SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT UNDER 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 0-9408
PRIMA ENERGY CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 84-1097578
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1801 Broadway, Suite 500, Denver CO 80202
(Address of principal executive offices) (Zip Code)
(303) 297-2100
(Registrant's telephone number, including area code)
No Change
(Former name, former address and former fiscal year, if changed from 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 (2) has been subject to
such filing requirements for the past 90 days.
Yes [x] No [ ]
As of May 1, 1997, the Registrant had 5,790,556 shares of Common Stock,
$0.015 Par Value, outstanding.
<PAGE>
PRIMA ENERGY CORPORATION
INDEX
-----
Part I - Financial Information
- ------------------------------
Page
Item 1. Financial Statements
Unaudited consolidated balance sheets . . . . . . . . . . 3
Unaudited consolidated statements of income . . . . . . . 5
Unaudited consolidated statements of cash flows . . . . . 6
Notes to unaudited consolidated financial statements . . 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . 9
Cautionary Statement for Purposes of the "Safe Harbor"
Provisions of the Private Securities Litigation Reform
Act of 1995 . . . . . . . .. . . . . . . . . . . . . . . . . . 12
Part II - Other Information
- ---------------------------
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . 13
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . 14
<PAGE>
PRIMA ENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
------
MARCH 31, DECEMBER 31,
1997 1996
----------- -----------
CURRENT ASSETS
Cash and cash equivalents................. $ 8,432,000 $ 6,704,000
Available for sale securities, at
market................................. 1,432,000 1,503,000
Receivables (net of allowance for
doubtful accounts: 3/31/97, $45,000;
12/31/96, $45,000)..................... 4,450,000 5,921,000
Tubular goods inventory................... 616,000 311,000
Other..................................... 450,000 572,000
---------- ----------
Total current assets................... 15,380,000 15,011,000
---------- ----------
OIL AND GAS PROPERTIES, at cost, accounted
for using the full cost method......... 55,368,000 52,885,000
Less accumulated depreciation,
depletion and amortization............. (23,140,000) (21,940,000)
---------- ----------
Oil and gas properties - net........... 32,228,000 30,945,000
---------- ----------
PROPERTY AND EQUIPMENT, at cost
Oilfield service equipment................ 2,537,000 2,387,000
Furniture and equipment................... 659,000 652,000
Field office, shop and land............... 341,000 341,000
---------- ----------
3,537,000 3,380,000
Less accumulated depreciation............. (2,111,000) (2,000,000)
---------- ----------
Property and equipment - net........... 1,426,000 1,380,000
---------- ----------
OTHER ASSETS
Cash, designated.......................... 548,000 325,000
Other..................................... 360,000 345,000
---------- ----------
Total other assets..................... 908,000 670,000
---------- ----------
$49,942,000 $48,006,000
========== ==========
See accompanying notes to unaudited consolidated financial statements.<PAGE>
PRIMA ENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS (cont'd.)
