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 MARCH 31, 2000
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, JENNETT 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 April 30, 2000
Ordinary Shares, par value $0.01 per share 36,157,126
-----------------------------
TRITON ENERGY LIMITED AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE NO.
--------
<S> <C> <C>
Item 1. Financial Statements
Condensed Consolidated Statements of Operations -
Three months ended March 31, 2000 and 1999 2
Condensed Consolidated Balance Sheets -
March 31, 2000 and December 31, 1999 3
Condensed Consolidated Statements of Cash Flows -
Three months ended March 31, 2000 and 1999 4
Condensed Consolidated Statement of Shareholders' Equity -
Three months ended March 31, 2000 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 19
Item 3. Quantitative and Qualitative Disclosures about Market Risk 24
PART II. OTHER INFORMATION
Item 3. Legal Proceedings 26
Item 6. Exhibits and Reports on Form 8-K 28
</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)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
2000 1999
-------- --------
<S> <C> <C>
Oil and gas sales $74,505 $49,170
Costs and expenses:
Operating 15,831 18,976
General and administrative 4,575 4,935
Depreciation, depletion and amortization 14,009 15,371
Special charges --- 1,220
-------- --------
34,415 40,502
-------- --------
Operating income 40,090 8,668
Interest income 2,777 2,578
Interest expense, net (4,750) (5,983)
Other income (expense), net (1,042) 923
-------- --------
(3,015) (2,482)
-------- --------
Earnings before income taxes 37,075 6,186
Income tax expense 10,551 4,299
-------- --------
Net earnings 26,524 1,887
Dividends on preference shares 163 180
-------- --------
Earnings applicable to ordinary shares $26,361 $ 1,707
======== ========
Average ordinary shares outstanding 35,895 36,663
======== ========
Basic earnings per ordinary share $ 0.73 $ 0.05
======== ========
Diluted earnings per ordinary share $ 0.45 $ 0.03
======== ========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
TRITON ENERGY LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS MARCH 31, DECEMBER 31,
<S> <C> <C>
2000 1999
----------- ----------
Current assets:
Cash and equivalents $ 200,933 $ 186,323
Trade receivables, net 20,494 17,246
Other receivables 33,540 23,814
Deferred income taxes 14,410 20,090
Inventories, prepaid expenses and other 5,273 7,806
----------- ----------
Total current assets 274,650 255,279
Property and equipment, at cost, less accumulated depreciation
and depletion of $449,972 for 2000 and $436,103 for 1999 546,207 524,152
Investment in affiliate 95,635 93,188
Deferred taxes and other assets 103,296 101,856
----------- ----------
$1,019,788 $ 974,475
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 9,110 $ 9,027
Accounts payable and accrued liabilities 93,919 62,576
Deferred income and other 7,736 22,347
----------- ----------
Total current liabilities 110,765 93,950
Long-term debt, excluding current maturities 400,039 404,460
Deferred income taxes 7,651 6,677
Other liabilities 6,464 6,336
Shareholders' equity:
5% preference shares, stated value $34.41 6,441 7,214
8% preference shares, stated value $70.00 363,112 363,555
Ordinary shares, par value $0.01 361 358
Additional paid-in capital 538,410 531,904
Accumulated deficit (411,004) (437,528)
Accumulated other non-owner changes in shareholders' equity (2,451) (2,451)
----------- ----------
Total shareholders' equity 494,869 463,052
Commitments and contingencies (note 5) --- ---
----------- ----------
$1,019,788 $ 974,475
=========== ==========
</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
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
2000 1999
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 26,524 $ 1,887
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation, depletion and amortization 14,009 15,371
Amortization of deferred income (8,814) (8,814)
Deferred income taxes and other 5,725 5,176
Changes in working capital pertaining to operating activities 2,819 426
--------- ---------
Net cash provided by operating activities 40,263 14,046
--------- ---------
Cash flows from investing activities:
Capital expenditures and investments (25,252) (28,968)
Other 661 1,066
--------- ---------
Net cash used by investing activities (24,591) (27,902)
--------- ---------
Cash flows from financing activities:
Payments on revolving lines of credit and long-term debt (4,513) (14,514)
Issuance of 8% preference shares, net --- 217,805
Issuances of ordinary shares 5,456 132
Dividends paid on preference shares (163) (2,873)
Other (1,685) ---
--------- ---------
Net cash provided (used) by financing activities (905) 200,550
--------- ---------
Effect of exchange rate changes on cash and equivalents (157) 65
--------- ---------
Net increase in cash and equivalents 14,610 186,759
Cash and equivalents at beginning of period 186,323 19,122
--------- ---------
Cash and equivalents at end of period $200,933 $ 205,881
========= =========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
TRITON ENERGY LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
------------------
OWNER SOURCES OF SHAREHOLDERS' EQUITY:
5% PREFERENCE SHARES:
<S> <C>
Balance at December 31, 1999 $ 7,214
Conversion of 5% preference shares (773)
----------
Balance at March 31, 2000 6,441
----------
8% PREFERENCE SHARES:
Balance at December 31, 1999 363,555
Conversion of 8% preference shares (443)
----------
Balance at March 31, 2000 363,112
----------
ORDINARY SHARES:
Balance at December 31, 1999 358
Issuance of shares 3
----------
Balance at March 31, 2000 361
----------
ADDITIONAL PAID-IN CAPITAL:
Balance at December 31, 1999 531,904
Issuances under stock plans 5,454
Conversion of preference shares 1,215
Cash dividends (163)
----------
Balance at March 31, 2000 538,410
----------
TOTAL OWNER SOURCES OF SHAREHOLDERS' EQUITY 908,324
----------
NON-OWNER SOURCES OF SHAREHOLDERS' EQUITY:
ACCUMULATED DEFICIT:
Balance at December 31, 1999 (437,528)
Net earnings 26,524
----------
Balance at March 31, 2000 (411,004)
----------
ACCUMULATED OTHER NON-OWNER CHANGES IN SHAREHOLDERS'
EQUITY:
Balance at December 31, 1999 (2,451)
Other non-owner changes in shareholders' equity ---
----------
Balance at March 31, 2000 (2,451)
----------
TOTAL NON-OWNER SOURCES OF SHAREHOLDERS' EQUITY (413,455)
----------
TOTAL SHAREHOLDERS' EQUITY AT MARCH 31, 2000 $ 494,869
==========
</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" in this report 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, offshore Malaysia-Thailand and offshore
Equatorial Guinea. 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 March 31, 2000, and the results of its operations for the three months ended
March 31, 2000 and 1999, its cash flows for the three months ended March 31,
2000 and 1999, and shareholders' equity for the three months ended March 31,
2000. The results for the three months ended March 31, 2000, 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,
1999.
Certain other previously reported financial information has been reclassified to
conform to the current period's presentation.
2. LONG-TERM DEBT
In February 2000, the Company entered into an unsecured two-year revolving
credit facility with a group of banks. The credit facility, which matures in
February 2002, gives the Company the right to borrow from time to time up to the
amount of the borrowing base determined by the banks, not to exceed $150
million. At March 31, 2000, the borrowing base was $150 million. Borrowings
bear interest at various spreads ranging from 1.5% to 3% over the prime rate or
adjusted London Interbank Offer Rate (LIBOR). The credit facility contains
various restrictive covenants, including covenants that require the Company to
maintain a ratio of earnings before interest, depreciation, depletion,
amortization and income taxes to net interest expense of at least 2.5 to 1 on a
trailing four quarters basis. The restrictive covenants also prohibit the
Company from permitting net debt to exceed the product of 3.75 times the
Company's earnings before interest, depreciation, depletion, amortization and
income taxes on a trailing four quarters basis. As of March 31, 2000, the
Company had not made a borrowing under the facility.
<PAGE>
3. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities are summarized as follows:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
------- -------
<S> <C> <C>
Accrued exploration and development $24,426 $ 9,762
Accrued interest payable 16,718 7,864
Colombian income taxes 16,684 14,471
Equity swap 11,998 8,435
Taxes other than income 8,045 7,713
Payable from financial market transactions 5,801 4,647
Litigation and environmental matters 3,845 3,872
Accounts payable, principally trade 2,297 1,242
Other 4,105 4,570
------- -------
$93,919 $62,576
======= =======
</TABLE>
4. EARNINGS PER ORDINARY SHARE
The following table reconciles the numerators and denominators of the basic and
diluted earnings per ordinary share computation for earnings from continuing
operations for the three months ended March 31, 2000 and 1999.
<TABLE>
<CAPTION>
INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
----------- ------------- ---------
THREE MONTHS ENDED MARCH 31, 2000:
<S> <C> <C> <C>
Net earnings $ 26,524
Less: 5% preference share dividends (163)
-----------
Earnings available to ordinary shareholders 26,361
Basic earnings per ordinary share 35,895 $ 0.73
=========
Effect of dilutive securities:
8% preference shares 20,762
Stock options 1,819
----------- -------------
Earnings available to ordinary shareholders
and assumed conversions $ 26,361
===========
Diluted earnings per ordinary share 58,476 $ 0.45
============= =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
----------- ------------- ---------
THREE MONTHS ENDED MARCH 31, 1999:
<S> <C> <C> <C>
Net earnings $ 1,887
Less: 5% preference share dividends (180)
-----------
Earnings available to ordinary shareholders 1,707
Basic earnings per ordinary share 36,663 $ 0.05
=========
Effect of dilutive securities:
8% preference shares 19,576
----------- -------------
Earnings available to ordinary shareholders
and assumed conversions $ 1,707
===========
Diluted earnings per ordinary share 56,239 $ 0.03
============= =========
</TABLE>
5. COMMITMENTS AND CONTINGENCIES
For internal planning purposes, the Company's revised capital spending program
for the year ending December 31, 2000, is approximately $213 million, excluding
capitalized interest and acquisitions. The $213 million comprises approximately
$144 million for exploration and development activities in Equatorial Guinea,
$58 million for the Cusiana and Cupiagua fields in Colombia and $11 million for
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. Management believes
that such commitments, including the capital requirements in Colombia,
Equatorial Guinea 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 March 31, 2000, the Company guaranteed the performance of a total of $12.5
million in future exploration expenditures to be incurred through September 2001
in various countries. A total of approximately $6 million of the exploration
expentitures are included in the 2000 capital spending program related to a
commitment for two onshore exploratory wells in Greece. These commitments are
backed primarily by unsecured letters of credit.
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. The lawsuits were
filed in the United States District Court for the Eastern District of Texas,
Texarkana Division, and have been consolidated and are styled In re: Triton
Energy Limited Securities Litigation. They allege violations of Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5
promulgated thereunder, and negligent misrepresentation 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. The
lawsuits seek recovery of an unspecified amount of compensatory and punitive
damages and fees and costs.
On September 29, 1999, the court granted the plaintiffs' motion for appointment
as lead plaintiffs and for approval of selection of lead counsel. In addition,
the court denied the Company's motion to dismiss or transfer for improper venue.
On October 14, 1999 the Company filed a motion to dismiss the lawsuits for
failure to state a claim. A hearing on the Company's motion to dismiss is
scheduled for June 2000.
The Company believes its disclosures have been accurate and intends to
vigorously defend these actions. 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.
In November 1999, a lawsuit was filed against the Company, one of its
subsidiaries and Thomas G. Finck, Peter Rugg and Robert B. Holland, III, in
their capacities as officers of the Company, in the District Court of the State
of Texas for Dallas County. The lawsuit is styled Aaron Sherman, et al. vs.
Triton Energy Corporation et al. and seeks compensatory and punitive damages and
interest. Following the Court's order to replead, the plaintiffs amended their
petition, which currently alleges as causes of action fraud, negligent
misrepresentation and violations of the Texas Securities fraud statutes in
connection with disclosures concerning the prospective sale by the Company of
all or a substantial part of its assets announced in March 1998. The Court has
dismissed all claims of certain plaintiffs and some claims of the remaining
plaintiffs for their failure to plead causes of action cognizable in law. The
Court has ordered the remaining plantiffs to replead their claims relating to
their alleged purchases of stock and has stayed discovery pending its further
orders.
