-----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, P0NU7BXxpai9Oj2L56L6KQEWLE9MaUYHPTzmQ+8Oidh9KMxvYfzg9KAyzKf85IV9 4IiuToLgbcBT4cbIaiJeyQ== 0000071297-94-000052.txt : 19941111 0000071297-94-000052.hdr.sgml : 19941111 ACCESSION NUMBER: 0000071297-94-000052 CONFORMED SUBMISSION TYPE: 35-CERT PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19941110 SROS: BSE SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NEW ENGLAND ELECTRIC SYSTEM CENTRAL INDEX KEY: 0000071297 STANDARD INDUSTRIAL CLASSIFICATION: 4911 IRS NUMBER: 041663060 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 35-CERT SEC ACT: 1935 Act SEC FILE NUMBER: 070-05543 FILM NUMBER: 94558456 BUSINESS ADDRESS: STREET 1: 25 RESEARCH DR CITY: WESTBOROUGH STATE: MA ZIP: 01581 BUSINESS PHONE: 5083669011 35-CERT 1 File Nos. 70-5543/70-6958 70-7055/70-6513 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Report Pursuant to Rule 24 under the Public Utility Holding Company Act of 1935 NEW ENGLAND ELECTRIC SYSTEM (NEES) NEW ENGLAND ENERGY INCORPORATED (NEEI) In accordance with the Orders of the Securities and Exchange Commission dated July 19, 1978, October 22, 1985, October 3, 1991 and December 8, 1987, following is a report for the third quarter of 1994: For the purpose of this report and following the Commission's Order dated October 22, 1985 (Release No. 23873), references herein to "Old Program" relate to that portion of the NEEI oil and gas exploration and development program which consists of prospects entered into through December 31, 1983. Likewise, references to "New Program" relate to prospects entered into since December 31, 1983. In 1991, NEEI sold substantially all of the properties in the New Program. No new prospects have been acquired since December 31, 1986. a. Investment in partnerships by prospect: See Exhibit a. b. Summary statement of proved and probable reserves: Old Program ----------- Natural Gas Oil and ----------- Total Condensate Equivalent Equivalent Bbl. MCF Bbl. Bbl. ---------- ---------- ---------- ---------- Balance 7/1/94 1,172,799 75,855,831 12,642,638 13,815,437 Additions & Revisions through 9/30/94 - - - - --------- ----------- ---------- ---------- Balance 1,172,799 75,855,831 12,642,638 13,815,437 Production 3rd Qtr. 1994 (88,781) (4,905,296) (817,549) (906,330) --------- ----------- ---------- ---------- Balance 9/30/94 1,084,018 70,950,535 11,825,089 12,909,107 --------- ----------- ---------- ---------- New Program ----------- None. -2- c. Production and revenue by prospect: See Exhibit c. d. Description of Operations: NEEI has participated through its partnership with Samedan Oil Corporation (Samedan) in drilling operations with the results as summarized below. Also shown are activities on properties acquired from a former partner, Dorchester Exploration, Inc. (Dorchester), prior to termination of that partnership. NEEI sold its remaining interests in "Dorchester" properties as of June 1, 1988. Old Program ----------- Since Quarter Inception ------- --------- No. of dry holes Samedan 0 732 Dorchester 0 51 -- ----- 0 783 -- ----- No. of productive wells Samedan 2 1,164* Dorchester 0 69* -- ------ 2 1,233* -- ------ No. of wells drilled 2 2,016 (both exploration and development) -- ----- * Includes depleted/sold wells as follows: Samedan 0 465 Dorchester 0 69 -- ----- 0 534 -- ----- New Program ----------- None. INVESTMENT ---------- Budget Authorized Actual By SEC ------------------------------------ ----------------- Since Quarter Nine Months 1/1/94 1994 ---------- ----------- ----------- ---------------- Samedan $4,142,457 $12,492,840 $12,492,840 (1) $15,000,000 (2) (1) Includes $1,500,399 of management fees thru September 30, 1994. (2) Authorized through