<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
FOR THE SIX MONTHS ENDED JUNE 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
FOR THE TRANSITION PERIOD FROM __________ TO __________
COMMISSION FILE NUMBER 0-8933
APCO ARGENTINA INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CAYMAN ISLANDS -
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION)
POST OFFICE BOX 2400
TULSA, OKLAHOMA 74102
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER: (918) 573-2164
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.
CLASS OUTSTANDING AT JULY 31, 1999
ORDINARY SHARES, $.01 PAR VALUE 7,360,311 SHARES
<PAGE> 2
APCO ARGENTINA INC. AND SUBSIDIARY
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I. FINANCIAL INFORMATION:
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets -- June 30, 1999 and
December 31, 1998
3
Consolidated Statements of Operations -- Three and
Six Months Ended June 30, 1999 and 1998
4
Consolidated Statements of Cash Flows -- Six Months
Ended June 30, 1999 and 1998
5
Notes to Consolidated Financial Statements
6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
8
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISKS 12
PART II. OTHER INFORMATION 14
</TABLE>
Portions of this document may constitute "forward-looking statements" as defined
by federal law. Although Apco Argentina Inc. believes any such statements are
based on reasonable assumptions, there is no assurance that actual outcomes will
not be materially different. Additional information about issues that could lead
to material changes in performance is contained in Apco Argentina Inc.'s annual
report on Form 10-K.
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<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
APCO ARGENTINA INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Amounts in Thousands) June 30, December 31,
1999 1998
-------- -----------
ASSETS (UNAUDITED)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 11,359 $ 13,596
Accounts receivable 8,582 5,653
Inventory 600 865
Other current assets 101 472
-------- --------
Total Current Assets 20,642 20,586
-------- --------
Property and Equipment:
Cost 82,611 79,596
Accumulated depreciation (40,779) (38,458)
-------- --------
41,832 41,138
-------- --------
Other Assets 1,258 550
-------- --------
$ 63,732 $ 62,274
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 3,030 $ 5,415
Accrued liabilities 4,608 2,092
Dividends payable 1,196 1,196
-------- --------
Total Current Liabilities 8,834 8,703
-------- --------
Other Liabilities 3,189 3,170
-------- --------
Stockholders' Equity:
Ordinary shares, par value $.01 per share;
15,000,000 shares authorized
7,360,311 outstanding 74 74
Additional paid-in capital 9,326 9,326
Retained earnings 42,309 41,001
-------- --------
Total Stockholders' Equity 51,709 50,401
-------- --------
$ 63,732 $ 62,274
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
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<PAGE> 4
APCO ARGENTINA INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
(Amounts in Thousands Except Per Share) Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
REVENUES:
Operating revenues $ 9,445 $ 7,991 $ 17,104 $ 16,375
Other revenues 103 209 204 446
-------- -------- -------- --------
9,548 8,200 17,308 16,821
-------- -------- -------- --------
COSTS AND EXPENSES:
Operating expense 2,812 3,497 5,366 6,281
Provincial royalties 1,118 960 1,809 1,850
Transportation & storage 434 425 906 904
Selling and administrative 491 652 1,070 1,133
Depreciation, depletion, and amortization 1,390 918 2,418 1,940
Exploration expense -- 62 2 140
Argentine taxes 1,404 618 2,121 1,486
Other (income) expense, net (425) (163) (84) 46
-------- -------- -------- --------
7,224 6,969 13,608 13,780
-------- -------- -------- --------
NET INCOME $ 2,324 $ 1,231 $ 3,700 $ 3,041
======== ======== ======== ========
INCOME PER ORDINARY SHARE, Basic and
Diluted $ .31 $ .17 $ .50 $ .41
======== ======== ======== ========
AVERAGE ORDINARY SHARES
OUTSTANDING, Basic and Diluted 7,360 7,360 7,360 7,360
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
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<PAGE> 5
APCO ARGENTINA INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
(Amounts in Thousands) Six Months Ended
June 30,
----------------------
1999 1998
-------- --------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income $ 3,700 $ 3,041
Adjustments to reconcile to cash
provided by operating activities:
Depreciation, depletion and amortization 2,418 1,940
Retirement of property 17 --
Changes in accounts receivable (2,929) 1,128
Changes in inventory 265 511
Changes in other current assets 371 (89)
Changes in accounts payable (2,385) 444
Changes in accrued liabilities 2,516 (3,579)
Changes in other assets and liabilities
including Acambuco investments (689) 465
-------- --------
Net cash provided by operating activities 3,284 3,861
CASH FLOW FROM INVESTING ACTIVITIES:
Capital expenditures (3,129) (6,278)
CASH FLOW FROM FINANCING ACTIVITIES:
Dividends paid (2,392) (2,392)
-------- --------
NET CHANGE IN CASH AND
CASH EQUIVALENTS (2,237) (4,809)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF THE PERIOD 13,596 21,183
-------- --------
CASH AND CASH EQUIVALENTS AT
END OF THE PERIOD $ 11,359 $ 16,374
======== ========
Supplemental disclosures of cash flow information:
Cash paid during the year for income taxes $ 523 $ 2,587
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
-5-
<PAGE> 6
APCO ARGENTINA INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(1) GENERAL
The unaudited, consolidated financial statements of Apco Argentina Inc.
