SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 3, 1996
------------------------
Seagull Energy Corporation
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(Exact name of registrant as specified in charter)
Texas
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(State or other jurisdiction of incorporation)
1-8094 74-1764876
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(Commission File Number) (IRS Employer Identification No.)
1001 Fannin, Suite 1700, Houston, Texas 77002 -6714
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(Address of principal executive offices) (Zip Code)
(713) 951-4700
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(Registrant's telephone number including area code)
Not Applicable
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(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On October 3, 1996, the shareholders of Seagull Energy Corporation, a
Texas corporation ("Seagull"), and the shareholders of Global Natural Resources
Inc., a New Jersey corporation ("Global"), approved a stock merger (the
"Merger") pursuant to the Agreement and Plan of Merger, dated July 22, 1996 (the
"Merger Agreement") among Seagull, GNR Merger Corporation, a New Jersey
corporation and a wholly owned subsidiary of Seagull ("Merger Sub"), and Global.
On October 3, 1996, Merger Sub merged with and into Global, which is the
surviving corporation in the Merger. As a result of the Merger, Global became a
wholly owned subsidiary of Seagull. The transaction will be accounted for as a
"pooling of interests." Each issued and outstanding share of common stock of
Global ("Global Common Stock") was converted into .88 of a share of common stock
(the "Common Stock Exchange Ratio") of Seagull ("Seagull Common Stock"). Cash
will be paid in lieu of fractional shares of Seagull Common Stock.
Assets of Global
Domestic Activities. Global's domestic activities have been conducted
principally offshore in the Gulf of Mexico and in the gulf coast. At December
31, 1995, Global's domestic reserves included 68,623 million cubic feet ("MMcf")
of natural gas and 2,721 thousand barrels ("Mbbls") of oil and condensate.
Egypt. Global's assets in Egypt consist primarily of interests in three
areas: (i) a 25% working interest in the 1.9 million acre Qarun block located in
the western desert of Egypt; (ii) a 50% working interest in the 6.8 million acre
East Beni Suef block which lies adjacent to the south of the Qarun concession;
and (iii) a 50% working interest in the 460,000 acre Darag block located in the
northern portion of the Gulf of Suez. Global is the operator of East Beni Suef.
The three Egyptian concessions require the working interest partners to pay 100%
of the capital and operating costs. A portion of the oil and gas produced and
sold from the concessions is available to the operating interest partners to
recover costs. The remaining oil and gas produced and sold is divided between
the Egyptian government and the working interest partners. All Egyptian
government royalties and the working interest partners' Egyptian income taxes
attributable to their share of Egyptian taxable income (converted to barrels of
crude oil based on the value of such barrels) are included in the Egyptian
government's share of petroleum.
Cote d'Ivoire. Global's activities in Cote d'Ivoire consist of
interests in three oil and gas concessions. Global has a 10% working interest in
an area referred to as the "Special Area" and a 16% working interest in a area
referred to as the "Remaining Area," both of which are included in 335,000 gross
acres in block CI-11 offshore Cote d'Ivoire, West Africa. Block CI-11 is
currently producing approximately 15 Mbbls per day gross of oil and 50 MMcf per
day gross of gas. Global and its working interest partners also signed a
production sharing contract with the government of Cote d'Ivoire on the 525,000
acre CI-12 block which lies adjacent to the west of CI-11. Additionally, in
September 1996, Global signed a production sharing contract for the 249,000 acre
CI-104 block which lies adjacent to the west of block CI-12. Global has a
16.67% working interest in the CI-12 block and a 100% working interest in the
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CI-104 block. In general, the working interest partners (including Global) pay
the capital and operating costs, with production split between the Ivorian
government and the working interest partners. Up to 40% (in the case of block
CI-11), up to 50% (in the case of block CI-12) and up to 52% or 75% (in the case
of block CI-104, depending on the depth of the water at the wellsite) of the oil
and gas produced and sold from the acreage is available to the working interest
partners to recover costs. The remaining oil and gas produced and sold is
divided between the Ivorian government and the working interest partners. All
Ivorian government royalties and the working interest partners' share of Ivorian
income taxes attributable to their share of Ivorian taxable income (converted to
barrels of crude oil based on the value of such barrels) are included in the
Ivorian government's share of petroleum.
