-----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, UGG3ldgk1lC9wnjEODVCEYpGOq9WE5Wydyb8p4/9Hv97j/Pt1A85E70xctR2dkv6 2j1KP8TXVtG/nvDw3zUEGw== 0000950129-95-000065.txt : 19950501 0000950129-95-000065.hdr.sgml : 19950501 ACCESSION NUMBER: 0000950129-95-000065 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950207 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19950207 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNION TEXAS PETROLEUM HOLDINGS INC CENTRAL INDEX KEY: 0000774214 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 760040040 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09019 FILM NUMBER: 95505755 BUSINESS ADDRESS: STREET 1: 1330 POST OAK BLVD CITY: HOUSTON STATE: TX ZIP: 77056 BUSINESS PHONE: 7136236544 MAIL ADDRESS: STREET 1: 1330 POST OAK BLVD CITY: HOUSTON STATE: TX ZIP: 77056 8-K 1 UNION TEXAS PETROLEUM 8-K DATED 02/07/95 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 --------------- Date of Report (Date of Earliest Event Reported): February 7, 1995 UNION TEXAS PETROLEUM HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 1-9019 76-0040040 (State or other (Commission (I.R.S. Employer jurisdiction File Number) Identification No.) of incorporation) 1330 Post Oak Boulevard, Houston, Texas 77056 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (713) 623-6544 2 Item 5. Other Events. ------------ The information set forth in the press releases of the Registrant dated January 25, 1995, February 2, 1995 and February 6, 1995, which are filed as exhibits hereto, is incorporated herein by reference. Item 7. Financial Statements and Exhibits. --------------------------------- (c) Exhibits: Exhibit Number Description - ------ ----------- 99.1 Press release dated January 25, 1995 99.2 Press release dated February 2, 1995 99.3 Press release dated February 6, 1995 3 Signature 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. UNION TEXAS PETROLEUM HOLDINGS, INC. By: /s/ NEWTON W. WILSON, III -------------------------- NEWTON W. WILSON, III General Counsel, Vice President-Administration and Secretary Date: February 7, 1995 4 INDEX TO EXHIBITS Exhibit Number Description - ------ ----------- 99.1 Press Release dated January 25, 1995 99.2 Press Release dated February 2, 1995 99.3 Press Release dated February 6, 1995 EX-99.1 2 NEWS RELEASE DATED 01/25/95 1 EXHIBIT 99.1 NEWS RELEASE [UNION TEXAS PETROLEUM LETTERHEAD] Contact: Carol L. Cox (713) 968-2714 FOURTH QUARTER AND FULL YEAR 1994 EARNINGS SUBSTANTIALLY HIGHER AT UNION TEXAS PETROLEUM Higher Sales Volumes in U.K. North Sea and Indonesia and Improved Ethylene Margins Contribute to Increased Net Income in 1994 Houston, January 25, 1995 -- Union Texas Petroleum Holdings, Inc. today reported 1994 earnings of 76 cents per share, up from 31 cents per share in 1993. Net income was $67 million, compared to $27 million in 1993. "Union Texas turned in a very good performance in 1994, even though low oil prices continued to affect our industry," said Chairman and CEO Clark Johnson. "In 1994, our company set a production record for our international operations, increased year-end reserves, reduced our unit operating costs and benefitted from sharply higher ethylene margins. We also developed an expanded and exciting exploration program for 1995. Union Texas is well positioned to continue to grow in 1995 and beyond." Union Texas' comparative results for 1993 were affected by three non-recurring items and also reflect a non-cash $4 million charge for the cumulative effect of adopting a new accounting standard for postemployment benefits, effective January 1, 1993. Excluding these four items, the company's earnings for 1993 were 61 cents per share or $54 million. - more - 2 - 2 - For the fourth quarter of 1994, Union Texas reported net income of $17 million or 20 cents per share, compared to $5 million or 6 cents per share for the same period in 1993. The company said its 1994 fourth quarter results were favorably affected by increased ethylene margins and higher oil prices. During the fourth quarter of 1994, Union Texas' ethylene margins from its petrochemical operations averaged over 11 cents per pound, up from 2 cents per pound a year earlier. The strengthening ethylene margins were attributed to tight supplies of ethylene coupled with improving demand for various consumer