December 31, 1994, by Order dated August 24, 1993 (Release No. 35-26110). -3- e. Fuel Production, Sales and Other Income: Old Program: 1. Sales to affiliates: There have been no direct sales of NEEI oil and gas production to affiliates. Quarter Inception Ended Thru 9/30/94 9/30/94 --------- --------- 2. Sales to nonaffiliates (Exhibit c.): Equivalent barrels of fuel produced 925,528 44,704,566 Average price per barrel $ 11.33 $ 14.39 ----------- ------------- Sales revenues $10,488,084 $ 643,189,383 3. Loss to NEP 13,044,332 280,509,219 4. Flow through of excess deferred taxes 1,573,200 76,484,288 5. Investment tax credit - 13,817,248 6. Depletion - 6,740,318 7. Deferred tax related to reserve - 9,080,000 addition 8. Transfer of reserve (net) from NEES - 6,400,000 ----------- ------------- Total $25,105,616 $1,036,220,456 ----------- ------------- New Program: None. f. Credits applied to New England Power Company (NEP): 1. Disposition of proceeds: Amortization of cost of fuel reserves $22,876,700 $ 951,871,751 Production costs 1,172,416 71,826,457 State taxes 1,056,500 7,044,500 Savings to NEP - 8,701,242 Royalty to NEP - 1,099,807 Other - 65,472 ----------- ------------- Total $25,105,616 $1,040,609,229 ----------- ------------- Net income/(loss)/retained deficit $ - $ (4,388,773) ----------- ------------- -4- f. continued Quarter Inception Ended Thru 9/30/94 9/30/94 -------- -------- 2. Royalties prepaid to NEP: Beginning balance in account $ 342,312 $ - ------------ ------------ Royalties/savings earned - (9,801,049) Royalties passed on to NEP - 10,143,361 * ------------ ------------ Ending balance in account $ 342,312 $ 342,312 ------------ ------------ 3. Losses to be passed on to NEP: Beginning balance in account $ 43,147,403 $ - ------------ ------------ Losses accrued 13,044,332 280,509,219 Losses passed on to NEP** (7,482,773) (231,800,257) ------------ ------------ Ending balance in account $ 48,708,962 $ 48,708,962 ------------ ------------ * Includes $8,701,242 savings passed on to NEP for sales prior to 1/1/84 pursuant to Commission Order File No. 70-5543. ** Consistent with pricing policy approved in Release No. 23873, current year losses cannot be recovered until the following year. -5- g. Investment by NEES compared with Commission Authorization:
Release No./Date -------------------------------------- 24847 24847 24847 ----- ----- ----- 3/29/89 3/29/89 3/29/89 ------- ------- ------- Maximum NEES Investment authorized: $45,000,000(1) $75,000,000 $400,000,000 ----------- ----------- ------------ 1. Investments by NEES-inception through June 30, 1994 (net) Subordinated notes 61,600 17,217,691 (2) - Common stock and premium 250,000 - - ------------ ----------- ------------ Total investment by NEES 311,600 17,217,691 - Investment by NEES-during the quarter (net) Subordinated notes 449,139 - - Total investment by NEES through September 30, 1994 (net) Subordinated notes 510,739 17,217,691 (2) - Common stock and premium 250,000 - - ----------- ----------- ------------ $760,739 $17,217,691 $ - ----------- ----------- ------------ 2. Increase or Reduction in Investment by NEES: Date Amount Date Amount Date Amount ---- ------ ---- ------ ---- ------ Issues of subordinated notes to NEES during quarter ended September 30, 1994 9/06/94 $449,139 $ - $ - Payments of subordinated notes to NEES during quarter ended September 30, 1994 $ - $ - $ - -------- ----------- ------- Net change in investment $449,139 $ - $ - -------- ----------- ------- - -------------------- (1) Plus any after-tax net loss attributable to the expensing of interest on up to $37,200,000 of borrowings in connection with the Old Program. (2) Includes $1,620,000 authorized for investment in the Old Program.