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
MARCH 31, DECEMBER 31,
1997 1996
----------- -----------
CURRENT LIABILITIES
Accounts payable.......................... $ 1,058,000 $ 2,526,000
Amounts payable to oil and gas
property owners........................ 2,322,000 2,831,000
Production taxes payable.................. 1,090,000 1,094,000
Accrued and other liabilities............. 465,000 476,000
Deferred tax liability.................... 139,000 221,000
---------- ----------
Total current liabilities.............. 5,074,000 7,148,000
PRODUCTION TAXES, non-current............. 1,508,000 984,000
DEFERRED TAX LIABILITY.................... 5,400,000 4,601,000
---------- ----------
Total liabilities...................... 11,982,000 12,733,000
---------- ----------
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value,
2,000,000 shares authorized; no shares
issued or outstanding.................. 0 0
Common stock, $0.015 par value, 8,000,000
shares authorized; 5,820,556 shares
issued................................. 87,000 87,000
Additional paid-in capital................ 4,222,000 4,222,000
Retained earnings......................... 34,060,000 31,383,000
Unrealized loss on available for sale
securities............................. (26,000) (36,000)
Treasury stock, 30,000 shares at cost..... (383,000) (383,000)
---------- ----------
Total stockholders' equity............. 37,960,000 35,273,000
---------- ----------
$49,942,000 $48,006,000
========== ==========
See accompanying notes to unaudited consolidated financial statements.<PAGE>
PRIMA ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
--------------------------
1997 1996
----------- -----------
REVENUES
Oil and gas sales......................... $ 5,678,000 $ 3,384,000
Trading revenues.......................... 5,049,000 2,195,000
Oilfield services......................... 777,000 419,000
Management and operator fees.............. 255,000 265,000
Interest and dividend income.............. 127,000 80,000
Other..................................... 27,000 42,000
---------- ----------
11,913,000 6,385,000
---------- ----------
EXPENSES
Depreciation, depletion and amortization.. 1,311,000 1,176,000
Lease operating expense................... 482,000 381,000
Production taxes.......................... 387,000 239,000
Cost of trading........................... 4,911,000 1,792,000
Cost of oilfield services................. 617,000 365,000
General and administrative................ 513,000 443,000
---------- ----------
8,221,000 4,396,000
---------- ----------
INCOME BEFORE INCOME TAXES................ 3,692,000 1,989,000
PROVISION FOR INCOME TAXES................ 1,015,000 460,000
---------- ----------
NET INCOME................................ $ 2,677,000 $ 1,529,000
========== ==========
NET INCOME PER COMMON SHARE
AND COMMON SHARE EQUIVALENT............ $ 0.45 $ 0.26
========== ==========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING AND COMMON SHARE
EQUIVALENTS............................ 5,940,777 5,820,556
========== ==========
See accompanying notes to unaudited consolidated financial statements.<PAGE>
PRIMA ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
--------------------------
1997 1996
----------- -----------
OPERATING ACTIVITIES
Net income ............................... $ 2,677,000 $ 1,529,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion and
amortization........................... 1,311,000 1,176,000
Deferred income taxes................... 711,000 348,000
Other................................... 301,000 135,000
Changes in current assets and liabilities:
Receivables............................ 1,471,000 (887,000)
Inventory.............................. (305,000) (43,000)
Other current assets................... 122,000 122,000
Payables............................... (1,981,000) (1,223,000)
Accrued and other liabilities.......... (11,000) (52,000)
---------- ----------
Net cash provided by operating
activities.......................... 4,296,000 1,105,000
---------- ----------
INVESTING ACTIVITIES
Additions to oil and gas properties....... (2,483,000) (911,000)
Purchases of other property............... (162,000) (40,000)
Purchases of available for sale securities (35,000) (151,000)
Proceeds from sales of available for
sale securities......................... 112,000 0
Proceeds from sale of oil & gas properties 0 136,000
---------- ----------
Net cash used by investing activities (2,568,000) (966,000)
---------- ----------
INCREASE IN CASH AND CASH EQUIVALENTS..... 1,728,000 139,000
CASH AND CASH EQUIVALENTS, beginning of
period.................................. 6,704,000 3,977,000
---------- ----------
CASH AND CASH EQUIVALENTS, end of period.. $ 8,432,000 $ 4,116,000
========== ==========
See accompanying notes to unaudited consolidated financial statements.<PAGE>
PRIMA ENERGY CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL
The financial information contained herein is unaudited but
includes all adjustments (consisting of only normal recurring
accruals) which, in the opinion of management, are necessary
to present fairly the information set forth. The consolidated
financial statements should be read in conjunction with the Notes
to Consolidated Financial Statements which are included in the
Annual Report on Form 10-K of Prima Energy Corporation for the year
ended December 31, 1996.
The results for interim periods are not necessarily indicative
of results to be expected for the fiscal year of the Company ending
December 31, 1997. The Company believes that the three month
report filed on Form 10-Q is representative of its financial
position, its results of operations and its cash flows for the
periods ended March 31, 1997 and 1996 covered thereby.
