-----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, HZLziCGuFqOQsa1zPXtPptJiHGSQA4yX/SsKs3cSuRx8cWzyD18gR8qhd5qq7l5m oRfklzOysoMpYWBEB6nhrA== 0000899243-96-001007.txt : 19960812 0000899243-96-001007.hdr.sgml : 19960812 ACCESSION NUMBER: 0000899243-96-001007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960809 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITED MERIDIAN CORP CENTRAL INDEX KEY: 0000818885 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 752160316 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-12088 FILM NUMBER: 96607030 BUSINESS ADDRESS: STREET 1: 1201 LOUISIANA STREET 2: STE 1400 CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 7136549110 MAIL ADDRESS: STREET 1: 1201 LOUISIANA STREET 2: STE 1400 CITY: HOUSTON STATE: TX ZIP: 77002 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549-1004 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 ------------- Commission file number 1-12088 ------------------ UNITED MERIDIAN CORPORATION (Exact name of registrant as specified in its charter) Delaware 75-2160316 - --------------------------------------------- ----------------------------- (State or other jurisdiction of incorporation (I.R.S. Employer or organization) Identification No.) 1201 Louisiana, Suite 1400, Houston, TX 77002-5603 - --------------------------------------------- ----------------------------- (Address of principal executive offices) (Zip Code) (713) 654-9110 --------------------------------- (Registrant's telephone number) 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 . ----- ----- The number of shares outstanding of the registrant's common stock, all of which comprise a single class with a $0.01 par value, as of August 2, 1996, the latest practicable date, was 28,832,220. UNITED MERIDIAN CORPORATION Form 10-Q June 30, 1996 TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION Page Item 1. Consolidated Financial Statements (Unaudited) Consolidated Statement of Income for the Three Months and Six Months Ended June 30, 1996 and 1995............ 1 Consolidated Balance Sheet at June 30, 1996 and December 31, 1995...................................... 2 Consolidated Statement of Changes in Stockholders' Equity Equity for the Year Ended December 31, 1995 and for the Six Months Ended June 30, 1996......................... 4 Consolidated Statement of Cash Flows for the Six Months Ended June 30, 1996 and 1995........................... 5 Notes to Consolidated Financial Statements............... 6 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition..................... 12 PART II - OTHER INFORMATION Item 1. Legal Proceedings.......................................... 16 Item 2. Changes in Securities...................................... 16 Item 3. Defaults Upon Senior Securities............................ 16 Item 4. Submission of Matters to a Vote of Security Holders........ 16 Item 5. Other Information.......................................... 16 Item 6. Exhibits and Reports on Form 8-K........................... 16 SIGNATURE............................................................. 17 EXHIBITS - Index to Exhibits................................................... 18
UNITED MERIDIAN CORPORATION CONSOLIDATED STATEMENT OF INCOME (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
For the three For the six months ended months ended June 30, June 30, ---------------------- -------------------- 1996 1995 1996 1995 -------- -------- -------- ------- Revenues: Gas sales............................ $30,305 $16,411 $ 60,986 $34,122 Oil sales............................ 18,865 11,723 35,284 21,128 Gain on sale of assets............... 12,487 82 18,012 12,569 Other................................ 458 122 680 955 ------- ------- -------- ------- 62,115 28,338 114,962 68,774 ------- ------- -------- ------- Costs and expenses: Production costs..................... 12,283 9,834 25,766 19,481 General and administrative........... 3,120 2,683 6,519 5,437 Exploration, including dry holes and impairments........................ 10,250 3,553 14,711 7,623 Depreciation, depletion and amortization....................... 22,062 12,868 41,821 25,828 ------- ------- -------- ------- 47,715 28,938 88,817 58,369 ------- ------- -------- ------- Income (loss) from operations........... 14,400 (600) 26,145 10,405 Other income and expenses: Interest and debt expense............ (5,841) (4,356) (11,380) (8,729) Other................................ (36) 184 78 305 ------- ------- -------- ------- Net income (loss) before income taxes... 8,523 (4,772) 14,843 1,981 Income tax benefit (provision).......... (3,288) 5,235 (5,892) 2,089 ------- ------- -------- ------- Net income.............................. 5,235 463 8,951 4,070 Preferred stock dividends............... (765) - (1,531) - ------- ------- -------- ------- Net income available to common stockholders........................... $ 4,470 $ 463 $ 7,420 $ 4,070 ======= ======= ======== ======= Net income per common share............. $ 0.15 $ 0.02 $ 0.24 $ 0.14 ======= ======= ======== ======= Weighted average number of common shares outstanding, including common stock equivalents (Exhibit 11.1)....... 30,652 29,079 30,474 29,035 ======= ======= ======== =======
The accompanying notes are an integral part of these financial statements. -1- UNITED MERIDIAN CORPORATION CONSOLIDATED BALANCE SHEET (IN THOUSANDS)
June 30, December 31, 1996 1995 ------- ------------ ASSETS Current assets: Cash and cash equivalents............................ $ 4,138 $ 13,586 Accounts receivable Oil and gas sales.................................. 21,083 18,188 Joint interest and other........................... 22,157 22,522 Deferred income taxes................................ 8,826 3,875 Inventory............................................ 8,695 15,313 Prepaid expenses and other........................... 3,188 2,529 --------- --------- Total current assets............................. 68,087 76,013 --------- --------- Property and equipment, at cost: Oil and gas (successful efforts method) Proved properties.................................. 768,353 759,695 Unproved properties................................ 11,565 12,369 Other property and equipment......................... 6,860 6,231 --------- --------- 786,778 778,295 Accumulated depreciation, depletion and amortization. (327,397) (309,622) --------- --------- 459,381 468,673 --------- --------- Other assets: Gas imbalances receivable............................ 5,818 5,852 Deferred income taxes................................ 14,295 17,140 Debt issue cost...................................... 9,375 9,905 Other................................................ 828 867 --------- --------- 30,316 33,764 --------- --------- TOTAL ASSETS..................................... $ 557,784 $ 578,450 ========= =========
The accompanying notes are an integral part of these financial statements. -2- UNITED MERIDIAN CORPORATION CONSOLIDATED BALANCE SHEET (IN THOUSANDS)
June 30, December 31, 1996 1995 -------- ------------ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable........................................ $ 37,534 $ 58,137 Advances from joint owners.............................. 8,977 8,238 Interest payable........................................ 5,310 4,494 Accrued liabilities..................................... 8,761 6,202 Notes payable........................................... - 10,639 Current maturities of long-term debt.................... 4,350 3,100 --------- --------- 64,932 90,810 --------- --------- Long-term debt: Revolving loan.......................................... 44,758 61,049 Cote d'Ivoire project loan.............................. 32,500 33,750 10-3/8% senior subordinated notes....................... 150,000 150,000 --------- --------- 227,258 244,799 --------- --------- Deferred credits and other liabilities: Deferred income taxes................................... 23,167 18,499 Gas imbalances payable.................................. 6,460 6,377 Other................................................... 6,151 5,653 --------- --------- 35,778 30,529 --------- --------- Commitments and contingencies Stockholders' equity: Series F preferred stock................................ 12 12 Common stock............................................ 287 281 Additional paid-in capital.............................. 346,526 336,469 Foreign currency translation adjustment................. (4,036) (4,057) Retained earnings (deficit)............................. (112,973) (120,393) --------- --------- 229,816 212,312 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY............ $ 557,784 $ 578,450 ========= =========
