<PAGE> 1
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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, 1997
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 000-20849
RUTHERFORD-MORAN OIL CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<C> <C>
DELAWARE 76-0499690
(State or other jurisdiction (I.R.S. Employer
incorporation of organization) Identification No.)
</TABLE>
5 GREENWAY PLAZA, SUITE 220, HOUSTON, TEXAS 77046
(Address of principal executive offices and zip code)
(713) 622-5555
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last
report)
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 has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
As of May 9, 1997, there were 25,659,338 shares of common stock, $.01 par
value, of the registrant outstanding.
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RUTHERFORD-MORAN OIL CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, 1997 MARCH 31, 1996
-------------- --------------
<S> <C> <C>
Revenues:
Oil and Gas Revenue....................................... $ 4,729 $ --
Interest Income........................................... 28 --
----------- -----------
Total Revenues.................................... 4,757 --
Expenses:
Operating expense......................................... 3,326 --
Interest expense.......................................... 918 414
Depreciation, depletion and amortization.................. 2,452 2
Salaries and wages........................................ 262 35
General and administrative................................ 1,185 53
----------- -----------
Total Expenses.................................... 8,143 504
----------- -----------
Net loss before taxes............................. (3,386) (504)
Income tax benefit.......................................... (1,294) --
----------- -----------
Net loss.......................................... $ (2,092) $ (504)
=========== ===========
Net loss per share................................ $ (0.08) $ (0.02)
=========== ===========
Weighted average number of common shares outstanding........ 25,653,205 21,726,244
=========== ===========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
1
<PAGE> 3
RUTHERFORD-MORAN OIL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
ASSETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
----------- ------------
(UNAUDITED)
<S> <C> <C>
Current assets:
Cash and cash equivalents................................. $ 1,499 $ 444
Accounts receivable....................................... 5,426 --
Inventory................................................. 4,111 --
Value added tax refund receivable......................... 4,668 2,806
Joint interest receivables................................ 1,272 150
Other..................................................... 497 17
-------- --------
Total current assets.............................. 17,473 3,417
Property and equipment, at cost:
Oil and gas properties (full cost method)................. 179,374 123,300
Office furniture and fixtures............................. 202 197
Accumulated depreciation, depletion and amortization...... (2,487) (37)
-------- --------
Net property and equipment........................ 177,089 123,460
Other assets:
Deferred financing costs.................................. 2,089 2,089
Accumulated amortization.................................. (682) (541)
-------- --------
Deferred financing costs.......................... 1,407 1,548
Deferred charges.......................................... 1,788 1,400
-------- --------
Total assets...................................... $197,757 $129,825
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities.................. $ 8,915 $ 852
Joint interest payable.................................... 7,891 2,715
-------- --------
Total current liabilities......................... 16,806 3,567
Note payable to bank........................................ 72,574 22,842
Deferred taxes.............................................. 7,972 1,391
Premium on written option................................... 1,788 1,400
Stockholders' equity:
Preferred stock, $0.01 par value, 10,000,000 shares
authorized, no shares issued and outstanding...........