and subsidiary (the "Company"), included herein, do not include all
footnote disclosures normally included in annual financial statements
and, therefore, should be read in conjunction with the financial
statements and notes thereto included in the Company's 1998 Form 10-K.
In the opinion of the Company, all adjustments have been made to
present fairly the results of the three and six months ended June 30,
1999 and 1998. The results for the periods presented are not
necessarily indicative of the results for the respective complete
years.
(2) INCOME TAXES
As described in Note 6 of Notes to Consolidated Financial Statements
included in the Company's 1998 Form 10-K, the Company believes its
earnings are not subject to U.S. income taxes, nor Cayman Islands
income or corporation taxes.
Income derived by the Company from its Argentine operations is subject
to Argentine income tax at a rate of thirty five percent which tax is
included in the Consolidated Statements of Operations as Argentine
taxes. The rate was increased to thirty-five percent as of December 31,
1998 and was effective for all of 1998.
(3) OBLIGATORY SAVINGS
In 1988, the Argentine government amended the Obligatory Savings Law
requiring that all taxpayers deposit with the government, both in 1988
and 1989, amounts computed on the basis of prior year taxable incomes.
It was the opinion of the Entre Lomas joint venture and its legal and
tax counsels that it was exempted from these deposits due to the tax
exemption granted in the original Entre Lomas contract number 12,507.
As a result the deposits were not made.
In August 1993, the Direccion General Impositiva ("DGI"), the Argentine
taxing authority, made a claim against Petrolera for the delinquent
deposits pertaining to the Entre Lomas operation, which including
interest and indexation for inflation, amounted to $9.2 million. An
appeal was filed by Petrolera in Argentine Federal Tax Court which
ruled in favor of the DGI in April 1997. Petrolera appealed the ruling
before Federal Appeals Court which in November 1998, ruled in favor of
Petrolera. The DGI has now filed an appeal before the Supreme Court. As
of the date of these Consolidated Financial Statements the Supreme
Court had not yet rendered its decision. Although the DGI can require
that the amount in question be deposited, it has not done so pending
the Supreme Court's final ruling. In the opinion of Petrolera's
management and
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<PAGE> 7
APCO ARGENTINA INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
its legal and tax counsel, the possibility that this claim will result
in an unfavorable outcome for the joint venture is remote. The Company
has no reason to believe otherwise, and accordingly, has not recorded a
liability for its share of the asserted claim.
(4) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June 1998, the FASB issued Statement of Financial Accounting
Standards No. 133, Accounting for Derivative Instruments and Hedging
Activities ("SFAS No. 133"). SFAS No. 133 establishes accounting and
reporting standards requiring that every derivative instrument
(including certain derivative instruments embedded in other contracts)
be recorded in the balance sheet as either an asset or liability
measured at its fair value. SFAS No. 133 requires that changes in the
derivative's fair value be recognized currently in earnings unless
specific hedge accounting criteria are met. Special accounting for
qualifying hedges allows a derivative's gains and losses to offset
related results on the hedged item in the income statement. Companies
must formally document, designate, and assess the effectiveness of
transactions that receive hedge accounting.
In June 1999, the FASB issued Statement of Financial Accounting
Standards No. 137, which amended SFAS No. 133 to extend the effective
date of adoption for fiscal periods after June 15, 2000. Further, SFAS
137 requires companies to either (a) recognize as an asset or liability
in the balance sheet all embedded derivative instruments at the date of
initial application or (b) select either January 1, 1998 or January 1,
1999 as a application date, and only those derivatives issued,
acquired, or substantively altered on or after that date shall be
recognized in the balance sheet. SFAS Nos. 133 and 137 have no impact
on the Company's financial statements as it currently is not using
derivative instruments.
