-----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, Bk9fppM9gvocMChVlEGKNdAUj4ULU4jE62Me0RS6ztG5vync5C9uiC6vKeosB3pT Q6MGVjUtgs04DKkdIBgpzw== 0000050104-96-000001.txt : 19960201 0000050104-96-000001.hdr.sgml : 19960201 ACCESSION NUMBER: 0000050104-96-000001 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960130 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19960131 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TESORO PETROLEUM CORP /NEW/ CENTRAL INDEX KEY: 0000050104 STANDARD INDUSTRIAL CLASSIFICATION: PETROLEUM REFINING [2911] IRS NUMBER: 950862768 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03473 FILM NUMBER: 96509295 BUSINESS ADDRESS: STREET 1: 8700 TESORO DR CITY: SAN ANTONIO STATE: TX ZIP: 78217 BUSINESS PHONE: 2108288484 8-K 1 CURRENT REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): January 30, 1996 TESORO PETROLEUM CORPORATION (Exact Name of Registrant as Specified in Its Charter) Delaware 1-3473 95-0862768 (State or Other Jurisdiction of (Commission (I.R.S. Employer Incorporation or Organization) File Number) Identification No.) 8700 Tesoro Drive San Antonio, Texas 78217 (Address of Principal Executive Offices) (Zip Code) 210-828-8484 (Registrant's Telephone Number, Including Area Code) TESORO PETROLEUM CORPORATION FORM 8-K Item 5. Other Events On January 30, 1996, Tesoro Petroleum Corporation (the "Company") announced earnings for the year ended December 31, 1995. In addition, the Company announced information regarding its natural gas reserves and 1996 capital budget. Item 7. Financial Statements and Exhibits (c) Exhibits 20.1 Press Release of the Company dated January 30, 1996 announcing earnings for the year ended December 31, 1995. 20.2 Press Release of the Company dated January 30, 1996 announcing information regarding its natural gas reserves and 1996 capital budget. 2 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 hereunto duly authorized. TESORO PETROLEUM CORPORATION Registrant Date: January 31, 1996 By: /s/ William T. Van Kleef William T. Van Kleef Senior Vice President and Chief Financial Officer 3 EXHIBIT INDEX Exhibit Description Page 20.1 Press Release of the Company dated January 30, 1996 5 announcing earnings for the year ending December 31, 1995. 20.2 Press Release of the Company dated January 30, 1996 9 announcing information regarding its natural gas reserves and 1996 capital budget. 4 EX-20.1 2 JANUARY 30, 1996 PRESS RELEASE OF YEAR-END EARNINGS FOR IMMEDIATE RELEASE Contact: Greg Wright (210) 283-2440 TESORO REPORTS ITS BEST RESULTS IN MORE THAN A DECADE San Antonio, Texas -- Jan. 30, 1996 -- Tesoro Petroleum Corporation (NYSE:TSO) today announced 1995 net earnings applicable to common stock of $54.6 million, or $2.18 per share, compared with $13.0 million, or $.56 per share in 1994. Operating profit reached $105.9 million, compared with $64.4 million in 1994. These results represent the company's best performance in more than a decade, and were achieved despite very difficult industry conditions that prevailed through most of the year. The 1995 results included an after-tax gain of approximately $33 million ($1.34 per share) from the sale of certain interests in the Bob West field in south Texas, partially offset by charges of approximately $5 million ($.21 per share) for employee terminations and restructuring and $3 million ($.11 per share) for the early extinguishment of debt. The 1994 results included an $8.5 million ($.37 per share) refund from the resolution of a refining and marketing tariff issue, partially offset by a $5 million ($.21 per share) charge for the early extinguishment of debt. Excluding the gain on sale of Bob West field interests, 1995 results were the best in five years. "Achieving these results in the face of depressed natural gas and petroleum refining