products that utilize ethylene in their manufacturing process. Union Texas also noted that its average sales price for U.K. North Sea crude oil was 18% higher during the fourth quarter of 1994 than the average price a year ago. Increased Revenues Sales and operating revenues for the fourth quarter and full-year 1994 totaled $214 million and $748 million, respectively, versus $189 million and $682 million, respectively, for the corresponding periods in 1993. The increase in revenues for the full-year 1994 was due largely to higher sales volumes in the U.K. North Sea and Indonesia and improved ethylene sales prices, partially offset by lower oil and liquefied natural gas (LNG) prices. The company's average worldwide oil and gas sales prices in 1994 were $14.94 per barrel and $2.48 per thousand cubic feet, respectively. "All of Union Texas' oil and gas producing operations are located overseas. The vast majority of our gas production is sold to international gas markets in the Pacific Rim and U.K. North - more - 3 - 3 - Sea, which accounts for the higher gas prices that Union Texas receives as compared to the currently weak U.S. domestic gas markets," Johnson noted. Operations Highlights In a review of the company's performance in 1994, Mr. Johnson pointed out that Union Texas made significant progress toward its goals of boosting production, increasing reserves and expanding its exploration portfolio. "During 1994, our worldwide annual production rose 16% from 1993 levels to approximately 45 million barrels of oil equivalent. Our fields in the U.K. North Sea recorded significantly higher sales volumes of both oil and gas. In Indonesia, where our joint venture supplies natural gas to the world's largest LNG facility, a record 247 gross cargoes of LNG (108 billion cubic feet of gas net to Union Texas) were sold in 1994, up from 217 gross cargoes (96 billion cubic feet net to Union Texas) in 1993, benefitting from increased production capacity at the LNG plant," Johnson said. A significant portion of Union Texas' worldwide natural gas output is produced from its Indonesian operations where the gas is liquefied and sold into the growing Pacific Rim markets. Indonesian LNG prices, which are based on world oil prices, averaged $2.85 per thousand cubic feet in 1994, off from $3.17 in the previous year. The company's average sales price for oil was $14.94 per barrel in 1994, compared to $15.43 per barrel in 1993. About 90% of Union Texas' oil and gas revenues are indexed to world oil prices. - more - 4 - 4 - Strategic Acquisition "Our 1994 acquisition of an interest in the U.K. North Sea's Britannia field helped us to accomplish one of our key objectives: to increase our reserve base through strategic purchases. With Union Texas' financial strength, our company is in an excellent position to continue to increase value for our shareholders by pursuing an aggressive exploration program and quality acquisition opportunities," Johnson said. As previously reported, Union Texas increased its proved worldwide reserves at year-end 1994 to 411 million barrels of oil equivalent, up from 381 million barrels at the end of 1993. The company's reserve increase in 1994 included 38 million barrels of oil equivalent in proved reserves attributable to Union Texas' acquisition of a 9.42% unit interest in the Britannia field, the U.K. North Sea's largest undeveloped gas field. Over time, Union Texas anticipates recording additional proved reserves from the Britannia field, supported by the field's development results and its production history. Through reserve acquisitions, revisions and additions, the company replaced approximately 170% of its 1994 production at a cost of about $4.50 per barrel of oil equivalent. Higher Ethylene Margins Discussing the upturn in the petrochemical industry, Johnson pointed out that Union Texas' 1995 performance would likely continue to benefit from higher ethylene margins. By December 1994, the company's ethylene margins had risen to approximately 12 cents per pound, up from about 1 cent at the beginning of 1994. The company's - more - 5 - 5 - average ethylene margin for the full-year 1994 was approximately 6 cents per pound. "With an expected 1995 net production of approximately 500 million pounds of ethylene at our petrochemical plant, Union Texas could benefit