SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
COMMISSION FILE NUMBER: 1-11675
TRITON ENERGY LIMITED
(Exact name of registrant as specified in its charter)
CAYMAN ISLANDS NONE
- ---------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
Organization)
CALEDONIAN HOUSE, MARY STREET, P.O. BOX 1043, GEORGE TOWN, GRAND CAYMAN, CAYMAN
ISLANDS
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (345) 949-0050
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Number of Shares
Title of Each Class Outstanding at July 30, 1999
Ordinary Shares, par value $0.01 per share 35,750,410
----------------------------
TRITON ENERGY LIMITED AND SUBSIDIARIES
INDEX
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PART I. FINANCIAL INFORMATION PAGE NO.
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Item 1. Financial Statements
Condensed Consolidated Statements of Operations -
Three and six months ended June 30, 1999 and 1998 2
Condensed Consolidated Balance Sheets -
June 30, 1999 and December 31, 1998 3
Condensed Consolidated Statements of Cash Flows -
Six months ended June 30, 1999 and 1998 4
Condensed Consolidated Statement of Shareholders' Equity -
Six months ended June 30, 1999 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 18
Item 3. Quantitative and Qualitative Disclosures about Market Risk 28
PART II. OTHER INFORMATION
Item 3. Legal Proceedings 29
Item 4. Submission of Matters for Vote of Security Holders 30
Item 6. Exhibits and Reports on Form 8-K 31
</TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TRITON ENERGY LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
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THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
--------------------- ---------------------
1999 1998 1999 1998
-------- ---------- --------- ----------
Oil and gas sales $59,622 $ 36,378 $108,792 $ 72,553
Costs and expenses:
Operating 19,186 21,081 38,162 36,768
General and administrative 4,843 6,495 9,778 14,184
Depreciation, depletion and amortization 15,285 12,804 30,656 24,883
Writedown of assets --- 182,672 --- 182,672
Special charges --- --- 1,220 ---
-------- ---------- --------- ----------
39,314 223,052 79,816 258,507
-------- ---------- --------- ----------
Operating income (loss) 20,308 (186,674) 28,976 (185,954)
Gain on sale of Triton Pipeline Colombia --- --- --- 50,227
Interest income 2,660 757 5,238 1,492
Interest expense, net (5,954) (5,154) (11,937) (10,320)
Other income (loss), net (716) 1,536 207 3,028
-------- ---------- --------- ----------
(4,010) (2,861) (6,492) 44,427
-------- ---------- --------- ----------
Earnings (loss) before income taxes 16,298 (189,535) 22,484 (141,527)
Income tax expense (benefit) 5,415 (39,473) 9,714 (34,377)
-------- ---------- --------- ----------
Net earnings (loss) 10,883 (150,062) 12,770 (107,150)
Dividends on preference shares 13,765 --- 13,945 187
-------- ---------- --------- ----------
Loss applicable to ordinary shares $(2,882) $(150,062) $ (1,175) $(107,337)
======== ========== ========= ==========
Average ordinary shares outstanding 36,350 36,595 36,505 36,581
======== ========== ========= ==========
Basic and diluted loss per ordinary share $ (0.08) $ (4.10) $ (0.03) $ (2.93)
======== ========== ========= ==========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
TRITON ENERGY LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
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ASSETS JUNE 30, DECEMBER 31,
1999 1998
------------ ----------
(UNAUDITED)
Current assets:
Cash and equivalents $ 213,013 $ 19,122
Trade receivables, net 17,663 9,554
Other receivables 20,921 48,415
Inventories, prepaid expenses and other 3,671 1,655
------------ ----------
Total current assets 255,268 78,746
Property and equipment, at cost, less accumulated depreciation
and depletion of $478,950 for 1999 and $451,986 for 1998 571,002 556,122
Deferred taxes and other assets 111,408 121,265
------------ ----------
$ 937,678 $ 756,133
============ ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current maturities of long-term debt $ 9,027 $ 19,027
Accounts payable and accrued liabilities 37,697 45,892
Deferred income 26,441 35,254
------------ ----------
Total current liabilities 73,165 100,173
Long-term debt, excluding current maturities 408,962 413,465
Deferred income taxes 5,655 4,169
Other 5,284 14,519
Shareholders' equity:
5% Preference shares, stated value $34.41 7,214 7,214
8% Preference shares, stated value $70.00 363,753 127,575
Ordinary shares, par value $0.01 359 366
Additional paid-in capital 547,727 575,863
Accumulated deficit (472,315) (485,085)
Accumulated other non-owner changes in shareholders' equity (2,126) (2,126)
------------ ----------
Total shareholders' equity 444,612 223,807
Commitments and contingencies (note 9) --- ---
------------ ----------
$ 937,678 $ 756,133
============ ==========
</TABLE>
The Company uses the full cost method to account for its oil and gas producing
activities.
See accompanying Notes to Condensed Consolidated Financial Statements.
TRITON ENERGY LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(IN THOUSANDS)
(UNAUDITED)
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1999 1998
--------- ----------
Cash flows from operating activities:
Net earnings (loss) $ 12,770 $(107,150)
Adjustments to reconcile net earnings (loss) to net cash provided
by operating activities:
Depreciation, depletion and amortization 30,656 24,883
Additional proceeds from forward oil sale 30,000 ---
Amortization of deferred income (17,627) (17,627)
Gain on sale of Triton Pipeline Colombia --- (50,227)
Writedown of assets --- 182,672
Deferred income taxes 7,158 (35,727)
Other 609 (1,585)
Changes in working capital pertaining to operating activities (13,529) 10,069
--------- ----------
Net cash provided by operating activities 50,037 5,308
--------- ----------
Cash flows from investing activities:
Capital expenditures and investments (50,326) (97,849)
Proceeds from sale of Triton Pipeline Colombia --- 97,656
Proceeds from sale of assets 1,465 12,953
Other 2,026 (899)
--------- ----------
Net cash provided (used) by investing activities (46,835) 11,861
--------- ----------
Cash flows from financing activities:
Proceeds from revolving lines of credit and long-term debt --- 114,005
Payments on revolving lines of credit and long-term debt (14,514) (135,588)
Short-term notes payable, net --- 10,000
Issuances of 8% preference shares, net 217,805 ---
Issuances of ordinary shares 97 1,939
Repurchase of ordinary shares (9,685) ---
Dividends paid on preference shares (2,875) (187)
--------- ----------
Net cash provided (used) by financing activities 190,828 (9,831)
--------- ----------
Effect of exchange rate changes on cash and equivalents (139) (265)
--------- ----------
Net increase in cash and equivalents 193,891 7,073
Cash and equivalents at beginning of period 19,122 13,451
--------- ----------
Cash and equivalents at end of period $213,013 $ 20,524
========= ==========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
TRITON ENERGY LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 1999
(IN THOUSANDS)
(UNAUDITED)
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OWNER SOURCES OF SHAREHOLDERS' EQUITY:
5% PREFERENCE SHARES:
Balance at December 31, 1998 $ 7,214
Conversion of 5% preference shares ---
----------
Balance at June 30, 1999 7,214
----------
8% PREFERENCE SHARES:
Balance at December 31, 1998 127,575
Issuance of 3,177,500 shares at $70 per share 222,425
Stock dividend, 196,624 shares at $70 per share 13,763
Conversion of 8% preference shares (10)
----------
Balance at June 30, 1999 363,753
----------
ORDINARY SHARES:
Balance at December 31, 1998 366
Repurchase of shares (8)
Issuances under stock plans 1
----------
Balance at June 30, 1999 359
----------
ADDITIONAL PAID-IN CAPITAL:
Balance at December 31, 1998 575,863
Stock dividend, 8% preference shares (13,765)
Repurchase of ordinary shares (9,677)
Transaction costs for issuance of 8% preference shares (4,620)
Cash dividends, 5% preference shares (180)
Other 106
----------
Balance at June 30, 1999 547,727
----------
TOTAL OWNER SOURCES OF SHAREHOLDERS' EQUITY 919,053
----------
NON-OWNER SOURCES OF SHAREHOLDERS' EQUITY:
ACCUMULATED DEFICIT:
Balance at December 31, 1998 (485,085)
Net earnings 12,770
----------
Balance at June 30, 1999 (472,315)
----------
ACCUMULATED OTHER NON-OWNER CHANGES IN SHAREHOLDERS' EQUITY:
Balance at December 31, 1998 (2,126)
Other non-owner changes in shareholders' equity ---
----------
Balance at June 30, 1999 (2,126)
----------
TOTAL NON-OWNER SOURCES OF SHAREHOLDERS' EQUITY (474,441)
----------
TOTAL SHAREHOLDERS' EQUITY AT JUNE 30, 1999 $ 444,612
==========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
TRITON ENERGY LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS IN TABLES IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
1. GENERAL
Triton Energy Limited ("Triton") is an international oil and gas exploration and
production company. The term "Company" when used herein means Triton and its
subsidiaries and other affiliates through which the Company conducts its
business. The Company's principal properties, operations, and oil and gas
reserves are located in Colombia and Malaysia-Thailand. The Company is
exploring for oil and gas in these areas, as well as in southern Europe, Africa,
and the Middle East. All sales currently are derived from oil and gas
production in Colombia.
In the opinion of management, the accompanying unaudited condensed consolidated
financial statements of the Company contain all adjustments of a normal
recurring nature necessary to present fairly the Company's financial position as
of June 30, 1999, and the results of its operations for the three and six months
ended June 30, 1999 and 1998, its cash flows for the six months ended June 30,
1999 and 1998, and shareholders' equity for the six months ended June 30, 1999.
The results for the three and six months ended June 30, 1999, are not
necessarily indicative of the final results to be expected for the full year.
The condensed consolidated financial statements should be read in conjunction
with the Notes to Consolidated Financial Statements, which are included as part
of the Company's Annual Report on Form 10-K for the year ended December 31,
1998.
Certain other previously reported financial information has been reclassified to
conform to the current period's presentation.
2. 8% PREFERENCE SHARES ISSUANCE
In August 1998, the Company and HM4 Triton, L.P. ("HM4 Triton"), an affiliate
of Hicks, Muse, Tate & Furst Incorporated ("Hicks Muse"), entered into a stock
purchase agreement (the "Stock Purchase Agreement") that provided for a $350
million equity investment in the Company. The investment was effected in two
stages. At the closing of the first stage in September 1998 (the "First
Closing"), the Company issued to HM4 Triton 1,822,500 shares of 8% convertible
preference shares ("8% Preference Shares") for $70 per share (for proceeds of
$116.8 million, net of transaction costs). Pursuant to the Stock Purchase
Agreement, the second stage was effected through a rights offering for 3,177,500
shares of 8% Preference Shares at $70 per share, with HM4 Triton being obligated
to purchase any shares not subscribed. At the closing of the second stage, which
occurred on January 4, 1999 (the "Second Closing"), the Company issued an
additional 3,177,500 8% Preference Shares for proceeds totaling $217.8 million,
net of closing costs (of which, HM4 Triton purchased 3,114,863 shares).
Each 8% Preference Share is convertible at any time at the option of the holder
into four ordinary shares of the Company (subject to certain antidilution
protections). Holders of 8% Preference Shares are entitled to receive, when and
if declared by the Board of Directors, cumulative dividends at a rate per annum
equal to 8% of the liquidation preference of $70 per share, payable for each
semi-annual period ending June 30 and December 30 of each year. At the
Company's option, dividends may be paid in cash or by the issuance of additional
whole shares of 8% Preference Shares. If a dividend is to be paid in additional
shares, the number of additional shares to be issued in payment of the dividend
will be determined by dividing the amount of the dividend by $70, with amounts
in respect of any fractional shares to be paid in cash. The first dividend
period was the period from January 4, 1999, to June 30, 1999. The Company's
Board of Directors elected to pay the dividend for that period in additional
shares resulting in the issuance of approximately 196,600 8% Preference Shares.
The declaration of a dividend in cash or additional shares for any period should
not be considered an indication as to whether the Board will declare dividends
in cash or additional shares in future periods. Holders of 8% Preference Shares
are entitled to vote with the holders of ordinary shares on all matters
submitted to the shareholders of the Company for a vote, with each 8% Preference
Share entitling its holder to a number of votes equal to the number of ordinary
shares into which it could be converted at that time.
3. FORWARD OIL SALE
In April 1999, the Company received substantially all of the remaining proceeds,
approximately $30 million, from the forward oil sale consumated in May 1995.
The delivery requirement under the forward oil sale will be completed March 31,
2000. The remaining deferred income is reported in current liabilities and will
be amortized as barrels are delivered through March 31, 2000.
4. SHARE REPURCHASE
In April 1999, the Company's Board of Directors authorized a share repurchase
program enabling the Company to repurchase up to ten percent of the Company's
36.7 million outstanding ordinary shares. Purchases of ordinary shares by the
Company began in April and may be made from time to time in the open market or
through privately negotiated transactions at prevailing market prices depending
on market conditions. The Company has no obligation to repurchase any of its
outstanding shares and may discontinue the share repurchase program at
management's discretion. As of June 30, 1999, the Company had purchased 799,300
ordinary shares for $9.7 million. The Company cancelled and returned the
repurchased ordinary shares to the status of authorized but unissued shares.
5. SPECIAL CHARGES
In July 1998, the Company commenced a plan to restructure the Company's
operations, reduce overhead costs and substantially scale back
exploration-related expenditures. The plan contemplated the closing of foreign
offices in four countries, the elimination of approximately 105 positions, or
41% of the worldwide workforce, and the relinquishment or other disposal of
several exploration licenses. As a result of the restructuring, the Company
recognized special charges totaling $18.3 million during the third and fourth
quarters of 1998. Of the $18.3 million in special charges, $14.5 million
related to the reduction in workforce, and represented the estimated costs for
severance, benefit continuation and outplacement costs, which will be paid over
a period of up to two years according to the severance formula. A total of $2.1
million of special charges related to the closing of foreign offices, and
represented the estimated costs of terminating office leases and the write-off
of related assets. The remaining special charges of $1.7 million primarily
related to the write-off of other surplus fixed assets resulting from the
reduction in workforce. At June 30, 1999, all of the positions had been
eliminated, all designated foreign offices had closed and twelve licenses had
been relinquished, sold or their commitments renegotiated. The Company expects
to dispose of two other licenses during 1999. Since July 1998, the Company has
paid $11.2 million in severance, benefit continuation and outplacement costs.
As of June 30, 1999, no changes had been made to the Company's estimate of the
total restructuring expenditures to be incurred. At June 30, 1999, the
remaining liability related to the restructuring activities undertaken in 1998
was $3.1 million.
In March 1999, the Company accrued special charges of $1.2 million related to an
additional 15% reduction in the number of employees resulting from the
Company's continuing efforts to reduce costs. The special charges consisted of
$1 million for severance, benefit continuation and outplacement costs and $.2
million related to the write-off of surplus fixed assets. Since March 1999, the
Company has paid $.2 million in severance, benefit continuation and outplacement
costs. At June 30, 1999, the remaining liability related to the restructuring
activities undertaken in 1999 was $.7 million.
6. WRITEDOWN OF ASSETS
Writedown of assets is summarized as follows:
<TABLE>
<CAPTION>
THREE AND SIX
MONTHS ENDED
JUNE 30, 1998
--------------
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Evaluated oil and gas properties (SEC ceiling test) $ 105,354
Unevaluated oil and gas properties 73,890
Other assets 3,428
--------------
$ 182,672
==============
</TABLE>
In June 1998, the carrying amount of the Company's evaluated oil and gas
properties in Colombia was written down by $105.4 million ($68.5 million, net of
tax) through application of the full cost ceiling limitation as prescribed by
the Securities and Exchange Commission ("SEC"), principally as a result of a
decline in oil prices. No adjustments were made to the Company's reserves in
Colombia as a result of the decline in prices. The SEC ceiling test was
calculated using the June 30, 1998, West Texas Intermediate ("WTI") oil price of
$14.18 per barrel that after a differential for Cusiana crude delivered at the
port of Covenas in Colombia, resulted in a net price of approximately $13 per
barrel.
In conjunction with the plan to restructure operations and scale back
exploration-related expenditures, the Company assessed its investments in
exploration licenses and determined that certain investments were impaired. As
a result, unevaluated oil and gas properties and other assets totaling $77.3
million ($72.6 million, net of tax) were expensed in June 1998. The writedown
included $27.2 million and $22.5 million related to exploration activity in
Guatemala and China, respectively. The remaining writedowns related to the
Company's exploration projects in certain other areas of the world.
