UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 17, 1998
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TRITON ENERGY LIMITED
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(Exact name of registrant as specified in its charter)
Cayman Islands 1-11675 None
- --------------- ------- ----
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Caledonian House, Mary Street
P.O.Box 1043
George Town
Grand Cayman, Cayman Islands N/A
---------------------------- ---
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (345) 490-0050
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N/A
---
(Former name or former address, if changed since last report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
In July 1998, Triton Energy Limited (the "Company") and Atlantic Richfield
Company ("ARCO") signed an agreement providing financing for the development
of the Company's gas reserves on Block A-18 of the Malaysia-Thailand Joint
Development Area. Under terms of the agreement consumated in August 1998, the
Company sold to a subsidiary of ARCO for $150 million one-half of the shares
of the subsidiary through which the Company owned its 50% share of Block A-18.
The agreements also require ARCO to pay all future exploration and development
costs attributable to the Company's and ARCO's collective interest in Block
A-18, up to $377 million or until first production from a gas field, at which
time the Company and ARCO would each pay 50% of such costs. Additionally, the
agreements require ARCO to pay the Company an additional $65 million each at
July 1, 2002 and July 1, 2005, if certain specific development objectives are
met by such dates, or $40 million each if the objectives are met within one
year thereafter.
The agreements provide that the Company will recover its investment in
recoverable costs in the project, approximately $105 million, and that ARCO
will recover its investment in recoverable costs, on a first-in, first-out
basis from the cost recovery portion of future production. The sale resulted
in an aftertax gain of approximately $63 million, which will be recorded in
the third quarter of 1998. The Company used $103.4 million of the proceeds to
reduce certain outstanding revolving credit facilities.
ITEM 5. OTHER EVENTS.
On July 17, 1998, the Company announced that Thomas G. Finck had resigned from
his positions as the Company's Chairman, President and Chief Executive Officer
to pursue other interests. Sheldon R. Erikson, a Company director since 1995,
was named Chairman of the Board. Mr. Erikson is the Chairman, President and
Chief Executive Officer of Cooper Cameron Corp., a petroleum and industrial
equipment manufacturing company. A search committee has been established to
find a replacement as Chief Executive Officer. Robert B. Holland, III, has
been named interim Chief Executive Officer. Mr. Holland has served as Senior
Vice President and General Counsel for the Company since 1993.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable
(b) Pro Forma Condensed Consolidated Balance Sheet as of June 30, 1998
Pro Forma Condensed Consolidated Statement of Operations -
Six months ended June 30, 1998
Pro Forma Condensed Consolidated Statement of Operations -
Year ended December 31, 1997
Notes to Pro Forma Condensed Consolidated Financial Information
TRITON ENERGY LIMITED AND SUBSIDIARIES
PRO FORMA FINANCIAL INFORMATION
BASIS OF PRESENTATION
The accompanying unaudited pro forma condensed consolidated financial
information gives effect to the sale of one-half of the shares of the
subsidiary through which the Company owned its 50% share of Block A-18 in the
Gulf of Thailand to a subsidiary of the Atlantic Richfield Company for $150
million, and the subsequent use of a portion of the proceeds to reduce certain
outstanding revolving credit facilities. The unaudited Pro Forma Condensed
Consolidated Balance Sheet adjusts the June 30, 1998 historical condensed
consolidated balance sheet as though the sale occurred on June 30, 1998. The
unaudited Pro Forma Condensed Consolidated Statements of Operations adjust the
historical condensed consolidated statements of operations for the six months
ended June 30, 1998 and the year ended December 31, 1997, as though the sale
occurred on January 1, 1997. The pro forma results exclude any nonrecurring
charges or credits directly attributable to the sale.
The pro forma condensed consolidated financial information should be read in
conjunction with the historical consolidated financial statements and related
notes included as a part of Triton Energy Limited's Annual Report on Form 10-K
for the year ended December 31, 1997, and Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 1998. The pro forma information is not
necessarily indicative of the Company's financial position or results of
operations that might have occurred had such transaction actually occurred on
the dates indicated above.
