<PAGE>
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 QUARTER ENDED SEPTEMBER 30, 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 0-9498
BELLWETHER EXPLORATION COMPANY
(Exact name of registrant as specified in its charter)
Delaware 74-0437769
(State of incorporation) (IRS Employer Identification Number)
1331 Lamar, Suite 1455 Houston, Texas 77010-3039
(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code: (713) 650-1025
Name of each exchange
Title of each class on which registered
------------------- ---------------------
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $ 0.01 par value NASDAQ/NMS
10 7/8% Senior Subordinated Notes Due 2007 None
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 November 13, 1997, 13,887,965 shares of common stock of Bellwether
Exploration Company were outstanding.
1
<PAGE>
BELLWETHER EXPLORATION COMPANY
INDEX
PART I. FINANCIAL INFORMATION Page #
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets:
September 30, 1997 (Unaudited) and June 30, 1997..................... 3
Condensed Consolidated Statements of Operations (Unaudited):
Three months ended September 30, 1997 and September 30, 1996......... 5
Condensed Consolidated Statements of Cash Flows (Unaudited):
Three months ended September 30, 1997 and September 30, 1996......... 6
Notes to Condensed Consolidated Financial Statements (Unaudited)....... 8
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................. 12
PART II. OTHER INFORMATION.............................................. 15
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
BELLWETHER EXPLORATION COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
ASSETS
<TABLE>
<CAPTION>
September 30, June 30,
1997 1996
------------- --------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents............................. $ 8,144 $ 15,341
Accounts receivable and accrued revenues.............. 13,999 16,795
Due from related parties.............................. 2,440 1,836
Prepaid expenses and other............................ 2,263 1,759
-------- --------
Total current assets................................ 26,846 35,731
-------- --------
PROPERTY AND EQUIPMENT, AT COST:
Oil and gas properties (full cost method)............. 242,134 233,175
Gas plant facilities.................................. 13,089 12,924
-------- --------
255,223 246,099
Accumulated depreciation, depletion and amortization.. (77,348) (65,097)
-------- --------
OTHER ASSETS.......................................... 5,904 5,915
-------- --------
$210,625 $222,648
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements
3
<PAGE>
BELLWETHER EXPLORATION COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share information)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
September 30, June 30,
1997 1997
------------- --------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable and accrued liabilities......................................... $ 12,165 $ 12,739
Due to related parties........................................................... 2,722 209
-------- --------
Total current liabilities...................................................... 14,887 12,948
-------- --------
LONG-TERM DEBT................................................................... 100,000 115,300
DEFERRED INCOME TAXES............................................................ 6,005 5,521
OTHER LIABILITIES................................................................ 838 955
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value, 1,000,000 shares authorized; none issued or
outstanding at September 30, 1997 and June 30, 1997............................. --
Common Stock, $0.01 par value, 30,000,000 shares authorized, 13,879,965 and
13,844,965 shares issued and outstanding at September 30, 1997 and
June 30, 1997, respectively..................................................... 139 139
Additional paid-in capital....................................................... 78,387 78,273
Retained earnings................................................................ 10,369 9,512
-------- --------
Total stockholders' equity..................................................... 88,895 87,924
-------- --------
$210,625 $222,648
======== ========
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE>
BELLWETHER EXPLORATION COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts in thousands, except share information)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
------------------
1997 1996
-------- --------
<S> <C> <C>
REVENUES:
Oil and gas revenues............................... $20,526 $4,463
Gas plant operations, net.......................... 394 828
Interest and other income.......................... 257 27
------- ------
21,177 5,318
------- ------
COSTS AND EXPENSES:
Production expenses................................ 6,628 1,365
Depreciation, depletion and amortization........... 8,357 1,994
General and administrative expenses................ 1,811 690
Interest expense................................... 3,006 288
------- ------
19,802 4,337
------- ------
Income before income taxes........................... 1,375 981
Provision for income taxes........................... 518 363
------- ------
NET INCOME........................................... $ 857 $ 618
======= ======
NET INCOME PER SHARE................................. $ 0.06 $ 0.07
======= ======
WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES
OUTSTANDING......................................... 14,442 9,090
======= ======
</TABLE>
See accompanying notes to condensed consolidated financial statements
5
<PAGE>
BELLWETHER EXPLORATION COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Amounts in thousands)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
-------------------------
1997 1996
----------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME.................................................. $ 857 $ 618
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion and amortization................ 8,530 2,046
