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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date or Report (Date of earliest event reported)
APRIL 24, 1998
EEX CORPORATION
(Exact name of Registrant as specified in its charter)
TEXAS 1-12905 752421863
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
2500 CityWest Boulevard, Suite 1400, Houston, Texas 77042
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including Area Code (713) 243-3100
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ITEM 2. ACQUISITION OR DISPOSITION OF PROPERTIES
(a) Sale of East Texas Properties
On April 24, 1998, the previously announced sale of East Texas
producing oil and gas properties to Cross Timbers Oil Company was
completed. These properties represented proven reserves of
approximately 220 billion cubic feet equivalent of natural gas and
were sold for $235 million. The effective date of the sale was
January 1, 1998. As a part of the sale, EEX retained an obligation
existing under agreements with Encogen One Partners, Ltd. Proceeds
from the sale were used to fund the purchase of additional interests
in Indonesia and to provide additional financial flexibility.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro Forma Financial Information.
The following unaudited pro forma financial statements give effect to
the sale of the East Texas properties and the application of the net
proceeds as described in footnote (a). The unaudited condensed
consolidated pro forma balance sheet as of December 31, 1997 is based
on the historical balance sheet of EEX and is presented as if the sale
had occurred on that date. The unaudited pro forma statement of
consolidated operations for the year ended December 31, 1997 assumes
that the sale occurred at the beginning of 1997.
The unaudited condensed pro forma statement of consolidated operations
is not necessarily indicative of the financial results that would have
occurred had the sale of the East Texas properties been consummated on
the indicated date, nor is it necessarily indicative of future
financial results.
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EEX CORPORATION
UNAUDITED CONDENSED CONSOLIDATED PRO FORMA BALANCE SHEET
December 31, 1997
<TABLE>
<CAPTION>
Pro Forma
EEX Adjustments(a) Pro Forma
---------- ------------ ---------
(In thousands)
<S> <C> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents.......................... $ 3,790 $ 105,000 $ 108,790
Accounts receivable - trade........................ 57,925 57,925
Other.............................................. 11,545 11,545
---------- --------- --------
Total current assets.............................. 73,260 105,000 178,260
---------- --------- --------
Property, Plant and Equipment (at cost)
Gas and oil properties(successful efforts method).. 1,882,097 (622,542) 1,259,555
Other.............................................. 19,581 19,581
---------- --------- --------
Total............................................. 1,901,678 (622,542) 1,279,136
Less accumulated depreciation and amortization..... 1,192,691 (387,542) 805,149
---------- --------- --------
Net property, plant and equipment............... 708,987 (235,000) 473,987
---------- --------- --------
Deferred Income Tax Benefit......................... 20,238 20,238
---------- --------- --------
Other Assets........................................ 5,304 5,304
---------- --------- --------
Total........................................... $807,789 $(130,000) $677,789
========== ========= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable - trade........................... 108,616 108,616
Short term borrowings.............................. 5,000 (5,000)
Current portion of capital lease obligations....... 8,418 8,418
Other.............................................. 10,031 10,031
---------- --------- --------
Total current liabilities....................... 132,065 (5,000) 127,065
---------- --------- --------
Bank Revolving Credit Agreement..................... 25,000 (25,000)
---------- --------- --------
Capital Lease Obligations........................... 233,317 233,317
---------- --------- --------
Other Liabilities................................... 42,744 42,744
---------- --------- --------
Minority Interests in
Preferred Securities of Subsidiary................. 100,000 (100,000)
---------- --------- --------
Common Shareholders' Equity
Common stock and paid in capital................... 571,764 571,764
Retained earnings (deficit)........................ (293,772) (293,772)
Unamortized restricted stock compensation.......... (2,877) (2,877)
Treasury stock..................................... (452) (452)
---------- --------- --------
Common shareholders' equity..................... 274,663 274,663
---------- --------- --------
Total........................................... $ 807,789 $(130,000) $677,789
========== ========= ========
</TABLE>
See accompanying Notes.
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EEX CORPORATION
UNAUDITED PRO FORMA CONDENSED STATEMENT OF CONSOLIDATED OPERATIONS
Year Ended December 31, 1997
<TABLE>
<CAPTION>
Pro Forma
EEX Adjustments(b) Pro Forma
---------- ------------ ---------
(In thousands, except per share amounts)
<S> <C> <C> <C>
Revenues
Natural gas....................................... $199,754 $ (67,060) $132,694
Oil and condensate................................ 91,029 (6,683) 84,346
Natural gas liquids............................... 9,161 (370) 8,791
Cogeneration operations........................... 13,297 13,297
Other............................................. 972 972
-------- --------- --------
Total............................................ 314,213 (74,113) 240,100
-------- --------- --------
Costs and Expenses
Production and operating.......................... 48,960 (6,742) 42,218
Exploration....................................... 70,599 70,599
Depreciation and amortization..................... 144,485 (24,987) 119,498
Impairment of producing oil and gas properties.... 260,112 (118,860) 141,252
(Gain) on sales of property, plant and equipment.. (52,917) (52,917)
Unusual charges................................... 27,105 27,105
Cogeneration operations........................... 10,381 10,381
General, administrative and other................. 28,485 28,485
Taxes, other than income.......................... 17,356 (5,133) 12,223
-------- --------- --------
Total............................................ 554,566 (155,722) 398,844
-------- --------- --------
Operating (Loss)................................... (240,353) 81,609 (158,744)
Other Income - Net................................. 301 301
Interest Income.................................... 574 679 1,253
Interest and Other Financing Costs................. (30,645) 11,642 (19,003)
-------- --------- --------
(Loss) Before Income Taxes......................... (270,123) 93,930 (176,193)
Income Taxes (Benefit)............................. (58,945) 32,876 (26,069)
Minority Interest.................................. (4,925) 4,925
-------- --------- --------
Net (Loss)......................................... $(216,103) $ 65,979 $(150,124)
======== ========= ========
Basic and Diluted Net (Loss) Per Share............. $ (1.71) $ 0.52 $ (1.19)
======== ========= ========
Weighted Average Shares Outstanding................ 126,641 126,641 126,641
======== ========= ========
</TABLE>
See accompanying Notes.
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EEX CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(a) Pro forma adjustments to the unaudited condensed consolidated balance sheet
as of December 31, 1997 reflect use of proceeds of $235 million to repay
outstanding debt, redeem preferred securities of subsidiary and invest the
remaining $105 million in short term investments. Also reflected is the
retirement of applicable property, plant and equipment and related
accumulated depreciation and amortization.
(b) Pro forma adjustments to the unaudited condensed statement of consolidated
operations for the year ended December 31, 1997 reflect reversal of oil and
gas revenues and related costs and expenses for sold properties and
adjustment of interest and other financing costs and minority interest
resulting from the assumed use of proceeds of $235 million to reduce
financings.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EEX Corporation
By: /s/ R. E. Schmitz
------------------------
R. E. Schmitz
Vice President and
Controller
Date: May 8, 1998
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