Common stock, $0.01 par value, 40,000,000 shares
authorized, 25,654,338 and 25,651,338 shares issued and
outstanding at March 31, 1997 and December 31, 1996,
respectively........................................... 256 256
Additional paid-in capital................................ 103,211 103,143
Accumulated deficit....................................... (3,808) (1,716)
Deferred compensation..................................... (1,042) (1,058)
-------- --------
Total stockholders' equity........................ 98,617 100,625
-------- --------
Total liabilities and stockholders' equity................ $197,757 $129,825
======== ========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
2
<PAGE> 4
RUTHERFORD-MORAN OIL CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
MARCH 31, 1997 MARCH 31, 1996
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net loss.................................................. $ (2,092) $ (504)
Adjustments to reconcile net loss to cash flows provided
by (used in) operating activities:
Depreciation, depletion and amortization............... 2,676 2
Deferred income taxes.................................. (1,294) --
Changes in working capital............................. 899 (1,252)
-------- --------
Cash flows provided by (used in) operating activities....... 189 (1,754)
-------- --------
Cash flows from investing activities:
Investment in oil and gas properties...................... (19,447) (9,670)
Investment in Maersk, net of cash acquired................ (29,414) --
Other capital expenditures................................ (5) (25)
-------- --------
Cash flows used in investing activities................ (48,866) (9,695)
-------- --------
Cash flows from financing activities:
Borrowings under bank notes............................... 49,732 13,550
Repayment of bank notes................................... -- (9,035)
-------- --------
Cash flows provided by financing activities............ 49,732 4,515
-------- --------
Net increase (decrease) in cash and cash equivalents... 1,055 (6,934)
Cash and cash equivalents, beginning of period.............. 444 9,831
-------- --------
Cash and cash equivalents, end of period.................... $ 1,499 $ 2,897
======== ========
Supplemental disclosures of interest paid in cash........... $ 146 $ 284
======== ========
Supplemental disclosures of noncash investing and financing
activities:
Capitalization of amortized loan acquisition costs........ $ -- $ 126
======== ========
Premium deferred and premium on written options........... $ 388 $ --
======== ========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
3
<PAGE> 5
RUTHERFORD-MORAN OIL CORPORATION
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited consolidated financial statements include all
adjustments necessary to present fairly the consolidated financial position of
Rutherford-Moran Oil Corporation ("RMOC" or the "Company") at March 31, 1997 and
December 31, 1996, and its results of operations and cash flows for the three
months ended March 31, 1997 and 1996. The financial statements herein should be
read in conjunction with the consolidated financial statements and notes to the
consolidated financial statements as of and for the year ended December 31,
1996, as included in the Company's annual report and Form 10-K.
(2) ORGANIZATION
Rutherford-Moran Exploration Company ("RMEC") was formed on September 21,
1990, for the purpose of holding an interest in an oil and gas concession in
Thailand through Thai Romo Limited ("Thai Romo"). RMEC paid all of the expenses
of the concession on behalf of Thai Romo through November 4, 1993.
Effective September 24, 1990, the stockholders of RMEC elected to have it
treated as a Subchapter S Corporation under the Internal Revenue Code of 1986,
as amended. As such, RMEC did not incur federal income taxes at the corporate
level prior to June 18, 1996, and its taxable income or loss was passed through
to its stockholders based on their interests.
In June 1991, Thai Romo was organized as a foreign corporation under the
laws of the Kingdom of Thailand for the purpose of holding an interest in an oil
and gas concession. In August 1991, Thai Romo, with two other companies, was
awarded Petroleum Concession 1/2534/36 (the "Concession"), offshore Block B8/32
in the Gulf of Thailand from the Ministry of Industry in Thailand to explore for
petroleum. A subsidiary of Pogo Producing Company is the operator of the
Concession. In November 1993, Thai Romo amended its Articles of Association so
that it would be treated as a partnership for U.S. income tax purposes. As such,
Thai Romo was not subject to federal income taxes from November 1993 to June 17,
1996. Income and losses earned by Thai Romo were passed through to the partners
on the basis of their interest in Thai Romo.
As RMEC and Thai Romo are now part of the Company's consolidated tax
return, RMEC and Thai Romo recorded a deferred tax liability and expense of
$1,921,000 on June 17, 1996 representing the difference between the book basis
and tax basis of its foreign oil and gas properties.
(3) PRINCIPLES OF PRESENTATION
In April 1996, Rutherford/Moran Oil Corporation changed its name to RMEC.
Effective June 17, 1996, the stockholders of RMEC and the partners of Thai Romo
exchanged their interests for shares of common stock of the newly formed entity,
RMOC. RMOC is the parent company of RMEC and Thai Romo Holdings, Inc. ("TRH").
RMEC and TRH collectively own the outstanding shares of Thai Romo. During June
1996, RMOC sold 16% of its common stock in an initial public offering (the
"Offering") in conjunction with the consummation of the exchange of RMEC common
stock and Thai Romo interests for common stock of RMOC. In conjunction with the
Offering, RMEC redeemed for $12.4 million approximately 56,000 shares of its
common stock from Patrick R. Rutherford and John A. Moran, majority stockholders
of RMEC (the "Redemption"), exercised RMEC's call option on 3% of the partners'
interest in Thai Romo held by Red Oak Holdings, Inc. for $3.1 million and repaid
outstanding debt of $62 million owed stockholders and banks. On June 18, 1996,
the stockholders' equity accounts were adjusted to reflect the deficit
accumulated during the development stage to additional paid-in capital upon RMEC
and Thai Romo becoming subject to federal income taxes. During July 1996, an
additional 2.4% of RMOC's common stock was sold when the underwriters exercised
their over-allotment option.