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. Prior
to this litigation, 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 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 sought 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 were reduced to approximately $700,000 (not including
punitive damages). The lawsuit was tried and the jury found in favor of the
plaintiffs and assessed compensatory damages against the Company in the amount
of approximately $700,000 and punitive damages in the amount of approximately
$11 million. The Company believes it has acted appropriately and has appealed
the verdict. Enforcement of the judgment has been stayed without a bond pending
the outcome of the appeal.
In April 2000, a lawsuit was filed in the High Court of Malaya at Kuala Lumpur
against Carigali-Triton Operating Company Sdn. Bhd. ("CTOC"), the
Malaysia-Thailand Joint Authority and Technip Geoproduction (M) Sdn. Bhd.
("Technip") by Pertiwi Ulung Sdn. Bhd. ("Pertiwi"). CTOC is the operating
company owned by Petronas Carigali (JDA) Sdn. Bhd., a subsidiary of the
Malaysian national oil company, the Company and BP to operate their interest in
Block A-18 of the Malaysia-Thailand Joint Development Area in the Gulf of
Thailand. The lawsuit relates to the award by CTOC of the engineering,
procurement and construction ("EPC") contract to a consortium of companies,
including Technip, for the Cakerawala Field gas-development project. Pertiwi
allegedly was to be a subcontractor for a consortium that was an unsuccessful
bidder for the EPC contract. In this lawsuit, Pertiwi alleges, among other
things, irregularities in the bidding process that favored the Technip
consortium, and seeks an order from the court to have the award of the EPC
contract to Technip set aside, to force CTOC to conduct a new bidding process
among the four final bidders and the award of an unspecified amount of damages.
CTOC believes it acted appropriately in the conduct of the bid process and
intends to defend this lawsuit vigorously. The Company is not a named defendant
in the lawsuit.
The Company is subject to certain other litigation matters, none of which is
expected to have a material, adverse effect on the Company's operations or
consolidated financial condition.
6. 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, news releases, conferences, teleconferences, web postings,
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. When used in this document, the
words "anticipates," "estimates," "expects," "believes," "intends," "plans" and
similar expressions are intended to identify such forward-looking statements.
These statements include information regarding:
- - drilling schedules;
- - expected or planned production capacity;
- - future production from the Cusiana and Cupiagua fields in Colombia, including
the Recetor license;
- - the completion of development and commencement of production offshore
Malaysia-Thailand;
- - future production of the Ceiba Field in Equatorial Guinea, including volumes
and timing of first production;
- - the acceleration of the Company's exploration, appraisal and development
activities in Equatorial Guinea;
- - the Company's capital budget and future capital requirements;
- - the Company's meeting its future capital needs;
- - the Company's utilization of net operating loss carryforwards and realization
of its deferred tax asset;
- - the level of future expenditures for environmental costs;
- - the outcome of regulatory and litigation matters;
- - 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 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 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 exploration
efforts in a country where no proved reserves are assigned, all acquisition and
exploration costs associated with the country are expensed. The Company's
assessments of whether its investment within a country is impaired and whether
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, 1999, including capitalized costs by geographic
area, is set forth in note 21 of Notes to Consolidated Financial Statements in
Triton's Annual Report on Form 10-K for the year ended December 31, 1999.
The Company's activities are 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 activities are 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
Cusiana and Cupiagua fields, located approximately 160 kilometers (100 miles)
northeast of Bogota, Colombia. Development of reserves in the Cusiana and
Cupiagua 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. Such activity increased over the last year and appears to
be increasing as political negotiations among government and various rebel
groups proceed. In one recent case, a bomb planted near the pipeline caused
OCENSA to halt shipments, which in turn caused the operator of the fields to
curtail production for approximately two days. 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. Although the President granted Colombia certification in
2000, Colombia was denied certification in two recent years and only received a
national interest waiver for one of those years. 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. On October 30, 1999, the Company and the other parties to the
production-sharing contract for Block A-18 executed a gas sales agreement
providing for the sale of the first phase of gas. Under terms of the gas sales
agreement, delivery of gas is scheduled to begin by the end of the second
quarter of 2002, following timely completion and approval of an environmental
impact assessment associated with the buyers' pipeline and processing
facilities. No assurance can be given as to when such approval will be obtained.
A lengthy approval process, or significant opposition to the project, could
delay construction and the commencement of gas sales.
In connection with the sale to ARCO, now British Petroleum ("BP") of one-half of
the shares through which the Company owned its interest in Block A-18, BP agreed
to pay the future exploration and development costs attributable to the
Company's and BP's collective interest in Block A-18, up to $377 million or
until first production from a gas field, after which the Company and BP would
each pay 50% of such costs. There can be no assurance that the Company's and
BP's collective share of the cost of developing the project will not exceed $377
million. BP also agreed to pay the Company certain incentive payments if certain
criteria were met. The first $65 million in incentive payments is conditioned
upon having the production facilities for the sale of gas from Block A-18
completed by June 30, 2002. If the facilities are completed after June 30, 2002,
but before June 30, 2003, the incentive payment would be reduced to $40 million.
A lengthy environmental approval process or unanticipated delays in construction
of the facilities could result in the Company's receiving a reduced incentive
payment or possibly the complete loss of the first incentive payment. In
addition, the Company has agreed to share with BP some of the risk that the
environmental approval process might delay production by agreeing to pay BP
$1.25 million per month for each month, if applicable, that first gas sales are
delayed beyond 30 months following the award of an engineering, procurement and
construction contract for the project. The Company's obligation is capped at 24
months of these payments.
CERTAIN FACTORS RELATING TO THE COMPANY'S OPERATIONS IN EQUATORIAL GUINEA
The Company is a participant in a significant oil discovery, the Ceiba Field,
located on Block G offshore the Republic of Equatorial Guinea. The field is
located in approximately 2,200 feet of water, approximately 22 miles off the
continental coast. The Company is implementing an accelerated exploration,
appraisal and development program through a two-rig drilling program.
Development of the field will require significant capital expenditures, the
drilling and completion of additional wells and, under the Company's plan of
development, the utilization of a floating production storage and offloading
(FPSO) system. Based on discussions held to date with development contractors,
the Company is targeting first oil production to occur by year-end 2000, and the
plan of development provides for initial or phase-one production of about 52,000
BOPD. The Company's ability to meet these targets is subject to the timely
drilling and completion of development wells and the timely performance by the
development contractors of their commitments, and is subject to the risks
associated with oil and gas operations and international operations discussed
above. The Company can give no assurance that it will meet these targets.
Under the terms of the production sharing contracts, the Company has the right
to continue to explore the remaining acreage on its Blocks F and G for three
additional one-year periods, provided that the Company commits to drill at least
two exploration wells during that year (one well each year being contingent upon
the Company's identifying an additional structure it believes is a drillable
prospect). Under the current terms of the contracts, the Company is required to
relinquish 30% of each contract's original area in 2000, and an additional 20%
of the remaining contract area by the end of April 2003. Notwithstanding the
requirement for relinquishment, the Company will not be required to surrender an
area that includes a commercial field or a discovery that has not then been
declared commercial. The area or areas to be surrendered is to be designated by
the Company, provided that, where possible, each area is of sufficient size and
convenient shape to permit petroleum operations. There can be no assurance that
the Company will be successful in future exploration efforts on the blocks.
At the request of the Republic of Equatorial Guinea, the Company and its partner
are negotiating amendments to certain terms of the contracts with the government
of Equatorial Guinea. The parties have signed a memorandum of understanding
reflecting the revised terms, and negotiations of definitive amendments are
continuing. The implementation of the revised terms of the contract is subject
to the negotiation and execution of definitive amendments, but there can be no
assurance as to whether, or when, such definitive amendments will be executed.
The current terms of the contracts, and the terms reflected in the memorandum of
understanding, are described more fully in the Company's Annual Report on Form
10-K for the year ended December 31, 1999.
INFLUENCE OF HICKS MUSE
In connection with the issuance of 8% Convertible Preference Shares to HM4
Triton, L.P., the Company and HM4 Triton, L.P. 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 10, and HM4 Triton, L.P.
exercised its right to designate four out of such 10 directors. The
Shareholders' Agreement provides that, in general, for so long as the entire
Board of Directors consists of 10 members, HM4 Triton, L.P. (and its designated
transferees, collectively) may designate four nominees for election to the Board
of Directors. The right of HM4 Triton, L.P. (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, L.P. and its affiliates (assuming conversion
of 8% Convertible Preference Shares into ordinary shares) represents less than
certain specified percentages of the number of ordinary shares (assuming
conversion of 8% Convertible Preference Shares into ordinary shares) purchased
by HM4 Triton, L.P. pursuant to the Stock Purchase Agreement.
The Shareholders' Agreement provides that, for so long as HM4 Triton, L.P. and
its affiliates continue to hold a certain minimum number of ordinary shares
(assuming conversion of 8% Convertible Preference Shares into ordinary shares),
the Company may not take certain actions without the consent of HM4 Triton,
L.P., including (i) amending its Articles of Association or the terms of the 8%
Convertible Preference Shares with respect to the voting powers, rights or
preferences of the holders of 8% Convertible 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% Convertible 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% Convertible 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% Convertible Preference Shares, other than regular dividends on
the Company's 5% Convertible 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% Convertible Preference
Shares, other than in payment of accumulated dividends on the outstanding 8%
Convertible Preference Shares, (viii) issuing any shares of a class ranking
equal or senior to the 8% Convertible 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% Convertible Preference
Shares.
As a result of HM4 Triton, L.P.'s ownership of 8% Convertible Preference Shares
and ordinary shares and the rights conferred upon HM4 Triton, L.P. and its
designees pursuant to the Shareholders' Agreement, HM4 Triton, L.P. 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, L.P. 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, L.P. and the interests of HM4 Triton, L.P. 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 use of the Company's cash, or the issuance of the
Company's debt or equity securities, which could have a dilutive effect on the
current shareholders.
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 in which 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. The Company
believes that the principal means of competition in the sale of oil and gas are
product availability, price and quality.
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 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 an attempt to avoid costly litigation.
Judgments or settlements could, therefore, exceed any reserves.
7. SUBSEQUENT EVENTS
In May 2000, the Company acquired from an unrelated third party, for $88.8
million in cash 100% of the shares of Triton Pipeline Colombia, Inc. ("TPC"), a
formerly wholly owned subsidiary up to its disposal on February 2, 1998. TPC's
sole asset is its 9.6% equity interest in the Colombian pipeline company,
Oleoducto Central S.A. ("OCENSA"). OCENSA owns and operates the pipeline and
port facilities, which transport and handle crude oil from the Cusiana and
Cupiagua fields to the Caribbean port of Covenas.
In May 2000, the equity swap entered into in February 1998 terminated, and the
Company paid $12 million to the counterparty in accordance with the terms of the
equity swap.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL REQUIREMENTS
----------------------------------
Cash and equivalents totaled $200.9 million and $186.3 million at March 31,
2000, and December 31, 1999, respectively. Working capital was $163.9 million
at March 31, 2000, compared with $161.3 million at December 31, 1999. These
figures are prior to the Company's acquisition of the shares of TPC in May 2000,
for approximately $88.8 million, which was paid out of the Company's cash on
hand.
The following summary table reflects cash flows for the Company for the
three months ended March 31, 2000 (in thousands):
<TABLE>
<CAPTION>
<S> <C>
Net cash provided (used) by operating activities $ 40,263
Net cash provided (used) by investing activities $(24,591)
Net cash provided (used) by financing activities $ (905)
</TABLE>
Operating Activities
--------------------
The Company's cash flows provided by operating activities for the
three months ended March 31, 2000, benefited from a higher average realized oil
price. The higher realized oil price was partially offset by a decrease in
production from the Cusiana and Cupiagua fields in Colombia. Gross production
from the Cusiana and Cupiagua fields averaged approximately 364,000 barrels of
oil per day ("BOPD") during the first three months of 2000 following an average
production rate for the year 1999 of 430,000 BOPD. See "Results of Operations."