-7-
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion explains the significant factors which have affected
the Company's financial condition and results of operations during the periods
covered by this report.
FINANCIAL CONDITION
OIL PRICES
This year's March OPEC meeting resulted in a decision by member nations to
implement important reductions in production quotas. Commodities markets reacted
favorably to the decision and oil prices began to rise. During the second
quarter of the year, there were also indications of renewed growth in the
economies of far east Asian countries which had been in recession since
mid-1997. This combination of events helped trigger a spurt in oil prices. By
the end of July, the per barrel price of West Texas Intermediate ("WTI"), the
reference crude used for determining oil prices in Argentina, was $20.50.
Adjusting for the local discount from WTI, the Company's per barrel sales price
at this level is just over $19.00.
As reflected in the statistical table on page 10, the average per barrel sales
price for the six months ended June 30, 1999 is $13.78. This compares favorably
with the previously reported first quarter's average price of $11.48 and
reflects the recent trend in oil prices. The Company's sales price for the
second quarter averaged $16.40. The improvement in oil prices has had a
significantly positive impact on the Company's year to date net income that
totaled $3.7 million.
There is no way to predict whether this recent sharp increase in crude oil
prices can be sustained. Adherence by OPEC member nations to the production
quotas agreed in March is crucial. If oil markets see any evidence of
non-compliance, prices could again soften.
CAPITAL SPENDING
As described in the first quarter 10-Q, due to the depressed state of oil prices
early in the first quarter of 1999, the Entre Lomas partners reduced the 1999
capital budget by fifty percent from the originally proposed $26 million, or
$12.5 million net to the Company. However, since April, the joint venture has
twice modified the investment program, restoring most of the original
development drilling program and supplementing the budget for the conversion of
all remaining gas lift wells in the Charco Bayo/Piedras Blancas field to rod
pumps. This requires an additional investment of $10 million, or $4.7 million
net to the Company. The conversions should be completed sometime in the year
2000. Their effect should be modest increases in oil production from converted
wells, and availability for sale of associated gas currently being consumed by
the gas lift system.
No development drilling occurred during the first quarter of the year. In the
second quarter, eight wells commenced drilling, of which, some were recently
placed on production, and others are in different stages of drilling and
completion. We expect that all will be on production by the end of August.
Secondary recovery operations commenced in the Entre Lomas oil field in 1998.
Over the next two years, waterflooding will be expanded gradually throughout the
entire field. Some of the
-8-
<PAGE> 9
development wells currently being drilled in this field will eventually be
converted to injection. The length of time they remain on production will depend
on their future performance.
PRODUCTION
Over the first six months of the year, Entre Lomas oil production averaged
10,000 barrels per day totaling 1.8 million barrels, or 860 thousand net to the
Company. Over the same period, natural gas production averaged 42 million cubic
feet per day totaling 7.6 billion cubic feet, or 3.6 billion cubic feet net to
the Company.
ENTRE LOMAS EXPLORATION
In March 1999, the joint venture partners began their interpretation of the 370
square kilometers of 3D seismic shot over the Entre Lomas concession in 1998. It
is expected that the interpretation will be completed by the third quarter of
this year. This just acquired seismic will enable the partners to integrate it
and the previous 1995 3D seismic program into one continuous block. It is the
intention of the partners to identify the most attractive exploration prospects,
and thereafter, if oil prices cooperate, undertake exploration drilling in the
concession. To date the interpretation process is proceeding as planned.
ACAMBUCO
Two wells are currently drilling in the concession. The first well, the San
Pedrito x-2 commenced drilling in September 1998. The intended objective is to
confirm the 1996 Huamampampa discovery made by the San Pedrito x-1 well. The
projected total depth is 18,150 feet. When drilling reached 14,000 feet,
problems were encountered. The well is currently being sidetracked at a depth of
11,400 feet.
The second well, the Cerro Tuyunti x-1, commenced drilling in January of this
year. It will explore what is believed to be the largest of the four principal
structures currently identified in the concession. This well is currently
drilling at 16,000 feet and has been problem free. However, repeat sections of
shallower formations have been encountered resulting in the objective formation
being considerably deeper than originally believed.
The subsurface environment in Acambuco is very faulted and folded. Combine this
aspect with the depth of the target formations and the result is complex and
difficult drilling. To date, of all deep wells drilled in Acambuco dating back
to the early 1980's, all have experienced mechanical problems of some form or
another and encountered unexpected subsurface developments.
