-----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, QJ6Yi+7qDTF9J7GZv3aeM0Ub4DftwWrB+gkOod3W8UCP1r8cMWqSAQ2w5gQEvjMi xvB34gXVbkVr8eP4wsZTIA== 0000060512-96-000008.txt : 19960814 0000060512-96-000008.hdr.sgml : 19960814 ACCESSION NUMBER: 0000060512-96-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LOUISIANA LAND & EXPLORATION CO CENTRAL INDEX KEY: 0000060512 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 720244700 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-00959 FILM NUMBER: 96609535 BUSINESS ADDRESS: STREET 1: 909 POYDRAS ST CITY: NEW ORLEANS STATE: LA ZIP: 70112 BUSINESS PHONE: 5045666500 MAIL ADDRESS: STREET 1: P O BOX 60350 CITY: NEW ORLEANS STATE: LA ZIP: 70160 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended JUNE 30, 1996 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 1-959 THE LOUISIANA LAND AND EXPLORATION COMPANY Exact name of registrant as specified in its charter MARYLAND 72-0244700 State or other jurisdiction of I.R.S. Employer incorporation or organization Identification No. 909 POYDRAS STREET, NEW ORLEANS, LA. 70112 Address of principal executive offices Zip Code Registrant's telephone number, including area code 504-566-6500 NO CHANGE Former name, former address and former fiscal year, if changed since last report 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 . Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Outstanding at Class August 1, 1996 CAPITAL STOCK, $.15 PAR VALUE 34,138,709 SHARES THE LOUISIANA LAND AND EXPLORATION COMPANY INDEX Page Number _________________________________________________________________ PART I. FINANCIAL INFORMATION: Item 1. Financial Statements: (The June 30, 1996 and 1995 consolidated financial state- ments included in this filing on Form 10-Q have been reviewed by KPMG Peat Marwick LLP, independent auditors, in accordance with established professional standards and procedures for such a review. The report of KPMG Peat Marwick LLP commenting upon their review is included herein.) Consolidated Balance Sheets - June 30, 1996 and December 31, 1995............................. 3 Consolidated Statements of Earnings - three months and six months ended June 30, 1996 and 1995... 4 Consolidated Statements of Cash Flows - six months ended June 30, 1996 and 1995.................. 5 Notes to Consolidated Financial Statements........ 6-7 Independent Auditors' Review Report............... 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............................... 9-12 Petroleum Segment Information......................... 13 Operating Data........................................ 14-15 Part II. OTHER INFORMATION: Item 6. Exhibits and Reports on Form 8-K............ 16 Part I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. THE LOUISIANA LAND AND EXPLORATION COMPANY CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Millions of dollars) June 30, December 31, ASSETS 1996 1995 _____________________________________________________________________________________ CURRENT ASSETS: Cash, including cash equivalents (June 30, 1996-$3.0; December 31, 1995-$1.0) $ 11.7 10.3 Accounts and notes receivable, principally trade 132.5 143.6 Income taxes receivable .5 .2 Inventories 43.0 38.7 Prepaid expenses 14.2 12.9 Deferred income taxes .9 .9 _____________________________________________________________________________________ TOTAL CURRENT ASSETS 202.8 206.6 _____________________________________________________________________________________ Investments in affiliates 15.1 19.9 Property, plant and equipment 3,185.9 3,120.9 Less accumulated depletion, depreciation and amortization (1,981.5) (1,913.3) _____________________________________________________________________________________ NET PROPERTY, PLANT AND EQUIPMENT 1,204.4 1,207.6 _____________________________________________________________________________________ Other assets 33.0 33.6 _____________________________________________________________________________________ $ 1,455.3 1,467.7 _____________________________________________________________________________________ LIABILITIES AND STOCKHOLDERS' EQUITY _____________________________________________________________________________________ CURRENT LIABILITIES: Accounts payable and accrued expenses 208.1 199.8 Income taxes payable 6.4 .8 _____________________________________________________________________________________ TOTAL CURRENT LIABILITIES 214.5 200.6 _____________________________________________________________________________________ Deferred income taxes 62.2 49.6 Long-term debt 592.4 691.6 Other liabilities 158.5 155.2 _____________________________________________________________________________________ STOCKHOLDERS' EQUITY: Capital stock 5.1 5.0 Additional paid-in capital 36.8 14.8 Retained earnings 386.5 352.8 _____________________________________________________________________________________ 428.4 372.6 Loans to ESOP (.7) (1.9) _____________________________________________________________________________________ TOTAL STOCKHOLDERS' EQUITY 427.7 370.7 _____________________________________________________________________________________ $ 1,455.3 1,467.7 _____________________________________________________________________________________ See accompanying notes to consolidated financial statements.