-6- h. Financial Statements: Exhibit h-1 Balance Sheet of NEEI at September 30, 1994, (unaudited, subject to adjustment) Exhibit h-2 Statement of Income and Retained Deficit of NEEI for the quarter ended September 30, 1994 (unaudited, subject to adjustment) Exhibit h-3 Statement of Cash Flows of NEEI for the quarter ended September 30, 1994 (unaudited, subject to adjustment) Exhibit h-4 Computation of Bank Interest for the quarter ended September 30, 1994 i. Fuel purchased during quarter for NEP: (Summary: See Exhibit i for detail.) 1. From proceeds from sale of NEEI Old Program production Date purchased (delivered) 3rd Quarter Quantity of fuel (equiv. bbl) 607,012.98 Average net price (per equiv. bbl) $ 14.18 ------------- Cost to NEEI $ 8,606,136 Loss from NEEI fuel exploration activities 7,482,773 ------------- Cost to NEP 16,088,909 Inspection charges, etc. 38,595 ------------- ----------- Total $16,127,504 =========== j. Copies of filings on Form 423 related to the above sales are attached. (See Exhibits j-1 through j-2.) k. Use of Proceeds from Sales of NEEI New Program Production: None. -7- Sale of NEEI Wells ------------------ Old Program - ----------- During the period from July 1, 1994 through September 30, 1994, NEEI did not dispose of its interest in Existing (Old) Program wells containing proved or probable reserves. Losses Passed to NEP -------------------- Through December 31, 1985, NEEI's Old Program generated customer savings. Due to precipitous declines in oil and gas market prices, the Old Program generated operating losses for the first time during 1986. As a result of the losses during 1986, the crossover reserve, which was $24.1 MM at December 31, 1985, was exhausted. NEEI passed its 1986 losses in excess of the reserve, $277,732, on to NEP in 1987. NEEI's Old Program incurred losses in 1987 through 1992 totalling $198,673,870 which were passed on to NEP in 1988 through 1993. NEEI's Old Program loss of $46,354,838, incurred in 1993, is being passed on to NEP in 1994. -8- SIGNATURES Pursuant to the requirements of the Public Utility Holding Company Act of 1935, each undersigned company has duly caused this report (Commission's File Nos. 70-5543, 70-6513, 70-6958, and 70-7055) to be signed on its behalf, as indicated, by the undersigned officer thereunto duly authorized by each such company. NEW ENGLAND ELECTRIC SYSTEM s/Michael E. Jesanis Michael E. Jesanis, Treasurer NEW ENGLAND ENERGY INCORPORATED s/John G. Cochrane John G. Cochrane, Treasurer Date: November 10, 1994 The name "New England Electric System" means the trustee or trustees for the time being (as trustee or trustees but not personally) under an agreement and declaration of trust dated January 2, 1926, as amended, which is hereby referred to, and a copy of which as amended has been filed with the Secretary of the Commonwealth of Massachusetts. Any agreement, obligation or liability made, entered into or incurred by or on behalf of New England Electric System binds only its trust estate, and no shareholder, director, trustee, officer or agent thereof assumes or shall be held to any liability therefor. EX-99 2 EXHIBIT INDEX Exhibit No. Description Page - ----------- ----------- ---- a Investment in partnerships by prospect Filed under (Old Program) cover of Form SE c Production and net revenue (Old Program) Filed under cover of Form SE h-1 Balance Sheet at September 30, 1994 Filed herewith (Unaudited, Subject to Adjustment) h-2 Statement