<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D. C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1995 Commission File Number 1-7940
---------------------------- -------
PATRICK PETROLEUM COMPANY
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 38-2276752
- ----------------------------------------- ------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
301 West Michigan Avenue, Jackson, Michigan 49201
- ------------------------------------------- ------------------------------
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code (517) 787-6633
---------------------------
NONE
- -------------------------------------------------------------------------------
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 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.
Common shares outstanding as of May 9, 1995: 19,765,226
----------
-1-
<PAGE> 2
PATRICK PETROLEUM COMPANY
INDEX
Page No.
--------
Part I. Financial Information
Consolidated Balance Sheets
March 31, 1995 (Unaudited) and December 31, 1994................ 3
Consolidated Statements of Operations
Three Months Ended March 31, 1995 and 1994 (Unaudited).......... 5
Consolidated Statements of Cash Flows
Three Months Ended March 31, 1995 and 1994 (Unaudited).......... 6
Notes to Consolidated Financial Statements........................ 7
Management's Discussion and Analysis of Financial
Condition and the Results of Operations......................... 11
Part II. Other Information....................................... 15
Exhibit 11 - Computation of Net Earnings (Loss) per Common Share.. 17
Exhibit 27 - Financial Data Schedule.............................. 18
-2-
<PAGE> 3
PATRICK PETROLEUM COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
---------------------------
1995 1994
(Unaudited) ------------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents.................... $ 1,086,468 $ 748,811
Marketable securities (Note D)............... 1,097,200 1,434,800
Accounts receivable:
Trade, net of allowance.................... 226,443 509,136
Accrued oil and gas revenue................ 842,319 743,401
Other...................................... 7,099
Prepaid expenses and other................... 58,596 33,421
Assets held for sale......................... 836,238 836,238
------------ ------------
TOTAL CURRENT ASSETS........................ $ 4,154,363 $ 4,305,807
OTHER ASSETS:
Investments in Penske entities (at cost)..... $ 3,344,954 $ 3,344,954
Investment in Pecos pipeline, net............ 2,010,040 2,089,384
Other investments and deferred charge........ 170,662 197,439
------------ ------------
TOTAL OTHER ASSETS....................... $ 5,525,656 $ 5,631,777
PROPERTY AND EQUIPMENT:
Oil and gas properties (full cost method --
--$5,704,026 and $5,626,003 excluded
from amortization in 1995 and 1994,
respectively).............................. $ 36,403,236 $ 35,885,937
Furniture, fixtures and equipment............ 2,461,762 2,462,062
------------ ------------
$ 38,864,998 $ 38,347,999
Less accumulated depletion and depreciation.. (19,360,919) (18,882,785)
------------ ------------
TOTAL PROPERTY & EQUIPMENT.............. $ 19,504,079 $ 19,465,214
------------ ------------
TOTAL ASSETS.......................... $ 29,184,098 $ 29,402,798
============ ============
See notes to consolidated financial statements.
</TABLE>
-3-
<PAGE> 4
PATRICK PETROLEUM COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
---------------------------
1995 1994
------------- ------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable............................. $ 1,320,428 $ 2,045,333
Accrued liabilities.......................... 689,864 423,137
Reserve for contingent liabilities (Note C).. 1,033,496 1,022,000
Note payable to bank......................... 1,000,000
Current portion of long term debt............ 2,000,000 5,000,000
------------ -------------
TOTAL CURRENT LIABILITIES................. $ 6,043,788 $ 8,490,470
LONG TERM DEBT (Note B):
Subordinated Collateralized Notes............ $ 8,000,000 $ 5,000,000
------------ -------------
TOTAL LONG-TERM DEBT $ 8,000,000 $ 5,000,000
STOCKHOLDERS' EQUITY (Notes B and E):
Preferred stock, par value $1.00 per share;
authorized -- 10,000,000; issued 1,175,000
(liquidating preference $10 per share,
aggregating to $11,750,000). $ 1,175,000 $ 1,175,000
Common stock, par value $0.20 per share;
authorized 40,000,000 shares -- issued
19,981,076 in 1995 and 1994............... 3,996,215 3,996,215
Additional paid-in capital.................. 82,088,679 82,088,679
Retained earnings (deficit)................. (71,928,594) (71,494,176)
Unrealized gain on marketable securities.... 516,150 853,750
------------ -------------
$ 15,847,450 $ 16,619,468
Less:
Treasury stock at cost -- 215,849 shares
in 1995 and 1994.......................... 707,140 707,140
------------ -------------
TOTAL STOCKHOLDERS' EQUITY............... $ 15,140,310 $ 15,912,328
------------ -------------
TOTAL LIABILITIES & STOCKHOLDER'S
EQUITY............................... $ 29,184,098 $ 29,402,798
============= =============
See notes to consolidated financial statements.