2. BASIS OF PRESENTATION
The accompanying consolidated financial statements include the
accounts of Prima Energy Corporation ("Prima") and its subsidiaries,
herein collectively referred to as the "Company." All
significant intercompany transactions have been eliminated.
Certain amounts in prior years have been reclassified to conform
with the classifications at March 31, 1997.
3. LINE OF CREDIT
Prima maintains an $8,000,000 unsecured line of credit with a
commercial bank. The line of credit, which matures on May 1, 1999,
bears interest at the bank's prime rate (8.50% at March 31, 1997),
with interest payable monthly. At December 31, 1996 and March 31,
1997, there were no amounts outstanding under the line of credit.
4. EARNINGS PER SHARE
During February 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 128,
Earnings per Share ("SFAS 128"). SFAS 128 establishes standards
for computing and presenting earnings per share ("EPS"), and
supersedes APB Opinion No. 15 and its related interpretations. It
replaces the presentation of primary EPS with a presentation of
basic EPS, which excludes dilution, and requires dual presentation
of basic and diluted EPS for all entities with complex capital
structures. Diluted EPS is computed similarly to fully diluted EPS
pursuant to Opinion No. 15. SFAS 128 is effective for periods
ending after December 15, 1997, including interim periods, and will
require restatement of all prior period EPS data presented; earlier
application is not permitted.<PAGE>
A comparison of EPS shown in the accompanying financial
statements with the pro forma amounts that would have been
determined in accordance with SFAS 128 is as follows:
1997 1996
-------- --------
Primary (Basic):
As reported............ $0.45 $0.26
Pro forma.............. $0.46 $0.26
Fully Diluted (Diluted):
As reported............ n/a n/a
Pro forma.............. $0.45 $0.26
5. HEDGING ACTIVITIES
The Company's marketing and trading activities consist of
marketing the Company's own production, marketing the production of
others from wells operated by the Company, and natural gas trading
activities that consist of the purchase and resale of natural gas.
Crude oil and natural gas futures, options and swaps are used from
time to time in order to hedge the price of a portion of the
Company's production, as well as to hedge the margins on natural
gas purchased for resale. This is done to mitigate the risk of
fluctuating oil and natural gas prices which can adversely affect
operating results. These transactions have been entered into with
major financial institutions, thereby minimizing credit risk. The
Company hedged approximately 71% and 41% of its oil production in
the first quarters of 1997 and 1996, respectively, and hedged
approximately 67% and 0% of its natural gas production in these
same periods. Hedging gains and losses were $463,000 and $(54,000)
for the quarters ended March 31, 1997 and 1996, respectively, and
were included in oil and gas revenues at the time the hedged
volumes were sold. At March 31, 1997, the Company had sold futures
contracts as follows:
Unrealized
Price Volume Term Gain or (Loss)
------- --------- ------------- -------------
Oil (barrels)
$ 24.05 5,000 May 1997 $ 18,000
$ 23.50 5,000 June 1997 $ 16,000
Natural gas (MMBtu)
$ 1.575 1,800,000 April 1997 to $(18,000)
March 1998
At March 31, 1997, the Company had in place a swap on 420,000
MMBtu (60,000 MMBtu per month for seven months) to provide for a
fixed margin per MMBtu on a sales agreement for a similar volume of
natural gas. In a typical "swap" agreement, the Company receives
the difference between a fixed price per unit of production and the
index price, if the index price is lower. If the index price is higher,
the Company pays the difference. Current hedging agreements are settled
on a monthly basis. All current contracts specify the index price to be
the "Inside FERC" first of the month spot price for Colorado Interstate
Gas Co.
At March 31, 1997, the Company had no open futures transactions
that did not correspond to anticipated physical transactions.<PAGE>
PRIMA ENERGY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
- -------------------------------
The Company's principal internal sources of liquidity are cash
flows generated from operations and existing cash and cash equivalents.