THE LOUISIANA LAND AND EXPLORATION COMPANY CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) (Millions, except per share data)
Three months ended Six months ended June 30, June 30, 1996 1995 1996 1995 _____________________________________________________________________________________ REVENUES: Oil and gas $135.8 115.3 283.5 224.4 Refined products 110.2 93.2 225.0 175.4 Gain on sale of oil and gas properties .3 2.2 .3 2.2 Other 1.1 2.4 4.8 4.2 _____________________________________________________________________________________ 247.4 213.1 513.6 406.2 _____________________________________________________________________________________ COSTS AND EXPENSES: Lease operating and facility expenses 27.9 29.9 57.9 59.4 Refinery cost of sales and operating expenses 101.7 91.8 216.1 171.4 Dry holes and exploratory charges 21.8 16.9 43.3 32.1 Depletion, depreciation and amortization 44.6 39.0 88.1 75.9 Taxes, other than on earnings 6.3 6.3 12.5 12.7 General, administrative and other expenses 9.7 9.8 19.3 20.5 Interest and debt expenses 8.9 9.6 18.1 19.0 _____________________________________________________________________________________ 220.9 203.3 455.3 391.0 _____________________________________________________________________________________ Earnings before income taxes 26.5 9.8 58.3 15.2 Income tax expense 9.3 3.4 20.5 5.3 _____________________________________________________________________________________ NET EARNINGS $ 17.2 6.4 37.8 9.9 _____________________________________________________________________________________ EARNINGS PER SHARE $ 0.50 0.19 1.11 0.30 _____________________________________________________________________________________ AVERAGE SHARES 34.2 33.5 34.0 33.5 _____________________________________________________________________________________ CASH DIVIDENDS PER SHARE $ 0.06 0.06 0.12 0.12 _____________________________________________________________________________________ See accompanying notes to consolidated financial statements.
THE LOUISIANA LAND AND EXPLORATION COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Millions of dollars)
Six months ended June 30, 1996 1995 _____________________________________________________________________________________ CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 37.8 9.9 Adjustments to reconcile to cash flows from operations: Gain on sale of oil and gas properties (.3) (2.2) Depletion, depreciation and amortization 88.1 75.9 Deferred income taxes 12.6 - Dry holes and impairment charges 22.3 18.0 Other 6.1 .9 _____________________________________________________________________________________ 166.6 102.5 Changes in operating assets and liabilities: Net decrease in receivables 10.4 17.2 Net (increase) decrease in inventories (4.3) 6.4 Net (increase) decrease in prepaid items (1.3) 2.0 Net increase (decrease) in payables 7.8 (28.6) Other (2.1) (.3) _____________________________________________________________________________________ NET CASH FLOWS FROM OPERATING ACTIVITIES 177.1 99.2 _____________________________________________________________________________________ CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (99.7) (101.6) Proceeds from asset sales .5 6.3 Other .5 (6.1) _____________________________________________________________________________________ NET CASH FLOWS FROM INVESTING ACTIVITIES (98.7) (101.4) _____________________________________________________________________________________ CASH FLOWS FROM FINANCING ACTIVITIES: Additions to long-term debt - 29.1 Repayments of long-term debt (99.2) (32.6) Advances against cash surrender value 9.6 9.0 Dividends (4.1) (4.0) Repayment of loans to ESOP 1.2 1.7 Other 15.5 (4.8) _____________________________________________________________________________________ NET CASH FLOWS FROM FINANCING ACTIVITIES (77.0) (1.6) _____________________________________________________________________________________ INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 1.4 (3.8) _____________________________________________________________________________________ See accompanying notes to consolidated financial statements.
THE LOUISIANA LAND AND EXPLORATION COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position as of June 30, 1996, and the results of operations and cash flows for the three-month and six-month periods ended June 30, 1996 and 1995. Maryland General Corporate Law was amended whereby repurchased stock of a corporation constitutes authorized but unissued stock rather than treasury stock. Accordingly, effective January 1, 1994, the par value of treasury stock ($.7 million) has been reclassed as a reduction of capital stock issued. The cost of treasury stock in excess of par value has been charged to additional paid-in capital($81.5 million), to the extent avaliable, and the balance ($82.2 million) has been charged to retained earnings. All capital stock transactions subsequent to Janaury 1, 1994 are reflected as either issuances or retirements of capital stock. This change in the law had no effect on total stockholders' equity. 2. For the three months ended June 30, 1996 and 1995, interest costs incurred were $11.8 million and $14.0 million, respectively, of which $2.9 million and $4.4 million, respectively, were capitalized as part of the cost of property, plant and equipment. For the six months ended June 30, 1996 and 1995, interest costs incurred were $24.4 million and $27.6 million, respectively, of which $6.3 million and $8.6 million, respectively, were capitalized as part of the cost of property, plant and equipment. 3. Earnings per share are calculated on the weighted average number of shares outstanding during each period for capital stock and, when dilutive, capital stock equivalents, which assumes exercise of stock options. 4. In accordance with Regulation S-X, Rule 3-09, the audited consolidated financial statements of the Company's 50%-owned affiliate, MaraLou Netherlands Partnership (MaraLou) and its wholly-owned consolidated subsidiary, CLAM Petroleum Company (CLAM), were filed with the Company's Annual Report on Form 10-K for the year ended December 31, 1995. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Accordingly, the following unaudited summarized consolidated income statement information for MaraLou and its consolidated subsidiary, CLAM, for the three-month and six-month periods ended June 30, 1996 and 1995 are presented in accordance with Regulation S-X, Rule 10-01(b).