The operator expects the production rate will improve during the year as it
drills and completes additional wells and performs well maintenance, although
there can be no assurance that actual production will improve during the year.
Beginning in the second quarter of 2000, 254,136 barrels per month, the
amount previously delivered under the forward oil sale will be available for
sale at market prices subject to any hedging arrangements undertaken by the
Company.
Investing Activities
---------------------
The Company's capital expenditures and other capital investments were $25.3
million ($20.7 million excluding capitalized interest) for the three months
ended March 31, 2000, primarily for development of the Ceiba Field in Equatorial
Guinea and for development of the Cusiana and Cupiagua fields in Colombia.
Financing Activities
---------------------
For the three months ended March 31, 2000 and 1999, the Company repaid
borrowings of $4.5 million and $14.5 million, respectively, and paid cash
preference-share dividends totaling $.2 million and $2.9 million, respectively.
Future Capital Needs
----------------------
The Company is implementing an accelerated appraisal and development
program to enable early production from the Ceiba Field in Equatorial Guinea,
with a target of first production by the end of 2000. The Company has
contracted for a floating production storage and offloading (FPSO) system that
is expected to provide storage for up to two million barrels of oil and initial
processing capacity of up to 60,000 barrels of oil per day from a single
production unit. Capacity can be cost effectively increased through the
installation of additional processing units. In March 2000, the Company
announced a two-rig drilling program that is intended to enable the Company to
complete the Ceiba-1 and -2 wells as production wells, to drill four additional
appraisal/production wells in the Ceiba field, to drill two exploration wells
and to provide the Company the option to drill up to four additional wells. The
Company has submitted the revised work program and budget for the two-rig
program to the government of Equatorial Guinea for approval.
The accelerated appraisal and development program for Equatorial Guinea
will require significant capital outlays commencing this year. For internal
planning purposes, the Company's revised capital spending program for the year
ending December 31, 2000, is approximately $213 million, excluding capitalized
interest and acquisitions. The $213 million comprises approximately $144
million for exploration and development activities in Equatorial Guinea ($9.3
million incurred through March 31), $58 million for the Cusiana and Cupiagua
fields in Colombia ($9.1 million incurred through March 31), and $11 million for
the Company's exploration activities in other parts of the world ($2.3 million
incurred through March 31). The revised capital spending program does not
include capital requirements that would be associated with the four optional
wells in Equatorial Guinea.
In February 2000, the Company entered into an unsecured two-year revolving
credit facility with a group of banks. The credit facility, which matures in
February 2002, gives the Company the right to borrow from time to time up to the
amount of the borrowing base determined by the banks, not to exceed $150
million. At March 31, 2000, the borrowing base was $150 million. The credit
facility contains various restrictive covenants, including covenants that
require the Company to maintain a ratio of earnings before interest,
depreciation, depletion, amortization and income taxes to net interest expense
of at least 2.5 to 1 on a trailing four quarters basis. The restrictive
covenants also prohibit the Company from permitting net debt to exceed the
product of 3.75 times the Company's earnings before interest, depreciation,
depletion, amortization and income taxes on a trailing four quarters basis. As
of March 31, 2000, the Company had not made a borrowing under the facility.
The Company expects to fund 2000 capital spending with a combination of
some or all of the following: cash flow from operations, cash, the Company's
committed bank credit facility and the issuance of debt or equity securities.
To facilitate a possible future securities issuance or issuances the Company has
on file 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.
At March 31, 2000, the Company guaranteed the performance of a total of
$12.5 million in future exploration expenditures to be incurred through
September 2001 in various countries. A total of approximately $6 million of the
exploration expenditures are included in the 2000 capital spending program
related to a commitment for two onshore exploratory wells in Greece. These
commitments are backed primarily by unsecured letters of credit.
In May 2000, the Company acquired from an unrelated third party, for $88.8
million in cash 100% of the shares of Triton Pipeline Colombia, Inc. ("TPC"), a
formerly wholly owned subsidiary up to its disposal in February 2, 1998. TPC's
sole asset is its 9.6% equity interest in the Colombian pipeline company,
Oleoducto Central S.A. ("OCENSA"). OCENSA owns and operates the pipeline and
port facilities, which transport and handle crude oil from the Cusiana and
Cupiagua fields to the Caribbean port of Covenas.
In May 2000, the equity swap entered into in February 1998 terminated, and
the Company paid $12 million to the counterparty in accordance with the terms of
the equity swap.
RESULTS OF OPERATIONS
---------------------
Sales volumes and average prices realized were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
------------------
2000 1999
-------- --------
<S> <C>
Sales volumes:
Oil (MBbls), excluding forward oil sale 2,459 3,206
Forward oil sale (MBbls delivered) 762 762
-------- --------
Total 3,221 3,968
======== ========
Gas (MMcf) 111 101
Weighted average price realized:
Oil (per Bbl) (1) $ 23.09 $ 12.37
Gas (per Mcf) $ 1.27 $ 0.86
</TABLE>
(1) Includes the effect of barrels delivered under the forward oil
sale that are recognized at $11.56 per barrel.
THREE MONTHS ENDED MARCH 31, 2000,
COMPARED WITH THREE MONTHS ENDED MARCH 31, 1999
Oil and Gas Sales
--------------------
Oil and gas sales for the first quarter of 2000 totaled $74.5 million, a
52% increase from the first quarter of 1999, due to higher average realized oil
prices. This increase was partially offset by lower production. The average
realized oil price increased $10.72 per barrel, or 87%, resulting in an increase
in revenues of $34.6 million compared with the same period in 1999. Oil
production, including production related to barrels delivered under the forward
oil sale, decreased 19% in first-quarter 2000, compared with the prior-year
quarter, resulting in a revenue decrease of $9.3 million. Gross production from
the Cusiana and Cupiagua fields averaged 364,000 BOPD for the first-quarter
2000, compared with 435,000 BOPD for the prior-year quarter.
As a result of financial and commodity market transactions settled during
the three months ended March 31, 2000, the Company's risk management program
resulted in lower oil sales of approximately $6.1 million than if the Company
had not entered into such transactions. Additionally, the Company has hedged
its WTI price on a portion of its projected 2000 oil production. See
"Quantitative and Qualitative Disclosures about Market Risk" below.
The delivery requirement under the forward oil sale was completed in March
2000. Beginning in the second quarter of 2000, 254,136 barrels per month, the
amount previously delivered under the forward oil sale and recognized in
revenues at $11.56 per barrel, will be available for sale at market prices
subject to any hedging arrangements undertaken by the Company.
Costs and Expense
-------------------
Operating expenses decreased $3.1 million in 2000. On an oil-equivalent
barrel basis, operating expenses were $4.93 and $5.04 in 2000 and 1999,
respectively. Operating expenses were lower primarily due to lower pipeline
tariffs. OCENSA pipeline tariffs totaled $8.5 million or $2.67 per barrel, and
$13.1 million, or $3.50 per barrel, in 2000 and 1999, respectively. Following
the Company's acquisition of the shares of TPC, the Company plans to elect to
cancel the dividend it would receive as an owner of OCENSA shares. OCENSA
imposes a tariff on shippers from the Cusiana and Cupiagua 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 the
shareholder affiliated with that shipper, unless it has elected not to receive a
dividend. 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.
Depreciation, depletion and amortization decreased $1.4 million, primarily
due to lower production volumes, including barrels delivered under the forward
oil sale.
General and administrative expense before capitalization decreased $.4
million, or 6%, to $6.6 million in 2000. Capitalized general and administrative
costs were $2 million and $2.1 million in 2000 and 1999, respectively. The
Company anticipates general and administrative expense will increase during
2000, the result of growth in the Company's operations related to the Ceiba
Field and its activities in Equatorial Guinea.
Interest Expense, Net
-----------------------
Gross interest expense for 2000 and 1999 totaled $9.3 million and $9.4
million, respectively, while capitalized interest for 2000 increased $1.1
million to $4.5 million.
Income Taxes
-------------
The income tax provisions for 2000 and 1999 included deferred tax expense
of $2.2 million and $2.7 million, respectively. Current taxes increased to $8.4
million in 2000, from $1.6 million in 1999, due to higher pretax income from
Colombian operations. During 2000, the Company's tax expense was lower by
approximately $2.9 million due to the amortization of deferred income resulting
from anticipated utilization of net operating losses of an entity that was
acquired in the prior year.
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
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 regard 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.
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, news releases, conferences, teleconferences, web postings,
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. When used in this document, the
words "anticipates," "estimates," "expects," "believes," "intends," "plans" and
similar expressions are intended to identify such forward-looking statements.
These statements include information regarding:
- - drilling schedules;
- - expected or planned production capacity;
- - future production from the Cusiana and Cupiagua fields in Colombia, including
the Recetor license;
- - the completion of development and commencement of production offshore
Malaysia-Thailand;
- - future production of the Ceiba Field in Equatorial Guinea, including volumes
and timing of first production;
- - the acceleration of the Company's exploration, appraisal and development
activities in Equatorial Guinea;
- - the Company's capital budget and future capital requirements;
- - the Company's meeting its future capital needs;
- - the Company's utilization of net operating loss carryforwards and realization
of its deferred tax asset;
- - the level of future expenditures for environmental costs;
- - the outcome of regulatory and litigation matters;
- - 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 5 and 6 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. There can be no assurance that
the use of financial market transactions will not result in losses.
The Company does not enter into financial market transactions for trading
purposes.
With respect to the sale of oil to be produced by the Company, the Company
has entered into oil price collars with creditworthy counterparties to establish
a weighted average minimum WTI benchmark price of $18.83 per barrel and a
maximum of $24.66 per barrel on an aggregate of 1.8 million barrels of
production during the period from April through June 2000. As a result, to the
extent the average monthly WTI price exceeds $24.66, the Company will pay the
counterparties the difference between the average monthly WTI price and $24.66,
and to the extent that the average monthly WTI price is below $18.83, the
counterparties will pay the Company the difference between the average monthly
WTI price and $18.83. In addition, the Company has entered into option
contracts for an aggregate of 300,000 barrels of production during the period
from July through September 2000. As a result, to the extent the monthly
average WTI exceeds $28.43 per barrel, the Company will pay the counterparty the
difference between the average WTI and $28.43, and to the extent WTI is at or
below $22.00, the counterparty will pay the Company $2.00 per barrel.
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. The lawsuits were
filed in the United States District Court for the Eastern District of Texas,
Texarkana Division, and have been consolidated and are styled In re: Triton
Energy Limited Securities Litigation. They allege violations of Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5
promulgated thereunder, and negligent misrepresentation 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. The
lawsuits seek recovery of an unspecified amount of compensatory and punitive
damages and fees and costs.
On September 29, 1999, the court granted the plaintiffs' motion for
appointment as lead plaintiffs and for approval of selection of lead counsel. In
addition, the court denied the Company's motion to dismiss or transfer for
improper venue. On October 14, 1999 the Company filed a motion to dismiss the
lawsuits for failure to state a claim. A hearing on the Company's motion to
dismiss is scheduled for June 2000.
The Company believes its disclosures have been accurate and intends to
vigorously defend these actions. 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.
In November 1999, a lawsuit was filed against the Company, one of its
subsidiaries and Thomas G. Finck, Peter Rugg and Robert B. Holland, III, in
their capacities as officers of the Company, in the District Court of the State
of Texas for Dallas County. The lawsuit is styled Aaron Sherman, et al. vs.