</TABLE>
-4-
<PAGE> 5
PATRICK PETROLEUM COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------
1995 1994
----------- -----------
<S> <C> <C>
REVENUES:
Oil and gas sales................................. $ 918,549 $ 2,849,870
Interest and dividend income...................... 1,750
Gain on sale of investments....................... 7,260 6,498,492
Revenue from pipeline systems..................... 570,000 264,500
Other income...................................... 57,106 39,424
----------- -----------
$ 1,554,665 $ 9,652,286
EXPENSES:
Production taxes.................................. $ 42,155 $ 198,919
Lease operating costs............................. 262,672 881,096
Depletion, depreciation and amortization.......... 581,105 1,476,152
General and administrative........................ 603,102 642,506
Interest.......................................... 265,049 706,461
----------- -----------
$ 1,754,083 $ 3,905,134
EARNINGS (LOSS) BEFORE EXTRAORDINARY ITEM........... $ (199,418) $ 5,747,152
EXTRAORDINARY ITEM:
Early extinguishment of debt...................... $ $ 1,232,832
----------- ----------
NET EARNINGS (LOSS)................................. $ (199,418) $ 4,514,320
=========== ===========
NET EARNINGS (LOSS) PER SHARE....................... $ (.02) $ .21
=========== ===========
Weighted Average Shares Outstanding................. 19,765,226 19,765,226
=========== ===========
See notes to consolidated financial statements
</TABLE>
-5-
<PAGE> 6
PATRICK PETROLEUM COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
-------------------------
1995 1994
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss)...................................... $ (199,418) $ 4,514,320
Adjustments to reconcile net earnings (loss) to net cash
provided by (used in) operating activities:
Depletion, depreciation and amortization............... 581,105 1,476,151
Extraordinary charge, early extinguishment of debt..... 1,232,832
Gain on sale of investment............................. (6,498,492)
(Increase) decrease in:
Accounts and notes receivable......................... 176,676 (182,243)
Assets held for resale................................ (7,260) 1,516,316
Prepaid expenses and other............................ (25,175) (73,871)
Other investments..................................... 14,105 (76,420)
(Decrease) increase in:
Accounts payable...................................... (724,905) (930,335)
Accrued liabilities................................... 278,223 79,614
----------- -----------
Total Adjustments.................................... $ 292,769 (3,456,448)
----------- -----------
Net Cash Provided By (Used In) Operating Activities.. $ 93,351 $ 1,057,872
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from disposition of properties.................. $ 25,778 $ 177,878
Proceeds from adjustments relating to ANPC acquisition... 747,000
Capital expenditures..................................... (546,472) (1,349,815)
----------- -----------
Net Cash Used In Investing Activities................ $ (520,694) $ (424,937)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from bank borrowings............................ $ 1,000,000
Principal payments on bank borrowings.................... $ (552,823)
Preferred stock dividends................................ (235,000) (235,000)
----------- -----------
Net Cash Provided By (Used in) Financing Activities.. $ 765,000 $ (787,823)
----------- -----------
Net Decrease In Cash And Cash Equivalents............ $ 337,657 $ (154,888)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD.......... 748,811 685,654
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD................ $ 1,086,468 $ 530,766
=========== ===========
</TABLE>
-6-
<PAGE> 7
PATRICK PETROLEUM COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(1) For a description of the accounting policies followed refer to
the notes to the Company's annual consolidated financial
statements for the year ended December 31, 1994, included in Form
10-K filed with the Securities and Exchange Commission on March
31, 1995.