(Unaudited) Three months ended Six months ended June 30, June 30, 1996 1995 1996 1995 ________________________________________________________________________________ Gross revenues $ 21.4 20.7 53.1 45.7 ________________________________________________________________________________ Operating profit 7.4 7.8 24.3 20.3 ________________________________________________________________________________ Net earnings 3.8 2.8 11.8 8.2 ________________________________________________________________________________
5. The Company has been notified by the U.S. Environmental Protection Agency that it is one of many Potentially Responsible Parties (PRP) with respect to certain National Priorities List sites. Based on its evaluation of the potential total cleanup costs, its estimate of its potential exposure, and the viability of the other PRP's, the Company believes that any costs ultimately required to be borne by it at these sites will not have a material adverse effect on the results of operations, cash flow or financial position of the Company. The Company is subject to other legal proceedings, claims and liabilities which arise in the ordinary course of its business. In the opinion of Management, the amount of ultimate liability with respect to these actions will not have a material adverse effect on results of operations, cash flow or financial position of the Company. INDEPENDENT AUDITORS' REVIEW REPORT The Board of Directors The Louisiana Land and Exploration Company: We have reviewed the consolidated balance sheet of The Louisiana Land and Exploration Company and subsidiaries as of June 30, 1996, and the related consolidated statements of earnings and cash flows for the three-month and six-month periods ended June 30, 1996 and 1995. These consolidated financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of The Louisiana Land and Exploration Company and subsidiaries as of December 31, 1995, and the related consolidated statements of earnings, stockholders' equity, and cash flows for the year then ended (not presented herein); and in our report dated February 2, 1996, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 1995, is fairly presented, in all material respects, in relation to the consolidated balance sheet from which it has been derived. /KPMG PEAT MARWICK LLP KPMG PEAT MARWICK LLP New Orleans, Louisiana August 9, 1996 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. REVIEW OF OPERATIONS Second quarter and first half 1996 net earnings totaled $17.2 million and $37.8 million, respectively, up significantly from the net earnings of $6.4 million and $9.9 million for the respective 1995 periods. Both 1995 periods benefitted from after-tax gains from the sales of oil and gas properties of approximately $1.4 million. The improvement in 1996 net earnings was primarily attributable to higher natural gas prices and volumes, and higher refinery operating profits. OIL AND GAS OPERATIONS Revenues from the Company's oil and gas operations for the second quarter of 1996 were up $21 million from the second quarter of 1995. Natural gas revenues were up almost $19 million as a result of higher prices ($14 million) and deliveries ($5 million). Liquids revenues were up $2 million primarily due to higher crude oil volumes. In the first half of 1996 revenues from the Company's oil and gas operations were up $59 million from the comparable 1995 period. Natural gas revenues were up $55 million as a result of higher prices ($45 million) and deliveries ($10 million). Liquids revenues were up $4 million as a result of higher crude oil prices ($7 million), which more than offset the effect of reduced volumes ($1 million). Crude oil volumes in the second quarter increased 1200 barrels per day (BPD) from the 1995 quarter. However, in the first half of 1996, volumes declined 600 barrels per day from the comparable 1995 period. Domestic and North Sea operations were up 1100 BPD and 400 BPD, respectively, in the second quarter and down 300 BPD and 500 BPD, respectively, in the first half. New wells onstream at south Louisiana and Brae Complex properties contributed significantly to Domestic and North Sea volumes for both 1996 periods. However, natural production declines at mature properties and downtime due to drilling, maintenance and repair activities partially offset these production increases in the second quarter and resulted in decreases for the 1996 first half. Volumes from other foreign operations in 1996 benefitted from new wells coming onstream in mid-1995 from the KAKAP concession, offshore Indonesia. However, this production from new wells was offset by the effect of the 1995 sale of the Company's Canadian properties. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. (CONTINUED) Natural gas deliveries were up 33 million and 35 million cubic feet per day in the second quarter and first half of 1996, respectively, due to higher domestic and North Sea production. Domestic deliveries were up due to new wells onstream, the return to production of wells shut-in for repairs and maintenance, and weather-related demand for natural gas which resulted in the return to production of domestic wells voluntarily curtailed during the 1995 periods due to low prices. The higher domestic deliveries were partially offset by the effects of natural declines at mature producing properties and wells shut-in during 1996 for repairs and maintenance. North Sea deliveries were up in both periods due to increased demand caused by colder than normal weather. Also, contributing to the increases, were higher volumes from the Company's 50%-owned affiliate, CLAM Petroleum Company. Other foreign production, reflecting the sale of the Company's Canadian properties, was down in both 1996 periods. Lease operating and facility expenses were down in both 1996 periods as reductions in operating costs and second quarter workover costs offset higher facilities expenses. Depletion, depreciation and amortization (DD&A) was up $6 million and $12 million in the 1996 second quarter and first half, respectively, as a result of DD&A associated with new wells onstream. Dry holes and exploratory charges increased in both 1996 periods due primarily to the write-off of unsuccessful exploratory wells and higher seismic costs incurred. General, administrative and other expenses were down due to the Company's continuing efforts to minimize expenses. Interest and debt expenses were lower in both periods as a decline in interest incurred on a lower debt level was partially offset by reduced interest capitalized on qualifying projects. REFINING OPERATIONS Refining operations resulted in a $7.8 million pretax operating profit for the second quarter of 1996, which was up significantly from the $.4 million pretax operating profit reported in the comparable 1995 quarter. The favorable impact of higher sales volumes ($17 million) more than offset the effect of higher crude oil feedstock costs ($9 million) and operating expenses ($1 million). For the first half of 1996, refining operations resulted in a $7.5 million pretax operating profit, which was up significantly from the $1.8 million pretax operating profit reported in the comparable 1995 period. Higher sales volumes ($44 million) and product prices ($4 million) more than offset the effect of higher crude oil feedstock costs ($40 million) and operating expenses ($3 million). ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. (CONTINUED) LIQUIDITY AND CAPITAL RESOURCES In the first half of 1996, the Company generated approximately $177 million in cash from operations which, along with available cash, was used for capital projects ($100 million), repayment of long-term debt ($99 million) and dividends ($4 million). In 1995, the Company initiated a hedging program designed to minimize the price risks associated with future natural gas and crude oil production. This program utilizes futures, forwards, options and swap contracts in series of transactions designed to set a floor price for future production and at the same time allow the Company to participate in market price increases above a set level over the floor price. At June 30, 1996, approximately 48 trillion British Thermal Units (BTU) of domestic gas production for the remainder of 1996 were covered by a series of transactions designed to set an average floor price of $1.79 per million BTU and at the same time allow the Company to participate in natural gas price increases above the floor price and outside of specific ranges. The Company's non-participation in price increases above the floor price was limited to $0.19 per million BTU. For 1997, approximately 90 trillion BTU of domestic gas production were similarly hedged at an average floor price of $1.84 per million BTU with the Company's non- participation in price increases above the floor price limited to $0.17 per million BTU. While these transactions have no carrying value, their fair value, represented by the estimated amount that would be required to terminate the contracts, were net costs of $6.1 million for the 1996 hedges and $1.2 million for the 1997 hedges. (The Company estimates that its domestic natural gas production averages approximately 1.07 million BTU for each thousand cubic feet.) In addition, approximately 6.9 million barrels of the Company's worldwide 1996 crude oil production for the remainder of 1996 were similarly hedged at an average floor price of $18.03 per barrel with the Company's non-participation in price increases above the floor price limited to $1.29 per barrel. These transactions also do not have carrying values, but their fair value at June 30, 1996 amounted to a net benefit of $.8 million. On June 28, 1996, the Company amended its $450 million revolving credit agreement with a syndicate of banks to reduce the banks' commitments to $350 million, extend the maturity for one year to June 30, 2001, reduce interest rates and fees and improve other terms and conditions favorable to the Company. Effective July 31, 1996, the Company completed the sale of its crude oil refinery and terminal near Mobile, Alabama for a pretax gain of approximately $2 million. The proceeds from the sale of the refinery and associated inventories were used to reduce long-term debt by approximately $70 million. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. (CONTINUED) The Company expects to fund its 1996 expenditures, including an increased level of capital and exploration expenditures of approximately $240 million, primarily from operating cash flows. The Company's expenditures are continually reviewed, and revised as necessary, based on perceived current and long-term economic conditions. CAPITAL STOCK, DIVIDENDS AND OTHER MARKET DATA As more fully discussed in Note 14 of "Notes to Consolidated Financial Statements" in the Company's 1995 Annual Report to Shareholders, the Company's Board of Directors in 1986 declared a dividend to shareholders consisting of Capital Stock Purchase Rights ("Rights") issued under the Shareholder Rights Agreement ("Agreement") to protect shareholders. At its regularly scheduled meeting held on May 9, 1996, the Board of Directors has amended and restated the terms of the Agreement to extend the expiration date to June 6, 2006, increase the exercise price of Rights to $175, lower the ownership threshold at which Rights become exercisable to 20% and eliminate the provision that excluded an all-cash offer made to shareholders for all outstanding shares. NOTE: The accompanying consolidated financial statements and notes thereto included in Item 1. of this Form 10-Q and the petroleum segment information and operating data following this Item 2. are an integral part of this discussion and analysis and should be read in conjunction herewith. THE LOUISIANA LAND AND EXPLORATION COMPANY PETROLEUM SEGMENT INFORMATION (Millions of dollars)
Three months ended Six months ended June 30, June 30, 1996 1995 1996 1995 _____________________________________________________________________________________ Sales to unaffiliated customers: Domestic $207.3 172.8 426.2 325.4 North Sea 33.0 31.4 70.1 66.3 Other foreign 6.0 6.4 12.5 10.2 _____________________________________________________________________________________ 246.3 210.6 508.8 401.9 Interest and other income 1.1 2.5 4.8 4.3 _____________________________________________________________________________________ Total revenues $247.4 213.1 513.6 406.2 _____________________________________________________________________________________ Earnings before income taxes: Operating profit (loss): Domestic 38.7 25.7 80.4 44.4 North Sea 10.0 7.0 22.1 17.4 Other foreign (2.9) (4.5) (7.2) (8.2) _____________________________________________________________________________________ 45.8 28.2 95.3 53.6 Other income (expense), net (19.3) (18.4) (37.0) (38.4) _____________________________________________________________________________________ Earnings before income taxes $ 26.5 9.8 58.3 15.2 _____________________________________________________________________________________ Capital expenditures: Exploration: Domestic 26.0 11.1 43.9 22.8 North Sea .8 .4 .8 .4 Other foreign 4.3 4.3 6.4 8.2 _____________________________________________________________________________________ 31.1 15.8 51.1 31.4 _____________________________________________________________________________________ Development: Domestic 20.9 16.1 31.1 28.4 North Sea 4.3 4.4 10.3 7.1 Other foreign 2.4 3.2 4.8 7.0 _____________________________________________________________________________________ 27.6 23.7 46.2 42.5 _____________________________________________________________________________________ 58.7 39.5 97.3 73.9 Refining and marketing .3 .5 .6 1.6 _____________________________________________________________________________________ 59.0 40.0 97.9 75.5 Capitalized interest 2.9 4.4 6.3 8.6 Other .3 .9 .8 2.4 _____________________________________________________________________________________ $ 62.2 45.3 105.0 86.5 _____________________________________________________________________________________
THE LOUISIANA LAND AND EXPLORATION COMPANY OPERATING DATA
Three months ended Six months ended June 30, June 30, 1996 1995 1996 1995 _____________________________________________________________________________________ OIL AND GAS OPERATIONS1 CRUDE AND CONDENSATE2 Production (thousands of barrels per day): Domestic 21.7 20.6 20.8 21.1 North Sea 16.1 15.7 16.2 16.7 Other foreign 3.9 4.2 3.9 3.6 _____________________________________________________________________________________ 41.7 40.5 40.9 41.4 _____________________________________________________________________________________ Average price received (per barrel): Domestic $19.29 19.13 19.18 18.49 North Sea 18.33 18.30 18.55 17.76 Other foreign 17.40 16.38 17.55 14.93 Consolidated 18.74 18.52 18.77 17.88 _____________________________________________________________________________________ PLANT PRODUCTS Production (thousands of barrels per day): Domestic 2.1 2.9 2.0 3.1 North Sea .9 .9 .9 1.0 _____________________________________________________________________________________ 3.0 3.8 2.9 4.1 _____________________________________________________________________________________ Average price received (per barrel): Domestic $12.53 11.50 12.45 11.37 North Sea 14.26 12.39 15.39 14.26 Consolidated 13.06 11.70 13.37 12.05 _____________________________________________________________________________________ NATURAL GAS Production (millions of cubic feet per day): Domestic 272.1 248.8 263.6 240.8 North Sea 28.3 20.6 33.1 24.0 Other foreign - 2.2 - 2.3 CLAM Petroleum Company 44.3 39.7 52.2 46.6 _____________________________________________________________________________________ 344.7 311.3 348.9 313.7 _____________________________________________________________________________________ Average price received (per MCF): Domestic $ 2.23 1.65 2.54 1.58 North Sea 2.17 2.34 2.19 2.37 Other foreign - .61 - .67 CLAM Petroleum Company 2.64 2.78 2.75 2.61 Consolidated 2.27 1.83 2.54 1.79 _____________________________________________________________________________________ 1 Includes the Company's 50% equity interest in its unconsolidated affiliate, CLAM Petroleum Company. 2 Before the elimination of intercompany transfers.