7. ASSET DISPOSITIONS
In February 1998, the Company sold Triton Pipeline Colombia, Inc. ("TPC"), a
wholly owned subsidiary that held the Company's 9.6% equity interest in the
Colombian pipeline company, Oleoducto Central S. A. ("OCENSA"), to an unrelated
third party (the "Purchaser") for $100 million. Net proceeds were approximately
$97.7 million after $2.3 million of expenses. The sale resulted in a gain of
$50.2 million.
In conjunction with the sale of TPC, the Company entered into an equity swap
with a creditworthy financial institution (the "Counterparty"). The equity swap
has a notional amount of $97 million and requires the Company to make quarterly
floating LIBOR-based payments on the notional amount to the Counterparty. In
exchange, the Counterparty is required to make payments to the Company
equivalent to 97% of the dividends TPC receives in respect of its equity
interest in OCENSA. The equity swap is carried in the Company's financial
statements at fair value during its term, which, as amended, will expire April
14, 2000. The value of the equity swap in the Company's financial statements is
equal to the estimated fair value of the shares of OCENSA owned by TPC. Because
there is no public market for the shares of OCENSA, the Company estimates their
value using a discounted cash flow model applied to the distributions expected
to be paid in respect of the OCENSA shares. The discount rate applied to the
estimated cash flows from the OCENSA shares is based on a combination of current
market rates of interest, a credit spread for OCENSA's debt, and a spread to
reflect the preferred stock nature of the OCENSA shares. During the six months
ended June 30, 1999 and 1998, the Company recorded an expense of $.8 million, in
other income, net, related to the net payments made (or received) under and the
change in the fair market value of the equity swap. Net payments made (or
received) under the equity swap, and any fluctuations in the fair value of the
equity swap, in future periods, will affect other income in such periods. There
can be no assurance that changes in interest rates, or in other factors that
affect the value of the OCENSA shares and/or the equity swap, will not have a
material adverse effect on the carrying value of the equity swap.
Upon the expiration of the equity swap in April 2000, the Company expects that
the Purchaser will sell the TPC shares. Under the terms of the equity swap with
the Counterparty, upon any sale by the Purchaser of the TPC shares, the Company
will receive from the Counterparty, or pay to the Counterparty, an amount equal
to the excess or deficiency, as applicable, of the difference between 97% of the
net proceeds from the Purchaser's sale of the TPC shares and the notional amount
of $97 million. There can be no assurance that the value the Purchaser may
realize in any sale of the TPC shares will equal the value of the shares
estimated by the Company for purposes of valuing the equity swap. The Company
has no right or obligation to repurchase the TPC shares at any time, but the
Company is not prohibited from offering to purchase the shares when the
Purchaser offers to sell them.
8. EARNINGS PER ORDINARY SHARE
For the three and six months ended June 30, 1999 and 1998, the computation of
diluted net loss per ordinary share was antidilutive, and therefore, the amounts
for basic and diluted net loss per ordinary share where the same.
At June 30, 1999, approximately 5,196,500 shares of 8% Preference Shares
and approximately 209,600 shares of 5% Preference Shares were outstanding. Each
8% Preference Share is convertible any time into four ordinary shares, subject
to adjustment in certain events. Each 5% Preference Share is convertible any
time into one ordinary share, subject to adjustment in certain events. The 8%
Preference Shares and 5% Preference Shares were not included in the computation
of diluted earnings per ordinary share because the effect of assuming conversion
was antidilutive.
9. COMMITMENTS AND CONTINGENCIES
In January 1999, the Company approved a capital spending program for the year
ending December 31, 1999, of approximately $117 million, excluding capitalized
interest, of which approximately $83 million related to the Cusiana and Cupiagua
fields (the "Fields"), and $34 million related to the Company's exploration
activities in other parts of the world.
During the normal course of business, the Company is subject to the terms of
various operating agreements and capital commitments associated with the
exploration and development of its oil and gas properties. It is management's
belief that such commitments, including the capital requirements in Colombia and
other parts of the world discussed above, will be met without any material
adverse effect on the Company's operations or consolidated financial condition.
See Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Requirements.
GUARANTEES
At June 30, 1999, the Company had guaranteed loans of approximately $1.4 million
for a Colombian pipeline company in which the Company has an ownership interest.
The Company also guaranteed performance of $19.5 million in future exploration
expenditures in various countries. These commitments are backed primarily by
unsecured letters of credit.
<PAGE>
LITIGATION
In July through October 1998, eight lawsuits were filed against the Company and
Thomas G. Finck and Peter Rugg, in their capacities as Chairman and Chief
Executive Officer and Chief Financial Officer, respectively. Each case was filed
on behalf of a putative class of persons and/or entities who purchased the
Company's securities between March 30, 1998, and July 17, 1998, inclusive, and
seeks recovery of an unspecified amount of compensatory damages, fees and costs.
The cases allege violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder in
connection with disclosures concerning the Company's properties, operations, and
value relating to a prospective sale of the Company or of all or a part of its
assets. Additionally, one case alleges negligent misrepresentation and seeks
recovery of punitive damages. Each lawsuit was filed in the United States
District Court for the Eastern District of Texas, Texarkana Division.
On September 21, 1998, a motion for consolidation and for appointment as lead
plaintiffs and for approval of selection of lead counsel was filed. With the
exception of the request for consolidation, which has been agreed to, the motion
is presently pending. Also pending is the Company's motion to dismiss or
transfer for improper venue. The consolidated action is styled In re: Triton
Energy Limited Securities Litigation. The Company believes its disclosures have
been accurate and intends to vigorously defend these actions. No discovery has
been taken at this time, however, and the ultimate outcome is not currently
predictable. There can be no assurance that the litigation will be resolved in
the Company's favor. An adverse result could have a material adverse effect on
the Company's financial position or results of operations.
The Company is also subject to litigation that is incidental to its business.
10. CERTAIN FACTORS THAT COULD AFFECT FUTURE OPERATIONS
Certain information contained in this report, as well as written and oral
statements made or incorporated by reference from time to time by the Company
and its representatives in other reports, filings with the Securities and
Exchange Commission, press releases, conferences or otherwise, may be deemed to
be "forward-looking statements" within the meaning of Section 21E of the
Securities Exchange Act of 1934 and are subject to the "Safe Harbor" provisions
of that section. Forward-looking statements include statements concerning the
Company's and management's plans, objectives, goals, strategies and future
operations and performance and the assumptions underlying such forward-looking
statements. Forward-looking statements may be identified, without limitation,
by the use of the words "anticipates," "estimates," "expects," "believes,"
"intends," "plans" and similar expressions. These statements include
information regarding drilling schedules; expected or planned production
capacity; future production of the Fields; the negotiation of a gas-sales
contract, completion of development and commencement of production in
Malaysia-Thailand; the Company's capital budget and future capital requirements;
the Company's meeting its future capital needs; future general and
administrative expense and the portion to be capitalized; future interest
expense and the portion to be capitalized; the Company's realization of its
deferred tax asset; the level of future expenditures for environmental costs;
the outcome of regulatory and litigation matters; the impact of Year 2000
issues; the estimated fair value of derivative instruments, including the equity
swap; and proven oil and gas reserves and discounted future net cash flows
therefrom. These statements are based on current expectations and involve a
number of risks and uncertainties, including those described in the context of
such forward-looking statements, as well as those presented below. Actual
results and developments could differ materially from those expressed in or
implied by such statements due to these and other factors.
CERTAIN FACTORS RELATING TO THE OIL AND GAS INDUSTRY
The Company follows the full cost method of accounting for exploration and
development of oil and gas reserves whereby all acquisition, exploration and
development costs are capitalized. Costs related to acquisition, holding and
initial exploration of licenses in countries with no proved reserves are
initially capitalized, including internal costs directly identified with
acquisition, exploration and development activities. The Company's exploration
licenses are periodically assessed for impairment on a country-by-country basis.
If the Company's investment in exploration licenses within a country where no
proved reserves are assigned is deemed to be impaired, the licenses are written
down to estimated recoverable value. If the Company abandons all acquisition
and exploration efforts in a country where no proved reserves are assigned, all
exploration costs associated with the country are expensed. The Company's
assessments of whether its investment within a country is impaired and whether
acquisition and exploration activities within a country will be abandoned are
made from time to time based on its review and assessment of drilling results,
seismic data and other information it deems relevant. Due to the unpredictable
nature of exploration drilling activities, the amount and timing of impairment
expense are difficult to predict with any certainty. Financial information
concerning the Company's assets at December 31, 1998, including capitalized
costs by geographic area, is set forth in note 22 of Notes to Consolidated
Financial Statements in Triton's Annual Report on Form 10-K for the year ended
December 31, 1998.
The markets for oil and natural gas historically have been volatile and are
likely to continue to be volatile in the future. Oil and natural-gas prices
have been subject to significant fluctuations during the past several decades in
response to relatively minor changes in the supply of and demand for oil and
natural gas, market uncertainty and a variety of additional factors that are
beyond the control of the Company. These factors include the level of consumer
product demand, weather conditions, domestic and foreign government regulations,
political conditions in the Middle East and other production areas, the foreign
supply of oil and natural gas, the price and availability of alternative fuels,
and overall economic conditions. It is impossible to predict future oil and gas
price movements with any certainty.
The Company's oil and gas business is also subject to all of the operating risks
normally associated with the exploration for and production of oil and gas,
including, without limitation, blowouts, explosions, uncontrollable flows of
oil, gas or well fluids, pollution, earthquakes, formations with abnormal
pressures, labor disruptions and fires, each of which could result in
substantial losses to the Company due to injury or loss of life and damage to or
destruction of oil and gas wells, formations, production facilities or other
properties. In accordance with customary industry practices, the Company
maintains insurance coverage limiting financial loss resulting from certain of
these operating hazards. Losses and liabilities arising from uninsured or
underinsured events would reduce revenues and increase costs to the Company.
There can be no assurance that any insurance will be adequate to cover losses or
liabilities. The Company cannot predict the continued availability of
insurance, or its availability at premium levels that justify its purchase.
The Company's oil and gas business is also subject to laws, rules and
regulations in the countries where it operates, which generally pertain to
production control, taxation, environmental and pricing concerns, and other
matters relating to the petroleum industry. Many jurisdictions have at various
times imposed limitations on the production of natural gas and oil by
restricting the rate of flow for oil and natural-gas wells below their actual
capacity. There can be no assurance that present or future regulation will not
adversely affect the operations of the Company.
The Company is subject to extensive environmental laws and regulations. These
laws regulate the discharge of oil, gas or other materials into the environment
and may require the Company to remove or mitigate the environmental effects of
the disposal or release of such materials at various sites. In addition, the
Company could be held liable for environmental damages caused by previous owners
of its properties or its predecessors. The Company does not believe that its
environmental risks are materially different from those of comparable companies
in the oil and gas industry. Nevertheless, no assurance can be given that
environmental laws and regulations will not, in the future, adversely affect the
Company's consolidated results of operations, cash flows or financial position.
Pollution and similar environmental risks generally are not fully insurable.
CERTAIN FACTORS RELATING TO INTERNATIONAL OPERATIONS
The Company derives substantially all of its consolidated revenues from
international operations. Risks inherent in international operations include
the risk of expropriation, nationalization, war, revolution, border disputes,
renegotiation or modification of existing contracts, import, export and
transportation regulations and tariffs; taxation policies, including royalty and
tax increases and retroactive tax claims; exchange controls, currency
fluctuations and other uncertainties arising out of foreign government
sovereignty over the Company's international operations; laws and policies of
the Untied States affecting foreign trade, taxation and investment; and the
possibility of having to be subject to the exclusive jurisdiction of foreign
courts in connection with legal disputes and the possible inability to subject
foreign persons to the jurisdiction of courts in the United States. To date,
the Company's international operations have not been materially affected by
these risks.
CERTAIN FACTORS RELATING TO COLOMBIA
The Company is a participant in significant oil and gas discoveries in the
Fields, located approximately 160 kilometers (100 miles) northeast of Bogota,
Colombia. Development of reserves in the Fields is ongoing and will require
additional drilling. Pipelines connect the major producing fields in Colombia
to export facilities and to refineries.
From time to time, guerrilla activity in Colombia has disrupted the operation of
oil and gas projects causing increased costs. Such activity increased over the
last few years, causing delays in the development of the Cupiagua Field.
Although the Colombian government, the Company and its partners have taken steps
to maintain security and favorable relations with the local population, there
can be no assurance that attempts to reduce or prevent guerrilla activity will
be successful or that guerrilla activity will not disrupt operations in the
future.
Colombia is among several nations whose progress in stemming the production and
transit of illegal drugs is subject to annual certification by the President of
the United States. In March 1999, the President of the United States announced
that Colombia would be certified. There can be no assurance that, in the
future, Colombia will receive certification or a national interest waiver. The
consequences of the failure to receive certification or a national interest
waiver generally include the following: all bilateral aid, except
anti-narcotics and humanitarian aid, would be suspended; the Export-Import Bank
of the United States and the Overseas Private Investment Corporation would not
approve financing for new projects in Colombia; U.S. representatives at
multilateral lending institutions would be required to vote against all loan
requests from Colombia, although such votes would not constitute vetoes; and the
President of the United States and Congress would retain the right to apply
future trade sanctions. Each of these consequences could result in adverse
economic consequences in Colombia and could further heighten the political and
economic risks associated with the Company's operations in Colombia. Any
changes in the holders of significant government offices could have adverse
consequences on the Company's relationship with the Colombian national oil
company and the Colombian government's ability to control guerrilla activities
and could exacerbate the factors relating to foreign operations discussed above.
CERTAIN FACTORS RELATING TO MALAYSIA-THAILAND
The Company is a partner in a significant gas exploration project located in the
Gulf of Thailand approximately 450 kilometers (280 miles) northeast of Kuala
Lumpur and 750 kilometers (470 miles) south of Bangkok as a contractor under a
production-sharing contract covering Block A-18 of the Malaysia-Thailand Joint
Development Area. Development of gas production is in the planning stages, but
is expected to take several years and require the drilling of additional wells
and the installation of production facilities. Pipelines also will be required
to be connected between Block A-18 and ultimate markets. The terms under which
any gas produced from the Company's contract area in Malaysia-Thailand is sold
may be affected adversely by the present monopoly, gas-purchase and
transportation conditions in both Malaysia and Thailand. In connection with the
sale to a subsidiary of ARCO of one-half of the shares of the Company's
subsidiary that held its interest in Block A-18, ARCO agreed to pay the 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.
INFLUENCE OF HICKS MUSE
In connection with the issuance of 8% Preference Shares to HM4 Triton, the
Company and HM4 Triton entered into a shareholders agreement (the "Shareholders
Agreement") pursuant to which, among other things, the size of the Company's
Board of Directors was set at ten, and HM4 Triton exercised its right to
designate four out of such ten directors. The Shareholders Agreement provides
that, in general, for so long as the entire Board of Directors consists of ten
members, HM4 Triton (and its designated transferees, collectively) may designate
four nominees for election to the Board (with such number of designees
increasing or decreasing proportionately with any change in the total number of
members of the Board and with any fractional directorship rounded up to the next
whole number). The right of HM4 Triton (and its designated transferees) to
designate nominees for election to the Board will be reduced if the number of
ordinary shares held by HM4 Triton and its affiliates (assuming conversion of
8% Preference Shares into ordinary shares) represents less than certain
specified percentages of the number of ordinary shares (assuming conversion of
8% Preference Shares into ordinary shares) purchased by HM4 Triton pursuant to
the Stock Purchase Agreement.
The Shareholders Agreement provides that, for so long as HM4 Triton and its
affiliates continue to hold a certain minimum number of ordinary shares
(assuming conversion of 8% Preference Shares into ordinary shares), the Company
may not take certain actions without the consent of HM4 Triton, including (i)
amending its Articles of Association or the terms of the 8% Preference Shares
with respect to the voting powers, rights or preferences of the holders of 8%
Preference Shares, (ii) entering into a merger or similar business combination
transaction, or effecting a reorganization, recapitalization or other
transaction pursuant to which a majority of the outstanding ordinary shares or
any 8% Preference Shares are exchanged for securities, cash or other property,
(iii) authorizing, creating or modifying the terms of any series of securities
that would rank equal to or senior to the 8% Preference Shares, (iv) selling or
otherwise disposing of assets comprising in excess of 50% of the market value of
the Company, (v) paying dividends on ordinary shares or other shares ranking
junior to the 8% Preference Shares, other than regular dividends on the
Company's 5% Preference Shares, (vi) incurring or guaranteeing indebtedness
(other than certain permitted indebtedness), or issuing preference shares,
unless the Company's leverage ratio at the time, after giving pro forma effect
to such incurrence or issuance and to the use of the proceeds, is less than 2.5
to 1, (vii) issuing additional shares of 8% Preference Shares, other than in
payment of accumulated dividends on the outstanding 8% Preference Shares, (viii)
issuing any shares of a class ranking equal or senior to the 8% Preference
Shares, (ix) commencing a tender offer or exchange offer for all or any portion
of the ordinary shares or (x) decreasing the number of shares designated as 8%
Preference Shares.