Deferred income taxes................................... 485 331
-------- -------
9,872 2,995
Change in assets and liabilities:
Accounts receivable and accrued revenue................... 2,796 518
Accounts payable and other liabilities.................... (574) 293
Due from (to) related parties............................. 1,910 (646)
Prepaid expenses and other................................ (767) (367)
-------- -------
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES........... 13,237 2,793
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to properties................................... (9,142) (2,315)
Proceeds from sales of properties......................... 3,894 1,562
-------- -------
NET CASH FLOWS USED IN INVESTING ACTIVITIES............... (5,248) (753)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of long-term debt................................ (15,300) ---
Costs of issuance of common stock......................... (97) ---
Exercise of stock options................................. 211 264
-------- -------
NET CASH FLOWS (USED IN) PROVIDED BY FINANCING
ACTIVITIES............................................... (15,186) 264
-------- -------
Net increase (decrease) in cash and cash equivalents...... (7,197) 2,304
Cash and cash equivalents at beginning of period.......... 15,341 783
-------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD.................. $ 8,144 $ 3,087
======== =======
</TABLE>
See accompanying notes to condensed consolidated financial statements
6
<PAGE>
BELLWETHER EXPLORATION COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(Unaudited)
(Amounts in thousands)
Three Months Ended
September 30,
-------------------
1997 1996
-------- --------
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION:
Cash paid during the period for
Interest............................................ $90 $--
Income taxes (net of prior period refunds).......... $ 9 $30
See accompanying notes to condensed consolidated financial statements
7
<PAGE>
BELLWETHER EXPLORATION COMPANY
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Summary of Significant Accounting Policies
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with instructions to Form 10-Q and, therefore, do not
include all disclosures required by generally accepted accounting principles.
However, in the opinion of management, these statements include all adjustments,
which are of a normal recurring nature, necessary to present fairly the
financial position at September 30, 1997 and the results of operations and
changes in cash flows for the periods ended September 30, 1997 and 1996. These
financial statements should be read in conjunction with the consolidated
financial statements and notes to the consolidated financial statements in the
June 30, 1997 Form 10-K/A of Bellwether Exploration Company ("the Company") that
was filed with the Securities and Exchange Commission on October 20, 1997.
Certain reclassifications of prior period statements have been made to conform
with current reporting practices.
In order to prepare these financial statements in conformity with generally
accepted accounting principles, management of the Company has made a number of
estimates and assumptions relating to the reporting of assets and liabilities,
the disclosure of contingent assets and liabilities, and reserve information.
Actual results could differ from those estimates.
2. Acquisitions
On April 9 and 15, 1997, the Company closed acquisitions of oil and gas
properties (the "Partnership Transactions"), totaling $145.2 million (inclusive
of working capital acquired of $13.9 million), from certain partnerships and
other entities managed or sponsored by Torch Energy Advisors Incorporated
("Torch"). The acquisitions were financed by the sale of 4.4 million shares of
common stock, the sale of $100.0 million of 10-7/8% senior subordinated notes
due in 2007 and borrowings under the Company's senior unsecured revolving credit
facility.
The following table presents the unaudited pro forma results of operations as if
the Partnership Transactions had occurred on July 1, 1996. The Partnership
Transactions were accounted for as purchases, and their results of operations
are included in the Company's results of operations from the date of
acquisition. The Company's pro forma results are based on assumptions and
estimates and are not necessarily indicative of the Company's results of
operations in the future or such results had the transaction occurred as of July
1, 1996 (in thousands, except earnings per share).
8
<PAGE>
BELLWETHER EXPLORATION COMPANY
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
(Unaudited)
------------------
Three Months Ended
September 30, 1996
------------------
Revenues......................................... $30,244
Expenses......................................... 23,918
-------
Income before income taxes....................... 6,326
Income taxes..................................... 2,341
-------
Net earnings..................................... $ 3,985
=======
Net earnings per weighted average common and
common equivalent share......................... $ 0.28
=======
3. Long Term Debt
In April 1997, the Company entered into a senior unsecured revolving credit
facility ("Senior Credit Facility") in an amount up to $90.0 million, with an
initial borrowing base of $90.0 million to be redetermined annually, and a
maturity date of March 31, 2002. The Company may elect an interest rate based
either on a margin plus LIBOR or the higher of the prime rate or the sum of 1/2
of 1% plus the Federal Funds Rate. For LIBOR borrowings, the interest rate will
vary from LIBOR plus 0.875% to LIBOR plus 1.25% based upon the borrowing base
usage. In connection with the acquisition of oil and gas properties, $33.3
million was drawn under this facility ($22 million of which was used to retire
outstandings under the previous bank credit facility). As of September 30, 1997,
there were no balances outstanding under the Senior Credit Facility.