Triton Energy Corporation et al. and seeks compensatory and punitive damages and
interest. Following the Court's order to replead, the plaintiffs amended their
petition, which currently alleges as causes of action fraud, negligent
misrepresentation and violations of the Texas Securities fraud statutes in
connection with disclosures concerning the prospective sale by the Company of
all or a substantial part of its assets announced in March 1998. The Court has
dismissed all claims of certain plaintiffs and some claims of the remaining
plaintiffs for their failure to plead causes of action cognizable in law. The
Court has ordered the remaining plantiffs to replead their claims relating to
their alleged purchases of stock and has stayed discovery pending its further
orders.
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. Prior
to this litigation, 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 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 sought 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 were reduced to approximately $700,000
(not including punitive damages). The lawsuit was tried and the jury found in
favor of the plaintiffs and assessed compensatory damages against the Company
in the amount of approximately $700,000 and punitive damages in the amount of
approximately $11 million. The Company believes it has acted appropriately and
has appealed the verdict. Enforcement of the judgment has been stayed without a
bond pending the outcome of the appeal.
In April 2000, a lawsuit was filed in the High Court of Malaya at Kuala
Lumpur against Carigali-Triton Operating Company Sdn. Bhd. ("CTOC"), the
Malaysia-Thailand Joint Authority and Technip Geoproduction (M) Sdn. Bhd.
("Technip") by Pertiwi Ulung Sdn. Bhd. ("Pertiwi"). CTOC is the operating
company owned by Petronas Carigali (JDA) Sdn. Bhd., a subsidiary of the
Malaysian national oil company, the Company and BP to operate their interest in
Block A-18 of the Malaysia-Thailand Joint Development Area in the Gulf of
Thailand. The lawsuit relates to the award by CTOC of the engineering,
procurement and construction ("EPC") contract to a consortium of companies,
including Technip, for the Cakerawala Field gas-development project. Pertiwi
allegedly was to be a subcontractor for a consortium that was an unsuccessful
bidder for the EPC contract. In this lawsuit, Pertiwi alleges, among other
things, irregularities in the bidding process that favored the Technip
consortium, and seeks an order from the court to have the award of the EPC
contract to Technip set aside, to force CTOC to conduct a new bidding process
among the four final bidders and the award of an unspecified amount of damages.
CTOC believes it acted appropriately in the conduct of the bid process and
intends to defend this lawsuit vigorously. The Company is not a named defendant
in the lawsuit.
The Company is also subject to litigation that is incidental to its
business.
<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 (previously filed as an exhibit to the Company's
Registration Statement on Form S-3 (No 333-08005) and incorporated herein by
reference)
3.2 Articles of Association (previously filed as an exhibit to the Company's
Registration Statement on Form S-3 (No 333-08005) and incorporated herein by
reference)
4.1 Specimen Share Certificate of Ordinary Shares, $.01 par value, of the Company
(previously filed as an exhibit to the Company's Registration Statement on Form 8-A
dated March 25, 1996, and incorporated herein by reference)
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 (previously filed as an exhibit to the
Company's Registration Statement on Form S-3 (No 333-08005) and incorporated herein
by reference)
4.3 Resolutions Authorizing the Company's 5% Convertible Preference Shares (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)
4.4 Amendment No. 1 to Rights Agreement dated as of August 2, 1996, between Triton
Energy Limited and The Chase Manhattan Bank, as Rights Agent (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)
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 (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)
4.6 Unanimous Written Consent of the Board of Directors authorizing a Series of
Preference Shares (previously filed as an exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1998, and
incorporated herein by reference.)
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 (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)
10.1 Amended and Restated Retirement Income Plan (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)
10.2 Amendment to the Retirement Income Plan dated August 1, 1998. (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.)
10.3 Amendment to Amended and Restated Retirement Income Plan dated
December 31, 1996 (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)
10.4 Amended and Restated Supplemental Executive Retirement Income Plan. (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.)
10.5 1981 Employee Non-Qualified Stock Option Plan. (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.)
10.6 Amendment No. 1 to the 1981 Employee Non-Qualified Stock Option Plan. (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 herein by reference.)
10.7 Amendment No. 2 to the 1981 Employee Non-Qualified Stock Option Plan. (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.)
10.8 Amendment No. 3 to the 1981 Employee Non-Qualified Stock Option Plan. (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.)
10.9 1985 Stock Option Plan. (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.)
10.10 Amendment No. 1 to the 1985 Stock Option Plan. (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)
10.11 Amendment No. 2 to the 1985 Stock Option Plan. (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.)
10.12 1989 Stock Option Plan. (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.) (1)
10.13 Amendment No. 1 to 1989 Stock Option Plan. (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.) (1)
10.14 Amendment No. 2 to 1989 Stock Option Plan. (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 herein by reference.) (1)
10.15 Second Amended and Restated 1992 Stock Option Plan.(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.) (1)
10.16 Form of Amended and Restated Employment Agreement with Triton Energy Limited
and certain officers, including Messrs. Dunlevy, Garrett and Maxted (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.) (1)
10.17 Amended and Restated Employment Agreement among Triton Energy Limited, Triton
Exploration Services, Inc. and Robert B. Holland, III. (previously filed as an exhibit
to the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998, and incorporated herein by reference.) (1)
10.18 Form of Amended and Restated Employment Agreement among Triton Energy Limited,
Triton Exploration Services, Inc. and each of Peter Rugg and Al E. Turner. (previously
filed as an exhibit to the Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1998, and incorporated herein by reference.) (1)
10.19 Letter Agreement among Triton Energy Limited, Triton Exploration Services, Inc.
and Robert B. Holland, III dated December 17, 1998. (previously filed as an exhibit to
the Company's Annual Report on Form 10-K for the year ended December 31, 1998 and
incorporated herein by reference.) (1)
10.20 Letter Agreement among Triton Energy Limited, Triton Exploration Services, Inc.
and Peter Rugg dated December 10, 1998. (previously filed as an exhibit to the
Company's Annual Report on Form 10-K for the year ended December 31, 1998 and
incorporated herein by reference.) (1)
10.21 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. (previously
filed as an exhibit to the Annual Report on Form 10-K for the year ended December 31,
1998 and incorporated herein by reference.) (1)
10.22 Amended and Restated 1985 Restricted Stock Plan. (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 herein by reference.) (1)
10.23 First Amendment to Amended and Restated 1985 Restricted Stock Plan. (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.) (1)
10.24 Second Amendment to Amended and Restated 1985 Restricted Stock Plan. (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.) (1)
10.25 Executive Life Insurance Plan. (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.) (1)
10.26 Long Term Disability Income Plan. (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.) (1)
10.27 Amended and Restated Retirement Plan for Directors. (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.) (1)
10.28 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. (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.)
10.29 Contract for Exploration and Exploitation for Tauramena with an effective date of July
4, 1988, between Triton Colombia, Inc., and Empresa Colombiana De Petroleos.
(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.)
10.30 Summary of Assignment legalized by Public Instrument No. 1255 dated September 15,
1987 (Assignment is in Spanish language). (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 herein by reference.)
10.31 Summary of Assignment legalized by Public Instrument No. 1602 dated June 11, 1990
(Assignment is in Spanish language). (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 herein by reference.)
10.32 Summary of Assignment legalized by Public Instrument No. 2586 dated September 9,
1992 (Assignment is in Spanish language). (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 herein by reference.)
10.33 401(K) Savings Plan. (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 herein by reference.) (1)
10.34 Amendment to the 401(k) Savings Plan dated August 1, 1998. (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.) (1)
10.35 Amendment to 401(k) Savings Plan dated December 31, 1996. (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.) (1)
10.36 Contract between Malaysia-Thailand 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. (previously
filed as an exhibit to Triton Energy Corporation's Current Report on Form 8-K dated
April 21, 1994, and incorporated herein by reference.)
10.37 Triton Crude Purchase Agreement between Triton Colombia, Inc. and Oil Co., LTD.
dated May 25, 1995. (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.)
10.38 Credit Agreement among Triton Colombia, Inc., Triton Energy Corporation,
NationsBank, N.A. (Carolinas) and Export-Import Bank of the United States
(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.)
10.39 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. (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.)
10.40 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. (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)
10.41 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. (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)
10.42 Form of Indemnity Agreement entered into with each director and officer of the
Company. (previously filed as an exhibit to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1998, and incorporated herein by reference)
10.43 Description of Performance Goals for Executive Bonus Compensation. (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) (1)
10.44 Stock Purchase Agreement dated September 2, 1997, between The Strategic
Transaction Company and Triton International Petroleum, Inc. (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)
10.45 Fourth Amendment to Stock Purchase Agreement dated February 2, 1998, between
The Strategic Transaction Company and Triton International Petroleum, Inc. (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)
10.46 Amended and Restated 1997 Share Compensation Plan. (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) (1)
10.47 First Amendment to Amended and Restated Retirement Plan for Directors. (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) (1)
10.48 First Amendment to Second Amended and Restated 1992 Stock Option Plan. (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) (1)
10.49 Second Amendment to Second Amended and Restated 1992 Stock Option Plan.
(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) (1)
10.50 Amended and Restated Indenture dated July 25, 1997, between Triton Energy
Limited and The Chase Manhattan Bank. (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)
10.51 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. (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)
10.52 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. (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)
10.53 Share Purchase Agreement dated July 17, 1998, among Triton Energy Limited, Triton
Asia Holdings, Inc., Atlantic Richfield Company and BP JDA Limited.
(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)
10.54 Shareholders Agreement dated August 3, 1998, among Triton Energy Limited, Triton
Asia Holdings, Inc., Atlantic Richfield Company, and BP JDA Limited.