4
<PAGE> 6
RUTHERFORD-MORAN OIL CORPORATION
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The consolidated financial statements for 1997 include the accounts of
RMOC, its wholly owned subsidiaries, RMEC, TRH, Thai Romo and Thai-Tex Insurance
Company, Inc., and its proportionate ownership of B8/32 Partners, Limited
("B8/32 Partners"), in which RMOC owns 46.34% of the outstanding voting shares.
All material intercompany accounts and transactions have been eliminated in the
consolidation.
The financial statements for the three months ended March 31, 1996, include
the accounts of RMEC and Thai Romo (combined). All material intercompany
accounts and transactions have been eliminated in the combination. The combined
financial statements are presented due to the commonality of the stockholders
and partners of RMEC and Thai Romo.
During the period from September 21, 1990, through December 31, 1996, the
Company was considered a development stage company and its sole activity was the
development of Block B8/32 in the Gulf of Thailand. Production from the Tantawan
Field commenced in February 1997, at which time the Company was no longer
considered a development stage company.
(4) OIL AND GAS PROPERTY ACQUISITION
On December 19, 1996, the Company, through its wholly owned subsidiary,
Thai Romo, exercised its preferential right to purchase 46.34% of the
outstanding shares of Maersk Oil (Thailand) Limited ("MOTL"), a wholly owned
subsidiary of Maersk Olie og Gas AS of Copenhagen, Denmark ("Maersk"). MOTL is a
former co-concessionaire in Block B8/32 owning a 31.67% interest. The purchase
was consummated on March 3, 1997, with TRH, a wholly owned subsidiary of the
Company and Thai Romo's nominee under the Share Sales Agreement with Maersk,
purchasing the shares for $28,617,000, which included $1,554,000 in satisfaction
of outstanding debt. After the closing, MOTL was renamed B8/32 Partners.
The remaining 53.66% of MOTL's stock was purchased by Thaipo Limited
("Thaipo"), a subsidiary of Pogo Producing Company ("Pogo"), and by Palang
Sophon Limited ("Palang") of Bangkok, Thailand. Thaipo, Palang and MOTL were
co-concessionaires with Thai Romo prior to the sale of MOTL. As a result of the
purchase, RMOC now effectively owns a uniform interest of 46.34% in the entire
Block.
While the entire purchase price of the acquisition has been capitalized,
the amount will be allocated between proven properties and unproven properties.
Production from the properties acquired is anticipated to commence in early 1999
after the development plan is completed. Finalization of the purchase price
allocation is pending the receipt of certain requested information from the
seller, fair value appraisals, and analysis of reserves estimates by the
Company.
The Company financed the purchase of MOTL by utilizing borrowings under its
Revolving Credit Facility ("Revolving Credit Facility") and $20,000,000 from a
new Credit Agreement entered into with Chase Manhattan Bank ("Chase"), which
matures on the earlier of June 30, 1997, or the redetermination of the borrowing
base in the Company's Revolving Credit Facility.
(5) CREDIT FACILITY
On September 20, 1996, the Company entered into a $150,000,000 Revolving
Credit Facility with a group of commercial lenders. The Revolving Credit
Facility has a final maturity of September 30, 1999, and an initial borrowing
base limitation of $60,000,000. The Revolving Credit Facility is secured by the
stock of certain subsidiaries of the Company.
Under the terms of the Revolving Credit Facility, outstanding borrowings
will bear interest at the Base Rate (defined as the greater of the Federal Funds
Rate plus .5% or the agent bank's prime rate) plus .25% or the Eurodollar Rate
(defined as an average of the London Interbank Offered Rate ("LIBOR") of two
banks)
5
<PAGE> 7
RUTHERFORD-MORAN OIL CORPORATION
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
plus 1.75%, at the Company's option. Interest is payable quarterly. The Company
is also assessed a commitment fee equal to .5% per annum on the average daily
balance of the unused borrowing base. The Revolving Credit Facility provides for
semi-annual borrowing base redeterminations as well as certain restrictions,
including limitations on additional indebtedness, payment of dividends and
maintenance of an interest coverage ratio.
At March 31, 1997, $52,573,000 was outstanding under the Revolving Credit
Facility at interest rates ranging from 7.125% to 7.4375% per annum.