THE LOUISIANA LAND AND EXPLORATION COMPANY OPERATING DATA (CONTINUED)
Three months ended Six months ended June 30, June 30, 1996 1995 1996 1995 _____________________________________________________________________________________ REFINING OPERATIONS Refining Operating Profit: Revenues: Refined products* $117.9 101.1 239.0 191.6 Other .2 .1 .3 .1 _____________________________________________________________________________________ 118.1 101.2 239.3 191.7 _____________________________________________________________________________________ Cost and expenses: Cost of sales* 98.2 89.6 207.4 167.6 Operating expenses 11.2 10.1 22.7 20.0 Depreciation .5 .4 .9 .8 Taxes, other than income .4 .7 .8 1.5 _____________________________________________________________________________________ 110.3 100.8 231.8 189.9 _____________________________________________________________________________________ $ 7.8 .4 7.5 1.8 _____________________________________________________________________________________ *Before the elimination of intercompany transfers to the Company's refinery $ 7.7 7.9 14.0 16.2 _____________________________________________________________________________________ Sales (thousands of barrels per day) 58.0 49.7 60.6 49.6 _____________________________________________________________________________________ Average price received (per barrel) $22.36 22.33 21.66 21.33 _____________________________________________________________________________________ _____________________________________________________________________________________ GROSS WELLS DRILLED Working Interest Exploratory: Oil 0 1 2 1 Gas 3 1 5 8 Dry 4 3 7 4 _____________________________________________________________________________________ 7 5 14 13 _____________________________________________________________________________________ Development: Oil 5 5 10 7 Gas 2 - 3 2 Dry - - - - _____________________________________________________________________________________ 7 5 13 9 _____________________________________________________________________________________ Total working interest 14 10 27 22 Royalty Interest 5 6 7 11 _____________________________________________________________________________________ Total wells 19 16 34 33 _____________________________________________________________________________________ NET WELLS DRILLED Exploratory: Oil - .4 .7 .4 Gas 1.1 .3 2.1 3.6 Dry 1.6 .7 2.5 1.4 _____________________________________________________________________________________ 2.7 1.4 5.3 5.4 _____________________________________________________________________________________ Development: Oil .5 .5 1.1 .9 Gas 1.0 - 1.5 .5 Dry - - - - _____________________________________________________________________________________ 1.5 .5 2.6 1.4 _____________________________________________________________________________________ Total net wells 4.2 1.9 7.9 6.8 _____________________________________________________________________________________ /TABLE PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits: Exhibit 10(l)(i) - Amendment No. 1 to Credit Agreement dated as of June 8, 1995 Exhibit 27 - Financial Data Schedule (b) Reports on Form 8-K: On May 10, 1996, the Company filed a Current Report on Form 8-K to report the amendment and restatement of the Rights Agreement dated May 25, 1986 between the Company and First Chicago Trust Company of New York, as Successor Rights Agent. 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. THE LOUISIANA LAND AND EXPLORATION COMPANY (REGISTRANT) By: /s/ Jerry D. Carlisle __________________________________________ JERRY D. CARLISLE VICE PRESIDENT AND CONTROLLER (PRINCIPAL ACCOUNTING OFFICER) Dated: August 13, 1996 EX-10 2 EXHIBIT 10(l)(i) Exhibit 10(l)(i) CONFORMED COPY AMENDMENT NO. 1 TO CREDIT AGREEMENT AMENDMENT dated as of June 28, 1996 among THE LOUISIANA LAND AND EXPLORATION COMPANY (the "Borrower"), the BANKS listed on the signature pages hereof (the "Banks"), MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent") and TEXAS COMMERCE BANK NATIONAL ASSOCIATION and NATIONSBANK OF TEXAS, N.A., as Co-Agents. W I T N E S S E T H : WHEREAS, the parties hereto have heretofore entered into a Credit Agreement dated as of June 8, 1995 (the "Agreement"); and WHEREAS, the parties hereto desire to amend certain provisions of the Agreement. NOW, THEREFORE, the parties hereto agree as follows: SECTION 1. Definitions; References. Unless otherwise specifically defined herein, each term used herein that is defined in the Agreement shall have the meaning assigned to such term in the Agreement. Each reference to "hereof", "hereunder", "herein", and "hereby" and each other similar reference and each reference to "this Agreement" and each other similar reference contained in the Agreement shall from and after the date hereof refer to the Agreement as amended hereby. SECTION 2. Amendments to Definitions. Section 1.01 of the Agreement is amended as follows: (a) The definition "Termination Date" is amended by substituting "June 30, 2001" for "June 30, 2000". (b) The definition "Debt" is amended to read as follows: "Debt" of any Person means at any date, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations of such Person to pay the deferred purchase price of property or services, (iv) all obligations of such Person as lessee which are capitalized in accordance with generally accepted accounting principles, (v) all