As a result of HM4 Triton's ownership of 8% Preference Shares and ordinary
shares and the rights conferred upon HM4 Triton and its designees pursuant to
the Shareholder Agreement, HM4 Triton has significant influence over the actions
of the Company and will be able to influence, and in some cases determine, the
outcome of matters submitted for approval of the shareholders. The existence of
HM4 Triton as a shareholder of the Company may make it more difficult for a
third party to acquire, or discourage a third party from seeking to acquire, a
majority of the outstanding ordinary shares. A third party would be required to
negotiate any such transaction with HM4 Triton, and the interests of HM4 Triton
as a shareholder may be different from the interests of the other shareholders
of the Company.
POSSIBLE FUTURE ACQUISITIONS
The Company's strategy includes the possible acquisition of additional reserves,
including through possible future business combination transactions. There can
be no assurance as to the terms upon which any such acquisitions would be
consummated or as to the affect any such transactions would have on the
Company's financial condition or results of operations. Such acquisitions, if
any, could involve the issuance of the Company's equity securities, which could
have a dilutive effect on the current shareholders. Furthermore, any such
acquisitions could require substantial financial expenditures that would need to
be financed through cash on hand, cash flow from operations or the issuance of
debt or equity securities. The Company may not be able to acquire companies or
oil and gas properties using its equity as currency. In the case of cash
acquisitions, the Company may not be able to generate sufficient cash flow from
operations or obtain debt or equity financing sufficient to fund future
acquisitions of reserves.
To facilitate a possible future securities issuance or issuances, the Company
has filed with the Securities and Exchange Commission a shelf registration
statement under which the Company could issue up to an aggregate of $250 million
debt or equity securities when the registration statement becomes effective.
COMPETITION
The Company encounters strong competition from major oil companies (including
government-owned companies), independent operators and other companies for
favorable oil and gas concessions, licenses, production-sharing contracts and
leases, drilling rights and markets. Additionally, the governments of certain
countries where the Company operates may from time to time give preferential
treatment to their nationals. The oil and gas industry as a whole also competes
with other industries in supplying the energy and fuel requirements of
industrial, commercial and individual consumers.
MARKETS
Crude oil, natural gas, condensate, and other oil and gas products generally are
sold to other oil and gas companies, government agencies and other industries.
The availability of ready markets for oil and gas that might be discovered by
the Company and the prices obtained for such oil and gas depend on many factors
beyond the Company's control, including the extent of local production and
imports of oil and gas, the proximity and capacity of pipelines and other
transportation facilities, fluctuating demands for oil and gas, the marketing of
competitive fuels, and the effects of governmental regulation of oil and gas
production and sales. Pipeline facilities do not exist in certain areas of
exploration and, therefore, any actual sales of discovered oil or gas might be
delayed for extended periods until such facilities are constructed.
LITIGATION
The outcome of litigation and its impact on the Company are difficult to predict
due to many uncertainties, such as jury verdicts, the application of laws to
various factual situations, the actions that may or may not be taken by other
parties and the availability of insurance. In addition, in certain situations,
such as environmental claims, one defendant may be responsible, or potentially
responsible, for the liabilities of other parties. Moreover, circumstances could
arise under which the Company may elect to settle claims at amounts that exceed
the Company's expected liability for such claims in order to avoid costly
litigation. Judgments or settlements could, therefore, exceed any reserves.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL REQUIREMENTS
----------------------------------
Cash and cash equivalents totaled $213 million and $19.1 million at June
30, 1999, and December 31, 1998, respectively. Working capital (deficit) was
$182.1 million at June 30, 1999, compared with ($21.4 million) at December 31,
1998. Current liabilities included deferred income totaling $26.4 million at
June 30, 1999 and $35.3 million at December 31, 1998 related to a forward oil
sale consummated in 1995.
The following summary table reflects cash flows for the Company for the six
months ended June 30, 1999 (in thousands):
<TABLE>
<CAPTION>
<BTB>
<S> <C>
Net cash provided (used) by operating activities $ 50,037
Net cash provided (used) by investing activities $(46,835)
Net cash provided (used) by financing activities $190,828
</TABLE>
Operating Activities
--------------------
The Company's cash flows provided by operating activities for the six
months ended June 30, 1999, benefited from increased production from the Cusiana
and Cupiagua fields (the "Fields") in Colombia and an increased average realized
oil price. Gross production from the Fields averaged 434,000 barrels of oil per
day ("BOPD") during the first six months of 1999, compared with 307,000 BOPD
during the first six months of 1998. The average realized oil price increased
$.56 per barrel compared to the same period in 1998. See "Results of
Operations."
In April 1999, the Company received substantially all of the remaining
proceeds (approximately $30 million) from the forward oil sale in May 1995,
which was included in other receivables at December 31, 1998.
Investing Activities
---------------------
The Company's capital expenditures and other capital investments were $50.3
million ($43.5 million excluding capitalized interest) for the six months ended
June 30, 1999, primarily for development of the Fields.
Financing Activities
---------------------
In August 1998, the Company and HM4 Triton, L.P. ("HM4 Triton"), an
affiliate of Hicks, Muse, Tate & Furst Incorporated ("Hicks Muse"), entered into
a stock purchase agreement (the "Stock Purchase Agreement") that provided for a
$350 million equity investment in the Company. The investment was effected in
two stages. At the closing of the first stage in September 1998 (the "First
Closing"), the Company issued to HM4 Triton 1,822,500 shares of 8% convertible
preference shares ("8% Preference Shares") for $70 per share (for proceeds of
$116.8 million, net of transaction costs). Pursuant to the Stock Purchase
Agreement, the second stage was effected through a rights offering for 3,177,500
shares of 8% Preference Shares at $70 per share, with HM4 Triton being obligated
to purchase any shares not subscribed. At the closing of the second stage, which
occurred on January 4, 1999 (the "Second Closing"), the Company issued an
additional 3,177,500 8% Preference Shares for proceeds totaling $217.8 million,
net of closing costs (of which, HM4 Triton purchased 3,114,863 shares).
Each 8% Preference Share is convertible at any time at the option of the
holder into four ordinary shares of the Company (subject to certain antidilution
protections). Holders of 8% Preference Shares are entitled to receive, when and
if declared by the Board of Directors, cumulative dividends at a rate per annum
equal to 8% of the liquidation preference of $70.00 per share, payable for each
semi-annual period ending June 30 and December 30 of each year. At the
Company's option, dividends may be paid in cash or by the issuance of additional
whole shares of 8% Preference Shares. If a dividend is to be paid in additional
shares, the number of additional shares to be issued in payment of the dividend
will be determined by dividing the amount of the dividend by $70, with amounts
in respect of any fractional shares to be paid in cash. The first dividend
period was the period from January 4, 1999, to June 30, 1999. The Company's
Board of Directors elected to pay the dividend for that period in additional
shares resulting in the issuance of approximately 196,600 8% Preference Shares.
The declaration of a dividend in cash or additional shares for any period should
not be considered an indication as to whether the Board will declare dividends
in cash or additional shares in future periods.
In April 1999, the Company's Board of Directors authorized a share
repurchase program enabling the Company to repurchase up to ten percent of the
Company's 36.7 million outstanding ordinary shares. Purchases of ordinary
shares by the Company began in April and may be made from time to time in the
open market or through privately negotiated transactions at prevailing market
prices depending on market conditions. The Company has no obligation to
repurchase any of its outstanding shares and may discontinue the share
repurchase program at management's discretion. As of June 30, 1999, the Company
had purchased 799,300 ordinary shares for $9.7 million.
During the six months ended June 30, 1999, the Company repaid
borrowings totaling $14.5 million, including $10 million under unsecured credit
facilities that were outstanding at December 31, 1998. At June 30, 1999, all of
the Company's unsecured credit facilities had expired, except for an unused $10
million uncommitted credit facility which has no expiration date.
Future Capital Needs
----------------------
Development of the Fields, including drilling and construction of ancillary
production enhancement facilities, will require further capital outlays. In
January 1999, the Company approved a capital spending program for the year
ending December 31, 1999, of approximately $117 million, excluding capitalized
interest, of which approximately $83 million related to the Fields ($36.9
million incurred through June 30), and $34 million related to the Company's
exploration activities in other parts of the world ($6.6 million incurred
through June 30). The Company is continuing its efforts to reduce exploration
related capital expenditures and anticipates the final exploration related
capital expenditures will be lower than plan for the year.
The Company expects to fund its capital requirements for 1999 with cash
flow from operations and cash. In connection with the sale to ARCO of
one-half of the shares through which the Company owned its interest in Block
A-18 of the Malaysia-Thailand Joint Development Area in August 1998, ARCO
agreed to pay the 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 June 30, 1999, the Company had guaranteed loans of approximately $1.4
million for a Colombian pipeline company in which the Company has an ownership
interest. The Company also guaranteed performance of $19.5 million in future
exploration expenditures in various countries. These commitments are backed
primarily by unsecured letters of credit.
To facilitate a possible future securities issuance or issuances, the
Company has filed with the Securities and Exchange Commission ("SEC")
a shelf registration statement under which the Company could issue up to an
aggregate of $250 million debt or equity securities when the registration
statement becomes effective.
In conjunction with the sale of Triton Pipeline Colombia, Inc. ("TPC") to
an unrelated third party (the "Purchaser") in February 1998, the Company entered
into a five year equity swap with a creditworthy financial institution (the
"Counterparty"). The issuance to HM4 Triton of the 8% Preference Shares resulted
in the right of the Counterparty to terminate the equity swap prior to the end
of its five year term. In January 1999, the Counterparty exercised its right and
designated April 2000 as the termination date of the equity swap. Upon the
expiration of the equity swap in April 2000, the Company expects that the
Purchaser will sell the TPC shares. Under the terms of the equity swap with the
Counterparty, upon any sale by the Purchaser of the TPC shares, the Company will
receive from the Counterparty, or pay to the Counterparty, an amount equal to
the excess or deficiency, as applicable, of the difference between 97% of the
net proceeds from the Purchaser's sale of the TPC shares and the notional amount
of $97 million. There can be no assurance that the value the Purchaser may
realize in any sale of the TPC shares will equal the value of the shares
estimated by the Company for purposes of valuing the equity swap. The Company
has no right or obligation to repurchase the TPC shares at any time, but the
Company is not prohibited from offering to purchase the shares if the Purchaser
offers to sell them. See "- Results of Operations - Other Income and Expenses"
below, note 7 of Notes to Condensed Consolidated Financial Statements, and "Item
7A. Quantitative and Qualitative Disclosures about Market Risk" in Triton's
Annual Report on Form 10-K for the year ended December 31, 1998.
<PAGE>
RESULTS OF OPERATIONS
---------------------
Sales volumes and average prices realized were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------- -----------------
1999 1998 1999 1998
------ ------ ------ ------
Sales volumes:
Oil (MBbls), excluding forward oil sale 3,184 2,069 6,390 3,965
Forward oil sale (MBbls delivered) 763 763 1,525 1,525
------ ------ ------ ------
Total 3,947 2,832 7,915 5,490
====== ====== ====== ======
Gas (MMcf) 114 102 215 267
Weighted average price realized:
Oil (per Bbl) (1) $15.08 $12.80 $13.72 $13.16
Gas (per Mcf) $ 0.89 $ 1.15 $ 0.87 $ 1.05
</TABLE>
(1) Includes the effect of barrels delivered under the forward oil sale
that are recognized in revenue at $11.56 per barrel.
THREE MONTHS ENDED JUNE 30, 1999,
COMPARED WITH THREE MONTHS ENDED JUNE 30, 1998
Oil and Gas Sales
--------------------
Oil and gas sales for the second quarter of 1999 totaled $59.6 million, a
64% increase from the second quarter of 1998, due to higher production and
higher average realized oil prices. Oil production, including production
related to barrels delivered under the forward oil sale, increased 39% in second
quarter 1999, compared to the prior-year quarter, resulting in an increase in
revenues of $14.3 million. Gross production from the Fields averaged 434,000
BOPD for the second quarter 1999, compared to 312,000 BOPD for the prior-year
quarter. The increased production was primarily due to the start-up in late
1998 of two 100,000 BOPD oil-production units at the Cupiagua central processing
facility. The average realized oil price increased $2.28 per barrel, or 18%,
resulting in an increase in revenues of $9 million compared to the same period
in 1998.
As a result of financial and commodity market transactions settled during
the three months ended June 30, 1999, the Company's risk management program
resulted in lower revenues of approximately $2.6 million than if the Company had
not entered into such transactions. Additionally, the Company has hedged its
WTI price on a significant portion of its remaining projected 1999 oil
production. See "Item 3. Quantitative and Qualitative Disclosures about Market
Risk."
<PAGE>
Costs and Expenses
--------------------
Operating expenses decreased $1.9 million in 1999, primarily due to lower
pipeline tariffs. Depreciation, depletion and amortization increased $2.5
million, primarily due to higher production volumes, including barrels delivered
under the forward oil sale. The Company pays lifting costs, production taxes
and transportation costs to the Colombian port of Covenas for barrels to be
delivered under the forward oil sale.
The Company's operating costs per equivalent-barrel, which include field
operating expenses, pipeline tariffs and production taxes, improved from $7.67
in 1998, to $5.02 in 1999, primarily due to higher production volumes.
Oleoducto Central S.A. ("OCENSA") pipeline tariffs totaled $12.9 million or
$3.39 per barrel, and $15.5 million or $5.69 per barrel in 1999 and 1998,
respectively. OCENSA imposes a tariff on shippers from the Fields (the "Initial
Shippers"), which is estimated to recoup: the total capital cost of the project
over a 15-year period; its operating expenses, which include all Colombian
taxes; interest expense; and the dividend to be paid by OCENSA to its
shareholders. Any shippers of crude oil who are not Initial Shippers are
assessed a premium tariff on a per-barrel basis, and OCENSA will use revenues
from such tariffs to reduce the Initial Shippers' tariff. Additionally, field
operating expense totaled $5.1 million or $1.34 per barrel in 1999 and $5.2
million or $1.88 per barrel in 1998.
General and administrative expense before capitalization decreased $6.1
million, or 47%, to $7 million in 1999. Capitalized general and administrative
costs were $2.2 million and $6.7 million in 1999 and 1998, respectively.
General and administrative expenses, and the portion capitalized, decreased as a
result of restructuring activities undertaken during the second half of 1998 and
March 1999.
In June 1998, the carrying amount of the Company's evaluated oil
and gas properties in Colombia was written down by $105.4 million ($68.5
million, net of tax) through application of the full cost ceiling limitation
as prescribed by the SEC, principally as a result of a decline in oil
prices. No adjustments were made to the Company's reserves in Colombia as a
result of the decline in prices. The SEC ceiling test was calculated using
the June 30, 1998, WTI oil price of $14.18 per barrel that, after a
differential for Cusiana crude delivered at the port of Covenas in
Colombia, resulted in a net price of approximately $13 per barrel.
The Company assessed its investments in exploration licenses in conjunction
with the plan to restructure operations and scale back exploration-related
expenditures in 1998, and determined that certain investments were impaired. As
a result, unevaluated oil and gas properties and other assets totaling $77.3
million ($72.6 million, net of tax) were expensed in writedown of assets in June
1998. The writedown included $27.2 million and $22.5 million related to
exploration activity in Guatemala and China, respectively. The remaining
writedowns related to the Company's exploration projects in certain other areas
of the world.
<PAGE>
Other Income and Expenses
----------------------------
Gross interest expense for 1999 and 1998 totaled $9.4 million and $12.6
million, respectively, while capitalized interest for 1999 decreased $4 million
to $3.5 million. The decrease in gross interest expense is due to lower
outstanding borrowings resulting from the repayment of primarily all outstanding
borrowings under bank credit facilities in the third quarter of 1998.
Capitalized interest decreased primarily due to the writedown of unevaluated
property totaling $73.9 million in June 1998 and a sale of 50% of the Company's
Block A-18 project in August 1998.
Other income, net included a foreign exchange loss of $2.3 million and $.1
million in 1999 and 1998, respectively. In 1998, the Company recognized a gain
of $1.9 million on the sale of non-operating assets. During 1999 and 1998, the
Company recorded an unrealized gain (loss) of $1.5 million and ($.1 million),
respectively, representing the change in the fair value of the call options
purchased in 1995, in anticipation of the forward oil sale. In addition, the
Company recorded expense of $1.1 million in 1999 and nil in 1998 in other
income, net, related to the net payments made under and the change in the fair
value of the equity swap entered into in conjunction with the sale of TPC. Net
payments made (or received) under the equity swap, and any fluctuations in the
fair values of the call options and the equity swap, in future periods will
affect other income in such periods. See "Item 7A. Quantitative and Qualitative
Disclosures About Market Risk" in Triton's Annual Report on Form 10-K for the
year ended December 31, 1998.