On February 25, 1997, the Company entered into a Credit Agreement with
Chase for an additional borrowing of $20,000,000, which matures on the earlier
of June 30, 1997, or the redetermination of the borrowing base in the Revolving
Credit Facility. This Credit Agreement contains covenants substantially
identical to those in the Revolving Credit Facility. Under the terms of the
Credit Agreement, the outstanding borrowing will bear interest at the Base Rate
(defined as the Chase prime rate plus .75%). On April 15, 1997, the Company
amended the Credit Agreement to allow for an additional borrowing of $5,000,000.
At March 31, 1997, $20,000,000 was outstanding under the Credit Agreement at an
interest rate of 9.25%.
On April 29, 1997, the borrowing base in the Revolving Credit Facility was
redetermined to $120,000,000. As a result, the Company repaid the amount due
under the Credit Agreement with additional borrowings under the Revolving Credit
Facility.
(6) CRUDE OIL HEDGING ACTIVITIES
During the first quarter of 1996, the Company entered into crude oil price
swaps with an affiliate of its lender. While the swaps are intended to reduce
the Company's exposure to declines in the market price of crude oil, they may
limit the Company's gain from increases in the market price. At March 31, 1997,
the crude oil price swap agreements incorporated one million barrels ("MMBbl")
of oil volumes from April through December 1997 at a weighted average price of
$15.92 per Bbl and 1.75 MMBbl of oil volumes from January through December 1998
at a weighted average price of $15.92 per Bbl.
At the same time, the Company sold to an affiliate of the lender an option
to purchase 1.25 MMBbl of aggregate oil volumes from January through December
1999 at a price of $18.30 per Bbl. The Company has accounted for the swap option
separately as it does not qualify as a hedge. At March 31, 1997, the Company
estimates the fair market value of this position to be $1,788,000 and has
recorded the amount both as a liability and a deferred asset on the consolidated
balance sheet. Subsequent to March 31, 1997, the liability will be adjusted to
reflect current market value, with unrealized gains and losses being recognized
in income, while the deferred cost of $1,788,000 will be amortized into income
as hedged volumes expire.
The fair value of the swap and the swap option at May 2, 1997, is a
liability of $6,287,000, and $1,400,000, respectively.
(7) REVENUE RECOGNITION
With initial production and a long-term crude oil sales agreement, the
Company has changed its method of accounting for crude oil inventory from the
cost of production method to the estimated net realizable value method.
Accordingly, crude oil revenues are recorded at the estimated net realizable
value. The change to the estimated net realizable value method did not have an
impact on previously reported financial results.
(8) FOREIGN TRANSLATION GAIN/LOSS
The Company follows SFAS 52, "Foreign Currency Translation", which requires
that business transactions and foreign operations recorded in a foreign currency
be restated in U.S. dollars, which is the Company's
6
<PAGE> 8
RUTHERFORD-MORAN OIL CORPORATION
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
functional currency. The assets and liabilities of the Company's foreign
operations are translated into U.S. dollars at current exchange rates and
resulting translation adjustments are reflected as a separate component of
stockholders' equity.
Revenues and expenses are translated at an average exchange rate for the
month. Transaction gains and losses that arise from exchange rate fluctuations
on transactions denominated in a currency other than the functional currency are
included in the results of operations as incurred. The gain and/or loss for the
three months ended March 31, 1997, is immaterial.
(9) OIL AND GAS PROPERTY AND EQUIPMENT
The Company and its subsidiaries follow the full cost method of accounting
for its investment in oil and gas properties. Under this method of accounting,
all costs of acquisition, exploration and development of oil and natural gas
reserves are capitalized into a "full cost pool" as incurred. Properties in the
pool are depleted and charged to operations utilizing the unit-of-production
method based on the ratio of current production to total proved oil and natural
gas reserves.
Interest in connection with expenditures on major exploration projects is
capitalized. During the three month period ending March 31, 1997, $204,000 of
interest was capitalized.
7
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the audited
consolidated financial statements as of and for the year ended December 31,
1996, included in the Company's annual report on Form 10-K.
OVERVIEW
Oil and gas production commenced February 1, 1997, at which time the
Company was no longer considered a development stage company.