non-contingent obligations (and for purposes of Section 5.12 [Negative Pledge] and the definition of Material Debt [Cross Default], all contingent obligations) of such Person to reimburse any bank or other Person in respect of amounts paid under a letter of credit or similar instrument which remain unpaid for more than five days, (vi) all Debt secured by a Lien on any asset of such Person, whether or not such Debt is otherwise an obligation of such Person (quantified, for purposes hereof, as an amount equal to the lesser of (a) the amount of such Debt and (b) the value (determined as of the last day of the fiscal year most recently ended) of the assets securing such Debt), (vii) all Debt of others Guaranteed by such Person; provided that (x) neither (a) trade or other accounts payable arising in the ordinary course of business nor (b) obligations in respect of insurance policies or performance or surety bonds (including performance or surety bonds in the form of a letter of credit or similar instrument) which are not themselves Guarantees of Debt (nor drafts, acceptances or similar instruments evidencing the same nor obligations in respect of letters of credit or similar instruments supporting the payment of the foregoing) shall constitute Debt, it being understood that any obligation referred to in (b) that is drawn and remains unpaid for more than 90 days shall constitute Debt, except where such obligation is being contested in good faith by appropriate proceedings, (y) the Morgan Gold Loans shall not at any time constitute Debt unless, at such time, for any reason whatsoever, (1) no royalty income shall have accrued under the Royalty Agreement dated as of December 5, 1984 between Copper Range Company, a Michigan Corporation, and the Borrower during the three consecutive fiscal quarters of the Borrower most recently ended prior to such time or (2) any payment required to have been made to the Borrower under such agreement prior to such time shall not have been paid on, or within 30 days after, the date such payment is due and (z) amounts borrowed by the Borrower under life insurance policies issued to the Borrower and covering employees or former employees of the Borrower not in excess of the cash surrender value of such policies shall not constitute Debt of the Borrower. SECTION 3. Amendment of Section 5.12(g) of the Agreement. Section 5.12(g) of the Agreement is amended by replacing $35,000,000 with $75,000,000. SECTION 4. Amendment of Section 9.06(c) of the Agreement. The first sentence of Section 9.06(c) of the Agreement is amended to read as follows: Any Bank may at any time assign to one or more banks or other institutions (each an "Assignee") all, or a ratable portion of all, of its rights and obligations under this Agreement and the Notes, and such Assignee shall assume such rights and obligations, pursuant to an Assignment and Assumption Agreement substantially in the form of Exhibit G hereto executed by such Assignee and such transferor Bank, with (and subject to) the subscribed consent of the Borrower and the Agent, which shall not be unreasonably withheld in the case of an assignment to an Assignee in an amount equivalent to an initial Commitment of not less than $10,000,000; provided that if an Assignee is an affiliate of such transferor Bank no such consent shall be required; and provided further that such assignment may, but need not, include rights of the transferor Bank in respect of outstanding Money Market Loans. SECTION 5. Amendment of Pricing Schedule. The Agreement is further amended by replacing the existing Pricing Schedule attached thereto with the Pricing Schedule attached hereto. SECTION 6. Changes in Commitments. With effect from and including the date this Amendment becomes effective in accordance with Section 10 of this Amendment, the Commitment of each Bank shall be the amount set forth opposite the name of such Bank on the signature pages hereof, as such amount may be reduced from time to time pursuant to Section 2.09 of the Agreement. Any Bank whose Commitment is changed to zero shall upon effectiveness cease to be a Bank party to the Agreement, and all accrued fees and other amounts payable under the Agreement for the account of such Bank shall be due and payable on such date; provided that the provisions of Sections 8.03 and 9.03 shall continue to inure to the benefit of such Bank. SECTION 7. Debt Limit. Prior to a determination pursuant to Section 5.11(b)(ii)(x) of the Agreement on the basis of the initial Reserve Report hereafter delivered pursuant to Section 5.02(a) thereof, and subject to adjustment in accordance with Section 5.11(b)(ii)(y) and 5.11(b)(iii) through (v) of the Agreement, the Debt Limit shall be $620,000,000. SECTION 8. No Other Waivers or Amendments. Except as expressly provided herein, this Amendment shall not operate as a waiver or amendment of any right, power or privilege of the Banks under the Agreement. Except as expressly modified hereby, all of the terms and conditions of the Agreement shall remain unaltered and in full force and effect. SECTION 9. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of New York. SECTION 10. Counterparts; Effectiveness. This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Amendment shall become effective as of the date hereof when the Agent shall have received duly executed counterparts hereof signed by the Borrower and each of the Banks (or, in the case of any party as to which an executed counterpart shall not have been received, the Agent shall have received telegraphic, telex or other written confirmation from such party of execution of a counterpart hereof by such party). PRICING SCHEDULE The "Applicable Margin", "Commitment Fee Rate" and "Facility Fee Rate" for any day are the respective percentages set forth below in the applicable row under the column corresponding to the "Pricing Level" that applies to the Borrower on such day: Level Level Level Level Status I II III IV Applicable Margin 0.20% 0.25% 0.30% 0.50% Commitment Fee Rate 0.0% 0.0% 0.0% 0.0% Facility Fee Rate 0.10% 0.125% 0.15% 0.25% For purposes of this Schedule, the following terms have the following meanings, subject to the further provisions of this Schedule: "Applicable Pricing Rating" means, as to the Borrower at any date, the higher of the ratings assigned to the Borrower by S&P and Moody's at such date; provided that if the difference between such ratings is more than one notch (e.g. more than the difference between A+ and A), the Applicable Pricing Rating will be the median rating between them (or if there is no such median rating, the higher of two intermediate ratings). "Level I Pricing" exists at any date if, at such date, the Applicable Pricing Rating is BBB+ (Baa1) or higher. "Level II Pricing" exists at any date if, at such date, the Applicable Pricing Rating is BBB (Baa2) or higher. "Level III Pricing" exists at any date if, at such date, the Applicable Pricing Rating is BBB- (Baa3) or higher. "Level IV Pricing" exists at any date if, at such date, no other Pricing Level applies. "Pricing Level" refers to the determination of which of Level I, Level II, Level III or Level IV applies at any date. The credit ratings to be utilized for purposes of this Schedule are those assigned to the senior unsecured long-term debt securities of the Borrower without third-party credit enhancement, and any rating assigned to any other debt security of the Borrower shall be disregarded. The rating in effect at any date is that in effect at the close of business of such date. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written. THE LOUISIANA LAND AND EXPLORATION COMPANY By /s/ Suzanne V. Baer Title: Vice President & Treasurer Commitments $30,000,000 MORGAN GUARANTY TRUST COMPANY OF NEW YORK By /s/ Vernon M. Ford, Jr. Title: Vice President $27,000,000 TEXAS COMMERCE BANK NATIONAL ASSOCIATION By /s/ Scott Richardson Title: Vice President $27,000,000 NATIONSBANK OF TEXAS, N.A. By /s/ Paul A. Squires Title: Senior Vice President $21,000,000 UNION BANK OF SWITZERLAND, HOUSTON AGENCY By /s/ Dan O. Boyle Title: Managing Director By /s/ J. Finley Bigerstaff Title: Assistant Treasurer $21,000,000 WACHOVIA BANK OF GEORGIA, N.A. By /s/ David K. Alexander Title: Senior Vice President $14,000,000 ABN AMRO BANK N.V., HOUSTON AGENCY By: ABN AMRO North American, Inc. as agent By /s/ H. Gene Shiels Title: Vice President and Director By /s/ W. Bryan Chapman Title: Vice President and Director $14,000,000 BANK OF MONTREAL By /s/ Natasha Glossop Title: Director, U.S. Corporate Banking $14,000,000 THE BANK OF NEW YORK By /s/ Dennis M. Pidherny Title: Vice President $14,000,000 THE BANK OF NOVA SCOTIA By /s/ F.C.H. Ashby Title: Senior Manager Loan Operations $14,000,000 BANQUE PARIBAS HOUSTON AGENCY By /s/ Barton D. Schouest Title: Group Vice President By /s/ Mark M. Green Title: Vice President $14,000,000 BARCLAYS BANK PLC By /s/ Les Bek Title: Director $14,000,000 CREDIT LYONNAIS CAYMAN ISLAND BRANCH By /s/ Pascal Poupelle Title: Authorized Signature $14,000,000 THE FIRST NATIONAL BANK OF CHICAGO By /s/ Dixon P. Schultz Title: Vice President $14,000,000 FIRST NATIONAL BANK OF COMMERCE By /s/ Nemesio J. Viso Title: Assistant Vice President $14,000,000 HIBERNIA NATIONAL BANK By /s/ Colleen B. Smith Title: Assistant Vice President $-0- MIDLAND BANK PLC, NEW YORK BRANCH By /s/ John A. Cleveland Title: Senior Vice President $14,000,000 THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK BRANCH By /s/ Akijiro Yoshino Title: Executive Vice President $-0- MEESPIERSON N.V. By /s/ Karel Louman Title: Vice President $14,000,000 MELLON BANK, N.A. By /s/ A. Gary Chace Title: Senior Vice President $14,000,000 ROYAL BANK OF CANADA By /s/ Linda M. Stephens Title: Manager $14,000,000 SOCIETE GENERALE, SOUTHWEST AGENCY By /s/ Elizabeth W. Hunter Title: Vice President $14,000,000 TORONTO DOMINION (TEXAS), INC. By /s/ Lisa Allison Title: Vice President $14,000,000 WHITNEY NATIONAL BANK By /s/ Robert L. Browning Title: Senior Vice President MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent By /s/ Vernon M. Ford, Jr. Title: Vice President TEXAS COMMERCE BANK NATIONAL ASSOCIATION, as Co-Agent By /s/ Scott Richardson Title: Vice President NATIONSBANK OF TEXAS, N.A., as Co-Agent By /s/ Paul A. Squires Title: Senior Vice President EX-27 3
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF EARNINGS OF THE LOUISIANA LAND AND EXPLORATION COMPANY AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS DEC-31-1996 JUN-30-1996 11,700 0 133,000 0 43,000 202,800 3,185,900 1,981,500 1,455,300 214,500 592,400 5,100 0 0 422,600 1,455,300 508,500 513,600 0 417,900 19,300 0 18,100 58,300 20,500 37,800 0 0 0 37,800 1.11 1.11 -----END PRIVACY-ENHANCED MESSAGE-----