Net cash provided by operating activities for the three months ended
March 31, 1997 was $4,295,000 compared to $1,105,000 for the same three month
period of 1996. Net working capital at March 31, 1997 was $10,306,000
compared to $7,863,000 at December 31, 1996. Current liabilities at March
31, 1997 decreased from December 31, 1996 levels by $2,074,000, while current
assets increased by $369,000 for the same period. The increase in working
capital of $2,443,000 was primarily generated by cash flows from operations
during the quarter ended March 31, 1997. The Company also received $112,000
in proceeds from the sale of securities during the first quarter of 1997.
The Company has external borrowing capacity of $8,000,000 through an
unsecured line of credit with a commercial bank, all of which is available to
be drawn.
The Company invested $2,644,000 in property and equipment during the
quarter ended March 31, 1997, compared to $951,000 for the 1996 quarter. The
Company expended $2,227,000 during the 1997 quarter for its proportionate
share of the costs of drilling and completing wells, $245,000 for
undeveloped acreage, $10,000 for purchases of producing properties and
$162,000 for other property and equipment. These expenditures compare to
$822,000 for well costs, $77,000 for undeveloped acreage, $12,000 for
purchases of producing properties and $40,000 for other equipment in the 1996
quarter.
The Company drilled and completed four wells (4.0 net) and recompleted
two wells (2.0 net) in the Wattenberg Field in northeastern Colorado during
the first quarter of 1997, as well as completing the two wells which were
drilling or waiting on completion at December 31, 1996. The Company also
participated in the drilling and completion of one non-operated development
well (.14 net) in the Wind River Basin in Wyoming during the 1997 quarter.
Currently, the Company anticipates a 1997 capital expenditures budget of
about $15,000,000, including the $2,644,000 expended during the quarter ended
March 31, 1997. Drilling plans include an estimated fifteen to twenty well
program in the Wattenberg Field and an approximate fifteen well drilling
program in the Bonny Field, both in the Denver Basin in Colorado. Additional
drilling is also anticipated in the Powder and Wind River Basins in Wyoming
and the Texas Panhandle. It is expected that these expenditures will be
funded from cash flows. During April 1997, Prima participated for a 15%
working interest in the drilling of an offshore Louisiana test well defined
by 3-D seismic. Although the well encountered the structure as anticipated,
the actual gas column was thinner than needed for a commercial well and,
therefore, the well was plugged and abandoned. Prima's anticipated share of
the dry hole and acreage costs associated with this well was approximately
$365,000.<PAGE>
The Company regularly reviews opportunities for acquisition of assets or
companies related to the oil and gas industry which could expand or enhance
its existing business. The Company expects its operations, including
acquisition, drilling, completion and recompletion well costs, will be
financed by funds provided by operations, working capital, additional
borrowings on the line of credit, various cost-sharing arrangements, or from
other financing alternatives.
Results of Operations
- ---------------------
For the quarter ended March 31, 1997, the Company earned net income of
$2,677,000, or $.45 per share, on revenues of $11,913,000, compared to net
income of $1,529,000, or $.26 per share on revenues of $6,385,000 for the
comparable quarter of 1996. Expenses were $8,221,000 for the 1997 quarter
compared to $4,396,000 for the 1996 quarter. Revenues increased $5,528,000,
or 86.6%, expenses increased $3,825,000, or 87.0% and net income increased
$1,148,000, or 75.1%.
Oil and gas sales for the quarter ended March 31, 1997 were $5,678,000
compared to $3,384,000 for the same period of 1996, an increase of $2,294,000
or 67.8%. The increase is attributable to significantly higher oil and gas
prices which were further aided by hedging gains, and to increased production
on a BOE basis. The Company's net natural gas production was 1,344,000 Mcf
and 1,209,000 Mcf for the first quarters of 1997 and 1996, respectively, an
increase of 135,000 Mcf or 11.2%. Its net oil production was 63,000 barrels
compared to 69,000 barrels for the same periods, a decrease of 6,000 barrels
or 8.7%. Net production on a BOE basis increased 6.3% from 270,000 BOE to
287,000 BOE.