<PAGE>
TRITON ENERGY LIMITED AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1998
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA
ASSETS HISTORICAL ADJUSTMENTS PRO FORMA
----------------- ------------- -----------------
Current assets:
<S> <C> <C> <C> <C>
Cash and equivalents $ 20,524 $ (167) (a) $ 59,982
39,625 (b)
Trade receivables, net 8,415 8,415
Other receivables 41,649 (138) (a) 41,511
Inventories, prepaid expenses and other 2,954 (681) (a) 2,273
Assets held for sale 2,005 2,005
----------------- ------------- -----------------
Total current assets 75,547 38,639 114,186
Property and equipment, net 723,369 (79,022) (a) 644,347
Deferred taxes and other assets 120,140 (633) (a) 119,507
----------------- ------------- -----------------
$ 919,056 $ (41,016) $ 878,040
================= ============= =================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current maturities
of long-term debt $ 199,977 $ (103,375) (b) $ 96,602
Accounts payable and accrued liabilities 29,500 (1,145) (a) 28,355
Deferred income 35,254 35,254
----------------- ------------- -----------------
Total current liabilities 264,731 (104,520) 160,211
Long-term debt, excluding current maturities 418,276 418,276
Deferred income taxes 12,100 (887) (a) 11,213
Deferred income and other 32,727 32,727
Convertible debentures due to employees --- ---
Shareholders' equity:
Preference shares 7,473 7,473
Ordinary shares, par value $0.01 366 366
Additional paid-in capital 590,244 590,244
Accumulated deficit (404,731) 64,391 (c) (340,340)
Accumulated other non-owner changes in
shareholder' equity (2,126) (2,126)
----------------- ------------- -----------------
191,226 64,391 255,617
Less cost of ordinary shares in treasury 4 4
----------------- ------------- -----------------
Total shareholders' equity 191,222 64,391 255,613
Commitments and contingencies --- ---
----------------- ------------- -----------------
$ 919,056 $ (41,016) $ 878,040
================= ============= =================
</TABLE>
The Company uses the full cost method to account for its oil and
gas producing activities.
See accompanying Notes to Pro Forma Condensed Consolidated
Financial Information.
<PAGE>
TRITON ENERGY LIMITED AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
------------------- --------------- -------------------
<S> <C> <C> <C> <C>
Oil and gas sales $ 72,553 $ 72,553
Costs and expenses:
Operating 36,768 36,768
General and administrative 14,184 14,184
Depreciation, depletion and amortization 24,883 $ (30) (d) 24,853
Writedown of assets 182,672 182,672
------------------- --------------- -------------------
258,507 (30) 258,477
------------------- --------------- -------------------
Operating loss (185,954) 30 (185,924)
Gain on sale of Triton Pipeline Colombia 50,227 50,227
Interest income 1,492 1,492
Interest expense, net (10,320) (4,127) (d) (10,312)
4,135 (e)
Other income, net 3,028 3,028
------------------- --------------- -------------------
44,427 8 44,435
------------------- --------------- -------------------
Loss before income taxes (141,527) 38 (141,489)
Income tax benefit (34,377) (186) (d) (34,563)
------------------- --------------- -------------------
Net loss (107,150) 224 (106,926)
Dividends on preference shares 187 187
------------------- --------------- -------------------
Loss applicable to ordinary shares $ (107,337) $ 224 $ (107,113)
=================== =============== ===================
Average ordinary shares outstanding 36,581 36,581
=================== ===================
Basic and diluted loss per ordinary share $ (2.93) $ (2.93)
=================== ===================
</TABLE>
See accompanying Notes to Pro Forma Condensed Consolidated Financial
Information.