The Company and its subsidiaries follow the full cost method of accounting
for its investment in oil and gas properties. Under this method of accounting,
all costs of acquisition, exploration and development of oil and natural gas
reserves are capitalized into a "full cost pool" as incurred. Properties in the
pool are depleted and charged to operations utilizing the unit-of-production
method based on the ratio of current production to total proved oil and natural
gas reserves.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1997, Compared with Three Months Ended March 31,
1996.
The Company's net loss of $2,092,000 or $0.08 per share for the three
months ended March 31, 1997, increased from the Company's net loss of $504,000
or $0.02 per share for the three months ended March 31, 1996, primarily due to
the commencement of production operations on February 1, 1997. As production
began, charges for operating expense and depletion more than offset initial
revenues during February 1997 as operating expenses are incurred upon start-up
while revenues increase gradually. Interest expense, salaries and wages, and
general and administrative expenses also increased in 1997 due to increased
activity levels, partially offset by interest income and an income tax benefit.
The Company's total revenues for the three months ended March 31, 1997,
were $4,757,000 as compared to no revenues previously. Initial oil and gas
revenues were $4,729,000 and interest income was $28,000 for the current period.
The Company recorded oil and gas revenues based upon weighted average oil and
gas prices of $20.42/Bbl and $1.73 per MCF of gas, respectively. The gas price
received for the quarter was impacted by receipt of 75% of the contract price
for natural gas purchased by the Petroleum Authority of Thailand from start up
until March 15, 1997, when Thai Romo and its partners passed the production
run-in test.
Production volumes for the first quarter of 1997, net of royalties, were
99,000 barrels of oil and 1,563,000 MCF of gas, respectively.
Operating expenses incurred for the three months ended March 31, 1997, were
$3,326,000 as compared to no operating expenses previously.
Depreciation, depletion and amortization expense recorded for the three
months ended March 31, 1997, was $2,452,000 as compared to $2,000 for the three
months ended March 31, 1996. This increase is due to the commencement of
production during February 1997.
Interest expense of $918,000 for the three months ended March 31, 1997,
increased compared to $414,000 for the three months ended March 31, 1996. This
increase is due to an increase in borrowings and the amortization of deferred
financing costs. Outstanding debt at March 31, 1997, was $72,574,000 as compared
to $47,673,000 at March 31, 1996. During the three months ended March 31, 1997,
$204,000 of interest expense was capitalized to unproved properties.
Salaries and wages and general administrative expenses of $262,000 and
$1,185,000, respectively, for the three months ended March 31, 1997, increased
compared to $35,000 and $53,000, respectively, for the three months ended March
31, 1996. This increase is primarily due to the capitalization of a greater
portion of salaries and wages and costs in 1996 compared to 1997, when
capitalization of such expenses terminated. Additionally, there was an increase
in personnel during the third and fourth quarters of 1996 resulting in higher
administrative costs for the first quarter 1997 compared to 1996.
8
<PAGE> 10
As a result of the initial public offering in June 1996, the Company became
a taxable entity and recorded a one-time charge of $1,921,000, representing the
difference between the book and tax basis of its foreign oil and gas properties.
LIQUIDITY AND CAPITAL RESOURCES
On September 20, 1996, the Company entered into a $150,000,000 Revolving
Credit Facility with a group of commercial lenders. The Revolving Credit
Facility has a final maturity of September 30, 1999, and an initial borrowing
base limitation of $60,000,000. The Revolving Credit Facility is secured by the
stock of certain subsidiaries of the Company. At March 31, 1997, $52,574,000 was
outstanding under the Revolving Credit Facility at interest rates ranging from
7.125% to 7.4375%.
On February 25, 1997, the Company entered into a Credit Agreement with
Chase for an additional borrowing of $20,000,000, which matures on the earlier
of June 30, 1997, or the redetermination of the borrowing base in the Revolving
Credit Facility. This Credit Agreement contains covenants substantially
identical to those in the Revolving Credit Facility. On April 15, 1997, the
Company amended the Credit Agreement to allow for an additional borrowing of
$5,000,000. At March 31, 1997, $20,000,000 was outstanding under the Credit
Agreement at an interest rate of 9.25%.
On April 29, 1997, the borrowing base in the Revolving Credit Facility was
redetermined to $120,000,000. As a result, the Company repaid the amount due
under the Credit Agreement with additional borrowings under the Revolving Credit
Facility.