Income Taxes
-------------
The income tax provisions for 1999 and 1998 included deferred tax expense
(benefit) of $4.5 million and ($39.8 million), respectively. The benefit
recognized in 1998 related to the writedown of oil and gas properties. Current
taxes related to the Company's Colombian operations totaled $.9 million and $.3
million in 1999 and 1998, respectively.
SIX MONTHS ENDED JUNE 30, 1999,
COMPARED WITH SIX MONTHS ENDED JUNE 30, 1998
Oil and Gas Sales
--------------------
Oil and gas sales in 1999 totaled $108.8 million, a 50% increase from the
prior year, due to higher production and higher average realized oil prices.
Oil production, including production related to barrels delivered under the
forward oil sale, increased 44% in 1999, compared to the prior year, resulting
in an increase in revenues of $32 million. Gross production from the Fields
averaged 434,000 BOPD in 1999, compared to 307,000 in 1998. The average
realized oil price increased $.56 per barrel, or 4%, resulting in an increase in
revenues of $4.3 million compared to the same period in 1998.
<PAGE>
Costs and Expenses
--------------------
Operating expenses increased $1.4 million in 1999, and depreciation,
depletion and amortization increased $5.8 million, primarily due to higher
production volumes, including barrels delivered under the forward oil sale. The
Company's operating costs per equivalent-barrel were $5.03 and $6.85 in 1999 and
1998, respectively. Operating expenses on a per equivalent-barrel basis were
lower primarily due to higher production volumes. OCENSA pipeline tariffs
totaled $26 million or $3.44 per barrel, and $25.6 million or $4.82 per barrel
in 1999 and 1998, respectively. Additionally, field operating expense totaled
$10.2 million or $1.34 per barrel in 1999 and $10.4 million or $1.93 per barrel
in 1998.
General and administrative expense before capitalization decreased $13.2
million, or 49%, to $14 million in 1999. Capitalized general and
administrative costs were $4.2 million and $13 million in 1999 and 1998,
respectively. General and administrative expenses, and the portion capitalized,
decreased as a result of restructuring activities undertaken during the second
half of 1998 and March 1999.
In July 1998, the Company commenced a plan to restructure the Company's
operations, reduce overhead costs and substantially scale back
exploration-related expenditures. The plan contemplated the closing of foreign
offices in four countries, the elimination of approximately 105 positions, or
41% of the worldwide workforce, and the relinquishment or other disposal of
several exploration licenses. As a result of the restructuring, the Company
recognized special charges totaling $18.3 million during the third and fourth
quarters of 1998. Of the $18.3 million in special charges, $14.5 million
related to the reduction in workforce, and represented the estimated costs for
severance, benefit continuation and outplacement costs, which will be paid over
a period of up to two years according to the severance formula. A total of $2.1
million of special charges related to the closing of foreign offices, and
represented the estimated costs of terminating office leases and the write-off
of related assets. The remaining special charges of $1.7 million primarily
related to the write-off of other surplus fixed assets resulting from the
reduction in workforce. At June 30, 1999, all of the positions had been
eliminated, all designated foreign offices had closed and twelve licenses had
been relinquished, sold or their commitments renegotiated. The Company expects
to dispose of two other licenses during 1999. Since July 1998, the Company has
paid $11.2 million in severance, benefit continuation and outplacement costs.
As of June 30, 1999, no changes had been made to the Company's estimate of the
total restructuring expenditures to be incurred. At June 30, 1999, the
remaining liability related to the restructuring activities undertaken in 1998
was $3.1 million.
In March 1999, the Company accrued special charges of $1.2 million related
to an additional 15% reduction in the number of employees resulting from the
Company's continuing efforts to reduce costs. The special charges consisted of
$1 million for severance, benefit continuation and outplacement costs and $.2
million related to the write-off of surplus fixed assets. Since March 1999, the
Company has paid $.2 million in severance, benefit continuation and outplacement
costs. At June 30, 1999, the remaining liability related to the restructuring
activities undertaken in 1999 was $.7 million.
Other Income and Expenses
----------------------------
In February 1998, the Company sold TPC, a wholly owned subsidiary that held
the Company's 9.6% equity interest in the Colombian pipeline company, OCENSA, to
an unrelated third party (the "Purchaser") for $100 million. Net proceeds were
approximately $97.7 million after $2.3 million of expenses. The sale resulted
in a gain of $50.2 million.
Gross interest expense for 1999 and 1998 totaled $18.8 million and $25
million, respectively, while capitalized interest for 1999 decreased $7.8
million to $6.9 million. The decrease in gross interest expense is due to lower
outstanding borrowings resulting from the repayment of primarily all outstanding
borrowings under bank credit facilities in the third quarter of 1998.
Capitalized interest decreased primarily due to the writedown of unevaluated
property totaling $73.9 million in June 1998 and a sale of 50% of the Company's
Block A-18 project in August 1998.
Other income, net included a foreign exchange gain (loss) of ($2.7 million)
and $1.7 million in 1999 and 1998, respectively. During 1999, the Company
recorded an unrealized gain of $2.4 million, representing the change in the fair
value of the call options purchased in anticipation of a forward oil sale. In
addition, during 1999 and 1998, the Company recorded expense of $.8 million in
other income, net, related to the net payments made under and the change in the
fair value of the equity swap entered into in conjunction with the sale of TPC.
Net payments made (or received) under the equity swap, and any fluctuations in
the fair values of the call options and the equity swap, in future periods will
affect other income in such periods. See "Item 7A. Quantitative and Qualitative
Disclosures About Market Risk" in Triton's Annual Report on Form 10-K for the
year ended December 31, 1998.
Income Taxes
-------------
The income tax provisions for 1999 and 1998 included deferred tax expense
(benefit) of $7.2 million and ($35.7 million), respectively. The benefit
recognized in 1998 related to the writedown of oil and gas properties. Current
taxes related to the Company's Colombian operations totaled $2.6 million and
$1.4 million in 1999 and 1998, respectively.
Recent Accounting Pronouncements
--------------------------------
In June 1998, the Financial Accounting Standards Board issued
Statement No. 133 ("SFAS 133"), "Accounting for Derivative Instruments and
Hedging Activities." SFAS 133 establishes accounting and reporting standards
for derivative instruments and for hedging activities. It requires enterprises
to recognize all derivatives as either assets or liabilities in the balance
sheet and measure those instruments at fair value. The requisite accounting for
changes in the fair value of a derivative will depend on the intended use of the
derivative and the resulting designation. The Company must adopt SFAS 133, as
amended, effective January 1, 2001. Based on the Company's outstanding
derivatives contracts, the impact of adopting this standard would not have a
material adverse effect on the Company's operations or consolidated financial
condition. However, no assurances can be given with regards to the level of the
Company's derivatives activities at the time SFAS 133 is adopted or the
resulting effect on the Company's operations or consolidated financial
condition.
Information Systems and the Year 2000
-------------------------------------
The Year 2000 issue involves circumstances where a computerized system may
not properly recognize or process date-sensitive information on or after January
1, 2000. The Company began a formal process in 1998 to identify those internal
computerized systems that are not Year 2000 compliant, prioritize those
business-critical computerized systems that need remediation or replacement,
test compliance once the appropriate corrective measures have been implemented,
and develop any contingency plans where considered necessary.
The Company's information technology infrastructure consists of desktop
Pentium class Intel based PC systems, servers and Sparc UNIX based computers and
off-the-shelf software packages. The systems are networked via Microsoft NT 4.0
and other telecommunications equipment. The Company does not use mini or
mainframe computer systems and uses only off-the-shelf software products. The
PBX and phone system is a standard off-the-shelf phone system with voice mail
capability. Additionally, telefax and copier machines are additional business
tools used by the Company in conducting its day-to-day activities.
The Company has completed its assessment of Year 2000 readiness of its
internal computerized systems and has made substantial progress toward
installing upgrades to its off-the-shelf financial and operational software
applications, hardware and telecommunications equipment. The Company expects
that such remediation procedures and the testing of newly upgraded systems to
ensure compliance with Year 2000 date recognition and the development of
contingency plans will be completed by the third quarter of 1999.
All of the Company's sales are derived from oil and gas production from the
Fields, which is heavily dependent upon the operation of the Fields by BP
Exploration Company (Colombia) Limited (the "Operator") and the transportation
of oil through OCENSA, a Colombian pipeline company. The Company is monitoring
progress of the Operator of the Fields and OCENSA on their activities related to
the Year 2000. At this time, the Company expects that field operations will not
be interrupted due to improper recognition of the Year 2000 by computerized
systems of the Operator of the Fields or OCENSA.
The Company also relies on other oil and gas partners, vendors, and financial
institutions in its daily operations. The Company believes it has identified
those third-party relationships that could have a material adverse effect on the
Company's results of operations and financial position should their computerized
systems not be compliant for the Year 2000. The Company has surveyed third
parties on their readiness for the Year 2000 and is in the process of
establishing appropriate alternatives, if needed, where noncompliance may pose a
risk to the Company's operations.
The Company does not believe that the costs to resolve any Year 2000 issues will
be material. To date, the Company has incurred approximately $250,000 on Year
2000 matters and it expects that the total cost, primarily consulting fees, will
not exceed $400,000.
The failure to correct a material Year 2000 problem by the Company, its partners
or other vendors could result in an interruption of the Company's normal
business activities or operations, including production in the Fields or
transportation of the Company's crude oil to the port of Covenas. Any
interruptions could result in a material adverse effect on the Company's results
of operations, cash flows and financial condition. Due to the inherent
uncertainties relating to the effect of the Year 2000 on the Company's
operations, it is difficult to predict what impact, if any, noncompliance with
the Year 2000 issue will have on the Company's results of operations, cash flows
and financial condition.
As the Company progresses further through its Year 2000 analysis, it
intends to develop contingency plans for risks that could cause a material
adverse effect on the Company's results of operations, cash flows and financial
condition.
Certain Factors That Could Affect Future Operations
---------------------------------------------------
Certain information contained in this report, as well as written and oral
statements made or incorporated by reference from time to time by the Company
and its representatives in other reports, filings with the Securities and
Exchange Commission, press releases, conferences or otherwise, may be deemed to
be "forward-looking statements" within the meaning of Section 21E of the
Securities Exchange Act of 1934 and are subject to the "Safe Harbor" provisions
of that section. Forward-looking statements include statements concerning the
Company's and management's plans, objectives, goals, strategies and future
operations and performance and the assumptions underlying such forward-looking
statements. Forward-looking statements may be identified, without limitation,
by the use of the words "anticipates," "estimates," "expects," "believes,"
"intends," "plans" and similar expressions. These statements include
information regarding drilling schedules; expected or planned production
capacity; future production of the Fields; the negotiation of a gas-sales
contract, completion of development and commencement of production in
Malaysia-Thailand; the Company's capital budget and future capital requirements;
the Company's meeting its future capital needs; future general and
administrative expense and the portion to be capitalized; future interest
expense and the portion to be capitalized; the Company's realization of its
deferred tax asset; the level of future expenditures for environmental costs;
the outcome of regulatory and litigation matters; the impact of Year 2000
issues; the estimated fair value of derivative instruments, including the equity
swap; and proven oil and gas reserves and discounted future net cash flows
therefrom. These statements are based on current expectations and involve a
number of risks and uncertainties, including those described in the context of
such forward-looking statements, and in notes of Notes to Condensed Consolidated
Financial Statements. Actual results and developments could differ materially
from those expressed in or implied by such statements due to these and other
factors.
ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
Oil sold by the Company is normally priced with reference to a defined
benchmark, such as light sweet crude oil traded on the New York Mercantile
Exchange. Actual prices received vary from the benchmark depending on quality
and location differentials. It is the Company's policy to use financial market
transactions with creditworthy counterparties from time to time, primarily to
reduce risk associated with the pricing of a portion of the oil and natural gas
that it sells. The policy is structured to underpin the Company's planned
revenues and results of operations. The Company also may enter into financial
market transactions to benefit from its assessment of the future prices of its
production relative to other benchmark prices. The Company does not hold or
issue derivative instruments for trading purposes. There can be no assurance
that the use of financial market transactions will not result in losses.
With respect to the sale of oil to be produced by the Company, the Company
has entered into an oil price collar with a creditworthy counterparty to
establish a weighted average minimum WTI benchmark price of $14.25 per barrel
and a maximum of $15.40 per barrel on 300,000 barrels per month during the
period from July through December 1999, for an aggregate of 1.8 million barrels.
As a result, to the extent the average monthly WTI price exceeds $15.40, the
Company will pay the counterparty the difference between the average monthly WTI
price and $15.40, and to the extent that the average monthly WTI price is below
$14.25, the counterparty will pay the Company the difference between the average
monthly WTI price and $14.25. In addition, the Company established a weighted
average WTI fixed price of $17.05 for an aggregate of 1.6 million barrels of
production during the period from July through December 1999, under its
marketing agreement with a third party. The Company also entered into an oil
price collar with a creditworthy counterparty to establish a weighted average
minimum WTI benchmark price of $17.00 per barrel and a maximum of $19.80 per
barrel on 100,000 barrels per month during the period from January through June
2000, for an aggregate of 600,000 barrels.
During the six months ended June 30, 1999, markets provided the Company the
opportunity to realize WTI benchmark oil prices on average $2.26 per barrel
(excluding forward oil sale and Ecopetrol reimbursement barrels) above the WTI
benchmark oil price the Company set as part of its 1999 annual plan. As a
result of financial and commodity market transactions settled during the six
months ended June 30, 1999, the Company's risk management program resulted in an
average net realization of approximately $.42 per barrel lower than if the
Company had not entered into such transactions.
PART II. OTHER INFORMATION
ITEM 3. LEGAL PROCEEDINGS
In July through October 1998, eight lawsuits were filed against the Company
and Thomas G. Finck and Peter Rugg, in their capacities as Chairman and Chief
Executive Officer and Chief Financial Officer, respectively. Each case was filed
on behalf of a putative class of persons and/or entities who purchased the
Company's securities between March 30, 1998, and July 17, 1998, inclusive, and
seeks recovery of an unspecified amount of compensatory damages, fees and costs.
The cases allege violations of Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder in
connection with disclosures concerning the Company's properties, operations, and
value relating to a prospective sale of the Company or of all or a part of its
assets. Additionally, one case alleges negligent misrepresentation and seeks
recovery of punitive damages. Each lawsuit was filed in the United States
District Court for the Eastern District of Texas, Texarkana Division.
On September 21, 1998, a motion for consolidation and for appointment as
lead plaintiffs and for approval of selection of lead counsel was filed. With
the exception of the request for consolidation, which has been agreed to, the
motion is presently pending. Also pending is the Company's motion to dismiss or
transfer for improper venue. The consolidated action is styled In re: Triton
Energy Limited Securities Litigation. The Company believes its disclosures have
been accurate and intends to vigorously defend these actions. No discovery has
been taken at this time, however, and the ultimate outcome is not currently
predictable. There can be no assurance that the litigation will be resolved in
the Company's favor. An adverse result could have a material adverse effect on
the Company's financial position or results of operations.
During the quarter ending September 30, 1995, the United States
Environmental Protection Agency (the "EPA") and Justice Department advised the
Company that one of its domestic oil and gas subsidiaries, as a potentially
responsible party for the clean-up of the Monterey Park, California, Superfund
site operated by Operating Industries, Inc., could agree to contribute
approximately $2.8 million to settle its alleged liability for certain remedial
tasks at the site. The offer did not address responsibility for any groundwater
remediation. The subsidiary was advised that if it did not accept the
settlement offer, it, together with other potentially responsible parties, may
be ordered to perform or pay for various remedial tasks. After considering the
cost of possible remedial tasks, its legal position relative to potentially
responsible parties and insurers, possible legal defenses and other factors, the
subsidiary declined to accept the offer.
In October 1997, the EPA advised the Company that the estimated cost of
the clean-up of the site would be approximately $217 million to be allocated
among the 280 known operators. The subsidiary's share would be approximately $1
million based upon a volumetric allocation, but there can be no assurance that
any allocation of liability to the subsidiary would be made on a volumetric
basis. No proceeding has been brought in any court against the Company or the
subsidiary in this matter.