<PAGE>
TRITON ENERGY LIMITED AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
------------------- --------------- ------------------
<S> <C> <C> <C> <C>
Revenues:
Oil and gas sales $ 145,419 $ 145,419
Other operating revenues 4,077 4,077
------------------- ------------------
149,496 149,496
------------------- ------------------
Costs and expenses:
Operating 51,357 51,357
General and administrative 28,607 28,607
Depreciation, depletion and amortization 36,828 $ (12) (d) 36,816
------------------- --------------- ------------------
116,792 (12) 116,780
------------------- --------------- ------------------
Operating income 32,704 12 32,716
Interest income 5,178 5,178
Interest expense, net (23,858) (6,656) (d) (22,244)
8,270 (e)
Other income, net 2,872 2,872
------------------- ------------------
(15,808) 1,614 (14,194)
------------------- --------------- ------------------
Earnings before income taxes
and extraordinary item 16,896 1,626 18,522
Income tax expense 11,301 (277) (d) 11,024
------------------- --------------- ------------------
Net earnings before extraordinary item $ 5,595 $ 1,903 $ 7,498
=================== =============== ==================
Average ordinary shares outstanding 36,471 36,471
=================== ==================
Basic and diluted earnings per ordinary share
before extraordinary item $ 0.14 $ 0.19
=================== ==================
</TABLE>
See accompanying Notes to Pro Forma Condensed Consolidated Financial
Information.
<PAGE>
TRITON ENERGY LIMITED AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
1. GENERAL
In July 1998, the Company and a subsidiary of Atlantic Richfield Company
("ARCO") signed an agreement providing financing for the development of the
Company's gas reserves on Block A-18 of the Malaysia-Thailand Joint
Development Area. Under terms of the agreement consumated in August 1998, the
Company sold to a subsidiary of ARCO for $150 million one-half of the shares
of the subsidiary through which the Company owned its 50% share of Block A-18.
The agreements also require ARCO to pay all future exploration and development
costs attributable to the Company's and ARCO's collective interest in Block
A-18, up to $377 million or until first production from a gas field, at which
time the Company and ARCO would each pay 50% of such costs. Additionally, the
agreements require ARCO to pay the Company an additional $65 million each at
July 1, 2002 and July 1, 2005, if certain specific development objectives are
met by such dates, or $40 million each if the objectives are met within one
year thereafter.
The agreements provide that the Company will recover its investment in
recoverable costs in the project, approximately $105 million, and that ARCO
will recover its investment in recoverable costs, on a first-in, first-out
basis from the cost recovery portion of future production. The sale resulted
in an aftertax gain of approximately $63 million, which will be recorded in
the third quarter of 1998.
Pro forma adjustments are made to reflect:
(a) the elimination of 50% of the assets and liabilities associated with
the Company's ownership in its Block A-18 oil and gas project as if the sale
occurred on June 30, 1998;
(b) the receipt of $150 million in proceeds net of estimated selling
expenses of approximately $7 million, and the subsequent use of $103.4 million
of the proceeds to reduce certain outstanding revolving credit facilities;
(c) the resulting aftertax gain on sale reflected as a reduction of
accumulated deficit;
(d) the elimination of 50% of depreciation expense, capitalized
interest and deferred tax expense associated with the Company's ownership in
its Block A-18 oil and gas project as if the sale occurred on January 1,
1997; and
(e) the reduction in interest expense associated with the use of $103.4
million of the proceeds to reduce certain outstanding revolving credit
facilities.
(c) Exhibits
Exhibit No.
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2.1 Share Purchase Agreement dated July 17, 1998 among Triton Energy
Limited, Triton Asia Holdings, Inc., Atlantic Richfield Company and ARCO
JDA Limited.*
99.1 Shareholders Agreement dated August 3, 1998 among Triton Energy Limited,
Triton Asia Holdings, Inc., Atlantic Richfield Company, and ARCO JDA
Limited.*
____________________
* Previously filed as an exhibit to the Registrant's Quarterly Report on
Form 10-Q for the quarterly period ended June 30, 1998 and incorporated
herein by reference.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRITON ENERGY LIMITED
By: /s/ Robert B. Holland, III
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Date: August 17, 1998 Robert B. Holland, III,
President