significantly from continued high margin levels," Johnson said. Lower Unit Operating Expenses Johnson also noted that the company reduced its unit operating expenses by approximately 30% during 1992 to 1994, from about $5.50 per barrel of oil equivalent in 1992 to approximately $4.00 per barrel in 1994, primarily as a result of increased volumes in the U.K. North Sea, lower LNG plant costs in Indonesia and the benefits of a company-wide cost containment program. Expanded Exploration Portfolio In the company's exploration programs, Johnson commented that Union Texas further expanded its new ventures portfolio in 1994 by entering into exploration concessions in Vietnam, Tunisia, Alaska's Kenai Peninsula, Pakistan and Ireland. "The work that our new venture exploration team accomplished over the past several years has set the stage for a very exciting year in 1995," Johnson said. "In 1995, we plan to participate in at least nine exploration wells in our new ventures areas in addition to as many as 20 exploration wells in ongoing programs in our core producing areas in the U.K. North Sea, Indonesia and Pakistan." One of the largest independent producers located in the U.S., Houston-based Union Texas Petroleum Holdings, Inc. (NYSE: UTH) explores for and produces oil and gas overseas primarily in the U.K. - more - 6 - 6 - North Sea, Indonesia and other strategic areas. The company also has petrochemicals interests in the U.S. Comparative financial highlights follow (amounts in millions, except per share data):
Three Months Ended December 31, ------------------------------- 1994 1993 ---- ---- Net income............................... $ 17 $ 5 Earnings per share....................... $ .20 $ .06 Sales and operating revenues............. $ 214 $ 189 Average common shares outstanding........ 87.6 87.6
Full Year Ended December 31, ---------------------------- 1994 1993 ---- ---- Net income............................... $ 67 $ 27(a) Net income excluding non-recurring items and cumulative effect of change in accounting principle............... $ 67 $ 54 Earnings per share: Before cumulative effect of change in accounting principle............. $ .76 $ .35 Cumulative change in accounting principle........................... - $(0.04) Net income............................ $ .76 $ .31 Sales and operating revenues............. $ 748 $ 682 Average common shares outstanding........ 87.6 87.2
See footnotes on page 9. Additional financial and operating information appears on the attached pages. - more - 7 - 7 - UNION TEXAS PETROLEUM FINANCIAL SUMMARY (amounts in millions, except per share data)
FOURTH QUARTER FULL YEAR ----------------------- ------------------------ 1994 1993 1994 1993 Sales and operating revenues $ 214 $ 189 $ 748 $ 682 Net income $ 17 $ 5 $ 67 $ 27(a) Major operations(b) Indonesia $ 26 $ 23 $ 94 $ 89 U.K. North Sea $ 7 $ 1 $ 27 $ 23 Pakistan $ 1 $ 4 $ 10 $ 16 Petrochemicals $ 9 $ 3 $ 15 $ 5 Earnings per share of common stock Before cumulative effect of change in accounting principle - - - $ .35 Cumulative effect of change in accounting principle - - - $(0.04) Net income $ .20 $ .06 $ .76 $ .31 Discretionary cash flow(c) $ 76 $ 83 $ 295 $ 292 Major operations (b) Indonesia $ 40 $ 46 $ 154 $ 168 U.K. North Sea $ 39 $ 41 $ 142 $ 125 Pakistan $ 3 $ 3 $ 22 $ 24 Petrochemicals $ 15 $ 6 $ 28 $ 12 Average common shares 87.6 87.6 87.6 87.2
See footnotes on page 9. DISCRETIONARY CASH FLOW SUMMARY (amounts in millions)
FOURTH QUARTER FULL YEAR ----------------------- ------------------------ 1994 1993 1994 1993 Net income $ 17 $ 5 $ 67 $ 27(a) Less: Equity partnership income $ (5) $ (1) $ (20) $ (9) Add: DD&A $ 45 $ 50 $ 168 $ 243 Deferred taxes $ (5) $ (2) $ (12) $(107) Exploration expenses $ 14 $ 20 $ 54 $ 93 Unimar equity DCF(d) $ 10 $ 11 $ 38 $ 41 Cumulative effect of change in accounting principle - - - 4 Discretionary cash flow $ 76 $ 83 $ 295 $ 292
See footnotes on page 9. - more - 8 - 8 - OPERATING SUMMARY (e)
FOURTH QUARTER FULL YEAR -------------- -------------- 1994 1993 1994 1993 Net crude oil sales (MBBLS/D) U.K. North Sea 37 41 34 27 Indonesia 5 6 6 6 Pakistan 4 6 5 5 Average crude oil prices (per BBL) U.K. North Sea $16.18 $13.74 $14.99 $15.10 Indonesia $16.00 $14.12 $15.78 $17.26 Pakistan $12.98 $14.03 $13.43 $15.04 Net natural gas sales (MMCF/D) Indonesian LNG 205 217 222 198 U.K. North Sea 36 13 24 8 Pakistan 40 41 43 43 Average natural gas prices (per MCF) Indonesian LNG $ 2.92 $ 2.96 $ 2.85 $ 3.17 U.K. North Sea(f) $ 2.91 $ 2.48 $ 2.57 $ 2.49 Pakistan $ 1.03 $ 1.14 $ 1.07 $ 1.26