of Income and Retained Filed herewith Deficit for the Quarter Ended September 30, 1994 (Unaudited, Subject to Adjustment) h-3 Statement of Cash Flows for the Quarter Filed herewith Ended September 30, 1994 (Unaudited, Subject to Adjustment) h-4 Computation of Bank Interest for the Filed herewith Quarter Ended September 30, 1994 i Fuel Purchased for NEP for the Quarter Filed herewith Ended September 30, 1994 j-1 Monthly Report of Cost and Quality Filed under of Fuels for Electric Plants cover of July 1994 (Salem Harbor) Form SE j-2 Monthly Report of Cost and Quality Filed under of Fuels for Electric Plants cover of August 1994 (Salem Harbor) Form SE EX-99 3 Exhibit h-1 NEW ENGLAND ENERGY INCORPORATED Balance Sheet September 30, 1994 (Unaudited, Subject to Adjustment)
Assets - ------- Old Program New Program Combined ---------- ---------- --------- Current assets: Cash, including temporary cash investments of $4,075,000 with affiliated companies $ 4,056,267 $ 52,121 $ 4,108,388 Accounts receivable: Affiliated companies - accrued loss to be passed on to affiliate 48,708,962 - 48,708,962 - tax benefits 1,702,585 59,900 1,762,485 - other 16,125 583 16,708 Prepaid expenses 342,312 - 342,312 -------------- ------------ -------------- Total current assets 54,826,251 112,604 54,938,855 -------------- ------------ -------------- Property at cost: Cost of fuel reserves: Exploration and development costs: Samedan 737,693,404 - 737,693,404 Dorchester 67,401,440 - 67,401,440 Cost of capital 431,528,468 - 431,528,468 Other 30,624,364 - 30,624,364 -------------- ------------ -------------- 1,267,247,676 - 1,267,247,676 Less-accumulated amortization (951,871,751) - (951,871,751) -------------- ------------ -------------- Net cost of fuel reserves 315,375,925 - 315,375,925 Work in process - Samedan 1,464,342 - 1,464,342 -------------- ------------ -------------- Total property 316,840,267 - 316,840,267 -------------- ------------ -------------- $ 371,666,518 $ 112,604 $ 371,779,122 ============== ============ ============== LIABILITIES AND PARENT COMPANY'S INVESTMENT - ------------------------------------------- Current liabilities: Accrued exploration and development costs $ 27,150,378 $ - $ 27,150,378* Accounts payable 1,984,497 336,660 2,321,157 Accrued interest 1,147,431 - 1,147,431 -------------- ------------ -------------- Total current liabilities 30,282,306 336,660 30,618,966 -------------- ------------ -------------- Deferred income taxes 107,890,828 36,100 107,926,928 -------------- ------------ -------------- Deferred credit 6,631,446 - 6,631,446 -------------- ------------ -------------- Notes payable to banks under credit agreement 230,000,000 - 230,000,000 -------------- ------------ -------------- Parent company's investment: Subordinated notes payable to parent 2,130,739 15,597,691 17,728,430 Common stock, par value $1 per share 2,500 - 2,500 Paid-in capital 247,500 - 247,500 Retained deficit (5,518,801) (15,857,847) (21,376,648) -------------- ------------ -------------- Total parent company's investment (3,138,062) (260,156) (3,398,218) -------------- ------------ -------------- $ 371,666,518 $ 112,604 $ 371,779,122 ============== ============ ============== *Accrued exploration and development costs: Total (All Samedan) ------------ Exploration $10,347,873 Development 16,256,122 Work in process 244,772 Advance 301,611 ----------- $27,150,378 ===========