On August 22, 1997, the Company was sued in the Superior Court of the State
of California for the County of Los Angeles, by David A. Hite, Nordell
International Resources Ltd., and International Veronex Resources, Ltd. The
Company and the plaintiffs were adversaries in a 1990 arbitration proceeding in
which the interest of Nordell International Resources Ltd. in the Enim oil field
in Indonesia was awarded to the Company (subject to a 5% net profits interest
for Nordell) and Nordell was ordered to pay the Company nearly $1 million. The
arbitration award was followed by a series of legal actions by the parties in
which the validity of the award and its enforcement were at issue. As a result
of these proceedings, the award was ultimately upheld and enforced.
The current suit alleges that the plaintiffs were damaged in amounts
aggregating $13 million primarily because of the Company's prosecution of
various claims against the plaintiffs as well as its alleged misrepresentations,
infliction of emotional distress, and improper accounting practices. The suit
seeks specific performance of the arbitration award, damages for alleged fraud
and misrepresentation in accounting for Enim field operating results, an
accounting for Nordell's 5% net profit interest, and damages for emotional
distress and various other alleged torts. The suit seeks interest, punitive
damages and attorneys fees in addition to the alleged actual damages. On
September 26, 1997, the Company removed the action to the United States
District Court for the Central District of California. On August 31, 1998, the
district court dismissed all claims asserted by the plaintiffs other than claims
for malicious prosecution and abuse of the legal process, which the court held
could not be subject to a motion to dismiss. The abuse of process claim was
later withdrawn, and the damages sought have been reduced to approximately
$700,000 (not including punitive damages). Trial of the malicious prosecution
claim will begin on 24 hours' notice from the district court, although the court
has indicated that it is unlikely the matter will be called for trial before
September 1999. The Company believes it has acted appropriately and intends
vigorously to defend itself.
The Company is also subject to litigation that is incidental to its
business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual Meeting of Shareholders on May 11, 1999. At the
meeting, the shareholders of the Company voted on the proposal for election of
six directors and a proposal to adopt an amendment to the Company's Amended and
Restated Restricted Stock Plan to increase by 200,000 shares the number of
shares available for issuance under the plan. The directors elected and the
votes cast for or withheld were as follows: Jack D. Furst (52,937,790 votes
for and 488,333 votes withheld), Michael E. McMahon (52,991,174 votes for and
381,565 votes withheld), C. Richard Vermillion (52,982,207 votes for and
399,499 votes withheld) and J. Otis Winters (52,970,394 votes for and 423,125
votes withheld). The following directors continued in office: Sheldon R.
Erickson, Thomas O. Hicks, Fitzgerald S. Hudson, John R. Huff, James C.
Musselman and Lamar Norsworthy.
The proposal to adopt the amendment to the Company's Amended and Restated
Restricted Stock Plan was approved with 51,862,132 shares voting for the
proposal, 1,099,844 shares voting against and 403,973 shares abstaining.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: The following documents are filed as part of this Quarterly
Report on Form 10-Q:
1. Exhibits required to be filed by Item 601 of Regulation S-K. (Where the
amount of securities authorized to be issued under any of Triton Energy
Limited's and any of its subsidiaries' long-term debt agreements does not exceed
10% of the Company's assets, pursuant to paragraph (b)(4) of Item 601 of
Regulation S-K, in lieu of filing such as exhibits, the Company hereby agrees to
furnish to the Commission upon request a copy of any agreement with respect to
such long-term debt.)
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3.1 Memorandum of Association. (1)
3.2 Articles of Association. (1)
4.1 Specimen Share Certificate of Ordinary Shares, $.01 par value, of the Company. (2)
4.2 Rights Agreement dated as of March 25, 1996, between Triton and The Chase
Manhattan Bank, as Rights Agent, including, as Exhibit A thereto, Resolutions
establishing the Junior Preference Shares. (1)
4.3 Resolutions Authorizing the Company's 5% Convertible Preference Shares. (3)
4.4 Amendment No. 1 to Rights Agreement dated as of August 2, 1996, between Triton
Energy Limited and The Chase Manhattan Bank, as Rights Agent. (4)
4.5 Amendment No. 2 to Rights Agreement dated as of August 30, 1998, between Triton
Energy Limited and The Chase Manhattan Bank, as Rights Agent. (5)
4.6 Unanimous Written Consent of the Board of Directors authorizing a Series of
Preference Shares. (6)
4.7 Amendment No. 3 to Rights Agreement dated as of January 5, 1999, between Triton
Energy Limited and The Chase Manhattan Bank, as Rights Agent. (7)
10.1 Amended and Restated Retirement Income Plan. (8)
10.2 Amendment to the Retirement Income Plan dated August 1, 1998. (9)
10.3 Amendment to Amended and Restated Retirement Income Plan dated
December 31, 1996. (10)
10.4 Amended and Restated Supplemental Executive Retirement Income Plan. (11)
10.5 1981 Employee Non-Qualified Stock Option Plan. (12)
10.6 Amendment No. 1 to the 1981 Employee Non-Qualified Stock Option Plan. (13)
10.7 Amendment No. 2 to the 1981 Employee Non-Qualified Stock Option Plan. (12)
10.8 Amendment No. 3 to the 1981 Employee Non-Qualified Stock Option Plan. (8)
10.9 1985 Stock Option Plan. (14)
10.10 Amendment No. 1 to the 1985 Stock Option Plan. (12)
10.11 Amendment No. 2 to the 1985 Stock Option Plan. (8)
10.12 Amended and Restated 1986 Convertible Debenture Plan. (8)
10.13 1988 Stock Appreciation Rights Plan. (15)
10.14 1989 Stock Option Plan. (16)
10.15 Amendment No. 1 to 1989 Stock Option Plan. (12)
10.16 Amendment No. 2 to 1989 Stock Option Plan. (8)
10.17 Second Amended and Restated 1992 Stock Option Plan.(17)
10.18 Form of Amended and Restated Employment Agreement with Triton
Energy Limited and certain officers. (11)
10.19 Amended and Restated Employment Agreement among Triton Energy Limited, Triton
Exploration Services, Inc. and Robert B. Holland, III. (6)
10.20 Form of Amended and Restated Employment Agreement among Triton Energy Limited,
Triton Exploration Services, Inc. and each of Peter Rugg and Al E. Turner. (6)
10.21 Letter Agreement among Triton Energy Limited, Triton Exploration Services, Inc.
and Robert B. Holland, III dated December 17, 1998. (27)
10.22 Letter Agreement among Triton Energy Limited, Triton Exploration Services, Inc.
and Peter Rugg dated December 10, 1998. (27)
10.23 Form of Bonus Agreement between Triton Exploration Services, Inc. and each of
Al E. Turner, Robert B. Holland, III, and Peter Rugg dated July 15, 1998. (27)
10.24 Amended and Restated 1985 Restricted Stock Plan. (8)
10.25 First Amendment to Amended and Restated 1985 Restricted Stock Plan. (18)
10.26 Second Amendment to Amended and Restated 1985 Restricted Stock Plan. (17)
10.27 Executive Life Insurance Plan. (19)
10.28 Long Term Disability Income Plan. (19)
10.29 Amended and Restated Retirement Plan for Directors. (14)
10.30 Contract for Exploration and Exploitation for Santiago de Atalayas I with an effective
date of July 1, 1982, between Triton Colombia, Inc., and Empresa Colombiana
De Petroleos. (14)
10.31 Contract for Exploration and Exploitation for Tauramena with an effective date of July
4, 1988, between Triton Colombia, Inc., and Empresa Colombiana De Petroleos. (14)
10.32 Summary of Assignment legalized by Public Instrument No. 1255 dated September 15,
1987 (Assignment is in Spanish language). (15)
10.33 Summary of Assignment legalized by Public Instrument No. 1602 dated June 11, 1990
(Assignment is in Spanish language). (15)
10.34 Summary of Assignment legalized by Public Instrument No. 2586 dated September 9,
1992 (Assignment is in Spanish language). (15)
10.35 401(K) Savings Plan. (8)
10.36 Amendment to the 401(k) Savings Plan dated August 1, 1998. (9)
10.37 Amendment to 401(k) Savings Plan dated December 31, 1996. (10)
10.38 Contract between Malaysia-Thailand and Joint Authority and Petronas Carigali
SDN.BHD. and Triton Oil Company of Thailand relating to Exploration and Production
of Petroleum for Malaysia-Thailand Joint Development Area Block A-18. (20)
10.39 Triton Crude Purchase Agreement between Triton Colombia, Inc. and Oil Co., LTD.
dated May 25, 1995. (21)
10.40 Credit Agreement among Triton Colombia, Inc., Triton Energy Corporation,
NationsBank, N.A. (Carolinas) and Export-Import Bank of the United States. (18)
10.41 Amendment No. 1 to Credit Agreement among Triton Colombia, Inc., Triton Energy
Corporation, NationsBank, N.A. (Carolinas) and Export-Import Bank of the United
States. (18)
10.42 Amendment No. 2 to Credit Agreement among Triton Colombia, Inc.,
Triton Energy Corporation, NationsBank, N.A. (Carolinas) and Export-Import Bank
of the United States. (17)
10.43 Amendment No. 3 to Credit Agreement among Triton Colombia, Inc., Triton Energy
Corporation, NationsBank, N.A. (Carolinas) and Export-Import Bank of the United
States. (10)
10.44 Form of Indemnity Agreement entered into with each director and officer of the
Company. (6)
10.45 Description of Performance Goals for Executive Bonus Compensation. (22)
10.46 Stock Purchase Agreement dated September 2, 1997, between The Strategic
Transaction Company and Triton International Petroleum, Inc. (11)
10.47 Fourth Amendment to Stock Purchase Agreement dated February 2, 1998, between
The Strategic Transaction Company and Triton International Petroleum, Inc. (11)
10.48 Amended and Restated 1997 Share Compensation Plan. (27)
10.49 First Amendment to Amended and Restated Retirement Plan for Directors. (11)
10.50 First Amendment to Second Amended and Restated 1992 Stock Option Plan. (23)
10.51 Second Amendment to Second Amended and Restated 1992 Stock Option Plan. (11)
10.52 Amended and Restated Indenture dated July 25, 1997, between Triton Energy
Limited and The Chase Manhattan Bank. (24)
10.53 Amended and Restated First Supplemental Indenture dated July 25, 1997, between
Triton Energy Limited and The Chase Manhattan Bank relating to the 8 3/4% Senior
Notes due 2002. (24)
10.54 Amended and Restated Second Supplemental Indenture dated July 25, 1997,
between Triton Energy Limited and The Chase Manhattan Bank relating to the 9 1/4%
Senior Notes due 2005. (24)
10.55 Share Purchase Agreement dated July 17, 1998 ,among Triton Energy Limited, Triton
Asia Holdings, Inc., Atlantic Richfield Company and ARCO JDA Limited. (9)
10.56 Shareholders Agreement dated August 3, 1998, among Triton Energy Limited, Triton
Asia Holdings, Inc., Atlantic Richfield Company, and ARCO JDA Limited. (9)
10.57 Stock Purchase Agreement dated as of August 31, 1998, between Triton Energy
Limited and HM4 Triton, L.P. (6)
10.58 Shareholders Agreement dated as of September 30, 1998, between Triton Energy
Limited and HM4 Triton, L.P. (6)
10.59 Financial Advisory Agreement dated as of September 30, 1998, between Triton Energy
Limited and Hicks, Muse & Co. Partners, L.P. (6)
10.60 Monitoring and Oversight Agreement dated as of September 30, 1998, between Triton
Energy Limited and Hicks, Muse & Co. Partners, L.P. (6)
10.61 Severance Agreement dated as of July 15, 1998, between Thomas G. Finck and Triton
Energy Limited. (6)
10.62 Severance Agreement dated April 9, 1999, made and entered into by and among Triton
Energy Limited, Triton Exploration Services, Inc. and Peter Rugg. (28)
10.63 Consulting and Non-Compete Agreement dated April 9, 1999, made and entered into
by and between Triton Exploration Services, Inc. and Peter Rugg. (28)
10.64 Third Amendment to Amended and Restated 1985 Restricted Stock Plan. (28)
10.65 Amendment to Triton Exploration Services, Inc. Retirement Income
Plan. (29)
10.66 Amendment to the Triton Exploration Services, Inc. Supplemental Executive
Retirement Plan. (29)
10.67 Third Amendment to the Second Amended and Restated 1992 Stock Option Plan. (29)
10.68 First Amendment to the Amended and Restated 1997 Share Compensation Plan. (29)
10.69 Amended and Restated Employment Agreement dated July 15, 1998 among
Triton Exploration Services, Inc., Triton Energy Limited and A.E. Turner, III. (29)
10.70 Amended Employment Agreement among Triton Exploration Services, Inc.,
Triton Energy Limited and certain officers. (29)
10.71 Second Amendment to Retirement Plan for Directors. (29)
10.72 Amendment to Triton Exploration Services, Inc. 401 (k) Savings Plan. (29)
10.73 Amendment No. 1 to Shareholders Agreement between Triton Energy Limited
And HM4 Triton. (29)
10.74 Amendment No. 4 to the 1981 Employee Nonqualified Stock Option Plan. (29)
10.75 Amendment No. 3 to the 1985 Stock Option Plan. (29)
10.76 Amendment No. 3 to the 1989 Stock Option Plan. (29)
12.1 Computation of Ratio of Earnings to Fixed Charges. (29)
12.2 Computation of Ratio of Earnings to Combined Fixed Charges and Preference
Dividends. (29)
27.1 Financial Data Schedule. (29)
99.1 Heads of Agreement for the Supply of Gas from Block A-18 of the Malaysia-Thailand Joint Development Area. (10)
99.2 Rio Chitamena Association Contract. (25)
99.2 Rio Chitamena Purchase and Sale Agreement. (25)
99.3 Integral Plan - Cusiana Oil Structure. (25)
99.4 Letter Agreements with co-investor in Colombia. (25)
99.5 Colombia Pipeline Memorandum of Understanding. (25)
99.6 Amended and Restated Oleoducto Central S.A. Agreement dated as of March 31,
1995. (26)
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(1) Previously filed as an exhibit to the Company's Registration Statement
on Form S-3 (No 333-08005) and incorporated herein by reference.
(2) Previously filed as an exhibit to the Company's Registration Statement on Form 8-A
dated March 25, 1996, and incorporated herein by reference.
(3) Previously filed as an exhibit to the Company's and Triton Energy Corporation's
Registration Statement on Form S-4 (No. 333-923) and incorporated herein
by reference.
(4) Previously filed as an exhibit to the Company's Registration Statement on Form 8-A/A
(Amendment No. 1) dated August 14, 1996, and incorporated herein by reference.
(5) Previously filed as an exhibit to the Company's Registration Statement on Form 8-A/A
(Amendment No. 2) dated October 2, 1998, and incorporated herein by reference.
(6) Previously filed as an exhibit to Triton Energy Corporation's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1998, and incorporated herein by
reference.
(7) Previously filed as an exhibit to the Company's Registration Statement on Form 8-A/A
(Amendment No. 3) dated January 31, 1999, and incorporated herein by reference.
(8) Previously filed as an exhibit to Triton Energy Corporation's Quarterly Report on Form
10-Q for the quarter ended November 30, 1993, and incorporated by reference
herein.
(9) Previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998, and incorporated herein by reference.
(10) Previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998, and incorporated herein by reference.
(11) Previously filed as an exhibit to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1997, and incorporated herein by reference.
(12) Previously filed as an exhibit to Triton Energy Corporation's Annual Report on Form
10-K for the fiscal year ended May 31, 1992 ,and incorporated herein by reference.
(13) Previously filed as an exhibit to Triton Energy Corporation's Annual Report on Form
10-K for the fiscal year ended May 31, 1989, and incorporated by reference herein.
(14) Previously filed as an exhibit to Triton Energy Corporation's Annual Report on Form
10-K for the fiscal year ended May 31, 1990, and incorporated herein by reference.
(15) Previously filed as an exhibit to Triton Energy Corporation's Annual Report on Form
10-K for the fiscal year ended May 31, 1993, and incorporated by reference herein.
(16) Previously filed as an exhibit to Triton Energy Corporation's Quarterly Report on
Form 10-Q for the quarter ended November 30, 1988, and incorporated herein by
reference.
(17) Previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996, and incorporated herein by reference.
(18) Previously filed as an exhibit to Triton Energy Corporation's Annual Report on Form
10-K for the fiscal year ended December 31, 1995, and incorporated herein by
reference.
(19) Previously filed as an exhibit to Triton Energy Corporation's Annual Report on Form
10-K for the fiscal year ended May 31, 1991, and incorporated herein by reference.
(20) Previously filed as an exhibit to Triton Energy Corporation's current report on Form
8-K dated April 21, 1994, and incorporated by reference herein.
(21) Previously filed as an exhibit to Triton Energy Corporation's Current Report on Form
8-K dated May 26, 1995, and incorporated herein by reference.
(22) Previously filed as an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1996, and incorporated herein by
reference.
