SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 11-K
(Mark One)
/ X / ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to _______________________
Commission file number 33-14463
A. Full title of the plan and address of the plan, if different from that of the
issuer named below:
ENSTAR NATURAL GAS COMPANY
THRIFT INVESTMENT PLAN
3000 Spenard Road
Anchorage, Alaska 99503
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office.
SEAGULL ENERGY CORPORATION
1001 Fannin, Suite 1700
Houston, Texas 77002-6714
<PAGE>
ENSTAR NATURAL GAS COMPANY
THRIFT INVESTMENT PLAN
Annual Report on Form 11-K
for the year ended December 31, 1997
Index
Financial Statements, Supplemental
Schedules, Signature and Exhibit
<TABLE>
<S> <C>
Page
Financial Statements:
Independent Auditors' Report dated March 27, 1998.......................... 2
Statements of Net Assets Available for Plan Benefits as of
December 31, 1997 and 1996............................................. 3
Statements of Changes in Net Assets Available for Plan Benefits
for the Years Ended December 31, 1997, 1996 and 1995................... 4
Notes to Financial Statements.............................................. 5-15
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment Purposes................. 16
Item 27d - Schedule of Reportable Transactions............................. 17
Signature....................................................................... 18
Exhibit - Independent Auditors' Consent......................................... 20
</TABLE>
Note: Plan financial statements have been prepared in accordance with item 4
under "Required Information" of Annual Report on Form 11-K.
1
<PAGE>
Independent Auditors' Report
The Administrative Committee
ENSTAR Natural Gas Company
Thrift Investment Plan:
We have audited the accompanying statements of net assets available for Plan
benefits of ENSTAR Natural Gas Company Thrift Investment Plan (Plan) as of
December 31, 1997 and 1996, and the related statements of changes in net assets
available for Plan benefits for each of the years in the three-year period ended
December 31, 1997. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for Plan benefits as of December
31, 1997 and 1996, and changes in net assets available for Plan benefits for
each of the years in the three-year period ended December 31, 1997 in conformity
with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules are presented
for the purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974, as amended. The
supplemental schedules have been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, are fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
Anchorage, Alaska
March 27, 1998
2
<PAGE>
ENSTAR NATURAL GAS COMPANY
THRIFT INVESTMENT PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 1997 and 1996
<TABLE>
<S> <C> <C>
1997 1996
---------------- ---------------
Assets:
Investments:
Common stock of Seagull Energy Corporation,
15,814 shares in 1997 and 18,588 shares
in 1996 (cost $268,018 in 1997 and
$397,107 in 1996) $ 326,167 $ 408,930
Mutual funds (cost $10,053,286 in 1997 and
$8,082,110 in 1996) 10,883,396 8,511,833
Scudder Stable Value Fund 8,687,468 8,479,487
Scudder Stock Index Fund (cost $253,138) 260,159 -
Participant loans 397,849 329,597
---------------- ---------------
Total investments 20,555,039 17,729,847
---------------- ---------------
Contributions receivable:
Employee 33,295 32,319
Employer 12,218 7,824
---------------- ---------------
Total receivables 45,513 40,143
---------------- ---------------
Total assets 20,600,552 17,769,990
---------------- ---------------
Liabilities:
Distributions payable 263,000 -
Other 358 -
---------------- ---------------
Total liabilities 263,358 -
---------------- ---------------
Net assets available for Plan benefits $ 20,337,194 $ 17,769,990
================ ===============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
ENSTAR NATURAL GAS COMPANY
THRIFT INVESTMENT PLAN
Statements of Changes in Net Assets
Available for Plan Benefits
Years ended December 31, 1997, 1996 and 1995
<TABLE>
<S> <C> <C> <C>
1997 1996 1995
--------------- ---------------- ----------------
Contributions:
Employee $ 1,166,978 $ 1,129,565 $ 1,029,193
Employer 301,790 246,604 233,052
--------------- ---------------- ----------------
Total contributions 1,468,768 1,376,169 1,262,245
--------------- ---------------- ----------------
Investment income:
Interest income 570,557 509,904 466,031
Dividend income 912,472 606,319 538,572
Net appreciation in fair value
of investments:
Seagull Energy Corporation
common stock 81,360 20,305 76,626
Other investments 887,434 508,220 1,091,498
--------------- ---------------- ----------------
Total net investment income 2,451,823 1,644,748 2,172,727
--------------- ---------------- ----------------
Distributions:
Employee withdrawals 1,353,387 1,025,236 822,267
--------------- ---------------- ----------------
Net increase in net assets
available for Plan benefits 2,567,204 1,995,681 2,612,705
Net assets available for Plan benefits
at beginning of year 17,769,990 15,774,309 13,161,604
--------------- ---------------- ----------------
Net assets available for Plan benefits
at end of year $ 20,337,194 $ 17,769,990 $ 15,774,309
=============== ================ ================
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
ENSTAR NATURAL GAS COMPANY
THRIFT INVESTMENT PLAN
Notes to Financial Statements
December 31, 1997 and 1996
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying financial statements of the ENSTAR Natural Gas Company
Thrift Investment Plan (Plan) have been prepared on the accrual basis.