industry conditions speaks loudly for the changes we have effected at Tesoro," President and Chief Executive Officer Bruce Smith said. "Initiatives within our core operations, coupled with company-wide efficiency measures and lower debt levels, are expected to help continue Tesoro's improvements. Only a small portion of the benefits we expect from these efforts was realized in 1995, but they should have a much larger impact in 1996 and beyond." Tesoro's enhanced 1995 results were primarily attributable to improvements within its Exploration & Production (E&P) segment, specifically relating to natural gas operations in south Texas. These operations benefited from continued development of the Bob West field, despite natural gas market prices that averaged almost 10 percent lower than in 1994. Excluding the gain from sale of certain Bob West field interests earlier in the year, the segment's operating profit rose 18 percent from 1994 to $76 million as total domestic and Bolivian natural gas production increased 26 percent to an average of 133 million cubic feet per day. The Refining & Marketing (R&M) segment had operating profit of $.7 million in 1995, reflecting a strong recovery from more than $7 million of operating losses through the first half of the year, when industry refining margins were among the lowest in a decade. These results compare with a $2.4 million operating profit in 1994. -more- Stronger product prices and a more advantageous feedstock mix in the latter part of 1995 helped to increase the refinery product spread to $3.47 per barrel for the full year from just $2.89 per barrel for the first six months. The 1995 spread represented a 9 percent drop from the 1994 level of $3.83 per barrel. However, throughput volume rose significantly in the second half of the year due to the improved margins and feedstock mix, resulting in a 10 percent increase in throughput for full-year 1995. The R&M segment benefited from key initiatives to enhance profitability. The vacuum tower that went into operation in December 1994 raised the refinery product spread approximately $.80 per barrel from what it otherwise would have been. The segment also began to benefit from expansion of its Alaska retail gasoline market share, which grew from 29 percent in 1994 to 43 percent at year-end 1995, along with product shipments to the Russian Far East. A larger impact from these initiatives is expected in 1996. The company's Marine Services segment, which includes operations previously reported as Oil Field Supply and Distribution, was the only business area that did not achieve significant improvements in its fundamental performance during 1995. This segment recorded a $4.4 million loss, compared with a loss of $2.3 million in 1994. "During the latter part of 1995, we initiated a restructuring that will refocus these operations, including the sale or closure of unprofitable sites and the merger of the remaining assets with Coastwide Energy Services into a new Marine Services segment, which we expect to complete in February," Smith said. "This newly consolidated segment should achieve a strong market share along the western Gulf Coast, with considerable efficiencies, resulting in a lean and very profitable business." For the fourth quarter of 1995, earnings applicable to common stock were $8.6 million, or $.35 per share, compared with $15.3 million, or $.61 per share, in the 1994 quarter. The 1995 fourth quarter results were negatively impacted by a non-cash extraordinary charge of $2.9 million for the early retirement of debt, while the 1994 quarter benefited from an $8.5 million refund from settlement of an R&M tariff issue, partially offset by charges of approximately $4 million related to environmental contingencies and other matters. Fourth-quarter operating profit was $20.6 million, compared with $27.3 million in the 1994 quarter. In addition to the tariff issue, the 1994 fourth-quarter operating results benefited from Tennessee Gas Pipeline Company's election to take higher volumes of gas under its contract to make up for reduced takes during 1994's third quarter. Tesoro Petroleum Corporation is a natural resource company engaged in natural gas exploration and production, petroleum refining and marketing, and wholesale marketing of fuel and lubricants. -30-