The accompanying notes are an integral part of these financial statements. -3- UNITED MERIDIAN CORPORATION CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (IN THOUSANDS, EXCEPT SHARE AMOUNTS) For the year ended December 31, 1995 and six months ended June 30, 1996
SERIES F PREFERRED STOCK COMMON STOCK ADD'L FOREIGN RETAINED ------------------ ------------------- PAID-IN CURRENCY EARNINGS SHARES AMOUNT SHARES AMOUNT CAPITAL ADJUSTMENT (DEFICIT) TOTAL -------- ------- ---------- -------- --------- ---------- ---------- -------- Balance, December 31, 1994........ - $ - 27,721,881 $277 $296,168 $(3,999) $(121,008) $171,438 Foreign currency translation adjustment.................... (58) (58) Preferred stock issuance - June 30.................... 833,333 8 24,992 25,000 - July 24.................... 333,334 4 9,902 9,906 Exercise of common stock options....................... 428,343 4 5,407 5,411 Preferred stock dividends...... (1,484) (1,484) Net income..................... 2,099 2,099 --------- --- ----------- ---- -------- ------- ---------- -------- Balance, December 31, 1995........ 1,166,667 12 28,150,224 281 336,469 (4,057) (120,393) 212,312 Foreign currency translation adjustment.................... 21 21 Exercise of common stock options....................... 318,358 3 6,472 6,475 Exercise of warrants........... 233,556 3 3,585 3,588 Preferred stock dividends...... (1,531) (1,531) Net income..................... 8,951 8,951 --------- --- ----------- ---- -------- ------- ---------- -------- Balance, June 30, 1996............ 1,166,667 $12 28,702,138 $287 $346,526 $(4,036) $(112,973) $229,816 ========= === =========== ==== ======== ======= ========= ========
The accompanying notes are an integral part of these financial statements. -4- UNITED MERIDIAN CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (IN THOUSANDS)
For the six months ended June 30, -------------------------------- 1996 1995 --------- --------- Cash flows from operating activities: Net income................................................................ $ 8,951 $ 4,070 Adjustments to reconcile net income to cash from operating activities: Exploration, including dry holes and impairments........................ 14,711 7,623 Depreciation, depletion and amortization................................ 41,821 25,828 Amortization of debt issue cost......................................... 792 319 Deferred income tax provision (benefit)................................. 5,595 (2,476) Gain on sale of assets.................................................. (18,012) (12,569) --------- --------- 53,858 22,795 Changes in assets and liabilities: Increase in receivables................................................. (2,530) (3,744) Decrease in payables and accrued liabilities............................ (19,185) (517) Increase in net gas imbalances.......................................... 117 183 Other................................................................... 2,700 1,869 --------- --------- Net cash provided by operating activities............................. 34,960 20,586 --------- --------- Cash flows from investing activities: Exploration............................................................... (24,148) (14,120) Development............................................................... (37,444) (36,519) Acquisition of properties................................................. - (3,680) Additions to other property and equipment................................. (615) (549) Net proceeds from sale of assets.......................................... 29,715 48,410 --------- --------- Net cash used in investing activities................................. (32,492) (6,458) --------- --------- Cash flows from financing activities: Repayment of long-term debt............................................... (105,238) (237,784) Additions to total debt................................................... 88,947 187,645 Debt issue cost........................................................... (251) - Proceeds from exercise of common stock options and warrants............................................................ 6,157 1,029 Preferred stock dividends................................................. (1,531) - Net proceeds from issuance of preferred stock............................. - 24,970 --------- --------- Net cash used in financing activities................................. (11,916) (24,140) --------- --------- Net decrease in cash and cash equivalents.................................. (9,448) (10,012) Cash and cash equivalents at beginning of period........................... 13,586 11,825 --------- --------- Cash and cash equivalents at end of period................................. $ 4,138 $ 1,813 ========= =========
The accompanying notes are an integral part of these financial statements. -5- UNITED MERIDIAN CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Financial Statements The accompanying consolidated financial statements of United Meridian Corporation (UMC or the Company) included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Although certain information normally included in financial statements prepared in accordance with generally accepted accounting principles has been condensed or omitted, UMC believes that the disclosures are adequate to make the information presented not misleading. The financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 1995. The financial statements reflect all normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation. 2. Acquisitions and Dispositions As part of its on-going operations, the Company continually sells producing and undeveloped reserves and related assets. Certain transactions are discussed below. In February 1995, UMC sold all of its interests in oil and gas properties in West Virginia, effective January 1, 1995. Net proceeds from the sale were $41.2 million and a gain of $7.0 million was recognized. Total proved reserves at December 31, 1994, attributable to the sold properties were 61,715 MMcfe of natural gas equivalents. In March 1995, UMC sold all of its interest in the Main Pass 108 offshore Louisiana field effective February 1, 1995. Net proceeds from the sale were $6.9 million with a recognized gain of $4.7 million. Total proved reserves at December 31, 1994, associated with the Company's interest in Main Pass 108 were 2,106 MMcfe of natural gas equivalents. In October 1995, the Company agreed to assign a portion of its interest in Block B in Equatorial Guinea to Mobil for total consideration of $36.8 million, $18.8 million of which was received in 1995 with the remainder to be received in 1996. During the first six months of 1996, the Company recognized a gain of $11.4 million on proceeds of $13.0 million. In June 1996, UMC Resources Canada, Inc. (Resources), the Company's wholly- owned Canadian subsidiary, sold all of its interests in the Rocanville area in the province of Saskatchewan, effective May 1, 1996. Net proceeds from the sale were $6.9 million and a gain of $4.8 million was recognized. Total proved reserves attributable to the interests sold were 4,366 MMcfe of natural gas equivalents at December 31, 1995. 3. Financial Instruments The Company has, from time to time, entered into crude oil and natural gas price swaps and interest rate swaps, or other similar hedging transactions, to reduce its exposure to price reductions on a portion of its production that is subject to market sensitive pricing and to reduce its exposure to increases in interest rates. The Company hedged a portion of its gas production via swap agreements in the first six months of 1996, resulting in a $2.2 million downward adjustment to natural gas revenues. Details of current contracts in place are described below. -6- In April 1996, the Company entered into four natural gas collar contracts for a total of 14 BCF of natural gas for the period June through December, representing approximately 40% of estimated North American volumes. The collars consist of a guaranteed floor price of $2.20 per MMbtu and a cap of $2.70 per MMbtu. In addition, the Company also has an outstanding natural gas hedging contract expiring in December 1996 and having a notional volume of 50,000 MMbtu per month at $2.21 per MMbtu. As of January 1, 1996, UMC has a fixed interest rate swap contract that provides for fixed interest rates on $45.0 million of the Company's debt through 1998. The agreement includes annual fixed interest rates ranging from 5.55% in 1996 to 6.40% in 1998. Additionally, the Company has a two-year LIBOR interest rate cap contract, which began January 1, 1995, at an interest rate cap of 8.30% for 1996. The effect of these swaps has had minimal impact on Interest and Debt Expense during the six months ended June 30, 1996. 