ENSTAR Natural Gas Company (Company) is a division of Seagull Energy
Corporation (Seagull).
Preparation of financial statements in accordance with generally accepted
accounting principles requires the Plan Administrator to make estimates
and assumptions affecting the reported amounts of net assets available
for Plan benefits as of the statement date and changes in net assets
available for Plan benefits for the period. Actual results may differ
from those estimates and assumptions.
INVESTMENT VALUATION
Plan investments are valued as follows:
Scudder Mutual Funds and Stock Index Fund - Scudder mutual funds and
stock index fund are carried at fair market value as determined by
Scudder, based upon quoted market prices.
Franklin Balance Sheet Investment Fund - The Franklin Balance Sheet
Investment Fund is carried at fair market value as determined by
Franklin Templeton Group, based upon quoted market prices.
Templeton Foreign I Fund - The Templeton Foreign I Fund is carried at
fair market value as determined by Franklin Templeton Group, based on
quoted market prices.
Seagull Stock Fund - The common stock of Seagull is valued at fair
market value determined by the closing price on the New York Stock
Exchange.
The Scudder Stable Value Fund, formerly named Scudder Managed
Guaranteed Investment Contracts Trust - The Scudder Stable Value Fund
is reported at contract value.
Purchases and sales of securities are recorded on a trade date basis.
(2) PLAN DESCRIPTION
The following description of the Plan provides only general information.
Participants should refer to the Summary Plan Description for a more
complete description of the Plan's provisions. It is subject to the
provisions of the Employee Retirement Income Security Act of 1974, as
amended.
5 (Continued)
<PAGE>
ENSTAR NATURAL GAS COMPANY
THRIFT INVESTMENT PLAN
Notes to Financial Statements
GENERAL PROVISIONS OF THE PLAN
Employees of the Company become eligible to participate in the Plan on
the January 1 or July 1 coincident with or next following the later of
the date the employee has completed one year of service during which the
employee worked at least 1,000 hours for the Company or attained age
eighteen. Eligible employees may not be part of collective bargaining
units unless the applicable collective bargaining agreement provides for
coverage under the Plan. Benefit payments are either a single lump-sum or
periodic installments for a period specified under a commercial annuity
contract. Participants may make up to two withdrawals a year, as provided
by the Plan.
CONTRIBUTIONS
An active participant in the Plan may contribute from 1% to 12% of
compensation as defined in the Plan, either as cash or deferred (pretax)
or regular (after-tax) contributions; however, cash or deferred
contributions for any participant could not exceed $9,500 in 1997, $9,500
in 1996 and $9,240 in 1995. The basic contribution consists of up to 4%
of the participant's compensation as defined in the Plan. The Company
matches 50% to 100% of the participant's basic contribution up to a
maximum contribution of 3% of compensation as defined in the Plan.
Participants are 100% vested in employer contributions. The Company may
also make certain discretionary contributions to the Plan. Participants
may elect to invest in various programs as described in note 3.
OBLIGATION FOR BENEFITS
While it is the intention of the Company to continue the Plan
indefinitely, the Company may terminate the Plan in its entirety at any
time. Upon such termination, all benefits previously earned by the
participants would be nonforfeitable.
PARTICIPANT ACCOUNTS
Separate accounts reflecting regular contributions, cash or deferred
contributions and Company contributions are maintained for each
participant. Each participant's account is credited with these
contributions and allocations of earnings. In general, earnings are
allocated each month based on each participant's account as a proportion
of the total account for each investment program.
