 --------- --------- $ 280,442 $ 266,904 ========= =========
See notes to condensed consolidated financial statements. 3 PLAINS RESOURCES INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except per share data)
- ------------------------------------------------------------------------------- THREE MONTHS ENDED MARCH 31, --------------------- 1995 1994 --------- --------- REVENUE Oil and natural gas sales $ 14,689 $ 12,394 Marketing, transportation and storage 78,886 38,148 Interest and other income 72 42 --------- --------- 93,647 50,584 --------- --------- EXPENSES Production expenses 6,759 6,348 Purchases, transportation and storage 77,388 36,495 General and administrative 1,898 1,866 Depreciation, depletion and amortization 3,998 3,909 Interest expense 3,285 3,144 --------- --------- 93,328 51,762 --------- --------- NET INCOME (LOSS) $ 319 $ (1,178) ========= ========= Net loss per common and common equivalent share $ (.02) $ (.10) ========= ========= Weighted average number of common and common equivalent shares 11,593 11,567 ========= =========
See notes to condensed consolidated financial statements. 4 PLAINS RESOURCES INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands)
------------------------------------------------------------------------------------------------ THREE MONTHS ENDED MARCH 31, --------------------- 1995 1994 -------- --------- CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 319 $ (1,178) Item not affecting cash flows from operating activities: Depreciation, depletion and amortization 3,998 3,909 Change in assets and liabilities resulting from operating activities: Accounts receivable and other (8,141) (1,217) Inventory 145 3,600 Accounts payable and other current liabilities 7,904 (132) Interest payable 2,834 2,774 -------- --------- Net cash provided by operating activities 7,059 7,756 -------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from the sale of oil and natural gas properties 1,936 207 Payment for acquisition, exploration and development costs (3,526) (7,557) Payment for additions to other property (195) (110) -------- --------- Net cash used in investing activities (1,785) (7,460) -------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term debt 9,850 18,800 Proceeds from short-term debt --- 6,213 Principal payments of long-term debt (7,150) (9,400) Principal payments of short-term debt --- (9,010) Payments of other long-term liabilities (1,500) (144) Other (30) (97) -------- --------- Net cash provided by financing activities 1,170 6,362 -------- --------- Net increase in cash and cash equivalents 6,444 6,658 Cash and cash equivalents, beginning of period 1,291 3,783 -------- --------- Cash and cash equivalents, end of period $ 7,735 $ 10,441 ======== =========
See notes to condensed consolidated financial statements. 5 PLAINS RESOURCES INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1995 (UNAUDITED) NOTE 1--ACCOUNTING POLICIES The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to interim financial reporting as prescribed by the Securities and Exchange Commission. For further information, refer to the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1994, filed with the Securities and Exchange Commission. All material adjustments consisting only of normal recurring adjustments which, in the opinion of management, were necessary for a fair statement of the results for the interim periods, have been reflected. Certain reclassifications have been made to the prior year statements to conform with the current year presentation. The Company evaluates the capitalized costs of its oil and natural gas properties on an ongoing basis and has utilized the most recently available information to estimate its reserves at March 31, 1995, in order to determine the realizability of such capitalized costs. Future events, including drilling activities, product prices and operating costs, may affect future estimates of such reserves. NOTE 2 -- EARNINGS PER SHARE Primary earnings per share is based on the weighted average number of common and common equivalent shares of Common Stock outstanding. Common equivalent shares include employee stock options and warrants. For purposes of this calculation, net income available to common shareholders has been reduced to reflect accrued preferred stock dividends. Excluding accrued dividends on the Company's Series C Cumulative Convertible Preferred Stock (the "Series C Preferred Stock") which may be paid in additional shares of such stock, net income per common and common equivalent share was $.02 for the three months ended March 31, 1995. If the Company elects to pay dividends on the Series C Preferred Stock in additional shares of such stock, accounting pronouncements require the Company to retroactively restate earnings per share to reflect such dividends by increasing the weighted average number of common and common equivalent shares assumed to be outstanding for this calculation. The effects of accrued cash dividends will also be eliminated from the calculation in such circumstance. The indenture governing the Company's $100 million principal amount 12% Senior Subordinated Notes contains certain restrictions regarding the payment of cash dividends on the Series C Preferred Stock. 