(2) The consolidated financial statements include the accounts of the
Company and all of its subsidiaries. All material intercompany
profits, transactions, and balances have been eliminated.
(3) In the opinion of the Management, the accompanying unaudited
consolidated financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to
present fairly the financial position as of March 31, 1995 and
the results of operations for the three months ended March 31,
1995 and 1994.
(4) The results of operations for the three month period ended March
31, 1995 are not necessarily indicative of the results to be
expected for the full year.
NOTE B -- DEBT
The Company has entered into a new Credit Agreement with a Bank which
provides for a maximum credit facility of $30,200,000, consisting of a
$5,200,000 term loan, and a $25,000,000 revolving line of credit with an
initial borrowing base of $6,000,000 (collectively the "Bank Loan"). The
Company had consummated a short-term interim $2,000,000 Bridge Loan with the
same Bank, which debt will be retired as part of the above-described revolving
line of credit. At March 31, 1995 the Company has borrowed $1,000,000 under
the Bridge Loan. The Bank Loan offers fixed and variable interest rate options
based on Prime or LIBOR (+2%). The current borrowing rate is 8.125%. The
interest rates will increase by amounts up to .50% on Prime and 1.00% on LIBOR
if the merger described in Management's Discussion and Analysis of Financial
Condition and Results of Operations (page 11) does not occur on a timely basis.
Substantially all of the Company's assets are pledged to secure these credit
facilities.
The Revolving Credit Facility provided an initial $6,000,000 borrowing
base, of which $2,000,000 is designated to refinance the short-term interim
Bridge Loan, to refinance a portion of the 10.75% Subordinated Collateralized
Notes, to fund capital expenditures for oil and gas reserve acquisitions, and
exploration and development purposes. The borrowing base shall be reduced to
$5,250,000 on April 1, 1996, unless redetermined otherwise pursuant to the
scheduled borrowing base review.
The $5,200,000 term loan was designated to refinance the remaining
principal and accrued interest on the $10,000,000 10.75% Subordinated
Collateralized Notes. The maturity is April 30, 1999, and repayment is based
on the proceeds received from the sale of Penske stock.
-7-
<PAGE> 8
In 1990, the Company sold $20,000,000 in 10.75% Subordinated
Collateralized Notes with Warrants to acquire 800,000 shares of the Company's
$0.20 par value Common Stock at $6.16 per share, to three institutional
investors. The Company's equity ownership in Penske Corporation and Penske
Transportation Inc. serves as the collateral for the Senior Notes. The Senior
Note Purchase Agreement contains financial covenants consistent with those
contained in the Bank Loan.
In April, 1994, the Company utilized the proceeds from the sale of the
Penske Stock to prepay $10,000,000 of the Senior Notes. As a result of such
transaction, the Company incurred penalties of $1,040,000 associated with the
prepayment.
NOTE C -- COMMITMENTS AND CONTINGENCIES
The U.S. Environmental Protection Agency ("EPA") has identified the
Company as a potentially responsible party ("PRP") for the cost of clean-up of
"hazardous substances" at an oil field waste disposal site in Vermillion
Parish, Louisiana. The EPA has estimated that the total cost of long-term
cleanup of the site will be approximately $13.5 million, with the Company's
percentage of responsibility to be approximately 3.09%. As of March 31, 1995
the Company has accrued approximately $500,000 for this liability. The EPA and
the PRPs will continue to evaluate the site and revise estimates for the
long-term cleanup of the site. There can be no assurance that the cost of
cleanup and the Company's percentage responsibility will not be higher than
currently estimated by the EPA. In addition, under the federal environmental
laws, the liability costs for the cleanup of the site is joint and several
among all PRPs. Therefore, the ultimate cost of the cleanup to the Company
could be significantly higher than the amount presently accrued for this
liability.