(3) INVESTMENTS
INVESTMENT PROGRAMS
Scudder Trust Company (Scudder) is the trustee and recordkeeper of the
Plan. Plan participants were able to invest contributions in the
following investment programs:
MUTUAL FUNDS
Scudder Global Fund - A mutual fund seeking long-term capital
growth through investments in a variety of the world's stock
markets.
6 (Continued)
<PAGE>
ENSTAR NATURAL GAS COMPANY
THRIFT INVESTMENT PLAN
Notes to Financial Statements
Scudder Large Company Value Fund (formerly named Scudder Capital
Growth Fund) - A mutual fund seeking long-term capital growth.
Investments are generally in all sectors of the market including
those involved in electronics, business equipment, energy,
financial services, telecommunications and utilities.
Scudder Income Fund - A mutual fund which invests primarily in
high grade income producing securities such as corporate bonds,
convertible bonds and government securities.
Scudder Growth and Income Fund - A mutual fund seeking long-term
capital growth, current income and growth of income. Investments
are primarily in common stock and convertible securities, which
include both common stocks and debt securities.
Scudder Development Fund - A mutual fund seeking long-term
capital growth through a portfolio of equity securities of
small, emerging, or developing companies. To help reduce risk,
the fund diversifies its investment amounts in different
industries. This fund was closed for investments on December 31,
1997.
Scudder Managed Retirement Trust - Balanced - A trust comprised
of Scudder no-load mutual funds. This fund was closed for
investments on March 21, 1997.
Scudder Pathway Series - Balanced - A mutual fund which invests
primarily in Scudder stock, bond, and stable value mutual funds.
Templeton Foreign I Fund - A mutual fund seeking long-term
capital growth with international diversification and risk
through investments in foreign equity securities.
Franklin Balance Sheet Investment Fund - A mutual fund seeking
high total return of which appreciation and income are
components. Investments are primarily common stocks of emerging
U.S. growth companies that may benefit from rapidly changing
industrial and economic trends.
OTHER
Seagull Stock Fund - A fund invested in shares of Seagull common
stock.
Scudder Stable Value Fund (formerly named Scudder Managed
Guaranteed Investment Contract Trust) - A fund comprised of
several investment contracts maturing through 2003 with a
weighted average maturity of 2.4 years. The average yield during
1997, 1996 and 1995 was approximately 6.7%, 6.2% and 6.4%,
respectively.
7 (Continued)
<PAGE>
ENSTAR NATURAL GAS COMPANY
THRIFT INVESTMENT PLAN
Notes to Financial Statements
Scudder Stock Index Fund - A bank-maintained collective
investment trust (group trust) by Scudder Trust Company. The
fund seeks to invest directly in common stocks and/or mutual
funds or group trusts that purchase all 500 issues in the
Standard & Poor 500 Stock Index in their appropriate weightings.
Employees may elect to invest in more than one fund. The following table
summarizes the number of employees participating in each fund at December
31, 1997, 1996 and 1995:
<TABLE>
<S> <C> <C> <C>
1997 1996 1995
---- ---- ----
Scudder Global Fund 90 84 70
Scudder Large Company Value Fund 102 98 89
Scudder Income Fund 70 65 62
Scudder Growth and Income Fund 115 107 99
Scudder Development Fund - 75 57
Scudder Managed Retirement Trust - Balanced - 40 40
Seagull Stock Fund 40 35 40
Scudder Pathway Series - Balanced 41 - -
Franklin Balance Sheet Investment Fund 33 - -
Templeton Foreign Fund I 20 - -
Scudder Stable Value Fund 151 146 143
Scudder Stock Index Fund 18 - -
</TABLE>
(4) TRANSACTIONS WITH PLAN SPONSOR
In addition to contributions, the Company paid all administrative
expenses of the Plan in 1997, 1996 and 1995.
(5) FEDERAL INCOME TAXES
The Plan is qualified under Section 401(a) of the Internal Revenue Code
(Code), and the Trust is exempt from federal income taxes under the
provisions of Section 501(a) of the Code and pursuant to a tax
determination letter obtained from the Internal Revenue Service (IRS).
The Plan administrator believes that the Plan is currently designed and
operated in compliance with the applicable requirements of the Code.