TESORO PETROLEUM CORPORATION FINANCIAL AND OPERATING DATA (CONDENSED AND UNAUDITED) (In millions except per unit amounts) Three Months Ended Years Ended December 31, December 31, ------------------ ------------------ 1995 1994 1995 1994 BUSINESS SEGMENT DATA Gross Operating Revenues Refining and Marketing: Refined products . . . . . . . . . . . . . . . . . . $ 164.9 151.9 664.5 582.7 Other, including crude oil resales and merchandise . 17.4 11.5 106.5 104.3 Exploration and Production: U.S. oil and gas . . . . . . . . . . . . . . . . 23.8 31.6 107.3 87.5 U.S. gas transportation . . . . . . . . . . . . 1.5 1.2 5.7 3.1 Bolivia. . . . . . . . . . . . . . . . . . . . . . . 2.6 3.1 11.7 13.2 Marine Services . . . . . . . . . . . . . . . . . . . 17.6 19.5 74.5 77.9 -------- -------- -------- -------- Total Gross Operating Revenues . . . . . . . . . . . $ 227.8 218.8 970.2 868.7 ======== ======== ======== ======== Summary of Operations Segment Operating Profit (Loss): Refining and Marketing . . . . . . . . . . . . . . . $ 5.2 6.1 .7 2.4 Exploration and Production: U.S. oil and gas. . . . . . . . . . . . . . . . 14.6 18.6 96.9 52.1 U.S. gas transportation . . . . . . . . . . . . . . 1.3 1.2 5.1 2.9 Bolivia . . . . . . . . . . . . . . . . . . . . . . 1.4 1.9 7.6 9.3 Marine Services. . . . . . . . . . . . . . . . . . . ( 1.9) ( .5) ( 4.4) ( 2.3) -------- -------- -------- -------- Total Segment Operating Profit. . . . . . . . . . . 20.6 27.3 105.9 64.4 Corporate and Unallocated Costs: General and administrative expenses. . . . . . . . . 4.0 4.2 16.4 14.7 Interest expense . . . . . . . . . . . . . . . . . . 4.8 4.7 20.9 18.7 Interest income . . . . . . . . . . . . . . . . . . ( 1.2) ( .9) ( 1.8) ( 2.5) Other . . . . . . . . . . . . .9 2.0 8.5 7.4 -------- -------- -------- -------- Earnings Before Income Taxes and Extraordinary Item . 12.1 17.3 61.9 26.1 Income Tax Provision. . . . . . . . . . . . . . . . . .6 2.0 4.4 5.6 -------- -------- -------- -------- Earnings Before Extraordinary Item . . . . . . . . . 11.5 15.3 57.5 20.5 Extraordinary Loss on Extinguishment of Debt. . . . . ( 2.9) - ( 2.9) ( 4.8) -------- -------- -------- -------- Net Earnings. . . . . . . . . . . . . . . . . . . . . 8.6 15.3 54.6 15.7 Dividend Requirements on Preferred Stock. . . . . . . - - - 2.7 -------- -------- -------- -------- Net Earnings Applicable to Common Stock . . . . . . . $ 8.6 15.3 54.6 13.0 ======== ======== ======== ======== Average Outstanding Common & Common Equivalent Shares . . . . . . . . . . . . . . . . . . 25.0 25.0 25.1 23.2 ======== ======== ======== ======== Earnings Per Share Earnings Before Extraordinary Item. . . . . . . . . . $ .46 .61 2.29 .77 Extraordinary Loss on Extinguishment of Debt. . . . . ( .11) - ( .11) ( .21) -------- -------- -------- -------- Net Earnings . . . . . . . . . . . . . . . . . . . . $ .35 .61 2.18 .56 ======== ======== ======== ======== Depreciation, Depletion and Amortization Refining and Marketing . . . . . . . . . . . . . . . $ 3.1 2.6 11.9 10.4 Exploration and Production: U.S. oil and gas . . . . . . . . . . . . . . . . . . 