Tatarstan-Russia. Global's Tatarstan activities are conducted through
its 90% owned subsidiary, Texneft Inc. ("Texneft"), which has a 50% interest in
a joint venture ("Tatex") in Tatarstan, a republic that is part of the Russian
Federation. The joint venture activities currently include three projects: (i)
vapor recovery, (ii) the development and operation of the Onbysk field and (iii)
the development and operation of the Suncheleevsky and Demkinsky fields.
Indonesia. In Indonesia, Global has a 1.714% interest in a joint
venture for the exploration, development and production of oil and gas in East
Kalimantan, Indonesia, under a production sharing contract with Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara, the state petroleum enterprise of
Indonesia.
Consideration
The Common Stock Exchange Ratio was determined pursuant to
arm's-length negotiations between Seagull and Global. Written opinions were
obtained from independent financial advisors by the Boards of Directors of both
Seagull and Global that, as of the date of such written opinions, the Common
Stock Exchange Ratio was fair to the shareholders of each company. Based on the
Common Stock Exchange Ratio of .88, the number of outstanding shares of Global
Common Stock at October 2, 1996 and the closing price of Seagull's Common Stock
on October 2, 1996, the estimated transaction value of the Merger was
approximately $537 million.
Voting Agreement
Pursuant to a voting agreement (the "Voting Agreement"), The Prudential
Insurance Company of America ("Prudential"), which owned an aggregate of
6,311,547 shares, or approximately 21.2% of the outstanding shares of Global
Common Stock on the record date (August 30, 1996), agreed to vote all of such
stock in favor of the Merger so long as (i) the value of Seagull Common Stock
was not less than $17.00 per share, which value was to be calculated based on
the average closing sales price of Seagull Common Stock for a specified
twenty-day period prior to October 3, 1996; and (ii) Prudential had obtained
from the Securities and Exchange Commission any approvals required under
Sections 9(a) and 2(a) of the Public Utility Holding Company Act of 1935, as
amended. Pursuant to the Voting Agreement, Prudential voted all of the
outstanding shares of Global Common Stock owned by Prudential in favor of the
Merger.
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<PAGE>
The descriptions of the Merger Agreement and the Voting Agreement set
forth above are qualified by reference to the Merger Agreement and the Voting
Agreement which are filed as Exhibit 2.1 and 2.2, respectively, and are
incorporated herein by reference.
Other Recent Developments
On September 10, 1996, Seagull acquired all of the outstanding common
stock of Esso Suez Inc. ("Esso Suez") (the "Esso Suez Acquisition") and certain
assets of Esso Egypt Limited (the "EEL Assets") for a net purchase price of
approximately $74 million in cash. Esso Suez holds a 100 percent interest in the
East Zeit oil producing concession in the offshore Gulf of Suez, where current
net production averages approximately 4,000 - 5,000 barrels of crude oil per
day. The EEL Assets consist of the entire operating interest in the South
Hurghada exploration concession located onshore on the coast of the Gulf of Suez
approximately 250 miles southeast of Cairo.
Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired.
The consolidated financial statements of Global for the years ended
December 31, 1995, 1994 and 1993 (incorporated by reference to Global's
Annual Report on Form 10-K for the year ended December 31, 1995;
Registration No. 1-8674).
The unaudited consolidated financial statements of Global for the six
months ended June 30, 1996 and 1995 (incorporated by reference to
Global's Quarterly Report on Form 10-Q for the quarter ended June 30,
1996; Registration No. 1-8674).
(b) Pro forma financial information.
The pro forma financial statements giving effect to (i) the Merger
using the pooling of interests method of accounting for business
combinations and (ii) the Esso Suez Acquisition financed under
Seagull's revolving credit facilities and using the purchase method of
accounting are filed herewith as Exhibit 99.1.
(c) Exhibits.
2.1 Agreement and Plan of Merger dated as of July 22, 1996 by and
among Seagull Energy Corporation, GNR Merger Corporation and
Global Natural Resources Inc. (incorporated by reference to
Exhibit 2.1 to Registration Statement No. 333-09845 on Form
S-4 of Seagull Energy Corporation).
2.2 Voting Agreement dated as of July 22, 1996 among Seagull
Energy Corporation and The Prudential Life Insurance Company
of America (incorporated by reference to Exhibit 2.2 to
Registration Statement No. 333-09845 on Form S-4 of Seagull
Energy Corporation).
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<PAGE>
99.1 The pro forma financial statements giving effect to (i) the
Merger using the pooling of interests method of accounting for
business combinations and (ii) the Esso Suez Acquisition
financed under Seagull's revolving credit facilities and using
the purchase method of accounting.