EX-99 4 Exhibit h-2 NEW ENGLAND ENERGY INCORPORATED Statement of Income and Retained Deficit For the Quarter Ended September 30, 1994 (Unaudited, Subject to Adjustment)
Old Program New Program Combined ----------- ------------- --------- Operating revenue: Sales of fuel to an affiliate $16,127,504 $ - $ 16,127,504 Loss passed on to an affiliate (7,482,773) - (7,482,773) Accrued loss to be passed on to an affiliate 13,044,332 - 13,044,332 Sales to nonaffiliates: Oil 1,472,664 4,241 1,476,905 Gas 9,015,420 5,579 9,020,999 ----------- ------------ ------------ Total operating revenue 32,177,147 9,820 32,186,967 ----------- ------------ ------------ Operating expenses: Purchases of fuel for an affiliate 8,644,731 - 8,644,731 Amortization of cost of fuel reserves 22,876,700 - 22,876,700 Production costs 1,172,416 3,739 1,176,155 General and administrative expense - 2,149 2,149 ----------- ------------ ------------ Total operating expenses 32,693,847 5,888 32,699,735 ----------- ------------ ------------ Operating income/(loss) (516,700) 3,932 (512,768) Other income: Interest income - 1,736 1,736 Interest expense (493,295) (39,820) (533,115) State taxes (1,056,500) (53,458) (1,109,958) ----------- ------------ ------------ Operating and other income/(loss) (2,066,495) (87,610) (2,154,105) ----------- ------------ ------------ Federal income taxes: Current federal income taxes 2,855,700 (12,000) 2,843,700 Deferred federal income taxes (4,601,700) - (4,601,700) ----------- ------------ ------------ Net federal income taxes (1,746,000) (12,000) (1,758,000) ----------- ------------ ------------ Net income (320,495) (75,610) (396,105) Retained deficit at beginning of period (5,198,306) (15,782,237) (20,980,543) ----------- ------------ ------------ Retained deficit at end of period $(5,518,801) $(15,857,847) $(21,376,648) =========== ============ ============
EX-99 5 Exhibit h-3 NEW ENGLAND ENERGY INCORPORATED Statement of Cash Flows For the Quarter Ended September 30, 1994 (Unaudited, Subject to Adjustment)
Old Program New Program Combined ----------- ------------- ----------- Operating Activities: Net income $ (320,495) $ (75,610) $ (396,105) Adjustments to reconcile net income to net cash provided by operating activities: Amortization of cost of fuel reserves 22,876,700 - 22,876,700 Loss passed on to an affiliate 7,482,773 - 7,482,773 Accrued loss to be passed on to an affiliate (13,044,332) - (13,044,332) Deferred income taxes (4,145,200) - (4,145,200) (Increase)/decrease in accounts receivable (excluding loss to be passed on to affiliate) (1,445,095) (12,134) (1,457,229) Increase/(decrease) in accrued exploration and development costs (3,942,835) - (3,942,835) Increase/(decrease) in accounts payable 327,572 (20,756) 306,816 Increase/(decrease) in accrued interest payable 14,447 - 14,447 ------------ ---------- ------------ Net cash provided by operating activities $ 7,803,535 $ (108,500) $ 7,695,035 ----------- ---------- ------------ Investing Activities: Investment in property - Samedan: Exploration (also includes dry holes, depleted wells and work in process) $ 4,214,420 $ - $ 4,214,420 Development (also reflects transfer of depleted wells) (3,709,877) - (3,709,877) Capital costs (2,610,058) - (2,610,058) Other (1,678,250) - (1,678,250) ------------ --------- ------------ Net cash used in investing activities $ (3,783,765) $ - $ (3,783,765) ------------ --------- ------------ Financing Activities: Subordinated notes payable to parent-issues $ 449,139 $ - $ 449,139 Subordinated