6 MANAGEMENT'S DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Three month periods ended March 31, 1995 and 1994 For the quarter ended March 31, 1995, the Company reported net income of $319,000 on total revenue of $93.6 million. This compares with a net loss of $1.2 million on total revenue of $50.6 million for the first quarter of 1994. After deducting approximately $516,000 of dividends accrued on the Company's Series C Cumulative Convertible Preferred Stock (the "Series C Preferred Stock"), the Company reported a net loss of $.02 per common share as compared to a net loss of $.10 per common share in last year's quarter. Excluding accrued dividends on the Series C Preferred Stock which may be paid in additional shares of such stock, net income per common share was $.02 for the quarter ended March 31, 1995. Cash flow from operations (net income plus non-cash expenses) increased 58% to $4.3 million for the first quarter of 1995 versus $2.7 million for the 1994 period. Earnings before interest, taxes, depreciation, depletion and amortization ("EBITDA") increased 29% to $7.6 million for the quarter ended March 31, 1995 from $5.9 million reported for the 1994 comparative period. Oil and natural gas production for the first quarter of 1995 increased to 1.15 million barrels of oil equivalent ("BOE"), up 17% over the 982,000 BOE produced in last year's first quarter. Oil production, the Company's principal product, increased by 23% to 1,018,000 barrels from 827,000 barrels produced during the first quarter of 1994. The production increases are primarily a result of the Company's continuing focus on the development and exploitation of its principal properties and the acquisition of the remaining 50% working interest in its properties in the Sunniland Trend of South Florida (the "Sunniland Trend Properties") effective May 1, 1994. Production from the Company's LA Basin properties was negatively affected by downtime associated with unusual rainfall in the first quarter of 1995 (approximately 8,000 BOE, net to the Company's interest) and the Los Angeles earthquake in the first quarter of 1994 (approximately 40,000 BOE, net to the Company's interest). Natural gas production declined from .9 billion cubic feet to .8 billion cubic feet in the current year quarter primarily as a result of natural depletion in the Company's Gulf Coast properties. Oil and natural gas revenues increased approximately 19% to $14.7 million versus $12.4 million for the first quarter of 1994 due to increased production volumes and slightly higher product prices. The Company's average wellhead price, which represents a combination of fixed and floating price sales arrangements and incorporates location and quality discounts from benchmark New York Mercantile Exchange prices, increased 2% to $12.82 per BOE for the quarter ended March 31, 1995. Such increase is attributable to an increase in the spot oil price in the first quarter of 1995 offset by lower average natural gas prices. The posted wellhead price for the benchmark West Texas Intermediate crude oil averaged $16.81 per barrel during the quarter as compared to the first quarter 1994 average of $13.16 per barrel. The Company routinely maintains fixed price arrangements on approximately 60% to 70% of its crude oil production. The Company's average oil price was $13.61 per barrel for the three months ended March 31, 1995 versus $13.32 per barrel in the prior year period. The Company's average natural gas price decreased 26% to $1.09 per thousand cubic feet ("Mcf") during the first quarter of 1995 as compared to $1.48 received in the 1994 first quarter. Financial swap arrangements and futures transactions entered into by the Company to hedge production are included in the foregoing prices. Such transactions (which do not include fixed price, physical delivery arrangements) had the effect of decreasing the average price per BOE by $.46 in the first quarter of 1995 and increasing the average price per BOE by $0.71 in the first quarter of 1994. The Company's crude oil marketing and transportation activities continued to benefit from access to the Company's new crude oil storage and terminalling facility in Cushing, Oklahoma (the "Cushing Terminal"). Construction of the Cushing Terminal was completed in December 1993. Aggregate gross profit from the Company's downstream operations for the first quarter of 1995 was $1,498,000 on total 7 revenue of $78.9 million. Gross profit from marketing and transportation nearly doubled to $1,241,000 for the quarter ended March 31, 1995 versus gross profit of $644,000 in the prior year period. The Company recorded $1,653,000 of aggregate downstream gross profit on total revenue of $38.1 million in the first quarter of 1994. Such amount included approximately $603,000 of gross profit from contango market inventory transactions. Due to the strong near-term demand for crude oil, no material contango market inventory transactions occurred in the 1995 period. Excluding such inventory transactions, gross profit from the downstream segment's primary business activities rose nearly 40%, increasing to $1,468,000 in the 1995 period from $1,050,000 in last year's quarter. The trend of increased revenues and corresponding gross profit is reflective of increases in the quantity of crude oil marketed on behalf of other producers (46,000 barrels per day in the first quarter of 1995 versus 21,000 barrels per day in the 1994 quarter) and additional markets made available by the Cushing Terminal. Unit production expenses decreased approximately 9% to $5.90 per BOE for the first quarter of 1995 from $6.47 per BOE in the