On March 15, 1995, B.A.R.D. Industries ("B.A.R.D.") filed litigation
against Patrick Petroleum Company, U. E. Patrick and Petrie-Parkman Co., Inc.
in the District Court of Harris County, Texas. B.A.R.D. claims to be
beneficial owner of 3,107,741 shares of common stock in the Company. B.A.R.D.
raised several causes of action including breach of fiduciary duty, breach of
registration agreement, conspiracy and a claim for actual and punitive damages
in an unspecified amount, including attorneys' fees. In addition, B.A.R.D.
seeks a temporary and permanent injunction requiring the production of various
information from the defendants. Plaintiff claims that unless defendants are
immediately restrained from taking any action concerning the proposed merger
with La/Cal Energy Partners of Shreveport, Louisiana, that plaintiff will
suffer irreparable injury including the loss of a board seat, the dilution from
an ownership of 15.7% of the Company's common stock to approximately 7.875%,
and the loss of assets for less than fair value. Defendants removed the state
court proceeding to the United States District Court for the Southern District
of Texas. In response, B.A.R.D. filed with the United States District Court a
motion to remand the proceedings to the 269th District Court of Harris County,
Texas but has subsequently decided not to pursue the remand motion. On April
5, 1995, B.A.R.D.'s claims against Petrie-Parkman Co. were voluntarily
dismissed without prejudice.
-8-
<PAGE> 9
Additionally, the Company is party to a number of lawsuits arising in
the normal course of business. The Company has defended and intends to
continue to defend these actions vigorously and believes, based on currently
available information, that adverse settlements, if any, in excess of insurance
coverage or amounts already provided, will not be material to its financial
position or results of operations.
NOTE D -- MARKETABLE SECURITIES
The amortized cost and estimated fair value of marketable securities as
of March 31, 1995, and December 31, 1994 are shown in the tables below:
<TABLE>
March 31, 1995
--------------------------------------------
Gross
Amortized Unrealized Estimated Fair
Cost Gain Market Value
----------- ------------ --------------
<S> <C> <C> <C>
Marketable equity securities $ 581,050 $ 516,150 $ 1,097,200
December 31, 1994
------------------------------------------
Gross
Amortized Unrealized Estimated Fair
Cost Gain Market Value
----------- ------------ --------------
Marketable equity securities $ 581,050 $ 853,750 $ 1,434,800
</TABLE>
The Company uses the specific identification method in computing
realized gains and losses on sales of securities. In 1995, there were no sales
of such securities.
NOTE E -- CHANGES IN STOCKHOLDERS' EQUITY
During the three months ended March 31, 1995, Stockholders' equity
changed as follows:
<TABLE>
<S> <C>
Balance at December 31, 1994 $15,912,328
Unrealized loss on Marketable Securities (337,600)
Net Loss (199,418)
Preferred Stock Dividends (235,000)
-----------
Balance at March 31, 1995 $15,140,310
===========
</TABLE>
-9-
<PAGE> 10
NOTE F -- SALE OF ASSETS
On December 15, 1994 the Company sold substantially all of its producing
and nonproducing oil and gas properties in Alabama, Louisiana, Mississippi, New
Mexico, Oklahoma and Texas to Unit Petroleum for $16,100,000. Under the terms
of the agreement, the proceeds received by the Company were reduced by the net
revenues from such properties during the period May 1, 1994 to December 15,
1994. The Company received approximately $13,236,000 after such adjustments.
In a related transaction, LLOG Exploration Company exercised its election of
preferential right to purchase the Company's interests in the Bayou Pigeon
Field, Iberia Parish, Louisiana. The Company entered into a Purchase and Sale
Agreement dated December 14, 1994, and closed the transaction December 16,
1994, receiving approximately $1,569,000. The combined proceeds were used to
repay the Company's bank debt, approximately $13,700,000, with the remaining
proceeds used for interest, fees and general corporate purposes, including the
Company's exploration efforts in West Texas.