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.
Date: October 18, 1996
SEAGULL ENERGY CORPORATION
By: /s/ William L. Transier
William L. Transier
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
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<PAGE>
Exhibit Index
Page
2.1 Agreement and Plan of Merger dated as of July 22, 1996 by and
among Seagull Energy Corporation, GNR Merger Corporation and
Global Natural Resources Inc. (incorporated by reference to
Exhibit 2.1 to Registration Statement No. 333-09845 on Form
S-4 of Seagull Energy Corporation).
2.2 Voting Agreement dated as of July 22, 1996 among Seagull Energy
Corporation and The Prudential Life Insurance Company of America
(incorporated by reference to Exhibit 2.2 to Registration
Statement No. 333-09845 on Form S-4 of Seagull Energy
Corporation).
99.1 The pro forma financial statements giving effect to (i) the
Merger using the pooling of interests method of accounting for
business combinations and (ii) the Esso Suez Acquisition financed
under Seagull's revolving credit facilities and using the
purchase method of accounting.
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EXHIBIT 99.1
<PAGE>
UNAUDITED PRO FORMA
FINANCIAL INFORMATION
CONDENSED STATEMENT OF EARNINGS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
AND EACH OF THE YEARS IN THE THREE-YEAR PERIOD
ENDED DECEMBER 31, 1995
AND
CONDENSED BALANCE SHEET
AS OF JUNE 30, 1996
<PAGE>
UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION
On September 10, 1996, Seagull Energy Corporation ("Seagull") acquired all
of the outstanding common stock of Esso Suez Inc. ("Esso Suez") (the "Esso Suez
Acquisition") and certain assets of Esso Egypt Limited for a net purchase price
of approximately $74 million in cash. On October 3, 1996, the shareholders of
Seagull and the shareholders of Global Natural Resources Inc. ("Global")
approved a stock merger (the "Merger") whereby each outstanding share of Global
common stock was converted into .88 of share of Seagull common stock (the
"Common Stock Exchange Ratio").
The unaudited pro forma condensed statements of earnings for the six months
ended June 30, 1996 and each of the years in the three-year period ended
December 31, 1995 give effect to (i) the Merger using the pooling of interests
method of accounting for business combinations and (ii) the Esso Suez
Acquisition, financed under Seagull's revolving credit facilities (the "Credit
Facilities"), as if the acquisition had occurred on January 1, 1995. The
unaudited pro forma condensed balance sheet as of June 30, 1996 gives effect to
(i) the Merger using the pooling of interests method of accounting for business
combinations and (ii) the Esso Suez Acquisition, financed under the Credit
Facilities, as if the acquisition had occurred on June 30, 1996. The
transactions contemplated by the Merger will be accounted for as a pooling of
interests whereby the assets, liabilities and results of operations of Seagull
and Global are combined using the historical cost-based amounts of the two
separate entities.
The unaudited pro forma information presented is based upon the respective
historical consolidated financial statements of Seagull, Global and Esso Suez
and should be read in conjunction with such financial statements and the related
notes thereto. Estimated pre-tax expenses of approximately $8 million related to
effecting the Merger of Seagull and Global will be deducted in determining the
net income of the combined enterprise for the period in which the expenses are
incurred. The effects of such expenses are not reflected in the following
unaudited pro forma condensed financial statements. The unaudited pro forma
condensed financial information has been prepared from, and should be read in
conjunction with, the historical consolidated financial statements and notes
thereto of Seagull, Global and Esso Suez. The unaudited pro forma information
presented does not purport to be indicative of actual results, as if the
combinations had been in effect on the dates of or for the periods indicated, or
of future results.