(23) Previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1997, and incorporated herein by reference.
(24) Previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997, and incorporated herein by reference.
(25) Previously filed as an exhibit to Triton Energy Corporation's current report on Form
8-K/A dated July 15, 1994, and incorporated by reference herein.
(26) Previously filed as an exhibit to Triton Energy Corporation's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1995, and incorporated herein by
reference.
(27) Previously filed as an exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998, and incorporated herein by reference
(28) Previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1999, and incorporated herein by reference.
(29) Filed herewith.
</TABLE>
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TRITON ENERGY LIMITED
By: /s/ Bernard Gros-Dubois
-----------------------------
Bernard Gros-Dubois
Vice President
(Principal Accounting and
Financial Officer)
Date: August 11, 1999
EXHIBIT 10.65
AMENDMENT TO TRITON EXPLORATION SERVICES, INC.
----------------------------------------------
RETIREMENT INCOME PLAN
----------------------
This Amendment to Triton Exploration Services, Inc. Retirement Income Plan
(this "Amendment") is executed by Triton Exploration Services, Inc., a Delaware
corporation (the "Company"), effective as of May 11, 1999.
R E C I T A L S:
---------------
A. The Company is the sponsor of the Triton Exploration Services, Inc.
Retirement Income Plan, as amended and/or restated (the "Plan"); and
B. The Board of Directors has adopted certain amendments to the Plan
effective as of May 11, 1999.
NOW, THEREFORE, the Plan is amended in the following respects:
1. The sixth sentence of Section 1.40 of the Plan, which is the third
sentence of Section 1.40 following the table, be and it is hereby amended to
read in its entirety as follows:
"Notwithstanding the foregoing, a Participant's Vested Percentage will be 100%
if a 'Change in Control' of Triton Energy Limited ('TEL') occurs. For purposes
of this Section, Change in Control means the occurrence of any of the following
events:
(a) There shall be consummated (x) any consolidation, amalgamation, merger or
other form of business combination of TEL, or to which TEL is a party, in which
(I) TEL is not the continuing or surviving corporation or (II) where TEL is the
continuing or surviving corporation, TEL's Ordinary Shares would be converted
into cash, securities or other property, or the holders of TEL's Ordinary Shares
immediately prior to the consolidation, amalgamation, merger or other form of
business combination would represent less than a majority of the common stock or
ordinary shares of the surviving corporation immediately after the
consolidation, amalgamation, merger or other form of business combination, or
(y) any sale, lease, exchange or other transfer (excluding transfer by way of
pledge or hypothecation), in one transaction or a series of related
transactions, of all, or substantially all, of the assets of TEL;
(b) The shareholders of TEL approve any plan or proposal for the liquidation or
dissolution of TEL;
(c) Any 'person' (as such term is defined in Section 3(a)(9) or Section 13(d)(3)
under the Securities Exchange Act of 1934, as amended (the '1934 Act')) or any
'group' (as such term is used in Rule 13d-5 promulgated under the 1934 Act),
other than TEL or any successor of TEL or any subsidiary of TEL or any employee
benefit plan of TEL or any subsidiary (including such plan's trustee), becomes,
without the prior approval of the Board of Directors of TEL (the 'Board'), a
beneficial owner for purposes of Rule 13d-3 promulgated under the 1934 Act,
directly or indirectly, of securities of TEL representing 25.0% or more of TEL's
then outstanding securities having the right to vote in the election of
Directors of TEL; or
(d) During any period of two consecutive years, individuals who, at the
beginning of such period constituted the entire Board (the 'Incumbent
Directors'), cease for any reason (other than death) to constitute a majority of
the Directors of TEL, unless the election, or the nomination for election, by
TEL's shareholders, of each new Director of TEL was approved by a vote of at
least two-thirds of the Incumbent Directors (so long as such new Director was
not nominated by a person who expressed an intent to effect a change in control
of TEL or engage in a proxy or other control contest) in which case such new
Director shall be considered an Incumbent Director."
2. Except as amended by the provisions of this Amendment, all other
provisions of the Plan remain in full force and effect.
IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by
its duly authorized officer effective as of May 11, 1999.
TRITON EXPLORATION SERVICES, INC.
By:_________________________________
A.E. Turner, III, Senior Vice President and
Chief Operating Officer
EXHIBIT 10.66
AMENDMENT TO SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
---------------------------------------------------
This Amendment to the Triton Exploration Services, Inc. Supplemental
Executive Retirement Plan (this "Amendment") is executed by Triton Exploration
Services, Inc., a Delaware corporation ("Triton"), effective as May 11, 1999.
R E C I T A L S:
---------------
A. Triton has adopted the Supplemental Executive Retirement Plan
Amended and Restated 1992 Stock Option Plan (the "Plan"), and amended and
restated the Plan effective as of January 1, 1998; and
B. In accordance with the terms of the Plan, the Board of Directors has
adopted certain amendments to the Plan effective as of May 11, 1999.
NOW, THEREFORE, in accordance with the terms of the Plan, the Plan is
amended in the following respects:
1. Section 1.06 is amended to read in its entirety as follows:
"1.06 Change in Control
Change in Control means the occurrence of any of the following:
(a) The consummation of:
(1) Any consolidation, amalgamation, merger or other form of
business combination of Parent, or to which Parent is a party, in which (x)
Parent is not the continuing or surviving corporation or (y) where Parent is the
continuing or surviving corporation, Parent's ordinary shares would be converted
into cash, securities or other property, or the holders of Parent's ordinary
shares immediately prior to the consolidation, amalgamation, merger or other
form of business combination would represent less than a majority of the common
stock or ordinary shares of the surviving corporation immediately after the
consolidation, amalgamation, merger or other form of business combination, or
(2) Any sale, lease, exchange or other transfer (excluding
transfer by way of hypothecation), in one transaction or a series of related
transactions, of all, or substantially all, of the assets of Parent;
(b) The shareholders of Parent approve any plan or proposal for the
liquidation or dissolution of Parent,
(c) Any 'person' (as such term is defined in Section 3(a)(9) or Section
13(d)(3) under the Securities Exchange Act of 1934) or any 'group' (as such term
is used in Rule 13d-5 promulgated under the Securities Exchange Act of 1934),
other than Parent or any successor of Parent or any subsidiary of Parent or any
employee benefit plan of Parent or any subsidiary (including such plan's
trustee), becomes, without the prior approval of the Directors of Parent, a
beneficial owner for purposes of Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, directly or indirectly, of securities of Parent
representing 25% or more of Parent's then outstanding securities having the
right to vote in the election of Directors of Parent, or
(d) During any period of two consecutive years, individuals who, at the
beginning of such period constituted the entire Board of Directors of Parent,
cease for any reason (other than death) to constitute a majority of the
Directors of Parent, unless the election, or the nomination for election, by
Parent's shareholders, of each new Director of Parent was approved by a vote of
at least two-thirds of the Directors of Parent then still in office who were
Directors of Parent at the beginning of the period."
2. Except as amended by the provisions of this Amendment, all other
provisions of the Plan remain in full force and effect.
IN WITNESS WHEREOF, Triton has caused this Amendment to be executed by its
duly authorized officer effective this 11th day of May, 1999.
TRITON EXPLORATION SERVICES, INC.
By:_________________________________
A.E. Turner, III, Senior Vice President
and Chief Operating Officer
EXHIBIT 10.67
THIRD AMENDMENT TO
------------------
SECOND AMENDED AND RESTATED 1992 STOCK OPTION PLAN
--------------------------------------------------
This Third Amendment to the Second Amended and Restated 1992 Stock Option
Plan (this "Amendment") is executed by Triton Energy Limited, a Cayman Islands
company ("Triton"), effective as of May 11, 1999.
R E C I T A L S:
---------------
A. Triton has adopted the Second Amended and Restated 1992 Stock Option
Plan (the "Plan"), and amended and restated the Plan effective as of April 9,
1996; and
B. In accordance with the terms of the Plan, the Board of Directors has
adopted certain amendments to the Plan effective as of May 11, 1999.
NOW, THEREFORE, in accordance with the terms of the Plan, the Plan is
amended in the following respects:
1. The definition of "Change in Control", contained in Section 1.5 of the Plan,
is amended to read in its entirety as follows:
" 'Change in Control' means the occurrence of any of the following events: (i)
there shall be consummated (x) any consolidation, amalgamation, merger or other
form of business combination of the Company, or to which the Company is a party,
in which (I) the Company is not the continuing or surviving corporation or (II)
where the Company is the continuing or surviving corporation, the Company's
Ordinary Shares would be converted into cash, securities or other property, or
the holders of the Company's Ordinary Shares immediately prior to the
consolidation, amalgamation, merger or other form of business combination would
represent less than a majority of the common stock or ordinary shares of the
surviving corporation immediately after the consolidation, amalgamation, merger
or other form of business combination, or (y) any sale, lease, exchange or other
transfer (excluding transfer by way of pledge or hypothecation), in one
transaction or a series of related transactions, of all, or substantially all,
of the assets of the Company, (ii) the shareholders of the Company approve any
plan or proposal for the liquidation or dissolution of the Company, (iii) any
'person' (as such term is defined in Section 3(a)(9) or Section 13(d)(3) under
the Securities Exchange Act of 1934, as amended (the '1934 Act')) or any 'group'
(as such term is used in Rule 13d-5 promulgated under the 1934 Act), other than
the Company or any successor of the Company or any subsidiary of the Company or
any employee benefit plan of the Company or any subsidiary (including such
plan's trustee), becomes, without the prior approval of the Board of Directors
of the Company (the 'Board'), a beneficial owner for purposes of Rule 13d-3
promulgated under the 1934 Act, directly or indirectly, of securities of the
Company representing 25.0% or more of the Company's then outstanding securities
having the right to vote in the election of Directors of the Company, or (iv)
during any period of two consecutive years, individuals who, at the beginning of
such period constituted the entire Board (the 'Incumbent Directors'), cease for
any reason (other than death) to constitute a majority of the Directors of the
Company, unless the election, or the nomination for election, by the Company's
shareholders, of each new Director of the Company was approved by a vote of at
least two-thirds of the Incumbent Directors (so long as such new Director was
not nominated by a person who expressed an intent to effect a change in control
of the Company or engage in a proxy or other control contest) in which case such
new Director shall be considered an Incumbent Director."
2. Except as amended by the provisions of this Amendment, all other
provisions of the Plan remain in full force and effect.
IN WITNESS WHEREOF, Triton has caused this Amendment to be executed by its
duly authorized officer effective as of the date and year first above written.
TRITON ENERGY LIMITED
By:_________________________________
A.E. Turner, III, Senior Vice President and
Chief Operating Officer
EXHIBIT 10.68
FIRST AMENDMENT TO
------------------
AMENDED AND RESTATED 1997 SHARE COMPENSATION PLAN
-------------------------------------------------
This First Amendment to the Amended and Restated 1997 Share Compensation
Plan (this "Amendment") is executed by Triton Energy Limited, a Cayman Islands
company ("Triton"), effective as of May 11, 1999.
R E C I T A L S:
---------------
A. Triton has adopted the Amended and Restated 1997 Share Compensation
Plan (the "Plan") effective as of December 2, 1998; and
B. In accordance with the terms of the Plan, the Board of Directors has
adopted certain amendments to the Plan effective as of May 11, 1999.
NOW, THEREFORE, in accordance with the terms of the Plan, the Plan is
amended in the following respects:
1. The definition of "Change in Control" is amended to read in its entirety as
follows:
" 'Change in Control' means the occurrence of any of the following events: (i)
there shall be consummated (x) any consolidation, amalgamation, merger or other
form of business combination of the Company, or to which the Company is a party,
in which (I) the Company is not the continuing or surviving corporation or (II)
where the Company is the continuing or surviving corporation, the Company's
Ordinary Shares would be converted into cash, securities or other property, or
the holders of the Company's Ordinary Shares immediately prior to the
consolidation, amalgamation, merger or other form of business combination would
represent less than a majority of the common stock or ordinary shares of the
surviving corporation immediately after the consolidation, amalgamation, merger
or other form of business combination, or (y) any sale, lease, exchange or other
transfer (excluding transfer by way of pledge or hypothecation), in one
transaction or a series of related transactions, of all, or substantially all,
of the assets of the Company, (ii) the shareholders of the Company approve any
plan or proposal for the liquidation or dissolution of the Company, (iii) any
'person' (as such term is defined in Section 3(a)(9) or Section 13(d)(3) under
the Securities Exchange Act of 1934, as amended (the '1934 Act')) or any 'group'
(as such term is used in Rule 13d-5 promulgated under the 1934 Act), other than
the Company or any successor of the Company or any subsidiary of the Company or
any employee benefit plan of the Company or any subsidiary (including such
plan's trustee), becomes, without the prior approval of the Board of Directors
of the Company (the 'Board'), a beneficial owner for purposes of Rule 13d-3
promulgated under the 1934 Act, directly or indirectly, of securities of the
Company representing 25.0% or more of the Company's then outstanding securities
having the right to vote in the election of Directors of the Company, or (iv)
during any period of two consecutive years, individuals who, at the beginning of
such period constituted the entire Board (the 'Incumbent Directors'), cease for
any reason (other than death) to constitute a majority of the Directors of the
Company, unless the election, or the nomination for election, by the Company's
shareholders, of each new Director of the Company was approved by a vote of at
least two-thirds of the Incumbent Directors (so long as such new Director was
not nominated by a person who expressed an intent to effect a change in control
of the Company or engage in a proxy or other control contest) in which case such
new Director shall be considered an Incumbent Director."
2. Except as amended by the provisions of this Amendment, all other
provisions of the Plan remain in full force and effect.
IN WITNESS WHEREOF, Triton has caused this Amendment to be executed by its
duly authorized officer effective as of the date and year first above written.
TRITON ENERGY LIMITED
By:_________________________________
A.E. Turner, III, Senior Vice President
and Chief Operating Officer
EXHIBIT 10.69
TRITON EXPLORATION SERVICES, INC.
6688 North Central Expressway, Suite 1400
Dallas, Texas 75206
May 11, 1999
Mr. A.E. Turner, III
3004 Rosedale
Dallas, Texas 75205
Re: Amended and Restated Employment Agreement dated July 15, 1998 among
Triton Exploration Services, Inc., Triton Energy Limited and A.E.
Turner, III (as amended or modified to date, the "Agreement"; capitalized
terms used in this letter shall have the meanings set forth in the
Agreement)
Dear Mr. Turner:
This letter will evidence our agreement to amend the Agreement as set forth
herein. Section 1.6 of the Agreement is hereby amended to read in its entirety
as follows:
"For purposes of this Agreement, a 'change in control of the Company' shall
mean the occurrence of any of the following events: (i) there shall be
consummated (x) any consolidation, amalgamation, merger or other form of
business combination of the Company, or to which the Company is a party, in
which (I) the Company is not the continuing or surviving corporation or (II)
where the Company is the continuing or surviving corporation, the Company's
Ordinary Shares would be converted into cash, securities or other property, or
the holders of the Company's Ordinary Shares immediately prior to the
consolidation, amalgamation, merger or other form of business combination would
represent less than a majority of the common stock or ordinary shares of the
surviving corporation immediately after the consolidation, amalgamation, merger
or other form of business combination, or (y) any sale, lease, exchange or other
transfer (excluding transfer by way of pledge or hypothecation), in one
transaction or a series of related transactions, of all, or substantially all,
of the assets of the Company, (ii) the shareholders of the Company approve any
plan or proposal for the liquidation or dissolution of the Company, (iii) any
'person' (as such term is defined in Section 3(a)(9) or Section 13(d)(3) under
the Securities Exchange Act of 1934, as amended (the '1934 Act')) or any 'group'
(as such term is used in Rule 13d-5 promulgated under the 1934 Act), other than
the Company or any successor of the Company or any subsidiary of the Company or
any employee benefit plan of the Company or any subsidiary (including such
plan's trustee), becomes a beneficial owner for purposes of Rule 13d-3
promulgated under the 1934 Act, directly or indirectly, of securities of the
Company representing 15.0% or more of the Company's then outstanding securities
having the right to vote in the election of Directors of the Company, or (iv)
during any period of two consecutive years, individuals who, at the beginning of
such period constituted the entire Board of Directors of the Company (the
'Board', and such individuals being referred to as the 'Incumbent Directors'),
cease for any reason (other than death) to constitute a majority of the
Directors of the Company, unless the election, or the nomination for election,
by the Company's shareholders, of each new Director of the Company was approved
by a vote of at least two-thirds of the Incumbent Directors (so long as such new
Director was not nominated by a person who expressed an intent to effect a
change in control of the Company or engage in a proxy or other control contest)
in which case such new Director shall be considered an Incumbent Director."