Until March 1997, the Company funded its operations from proceeds of its
initial public offering and bank borrowings. During the remainder of 1997, the
Company expects to fund its obligations through net cash flow from operations
and incremental borrowings.
CHANGING OIL PRICES
The Company is dependent on crude oil prices, which have historically been
volatile. The Company may use crude oil price swaps and other similar
arrangements to hedge against potential adverse effects of fluctuations in
future prices for the Company's future oil production. While the swaps are
intended to reduce the Company's exposure to declines in the market price of
crude oil, they may limit the Company's gain from increases in the market price.
EARNINGS PER SHARE
Effective December 1997, the Company will be required to adopt Statement of
Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS 128"). SFAS
128 introduces the concept of basic earnings per share, which represents net
income divided by the weighted average common shares outstanding -- without the
dilutive effects of common stock equivalents (options, warrants, etc.). Diluted
earnings per share, giving effect for common stock equivalents, will be reported
when SFAS 128 is adopted in the fourth quarter of 1997.
9
<PAGE> 11
PART II -- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.1 -- Amendment to Credit Agreement dated February 25, 1997
27 -- Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K
During the three month period ended March 31, 1997, the Company filed a
current report on Form 8-K dated March 3, 1997, relating to the purchase by the
Company (through its subsidiary) of its proportionate interest in B8/32
Partners.
10
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: May 15, 1997 RUTHERFORD-MORAN OIL CORPORATION
By: /s/ DAVID F. CHAVENSON
-------------------------------------
David F. Chavenson
Vice President, Finance and Chief
Financial Officer and Treasurer
11
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.1 -- Amendment to Credit Agreement dated February 25, 1997
27 -- Financial Data Schedule
</TABLE>
12
<PAGE> 1
EXHIBIT 10.1
AMENDMENT NO. 1
AMENDMENT NO. 1 dated as of April 15, 1997 (this "Amendment"),
between RUTHERFORD--MORAN OIL CORPORATION, a Delaware corporation (the
"Borrower"); RUTHERFORD--MORAN EXPLORATION COMPANY, a Delaware corporation;
THAI ROMO HOLDINGS, INC., a Delaware corporation; THAI ROMO LIMITED, a company
organized under the laws of the Kingdom of Thailand (collectively, the
"Subsidiary Guarantors"); and The Chase Manhattan Bank, a New York State
banking corporation (the "Bank").
The Borrower, the Subsidiary Guarantors and the Bank are
parties to a Credit Agreement dated as of February 26, 1997 (the "Credit
Agreement"), providing, subject to the terms and conditions thereof, for a loan
to be made by the Bank to the Borrower in a principal amount up to but not
exceeding $20,000,000. The Borrower, the Subsidiary Guarantors and the Bank
wish to amend the Credit Agreement in certain respects, and accordingly, the
parties hereto agree as follows:
Section 1. Definitions. Except as otherwise defined in this
Amendment No. 1, terms defined in the Credit Agreement are used herein as
defined therein.
Section 2. Amendments. Subject to the satisfaction of the
conditions precedent specified in Section 4 below, but effective as of the date
hereof, the Credit Agreement shall be amended as follows:
2.01. References in the Credit Agreement (including
references to the Credit Agreement as amended hereby) to "this Agreement" (and
indirect references such as "hereunder", "hereby", "herein" and "hereof") shall
be deemed to be references to the Credit Agreement as amended hereby.
2.02. The definition of "Commitment" in Section 1.01 of the
Credit Agreement is amended by deleting $20,000,000 from the third line and
substituting $25,000,000 in place thereof.
2.03. The definition of ""Scheduled Commitment
Termination Date" is deleted and replaced as follows: "Scheduled Commitment
Termination Date" shall mean three Business Days after the date of this
Amendment.
2.04. The following definition is hereby added in
alphabetical order in Section 1.01 of the Credit Agreement:
"Thai-Tex" shall mean Thai-Tex Insurance Company, a captive
insurance company organized under the laws of the State of Hawaii, and a
wholly-owned Subsidiary of the Borrower.
2.05. Section 8.21 of the Credit Agreement is amended by (x)
deleting the word "the" at the end of the first line and inserting in place
thereof "$20,000,000 of" and (y) adding the following sentence at the end of
Section 8.21:
<PAGE> 2
"Proceeds of the Loan hereunder in excess of $20,000,000 may
be used for general corporate purposes of the Borrower or any
Subsidiary Guarantor."