4. Exercise of Common Stock Warrants On June 11, 1993, the Company issued warrants to purchase 250,004 shares of the Company's common stock in connection with the KPX acquisition at an exercise price of $15.36 per share. During the quarter ended June 30, 1996, proceeds of $3.6 million for the exercise of warrants were received and 233,556 shares of common stock were issued. 5. Subsequent Event On July 26, 1996, the Company converted $35 million of Series F convertible preferred stock to 1.845 million shares of common stock in accordance with the automatic conversion terms of the original private offering. The conversion eliminates the 8.75% dividend on the preferred stock. Had the conversion of the Series F preferred stock occurred at January 1, 1996, the reported earnings per share would have been $0.28 and $0.16 for the six months and three months ended June 30, 1996, respectively. 6. Supplemental Guarantor Information In connection with the sale by UMC of the 10-3/8% Senior Subordinated Notes (Notes) in October 1995, UMC Petroleum Corporation (Petroleum), wholly-owned and the Company's only direct subsidiary, has unconditionally guaranteed the full and prompt performance of the Company's obligations under the Notes and related indenture, including the payment of principal, premium (if any) and interest. Other than intercompany arrangements and transactions, the consolidated financial statements of Petroleum are equivalent in all material respects to those of the Company and therefore the separate consolidated financial statements of Petroleum are not material to investors and have not been included herein. However, in an effort to provide meaningful financial data relating to the guarantor (i.e., Petroleum on an unconsolidated basis) of the Notes, the following condensed consolidating financial information has been provided following the policies set forth below: (1) Investments in subsidiaries are accounted for by the Company on the cost basis. Earnings of subsidiaries are therefore not reflected in the related investment accounts. (2) Certain reclassifications were made to conform all of the financial information to the financial presentation on a consolidated basis. The principal eliminating entries eliminate investments in subsidiaries and intercompany balances. -7- SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME For the six months ended June 30, 1996 and 1995 (In thousands)
Unconsolidated ---------------------------------------------------- Guarantor Non-Guarantor Consolidated UMC Subsidiary Subsidiaries UMC --------- --------------- ---------------- --------------- 1996 - ---- Revenues..................................... $ - $ 78,477 $36,485 $114,962 ------- -------- ------- -------- Costs and expenses: Production costs............................ - 19,929 5,837 25,766 General and administrative.................. 107 5,187 1,225 6,519 Exploration, including dry holes and impairments............................... - 8,811 5,900 14,711 Depreciation, depletion and amortization.... - 35,537 6,284 41,821 ------- -------- ------- -------- Income (loss) from operations................ (107) 9,013 17,239 26,145 Interest income (expense), net.............. 8,849 (15,814) (4,415) (11,380) Other credits, net.......................... - (22) 100 78 ------- -------- ------- -------- Net income (loss) before income taxes........ 8,742 (6,823) 12,924 14,843 Income tax benefit (provision)............... (2,371) 1,272 (4,793) (5,892) ------- -------- ------- -------- Net income (loss)............................ $ 6,371 $ (5,551) $ 8,131 $ 8,951 ======= ======== ======= ======== 1995 - ---- Revenues..................................... $ - $ 58,362 $10,412 $ 68,774 ------- -------- ------- -------- Costs and expenses: Production costs............................ - 15,786 3,695 19,481 General and administrative.................. 374 3,794 1,269 5,437 Exploration, including dry holes and impairments............................... - 5,470 2,153 7,623 Depreciation, depletion and amortization.... - 21,306 4,522 25,828 ------- -------- ------- -------- Income (loss) from operations................ (374) 12,006 (1,227) 10,405 Interest income (expense), net.............. 7,614 (15,423) (920) (8,729) Other credits, net.......................... - 57 248 305 ------- -------- ------- -------- Net income (loss) before income taxes........ 7,240 (3,360) (1,899) 1,981 Income tax benefit (provision)............... (2,534) 1,282 3,341 2,089 ------- -------- ------- -------- Net income (loss)............................ $ 4,706 $ (2,078) $ 1,442 $ 4,070 ======= ======== ======= ========
-8- SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME For the three months ended June 30, 1996 and 1995 (In thousands)
Unconsolidated ---------------------------------------------------- Guarantor Non-Guarantor Consolidated UMC Subsidiary Subsidiaries UMC --------- --------------- ---------------- --------------- 1996 - ---- Revenues..................................... $ - $39,628 $22,487 $62,115 ------- ------- ------- ------- Costs and expenses: Production costs............................ - 9,543 2,740 12,283 General and administrative.................. 70 2,544 506 3,120 Exploration, including dry holes and impairments............................... - 6,792 3,458 10,250 Depreciation, depletion and amortization.... - 18,839 3,223 22,062 ------- ------- ------- ------- Income (loss) from operations................ (70) 1,910 12,560 14,400 Interest income (expense), net.............. 4,444 (7,861) (2,424) (5,841) Other credits, net.......................... - (103) 67 (36) ------- ------- ------- ------- Net income (loss) before income taxes........ 4,374 (6,054) 10,203 8,523 Income tax benefit (provision)............... (862) 1,289 (3,715) (3,288) ------- ------- ------- ------- Net income (loss)............................ $ 3,512 $(4,765) $ 6,488 $ 5,235 ======= ======= ======= ======= 1995 - ---- Revenues..................................... $ - $22,353 $ 5,985 $28,338 ------- ------- ------- ------- Costs and expenses: Production costs............................ - 7,613 2,221 9,834 General and administrative.................. 176 1,853 654 2,683 Exploration, including dry holes and impairments............................... - 2,807 746 3,553 Depreciation, depletion and amortization.... - 10,627 2,241 12,868 ------- ------- ------- ------- Income (loss) from operations................ (176) (547) 123 (600) Interest income (expense), net.............. 3,871 (7,751) (476) (4,356) Other credits, net.......................... - 28 156 184 ------- ------- ------- ------- Net income (loss) before income taxes........ 3,695 (8,270) (197) (4,772) Income tax benefit (provision)............... (1,293) 3,308 3,220 5,235 ------- ------- ------- ------- Net income (loss)............................ $ 2,402 $(4,962) $ 3,023 $ 463 ======= ======= ======= =======
-9- SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET At June 30, 1996 and December 31, 1995 (In thousands)