RESULTS OF OPERATIONS
For the three and six months ended June 30, 1999, the Company generated net
income of $2.3 million and $3.7 million, respectively. This compares with $1.2
million and $3 million for the same periods in 1998.
The improvement in net income for the three month periods is due to increased
oil sales revenue caused by a sharp rise in the Company's average sales price
that occurred during the quarter. The factors that gave rise to this price
increase are explained previously under "Financial Condition". In addition,
operating expense during the period decreased due to the
-9-
<PAGE> 10
reduced volume of workovers performed in the Entre Lomas concession, personnel
reductions implemented in Entre Lomas, and the cessation of operations in the
Canadon Ramirez concession. In 1998, the Company was incurring expenses related
with its Canadon Ramirez work commitment.
The positive effects of increased sales and reduced operating expense were
partially offset by higher depreciation expense relating to the Canadon Ramirez
concession, and increased Argentine income taxes that are the result of higher
net income.
The improvement in net income for the six-month periods is due to increased oil
sales revenue caused by higher sales volumes over the period. Oil sales price
was not a factor during the six-month period as the average for both years was
almost the same. In fact, although the average oil price for the periods was
almost the same, during 1999 oil prices have been on the increase, while in
1998, oil prices were declining. The other factors that contributed to the
increase in net income for the six month periods are the same as those described
previously for the three month periods. More specifically, they are lower
operating expense in both the Entre Lomas and Canadon Ramirez concessions,
offset by higher depreciation expense relating to Canadon Ramirez, and increased
Argentine income taxes.
The following table shows sales of crude oil, condensate, natural gas and gas
liquids, net to the Company's interests, and average sales prices, and
production costs for the periods indicated.
<TABLE>
<CAPTION>
Six Months Ended
-------------------------------
June 30, June 30,
1999 1998
------------- -------------
<S> <C> <C>
Total Sales-Net to Company
Crude Oil and Condensate (bbls) 853,413 792,405
Gas (mcf) 3,615,802 3,738,910
LPG (tons) 3,351 2,765
Average Sales Prices (in U.S. Dollars)
Oil (per bbl) $ 13.78 $ 13.92
Gas (per mcf) $ 1.33 $ 1.30
LPG (per ton) $ 157.66 $ 171.23
Average Production Costs (in U.S. Dollars)
Oil (per bbl) $ 8.24 $ 8.77
Gas (per mcf) $ .19 $ .29
LPG (per ton) $ 61.98 $ 95.95
</TABLE>
Volumes presented in the above table represent those sold to customers and do
not consider provincial royalties, which are paid separately and are accounted
for as an expense by the Company. In calculating provincial royalties to be
paid, Argentine producers are entitled to deduct gathering, storage, treating
and compression costs.
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<PAGE> 11
Average production cost is calculated by taking into consideration all costs of
operation, including costs of remedial workovers and depreciation of property
and equipment.
YEAR 2000 COMPLIANCE
During 1999, most companies are facing a potentially serious information systems
problem because many software applications and the operational programs written
in the past may not properly recognize calendar dates beginning in the year
2000. This problem could force computers to shut down or provide incorrect data
or information. Petrolera, the operator of the Entre Lomas concession, from
which the Company derives one-hundred percent of its operating revenue, has
initiated the process of identifying changes required to computer programs that
impact the critical aspects of the joint venture's business and guarantee
continuation of its production and sales operations, including major interfaces
with customers and suppliers such as pipelines that carry products to market and
companies that provide power to the concession.
Petrolera has completed an inventory of all equipment and software that may be
affected by the change of the century, and is evaluating modifications required
to become Year 2000 compatible. At this time, new financial, accounting and
administrative systems have been implemented which are fully compatible.
Petrolera, and the Company, believe that systems over which they have direct
control will be fully compliant. It is estimated that by the end of August 1999,
Petrolera will have achieved the fundamental objective of full Year 2000
compliance of the systems over which it has direct control at a cost which is
not material to the joint venture's business, financial condition, or results of
operation.
Although Petrolera is monitoring compliance efforts by major third party
companies upon which the Entre lomas concession depends, there does exist the
possibility of operation disruptions in the event of non-compliance by third
parties. Sales disruption would be the worst case manifestation of this
possibility exposing the Company to a loss of sales revenue of approximately $90
thousand per day. Based on Petrolera's discussions with third parties, the
Company expects them to also be fully compliant by the end of the third quarter,
thereby minimizing the chance of a disruption of operations.