prior year comparative period. Annual unit production expenses were $7.36, $6.65 and $6.15 per BOE in 1992, 1993 and 1994, respectively. The unit expense reductions are primarily the result of the Company's ongoing focus on cost reduction and cost control and to increased production volumes. Unit production expenses will vary throughout each year due to seasonal demand charges for peak electricity usage and periodic workover expenses associated with the Company's production and exploitation activities. Total production expenses increased to $6.8 million from $6.3 million for the first quarter of 1994 as a result of increased production volumes. General and administrative ("G&A") expenses, which exclude amounts capitalized as direct oil and natural gas acquisition, exploration and development costs, remained relatively constant at $1.9 million for the three months ended March 31, 1995 and 1994. Excluding G&A expenses related to the Company's downstream activities, unit G&A expenses declined 17% to $1.09 per BOE as compared to $1.31 per BOE reported in the prior year quarter. On an annual basis, unit general and administrative expenses were $2.48, $1.34 and $1.04 per BOE in 1992, 1993 and 1994, respectively. Depreciation, depletion and amortization ("DD&A") expense increased 2% to approximately $4 million for the quarter ended March 31, 1995. Increased DD&A attributable to higher production volumes was partially offset by a lower DD&A rate ($3.00 per BOE in the 1995 quarter versus $3.40 per BOE in the 1994 quarter). Interest expense for the quarter ended March 31, 1995, increased to $3.3 million from $3.1 million reported for the comparative prior year quarter. The increase is primarily due to a higher average interest rate. CAPITAL RESOURCES, LIQUIDITY AND FINANCIAL CONDITION At March 31, 1995, the Company had a working capital deficit of approximately $3.2 million compared to a deficit of $4.5 million at December 31, 1994. The Company has historically operated with a working capital deficit due primarily to ongoing capital expenditures that have been financed through cash flow and the Company's revolving credit facility. The outstanding balance on the Company's $55 million revolving credit facility (the "Credit Facility") was $47.8 million on March 31, 1995. Investing and Financing Activities Net cash flows used in investing activities were $1.8 million and $7.5 million for the three months ended March 31, 1995 and 1994, respectively. Investing activities include payments for acquisition, exploration 8 and development costs of $3.5 million and $7.6 million for these same periods, respectively. Also included in investing activities are proceeds from the sale of certain minor nonoperated properties of $1.9 million and $.2 million for the three months ended March 31, 1995, and 1994, respectively. Net cash provided by financing activities amounted to $1.2 million and $6.4 million for the three months ended March 31, 1995 and 1994, respectively. Proceeds, net of payments, from long-term debt for the three months ended March 31, 1995 and 1994, were $2.7 million and $9.4 million, respectively. Such amounts in both years represent net proceeds from the Credit Facility used primarily to finance acquisition, exploration and development activities. Short-term debt transactions during the 1994 period reflect borrowings and repayments associated with crude oil inventory transactions conducted during a contango crude oil futures market. 9 PART II. OTHER INFORMATION Item 1 - None Item 2 - None Item 3 - None Item 4 - None Item 5 - None Item 6 - A. Exhibits 11. Computation of per share earnings 27. Financial Data Schedule B. Report on Form 8-K None 10 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 and thereunto duly authorized. PLAINS RESOURCES INC. Date: May 9, 1995 By: /s/ Phillip D. Kramer ----------- ------------------------------------------ Phillip D. Kramer, Vice President and Chief Financial Officer (Principal Financial Officer) 11 EX-11 2 EXHIBIT 11 EXHIBIT 11. - COMPUTATION OF PER SHARE EARNINGS - -----------------------------------------------------------------------------------
THREE MONTHS ENDED THREE MONTHS ENDED MARCH 31, 1995 MARCH 31, 1994 ---------------------- ------------------------- COMMON AND COMMON AND COMMON COMMON EQUIVALENT FULL EQUIVALENT FULL SHARES DILUTION SHARES DILUTION ---------- ---------- ---------- ------------- Weighted average common shares outstanding 11,593,457 11,593,457 11,567,013 11,567,013 Incremental shares assumed to be issued 0 4,029,065 0 0 ----------- ----------- ----------- ----------- 11,593,457 15,622,522 11,567,013 11,567,013 =========== =========== =========== =========== Net income (loss) as reported $ 319,000 $ 319,000 $(1,178,000) $(1,178,000) Deduct dividends on Cumulative Convertible Preferred Stock (532,000) (15,000) (16,000) (16,000) ----------- ----------- ----------- ----------- Net income (loss) availabe to common shareholders $ (213,000) $ 304,000 $(1,194,000) $(1,194,000) =========== =========== =========== =========== Net income (loss) per share $ (0.02) $ 0.02 $ (0.10) $ (0.10) ========== =========== =========== ===========
EX-27 3 EXHIBIT 27
5 1,000 U.S. Dollars 3-MOS DEC-31-1994 JAN-01-1995 MAR-31-1995 1 9,235 0 40,141 0 5,380 54,756 342,495 125,379 280,442 57,953 155,303 1,159 20,937 481 44,609 280,442 93,575 93,647 84,147 88,145 1,898 0 3,285 319 0 319 0 0 0 319 (0.02) 0.02
-----END PRIVACY-ENHANCED MESSAGE-----