notes payable to parent-retirements - - - Changes in notes payable to bank under credit agreement (2,000,000) - (2,000,000) ------------ --------- ------------ Net cash used in financing activities $ (1,550,861) $ - $(1,550,861) ------------ --------- ------------ Net increase/(decrease) in cash and cash equivalents $ 2,468,909 $ (108,500) $ 2,360,409 Cash and cash equivalents at beginning of period 1,587,358 160,621 1,747,979 ------------ --------- ------------ Cash and cash equivalents at end of period $ 4,056,267 $ 52,121 $ 4,108,388 ------------ --------- ------------
EX-99 6 Exhibit h-4 NEW ENGLAND ENERGY INCORPORATED Computation of Bank Interest Quarter Ended September 30, 1994 -------------------------------- Cost of Notes Payable to Banks Under Credit Agreement ----------------------------------------------------- Date Paid Date or Maturity Annual Amount Issued Date Rate % Total ------ ------ ----------- ------ ----- Old Program ----------- $ 37,000,000 03/04/94 09/06/94 4.7500 $ 327,090.28 60,000,000 04/22/94 07/22/94 4.8750 170,625.00 20,000,000 05/23/94 08/23/94 4.8550 142,952.78 49,000,000 05/24/94 08/23/94 5.1875 374,220.49 24,000,000 06/20/94 07/20/94 4.9375 62,541.67 10,000,000 06/23/94 07/25/94 5.0000 33,333.33 15,000,000 06/30/94 07/29/94 5.1250 59,791.67 24,000,000 07/20/94 08/23/94 5.1250 116,166.67 60,000,000 07/22/94 10/24/94 5.3125 628,645.84 17,000,000 06/23/94 08/10/94 4.6380 87,606.67 10,000,000 07/25/94 08/25/94 5.1250 44,131.95 15,000,000 07/29/94 08/30/94 5.1250 68,333.33 17,000,000 08/10/94 09/12/94 5.1875 80,838.54 10,000,000 08/23/94 09/23/94 5.0130 43,167.50 5,000,000 08/23/94 09/23/94 5.2500 22,604.17 20,000,000 08/23/94 11/23/94 5.2300 113,316.67 10,000,000 08/23/94 11/23/94 5.2000 56,333.33 44,000,000 08/23/94 09/23/94 5.4375 206,020.83 10,000,000 08/25/94 09/26/94 5.4375 48,333.34 15,000,000 08/30/94 10/31/94 5.5000 73,333.33 37,000,000 09/06/94 03/06/95 5.9375 152,560.76 17,000,000 09/12/94 10/12/94 5.5000 49,347.22 10,000,000 09/23/94 11/23/94 5.2500 11,666.67 20,000,000 09/23/94 11/23/94 5.4000 24,000.00 31,000,000 09/23/94 10/23/94 5.5625 38,319.44 10,000,000 09/26/94 10/26/94 5.0000 6,944.44 Interest Rate Swap (50,899.31) Fees (Primarily facility) 111,625.35 ------------- Total Old Program $3,102,951.96 ------------- EX-99 7 Exhibit i NEW ENGLAND ENERGY INCORPORATED Fuel Purchased for NEP for the Quarter Ended September 30, 1994 --------------------------------------- Exploration - ----------- Date purchased (delivered) July 8, 1994 July 12, 1994 ------------- -------------- Quantity of fuel (bbl) 204,474.88 99,875.34 Average net price (per equiv.bbl) $14.97$ 16.20 -------------------------- Cost to NEEI $3,060,682.24$1,617,980.51 Loss from NEEI fuel exploration activities 2,520,603.621,231,183.72 -------------------------- Cost to NEP $5,581,285.86$2,849,164.23 -------------------------- Date purchased (delivered)Aug 27, 1994 ------------- Quantity of fuel (bbl) 193,720.69 Average net price (per equiv.bbl) $12.99 ------------- Cost to NEEI $2,516,238.04 Loss from NEEI fuel exploration activities 2,388,034.52 ------------- Cost to NEP $4,904,272.56 ------------- Date purchased (delivered)Sept 7, 1994 ------------- Quantity of fuel (bbl) 108,942.07 Average net price (per equiv.bbl) $12.95 ------------- Cost to NEEI $1,411,235.57 Loss from NEEI fuel exploration activities 1,342,951.15 ------------- Cost to NEP $2,754,186.72 ------------- -----END PRIVACY-ENHANCED MESSAGE-----