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<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONDENSED STATEMENTS OF EARNINGS
Six Months Ended June 30, 1996
(Dollars in Thousands, Except Per Share Amounts)
Seagull/ Esso Pro Forma
Seagull Global Adjustments Global Suez Adjustments Combined
--------- -------- ------------- --------- -------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Gas and oil operations................... $145,302 $55,516 $ $200,818 $26,903 $ $227,721
Alaska transmission and distribution..... 51,133 - 51,133 - 51,133
--------- -------- --------- --------- -------- --------- ---------
196,435 55,516 251,951 26,903 278,854
Costs of Operations:
Alaska transmission and distribution
cost of gas sold....................... 22,457 - 22,457 - 22,457
Operations and maintenance............... 51,013 23,638 (3,723)(B) 70,928 5,114 76,042
Exploration charges...................... 14,841 5,944 (600)(B) 20,185 - 20,185
Depreciation, depletion and amortization. 62,320 12,278 600 (B) 75,198 11,021 (11,021)(D) 82,790
7,592 (D)
--------- -------- --------- --------- -------- --------- ---------
150,631 41,860 (3,723) 188,768 16,135 (3,429) 201,474
--------- -------- --------- --------- -------- --------- ---------
Operating Profit........................... 45,804 13,656 3,723 63,183 10,768 3,429 77,380
Other (Income) Expense:
General and administrative............... 7,933 - 3,723 (B) 11,656 - 11,656
Interest expense......................... 22,654 29 22,683 - 2,246 (E) 24,929
Loss (gain) on sale of property, plant
and equipment, net.................... (384) 3 (381) - (381)
Interest income and other................ (468) (534) (1,002) (50) (1,052)
--------- -------- --------- --------- -------- --------- ---------
29,735 (502) 3,723 32,956 (50) 2,246 35,152
--------- -------- --------- --------- -------- --------- ---------
Earnings Before Income Taxes............... 16,069 14,158 - 30,227 10,818 1,183 42,228
Income Tax Expense......................... 7,130 7,012 707 (C) 14,849 6,566 (786)(F) 20,629
--------- -------- --------- --------- -------- --------- ---------
Net Earnings............................... $ 8,939 $ 7,146 $ (707) $ 15,378 $ 4,252 $ 1,969 $ 21,599
========= ======== ========= ========= ======== ========= =========
Earnings Per Share......................... $ 0.24 $ 0.24 $ 0.34
========= ========= =========
Weighted Average Number of Common
Shares Outstanding (in thousands)........ 37,062 26,098 (A) 63,160 63,160
========= ========= ========= =========
</TABLE>
See Accompanying Notes to Unaudited Pro Forma Condensed Statements of Earnings.
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<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONDENSED STATEMENTS OF EARNINGS
Year Ended December 31, 1995
(Dollars in Thousands, Except Per Share Amounts)
Seagull/ Esso Pro Forma
Seagull Global Adjustments Global Suez Adjustments Combined
--------- --------- ----------- ---------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Gas and oil operations................... $238,503 $78,457 $ $316,960 $ 75,889 $ $392,849
Alaska transmission and distribution..... 97,770 - 97,770 - 97,770
--------- --------- --------- ---------- --------- --------- ---------
336,273 78,457 414,730 75,889 490,619
Costs of Operations:
Alaska transmission and distribution
cost of gas sold....................... 46,328 - 46,328 - 46,328
Operations and maintenance............... 105,674 40,964 (5,556)(B) 141,082 11,766 152,848
Exploration charges...................... 29,555 11,768 (1,100)(B) 40,223 - 40,223
Depreciation, depletion and amortization. 124,790 21,520 1,100 (B) 147,410 32,154 (32,154)(D) 169,523
22,113 (D)
Impairment of long-lived assets.......... 44,376 4,466 48,842 - 48,842
--------- --------- --------- ---------- --------- ---------- ---------
350,723 78,718 (5,556) 423,885 43,920 (10,041) 457,764
--------- --------- --------- ---------- --------- ---------- ---------
Operating Profit (Loss).................... (14,450) (261) 5,556 (9,155) 31,969 10,041 32,855
Other (Income) Expense:
General and administrative............... 19,167 - 5,556 (B) 24,723 - 24,723
Interest expense......................... 52,814 164 52,978 - 5,032 (E) 58,010
Loss (gain) on sale of property, plant
and equipment, net.................... (83,591) 203 (83,388) - (83,388)
Interest income and other................ (1,160) (3,352) (4,512) (34) (4,546)
--------- --------- --------- ---------- --------- ---------- ---------
(12,770) (2,985) 5,556 (10,199) (34) 5,032 (5,201)
--------- --------- --------- ---------- --------- ---------- ---------
Earnings (Loss) Before Income Taxes........ (1,680) 2,724 - 1,044 32,003 5,009 38,056
Income Tax Expense (Benefit)............... (2,312) 9,031 (3,937) (C) 2,782 22,843 (1,761)(F) 23,864
--------- --------- --------- ---------- --------- ---------- ---------
Net Earnings (Loss)........................ $ 632 $ (6,307) $3,937 $ (1,738) $ 9,160 $ 6,770 $ 14,192
========= ========= ========= ========== ========= ========== =========
Earnings (Loss) Per Share.................. $ 0.02 $ (0.03) $ 0.23
========= ========== =========
Weighted Average Number of Common
Shares Outstanding (in thousands)........ 36,717 25,957 (A) 62,674 62,674
========= ========= ========== ========
</TABLE>
See Accompanying Notes to Unaudited Pro Forma Condensed Statements of Earnings.