Unconsolidated ---------------------------------------------------- Guarantor Non-Guarantor Eliminating Consolidated UMC Subsidiary Subsidiaries Entries UMC --------- --------------- ---------------- ------- --------------- JUNE 30, 1996 - ------------- ASSETS Current assets.......................... $ 7 $ 44,752 $ 23,328 $ - $ 68,087 Intercompany investments................ 469,546 (246,999) (84,211) (138,336) - Property and equipment, net............. - 285,134 174,247 - 459,381 Other assets............................ 5,706 29,525 (4,915) - 30,316 -------- --------- -------- --------- -------- Total assets......................... $475,259 $ 112,412 $108,449 $(138,336) $557,784 ======== ========= ======== ========= ======== LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities..................... $ 4,091 $ 42,160 $ 18,681 $ - $ 64,932 Long-term debt.......................... 150,000 31,725 45,533 - 227,258 Deferred credits and other liabilities............................ - 13,451 22,327 - 35,778 Stockholders' equity.................... 321,168 25,076 21,908 (138,336) 229,816 -------- --------- -------- -------- --------- Total liabilities & stockholders' equity............................... $475,259 $ 112,412 $108,449 $(138,336) $557,784 ======== ========= ======== ========= ======== DECEMBER 31, 1995 - ----------------- ASSETS Current assets.......................... $ 31 $ 44,599 $ 31,383 $ - $ 76,013 Intercompany investments................ 453,574 (239,072) (76,165) (138,337) - Property and equipment, net............. - 305,930 162,743 - 468,673 Other assets............................ 6,103 28,970 (1,309) - 33,764 -------- -------- -------- --------- -------- Total assets......................... $459,708 $140,427 $116,652 $(138,337) $578,450 ======== ======== ======== ========= ======== LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities..................... $ 3,443 $ 57,920 $ 29,447 $ - $ 90,810 Long-term debt.......................... 150,000 39,225 55,574 - 244,799 Deferred credits and other liabilities............................ - 12,655 17,874 - 30,529 Stockholders' equity.................... 306,265 30,627 13,757 (138,337) 212,312 -------- -------- -------- --------- -------- Total liabilities & stockholders' equity................................ $459,708 $140,427 $116,652 $(138,337) $578,450 ========= ======== ======== ========= ========
-10- SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the six months ended June 30, 1996 and 1995 (In thousands)
Unconsolidated ----------------------------------------------------- Guarantor Non-Guarantor Consolidated 1996 UMC Subsidiary Subsidiaries UMC - ---- ----------- ------------ -------------- ------------ Cash flows from operating activities: Net income (loss)................................ $ 6,371 $ (5,551) $ 8,131 $ 8,951 Adjustments to reconcile net income (loss) to cash from operating activities........ 2,633 42,526 (252) 44,907 Changes in assets and liabilities................ 648 (14,598) (4,948) (18,898) ------- -------- -------- -------- Net cash provided by operating activities...... 9,652 22,377 2,931 34,960 Cash flows used in investing activities........... - (31,425) (1,067) (32,492) Cash flows provided by (used in) financing activities....................................... (9,676) (2,945) 705 (11,916) ------- -------- -------- -------- Net increase (decrease) in cash and cash equivalents...................................... (24) (11,993) 2,569 (9,448) Cash and cash equivalents at beginning of period.. 31 6,631 6,924 13,586 ------- -------- -------- -------- Cash and cash equivalents at end of period........ $ 7 $ (5,362) $ 9,493 $ 4,138 ======= ======== ======== ======== 1995 - ---- Cash flows from operating activities: Net income (loss)................................ $ 4,706 $ (2,078) $ 1,442 $ 4,070 Adjustments to reconcile net income (loss) to cash from operating activities........ 2,649 12,449 3,627 18,725 Changes in assets and liabilities................ (57) 5,269 (7,421) (2,209) ------- -------- -------- -------- Net cash provided by (used in) operating activities.................................... 7,298 15,640 (2,352) 20,586 Cash flows provided by (used in) investing activities....................................... - 22,001 (28,459) (6,458) Cash flows provided by (used in) financing activities....................................... (7,295) (40,520) 23,675 (24,140) ------- -------- -------- -------- Net increase (decrease) in cash and cash equivalents...................................... 3 (2,879) (7,136) (10,012) Cash and cash equivalents at beginning of period.. 12 3,728 8,085 11,825 ------- -------- -------- -------- Cash and cash equivalents at end of period........ $ 15 $ 849 $ 949 $ 1,813 ======= ======== ======== ========
-11- Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition. RESULTS OF OPERATIONS The following table sets forth certain operating information of the Company for the periods shown:
- -------- FOR THE THREE MONTHS FOR THE SIX MONTHS ENDED JUNE 30, ENDED JUNE 30, ------------------- ------------------ 1996 1995 1996 1995 -------- -------- -------- -------- Production: Natural gas (MMcf) U.S................................. 12,558 9,572 24,850 19,696 Canada.............................. 1,323 1,426 2,516 2,871 Cote d'Ivoire....................... 730 - 1,243 - ------ ------ ------ ------ Total............................... 14,611 10,998 28,609 22,567 Oil (Mbbls) U.S................................. 566 452 1,122 866 Canada.............................. 150 166 295 334 Cote d'Ivoire....................... 241 69 444 69 ------ ------ ------ ------ Total............................... 957 687 1,861 1,269 Average wellhead sales price: /(1)/ Natural gas ($ per Mcf) U.S................................. $ 2.19 $ 1.55 $ 2.23 $ 1.57 Canada.............................. $ 1.16 $ 1.15 $ 1.37 $ 1.15 Cote d'Ivoire....................... $ 1.74 $ - $ 1.73 $ - Total Company....................... $ 2.07 $ 1.49 $ 2.13 $ 1.51 Oil ($ per bbl) U.S................................. $20.56 $16.83 $19.32 $16.40 Canada.............................. $18.94 $18.49 $17.85 $17.59 Cote d'Ivoire....................... $18.21 $15.04 $18.79 $15.04 Total Company....................... $19.71 $17.06 $18.96 $16.65 Additional data ($ per Mcfe): Production and operating costs /(2)/... $ 0.52 $ 0.54 $ 0.53 $ 0.54 Ad valorem and production taxes........ $ 0.08 $ 0.11 $ 0.12 $ 0.11 General and administrative expense..... $ 0.15 $ 0.18 $ 0.16 $ 0.18 Oil and natural gas depletion, depreciation and amortization......... $ 1.07 $ 0.84 $ 1.04 $ 0.84
- -------------------------------------------- /(1)/ Net of impact of hedging activities. /(2)/ Costs incurred to operate and maintain wells and related equipment, excluding ad valorem and production taxes. -12- SIX MONTHS ENDED JUNE 30, 1996 COMPARED WITH THE SIX MONTHS ENDED JUNE 30, 1995. Total revenues for the six months ended June 30, 1996 were $115.0 million, or 67.2% greater than the six months ended June 30, 1995 amount of $68.8 million. The increase in total revenue was primarily attributable to significant improvements in oil and natural gas prices for the period, increased production volumes of oil and natural gas and gain on sale of assets of $18.0 million, an increase of 42.9% from the comparable period. The average sales price for natural gas increased $0.62 per Mcf or 41.1% in the first six months of 1996 from the first six months of 1995. Natural gas production for the six months ended June 30, 1996, was 28,609 MMcf, an increase of 26.8% over 1995 volumes due primarily to new production from the Gulf of Mexico and gas production in Cote d'Ivoire which commenced late in 1995. The average sales price for oil increased $2.31 per bbl or 13.9% in the first six months of 1996 compared to the first six months of 1995. Oil production increased 46.7% or 592 Mbbls in the first six months of 1996 due primarily to increased oil production in Cote d'Ivoire and condensate production in the Gulf of Mexico. Production costs, including ad valorem and production taxes, for the first six months of 1996 of $25.8 million increased 32.3% from $19.5 million for the first six months of 1995, with the increase primarily attributable to production in Cote d'Ivoire. However, production costs per Mcfe remained flat at $0.65 in the first six months of 1996 and 1995. General and administrative expenses for the six months ended June 30, 1996, were $6.5 million compared to $5.4 million for the six months ended June 30, 1995, primarily due to an overall increase in the Company's operations. However, in the first six months of 1996, general and administrative expenses per Mcfe of production were $0.16 compared to $0.18 for the comparable period of 1995 or a decrease of 11.1%. Exploration, dry hole and lease impairment expenses for the first six months of 1996 were $14.7 million compared to $7.6 million for the first six months of 1995. This increase of $7.1 million was primarily due to increased geological and geophysical costs, reflecting a higher