The average price received for natural gas production was $3.17 per Mcf
for the 1997 quarter compared to $1.76 per Mcf for the 1996 quarter, an
increase of $1.41 per Mcf or 80.1%. Approximately 5% of the natural gas
production at March 31, 1997 was attributable to production sold under a
fixed contract price of $5.90 per MMBtu. The average price for the Company's
natural gas production exclusive of the fixed price contract gas was $3.02
for the 1997 quarter compared to $1.53 for the 1996 quarter. The average
price received for oil in 1997 was $22.50 per barrel compared to $18.35
per barrel for the same period of 1996, an increase of $4.15 per barrel or
22.6%. During the first quarter of 1997, the Company hedged approximately
71% of its oil production and 67% of its natural gas production. Hedging
gains of $463,000 are included in oil and gas revenues for this period, which
increased the average price received per barrel of oil by $1.27 and the
average price received per Mcf of natural gas by $0.285. During the first
quarter of 1996, the Company hedged approximately 41% of it oil production.
Hedging losses of $54,000 reduced the average price received for oil by $0.78
per barrel. No natural gas production was hedged during this period.
Lease operating expenses and production taxes ("LOE") were $869,000 for
the 1997 quarter compared to $620,000 for the 1996 quarter, an increase of
$249,000 or 40.2%. Depreciation, depletion and amortization ("DD&A") was
$1,311,000 for the first quarter of 1997 compared to $1,176,000 for the first
quarter of 1996, an increase of $135,000 or 11.5%. Production for the
quarter ended March 31, 1997 was 287,000 BOE compared to 270,000 BOE for the
quarter ended March 31, 1996. LOE per equivalent barrel of production was
$3.03 for the first quarter of 1997 compared to $2.30 for the comparable
quarter of 1996. The increased rate for 1997 was due to workover expenses
and additional production taxes resulting from higher product prices. DD&A
applicable to oil and gas properties was $4.18 per equivalent barrel of<PAGE>
production for the 1997 quarter compared to $4.08 per equivalent barrel of
production for the 1996 quarter. Depreciation of other property and
equipment was $111,000 and $75,000 for the quarters ended March 31, 1997 and
1996, respectively.
Trading revenues and cost of trading represent the marketing of third
party natural gas by Prima Natural Gas Marketing, Inc., a wholly owned
subsidiary. Trading revenues were $5,049,000 for the three months ended
March 31, 1997, a $2,854,000 increase (130.0%) over the $2,195,000 reported
for the three months ended March 31, 1996. The Company marketed 1,771,000
MMBtu's for the first quarter of 1997 compared to 1,269,000 MMBtu's marketed
during the comparable quarter of 1996, an increase of 502,000 or 39.6%.
Costs of trading were $4,911,000 for the 1997 quarter compared to $1,792,000
for the 1996 quarter, an increase of $3,119,000 or 174.1%. Trading
activities fluctuate with natural gas markets and the Company's ability to
develop markets that meet the Company's trading criteria. Revenues and costs
of trading increased due to higher natural gas prices during the first
quarter of 1997.
Oilfield services represent the revenues earned by Action Oilfield
Services, Inc., a wholly owned subsidiary. These revenues include well
servicing fees from completion and swab rigs, trucking, water hauling and
rental equipment, and other related activities. Revenues were $777,000 for
the quarter ended March 31, 1997 compared to $419,000 for the comparable
quarter of 1996. This $358,000, or 85.4%, increase in revenues was
attributable to increased activity in the Wattenberg Field area where the
service company is active. This increase in activity was due at least in
part to increased product prices and improved technologies in the area over
the comparable period of 1996. Costs of oilfield services were $617,000 for
the quarter ended March 31, 1997 compared to $365,000 for the same quarter of
1996, an increase of $252,000 or 69.0% For the quarter ended March 31, 1997,
20% of the fees billed by Action were for Company owned wells compared to 23%
for the quarter ended March 31, 1996. The Company's share of fees paid to
Action on Company owned properties and the costs associated with providing
the services are eliminated in consolidation.