Except as expressly set forth in this letter, the Agreement shall remain in
full force and effect. Nothing in this letter shall in any way be deemed to
affect any rights of Employee that may have arisen under the Agreement on or
prior to the date of this letter, including without limitation pursuant to any
change in control of the Company that may have occurred on or prior to the date
of this letter.
Please acknowledge your agreement with the foregoing by signing below.
Very truly yours,
Triton Exploration Services, Inc.
By: _____________________________
James C. Musselman, President
and Chief Executive Officer
Acknowledged and Agreed:
A.E. Turner, III
Acknowledged and Agreed by Triton Energy Limited, as guarantor
of Triton Exploration Services, Inc.
Triton Energy Limited
By: _________________________________
James C. Musselman, President and
Chief Executive Officer
EXHIBIT 10.70
TRITON EXPLORATION SERVICES, INC.
6688 North Central Expressway, Suite 1400
Dallas, Texas 75206
May 11, 1999
Re: Employment Agreement among Triton Exploration Services, Inc., Triton
Energy Limited and ________________ (as amended or modified to
date, the "Agreement"; capitalized terms used in this letter shall have
the meanings set forth in the Agreement)
Dear M__________:
This letter will evidence our agreement to amend the Agreement as set forth
herein.
1. The second sentence of Section 2 of the Agreement is hereby amended to read
in its entirety as follows:
"For purposes of this Agreement, a 'change in control of the Company' shall
mean the occurrence of any of the following events: (i) there shall be
consummated (x) any consolidation, amalgamation, merger or other form of
business combination of the Company, or to which the Company is a party, in
which (I) the Company is not the continuing or surviving corporation or (II)
where the Company is the continuing or surviving corporation, the Company's
Ordinary Shares would be converted into cash, securities or other property, or
the holders of the Company's Ordinary Shares immediately prior to the
consolidation, amalgamation, merger or other form of business combination would
represent less than a majority of the common stock or ordinary shares of the
surviving corporation immediately after the consolidation, amalgamation, merger
or other form of business combination, or (y) any sale, lease, exchange or other
transfer (excluding transfer by way of pledge or hypothecation), in one
transaction or a series of related transactions, of all, or substantially all,
of the assets of the Company, (ii) the shareholders of the Company approve any
plan or proposal for the liquidation or dissolution of the Company, (iii) any
'person' (as such term is defined in Section 3(a)(9) or Section 13(d)(3) under
the Securities Exchange Act of 1934, as amended (the '1934 Act')) or any 'group'
(as such term is used in Rule 13d-5 promulgated under the 1934 Act), other than
the Company or any successor of the Company or any subsidiary of the Company or
any employee benefit plan of the Company or any subsidiary (including such
plan's trustee), becomes, without the prior approval of the Board of Directors
of the Company (the 'Board'), a beneficial owner for purposes of Rule 13d-3
promulgated under the 1934 Act, directly or indirectly, of securities of the
Company representing 25.0% or more of the Company's then outstanding securities
having the right to vote in the election of Directors of the Company, or (iv)
during any period of two consecutive years, individuals who, at the beginning of
such period constituted the entire Board (the 'Incumbent Directors'), cease for
any reason (other than death) to constitute a majority of the Directors of the
Company, unless the election, or the nomination for election, by the Company's
shareholders, of each new Director of the Company was approved by a vote of at
least two-thirds of the Incumbent Directors (so long as such new Director was
not nominated by a person who expressed an intent to effect a change in control
of the Company or engage in a proxy or other control contest) in which case such
new Director shall be considered an Incumbent Director."
2. Section 4.3-2 of the Agreement is hereby amended to read in its
entirety as follows:
"4.3-2 In lieu of any further salary payments to Employee for periods
subsequent to the Date of Termination, an amount equal to the product of (a)
115% times Employee's annual base salary at the rate in effect as of the Date of
Termination (without giving effect to any reduction thereof by Employer without
Employee's prior written consent) multiplied by (b) the number two (2);"
Except as expressly set forth in this letter, the Agreement shall remain in
full force and effect.
Please acknowledge your agreement with the foregoing by signing below.
Very truly yours,
Triton Exploration Services, Inc.
By: _____________________________
A.E. Turner, III, Senior Vice
President and Chief Operating Officer
Acknowledged and Agreed:
__________________________
Acknowledged and Agreed by Triton Energy Limited, as guarantor
of Triton Exploration Services, Inc.
Triton Energy Limited
By: _________________________________
A.E. Turner, III, Senior Vice President and
Chief Operating Officer
The following officers are party to this form of amendment:
W. Greg Dunlevy
Bernard Gros-Dubois
Brian Maxted
Richard Stevens
Belle Toren
EXHIBIT 10.71
SECOND AMENDMENT TO RETIREMENT PLAN FOR DIRECTORS
-------------------------------------------------
This Second Amendment to Retirement Plan for Directors (this "Amendment")
is executed by Triton Energy Limited, a Cayman Islands company ("Triton"),
effective as of May 11, 1999.
RECITALS:
--------
A. Triton (through its predecessor company) has adopted the Amended and
Restated Retirement Plan for Directors (the "Plan"); and
B. The Board of Directors has adopted certain amendments to the Plan
effective as of May 11, 1999.
NOW, THEREFORE, the Plan is amended in the following respects:
1. the definition of "change in control", contained in the second
paragraph of Section 3 of the Plan, is hereby amended and restated to read as
follows:
"For purposes hereof, a 'change in control of the Company' shall mean the
occurrence of any of the following events: (i) there shall be consummated (x)
any consolidation, amalgamation, merger or other form of business combination of
the Company, or to which the Company is a party, in which (I) the Company is not
the continuing or surviving corporation or (II) where the Company is the
continuing or surviving corporation, the Company's Ordinary Shares would be
converted into cash, securities or other property, or the holders of the
Company's Ordinary Shares immediately prior to the consolidation, amalgamation,
merger or other form of business combination would represent less than a
majority of the common stock or ordinary shares of the surviving corporation
immediately after the consolidation, amalgamation, merger or other form of
business combination, or (y) any sale, lease, exchange or other transfer
(excluding transfer by way of pledge or hypothecation), in one transaction or a
series of related transactions, of all, or substantially all, of the assets of
the Company, (ii) the shareholders of the Company approve any plan or proposal
for the liquidation or dissolution of the Company, (iii) any 'person' (as such
term is defined in Section 3(a)(9) or Section 13(d)(3) under the Securities
Exchange Act of 1934, as amended (the '1934 Act')) or any 'group' (as such term
is used in Rule 13d-5 promulgated under the 1934 Act), other than the Company or
any successor of the Company or any subsidiary of the Company or any employee
benefit plan of the Company or any subsidiary (including such plan's trustee),
becomes, without the prior approval of the Board of Directors of the Company
(the 'Board'), a beneficial owner for purposes of Rule 13d-3 promulgated under
the 1934 Act, directly or indirectly, of securities of the Company representing
25.0% or more of the Company's then outstanding securities having the right to
vote in the election of Directors of the Company, or (iv) during any period of
two consecutive years, individuals who, at the beginning of such period
constituted the entire Board (the 'Incumbent Directors'), cease for any reason
(other than death) to constitute a majority of the Directors of the Company,
unless the election, or the nomination for election, by the Company's
shareholders, of each new Director of the Company was approved by a vote of at
least two-thirds of the Incumbent Directors (so long as such new Director was
not nominated by a person who expressed an intent to effect a change in control
of the Company or engage in a proxy or other control contest) in which case such
new Director shall be considered an Incumbent Director."
2. Except as amended by the provisions of this Amendment, all other
provisions of the Plan remain in full force and effect.
IN WITNESS WHEREOF, Triton has caused this Amendment to be executed by its
duly authorized officer effective as of the date and year first above written.
TRITON ENERGY LIMITED
By:_________________________________
A.E. Turner, III, Senior Vice President and
Chief Operating Officer
EXHIBIT 10.72
AMENDMENT TO TRITON EXPLORATION SERVICES, INC.
----------------------------------------------
401(K) SAVINGS PLAN
-------------------
This Amendment to Triton Exploration Services, Inc. 401(k) Savings Plan
(this "Amendment") is executed by Triton Exploration Services, Inc., a Delaware
corporation (the "Company"), effective as of May 11, 1999.
RECITALS:
--------
A. The Company is the sponsor of the Triton Exploration Services, Inc.
401(k) Savings Plan, as amended and/or restated (the "Plan"); and
B. The Board of Directors has adopted certain amendments to the Plan
effective as of May 11, 1999.
NOW, THEREFORE, the Plan is amended in the following respects:
1. The third sentence of Section 1.40 of the Plan, which is the first
sentence of Section 1.40 following the table, is hereby amended to read in its
enterety as follows:
"Notwithstanding the foregoing, a Participant's Vested Percentage will be 100%
if a 'Change in Control' of Triton Energy Limited ('TEL') occurs. For purposes
of this Section, Change in Control means the occurrence of any of the following
events:
(a) There shall be consummated (x) any consolidation, amalgamation, merger or
other form of business combination of TEL, or to which TEL is a party, in which
(I) TEL is not the continuing or surviving corporation or (II) where TEL is the
continuing or surviving corporation, TEL's Ordinary Shares would be converted
into cash, securities or other property, or the holders of TEL's Ordinary Shares
immediately prior to the consolidation, amalgamation, merger or other form of
business combination would represent less than a majority of the common stock or
ordinary shares of the surviving corporation immediately after the
consolidation, amalgamation, merger or other form of business combination, or
(y) any sale, lease, exchange or other transfer (excluding transfer by way of
pledge or hypothecation), in one transaction or a series of related
transactions, of all, or substantially all, of the assets of TEL;
(b) The shareholders of TEL approve any plan or proposal for the liquidation or
dissolution of TEL;
(c) Any 'person' (as such term is defined in Section 3(a)(9) or Section 13(d)(3)
under the Securities Exchange Act of 1934, as amended (the '1934 Act')) or any
'group' (as such term is used in Rule 13d-5 promulgated under the 1934 Act),
other than TEL or any successor of TEL or any subsidiary of TEL or any employee
benefit plan of TEL or any subsidiary (including such plan's trustee), becomes,
without the prior approval of the Board of Directors of TEL (the 'Board'), a
beneficial owner for purposes of Rule 13d-3 promulgated under the 1934 Act,
directly or indirectly, of securities of TEL representing 25.0% or more of TEL's
then outstanding securities having the right to vote in the election of
Directors of TEL; or
(d) During any period of two consecutive years, individuals who, at the
beginning of such period constituted the entire Board (the 'Incumbent
Directors'), cease for any reason (other than death) to constitute a majority of
the Directors of TEL, unless the election, or the nomination for election, by
TEL's shareholders, of each new Director of TEL was approved by a vote of at
least two-thirds of the Incumbent Directors (so long as such new Director was
not nominated by a person who expressed an intent to effect a change in control
of TEL or engage in a proxy or other control contest) in which case such new
Director shall be considered an Incumbent Director."
2. Except as amended by the provisions of this Amendment, all other
provisions of the Plan remain in full force and effect.
IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by
its duly authorized officer effective as of May 11, 1999.
TRITON EXPLORATION SERVICES, INC.
By:_________________________________
A.E. Turner, III, Senior Vice President and
Chief Operating Officer
EXHIBIT 10.73
AMENDMENT NO. 1
TO SHAREHOLDERS AGREEMENT
This AMENDMENT NO. 1 TO SHAREHOLDERS AGREEMENT (the "Amendment") is
---------
executed effective as of January 20, 1999, by and between Triton Energy Limited,
a Cayman Islands company (the "Company"), and HM4 Triton, L.P., a Cayman Islands
exempted limited partnership (the "Purchaser"), to amend that certain
Shareholders Agreement, dated as of September 30, 1998 (the "Shareholders
------------
Agreement"), by and between the Company and Purchaser.
- ---------
1. DEFINITIONS. Unless the context indicates otherwise, capitalized
-----------
terms used but not defined in this Amendment and defined in the Shareholders
Agreement shall have the meanings ascribed to them in the Purchase Agreement.
2. SECTION 4.1.7. Section 4.1.7 is hereby amended to read in its
--------------
entirety as follow:
4.1.7 Fees; Costs and Expenses. Except as provided in the following
---------------------------
sentence, Holder Designees shall not receive an annual retainer, meeting fees or
other consideration for serving on the Board (or committees thereof) or any
Board of Directors of any Subsidiary of the Company. The Company will pay or
reimburse each Holder Designee for all reasonable out-of-pocket expenses
incurred by such Holder Designee in connection with its participation in
meetings of the Board (and committees thereof) and the Boards of Directors (and
committees thereof) of the Subsidiaries of the Company. Notwithstanding the
foregoing, any Holder Designee who is not an employee, principal or director of
the Purchaser or Hicks, Muse, Tate & Furst Incorporated shall be entitled to
receive any annual retainer, meeting fees or other consideration for serving on
the Board (or committees thereof) or any Board of Directors of any Subsidiary of
the Company as are provided to any director of the Company who is not also an
employee of the Company or any Subsidiary of the Company.
3. REMAINING PROVISIONS IN FULL FORCE AND EFFECT. As hereby amended,
-----------------------------------------------
the Purchase Agreement shall remain in full force and effect.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
be executed by its duly authorized officer effective as of January 20, 1999.
TRITON ENERGY LIMITED
By:______________________________
James C. Musselman, President and Chief
Executive Officer
HM4 TRITON, L.P.
By: HM4/GP Partners Cayman, L.P.,
its General Partner
By: HM GP Partners IV Cayman, L.P.,
its General Partner
By: HM Triton G.P., LLC,
its General Partner
By:____________________
Daniel S. Dross
Senior Vice President
EXHIBIT 10.74
AMENDMENT NO. 4
---------------
1981 EMPLOYEE NONQUALIFIED STOCK OPTION PLAN
--------------------------------------------
This Amendment No. 4 to the 1981 Employee Nonqualified Stock Option Plan
(this "Amendment") is executed by Triton Energy Limited, a Cayman Islands
company ("Triton"), effective as of May 11, 1999.
R E C I T A L S:
---------------
A. Triton has adopted the 1981 Employee Nonqualified Stock Option Plan
(the "Plan"); and
B. In accordance with the terms of the Plan, the Board of Directors has
adopted certain amendments to the Plan effective as of May 11, 1999.
NOW, THEREFORE, in accordance with the terms of the Plan, the Plan is
amended in the following respects:
1. The definition of "Change in Control", contained in the second
sentence of Section 8 of the Plan, is amended to read in its entirety as
follows:
" As used herein, the term 'Change in Control' shall mean the occurrence of any
of the following events: (i) there shall be consummated (x) any consolidation,
amalgamation, merger or other form of business combination of the Company, or to
which the Company is a party, in which (I) the Company is not the continuing or
surviving corporation or (II) where the Company is the continuing or surviving
corporation, the Company's Ordinary Shares would be converted into cash,
securities or other property, or the holders of the Company's Ordinary Shares
immediately prior to the consolidation, amalgamation, merger or other form of
business combination would represent less than a majority of the common stock or
ordinary shares of the surviving corporation immediately after the
consolidation, amalgamation, merger or other form of business combination, or
(y) any sale, lease, exchange or other transfer (excluding transfer by way of
pledge or hypothecation), in one transaction or a series of related
transactions, of all, or substantially all, of the assets of the Company, (ii)
the shareholders of the Company approve any plan or proposal for the liquidation
or dissolution of the Company, (iii) any 'person' (as such term is defined in
Section 3(a)(9) or Section 13(d)(3) under the Securities Exchange Act of 1934,
as amended (the '1934 Act')) or any 'group' (as such term is used in Rule 13d-5
promulgated under the 1934 Act), other than the Company or any successor of the
Company or any subsidiary of the Company or any employee benefit plan of the
Company or any subsidiary (including such plan's trustee), becomes, without the
prior approval of the Board of Directors of the Company (the 'Board'), a
beneficial owner for purposes of Rule 13d-3 promulgated under the 1934 Act,
directly or indirectly, of securities of the Company representing 25.0% or more
of the Company's then outstanding securities having the right to vote in the
election of Directors of the Company, or (iv) during any period of two
consecutive years, individuals who, at the beginning of such period constituted
the entire Board (the 'Incumbent Directors'), cease for any reason (other than
death) to constitute a majority of the Directors of the Company, unless the
election, or the nomination for election, by the Company's shareholders, of each
new Director of the Company was approved by a vote of at least two-thirds of the
Incumbent Directors (so long as such new Director was not nominated by a person
who expressed an intent to effect a change in control of the Company or engage
in a proxy or other control contest) in which case such new Director shall be
considered an Incumbent Director."
2. Except as amended by the provisions of this Amendment, all other
provisions of the Plan remain in full force and effect.