level of international and North American exploration activity in 1996 and increased dry hole costs. Depreciation, depletion and amortization (DD&A) expense for the first six months of 1996 of $41.8 million increased 62.0% from $25.8 million for the six months ended June 30, 1995, due primarily to overall increased production levels. Certain downward mid-year revisions of proved oil and gas reserves were recognized by the Company at June 30, 1996, increasing DD&A expense for the period by $1.3 million. Furthermore, a greater proportion of the Company's oil and gas volumes were produced from the Gulf of Mexico region which historically has higher amortization rates. Interest expense for the first six months of 1996 was $11.4 million compared to $8.7 million for the first six months of 1995. This $2.7 million increase is primarily due to a higher average interest rate in 1996, due to the issuance of senior subordinated notes in the fourth quarter of 1995, offset by lower debt levels for the first half of 1996 versus the comparable period of 1995. An income tax provision of $5.9 million (of which $0.3 million is a current provision and $5.6 million is a deferred provision) was recognized as of June 30, 1996, compared to a benefit of $2.1 million for the comparable period of 1995. Included in the 1995 tax provision was the release of $0.7 million in deferred income taxes and generation of a $0.6 million current tax receivable relating to the completion of an on-going audit of the Company's Canadian operations. Consistent with the Statement of Financial Accounting Standards No. 109, the income tax provision or benefit is derived from changes in deferred income taxes on the balance sheet. The Company reported net income of $9.0 million, or $0.24 per share, for the first six months of 1996 compared to net income of $4.1 million, or $0.14 per share, for the comparable period in 1995. -13- THREE MONTHS ENDED JUNE 30, 1996 COMPARED WITH THE THREE MONTHS ENDED JUNE 30, 1995. Material changes in the results of operations between the three months ended June 30, 1996 and 1995, primarily reflect the significant increases in oil and natural gas production volumes and prices received and gain on sale of assets, all of which have been discussed previously. Increases in exploration expenses during the second quarter of 1996 as compared to the comparable period in 1995 reflect the significant international seismic program underway and certain dry hole costs recorded during the quarter. CAPITAL RESOURCES AND LIQUIDITY The primary sources of cash for the Company during the six months ended June 30, 1996, included funds generated from operations which reflected significant increases in production volumes and prices received, proceeds from asset sales and exercise of stock options and warrants. In the comparable period of 1995, the primary sources of cash included funds generated from operations and proceeds from sales of certain oil and gas properties. Primary cash uses included capital expenditures (including exploration expenses) which totaled $62.2 million for the first six months of 1996. Discretionary cash flow, a measure of performance for exploration and production companies, is derived by adjusting net income to eliminate the effects of exploration expenses, including dry hole costs and impairments, depreciation, depletion and amortization, deferred income tax and gain (loss) on sale of assets. The effects of working capital changes are not taken into account. This measure reflects an amount that is available for capital expenditures, debt repayment or dividend payments. The Company generated discretionary cash flow of approximately $53.9 million for the first six months of 1996 and $22.8 million for the first six months of 1995. The Company anticipates higher levels of discretionary cash flow in the remainder of 1996 as compared to 1995 due to increased forecasted production levels, full-year production in Cote d'Ivoire, commencement of production in Equatorial Guinea and the improvement of oil and natural gas prices since December 31, 1995. As part of its on-going operations, the Company continually sells producing and undeveloped reserves and related assets. During the first six months of 1996, the Company realized net proceeds of $29.7 million, as compared to $48.4 million during the comparable period of 1995. During the first six months of 1996, the Company realized proceeds of $6.2 million on the exercise of common stock options and warrants, which were due to expire during the second quarter of 1996. On July 26, 1996, the Company converted $35 million of Series F convertible preferred stock to 1.845 million shares of common stock in accordance with the automatic conversion terms of the original private offering. This conversion eliminates the 8.75% dividend on the preferred stock. The Balance Sheet reflects a total debt to book capitalization ratio of 50% and 54% at June 30, 1996 and December 31, 1995, respectively. The ratio at June 30, 1995 was 48%. Long-term debt outstanding at June 30, 1996 consisted of (1) $150.0 million senior subordinated notes, (2) $32.5 million project loan and (3) $44.8 million outstanding on the Company's revolving loan, resulting in liquidity (including cash) exceeding $130 million, as compared to $124 million at December 31, 1995. The Company's interest coverage ratio (calculated as the ratio of income from operations plus depreciation, depletion and amortization, impairment of proved oil and gas properties and exploration expense to interest less non-cash amortization of debt issue costs) was 7.11 to 1 for the six months ended June 30, 1996, compared with 5.21 to 1 during the comparable period of 1995. -14- OPERATING DATA For 1996, the Company has adopted a total capital expenditure budget of $174 million (exploration, development, and acquisitions) which will be funded from discretionary cash flow, non-core area property sales and available debt liquidity under the Credit Facility. This capital program may change if the prices of oil and natural gas are significantly more or less than the Company's expectations or based upon the results of the Company's exploration program. FOREIGN CURRENCY TRANSACTIONS The Company conducts a portion of its business in Canadian dollars. Therefore, a portion of the Company's business is subject to fluctuations in currency exchange rates. In preparing the Company's financial statements, the results of operations of the Canadian subsidiary are generally translated at the average exchange rate for the year-to-date, and the subsidiary's assets and liabilities are translated at the rate of exchange in effect on the balance sheet date. The majority of revenues and expenditures for the Company's West African operations are settled and all books and records are maintained in the U.S. dollar. CHANGES IN PRICES AND INFLATION The Company's revenues and the value of its oil and natural gas properties have been, and will continue to be, effected by changes in oil and natural gas prices. The Company's ability to maintain its current borrowing capacity and to obtain additional capital on attractive terms is also substantially dependent on oil and natural gas prices. Oil and natural gas prices are subject to significant seasonal and other fluctuations that are beyond the Company's ability to control or predict. Although certain Company costs and expenses are effected by the level of inflation, inflation did not have a significant effect on the Company's results of operations for the first six months of 1996 or 1995. -15- PART II - OTHER INFORMATION Item 1. Legal Proceedings. The Company is a named defendant in lawsuits and is a party in governmental proceedings from time to time arising in the ordinary course of business. While the outcome of such lawsuits or other proceedings against the Company cannot be predicted with certainty, management does not expect these matters to have a material adverse effect on the financial condition or results of operations of the Company. Item 2. Changes in Securities. None. Item 3. Defaults Upon Senior Securities. None. Item 4. Submission of Matters to a Vote of Security Holders. Stockholders voting at the Annual Meeting on May 22, 1996, and by proxy, elected four Directors (three incumbent, one new) to serve on the Company's Board of Directors until the 1999 annual meeting. The vote tabulation for the individual Directors was:
Director Shares For Shares Withheld - ---------------------------- ---------- --------------- J. Dennis Bonney 25,743,164 93,440 John B. Brock 25,745,864 90,740 Steven A. Denning 25,743,364 93,240 David K. Newbigging 25,742,364 94,240
Voting stockholders approved an amendment to the Company's 1994 Employee Nonqualified Stock Option Plan to increase the number of shares available for issuance thereunder from 2,350,000 to 2,850,000. The amendment was approved by 23,306,453 (90.3%) votes for and 2,497,301 (9.7%) against with 32,850 abstentions. Voting stockholders approved an amendment to the Company's 1994 Outside Directors' Nonqualified Stock Option Plan to increase the number of shares available for issuance thereunder from 150,000 to 250,000. The amendment was approved by 22,770,212 (88.2%) votes for and 3,032,692 (11.8%) against with 33,700 abstentions. Voting stockholders also approved the appointment of Arthur Andersen LLP as the Company's independent public accountants. The vote was 25,821,478 for and 9,726 against. There were 5,400 abstentions. Item 5. Other Information. None. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits: See Index to Exhibits incorporated by reference. (b) Report on Form 8-K: None. -16- 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. UNITED MERIDIAN CORPORATION August 8, 1996 /s/ Jonathan M. Clarkson ------------------------- Jonathan M. Clarkson Executive Vice President and Chief Financial Officer /s/ Christopher E. Cragg ------------------------- Christopher E. Cragg Vice President, Controller and Chief Accounting Officer -17- INDEX TO EXHIBITS SEQUENTIALLY EXHIBIT NUMBERED NUMBER EXHIBIT PAGE - ------- ------------------------------------------------- ------------- 3.1 Certificate of Incorporation of the Company, as amended, incorporated by reference to Exhibit 3.1 to UMC's 1995 Form 10-K filed with the Securities and Exchange Commission on March 7, 1996. 3.2 By-laws of the Company, as amended, incorporated by reference to Exhibit 3.2 to UMC's 1995 Form 10-K filed with the Securities and Exchange Commission on March 7, 1996. 4.1 Amended and Restated Credit Agreement dated as of July 18, 1994, among Petroleum, UMC and Norfolk Holdings Inc. as the Guarantors, The Chase Manhattan Bank, N.A., Morgan Guaranty Trust Company of New York and the lenders signatory thereto, incorporated by reference to Exhibit (b)(1) of Schedule 14D-1 and Schedule 13D of UMC, (No. 5-44990) filed with the Securities and Exchange Commission on August 11, 1994. 4.2 First Joint Amendment to Amended and Restated Credit Agreement and to Amended and Restated Credit Agreement (Canada) effective as of September 2, 1994, incorporated by reference to Exhibit 4.2 to Amendment No. 1 to UMC's Form S-4 (No. 33-83458) filed with the Securities and Exchange Commission on October 7, 1994. 4.3 Guaranty Agreement dated as of July 18, 1994, by UMC in favor of The Chase Manhattan Bank, N.A., Morgan Guaranty Trust Company of New York and the lenders listed therein, incorporated by reference to Exhibit 4.4 to UMC's Form S-4 (No. 33-83458) filed with the Securities and Exchange Commission on August 31, 1994. 4.4 Guaranty Agreement dated as of July 18, 1994, by Norfolk Holdings Inc. as the Guarantor, in favor of The Chase Manhattan Bank, N.A., Morgan Guaranty Trust Company of New York and the lenders listed therein, incorporated by reference to Exhibit 4.5 to UMC's Form S-4 (No. 33-83458) filed with the Securities and Exchange Commission on August 31, 1994. 4.5 Amended and Restated Credit Agreement dated as of July 18, 1994 among UMC Resources Canada Ltd., The Chase Manhattan Bank of Canada and the lenders signatory thereto, incorporated by reference to Exhibit 4.6 to UMC's Form S-4 (No. 33-83458) filed with the Securities and Exchange Commission on August 31, 1994. -18- SEQUENTIALLY EXHIBIT NUMBERED NUMBER EXHIBIT PAGE - ------- ------------------------------------------------------- ------------- 4.6 Guaranty Agreement dated as of July 18, 1994, by UMC as the Guarantor, in favor of The Chase Manhattan Bank of Canada and the lenders listed therein, incorporated by reference to Exhibit 4.7 to UMC's Form S-4 (No. 33-83458) filed with the Securities and Exchange Commission on August 31, 1994. 4.7 Guaranty Agreement dated as of July 18, 1994 by Petroleum in favor of The Chase Manhattan Bank of Canada and the lenders listed therein, incorporated by reference to Exhibit 4.8 to UMC's Form S-4 (No. 33-83458) filed with the Securities and Exchange Commission on August 31, 1994. 4.8 Employment Agreement dated as of August 9, 1994, among Donald D. Wolf, UMC and Petroleum, incorporated by reference to Exhibit (c)(4) to UMC's Schedule 14D-1 (No. 5-44990) filed with the Securities and Exchange Commission on August 11, 1994. 4.9 Amendment No. 1 to Registration Rights Agreement dated as of August 9, 1994 among GARI, UMC, General Atlantic Corporation, John Hancock Mutual Life Insurance Company and Fidelity Oil Holdings, Inc., incorporated by reference to Exhibit (c)(8) to UMC's Schedule 14D-1 (No. 5-44990) filed with the Securities and Exchange Commission on August 11, 1994. 4.10 Second Joint Amendment to Amended and Restated Credit Agreement and to Amended and Restated Credit Agreement (Canada) effective as of November 15, 1994, incorporated by reference to Exhibit 4.11 to UMC's 1994 Form 10-K filed with the Securities and Exchange Commission on March 10, 1995. 4.11 Third Joint Amendment to Amended and Restated Credit Agreement and to Amended and Restated Credit Agreement (Canada) effective as of December 31, 1994, incorporated by reference to Exhibit 4.12 to UMC's 1994 Form 10-K filed with the Securities and Exchange Commission on March 10, 1995. 4.12 Credit Agreement dated as of December 31, 1994 among UMC, The Chase Manhattan Bank, N.A., Morgan Guaranty Trust Company of New York and Lenders Signatory thereto incorporated by reference to Exhibit 4.13 to UMC's 1994 Form 10-K filed with the Securities and Exchange Commission on March 10, 1995. 4.13 Specimen of certificate representing Series A Voting Common Stock, $.01 par value, of the Company, incorporated herein by reference to Exhibit 4.13 to the Company's Form 10-Q for the period ended June 30, 1994 filed with the Securities and Exchange Commission on August 10, 1994. -19- SEQUENTIALLY EXHIBIT NUMBERED NUMBER EXHIBIT PAGE - ------- ----------------------------------------------------- ------------ 4.14 Stock Purchase Agreement of Series F Convertible Preferred Stock (par value $0.01 per share) between UMC and John Hancock Mutual Life Insurance Company, The Travelers Insurance Company, The Travelers Life and Annuity Company, The Phoenix Insurance Company and The Travelers Indemnity Company dated June 30, 1994, incorporated by reference to Exhibit 4.16 to UMC's Form 10-Q for the quarterly period ended June 30, 1995, filed with the Securities and Exchange Commission on August 10, 1995. 4.15 Stock Purchase Agreement of Series F Convertible Preferred Stock (par value $0.01 per share) between UMC and John Hancock Mutual Life Insurance Company dated July 24, 1995, incorporated by reference to Exhibit 4.17 to UMC's Form 10-Q for the quarterly period ended June 30, 1995, filed with the Securities and Exchange Commission on August 10, 1995. 4.16 First Amendment to Credit Agreement among UMC, The Chase Manhattan Bank, N.A., Morgan Guaranty Trust Company of New York and Lenders Signatory thereto dated as of June 30, 1995, incorporated by reference to Exhibit 4.18 to UMC's Form 10-Q for the quarterly period ended June 30, 1995, filed with the Securities and Exchange Commission on August 10, 1995. 4.17 Loan Agreement between UMIC Cote d'Ivoire Corporation and International Finance Corporation dated as of July 14, 1995, incorporated by reference to Exhibit 4.19 to UMC's Form 10-Q for the quarterly period ended June 30, 1995, filed with the Securities and Exchange Commission on August 10, 1995. 4.18 Share Retention, Guarantee and Clawback Agreement among UMC, UMC Petroleum Corporation, UMIC Cote d'Ivoire Corporation and International Finance Corporation dated as of July 14, 1995, incorporated by reference to Exhibit 4.20 to UMC's Form 10-Q for the quarterly period ended June 30, 1995, filed with the Securities and Exchange Commission on August 10, 1995. 