6.2 9.1 29.0 24.1 U.S. gas transportation. . . . . . . . . . . . . . . .1 .1 .3 .2 Bolivia. . . . . . . . . . . . . . . . . . . . . . . .3 - .3 - Marine Services and Other . . . . . . . . . . . . . . .1 .3 1.1 1.3 -------- -------- -------- -------- Total Depreciation, Depletion and Amortization . . . $ 9.8 12.1 42.6 36.0 ======== ======== ======== ======== Capital Expenditures Refining and Marketing . . . . . . . . . . . . . . . $ 2.1 9.1 9.3 32.0 Exploration and Production: U.S. oil and gas . . . . . . . . . . . . . . . . . . 8.7 16.7 49.4 60.4 U.S. gas transportation. . . . . . . . . . . . . . . .1 .1 .2 5.2 Bolivia. . . . . . . . . . . . . . . . . . . . . . . 3.8 - 3.8 - Marine Services and Other . . . . . . . . . . . . . . .3 .4 1.2 2.0 -------- -------- -------- -------- Total Capital Expenditures . . . . . . . . . . . . . $ 15.0 26.3 63.9 99.6 ======== ======== ======== ======== REFINING AND MARKETING Refinery Throughput: Barrels per day . . . . . . . . . . . . . . . . . . . 52,092 49,775 50,569 46,032 % Alaska North Slope crude oil. . . . . . . . . . . . 65% 60% 68% 59% Refinery Production (Bbls/day): Gasoline. . . . . . . . . . . . . . . . . . . . . . . 14,385 13,306 14,298 11,728 Middle distillates. . . . . . . . . . . . . . . . . . 22,151 19,489 21,140 18,839 Heavy oils and residual product . . . . . . . . . . . 15,222 16,615 14,516 15,118 Refinery fuel . . . . . . . . . . . . . . . . . . . . 1,785 1,846 2,042 1,776 -------- -------- -------- -------- Total Refinery Production . . . . . . . . . . . . . 53,543 51,256 51,996 47,461 ======== ======== ======== ======== Refinery Operations - Product Spread ($/Bbl): Yield value of products manufactured - Gasoline . . . . . . . . . . . . . . . . . . . . . . $ 25.46 27.91 25.39 25.88 Middle distillates . . . . . . . . . . . . . . . . . $ 25.33 25.20 24.13 23.94 Heavy oils and residual product. . . . . . . . . . . $ 9.41 9.01 9.37 8.23 Average yield value of products manufactured. . . . . $ 20.89 20.72 20.35 19.48 Cost of raw materials . . . . . . . . . . . . . . . . 16.15 16.38 16.88 15.65 -------- -------- -------- -------- Product Spread. . . . . . . . .. . . . . . . . . . . 4.74 4.34 3.47 3.83 Operating costs. . . . . . . . .. . . . . . . . . . . 2.52 2.69 2.55 2.61 Depreciation . . . . . . . . . .. . . . . . . . . . . .50 .45 .51 .45 -------- -------- -------- -------- Net Refinery Margin . . . . . .. . . . . . . . . . . $ 1.72 1.20 .41 .77 ======== ======== ======== ======== Total Product Sales (Bbls/day): Gasoline. . . . . . . . . . . . . . . . . . . . . . . 21,451 21,970 24,526 23,191 Middle distillates. . . . . . . . . . . . . . . . . . 37,085 33,131 37,988 33,256 Heavy oils and residual product . . . . . . . . . . . 15,737 14,311 14,787 14,228 -------- -------- -------- -------- Total Product Sales Volumes. . . . . . . . . . . . . 74,273 69,412 77,301 70,675 ======== ======== ======== ======== Gross Margin - Merchandise & Other ($ millions). . . . $ 3.0 3.4 12.3 13.1 ======== ======== ======== ======== EXPLORATION AND PRODUCTION United States Natural Gas production, net (Mcf/day): Spot market and other. . . . . . . . . . . . . . . . 82,929 90,009 94,668 65,841 Tennessee Gas contract . . . . . . . . . . . . . 15,367 26,353 19,822 17,955 -------- -------- -------- -------- Total Production . . . . . . . . . . . . . . . . 98,296 116,362 114,490 83,796 ======== ======== ======== ======== Average natural gas sales price ($/Mcf): Spot market . . . . . . . . . . . . . . . . . . $ 1.51 1.43 1.34 1.48 Tennessee Gas contract . . . . . . . . . . . . . $ 8.64 8.13 8.41 7.93 Average. . . . . . . . . . . . . . . . . . . . . . . $ 2.63 2.94 2.57 2.86 Production cost ($/Mcf) . . . . . . . . . . . . . $ .25 .28 .29 .29 Total operating expense ($/Mcf) . . . . . . . . . . . $ .32 .36 .35 .37 Depletion ($/Mcf) . . . . . . . . . . . . . . . . . . $ .69 .85 .69 .79 Bolivia Natural gas: Production, net (Mcf/day). . . . . . . . . . . . . . 17,388 21,551 18,650 22,082 Sales price ($/Mcf). . . . . . . . . . . . . . . . . $ 1.25 1.14 1.28 1.20 Crude oil (condensate): Production, net (Bbls/day) . . . . . . . . . . . . . 