-10-
<PAGE> 11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
Overview and Analysis of Known Trends
- -------------------------------------
On March 10, 1995 the Company entered into an Agreement and Plan of
Merger ("Merger Agreement") with La/Cal Energy Partners of Shreveport,
Louisiana ("La/Cal"). The proposed transaction has been approved by the Board
of Directors of the Company and the Management Committee of La/Cal and is
subject to approval by their respective stockholders and partners as well as
other customary conditions and approvals. The dates for the stockholder and
partner votes have not yet been determined.
Under terms of the Merger Agreement, U.E. Patrick, presently President
and CEO of the Company, will be Chairman and Walter G. "Gil" Goodrich,
presently a managing partner of La/Cal, will be President and CEO of the
combined company. In addition, La/Cal and the Company will each nominate six
directors to the Board of Directors of the combined company.
The transaction will take the form of a tax-free exchange of common
stock. To effect the transaction the Company formed a holding company,
Goodrich Petroleum Corporation ("Goodrich"). La/Cal will contribute its oil
and gas assets to Goodrich Petroleum for 19,765,226 shares of Goodrich common
stock. Through a merger, the Company common stockholders will be entitled to
receive one share of Goodrich common stock for each of the 19,765,226
outstanding Company common shares. The Company Series B Preferred stockholders
will be entitled to receive for each of their 1,175,000 shares, one share of
Goodrich Series A Preferred Stock with substantially identical terms. The
Company will continue as a wholly-owned subsidiary of Goodrich Petroleum.
Capital Resources and Liquidity
- -------------------------------
At March 31, 1995, the Company had $1,086,468 in cash and cash
equivalents, negative working capital of $1.9 million, a current ratio of .69
to 1.0 and stockholders' equity of $15.1 million.
In 1995, the Company will require funds in addition to its forecasted
cash flow from operations in order to complete the development of its Sean
Andrew Field and certain additional prospects to be drilled in West Texas. The
Company has entered into a new Credit Agreement with a Bank which provides for
a maximum credit facility of $30,200,000, consisting of a $5,200,000 term loan,
and a $25,000,000 revolving line of credit with an initial borrowing base of
$6,000,000 (collectively the "Bank Loan"). Interest rates are at prime with a
LIBOR + 2.00% option. Substantially all of the Company's assets are pledged
for this credit facility.
The Company will continue to consider other sources of financing,
including the public or private sale of debt or equity securities, as it has
done in the past.
-11-
<PAGE> 12
The instability of hydrocarbon pricing could have a material effect on
the Company's revenues, cash flows and borrowing capacity. The Company
continually evaluates its proved and unproved oil and gas properties. Any long
term continuation of depressed price levels may impair the value of the oil and
gas properties.
LONG TERM OBLIGATIONS
---------------------
The Company's non-equity capitalization at March 31, 1995 consisted of
$10.0 million of indebtedness from the Company's subordinated collateralized
notes.
In 1990, the Company sold $20,000,000 in 10.75% Subordinated
Collateralized Notes with Warrants to acquire 800,000 shares of the Company's
$0.20 par value Common Stock at $6.16 per share to three institutional
investors. The Company's equity ownership in Penske Corporation and Penske
Transportation Inc. serves as the collateral for the notes, and the Note
Purchase Agreement contains financial covenants consistent with those contained
in the Revised Bank Loan.
On March 30, 1994, the Company entered into an agreement with Penske to
sell 37% of its interest in Penske Corporation and all of its interest in
Penske Transportation, Inc. for $12 million with the right to sell (put) the
remaining interest to Penske equally over the next five years. Terms call for
Penske to pay the Company, upon presentation of each put, an annual amount to
the greater of $2.4 million or 1.5 times book value of the shares presented.
The minimum value if all puts are presented will be an additional $12 million.
Penske has the right to call and accelerate the options in the event there is a
change in control of the Company during the term of the agreement.