(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)
10.55 Stock Purchase Agreement dated as of August 31, 1998, between Triton Energy
Limited and HM4 Triton, L.P. (previously filed as an exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1998, and
incorporated herein by reference)
10.56 Shareholders Agreement dated as of September 30, 1998, between Triton Energy
Limited and HM4 Triton, L.P. (previously filed as an exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1998, and
incorporated herein by reference)
10.57 Financial Advisory Agreement dated as of September 30, 1998, between Triton Energy
Limited and Hicks, Muse & Co. Partners, L.P. (previously filed as an exhibit to the
Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998,
and incorporated herein by reference)
10.58 Monitoring and Oversight Agreement dated as of September 30, 1998, between Triton
Energy Limited and Hicks, Muse & Co. Partners, L.P. (previously filed as an exhibit to
the Company's Quarterly Report on Form 10-Q for the quarter ended September 30,
1998, and incorporated herein by reference)
10.59 Severance Agreement dated as of July 15, 1998, between Thomas G. Finck and Triton
Energy Limited. (previously filed as an exhibit to the Company's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1998, and incorporated herein by
reference) (1)
10.60 Severance Agreement dated April 9, 1999, made and entered into by and among Triton
Energy Limited, Triton Exploration Services, Inc. and Peter Rugg. (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) (1)
10.61 Consulting and Non-Compete Agreement dated April 9, 1999, made and entered into
by and between Triton Exploration Services, Inc. and Peter Rugg. (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) (1)
10.62 Third Amendment to Amended and Restated 1985 Restricted Stock Plan (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) (1)
10.63 Amendment to Triton Exploration Services, Inc. Retirement Income Plan. (previously
filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999, and incorporated herein by reference) (1)
10.64 Amendment to the Triton Exploration Services, Inc. Supplemental Executive
Retirement Plan. (previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1999, and incorporated herein by
reference) (1)
10.65 Third Amendment to the Second Amended and Restated 1992 Stock Option Plan
(previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1999, and incorporated herein by reference) (1)
10.66 First Amendment to the Amended and Restated 1997 Share Compensation Plan
(previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1999, and incorporated herein by reference) (1)
10.67 Amendment dated May 11, 1999, to Amended and Restated Employment Agreement
dated July 15, 1998 among Triton Exploration Services, Inc., Triton Energy Limited
and A.E. Turner, III.(previously filed as an exhibit to the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1999, and incorporated herein by
reference) (1)
10.68 Form of Amendment dated May 11, 1999, to Employment Agreement
among Triton Exploration Services, Inc., Triton Energy Limited and certain officers,
including Messrs. Dunlevy, Garrett and Maxted (previously filed as an exhibit
to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999,
and incorporated herein by reference) (1)
10.69 Second Amendment to Retirement Plan for Directors. (previously filed as an exhibit to
the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999,
and incorporated herein by reference) (1)
10.70 Amendment to Triton Exploration Services, Inc. 401 (k) Savings Plan. (previously filed
as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1999, and incorporated herein by reference) (1)
10.71 Amendment No. 1 to Shareholders Agreement between Triton Energy Limited
and HM4 Triton, L.P. (previously filed as an exhibit to the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1999, and incorporated herein by
reference) (1)
10.72 Amendment No. 4 to the 1981 Employee Nonqualified Stock Option Plan. (previously
filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999, and incorporated herein by reference) (1)
10.73 Amendment No. 3 to the 1985 Stock Option Plan. (previously filed as an exhibit to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999, and
incorporated herein by reference) (1)
10.74 Amendment No. 3 to the 1989 Stock Option Plan. (previously filed as an exhibit to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999, and
incorporated herein by reference) (1)
10.75 Supplemental Letter Agreement dated October 28, 1999, among Triton Energy
Limited, Triton Asia Holdings, Inc., Atlantic Richfield Company, and BP JDA
Limited (previously filed as an exhibit to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1999, and incorporated herein by reference)
10.76 Gas Sales Agreement dated October 30, 1999 among the Malaysia-Thailand Joint
Authority, and Petronas Carigali (JDA) Sdn Bhd, Triton Oil Company of Thailand,
Triton Oil Company of Thailand (JDA) Limited, as Sellers, and with Petroleum
Authority of Thailand and Petroliam Nasional Berhad, as Buyers. (previously filed
as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1999, and incorporated herein by reference)
10.77 Form of Stock Option Agreement between Triton Energy Limited and its
non-employee directors. (previously filed as an exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1999, and
incorporated herein by reference)
10.78 Form of Stock Option Agreement between Triton Energy Limited and its employees,
including its executive officers. (1) (previously filed as an exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1999, and
incorporated herein by reference)
10.79 Amendment to Stock Options dated as of January 3, 2000, between Triton Energy
Limited and A.E. Turner. (1) (previously filed as an exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1999, and
incorporated herein by reference)
10.80 Form of Amendment to Stock Options dated as of January 3, 2000, between Triton
Energy Limited and its non-employee directors. (1) (previously filed as an exhibit to
the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1999, and incorporated herein by reference)
10.81 Production Sharing Contract between the Republic of Equatorial Guinea
and Triton Equatorial Guinea, Inc. for Block F. (previously filed as an exhibit to the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1999, and incorporated herein by reference)
10.82 Production Sharing Contract between the Republic of Equatorial Guinea and Triton
Equatorial Guinea, Inc. for Block G. (previously filed as an exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1999, and
incorporated herein by reference)
10.83 Supplementary Contract (No. 1) to the Production Sharing Contract for Block A-18
dated 21 April 1994 between Malaysia-Thailand Joint Authority and Petronas
Carigali (JDA) SDN.BHD., Triton Oil Company of Thailand and Triton Oil Company
of Thailand (JDA) Limited. (previously filed as an exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1999, and
incorporated herein by reference)
10.84 Supplementary Contract (No. 2) to the Production Sharing Contract for Block A-18
dated 21 April 1994 between Malaysia-Thailand Joint Authority and Petronas Carigali
(JDA) SDN.BHD., Triton Oil Company of Thailand and Triton Oil Company of
Thailand (JDA) Limited. (previously filed as an exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1999, and
incorporated herein by reference)
10.85 Credit Agreement dated as of February 29, 2000, among Triton Energy Limited,
the Lenders party thereto and The Chase Manhattan bank, as Administrative Agent
(previously filed as an exhibit to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1999, and incorporated herein by
reference)
10.86* Share Purchase Agreement dated as of May 8, 2000 between Triton International
Petroleum, Inc. and The Strategic Transaction Company.
12.1* Computation of Ratio of Earnings to Fixed Charges.
12.2* Computation of Ratio of Earnings to Combined Fixed Charges and Preference
Dividends.
27.1* Financial Data Schedule.
99.1 Rio Chitamena Association Contract. (previously filed as an exhibit to Triton Energy
Corporation's Current Report on Form 8-K/A dated July 15, 1994, and incorporated
herein by reference)
99.2 Rio Chitamena Purchase and Sale Agreement. (previously filed as an exhibit to Triton
Energy Corporation's Current Report on Form 8-K/A dated July 15, 1994, and
incorporated herein by reference)
99.3 Integral Plan - Cusiana Oil Structure. (previously filed as an exhibit to Triton Energy
Corporation's Current Report on Form 8-K/A dated July 15, 1994, and incorporated
herein by reference)
99.4 Letter Agreements with co-investor in Colombia. (previously filed as an exhibit to
Triton Energy Corporation's Current Report on Form 8-K/A dated July 15, 1994, and
incorporated herein by reference)
99.5 Amended and Restated Oleoducto Central S.A. Agreement dated as of March 31,
1995. (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)
* Filed herewith
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(1) Management contract or compensatory plan or arrangement.
(b) Reports on Form 8-K
Form 8-K filed on February 4, 2000 to announce results for year ended
December 31, 1999.
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/W. Greg Dunlevy
---------------------------
W. Greg Dunlevy
Vice President, Finance
Date: May 12, 2000
EXHIBIT 12.1
TRITON ENERGY LIMITED AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS, EXCEPT RATIOS)
(UNAUDITED)
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<CAPTION>
THREE MONTHS ENDING
MARCH 31, YEAR ENDING DECEMBER 31,
------------------ ------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
-------- -------- --------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined
Interest charges $ 9,520 $ 9,740 $ 38,231 $ 50,253 $ 50,625 $ 43,884 $ 41,305
Preferred dividend requirements of
subsidiaries adjusted to pre-tax basis --- --- --- --- --- --- ---
-------- -------- --------- ---------- --------- --------- ---------
Total fixed charges $ 9,520 $ 9,740 $ 38,231 $ 50,253 $ 50,625 $ 43,884 $ 41,305
======== ======== ========= ========== ========= ========= =========
Earnings, as defined (2):
Earnings (loss) from continuing operations
before income taxes and extraordinary item $37,075 $ 6,186 $ 76,177 $(238,609) $ 16,896 $ 20,945 $ 16,600
Fixed charges, above 9,520 9,740 38,231 50,253 50,625 43,884 41,305
Less interest capitalized (4,523) (3,390) (14,539) (23,215) (25,818) (27,102) (16,211)
Plus undistributed (earnings) loss of affiliates 13 --- 28 --- --- (118) 2,249
Less preferred dividend requirements of
subsidiaries adjusted to pre-tax basis --- --- --- --- --- --- ---
-------- -------- --------- ---------- --------- --------- ---------
$42,085 $12,536 $ 99,897 $(211,571) $ 41,703 $ 37,609 $ 43,943
======== ======== ========= ========== ========= ========= =========
RATIO OF EARNINGS TO FIXED CHARGES (1) (2) 4.4 1.3 2.6 --- 0.8 0.9 1.1
======== ======== ========= ========== ========= ========= =========
____________________
(1) Earnings were inadequate to cover fixed for the years ended December 31, 1998, 1997 and 1996 by $261,824,000,
$8,922,000 and $6,275,000, respectively.
(2) Earnings reflect nonrecurring writedowns and loss provisions of $1,220,000 for the three months ended March 31, 1999,
$5,159,000, $348,064,000, $46,153,000 and $1,058,000 for the years ended December 31, 1999, 1998, 1996 and 1995,
respectively. Nonrecurring gains from the sale of assets and other gains aggregated $442,000, $125,617,000, $6,253,000,
$22,189,000 and $13,617,000 for the years ended December 31, 1999, 1998, 1997, 1996 and 1995, respectively. The ratio of
earnings to fixed charges if adjusted to remove nonrecurring items, would have been 1.4 for the three months ended March 31,
1999, 2.7, 0.2, 0.7, 1.4 and 0.8 for the years ended December 31, 1999, 1998, 1997, 1996 and 1995, respectively. Without
nonrecurring items, earnings would have been inadequate to cover fixed charges for the years ended December 31, 1998, 1997
and 1995 by $39,377,000, $15,175,000 and $9,921,000, respectively.
</TABLE>
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>
THREE MONTHS ENDING
MARCH 31, YEAR ENDING DECEMBER 31,
------------------ ------------------------------------------------------
2000 1999 1999 1998 1997 1996 1995
-------- -------- --------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Fixed charges, as defined:
Interest charges $ 9,520 $ 9,740 $ 38,231 $ 50,253 $ 50,625 $ 43,884 $ 41,305
Preference dividend requirements of
the Company 163 180 28,671 3,061 400 985 802
Preferred dividend requirements of
subsidiaries adjusted to pre-tax basis --- --- --- --- --- --- ---
-------- -------- --------- ---------- --------- --------- ---------
Total fixed charges $ 9,683 $ 9,920 $ 66,902 $ 53,314 $ 51,025 $ 44,869 $ 42,107
======== ======== ========= ========== ========= ========= =========
Earnings, as defined (2):
Earnings (loss) from continuing operations
before income taxes and extraordinary item $37,075 $ 6,186 $ 76,177 $(238,609) $ 16,896 $ 20,945 $ 16,600
Fixed charges, above 9,683 9,920 66,902 53,314 51,025 44,869 42,107
Less interest capitalized (4,523) (3,390) (14,539) (23,215) (25,818) (27,102) (16,211)
Plus undistributed (earnings) loss of affiliates 13 --- 28 --- --- (118) 2,249
Less preference dividend requirements of
the Company and its subsidiaries adjusted
to pre-tax basis (163) (180) (28,671) (3,061) (400) (985) (802)
-------- -------- --------- ---------- --------- --------- ---------
$42,085 $12,536 $ 99,897 $(211,571) $ 41,703 $ 37,609 $ 43,943
======== ======== ========= ========== ========= ========= =========
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERENCE DIVIDENDS (1) (2) 4.3 1.3 1.5 --- 0.8 0.8 1.0
======== ======== ========= ========== ========= ========= =========
</TABLE>
____________________
(1) Earnings were inadequate to cover combined fixed charges and preference
dividends for the years ended December 31, 1998, 1997 and 1996 by $264,885,000,
$9,322,000 and $7,260,000, respectively.
(2) Earnings reflect nonrecurring writedowns and loss provisions of
$1,220,000 for the three months ended March 31, 1999, $5,159,000, $348,064,000,
$46,153,000 and $1,058,000 for the years ended December 31, 1999, 1998, 1996 and
1995, respectively. Nonrecurring gains from the sale of assets and other gains
aggregated $442,000, $125,617,000, $6,253,000, $22,189,000 and $13,617,000 for
the years ended December 31, 1999, 1998, 1997, 1996 and 1995, respectively. The
ratio of earnings to combined fixed charges and preference dividends if adjusted
to remove nonrecurring items, would have been 1.4 for the three months ended
March 31, 1999, 1.6, 0.2, 0.7, 1.4 and 0.7 for the years ended December 31,
1999, 1998, 1997, 1996 and 1995, respectively. Without nonrecurring items,
earnings would have been inadequate to cover combined fixed charges and
preference dividends for the years ended December 31, 1998, 1997 and 1995 by
$42,438,000, $15,575,000 and $10,723,000, respectively.
EXHIBIT 10.86
SHARE PURCHASE AGREEMENT
BETWEEN
TRITON INTERNATIONAL PETROLEUM, INC.