See footnotes on page 9. - more - 9 - 9 - FOOTNOTES (a) Includes a one-time favorable benefit of approximately $50 million due principally to the reduction in U.K. Petroleum Revenue Tax. Includes a non-cash charge of $25 million due to the write-off of the Kuvlum prospect in Alaska. Also includes a non-cash charge of approximately $48 million, net of tax, related to the write-down of the Piper field in the U.K. North Sea and a non-cash charge of $4 million for the cumulative effect of a change in accounting principle as a result of the company adopting a new accounting standard for future long-term disability benefits. (b) Excludes corporate items and other worldwide ventures. (c) Discretionary cash flow (DCF) is net income (less equity partnership income) excluding depreciation, deferred taxes, and exploration expenses, plus the company's estimated share of discretionary cash flow from its equity interest in its Unimar partnership's Indonesian operations. (d) Unimar equity DCF reflects the company's estimated share of discretionary cash flow from its equity interest in its Unimar partnership's Indonesian operations. (e) Excludes the Unimar equity partnership. (f) Excludes capacity charge of $32 million and $31 million in 1994 and 1993, respectively, from the North and South Sean gas fields in the U.K. North Sea. # # # EX-99.2 3 NEWS RELEASE DATED 2/2/95 1 EXHIBIT 99.2 NEWS RELEASE [UNION TEXAS PETROLEUM LETTERHEAD] Contact: Carol L. Cox (713) 968-2714 UNION TEXAS PETROLEUM ANNOUNCES $212 MILLION CAPITAL BUDGET FOR 1995, PLANS TO INCREASE EXPLORATION SPENDING BY 85% OVER 1994 Houston, February 2, 1995 -- The board of directors of Union Texas Petroleum Holdings, Inc. has approved a 1995 capital spending budget of approximately $212 million, up from $131 million spent in 1994. The exploration portion of the 1995 capital plan calls for an 85% increase over 1994 levels. "A major thrust for Union Texas' capital spending in 1995 will be a substantially expanded exploration program," said Chairman and CEO Clark Johnson. "During 1995, we expect to spend about $74 million on exploration activities, including at least nine exploratory wells in new venture areas in Argentina, Alaska, Tunisia, Vietnam and Eastern Indonesia in addition to as many as 20 wells in ongoing exploration programs in our producing areas in the U.K. North Sea, Indonesia and Pakistan." "Our exploration plan represents the highest level of international exploration activity for Union Texas in our recent history. The 1995 program provides exciting opportunities for Union Texas. We are committed to enhancing value for our shareholders." DEVELOPMENT PLANS Union Texas has allocated approximately $132 million for oil and gas development programs in the U.K. North Sea, Indonesia and Pakistan, up from $83 million spent in 1994. - more - 2 -2- A key focus for Union Texas' 1995 development program is the company's participation in the development of the Britannia gas field in the U.K. North Sea. Union Texas acquired a 9.42% unit interest in Britannia, the U.K. North Sea's largest undeveloped gas field, during 1994. Of the $132 million development budget for 1995, the company plans to spend about $47 million at Britannia, which will include drilling activities and platform and facilities construction. Overall, Union Texas' total share of development costs for Britannia from 1994 through start-up of production in late 1998 is estimated at approximately $200 million. EXPLORATION PLANS As part of its $74 million exploration budget in 1995, Union Texas has earmarked approximately $41 million for exploration activities in offshore Argentina, Alaska, Tunisia, Vietnam, Eastern Indonesia and other new venture areas. A total of approximately $33 million is budgeted for the company's ongoing exploration programs in the U.K. North Sea, Indonesia and Pakistan. The exploration portion of Union Texas' 1994 capital spending was $40 million. The company's increased capital spending in 1995 will enable Union Texas to participate in at least nine wells in new venture areas (compared to four in 1994) and up to 