The Senior Credit Facility contains various covenants including certain required
financial measurements for current ratio, consolidated tangible net worth and
interest coverage ratio. In addition, the Senior Credit Facility includes
certain limitations on restricted payments, dividends, incurrence of additional
funded indebtedness and asset sales.
In April 1997, the Company issued $100.0 million of 10-7/8% senior subordinated
notes ("Notes") that mature April 1, 2007. Interest on the Notes is payable
semi-annually on April 1 and October 1 commencing on October 1, 1997. The Notes
are guaranteed by the Company's wholly-owned subsidiaries, Odyssey Petroleum
Company, Black Hawk Oil Company and 1989-I TEAI Limited Partnership. The Notes
contain certain covenants, including limitations on indebtedness, liens,
dividends and other payment restrictions affecting restricted subsidiaries,
issuance and sales of restricted subsidiary stock, dispositions of proceeds of
asset sales and restrictions on mergers and consolidations or sales of assets.
4. New Accounting Pronouncements
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128 ("SFAS 128"), "Earnings per Share". SFAS
128 establishes standards for computing and presenting earnings per share (EPS)
and applies to entities with publicly
9
<PAGE>
BELLWETHER EXPLORATION COMPANY
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
held common stock or potential common stock. This Statement simplifies the
standards for computing EPS previously found in Accounting Principles Board
("APB") Opinion No. 15, "Earnings per Share", and makes them comparable to
international EPS standards. This Statement is effective for financial
statements issued for periods after December 15, 1997, including interim
periods; earlier application is not permitted. This Statement requires
restatement of all prior-period EPS data presented. Considering the guidelines
as prescribed by SFAS 128, management believes that the adoption of this
Statement will not have a material effect on EPS, thus pro forma EPS, as
suggested for all interim and annual periods prior to required adoption, have
been omitted.
5. Contingencies
On Sunday, September 28, 1997, there was a spill of crude oil into Santa Barbara
Channel from a pipeline which connects the Company's Point Pedernales field with
shore-based processing facilities. The volume of the spill was estimated to be
approximately 500 barrels of oil. Torch Operating Company, which operates the
platform and pipeline, notified the National Response Center and all appropriate
federal, state, and local authorities. Tests are currently being conducted to
determine the cause of the leak in the pipeline. Cost of the clean up will be
covered by general liability insurance held by the Company, less the related
deductible of $10,000 net to the Company. Total cost of the repair of the
pipeline is currently estimated to be approximately $2.5 million, ($500,000 net
to the Company's interest), and may be covered by insurance less the Company's
deductible of $20,000. Coverage by insurance will be based on the determination
of the cause of the leak in the pipeline. A final determination of the cause of
the leak is expected by the end of the year. At the time of the spill, the Point
Pedernales field was producing approximately 1,800 barrels per day, net to the
Company's interest. Production from the field has been halted until the pipeline
can be repaired and the Company receives all required permits from regulatory
bodies to return the pipeline to service. Repairs are expected to be complete by
the end of 1997 and production is currently expected to begin again by mid-1998,
although no assurances in this regard can be given. Quarterly net income and
cash flow from operations are expected to be reduced by approximately $.03 per
share and $.10 per share, respectively, during the period that field production
is shut-in.
Additionally, the Company has exposure to certain costs which may not be covered
by insurance, including potential fines, penalties and damages. Such costs are
not quantifiable at this time but are not expected to be material to the
Company.
6. Natural Gas and Crude Oil Hedging
Commodity derivatives utilized as hedges include swap contracts. In order to
qualify as a hedge, price movements in the underlying commodity derivative must
be sufficiently correlated with the hedged commodity. Settlement of gains and
losses on price swap contracts are realized monthly, generally based upon the
difference between the contract price and the average closing New York
10
<PAGE>
BELLWETHER EXPLORATION COMPANY
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Mercantile Exchange ("NYMEX") price and are reported as a component of oil and
gas revenues and operating cash flows in the period realized. Gains and losses
attributable to the termination of a swap contract are deferred on the balance
sheet and recognized in revenue when the hedged crude oil and natural gas is
sold. There were no such deferred gains or losses at September 30, 1997 or 1996.