On April 12, 1994, the Company utilized the proceeds from such sale to
prepay $10,000,000 of the Senior Notes secured by the Penske stock. As a
result of such transaction, the Company recognized a gain of $6,754,000 on the
sale of the stock and incurred penalties of $1,040,000 associated with the
prepayment.
On May 2, 1995 the Company retired all of the $10,000,000 10.75% Senior
Subordinated Notes outstanding. A portion of the debt was retired with the
$2,400,000 in proceeds from the exercise of the first put of Penske stock. The
remaining Senior Note indebtedness was retired with proceeds from the Company's
new credit facility. The rate of interest on such borrowing was 8.125% at May
8, 1995. The prepayment penalty incurred was $60,250. The Penske stock was
transferred as collateral to the lender as part of the credit agreement.
If the merger with La/Cal occurs, a change of control as defined in the
sale agreement with Penske Corporation will transpire. Penske intends to
exercise a call on the remaining 151,584 shares held by Patrick. If the merger
occurs, and Penske exercises its call, the Company anticipates receiving
approximately $9.6 million.
-12-
<PAGE> 13
CAPITAL EXPENDITURES
--------------------
During the period ended March 31, 1995, the Company's capital
expenditures were $546,472. The expenditures were for development costs of
$440,287, exploration expenditures of $100,039, and acquisition of leasehold
interest of $6,146. In addition, the Company received proceeds from the sale
of interests in oil and gas assets of $25,778.
In order to preserve current available cash, the Company intends to fund
its portion of certain on-going drilling expenditures by selling a portion of
its interest in seismic and acreage cost or borrowing on its working capital
credit facility. This method of funding has been used by the Company in
previous exploration efforts. The Company will still be responsible for its
share of completion costs and any future project development or seismic
expenditures.
The Company has no material binding commitments for capital expenditures
at March 31, 1995. However, the Company anticipates significant capital
expenditures primarily to develop its Sean Andrew Field and other West Texas
properties.
ADOPTION OF ACCOUNTING STANDARDS
- --------------------------------
The Financial Accounting Standards Board has issued SFAS No. 107,
"Disclosures about Fair Value of Financial Instruments". SFAS No. 107 extends
existing fair value disclosure practices for some instruments by requiring all
entities to disclose the fair value of financial instruments for which it is
practicable to estimate fair value. Management has determined that the effects
on the financial statements from the adoption of this statement, which is
required to be adopted by the Company in 1995, will not be material.
-13-
<PAGE> 14
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1995
---------------------------------------------------------------
COMPARED TO THE THREE MONTHS ENDED MARCH 31, 1994
-------------------------------------------------
During the three months ended March 31, 1995, the Company lost $199,418
compared to net earnings of $4,514,320 for the same period of the previous
year.
Revenues decreased $8,097,621 to $1,554,665 during 1995, compared to
$9,652,286 for 1994 primarily the result of decreased gains on sales of
investments of $6,491,232 and the loss of revenue from the wells sold to Unit
Petroleum in December, 1994. Oil and gas sales decreased $1,931,321, revenue
from pipeline systems increased $305,500 and the other components of revenue
increased $19,432 in 1995 compared to 1994.
A comparison of production volumes and average sales prices of oil and
gas produced and sold by the Company for the periods presented is as follows:
<TABLE>
<S> <C> <C>
Production Volumes 1995 1994
------------------ --------- ---------
Crude oil and Condensate (Bbls) 37,572 72,620
Natural gas (Mcf) 106,676 706,661
Average Sales Price
-------------------
Crude oil and Condensate (per Bbls) $17.24 $13.95
Natural gas (per Mcf) $ 1.58 $ 2.37
</TABLE>
Expenses decreased $3,383,883 during the three months ended March 31,
1995, compared to the same period of the previous year principally due to a
prepayment penalty recorded in 1994 and due to the reduced number of wells in
1995. Production taxes decreased $156,764, lease operating costs and
depletion, depreciation and amortization decreased $1,513,471, general and
administrative costs decreased $39,404, and interest expense decreased
$441,412, principally due to a reduction in outstanding debt. Under the full
cost accounting method, the Company capitalized $90,000 of exploration overhead
in 1995, compared to $450,000 in 1994. The Company recorded a prepayment
penalty expense in 1994 of approximately $1,233,000 as a result of the early
extinguishment of Senior Note debt.