Petrolera is currently in the process of developing contingency plans in the
event that disruptions occur as a result of third party non-compliance or any
failure of its systems.
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<PAGE> 12
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS
The Company's operations are exposed to market risks as a result of changes in
commodity prices and foreign currency exchange rates.
COMMODITY PRICE RISK
The Company produces and sells crude oil and natural gas. As a result, the
Company's financial results can be significantly impacted by fluctuations in
commodity prices due to changing market forces.
FOREIGN CURRENCY AND OPERATIONS RISK
The Company's operations are located in Argentina. Therefore, the Company's
financial results may be affected by factors such as changes in foreign currency
exchange risks, weak economic conditions, or changes in Argentina's political
climate.
ARGENTINE ECONOMIC AND POLITICAL ENVIRONMENT
Since 1989, the government of President Menem has pursued free market policies,
including the privatization of state-owned companies, deregulation of the oil
and gas industry, which included the successful sale of YPF shares in public
markets, tax reform to equalize income tax rates for domestic and foreign
investors, liberalization of import and export laws, and the lifting of exchange
controls.
The cornerstone of the country's economic reforms since 1989 has been its change
in monetary policy. In April 1991, the convertibility law was implemented
establishing an exchange rate of one Argentine peso to one U.S. dollar. The
convertibility plan requires that the country's monetary base be backed by an
equivalent amount of international reserves, including U.S. dollars and gold.
Essentially, the policy guarantees an exchange rate of 1:1. The Argentine
government has not strayed from this policy since implementation of the plan.
These policies have been successful as evidenced, first, by a reduction in
annual inflation from the 1989 rate of 5,000 percent to less than one percent in
1998 and, second, an influx of foreign investment capital into the country. In
July 1996, Domingo Cavallo, Economy Minister and author of the convertibility
plan, was replaced by Roque Fernandez, formerly president of the Central Bank.
The country's economy showed no adverse reactions to this replacement.
The Far East Asian and Russian financial crises of 1997 and 1998 impacted the
economies of many emerging market countries. Argentina was not affected
significantly but did experience a slow down in economic growth. In 1998, the
country's Gross Domestic Product grew at a rate of 4 percent compared with 8.6
percent in 1997. Economic activity in Argentina has now been impacted negatively
by this year's currency devaluation in Brazil. It is currently expected that
Argentina's economy will contract during 1999 as a consequence of Brazil's
devaluation.
-12-
<PAGE> 13
Argentina is a part of "Mercosur", a common market established by customs
agreements between Argentina, Brazil, Uruguay, and Paraguay. The "Mercosur"
market comprises a population of approximately 200 million with a total gross
domestic product of $1.1 trillion. The devaluation of Brazil's currency in early
1999 is having an adverse impact on Argentine economic growth. Brazil is
Argentina's largest trading partner.
Presidential elections will occur in Argentina in October of this year.
President Menem is completing his second and final term. All candidates for the
office have stated that they intend to preserve the convertibility law, the
current monetary regime that has worked so well since 1991. The new President
will be forced to deal with the country's growing fiscal deficit that if not
brought under control will put increasing strain on monetary policy.
-13-
<PAGE> 14
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K:
None
-14-
<PAGE> 15
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.
APCO ARGENTINA INC.
---------------------------
(Registrant)
By: /s/ Thomas Bueno
-----------------------------------
Controller, Duly Authorized Officer
and Chief Accounting Officer
August 12, 1999
<PAGE> 16
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description
- --------------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 11,359
<SECURITIES> 0
<RECEIVABLES> 8,582
<ALLOWANCES> 0
<INVENTORY> 600
<CURRENT-ASSETS> 20,642
<PP&E> 82,611
<DEPRECIATION> 40,779
<TOTAL-ASSETS> 63,732
<CURRENT-LIABILITIES> 8,834
<BONDS> 0
0
0
<COMMON> 74
<OTHER-SE> 51,635
<TOTAL-LIABILITY-AND-EQUITY> 63,732
<SALES> 17,104
<TOTAL-REVENUES> 17,308
<CGS> 0
<TOTAL-COSTS> 11,569
<OTHER-EXPENSES> 161
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 5,578
<INCOME-TAX> 1,878
<INCOME-CONTINUING> 3,700
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,700
<EPS-BASIC> .50
<EPS-DILUTED> .50
</TABLE>