503 702 567 733 Sales price ($/Bbl). . . . . . . . . . . . . . . . . $ 14.22 13.67 14.39 13.28 Production cost ($/NeMcf) . . . . . . . . . . . . . . $ .07 .07 .07 .06 Total operating expense ($/NeMcf) . . . . . . . . . . $ .56 .50 .48 .41 EBITDA, CONSOLIDATED ($ millions) . . . . . . . . . $ 26.7 34.1 125.4 80.8 Amounts previously reported have been changed to conform with the current presentation. Operating profit from the Exploration and Production segment for the year ended December 31, 1995 included a gain of approximately $33 million from the sale of certain interests in the Bob West Field. As previously disclosed, the Company is involved in litigation with Tennessee Gas Pipeline Company. Includes effects of the Company's natural gas price swaps which amounted to a gain of $.01 per Mcf for both the 1995 and 1994 years and a loss of $.09 per Mcf and gain of $.03 per Mcf for the three months ended December 31, 1995 and 1994, respectively. EBITDA represents earnings before extraordinary loss, interest expense, income taxes and depreciation, depletion and amortization. EDITDA, while not purporting to reflect any measure of the Company's operations or cash flow, is presented for additional analysis.
EX-20.2 3 JANUARY 30, 1996 PRESS RELEASE OF RESERVES AND BUDGET FOR IMMEDIATE RELEASE Contact: Greg Wright (210) 283-2440 TESORO'S RESERVES AND 1996 CAPITAL BUDGET ANNOUNCED San Antonio, Texas -- Jan. 30, 1996 -- Tesoro Petroleum Corporation (NYSE:TSO) today announced its Exploration & Production (E&P) segment added natural gas reserves at about double its total production level during 1995, although year-end proved reserves were lower due to property sales. The company also announced its 1996 capital budget, the bulk of which is directed at E&P. In 1995, Tesoro added 96 billion cubic feet-equivalent (Bcfe) of proved reserves, virtually all of which were natural gas in south Texas. These additions, including revisions of prior estimates, replaced 193 percent of overall net production of 49.8 Bcfe, of which 8 Bcfe were produced in Bolivia. Focusing on Tesoro's south Texas operations, the company replaced 230 percent of net domestic production, which totaled 41.8 Bcfe during 1995. Without revisions, Tesoro added 50.2 Bcfe of domestic proved reserves, for a 120 percent domestic replacement rate. Tesoro's domestic proved reserve additions in 1995 were achieved at low cost, bringing its three-year finding cost to $.70 per thousand cubic feet-equivalent, which is among the lowest in the industry. These additions were realized with an 85 percent domestic drilling-success rate during 1995, reflecting 100 percent success on 17 development wells (9.71 net) and 56 percent success on nine exploratory wells (3.63 net). For the year, Tesoro's net proved domestic reserves declined 18 percent due to the recent sale of certain Bob West field interests, which accounted for approximately 77 Bcfe of net proved reserves. Tesoro ended the year with 106.4 Bcfe of domestic net proved reserves, compared with 129.1 Bcfe at year-end 1994. "Our domestic drilling program had a very successful year," Tesoro E&P President Robert Oliver said. "Even though we sold properties containing about 77 Bcfe and produced about 42 Bcfe, our year-end domestic reserves were down less than 23 Bcfe. Looking ahead, we expect to derive significant benefits from the recent sale of some of our Bob West field interests. Aside from greatly strengthening our financial position, proceeds from the sale are enabling us to move forward with -more- high-potential drilling opportunities outside the Bob West field. During 1995, on a minimal exploration budget of less than $8 million, we participated in nine exploratory wells in other parts