PURCHASER
AND
THE STRATEGIC TRANSACTION COMPANY
SELLER
-------------------
Dated as of May 8, 2000
TABLE OF CONTENTS
-----------------
Section Page
- ------- ----
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE I DEFINITIONS 1
1.1 Certain Definitions 1
ARTICLE II SALE AND PURCHASE OF TPC SHARES 4
2.1 Sale and Purchase of TPC Shares 4
ARTICLE III PURCHASE PRICE AND PAYMENT 4
3.1 Amount of Purchase Price 4
3.2 Payment of Purchase Price 4
ARTICLE IV CLOSING 4
4.1 Closing Date 4
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE SELLER 4
5.1 Organization and Good Standing 4
5.2 Authorization of Agreement 5
5.3 Capital and TPC Shares 5
5.4 Other Activities 6
5.5 Corporate Records 6
5.6 Conflicts; Consents of Third Parties 6
5.7 Ownership and Transfer of TPC Shares 7
5.8 Compliance with Laws 7
5.9 No Misrepresentation 7
5.10 Absence of Certain Developments 7
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PURCHASER 8
6.1 Organization and Good Standing 8
6.2 Authorization of Agreement 8
6.3 No Misrepresentation 8
6.4 Conflicts; Consents of Third Parties 9
6.5 Litigation 9
6.6 Financing 9
ARTICLE VII COVENANTS 9
7.1 Access to Information 9
7.2 Consents 10
7.3 Other Actions 10
7.4 Confidentiality 10
7.5 Publicity 10
7.6 Conduct of the Business 10
ARTICLE VIII CONDITIONS TO CLOSING 11
8.1 Conditions Precedent to Obligations of the Purchaser 11
8.2 Conditions Precedent to Obligations of the Seller 12
ARTICLE IX DOCUMENTS TO BE DELIVERED 13
9.1 Documents to be Delivered by the Seller 13
9.2 Documents to be Delivered by the Purchaser 13
ARTICLE X MISCELLANEOUS 14
10.1 Payment of Sales, Use or Similar Taxes 14
10.2 Survival of Representations and Warranties 14
10.3 Expenses 14
10.4 Further Assurances 14
10.5 Submission to Jurisdiction; Consent to Service of Process 14
10.6 Entire Agreement; Amendments and Waivers 15
10.7 Governing Law 15
10.8 Table of Contents and Headings 15
10.9 Notices 15
10.10 Severability 16
10.11 Binding Effect; Assignment 16
10.12 Counterparts 16
</TABLE>
SHARE PURCHASE AGREEMENT
SHARE PURCHASE AGREEMENT, dated as of May 8, 2000 (the "Agreement"),
between Triton International Petroleum, Inc., a company incorporated under the
laws of the Cayman Islands whose registered office is at Ugland House, P.O. Box
309, Grand Cayman, Cayman Islands, B.W.I. (the "Purchaser"), and The Strategic
Transaction Company, a company incorporated under the laws of the Cayman Islands
whose registered office is at Elizabethan Square, P.O. Box 1984, George Town,
Grand Cayman, Cayman Islands, B.W.I. (the "Seller").
W I T N E S S E T H:
WHEREAS, the Seller owns all of the issued and outstanding shares of Triton
Pipeline Colombia, Inc., a company incorporated under the laws of the Cayman
Islands;
WHEREAS, Triton Pipeline Colombia, Inc. owns 9.6% of the shares of common
stock of Oleoducto Central S.A., a sociedad anonima existing under the
laws of Colombia; which shares have been converted into the rights to receive
Preferred Shares, or acciones privilegiadas, under Colombian law, par
value Ps 100,000 each
WHEREAS, the Seller desires to sell to the Purchaser, and the Purchaser
desires to purchase from the Seller, said shares of Triton Pipeline Colombia,
Inc. for the purchase price and upon the terms and conditions hereinafter set
forth; and
WHEREAS, certain terms used in this Agreement are defined in Section 1.1
hereof;
NOW, THEREFORE BE IT RESOLVED, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Definitions.
--------------------
For purposes of this Agreement, the following terms shall have the meanings
specified in this Section 1.1:
"Closing" shall have the meaning set forth in Section 4.1 hereof.
-------
"Closing Date" shall have the meaning set forth in Section 4.1 hereof.
-------------
"Contract" means any contract, agreement, indenture, mortgage, note, bond, loan,
--------
instrument, license, lease, commitment or other arrangement or agreement.
"Distributions" shall have the meaning set forth in Section 1.1 of the Dividend
-------------
Trust Agreement.
"Dividend Trust Agreement" means the Dividend Trust Agreement, dated as of May
--------------------------
24, 1996, among Ocensa, Empresa Colombiana De Petroleos-Ecopetrol, BP Colombia
Pipelines Limited, Total Pipeline Colombie S.A., TPC, IPL Enterprises (Colombia)
Inc., TCPL International Investments Inc., and Bankers Trust (Cayman)
International, Ltd. as dividend trustee.
"Dividend Trustee" shall have the meaning set forth in Section 1.1 of the
-----------------
Dividend Trust Agreement.
"Governmental Body" means any government or governmental, administrative or
------------------
regulatory body thereof, or political subdivision thereof, whether federal,
state, local or foreign, or any agency, instrumentality or authority thereof, or
any court or arbitrator (public or private).
"Indenture" means the Indenture dated February 2, 1998 between Seller and First
---------
Trust of New York, National Association (the "Indenture").
"Law" means any federal, state, local or foreign law (including common law or
---
civil law), statute, code, ordinance, rule, regulation or other requirement.
"Legal Proceeding" means any judicial, administrative or arbitral actions,
-----------------
suits, proceedings (public or private), claims or governmental proceedings.
"Lien" means any lien, pledge, mortgage, deed of trust, security interest,
----
claim, lease, charge, option, right of first refusal, easement, servitude,
transfer restriction under any shareholder or similar agreement, encumbrance or
any other restriction or limitation whatsoever.
"Material Adverse Effect" means any effect which has resulted in, or is
-------------------------
reasonably likely to result in, a material adverse change in the business,
properties, results of operations, prospects, condition (financial or otherwise)
of the Seller and its subsidiaries, taken as a whole.
"Ocensa" means Oleoducto Central S.A., a sociedad anonima existing under the
------
laws of Colombia.
"Ocensa Agreement" means the Amended and Restated Oleoducto Central Agreement,
-----------------
dated as of March 31, 1995, among Ocensa, Empresa Colombiana De
Petroleos-Ecopetrol, BP Colombia Pipelines Limited, Total Pipeline Colombie
S.A., TPC, IPL Enterprises (Colombia) Inc. and TCPL International Investments
Inc., as amended through the date of this Agreement.
"Ocensa Shares" means the shares of common stock of Ocensa owned by TPC, which
- ---------------
shares have been converted into the right to receive Preferred Shares, or
acciones privilegiadas, under Colombian law, par value Ps 100,000 each.
"Order" means any order, injunction, judgment, decree, ruling, writ, assessment
-----
or arbitration award.
"Permit" means any approval, authorization, consent, license, permit or
------
certificate.
"Person" means any individual, corporation, partnership, firm, joint venture,
------
association, joint-stock company, trust, unincorporated organization,
Governmental Body or other entity.
"Purchase Price" shall have the meaning set forth in Section 3.1 hereof.
---------------
"Purchaser Documents" shall have the meaning set forth in Section 6.2 hereof.
--------------------
"Seller Documents" shall have the meaning set forth in Section 5.2 hereof.
-----------------
Stop Notice" means a stop notice filed and served pursuant to Order 50, Rule 11
- ------------
of the Cayman Islands Grand Court Rules.
"Taxes" means (i) all federal, state, local or foreign taxes, charges, fees,
-----
imposts, levies or other assessments, including, without limitation, all net
income, gross receipts, capital, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, capital stock, license, withholding, payroll,
employment, social security, unemployment, excise, severance, stamp, occupation,
property and estimated taxes, customs duties, fees, assessments and charges of
any kind whatsoever; (ii) all interest, penalties, fines, additions to tax or
additional amounts imposed by any taxing authority in connection with any item
described in clause (i); and (iii) any transferee liability in respect of any
items described in clauses (i) and/or (ii).
"TPC" means Triton Pipeline Colombia, Inc., a company incorporated under the
---
laws of the Cayman Islands.
"TPC Shares" means all of the issued and outstanding shares in TPC, and shall
-----------
include securities or other property that may be issued or distributed in
respect thereof as a result of any merger, spin-off, stock or share split, stock
or share combination, bonus issue, recapitalization or other similar
transaction.
"Voting Agreement" means the Voting Agreement, dated as of May 24, 1996, among
-----------------
Ocensa, Empresa Colombiana De Petroleos - Ecopetrol, BP Colombia Pipelines
Limited, Total Pipeline Colombie S.A., TPC, IPL Enterprises (Colombia) Inc., and
TCPL International Investments Inc.
ARTICLE II
SALE AND PURCHASE OF TPC SHARES
2.1 Sale and Purchase of TPC Shares. Upon the terms and subject to the
------------------------------------
conditions contained herein, on the Closing Date the Seller, as record and
beneficial owner, shall sell, assign, transfer, convey and deliver to the
Purchaser, and the Purchaser shall purchase from the Seller, the TPC Shares,
free from all Liens (other than as set forth in the Ocensa Agreement), and with
all rights now or hereafter attaching to the TPC Shares.
ARTICLE III
PURCHASE PRICE AND PAYMENT
3.1 Amount of Purchase Price. The purchase price for the TPC Shares shall
--------------------------
be an amount equal to $88,800,000 (the "Purchase Price").
3.2 Payment of Purchase Price. Payment of the aggregate Purchase Price
----------------------------
shall be made on the Closing Date by wire transfer of immediately available
funds into the account designated by the Seller.
ARTICLE IV
CLOSING
4.1 Closing Date. Subject to the satisfaction of the conditions set forth
-------------
in Sections 8.1 and 8.2 hereof (or the waiver thereof by the party entitled to
waive that condition), the closing of the sale and purchase of the TPC Shares
provided for in Section 2.1 hereof (the "Closing") shall take place on the date
that is five (5) business days following the date that such conditions are
satisfied (or waived by the party entitled to waive that condition), or such
other date that is agreed to by the Purchaser and the Seller. The date on which
the Closing shall be held is referred to in this Agreement as the "Closing
Date."
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Purchaser as of the date
of this Agreement and as of the Closing Date that:
5.1 Organization and Good Standing. The Seller and TPC are companies duly
--------------------------------
incorporated, validly existing and in good standing under the laws of their
respective jurisdictions of incorporation as set forth above and have all
requisite corporate power and authority to own, lease and operate their
properties and to carry on their businesses as now conducted. TPC is duly
qualified or authorized to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction in which it owns or leases real
property and each other jurisdiction in which the conduct of its business or the
ownership of its properties requires such qualification or authorization
except where the failure to be so qualified, authorized or in good standing
would not have a Material Adverse Effect.
5.2 Authorization of Agreement. The Seller has all requisite power,
----------------------------
authority and legal capacity to execute and deliver this Agreement and each
other agreement, document, or instrument or certificate contemplated by this
Agreement or to be executed by the Seller in connection with the consummation of
the transactions contemplated by this Agreement (collectively, with this
Agreement, the "Seller Documents"), and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by the
Seller of this Agreement have been, and each of the Seller Documents will be at
or prior to the Closing Date, duly authorized by all necessary corporate action
on behalf of the Seller, and when so executed and delivered by the Seller
(assuming the due authorization, execution and delivery by the other parties
hereto and thereto) will constitute legal, valid and binding obligations of the
Seller, enforceable against the Seller in accordance with their respective
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights and remedies generally, and
subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
5.3 Capital and TPC Shares.
-------------------------
(a) The authorized share capital of TPC is US $50,000 and the number of
shares in TPC issued and outstanding is 35,000, with a par value of $1.00 per
share. There are no put options, call options, commitments, exchange rights,
preferential rights, plans, covenants or other agreements of any nature that are
outstanding that provide for the purchase, issue or sale of any of the TPC
Shares or grant to any Person conversion or exchange rights in connection with
the TPC Shares, or pursuant to which any Person, in any capacity, may be
entitled to receive or subscribe for shares issued or to be issued by TPC. All
of the TPC Shares were duly authorized for issuance and are validly issued,
fully paid and non-assessable. STC has not received a Stop Notice in respect of
the Shares. None of the TPC Shares has been issued in violation of any
preferential right or right to take up unsubscribed shares and none of the TPC
Shares is subject to any Lien, other than as set forth in the Ocensa Agreement
and this Agreement.