4.19 Fourth Joint Amendment to Amended and Restated Credit Agreement and to Amended Restated Credit Agreement (Canada) effective as of October 30, 1995, incorporated by reference to Exhibit 4.21 to UMC's Form 10-Q for the quarterly period ended September 30, 1995, filed with the Securities and Exchange Commission on November 13, 1995. 4.20 Indenture between the Company, Petroleum and Bank of Montreal Trust Company, dated October 30, 1995, incorporated by reference to Exhibit 4.20 to UMC's 1995 Form 10-K filed with the Securities and Exchange Commission on March 7, 1996. -20- SEQUENTIALLY EXHIBIT NUMBERED NUMBER EXHIBIT PAGE - ------- --------------------------------------------------------- ------------ 4.21 Rights Agreement by and between United Meridian Corporation and Chemical Mellon Shareholder Services, L.L.C., as Rights Agent, dated as of February 13, 1996, incorporated by reference as Exhibit 1 to Form 8-K, filed with the Securities and Exchange Commission on February 14, 1996. 10.1 UMC Key Employee Cash Compensation Program, as amended, incorporated herein by reference to Exhibit 10.1 to the Company's Form S-1 (No. 33-63532) filed with the Securities and Exchange Commission on May 28, 1993. 10.2 The UMC Petroleum Savings Plan as amended and restated incorporated herein by reference to Exhibit 4.10 to the Company's Form S-8 (No. 33-73574) filed with the Securities and Exchange Commission on December 29, 1993. 10.3 First Amendment to the UMC Petroleum Savings Plan, as Amended and Restated as of January 1, 1993, dated April 18, 1994, incorporated by reference to Exhibit 10.3 to UMC's 1994 Form 10-K filed with the Securities and Exchange Commission on March 10, 1995. 10.4 UMC 1987 Nonqualified Stock Option Plan, as amended, incorporated herein by reference to Exhibit 10.3 to the Company's Form S-1 (No. 33-63532) filed with the Securities and Exchange Commission on May 28, 1993. 10.5 Third Amendment to UMC 1987 Nonqualified Stock Option Plan dated November 16, 1993 incorporated herein by reference to Exhibit 10.4 to the Company's 1993 Form 10-K filed with the Securities and Exchange Commission on March 7, 1994. 10.6 Fourth Amendment to UMC 1987 Nonqualified Stock Option Plan dated April 6, 1994, incorporated by reference to Exhibit 10.6 to UMC's 1994 Form 10-K filed with the Securities and Exchange Commission on March 10, 1995. 10.7 UMC 1994 Nonqualified Employee Stock Option Plan incorporated herein by reference to Exhibit 4.14 to the Company's Form S-8 (No. 33-79160) filed with the Securities and Exchange Commission on May 19, 1994. 10.8 First Amendment to the UMC 1994 Employee Nonqualified Stock Option Plan dated November 16, 1994, incorporated herein by reference to Exhibit 4.11.1 to the Company's Form S-8 (No. 33-86480) filed with the Securities and Exchange Commission on November 18, 1994. -21- SEQUENTIALLY EXHIBIT NUMBERED NUMBER EXHIBIT PAGE - ------- ------------------------------------------------------- ----------- 10.9 UMC 1994 Outside Directors' Nonqualified Stock Option Plan incorporated herein by reference to Exhibit 4.15 to the Company's Form S-8 (No. 33-79160) filed with the Securities and Exchange Commission on May 19, 1994. 10.10 UMC Petroleum Corporation Supplemental Benefit Plan effective January 1, 1994, approved by the Board of Directors on March 29, 1994, incorporated by reference to Exhibit 10.10 to UMC's 1994 Form 10-K filed with the Securities and Exchange Commission on March 10, 1995. 10.11 Form of Indemnification Agreement, with Schedule of Signatories, incorporated herein by reference to Exhibit 10.4 to the Company's Form S-1 (No. 33-63532) filed with the Securities and Exchange Commission on May 28, 1993. 10.12 Petroleum Production Sharing Contract on Block CI-11 dated June 27, 1992 among the Republic of Cote d'Ivoire, UMIC Cote d'Ivoire Corporation and Societe Nationale d'Operations Petrolieres de la Cote d'Ivoire (including English translation), incorporated herein by reference to Exhibit 10.5 to Amendment No. 3 to the Company's Form S-1 (No. 33-63532) filed with the Securities and Exchange Commission on July 20, 1993. 10.13 Production Sharing Contract dated August 18, 1992 between the Republic of Equatorial Guinea and United Meridian International Corporation (Area A - Offshore NE Bioco), incorporated herein by reference to Exhibit 10.6 to Amendment No. 1 to the Company's Form S-1 (No. 33-63532) filed with the Securities and Exchange Commission on June 18, 1993. 10.14 Production Sharing Contract dated June 29, 1992 between the Republic of Equatorial Guinea and United Meridian International Corporation (Area B - Offshore NW Bioco), incorporated herein by reference to Exhibit 10.7 to Amendment No. 1 to the Company's Form S-1 (No. 33-63532) filed with the Securities and Exchange Commission on June 18, 1993. 10.15 Production Sharing Contract dated June 29, 1994 between the Republic of Equatorial Guinea and United Meridian International Corporation (Area C - Offshore Bioco) incorporated by reference to Exhibit 10.15 to UMC's 1994 Form 10-K filed with the Securities and Exchange Commission on March 10, 1995. -22- SEQUENTIALLY EXHIBIT NUMBERED NUMBER EXHIBIT PAGE - ------- ------------------------------------------------------ ------------ 10.16 Production Sharing Contract on Block CI-01 dated December 5, 1994 among The Republic of Cote d'Ivoire UMIC Cote d'Ivoire Corporation and Societe Nationale d'Operations Petrolieres de la Cote d'Ivoire (English translation) incorporated by reference to Exhibit 10.16 to UMC's 1994 Form 10-K filed with the Securities and Exchange Commission on March 10, 1995. 10.17 Production Sharing Contract on Block CI-02 dated December 5, 1994 among The Republic of Cote d'Ivoire UMIC Cote d'Ivoire Corporation and Societe Nationale d'Operations Petrolieres de la Cote d'Ivoire (English translation) incorporated by reference to Exhibit 10.17 to UMC's 1994 Form 10-K filed with the Securities and Exchange Commission on March 10, 1995. 10.18 Production Sharing Contract on Block CI-12 dated April 27, 1995 among The Republic of Cote d'Ivoire, UMIC Cote d'Ivoire Corporation and others (English translation), incorporated by reference to Exhibit 10.18 to UMC's 1995 Form 10-K filed with the Securities and Exchange Commission on March 7, 1996. 10.19 Contract for Sale and Purchase of Natural Gas for Block CI-11 among Caisse Autonome D'Amortissement, UMIC Cote d'Ivoire Corporation and others dated September 30, 1994 (French and English translation) incorporated by reference to Exhibit 10.7 to the Company's Form 10-Q for the period ended September 30, 1994 filed with the Securities and Exchange Commission on November 14, 1994. 10.20 Production Sharing Contract dated April 5, 1995 between The Republic of Equatorial Guinea and UMIC Equatorial Guinea Corporation (Area D - Offshore Bioco) incorporated by reference to Exhibit 10.20 to the Company's Form 10-Q for the period ended June 30, 1995 filed with the Securities and Exchange Commission on August 10, 1995. 10.21 Contract for Purchase and Sale of Lion Crude Oil between UMIC Cote d'Ivoire Corporation, International Finance Corporation, G.N.R. (Cote d'Ivoire) Ltd. and Pluspetrol S.A. and Total International Limited, dated December 1, 1995, incorporated by reference to Exhibit 10.22 to UMC's 1995 Form 10-K filed with the Securities and Exchange Commission on March 7, 1996. 10.22* Amendment to United Meridian Corporation 1994 Non-Qualified Stock Option Agreement for Former Employees of General Atlantic Resources, Inc. dated as of April 16, 1996 among UMC and Donald D. Wolf. 10.23* Amendment to Employment Agreement dated as of April 16, 1996 among Petroleum and Donald D. Wolf. -23- SEQUENTIALLY EXHIBIT NUMBERED NUMBER EXHIBIT PAGE - ------- ---------------------------------------------------- ------------- 11.1* Calculation of Net Income per Common Share. 