20 wells in its producing areas (versus 11 wells in 1994). "We believe that our expanded exploration program for 1995 will enhance our company's chance of finding significant reserves over time," said Mr. Johnson. PETROCHEMICAL OPERATIONS For its petrochemical interests in Louisiana, Union Texas has allocated approximately $5 million in 1995, primarily for the completion - more - 3 -3- of the additional 12th furnace at the company's jointly-owned ethylene plant and for other projects to increase volumes and enhance productivity. The company spent $6 million on its petrochemical operations in 1994. ACQUISITIONS The company also stated that it would continue to seek attractive acquisition opportunities during 1995. Union Texas said its acquisition strategy in 1995 would include the evaluation of both developed and undeveloped reserves. The company's capital spending budget does not include any amounts for acquisitions, but the company believes that its financial strength and available credit give it the financial resources to make acquisitions. Union Texas' 1994 capital spending of $131 million does not include $159 million for the acquisition of the interest in the Britannia field. One of the largest independent producers located in the U.S., Houston-based Union Texas Petroleum Holdings, Inc. (NYSE: UTH) explores for and produces oil and gas overseas primarily in the U.K. North Sea, Indonesia and other strategic areas. The company also has petrochemical interests in the U.S. - more - 4 -4- UNION TEXAS PETROLEUM HOLDINGS, INC. CAPITAL SPENDING* (Dollars in Millions)
PLANNED 1995 1994 ------------ -------- United Kingdom Exploration $ 13 $ 8 Development 35 34 Britannia 47 3 Indonesia Exploration $ 9 $ 5 Development 41 40 Pakistan Exploration $ 11 $ 4 Development 9 6 New Exploration Ventures ** $ 41 $ 23 Petrochemicals $ 5 $ 6 Corporate $ 1 $ 2 ---- ---- Total $212 $131 ***
* Includes the company's equity interests in the Unimar partnership and excludes capitalized interest. ** Primarily includes Argentina, Alaska, Tunisia, Vietnam and Eastern Indonesia. *** Does not include $159 million for the acquisition of a 9.42% unit interest in the Britannia field in the U.K. North Sea. # # # EX-99.3 4 PRESS RELEASE DATED FEBRUARY 6, 1995 1 EXHIBIT 99.3 NEWS RELEASE [UNION TEXAS PETROLEUM LETTERHEAD] Contact: Carol L. Cox (713) 968-2714 UNION TEXAS PETROLEUM TO ACQUIRE 25% STAKE IN OFFSHORE IRELAND BLOCKS IN ST. GEORGE'S CHANNEL Houston, February 6, 1995 -- Union Texas Petroleum Holdings, Inc. today announced that Union Texas Petroleum Limited, its wholly-owned London-based subsidiary, has entered into an agreement to acquire a 25% working interest in five and a half offshore blocks located in St. George's Channel between Ireland and Great Britain. The blocks are situated offshore Ireland, about 15 miles east of the town of Wexford. Water depths in the area range from 200 to 300 feet. The blocks, the nearest of which is located about five miles northwest of a gas discovery by Marathon Oil U.K., Limited, encompass a total of about 345,000 acres. Union Texas Petroleum Limited has agreed to acquire its interest in the blocks from Marathon Petroleum Ireland, Ltd. and Marathon Petroleum Hibernia, Ltd., both wholly-owned subsidiaries of Marathon Oil Company (NYSE:MRO). Marathon is operator of the blocks and retains the remaining 75% interest. The blocks involved are 41/25, 41/29, 41/30, 42/21, 50/4 and part of 41/28. To date, Marathon has acquired approximately 2,100 kilometers of seismic data on the blocks. The initial exploratory well is expected to begin drilling in the second quarter of 1995. -more- 2 -2- Terms of Union Texas Petroleum Limited's acquisition were not disclosed. Union Texas Petroleum Limited said the transfer of interest was subject to the approval of the Irish Minister for Transport, Energy and Communications. One of the largest independent producers located in the U.S., Houston-based Union Texas Petroleum Holdings, Inc. (NYSE: UTH) explores for and produces oil and gas overseas primarily in the U.K. North Sea, Indonesia and other strategic areas. The company also has petrochemical interests in the U.S. # # # Note to editors and reporters: A map of the offshore Ireland blocks is available by contacting Carol Cox at 713-968-2714. -----END PRIVACY-ENHANCED MESSAGE-----