Management and operator fees are earned pursuant to the Company's roles
as operator for oil and natural gas wells (approximately 340 at March 31,
1997), located primarily in the Wattenberg Field area of Weld County,
Colorado and as managing venturer of a joint venture which owns gas gathering
and pipeline facilities in the Bonny Field in Yuma County, Colorado. The
Company is a working interest owner in each of the operated wells. The
Company is paid operating and management fees by the other working interest
owners in the properties. Fees fluctuate with the number of wells operated,
the percentage working interest in a property owned by third parties, and the
amount of drilling activity during the period. Fees for the first quarter of
1997 were $255,000 compared to $265,000 for the same period of 1996, a
decrease of $10,000 or 3.8%.
General and administrative expenses were $513,000 for the quarter ended
March 31, 1997 compared to $443,000 for the quarter ended March 31, 1996, an
increase of $70,000 or 15.8%. The Company's general and administrative costs
have increased due to expansion of the Company's areas of activity.
The provision for income taxes increased $555,000 to $1,015,000 for the
three months ended March 31, 1997 compared to $460,000 for the three months
ended March 31, 1996. The increase was attributable to the increase in income
before income taxes, which totaled $3,692,000 for the 1997 quarter compared
to $1,989,000 for the 1996 quarter, an increase of $1,703,000, or 85.6%. The<PAGE>
effective income tax rate increased to 27.5% for the 1997 quarter compared to
23.1% for the 1996 quarter. Effective tax rates are affected by amounts of
permanent differences between financial and taxable income, consisting
primarily of statutory depletion deductions and Section 29 tax credits.
Historically, oil and natural gas prices have been volatile and are
likely to continue to be volatile. Prices are affected by, among other
things, market supply and demand factors, market uncertainty, and actions of
the United States and foreign governments and international cartels. These
factors are beyond the control of the Company. The oil and natural gas
prices received during the quarter ended March 31, 1997 were at the
highest levels in recent years. Oil and natural gas prices have
declined significantly from the levels received in the first quarter.
To the extent that oil and gas prices decline, the Company's revenues,
cash flows, earnings and operations would be adversely impacted. The Company
is unable to accurately predict future oil and natural gas prices.
The Company's main source of revenues is from the sale of oil and
natural gas production. Levels of revenues and earnings are affected by
volumes of oil and natural gas production and by the prices at which oil and
natural gas are sold. As a result, the Company's operating results for any
period are not necessarily indicative of future operating results because of
fluctuations in oil and natural gas prices and production volumes.
-------------------------
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR"
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
"Managements Discussion and Analysis of Financial Condition and Results
of Operations" included in Item 2 of this Report contains "forward-looking
statements" and are made pursuant to the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. These statements include,
without limitation, statements relating to liquidity, financing of
operations, capital expenditures budget (both the amount and the source of
funds), continued volatility of oil and natural gas prices, future drilling
plans and other such matters. The words "anticipates," "expects" or
"estimates" and similar expressions identify forward-looking statements.
Such statements are based on certain assumptions and analyses made by the
Company in light of its experience and its perception of historical trends,
current conditions, expected future developments and other factors it
believes are appropriate in the circumstances. Prima does not undertake to
update, revise or correct any of the forward-looking information. Factors
that could cause actual results to differ materially from the Company's
expectations expressed in the forward-looking statements include, but are not
limited to, the following: industry conditions; volatility of oil and
natural gas prices; hedging activities; operational risks (such as blowouts,
fires and loss of production); insurance coverage limitations; potential
liability imposed by government regulation (including environmental
regulation); the need to develop and replace its oil and natural gas
reserves; the substantial capital expenditures required to recover its
operations; risks related to exploration and developmental drilling; and
uncertainties about oil and natural gas reserve estimates. For a more
complete explication of these various factors, see "Cautionary Statement for
the Purposes of the 'Safe Harbor' Provisions of the Private Securities
Litigation Reform Act of 1995" included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1996, beginning on page 14.