(b) No Person has any claim pending or, to the Seller's best knowledge,
threatened against TPC based on the fact that any issue, exchange, subscription,
cancellation or redemption of TPC's share capital by TPC did not comply
with all the applicable Contracts and Laws, including, without limitation, the
Ocensa Agreement. Except for this Agreement, the Ocensa Agreement and the
Voting Agreement, there are no Contracts that are legally binding and
enforceable, with respect to the issue, redemption, conversion, exchange, vote
or transfer of any of the shares or other securities of TPC.
5.4 Other Activities. Since February 2, 1998, TPC has not engaged in any
-----------------
activity other than managing its interest in Ocensa since the date of its
incorporation. Other than its 9.6% interest of Ocensa, TPC, since February 2,
1998, has not, and does not, directly or indirectly, own any stock or other
equity interest in any other Person.
5.5 Corporate Records. The Seller has delivered or made available to the
------------------
Purchaser:
(a) the seal and true, correct and complete certified copies of the
memorandum of association, articles of association of TPC, Register of Members,
Register of Mortgages and Charges, Register of Directors and Officers, and
Certificate of Good Standing;
(b) the statutory books, books of account and documents of record of TPC,
complete and up-to-date and all other documents of TPC in the possession of the
Seller;
(c) the minutes of the meetings and copies of all written resolutions of the
Board of Directors and the committees thereof of TPC since February 2, 1998;
(d) the minutes of all shareholders' meetings and copies of all written
resolutions of shareholders of TPC since February 2, 1998;
(e) a copy of the registers of members, directors and officers of TPC as of
the most recent date practicable; and
(f) a list of any bank accounts maintained by TPC;
5.6 Conflicts; Consents of Third Parties.
----------------------------------------
(a) None of the execution and delivery by the Seller of this Agreement and
the Seller Documents, the consummation of the transactions contemplated hereby
or thereby, or compliance by the Seller with any of the provisions hereof or
thereof will (i) conflict with, or result in the breach of, any provision of the
memorandum of association, articles of association or comparable
organizational documents or statutory books of the Seller or TPC; (ii) conflict
with, violate, result in the breach or termination of, or constitute a default
under, any Contract to which the Seller or TPC is a party or by which any of
them or any of their respective properties or assets is bound, including,
without limitation, the Ocensa Agreement; (iii) violate any statute, rule,
regulation, order or decree of any Governmental Body by which the Seller or TPC
is bound; or (iv) result in the creation of any Lien upon the properties or
assets of TPC.
(b) Except as set forth in the Ocensa Agreement or as will have been
obtained on or prior to the Closing Date, no other consent, waiver, approval,
Order, Permit or authorization of, or declaration or filing with, or
notification to, any Person is required on the part of the Seller or TPC in
connection with the execution and delivery of this Agreement or the Seller
Documents, or the compliance by the Seller or TPC, as the case may be, with any
of the provisions hereof or thereof.
5.7 Ownership and Transfer of TPC Shares. The Seller is the registered and
-------------------------------------
beneficial owner of the TPC Shares and has valid title thereto, free and clear
of any and all Liens, other than as set forth in the Ocensa Agreement and this
Agreement; no Lien has been exercised over any of the TPC Shares other than the
lien of the Indenture, there is no outstanding call on any of the TPC Shares and
all of the TPC Shares are fully paid. The Seller has the corporate power
and authority to sell, transfer, assign and deliver the TPC Shares as provided
in this Agreement, and such delivery and entry in the register of members of TPC
will convey to the Purchaser good and marketable title to the TPC Shares, free
and clear of any and all Liens, other than as set forth in the Ocensa Agreement
and this Agreement.
5.8 Compliance with Laws. The Seller is not aware of:
----------------------
(a) any material violations by the Seller, TPC, or Ocensa of any Laws in any
jurisdiction in connection with the operations of the Seller, TPC, or
Ocensa at the date hereof; or
(b) any communications from any Governmental Body or representatives
concerning any investigation or allegation or non-compliance with Laws in any
jurisdiction, or deficiencies in financial reporting practices or other matters
that would reasonably be expected to have a Material Adverse Effect.
5.9 No Misrepresentation. No representation or warranty of the Seller
---------------------
contained in this Agreement or in any certificate or other instrument furnished
by the Seller to the Purchaser or its representatives pursuant to the terms
hereof, contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements contained herein or therein not
misleading.
5.10 Absence of Certain Developments. Except as expressly contemplated by
---------------------------------
this Agreement and except with respect to the conversion of the common stock of
Ocensa owned by TPC into the right to receive Preferred Shares, or acciones
privilegiadas, par value Ps 100,000 each, or as otherwise disclosed in writing
to the Purchaser, since February 2, 1998:
(a) TPC has not entered into any transaction or Contract (other than with
respect to the recapitalization of Ocensa) or conducted its business other than
in the ordinary course consistent with past practice;
(b) TPC has not instituted or settled any material Legal Proceeding;
(c) to the actual knowledge of the directors of TPC, there have been no
actions, claims, suits, litigation, administrative proceedings or governmental
investigations or inquiries, instituted or threatened, before any court,
arbitrator, administrator or governmental body affecting TPC, provided that TPC
makes no representations or warranties as to any matters (x) occurring in or
arising out of actions taken by any Person in the Republic of Colombia, or (y)
arising out of the operations of Ocensa or TPC's ownership of shares of Ocensa;
(d) the Seller has not received any notice from Deutsche Morgan Grenfell
(Cayman) Limited ("DMG") of any substantial change in circumstances or
conditions that are known to DMG that may affect TPC pursuant to Section 2(e) of
the Management Agreement dated February 2, 1998 between TPC and DMG; and
(e) there have been no amendments to the memorandum of association or
articles of association of TPC since February 2, 1998.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser hereby represents and warrants to the Seller as of the date
of this Agreement and as of the Closing Date that:
6.1 Organization and Good Standing. The Purchaser is a company duly
---------------------------------
organized, validly existing and in good standing under the laws of the Cayman
Islands and has all requisite corporate power and authority to own, lease and
operate its property and to carry on its business as it is currently conducted.
6.2 Authorization of Agreement. The Purchaser has all requisite power,
----------------------------
authority and legal capacity to execute and deliver this Agreement and each
other agreement, document, or instrument or certificate contemplated by this
Agreement or to be executed by the Purchaser in connection with the consummation
of the transactions contemplated by this Agreement (collectively, with this
Agreement, the "Purchaser Documents") and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by the
Purchaser of this Agreement have been, and each of the Purchaser Documents will
be at or prior to the Closing Date, duly authorized by all necessary corporate
action on behalf of the Purchaser, and when so executed and delivered by the
Purchaser (assuming the due authorization, execution and delivery by the other
parties hereto) will constitute, legal, valid and binding obligations of the
Purchaser, enforceable against the Purchaser in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity).
6.3 No Misrepresentation. No representation or warranty of the Purchaser
---------------------
contained in this Agreement or in any certificate or other instrument furnished
by the Purchaser to the Seller or its representatives pursuant to the terms
hereof, contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements contained herein or therein not
misleading.
6.4 Conflicts; Consents of Third Parties.
----------------------------------------
(a) None of the execution and delivery by the Purchaser of this Agreement,
the consummation of the transactions contemplated hereby, or the compliance by
the Purchaser with any of the provisions hereof will (i) conflict with, or
result in the breach of, any provision of the memorandum of association,
articles of association or comparable organizational documents of the Purchaser;
(ii) conflict with, violate, result in the breach or termination of, or
constitute a default under, any Contract to which the Purchaser is a party or by
which the Purchaser or its properties or assets are bound; (iii) violate any
statute, rule, regulation, order or decree of any Governmental Body by which the
Purchaser is bound; or (iv) result in the creation of any Lien upon the
properties or assets of the Purchaser.
(b) No consent, waiver, approval, Order, Permit or authorization of, or
declaration or filing with, or notification to, any Person is required on the
part of the Purchaser in connection with the execution and delivery of this
Agreement or the compliance by the Purchaser with any of the provisions hereof.
6.5 Litigation. There are no Legal Proceedings initiated by any Person,
----------
pending or, to the best knowledge of the Purchaser, threatened against the
Purchaser that are reasonably likely to prohibit or restrain the ability of the
Purchaser to enter into this Agreement or consummate the transactions
contemplated hereby.
6.6 Financing. As of the date of this Agreement, Purchaser has access to,
---------
and as of the Closing, Purchaser will have, sufficient funds necessary to (a)
pay the Purchase Price and (b) pay all of its fees and expenses incurred in
connection with the transactions contemplated by this Agreement.
ARTICLE VII
COVENANTS
7.1 Access to Information. The Seller agrees that, prior to the Closing
-----------------------
Date, the Seller shall make available to the Purchaser, through its officers,
employees and representatives (including, without limitation, its legal advisors
and accountants), the properties, businesses, operations, books and records
of TPC and Ocensa as the Purchaser reasonably requests and the Seller shall make
extracts and copies of such books and records for delivery to the Purchaser, to
the extent the Seller may do so in compliance with Law and applicable
contractual requirements. Any such investigation and examination shall be
conducted during regular business hours and under reasonable circumstances, and
the Seller shall cooperate, and shall cause TPC to cooperate, fully therein. No
investigation by the Purchaser prior to or after the date of this Agreement
shall diminish or obviate any of the representations, warranties, covenants or
agreements of the Seller contained in this Agreement or the Seller Documents.
7.2 Consents. The Seller and Purchaser shall use their commercially
--------
reasonable efforts to obtain at the earliest practicable date all consents and
approvals required to consummate the transactions contemplated by this
Agreement, including, without limitation, the consents and approvals referred to
in Section 5.6(b) hereof and required by Article Ten of the Ocensa
Agreement.
7.3 Other Actions.
--------------
(a) Each of the Seller and the Purchaser shall use its commercially
reasonable efforts to (i) take all actions necessary or appropriate to
consummate the transactions contemplated by this Agreement and (ii) cause the
fulfillment at the earliest practicable date of all of the conditions to their
respective obligations to consummate the transactions contemplated by this
Agreement.
(b) Effective as of the Closing, the Seller shall enter into and cause TPC
to enter into, as applicable, and the Purchaser shall enter into and cause its
Affiliates to enter into, as applicable, agreements terminating the following:
(i) Acknowledgement Agreement dated February 2, 1998, between the Seller and the
Purchaser, (ii) Confirmation of Initial Shipper Group Status dated February 2,
1998 among Triton Colombia, Inc., TPC, Triton Energy Corporation and the Seller,
and (iii) Confirmation of Initial Shipper and Throughput Obligor Status dated
February 2, 1998 among Triton Colombia, Inc., TPC, Triton Energy Corporation and
the Seller.
7.4 Confidentiality. Each of the Seller and Purchaser hereto acknowledges
---------------
to the other party that all information or documentation that any of the parties
provided to the other before, on or after the Closing Date, or that one of
the parties would have provided in the course of the negotiation of this
Agreement, with the exception of the information that is publicly available,
shall be treated as confidential and owned by such party and it shall not be
disclosed to third parties (except to legal and financial advisors of each
party) without the consent of the party that delivered the information or the
document, except as required by applicable Law.