2.06. Section 9.04 of the Credit Agreement is amended by
adding immediately after the words "similarly situated," the words "and may
reinsure such risks with Thai-Tex".
2.07. Section 9.07 of the Credit Agreement is amended by
(x) deleting the word "and" at the end of clause (j) therein and (y) adding a
new clause (k) as follows:
"(k) Indebtedness of Thai-Tex in respect of loans and
advances made as permitted by Section 9.08(j); and"
and (z) changing existing clause "(k)" therein to clause "(l)".
2.08. Section 9.08 of the Credit Agreement is amended by (x)
deleting the word "and" at the end of clause (i) therein and (y) adding a new
clause (j) as follows:
"(j) loans and advances by the Borrower to Thai-Tex, up to
but not exceeding $3,000,000 in the aggregate, and
Investments by the Borrower in common stock of
Thai-Tex and other capital contributions by the
Borrower to Thai-Tex up to but not exceeding $500,000
in the aggregate; and"
and (z) changing existing clause "(j)" therein to clause "(k)".
2.09. Section 9.11 of the Credit Agreement is hereby amended
by adding the following sentence at the end of Section 9.11:
"Notwithstanding the foregoing, Thai-Tex may engage in the
business of a reinsurance captive."
2.10. Section 9.13 of the Credit Agreement is amended by
adding ", (j) and (k)" immediately following the phrase "Section 9.08(g)"
therein.
Section 3. Representations and Warranties. Each of the
Borrower and the Subsidiary Guarantors represents and warrants to the Bank that
after giving effect to this Amendment No. 1 and the making of the additional
Loan contemplated hereunder,
(a) no Default shall have occurred and be continuing; and
(b) the representations and warranties made by the
Obligors in Section 8 of the Credit Agreement and by each
-2-
<PAGE> 3
Obligor in each of the Basic Documents to which such Obligor
is a party, are true and correct on and as of the date hereof
with the same force and effect as if made on and as of the
date hereof (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as
of such specific date).
Section 4. Conditions Precedent. The amendments to the
Credit Agreement set forth in Section 2 hereof shall become effective, as of
the date hereof, upon the satisfaction of the following conditions precedent:
4.01. Execution by All Parties. This Amendment No. 1 shall
have been executed and delivered by the Borrower, each of the Subsidiary
Guarantors and the Bank.
4.02 New Note. The Borrower hereby agrees to deliver to
the Bank a new promissory note (the "New Note") duly completed in accordance
with Section 2.05 of the Credit Agreement in extension, renewal and
substitution of the Note previously delivered by the Borrower to the Bank.
4.03 Opinion of Counsel. Delivery of an opinion, dated
the date of this Amendment, of Fulbright & Jaworski LLP, special New York
counsel to the Obligors, substantially in the form of Exhibit A hereto and
covering such other matters as the Bank may reasonably request (and each
Obligor hereby instructs such counsel to deliver such opinions to the Bank).
4.04. Other Documents. The Bank shall have received such
documents as the Bank or special New York counsel to the Bank may reasonably
request.
Section 5. Miscellaneous. Except as herein provided, the
Credit Agreement shall remain unchanged and in full force and effect. This
Amendment No. 1 may be executed in any number of counterparts, all of which
taken together shall constitute one and the same amendatory instrument and any
of the parties hereto may execute this Amendment No. 1 by signing any such
counterpart. This Amendment No. 1 shall be governed by, and construed in
accordance with, the laws of the State of New York.
-3-
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 1 to be duly executed and delivered as of the day and year first
above written.
BORROWER
--------
RUTHERFORD--MORAN OIL CORPORATION
By /s/ David F. Chavenson
-----------------------------------
Title: Vice President
SUBSIDIARY GUARANTORS
---------------------
RUTHERFORD--MORAN
EXPLORATION COMPANY
By /s/ David F. Chavenson
-----------------------------------
Title: Vice President
THAI ROMO HOLDINGS, INC.
By /s/ David F. Chavenson
-----------------------------------
Title: Vice President
THAI ROMO LIMITED
By /s/ David F. Chavenson
-----------------------------------
Title: Vice President
THE BANK
--------
THE CHASE MANHATTAN BANK
By /s/ Martha Fetner
-----------------------------------
Title: Vice President
-4-
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0
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