-------------------------<PAGE>
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
--------
The following exhibits are filed herewith pursuant to Rule 601
of Regulation S-K.
Exhibit No. Document
10-97.1 Extension of Line of Credit Agreement.
27 Financial Data Schedules
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the Registrants'
fiscal quarter ended March 31, 1997.<PAGE>
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.
PRIMA ENERGY CORPORATION
(Registrant)
Date May 13, 1997 By /s/ Richard H. Lewis
------------ --------------------
Richard H. Lewis,
President and
Principal Financial Officer<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM FORM 10-Q FOR
PRIMA ENERGY CORPORATION FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 8,432,000
<SECURITIES> 1,432,000
<RECEIVABLES> 4,495,000
<ALLOWANCES> (45,000)
<INVENTORY> 616,000
<CURRENT-ASSETS> 15,380,000
<PP&E> 58,905,000
<DEPRECIATION> (25,251,000)
<TOTAL-ASSETS> 49,942,000
<CURRENT-LIABILITIES> 5,074,000
<BONDS> 0
0
0
<COMMON> 87,000
<OTHER-SE> 37,873,000
<TOTAL-LIABILITY-AND-EQUITY> 49,942,000
<SALES> 10,727,000
<TOTAL-REVENUES> 11,913,000
<CGS> 7,708,000
<TOTAL-COSTS> 7,708,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,692,000
<INCOME-TAX> 1,015,000
<INCOME-CONTINUING> 2,677,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,677,000
<EPS-PRIMARY> .45
<EPS-DILUTED> .45
</TABLE>
Norwest Bank Colorado, N.A.
Denver
1740 Broadway
Denver, Colorado 80274
303/861-8811
May 7, 1997
Mr. Richard H. Lewis
President
Prima Energy Corporation
Prima Oil & Gas Company
1801 Broadway, Suite 500
Denver, CO 80202
RE: Letter Agreement between Prima Energy Corporation ("PEC"), Prima Oil
& Gas Company ("POGC") and Norwest Bank Colorado, National
Association, Successor in Interest to Norwest Bank Denver, National
Association ("Norwest"), dated as of June 13, 1995 ("Agreement").
Dear Mr. Lewis:
This will serve as the Second Amendment of the Agreement. Effective the date
hereof, the following has been amended:
I. TERMS
- --------
STRUCTURE
- ---------
Funds will be available on a revolving basis (i.e. borrow, repay, and
reborrow) through April 30, 1999. All outstanding balances will be due May
1, 1999.
MATURITY DATE
- -------------
The maturity is May 1, 1999. Letters of credit issued under this facility
may not be issued past April 30, 1999 and must fully expire on or before May
1, 1999, or the letters of credit be fully secured by cash deposits.
Except as specified in the Amendment, and the First Amendment, the
provisions of the Letter Agreement, and the Note shall remain in full force
and effect.
Sincerely,
NORWEST BANK COLORADO, NATIONAL ASSOCIATION
By: /s/ G. S. Todd Berryman
-----------------------
G. S. Todd Berryman
Vice President
Energy & Minerals<PAGE>
AGREED TO AND ACCEPTED THIS 9 DAY OF MAY, 1997
PRIMA ENERGY CORPORATION
By: /s/ Richard H. Lewis
---------------------------
Richard H. Lewis, President
PRIMA OIL & GAS COMPANY
By: /s/ Richard H. Lewis
---------------------------
Richard H. Lewis, President
ACKNOWLEDGMENTS
STATE OF COLORADO )
ss )
CITY AND COUNTY OF DENVER )
The foregoing instrument was acknowledged before me on the 9th day of
May, 1997 by Richard H. Lewis, President of Prima Energy Corporation and
Prima Oil & Gas Company.
Witness by hand and official seal.
/s/ Cynthia A. Danner
--------------------------------
Notary Public
My commission expires: 7/18/97
---------
Cynthia A. Danner
1801 Broadway, Suite 500
Denver, CO 80202