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<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONDENSED STATEMENTS OF EARNINGS
Year Ended December 31, 1994
(Dollars in Thousands, Except Per Share Amounts)
Pro Forma
Seagull Global Adjustments Combined
----------- ----------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Gas and oil operations................... $ 302,506 $ 62,943 $ $ 365,449
Alaska transmission and distribution..... 105,598 - 105,598
----------- ----------- ------------- -------------
408,104 62,943 471,047
Costs of Operations:
Alaska transmission and distribution
cost of gas sold....................... 54,465 - 54,465
Operations and maintenance............... 119,987 36,960 (6,591) (B) 150,356
Exploration charges...................... 26,888 19,325 (2,400) (B) 43,813
Depreciation, depletion and amortization. 144,697 9,837 2,400 (B) 156,934
----------- ----------- ------------- -------------
346,037 66,122 (6,591) 405,568
----------- ----------- ------------- -------------
Operating Profit (Loss).................... 62,067 (3,179) 6,591 65,479
Other (Income) Expense:
General and administrative............... 10,252 - 6,591 (B) 16,843
Interest expense......................... 51,550 124 51,674
Loss (gain) on sale of property, plant
and equipment, net.................... (413) 8 (405)
Interest income and other................ (254) (1,714) (1,968)
----------- ----------- ------------- -------------
61,135 (1,582) 6,591 66,144
----------- ----------- ------------- -------------
Earnings (Loss) Before Income Taxes........ 932 (1,597) - (665)
Income Tax Expense (Benefit)............... (2,314) 6,656 (602) (C) 3,740
----------- ----------- ------------- -------------
Net Earnings (Loss)........................ $ 3,246 $ (8,253) $ 602 $ (4,405)
=========== =========== ============= =============
Earnings (Loss) Per Share.................. $ 0.09 $ (0.07)
=========== =============
Weighted Average Number of Common
Shares Outstanding (in thousands)........ 36,904 26,102 (A) 63,006
=========== ============= =============
</TABLE>
See Accompanying Notes to Unaudited Pro Forma Condensed Statements of Earnings.
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<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONDENSED STATEMENTS OF EARNINGS
Year Ended December 31, 1993
(Dollars in Thousands, Except Per Share Amounts)
Pro Forma
Seagull Global Adjustments Combined
----------- ------------ ------------- -----------
<S> <C> <C> <C> <C>
Revenues:
Gas and oil operations................... $269,921 $75,084 $ $ 345,005
Alaska transmission and distribution..... 107,244 - 107,244
----------- ------------ ------------- -----------
377,165 75,084 452,249
Costs of Operations:
Alaska transmission and distribution
cost of gas sold....................... 59,898 - 59,898
Operations and maintenance............... 107,457 54,651 (7,664) (B) 154,444
Exploration charges...................... 17,265 6,946 (2,400) (B) 21,811
Depreciation, depletion and amortization. 116,556 8,376 2,400 (B) 127,332
----------- ------------ ------------- -----------
301,176 69,973 (7,664) 363,485
----------- ------------ ------------- -----------
Operating Profit........................... 75,989 5,111 7,664 88,764
Other (Income) Expense:
General and administrative............... 11,666 - 7,664 (B) 19,330
Interest expense......................... 36,753 101 36,854
Gain on sale of property, plant
and equipment, net.................... (3,929) (1,752) (5,681)
Interest income and other................ (1,779) (4,257) (6,036)
----------- ------------ ------------- -----------
42,711 (5,908) 7,664 44,467
----------- ------------ ------------- -----------
Earnings Before Income Taxes............... 33,278 11,019 - 44,297
Income Tax Expense......................... 6,080 6,532 3,799 (C) 16,411
----------- ------------ ------------- -----------
Net Earnings............................... $ 27,198 $ 4,487 $ (3,799) $ 27,886
=========== ============ ============= ===========
Earnings Per Share......................... $ 0.76 $ 0.46
=========== ===========
Weighted Average Number of Common
Shares Outstanding (in thousands)........ 35,790 24,958 (A) 60,748
=========== ============= ===========
</TABLE>
See Accompanying Notes to Unaudited Pro Forma Condensed Statements of Earnings.