IN WITNESS WHEREOF, Triton has caused this Amendment to be executed by its
duly authorized officer effective as of the date and year first above written.
TRITON ENERGY LIMITED
By:_________________________________
A.E. Turner, III, Senior Vice President and
Chief Operating Officer
EXHIBIT 10.75
AMENDMENT NO. 3
---------------
1985 STOCK OPTION PLAN
----------------------
This Amendment No. 3 to the 1985 Stock Option Plan (this "Amendment") is
executed by Triton Energy Limited, a Cayman Islands company ("Triton"),
effective as of May 11, 1999.
R E C I T A L S:
---------------
A. Triton has adopted the 1985 Stock Option Plan (the "Plan"); and
B. In accordance with the terms of the Plan, the Board of Directors has
adopted certain amendments to the Plan effective as of May 11, 1999.
NOW, THEREFORE, in accordance with the terms of the Plan, the Plan is
amended in the following respects:
1. The definition of "Change in Control", contained in the second
sentence of Section 8 of the Plan, is amended to read in its entirety as
follows:
" As used herein, the term 'Change in Control' shall mean the occurrence of any
of the following events: (i) there shall be consummated (x) any consolidation,
amalgamation, merger or other form of business combination of the Company, or to
which the Company is a party, in which (I) the Company is not the continuing or
surviving corporation or (II) where the Company is the continuing or surviving
corporation, the Company's Ordinary Shares would be converted into cash,
securities or other property, or the holders of the Company's Ordinary Shares
immediately prior to the consolidation, amalgamation, merger or other form of
business combination would represent less than a majority of the common stock or
ordinary shares of the surviving corporation immediately after the
consolidation, amalgamation, merger or other form of business combination, or
(y) any sale, lease, exchange or other transfer (excluding transfer by way of
pledge or hypothecation), in one transaction or a series of related
transactions, of all, or substantially all, of the assets of the Company, (ii)
the shareholders of the Company approve any plan or proposal for the liquidation
or dissolution of the Company, (iii) any 'person' (as such term is defined in
Section 3(a)(9) or Section 13(d)(3) under the Securities Exchange Act of 1934,
as amended (the '1934 Act')) or any 'group' (as such term is used in Rule 13d-5
promulgated under the 1934 Act), other than the Company or any successor of the
Company or any subsidiary of the Company or any employee benefit plan of the
Company or any subsidiary (including such plan's trustee), becomes, without the
prior approval of the Board of Directors of the Company (the 'Board'), a
beneficial owner for purposes of Rule 13d-3 promulgated under the 1934 Act,
directly or indirectly, of securities of the Company representing 25.0% or more
of the Company's then outstanding securities having the right to vote in the
election of Directors of the Company, or (iv) during any period of two
consecutive years, individuals who, at the beginning of such period constituted
the entire Board (the 'Incumbent Directors'), cease for any reason (other than
death) to constitute a majority of the Directors of the Company, unless the
election, or the nomination for election, by the Company's shareholders, of each
new Director of the Company was approved by a vote of at least two-thirds of the
Incumbent Directors (so long as such new Director was not nominated by a person
who expressed an intent to effect a change in control of the Company or engage
in a proxy or other control contest) in which case such new Director shall be
considered an Incumbent Director."
2. Except as amended by the provisions of this Amendment, all other
provisions of the Plan remain in full force and effect.
IN WITNESS WHEREOF, Triton has caused this Amendment to be executed by its
duly authorized officer effective as of the date and year first above written.
TRITON ENERGY LIMITED
By:_________________________________
A.E. Turner, III, Senior Vice President and
Chief Operating Officer
EXHIBIT 10.76
AMENDMENT NO. 3
---------------
1989 STOCK OPTION PLAN
----------------------
This Amendment No. 3 to the 1989 Stock Option Plan (this "Amendment") is
executed by Triton Energy Limited, a Cayman Islands company ("Triton"),
effective as of May 11, 1999.
R E C I T A L S:
---------------
A. Triton has adopted the 1989 Stock Option Plan (the "Plan"); and
B. In accordance with the terms of the Plan, the Board of Directors has
adopted certain amendments to the Plan effective as of May 11, 1999.
NOW, THEREFORE, in accordance with the terms of the Plan, the Plan is
amended in the following respects:
1. The definition of "Change in Control", contained in the second
sentence of Section 8 of the Plan, is amended to read in its entirety as
follows:
" As used herein, the term 'Change in Control' shall mean the occurrence of any
of the following events: (i) there shall be consummated (x) any consolidation,
amalgamation, merger or other form of business combination of the Company, or to
which the Company is a party, in which (I) the Company is not the continuing or
surviving corporation or (II) where the Company is the continuing or surviving
corporation, the Company's Ordinary Shares would be converted into cash,
securities or other property, or the holders of the Company's Ordinary Shares
immediately prior to the consolidation, amalgamation, merger or other form of
business combination would represent less than a majority of the common stock or
ordinary shares of the surviving corporation immediately after the
consolidation, amalgamation, merger or other form of business combination, or
(y) any sale, lease, exchange or other transfer (excluding transfer by way of
pledge or hypothecation), in one transaction or a series of related
transactions, of all, or substantially all, of the assets of the Company, (ii)
the shareholders of the Company approve any plan or proposal for the liquidation
or dissolution of the Company, (iii) any 'person' (as such term is defined in
Section 3(a)(9) or Section 13(d)(3) under the Securities Exchange Act of 1934,
as amended (the '1934 Act')) or any 'group' (as such term is used in Rule 13d-5
promulgated under the 1934 Act), other than the Company or any successor of the
Company or any subsidiary of the Company or any employee benefit plan of the
Company or any subsidiary (including such plan's trustee), becomes, without the
prior approval of the Board of Directors of the Company (the 'Board'), a
beneficial owner for purposes of Rule 13d-3 promulgated under the 1934 Act,
directly or indirectly, of securities of the Company representing 25.0% or more
of the Company's then outstanding securities having the right to vote in the
election of Directors of the Company, or (iv) during any period of two
consecutive years, individuals who, at the beginning of such period constituted
the entire Board (the 'Incumbent Directors'), cease for any reason (other than
death) to constitute a majority of the Directors of the Company, unless the
election, or the nomination for election, by the Company's shareholders, of each
new Director of the Company was approved by a vote of at least two-thirds of the
Incumbent Directors (so long as such new Director was not nominated by a person
who expressed an intent to effect a change in control of the Company or engage
in a proxy or other control contest) in which case such new Director shall be
considered an Incumbent Director."
2. Except as amended by the provisions of this Amendment, all other
provisions of the Plan remain in full force and effect.
IN WITNESS WHEREOF, Triton has caused this Amendment to be executed by its
duly authorized officer effective as of the date and year first above written.
TRITON ENERGY LIMITED
By:_________________________________
A.E. Turner, III, Senior Vice President and
Chief Operating Officer
EXHIBIT 12.1
TRITON ENERGY LIMITED AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS, EXCEPT RATIOS)
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SEVEN MONTHS
SIX MONTHS ENDING ENDING
JUNE 30, YEAR ENDING DECEMBER 31, DEC. 31,
--------------------- -------------------------------------------
1999 1998 1998 1997 1996 1995 1994
--------- ---------- ---------- --------- --------- --------- ----------
Fixed charges, as defined:
Interest charges $19,452 $ 25,487 $ 50,253 $ 50,625 $ 43,884 $ 41,305 $ 20,285
Preferred dividend requirements of
subsidiaries adjusted to pre-tax basis --- --- --- --- --- --- ---
-------- ---------- ---------- --------- --------- --------- ----------
Total fixed charges $19,452 $ 25,487 $ 50,253 $ 50,625 $ 43,884 $ 41,305 $ 20,285
======== ========== ========== ========= ========= ========= ==========
Earnings, as defined (2):
Earnings (loss) from continuing operations
before income taxes, minority interest and
extraordinary item $22,484 $(141,527) $(238,609) $ 16,896 $ 20,945 $ 16,600 $ (22,834)
Fixed charges, above 19,452 25,487 50,253 50,625 43,884 41,305 20,285
Less interest capitalized (6,851) (14,632) (23,215) (25,818) (27,102) (16,211) (11,833)
Plus undistributed (earnings) loss of affiliates --- --- --- --- (118) 2,249 4,102
Less preferred dividend requirements of
subsidiaries adjusted to pre-tax basis --- --- --- --- --- --- ---
-------- ---------- ---------- --------- --------- --------- ----------
$35,085 $(130,672) $(211,571) $ 41,703 $ 37,609 $ 43,943 $ (10,280)
======== ========== ========== ========= ========= ========= ==========
RATIO OF EARNINGS TO FIXED CHARGES (1) (2) 1.8 --- --- 0.8 0.9 1.1 ---
======== ========== ========== ========= ========= ========= ==========
<S> <C>
YEAR
ENDING
MAY 31,
1994
---------
Fixed charges, as defined:
Interest charges $ 26,951
Preferred dividend requirements of
subsidiaries adjusted to pre-tax basis 364
----------
Total fixed charges $ 27,315
==========
Earnings, as defined (2):
Earnings (loss) from continuing operations
before income taxes, minority interest and
extraordinary item $ (23,104)
Fixed charges, above 27,315
Less interest capitalized (16,863)
Plus undistributed (earnings) loss of affiliates (645)
Less preferred dividend requirements of
subsidiaries adjusted to pre-tax basis (364)
----------
$ (13,661)
==========
RATIO OF EARNINGS TO FIXED CHARGES (1) (2) ---
==========
</TABLE>
____________________
(1) Earnings were inadequate to cover fixed charges for the six months ended
June 30, 1998 by $156,159,000, for the years ended December 31, 1998, 1997 and
1996 by $261,824,000, $8,922,000 and $6,275,000, respectively, for the seven
months ended December 31, 1994 by $30,565,000 and for the year ended May 31,
1994 by $40,976,000.
(2) Earnings reflect nonrecurring writedowns and loss provisions of
$1,220,000 and $182,672,000 for the six months ended June 30, 1999 and 1998,
respectively, $348,064,000, $46,153,000 and $1,058,000 for the years ended
December 31, 1998, 1996 and 1995, respectively, $984,000 for the seven months
ended December 31, 1994 and $45,754,000 for the year ended May 31, 1994,
respectively. Nonrecurring gains from the sale of assets and other gains
aggregated $442,000 and $52,127,000 for the six months ended June 30, 1999 and
1998, respectively, $125,617,000, $6,253,000, $22,189,000, $13,617,000 and
$56,193,000 for the years ended December 31, 1998, 1997, 1996 and 1995 and May
31, 1994, respectively. The ratio of earnings to fixed charges if adjusted to
remove nonrecurring items, would have been 1.8 and nil for the six months ended
June 30, 1999 and 1998, respectively, 0.2, 0.7, 1.4 and 0.8 for the years ended
December 31, 1998, 1997, 1996 and 1995, respectively. Without nonrecurring
items, earnings would have been inadequate to cover fixed charges for the six
months ended June 30, 1998 by $25,614,000, for the years ended December 31,
1998, 1997 and 1995 by $39,377,000, $15,175,000 and $9,921,000, respectively,
for the seven months ended December 31, 1994 by $29,581,000 and for the year
ended May 31, 1994 by $51,415,000.
EXHIBIT 12.2
TRITON ENERGY LIMITED AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERENCE
DIVIDENDS
(IN THOUSANDS, EXCEPT RATIOS)
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SEVEN MONTHS
SIX MONTHS ENDING ENDING
JUNE 30, YEAR ENDING DECEMBER 31, DEC. 31,
--------------------- -------------------------------------------
1999 1998 1998 1997 1996 1995 1994
--------- ---------- ---------- --------- --------- --------- ----------
Fixed charges, as defined:
Interest charges $ 19,452 $ 25,487 $ 50,253 $ 50,625 $ 43,884 $ 41,305 $ 20,285
Preference dividend requirements of the Company 13,945 187 3,061 400 985 802 449
Preferred dividend requirements of subsidiaries
adjusted to pre-tax basis --- --- --- --- --- --- ---
--------- ---------- ---------- --------- --------- --------- ----------
Total fixed charges $ 33,397 $ 25,674 $ 53,314 $ 51,025 $ 44,869 $ 42,107 $ 20,734
========= ========== ========== ========= ========= ========= ==========
Earnings, as defined (2):
Earnings (loss) from continuing operations
before income taxes, minority interest and
extraordinary item $ 22,484 $(141,527) $(238,609) $ 16,896 $ 20,945 $ 16,600 $ (22,834)
Fixed charges, above 33,397 25,674 53,314 51,025 44,869 42,107 20,734
Less interest capitalized (6,851) (14,632) (23,215) (25,818) (27,102) (16,211) (11,833)
Plus undistributed (earnings) loss of affiliates --- --- --- --- (118) 2,249 4,102
Less preference dividend requirements of the
Company and its subsidiaries adjusted to
pre-tax basis (13,945) (187) (3,061) (400) (985) (802) (449)
--------- ---------- ---------- --------- --------- --------- ----------
$ 35,085 $(130,672) $(211,571) $ 41,703 $ 37,609 $ 43,943 $ (10,280)
========= ========== ========== ========= ========= ========= ==========
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERENCE DIVIDENDS (1) (2) 1.1 --- --- 0.8 0.8 1.0 ---
========= ========== ========== ========= ========= ========= ==========
<S> <C>
YEAR
ENDING
MAY 31,
1994
----------
Fixed charges, as defined:
Interest charges $ 26,951
Preference dividend requirements of the Company ---
Preferred dividend requirements of subsidiaries
adjusted to pre-tax basis 364
----------
Total fixed charges $ 27,315
==========
Earnings, as defined (2):
Earnings (loss) from continuing operations
before income taxes, minority interest and
extraordinary item $ (23,104)
Fixed charges, above 27,315
Less interest capitalized (16,863)
Plus undistributed (earnings) loss of affiliates (645)
Less preference dividend requirements of the
Company and its subsidiaries adjusted to
pre-tax basis (364)
----------
$ (13,661)
==========
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERENCE DIVIDENDS (1) (2) ---
==========
</TABLE>
____________________
(1) Earnings were inadequate to cover combined fixed charges and preference
dividends for the six months ended June 30, 1998 by $156,346,000, for the years
ended December 31, 1998, 1997 and 1996 by $264,885,000, $9,322,000 and
$7,260,000, respectively, for the seven months ended December 31, 1994 by
$31,014,000 and for the year ended May 31, 1994 by $40,976,000.
(2) Earnings reflect nonrecurring writedowns and loss provisions of
$1,220,000 and $182,672,000 for the six months ended June 30, 1999 and 1998,
respectively, $348,064,000, $46,153,000 and $1,058,000 for the years ended
December 31, 1998, 1996 and 1995, respectively, $984,000 for the seven months
ended December 31, 1994 and $45,754,000 for the year ended May 31, 1994.
Nonrecurring gains from the sale of assets and other gains aggregated $442,000
and $52,127,000 for the six months ended June 30, 1999 and 1998, respectively,
$125,617,000, $6,253,000, $22,189,000, $13,617,000 and $56,193,000 for the years
ended December 31, 1998, 1997, 1996 and 1995 and May 31, 1994, respectively. The
ratio of earnings to combined fixed charges and preference dividends if adjusted
to remove nonrecurring items, would have been 1.1 and nil for the six months
ended June 30, 1999 and 1998, respectively, 0.2, 0.7, 1.4 and 0.7 for the years
ended December 31, 1998, 1997, 1996 and 1995, respectively. Without
nonrecurring items, earnings would have been inadequate to cover combined fixed
charges and preference dividends for the six months ended June 30, 1998 by
$25,801,000, for the years ended December 31, 1998, 1997 and 1995 by
$42,438,000, $15,575,000 and $10,723,000, respectively, for the seven months
ended December 31, 1994 by $30,030,000 and for the year ended May 31, 1994 by
$51,415,000.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM JUNE 30,
1999 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BE REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 213,013
<SECURITIES> 0
<RECEIVABLES> 17,663
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 255,268
<PP&E> 1,049,952
<DEPRECIATION> 478,950
<TOTAL-ASSETS> 937,678
<CURRENT-LIABILITIES> 73,165
<BONDS> 408,962
0
370,967
<COMMON> 359
<OTHER-SE> 73,286
<TOTAL-LIABILITY-AND-EQUITY> 937,678
<SALES> 108,792
<TOTAL-REVENUES> 108,792
<CGS> 38,162
<TOTAL-COSTS> 38,162
<OTHER-EXPENSES> 30,656
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,937
<INCOME-PRETAX> 22,484
<INCOME-TAX> 9,714
<INCOME-CONTINUING> 12,770
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,770
<EPS-BASIC> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