27.1* Financial Data Schedule. - ------------------- * Filed herewith. -24- EX-10.22 2 AMENDED STOCK OPTION AGREEMENT Exhibit 10.22 AMENDMENT TO UNITED MERIDIAN CORPORATION 1994 NONQUALIFIED STOCK OPTION AGREEMENT FOR FORMER EMPLOYEES OF GENERAL ATLANTIC RESOURCES, INC. This Amendment to United Meridian Corporation 1994 Nonqualified Stock Option Agreement for Former Employees of General Atlantic Resources, Inc. (this "Amendment") is made and entered into this 16th day of April, 1996 by and between UNITED MERIDIAN CORPORATION, a Delaware corporation (the "Company"), and DONALD D. WOLF ("Optionee"). RECITALS A. The Company and Optionee heretofore entered into a United Meridian Corporation 1994 Nonqualified Stock Option Agreement for Former Employees of General Atlantic Resources, Inc. dated as of November 15, 1994 (the "Agreement") pursuant to which certain options which had been granted to Optionee by General Atlantic Resources, Inc. were converted into options to acquire shares of Series A Voting Common Stock, par value $0.01 per share, of the Company ("UMC Common Stock"). B. Optionee has given notice to the Company that he desires to terminate his employment arrangement effective as of April 30, 1996, and this Amendment modifies the Agreement to reflect the agreement of the parties in respect of such termination. C. Terms which are defined in the Agreement and used herein shall have the same meanings as so defined. AGREEMENTS 1. Notwithstanding anything to the contrary contained in the Agreement, the options granted therein shall continue to vest from the effective date of Optionee's resignation to and including July 15, 1996, but not thereafter. The effect of the preceding sentence will be to allow the option granted to Optionee to vest in respect of 8,580 shares of UMC Common Stock included in the grant of July 1993. Exhibit A attached hereto sets forth the number of shares of UMC Common Stock which may be purchased as of July 15, 1996 upon the exercise of the option granted by the Agreement, the per share exercise price for such shares and the dates on which such option shall expire with respect to such shares. 2. Section 4(d) of the Agreement is amended to read as follows: (d) In the event Optionee terminates his relationship with the Company and its affiliates voluntarily on or before August 15, 1996, Optionee may exercise this option at any time during the remaining term of the option. If Optionee dies subsequent to such voluntary termination, this option may be exercised, to the extent Optionee was entitled to exercise this option immediately prior to Optionee's death, within twelve months of Optionee's death (if otherwise within the option period), but not thereafter. Notwithstanding the foregoing, the provisions of this Section 4(d) shall be subject to Sections 1 and 6, which may earlier terminate the option. IN WITNESS WHEREOF, the parties have executed this Amendment on the date first set forth above. UNITED MERIDIAN CORPORATION By: /s/ John B. Brock -------------------- John B. Brock, Chairman and Chief Executive Officer /s/ Donald D. Wolf --------------------- Donald D. Wolf -2- EXHIBIT A
Shares which may Date after which such be Purchased as of Shares May no Longer July 15, 1996 upon be Purchased Upon Exercise of this Option Exercise Price per Share Exercise of the Option - ----------------------------------------------------------------------------- 141,288 $ 3.95 12/31/99 107,163 2.75 2/14/00 100,205 5.75 6/30/01 25,740 11.82 7/14/04 13,200 13.64 3/06/05
EX-10.23 3 AMENDED EMPLOYMENT AGREEMENT Exhibit 10.23 AMENDMENT TO EMPLOYMENT AGREEMENT This Amendment to Employment Agreement (this "Amendment") is made and entered into this 16th day of April, 1996 by and among UNITED MERIDIAN CORPORATION, a Delaware corporation (the "Parent"), UMC PETROLEUM CORPORATION, a Delaware corporation (the "Corporation"), and DONALD D. WOLF (the "Officer"). The Parent and the Corporation are referred to herein as "UMC". RECITALS A. UMC and the Officer entered into an Employment Agreement dated August 9, 1994 (the "Agreement") pursuant to which the Officer was to be employed as an officer of the Corporation. B. The Officer has given notice to UMC that he desires to terminate such employment, effective as of April 30, 1996 (the "Effective Date"), and this Amendment modifies the Agreement to reflect the agreement of the parties in respect of such termination. C. Terms which are defined in the Agreement and used herein shall have the same meanings as so defined. AGREEMENTS 1. The Corporation accepts the resignation of the Officer as an employee as of the Effective Date. Further, as of the Effective Date the Officer hereby resigns his position as President and Chief Operating Officer of the Parent and all positions which he holds as an officer or director of the Corporation and its subsidiary companies; provided, however, that such resignations shall not affect Officer's position as a director of the Parent. UMC accepts such further resignations. The termination of the Officer's employment by the Corporation is agreed to be a voluntary termination subject to the provisions of Section 2.6 of the Agreement. 2. The last sentence of Section 2.6 of the Agreement is amended to read as follows: Upon a voluntary termination hereunder, all options to purchase stock in the Parent heretofore granted to the Officer pursuant to the United Meridian Corporation 1994 Nonqualified Stock Option Agreement for Former Employees of General Atlantic Resources, Inc. dated as of November 15, 1994 between the Parent and the Officer, as modified by an amendment thereto dated April 16, 1996 (the "Stock Option Agreement"), which are vested as of the Effective Date, or subsequently become vested pursuant to its terms, may be exercised in accordance with the provisions of Section 4(d) of the Stock Option Agreement. 3. Notwithstanding any provisions of Section 4.1 of the Agreement to the contrary, the severance compensation payable to the Officer pursuant to Section 4.1(a) of the Agreement is agreed to be $735,000 (which amount is equal to three (3) times the Officer's Base Salary of $245,000); and such amount shall be payable in semi-monthly installments of $10,208.33, commencing May 15, 1996 and extending through December 31, 1996, with the unpaid amount thereof being due and payable not later than January 15, 1997. Section 4.1 of the Agreement is amended to be consistent with the foregoing sentence. IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first set forth above. UNITED MERIDIAN CORPORATION By: /s/ John B. Brock --------------------- John B. Brock, Chairman and Chief Executive Officer UMC PETROLEUM CORPORATION By: /s/ John B. Brock --------------------- John B. Brock, Chairman and Chief Executive Officer /s/ Donald D. Wolf ---------------------- Donald D. Wolf -2- EX-11.1 4 CALCULATION OF NET INCOME PER COMMON SHARE EXHIBIT 11.1 CALCULATION OF NET INCOME PER COMMON SHARE (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
For the three months For the six months ended June 30, ended June 30, -------------------- ------------------ 1996 1995 1996 1995 -------- -------- -------- ------- Net income............................................ $ 5,235 $ 463 $ 8,951 $ 4,070 Dividends paid on preferred stock..................... 765 - 1,531 - ------- ------- ------- ------- Amount available to common shareholders............... $ 4,470 $ 463 $ 7,420 $ 4,070 ======= ======= ======= ======= Weighted average number of common shares outstanding.................................. 30,652 29,079 30,474 29,035 ======= ======= ======= ======= Net income per common share........................... $ 0.15 $ 0.02 $ 0.24 $ 0.14 ======= ======= ======= =======
CALCULATION OF WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (IN THOUSANDS)
For the three months For the six months ended June 30, ended June 30, -------------------- ------------------ 1996 1995 1996 1995 -------- -------- -------- ------- Shares outstanding from beginning of period.............................................. 28,253 27,789 28,150 27,722 451 and 554 stock options and warrants exercised in the three months and six months ended June 30, 1996, respectively........................................ 261 - 186 - 123 and 190 stock options exercised in the three months and six months ended June 30, 1995, respectively................... - 46 - 86 Common stock equivalents of stock options /1/......................................... 2,138 1,244 2,138 1,227 ------- ------- ------- ------- 30,652 29,079 30,474 29,035 ======= ======= ======= =======
/1/ The calculation of common stock equivalents of stock options and warrants is based on the "Treasury Method" as detailed in Accounting Principles Board Opinion No. 15. EX-27.1 5 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 4,138 0 44,430 1,190 8,695 68,087 786,778 327,397 557,784 64,932 227,258 0 12 287 229,517 557,784 96,270 114,962 0 25,766 56,532 0 11,380 14,843 5,892 0 0 0 0 8,951 .24 .24
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