of south Texas, with a 56 percent success rate. Included in these numbers is our Longoria No.1 well, which represents a major new discovery that we named the Tea Jay field. We expect to accelerate this domestic drilling program in 1996." Oliver noted that potentially major enhancements also are on the horizon for Tesoro's Bolivian operations. Passage of a new hydrocarbons law in Bolivia, expected by mid-year, would significantly boost Tesoro's proved reserves due solely to a resulting extension of the company's contracts of operation. In addition, proposed pipeline projects in the region are moving forward, which would open up significant new markets for Tesoro's production. "We have discovered five fields on our 1.3 million acres under contract in Bolivia, with another prospect currently drilling," Oliver said. "Two of these fields are shut in and the other three could produce at much higher levels if we had access to sufficient markets. We fully expect our Bolivian operations to go from being a static asset to a very dynamic asset within the next few years." Tesoro completed one well (.73 net) in Bolivia during 1995, discovering the new Palo Marcado natural gas field, which has estimated gross potential reserves of more than 250 Bcfe. However, until the new hydrocarbon law is approved and the contracts are extended, no proved reserves can be attributable to this success. As a result, Tesoro's Bolivian reserves fell 8 percent to 98.0 Bcfe from year-end 1994. Capital Expenditures Tesoro plans company-wide 1996 capital expenditures of approximately $51 million, compared with $64 million in 1995. The E&P segment accounts for almost $41 million, or 80 percent, of the budgeted expenditures, compared with $53 million, or 84 percent, in 1995. Spending for Tesoro's Refining & Marketing (R&M) segment in 1996 is expected to be approximately $9 million, about the same as in 1995. The E&P segment's 1995 capital expenditures included $49 million for domestic operations and $4 million in Bolivia. The 1996 E&P budget calls for $36 million of domestic expenditures and approximately $5 million in Bolivia, where the current drilling program includes two exploratory -more- wells, one of which is now drilling. Planned domestic expenditures include $21 million for exploration, development and acquisition outside the Bob West field, reflecting a 100 percent increase. Expenditures for Bob West field development, on the other hand, are budgeted at $15 million, down from about $39 million in 1995. Tesoro expects to substantially complete its development of this field during 1996. "Our drilling focus has definitely shifted away from the development of this one field, which accounted for 80 percent of domestic E&P capital spending in 1995 but only 40 percent of planned 1996 expenditures," Oliver said. "However, we plan to remain in the same general area of south Texas within the Wilcox trend, capitalizing on the expertise we've developed in the region. The outstanding exploratory success we recorded during 1995 gives us additional confidence in the drilling prospects we have targeted for 1996." Approximately 15 percent of the R&M segment's $9 million 1996 capital budget is earmarked for the installation of facilities that will allow the company to begin producing and marketing asphalt in Alaska, where Tesoro hopes to capture a 20 percent market share by year-end. The remainder of the planned expenditures is targeted primarily toward maintenance and upgrades at Tesoro's refinery and 7-Eleven convenience stores in Alaska, roughly the same as in 1995. Tesoro Petroleum Corporation is a natural resource company engaged in natural gas exploration and production, petroleum refining and marketing, and wholesale marketing of fuel and lubricants. -30- -----END PRIVACY-ENHANCED MESSAGE-----