7.5 Publicity. Neither the Seller nor the Purchaser shall issue any press
---------
release or public announcement concerning this Agreement or the transactions
contemplated hereby without obtaining the prior written approval of the other
party hereto, unless, in the sole judgment of the Purchaser or the Seller,
disclosure is otherwise required by applicable Law, provided that, to the extent
required by applicable Law, the party intending to make such release shall
use its best efforts consistent with such applicable Law to consult with the
other party with respect to the text thereof.
7.6 Conduct of the Business.Except as otherwise expressly contemplated by
-----------------------
this Agreement or with the prior written consent of the Purchaser, from the date
hereof through and including the Closing Date, the Seller shall not and
shall cause TPC not to:
(a) conduct the business of TPC other than in the ordinary
course consistent with past practice;
(b) transfer, issue, sell or dispose of any shares of capital
stock or other securities of TPC or grant options, warrants, calls or other
rights to purchase or otherwise acquire shares of the capital stock or other
securities of TPC;
(c) effect any recapitalization, reclassification, stock split
or like change in the capitalization of TPC;
(d) amend the memorandum of association, articles of association
or comparable organizational documents or statutory books of TPC;
(e) subject to any Lien any of the properties or assets (whether
tangible or intangible) of TPC;
(f) acquire any material properties or assets for TPC or sell,
assign, transfer, convey, lease or otherwise dispose of any of the material
properties or assets of TPC; or
(g) agree to do anything prohibited by this Section 7.6.
------------
ARTICLE VIII
CONDITIONS TO CLOSING
8.1 Conditions Precedent to Obligations of the Purchaser. The obligation of
----------------------------------------------------
the Purchaser to consummate the transactions contemplated by this Agreement
is subject to the fulfillment, on or prior to the Closing Date, of each of the
following conditions (any or all of which may be waived by the Purchaser in
whole or in part to the extent permitted by applicable Law):
(a) all representations and warranties of the Seller contained herein shall
be true and correct in all material respects as of the Closing Date;
(b) the Seller shall have performed and complied in all material respects
with all agreements and obligations and covenants required by this Agreement to
be performed or complied with by it on or prior to the Closing Date;
(c) the Purchaser shall have been furnished with certificates (dated the
Closing Date and in form and substance reasonably satisfactory to the Purchaser)
executed by the Seller certifying as to the fulfillment of the conditions
specified in Sections 8.1(a) and 8.1(b) hereof;
(d) the Seller shall have delivered a duly completed and signed transfer
form in favor of the Purchaser or its designee of the TPC Shares, together with
the relative certificates representing 100% of the TPC Shares. The TPC Shares
shall have been, or shall at the Closing Date be, validly delivered and
transferred to the Purchaser, free and clear of any and all Liens, other than as
set forth in the Ocensa Agreement;
(e) the Seller shall have delivered to the Purchaser all of the certificates
representing the Ocensa Shares, free and clear of any Liens granted by
Seller;
(f) no Legal Proceedings shall have been instituted or threatened or claim
or demand made against the Seller or the Purchaser seeking to restrain or
prohibit or to obtain substantial damages with respect to the consummation of
the transactions contemplated hereby, and there shall not be in effect any Order
by a Governmental Body of competent jurisdiction restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated hereby;
(g) the Purchaser and Seller shall have obtained all consents and waivers
referred to in Section 5.6(b) hereof, in a form reasonably satisfactory to the
Purchaser, with respect to the transactions contemplated by this Agreement and
the Seller Documents including, without limitation, the consents required by
Article Ten of the Ocensa Agreement; and
(h) the Seller shall have delivered to the Dividend Trustee in accordance
with Section 4.16 of the Dividend Trust Agreement written notice of the transfer
of the TPC Shares as provided in this Agreement and the Seller shall have caused
to be delivered to such Dividend Trustee valid revocation of any instructions
with regard to the payment of Distributions pursuant to such Dividend Trust
Agreement, including without limitation the instructions dated February 2, 1998.
8.2 Conditions Precedent to Obligations of the Seller. The obligation of
----------------------------------------------------
the Seller to consummate the transactions contemplated by this Agreement is
subject to the fulfillment, on or prior to the Closing Date, of each of the
following conditions (any or all of which may be waived by the Seller in whole
or in part to the extent permitted by applicable Law):
(a) all representations and warranties of the Purchaser contained herein
shall be true and correct in all material respects as of the Closing Date;
(b) the Purchaser shall have performed and complied in all material respects
with all obligations and covenants required by this Agreement to be performed or
complied with by it on or prior to the Closing Date;
(c) the Seller shall have been furnished with certificates (dated the
Closing Date and in form and substance reasonably satisfactory to the Seller)
executed by the Purchaser certifying as to the fulfillment of the conditions
specified in Sections 8.2(a) and 8.2(b) hereof;
(d) the Seller shall have obtained all consents and waivers, if any,
referred to in Section 5.6(b) hereof, in a form reasonably satisfactory to the
Seller, with respect to the transactions contemplated by this Agreement;
(e) no Legal Proceedings shall have been instituted or threatened or claim
or demand made against the Seller or the Purchaser seeking to restrain or
prohibit or to obtain substantial damages with respect to the consummation of
the transactions contemplated hereby, and there shall not be in effect any Order
by a Governmental Body of competent jurisdiction restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated hereby;
and
(f) the Seller has received the Purchase Price in the manner specified in
Section 3.2 hereof.
ARTICLE IX
DOCUMENTS TO BE DELIVERED
9.1 Documents to be Delivered by the Seller.
---------------------------------------------
(a) At the Closing, the Seller shall deliver, or cause to be delivered, to
the Purchaser the following:
(i) share certificates representing the TPC Shares, a share transfer form as
required by the Articles of Association of TPC, and a certified copy of the
Register of Members of TPC showing Purchaser as the registered holder of the TPC
Shares;
(ii) stock certificates representing the Ocensa Shares;
(iii) the certificate referred to in Section 8.1(c) hereof;
(iv) copies of all consents and waivers referred to in Section 8.1(e)
hereof;
(v) the opinions of Walkers and Weil, Gotshal & Manges LLP, counsel to the
Seller, in form and substance reasonably satisfactory to the Purchaser;
(vi) the Seller Documents; and
(vii) such other documents as the Purchaser shall reasonably request.
9.2 Documents to be Delivered by the Purchaser. At the Closing, the
------------------------------------------------
Purchaser shall deliver, or cause to be delivered, to the Seller the following:
(i) the certificate referred to in Section 8.2(c) hereof;
(ii) copies of all consents and waivers referred to in Section 8.1(e)
hereof;
(iii) the opinions of Maples and Calder and Simpson Thacher & Bartlett,
counsel to the Purchaser, in form and substance reasonably satisfactory to the
Seller;
(iv) the Purchaser Documents; and
(v) such other documents as the Seller shall reasonably request.
ARTICLE X
MISCELLANEOUS
10.1 Payment of Sales, Use or Similar Taxes. All sales, use, transfer,
-------------------------------------------
intangible, recordation, documentary stamp or similar Taxes or charges, of any
nature whatsoever, applicable to, or resulting from, the transactions
contemplated by this Agreement shall be borne by the Purchaser.
10.2 Survival of Representations and Warranties. The parties hereto hereby
-------------------------------------------
agree that the representations and warranties and covenants contained in this
Agreement or in any certificate, document or instrument delivered in connection
herewith, shall remain in full force and effect after the Closing Date (except
insofar as they set out obligations that have been fully performed at the
Closing Date).
10.3 Expenses. Each party agrees to pay its own fees, costs and expenses
--------
and those of its representatives, and on or about the Closing Date the Seller
agrees to pay all fees, costs and expenses of TPC and its representatives,
incurred in connection with the negotiation and execution of this Agreement and
the Seller Documents or Purchaser Documents, as applicable, and the consummation
of the transactions contemplated hereby and thereby.
10.4 Further Assurances. The Seller and the Purchaser each agrees to
-------------------
execute and deliver such other documents or agreements and to take such other
action as may be reasonably necessary or desirable for the implementation of
this Agreement and the consummation of the transactions contemplated hereby. At
the Closing, the Seller shall deliver to the Purchaser, TPC or any other
Person designated by TPC or the Purchaser, the statutory books, minute books,
books of account and documents of record of TPC, and all other documents and
property of TPC in the possession of the Seller. Following the Closing, the
Purchaser and the Seller shall each provide the other at Seller's expense with
such assistance as may reasonably be requested by either of them in connection
with the preparation of any financial statement or Tax return.
10.5 Submission to Jurisdiction; Consent to Service of Process.
----------------------------------------------------------------
(a) The parties hereto hereby irrevocably submit to the non-exclusive
jurisdiction of any federal or state court located within the State of New York
over any dispute arising out of or relating to this Agreement or any of the
transactions contemplated hereby and each party hereby irrevocably agrees that
all claims in respect of such dispute or any suit, action or proceeding related
thereto may be heard and determined in such courts. The parties hereby
irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of venue of any
such dispute brought in such court or any defense of inconvenient forum for the
maintenance of such dispute. Each of the parties hereto agrees that a judgment
in any such dispute may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.
(b) Each of the parties hereto hereby consents to process being served by
any party to this Agreement in any suit, action or proceeding by the mailing of
a copy thereof in accordance with the provisions of Section 10.9.
10.6 Entire Agreement; Amendments and Waivers. This Agreement (together
--------------------------------------------
with any documents referred to herein or executed contemporaneously by the
parties in connection herewith) constitutes the whole arrangement between the
parties hereto and supersedes any previous agreements or arrangements between
them relating to the subject matter hereof. No amendment to this Agreement
shall be effective unless made in writing and signed by duly authorized
representatives of the Purchaser and the Seller.
10.7 Governing Law. THE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
--------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT
OF LAWS PROVISIONS THEREOF.
10.8 Table of Contents and Headings. The table of contents and section
----------------------------------
headings of this Agreement are for reference purposes only and are to be given
no effect in the construction or interpretation of this Agreement.
10.9 Notices. All notices and other communications under this Agreement
-------
shall be in writing and shall be deemed given when delivered personally or
mailed by certified mail, return receipt requested, to the parties (and shall
also be transmitted by facsimile to the Persons receiving copies thereof) at the
following addresses (or to such other address as a party may have specified
by notice given to the other party pursuant to this provision):
If to Seller, to:
The Strategic Transaction Company
Elizabethan Square
P.O. Box 1984
George Town, Grand Cayman
Cayman Islands, B.W.I.
Attention: Ms. Marlene Blake
Telephone: (809) 949-8244
Telecopy: (809) 949-8178
If to the Purchaser, to:
Triton International Petroleum, Inc.
c/o Triton Energy
6688 North Central Expressway
Suite 1400
Dallas, TX 75206
Attention: Legal Department
Telephone: (214) 691-5200
Telecopy: (214) 691-0198
10.10 Severability. If any provision of this Agreement is invalid or
------------
unenforceable, the balance of this Agreement shall remain in effect.
10.11 Binding Effect; Assignment. This Agreement shall be binding upon and
---------------------------
inure to the benefit of the parties and their respective successors and
permitted assigns. Nothing in this Agreement shall create or be deemed to
create any third party beneficiary rights in any Person not a party to this
Agreement except as provided in Section 10.3 hereof and this Section 10.11. No
assignment of this Agreement or of any rights or obligations hereunder may be
made by either the Seller or the Purchaser (by operation of Law or otherwise)
without the prior written consent of the other party hereto and any attempted
assignment without the required consents shall be void. Upon any such permitted
assignment, the references in this Agreement to the Purchaser shall also
apply to any such assignee unless the context otherwise requires.
10.12 Counterparts. This Agreement may be executed in counterparts, each of
------------
which shall constitute an original, but all of which shall together
constitute one Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first written above.
THE STRATEGIC TRANSACTION COMPANY
By:
Name:
Title:
TRITON INTERNATIONAL PETROLEUM, INC.
By:
Name:
Title:
AGREED AND ACCEPTED:
TRITON PIPELINE COLOMBIA, INC.
By:
Name:
Title:
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