Oil and gas revenues were decreased by $656,000 in the three months ended
September 30, 1997 and decreased by $27,900 in the same period of 1996 as a
result of such hedging activity.
11
<PAGE>
BELLWETHER EXPLORATION COMPANY
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
The Company's strategy is to maximize long-term shareholder value through
aggressive growth in reserves and cash flow using advanced technologies,
implementation of a low cost structure and maintenance of a capital structure
supportive of growth. The Company intends to continue to acquire producing oil
and gas properties through mergers or acquisitions and will increase its
emphasis on growth through development and exploration activities. The funding
of these activities has historically been provided by operating cash flows, bank
financing, equity placements and sale of non-core assets. The Company invested
$9.1 million in properties for the three months ended September 30, 1997 versus
$2.3 million in 1996. At September 30, 1997, the Company had $90 million of
available debt capacity under the Senior Credit Facility. Cash flows from
operations before changes in assets and liabilities were $9.8 million for the
three months ended September 30, 1997 compared to $3.0 million provided by
operating activities in the same period of 1996. In May and June 1997, the
Company divested non-core assets representing approximately 10% of the estimated
proved reserves attributable to the Partnership Transactions for $16.9 million.
During the current quarter, the Company sold other non-core assets for
approximately $3.9 million.
Partnership Transactions
In April 1997, the Company purchased oil and gas properties and $13.9 million of
working capital from affiliates of Torch for an adjusted purchase price at
closing of $141.8 million, plus a contingent payment of $3.4 million, the amount
of which was based on 1997 gas prices. The acquisitions were recorded effective
April 1, 1997 and the operations of the Company include the Partnership
Transactions from that date. The Partnership Transactions were financed with
$34.1 million of the net of proceeds of a Common Stock offering, $97.0 million
from the net proceeds of 10 7/8% Senior Subordinated Notes due 2007 (the
"Offerings") and borrowings under a new credit facility ("New Credit Facility").
In addition, Torch was issued 150,000 shares of the Company's common stock and a
warrant to purchase 100,000 shares at $9.90 for advisory services rendered in
connection with the Partnership Transactions. The warrant and shares were valued
at $1.5 million and recorded as a cost of the Partnership Transactions.
Change in Fiscal Year
Effective July 1, 1997 the Company changed its fiscal year to the calendar year.
As a result, the Company will report for a six month transition period ending
December 31, 1997.
Transition Period Capital Expenditures
During the six months ending December 31, 1997, the Company anticipates
investing approximately $20.6 million, primarily for development and exploratory
drilling activities and acquisitions. The Company believes its cash flow
provided by operating activities and the proceeds from credit facilities will be
sufficient to meet these projected capital investments (See Notes 2 and 3 of the
Notes to Condensed Consolidated Financial Statements). The Company continues to
seek acquisition opportunities and the consummation of such a transaction may
directly impact anticipated capital expenditures.
12
<PAGE>
BELLWETHER EXPLORATION COMPANY
Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Gas Balancing
It is customary in the industry for various working interest partners to sell
more or less than their entitled share of natural gas. The settlement or
disposition of existing gas balancing positions is not anticipated to materially
impact the financial condition of the Company.
Derivative Financial Instruments
The Company periodically uses derivative financial instruments to manage oil and
gas price risk. At September 30, 1997, the Company has entered into contracts to
hedge 300 barrels of oil per day at a price of $22.17 per barrel, and 31,000
MMBTU of natural gas per day at prices ranging from $1.98 to $2.69 per MCF for
October 1997.
Results of Operations
The following table sets forth certain operating information of the Company for
the periods presented:
<TABLE>
<CAPTION>
Three Months Ended September 30,
------------------------------------
Increase/
1997 1996 (Decrease)
-------- -------- ----------
<S> <C> <C> <C>
Production:
Oil and condensate (MBBLs).............................. 614 68 802.9%
Natural gas (MMCF)...................................... 5,458 1,387 293.5%
Average sales price:(1)(2)
Oil and condensate (per BBL)............................ $15.45 $19.38 (20.3%)
Natural gas (per MCF)................................... $ 2.14 $ 2.29 (6.4%)
Average costs:
Production expenses (per BOE)........................... $ 4.35 $ 4.57 (4.8%)
General and administrative expense (per BOE)............ $ 1.19 $ 2.31 (48.5%)
Depreciation, depletion and amortization (per BOE)...... $ 5.34 $ 5.92 (9.8%)
</TABLE>
(1) Average sales price for oil in 1997 includes revenues received from the sale
of natural gas liquids which were extracted from the Company's gas
production. In 1996, such revenues were included in the average sales price
for natural gas.