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NOTES TO UNAUDITED PRO FORMA
CONDENSED STATEMENTS OF EARNINGS
(A) The pro forma weighted average number of common shares outstanding has
been computed by multiplying the historical average common shares
outstanding for Global by the Common Stock Exchange Ratio of .88.
(B) To reclassify general and administrative costs associated with Global's
corporate staff and Global's leasehold amortization of unproved
properties to be consistent with Seagull's accounting presentation.
(C) To adjust the valuation allowance associated with the deferred tax
assets primarily related to book to tax basis differences on domestic
property, plant and equipment generated during the applicable periods.
(D) To adjust depreciation, depletion and amortization expense to give
effect to the Esso Suez Acquisition.
(E) To record interest expense to give effect to the Esso Suez Acquisition
financed under the Credit Facilities.
(F) To adjust U.S. federal income taxes for adjustments.
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<PAGE>
<TABLE>
<CAPTION>
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
June 30, 1996
(Dollars in Thousands)
ASSETS
Seagull/ Esso Pro Forma
Seagull Global Adjustments Global Suez Adjustments Combined
----------- ------- ------------ ----------- -------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Current Assets:
Cash and cash equivalents............ $ 14,404 $ 16,801 $ $ 31,205 $ 632 $ $ 31,837
Accounts receivable, net............. 107,583 13,399 120,982 96,191 (88,911)(D) 128,262
Inventories.......................... 5,488 - 5,488 7,157 12,645
Prepaid expense and other............ 6,502 4,056 10,558 739 11,297
---------- --------- --------- ---------- -------- ---------- ----------
Total Current Assets............... 133,977 34,256 168,233 104,719 (88,911) 184,041
Property, Plant and Equipment - at cost 1,645,282 216,741 1,862,023 255,113 (255,113)(B) 1,922,369
60,346 (C)
Accumulated Depreciation,
Depletion and Amortization........... 627,612 89,707 717,319 198,617 (198,617)(B) 717,319
---------- --------- --------- ---------- -------- ---------- ----------
1,017,670 127,034 1,144,704 56,496 3,850 1,205,050
Other Assets........................... 39,917 6,038 45,955 103 46,058
---------- --------- --------- ---------- -------- ---------- ----------
Total Assets....................... $1,191,564 $167,328 $ $1,358,892 $161,318 $ (85,061) $1,435,149
========== ========= ========= ========== ======== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable..................... $ 79,975 $ 10,641 $ $ 90,616 $ 647 $ $ 91,263
Accrued expenses..................... 33,518 11,386 44,904 1,610 46,514
Current maturities of long-term debt. 1,214 1,250 2,464 - 2,464
---------- --------- --------- ---------- -------- ---------- ----------
Total Current Liabilities.......... 114,707 23,277 137,984 2,257 140,241
Long-Term Debt......................... 522,632 16,250 538,882 - 74,000 (D) 612,882
Other Noncurrent Liabilities........... 53,581 624 54,205 - 54,205
Deferred Income Taxes.................. 41,111 - (5,811) (A) 35,300 - 35,300
Redeemable Bearer Shares............... - 16,265 16,265 - 16,265
Shareholders' Equity................... 459,533 110,912 5,811 (A) 576,256 159,061 (159,061)(E) 576,256
Commitments and Contingencies..........
---------- --------- --------- ---------- -------- ---------- ----------
Total Liabilities and
Shareholders' Equity............. $1,191,564 $167,328 $ $1,358,892 $161,318 $ (85,061) $1,435,149
========== ========= ========= ========== ======== ========== ==========
</TABLE>
See Accompanying Notes to Unaudited Pro Forma Condensed Balance Sheet.
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<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED BALANCE SHEET
(A) To adjust the valuation allowance associated with the deferred tax
assets primarily related to the book to tax basis differences on
domestic property, plant and equipment. These deferred tax assets were
generated, but not expected to be utilized, by Global but will more
likely than not be utilized by the pro forma combined entity.
(B) To eliminate the historical cost of property, plant and equipment and
accumulated depreciation, depletion and amortization of Esso Suez.
(C) To adjust the assets acquired and liabilities assumed in the Esso Suez
Acquisition to reflect the allocation of the estimated purchase price.
(D) To record the financing of the Esso Suez Acquisition through additional
borrowings under the Credit Facilities and the prompt collection of
certain receivables.
(E) To eliminate the shareholder's equity of Esso Suez.
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