-14-
<PAGE> 15
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
- ---------------------------
On March 15, 1995, B.A.R.D. Industries ("B.A.R.D.") filed litigation
against Patrick Petroleum Company, U. E. Patrick and Petrie-Parkman Co., Inc.
in the District Court of Harris County, Texas. B.A.R.D. claims to be
beneficial owner of 3,107,741 shares of common stock in the Company. B.A.R.D.
raised several causes of action including breach of fiduciary duty, breach of
registration agreement, conspiracy and a claim for actual and punitive damages
in an unspecified amount, including attorneys' fees. In addition, B.A.R.D.
seeks a temporary and permanent injunction requiring the production of various
information from the defendants. Plaintiff claims that unless defendants are
immediately restrained from taking any action concerning the proposed merger
with La/Cal Energy Partners of Shreveport, Louisiana, that plaintiff will
suffer irreparable injury including the loss of a board seat, the dilution from
an ownership of 15.7% of the Company's common stock to approximately 7.875%,
and the loss of assets for less than fair value. Defendants removed the state
court proceeding to the United States District Court for the Southern District
of Texas. In response, B.A.R.D. filed with the United States District Court a
motion to remand the proceedings to the 269th District Court of Harris County,
Texas but has subsequently decided not to pursue the remand motion. On April
5, 1995, B.A.R.D.'s claims against Petrie-Parkman Co. were voluntarily
dismissed without prejudice.
ITEM 2. CHANGES IN SECURITIES
- -------------------------------
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
- -----------------------------------------
None.
ITEM 4. RESULTS OF VOTES OF SECURITY HOLDERS
- ----------------------------------------------
None.
ITEM 5. OTHER INFORMATION
- ---------------------------
Not applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------------------------------------------
(a) Exhibit 11 Computation of Net Earnings (Loss) Per Share
(b) Exhibit 27 Financial Data Schedule
(c) Report on Form 8-K - None.
-15-
<PAGE> 16
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.
PATRICK PETROLEUM COMPANY
----------------------------------
(Registrant)
/s/Thomas G. Johnson
-----------------------------------
Thomas G. Johnson, Controller and
Chief Accounting Officer
DATE: May 9, 1995
-------------------
-16-
<PAGE> 1
EXHIBIT 11
PATRICK PETROLEUM COMPANY AND SUBSIDIARIES
COMPUTATION OF NET EARNINGS (LOSS) PER COMMON SHARE
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
------------------------
1995 1994
----------- ----------
<S> <C> <C>
Weighted average number of common shares outstanding. 19,765,226 19,765,226
----------- ----------
Net earnings (loss)................................ $ (199,418) $4,514,320
Preferred stock dividend........................... (235,000) (235,000)
----------- ----------
Net earnings (loss)................................ $ (434,418) $4,279,320
=========== ==========
Net earnings (loss) per common share............... $ (.02) $ .21
=========== ==========
</TABLE>
-17-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 1,086,468
<SECURITIES> 1,097,200
<RECEIVABLES> 1,075,861
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,154,363
<PP&E> 38,864,998
<DEPRECIATION> 19,360,919
<TOTAL-ASSETS> 29,184,098
<CURRENT-LIABILITIES> 6,043,788
<BONDS> 0
<COMMON> 3,996,215
0
1,175,000
<OTHER-SE> 9,969,095
<TOTAL-LIABILITY-AND-EQUITY> 29,184,098
<SALES> 918,549
<TOTAL-REVENUES> 1,554,665
<CGS> 885,932
<TOTAL-COSTS> 1,489,034
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 265,049
<INCOME-PRETAX> (199,418)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (199,418)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