(2) Average sales prices exclude the effect of hedges, which decreased revenues
by $656,000 and $27,900 in 1997 and 1996, respectively.
13
<PAGE>
BELLWETHER EXPLORATION COMPANY
Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Revenues
Oil and gas revenues for the three months ended September 30, 1997 were $20.5
million, as compared to $4.5 million for the respective periods in 1996. The
increase in revenues of 356% is attributable primarily to production from
properties acquired in the Partnership Transactions.
Net gas plant operating profit was $394,000 in the three months ended September
30, 1997 and $828,000 in the same period of fiscal 1996. A reduction in
throughput due to installation of new equipment which shut in the Snyder gas
plant for approximately 11 days during the quarter, and a reduction in liquid
sales due to a build-up of inventory, combined with a 4.4% decrease in average
prices, were the primary cause of the decreased net operating profit.
Expenses
Production expenses for the three months ended September 30, 1997 totaled $6.6
million, or 371% over the $1.4 million for the three months ended September 30,
1996, due primarily to the effect of the Partnership Transactions. Lease
operating expenses per barrel of oil equivalent were 4.8% lower for the three
months ended September 30, 1997, when compared to the respective period in
fiscal 1996.
Depreciation, depletion and amortization was $8.4 million for the three months
ended September 30, 1997. These amounts reflect a 320% increase over the $2.0
million recorded in the comparable period in 1996. Increases in oil and gas
production of 409% and a lower depletion rate per barrel of oil equivalent are
attributable primarily to the acquisitions of the properties from the
Partnership Transactions.
General and administrative expenses totaled $1.8 million in the three months
ended September 30, 1997 as compared to $0.7 million for the comparable period
of fiscal 1996 reflecting higher management fees and fixed costs resulting from
the increase in assets and cash flows.
Interest expense increased to $3.0 million for the three months ended September
30, 1997 from $0.2 million in the same period of 1996 due to debt incurred in
financing of the Partnership Transactions.
Income Taxes
The provision for federal and state income taxes for the three months ended
September 30, 1997 is based upon a 37.5% effective tax rate.
Net Income
Net income for the three months ended September 30, 1997 is approximately $0.9
million as compared to net income of $0.6 million for the respective period of
1996.
14
<PAGE>
BELLWETHER EXPLORATION COMPANY
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
None.
ITEM 2. Changes in Securities
None.
ITEM 3. Defaults Upon Senior Securities
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
A Proxy statement was sent to all shareholders of record on May 30, 1997 for the
following matters which were voted on at a Special Meeting of Stockholders held
on July 14, 1997:
1. The proposal to amend the Company's Certificate of Incorporation to increase
the number of authorized shares of Common Stock from 15,000,000 to 30,000,000
was approved by the Stockholders.
No other matters were brought up at the meeting.
A copy of the Proxy Statement was filed with the Securities and Exchange
Commission on June 23, 1997 and is incorporated herein by reference.
ITEM 5. Other Information
None.
ITEM 6. Exhibits and Reports on Form 8-K
a. Exhibits
The following exhibits are filed with this Form 10-Q and they are identified by
the number indicated.
27 Financial Data Schedule
b. Reports on Form 8-K.
None.
15
<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.
BELLWETHER EXPLORATION COMPANY
(Registrant)
Date: November 13, 1997 By: /s/ J. Darby Sere'
--------------------------------------
J. Darby Sere'
Chairman and Chief Executive Officer
Date: November 13, 1997 By: /s/ William C. Rankin
--------------------------------------
William C. Rankin
Senior Vice President and Chief Financial
Officer
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 8,144
<SECURITIES> 0
<RECEIVABLES> 16,439
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 26,846
<PP&E> 255,223
<DEPRECIATION> (77,348)
<TOTAL-ASSETS> 210,625
<CURRENT-LIABILITIES> 14,887
<BONDS> 100,000
0
0
<COMMON> 139
<OTHER-SE> 88,756
<TOTAL-LIABILITY-AND-EQUITY> 210,625
<SALES> 20,526
<TOTAL-REVENUES> 21,177
<CGS> 14,985
<TOTAL-COSTS> 19,802
<OTHER-EXPENSES> 1,811
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,006
<INCOME-PRETAX> 1,375
<INCOME-TAX> 518
<INCOME-CONTINUING> 857
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 857
<EPS-PRIMARY> 0.06
<EPS-DILUTED> 0.06
</TABLE>