Because the Plan is a qualified plan under Section 401(a) of the Code, an
employee participating in the Plan is not subject to federal income taxes
on his cash or deferred contributions, his share of Company matching or
discretionary contributions to the Plan or his share of income earned by
the Plan, until it is withdrawn or distributed.
8 (Continued)
<PAGE>
ENSTAR NATURAL GAS COMPANY
THRIFT INVESTMENT PLAN
Notes to Financial Statements
(6) UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS
Gross unrealized appreciation (depreciation) consists of the following at
December 31:
<TABLE>
<S> <C> <C> <C>
1997 1996 1995
---------- ---------- ----------
Mutual Funds:
Gross unrealized appreciation $ 883,696 $ 494,628 $ 953,771
Gross unrealized depreciation (53,575) (64,905) -
Seagull Stock -
Gross unrealized appreciation 58,138 11,823 78,968
Scudder Stock Index Fund -
Gross unrealized appreciation 7,021 - -
</TABLE>
(7) NET REALIZED GAINS (LOSSES)
Net realized gains (losses) consisted of the following for the years
ended December 31:
<TABLE>
<S> <C> <C> <C>
Aggregate Aggregate
proceeds from cost of Net realized
shares sold shares sold gains (losses)
---------------- -------------- -----------------
1997:
Scudder Global Fund $ 230,709 $ 229,538 $ 1,171
Scudder Large Company Value Fund 569,579 562,362 7,217
Scudder Income Fund 113,979 112,473 1,506
Scudder Growth and Income Fund 663,385 645,029 18,356
Scudder Development Fund 1,986,072 1,967,113 18,959
Scudder Managed Retirement
Trust - Balanced 844,843 834,092 10,751
Scudder Pathway Series -
Balanced 105,895 104,365 1,530
Franklin Balance Sheet Investment Fund 1,787 1,840 (53)
Templeton Foreign I Fund 38,431 43,146 (4,715)
Seagull Stock Fund 499,789 476,567 23,222
Scudder Stock Index Fund 98,952 103,382 (4,430)
---------------- -------------- -----------------
Total 1997 $ 5,153,421 $ 5,079,907 $ 73,514
================ ============== =================
</TABLE>
9 (Continued)
<PAGE>
ENSTAR NATURAL GAS COMPANY
THRIFT INVESTMENT PLAN
Notes to Financial Statements
<TABLE>
<S> <C> <C> <C>
Aggregate Aggregate
proceeds from cost of Net realized
shares sold shares sold gains (losses)
-------------- -------------- ----------------
1996:
Scudder Global Fund $ 258,882 $ 250,090 $ 8,792
Scudder Capital Growth Fund 179,576 164,345 15,231
Scudder Income Fund 248,734 253,700 (4,966)
Scudder Growth and Income Fund 476,161 435,279 40,882
Scudder Development Fund 289,512 284,249 5,263
Scudder Managed Retirement
Trust - Balanced 154,865 141,570 13,295
Seagull Stock Fund 276,191 267,709 8,482
-------------- -------------- ----------------
Total 1996 $ 1,883,921 $ 1,796,942 $ 86,979
============== ============== ================
1995:
Scudder Global Fund $ 520,163 $ 478,213 $ 41,950
Scudder Capital Growth Fund 356,197 315,545 40,652
Scudder Income Fund 38,536 36,016 2,520
Scudder Growth and Income Fund 267,589 241,137 26,452
Scudder Development Fund 199,241 176,550 22,691
Scudder Managed Retirement
Trust - Balanced 56,017 52,554 3,463
Seagull Stock Fund 49,819 52,161 (2,342)
-------------- -------------- ----------------
Total 1995 $ 1,487,562 $ 1,352,176 $ 135,386
============== ============== ================
</TABLE>
For purposes of calculating realized gains and losses, cost of stock sold
is determined based upon revalued cost. Revalued cost is the market value
of the investment as of the beginning of the Plan year.
(8) PARTICIPANT LOANS
Participants may borrow a minimum of $1,000 and a maximum of the lesser
of 50% of the balance in the participant's cash or deferred account or
$50,000. Loans bear interest at the prime rate published by the Wall
Street Journal on the date the loan documents are executed plus 2%. Loans
are repaid through payroll deductions for up to five years by monthly
installments of principal and interest.
10 (Continued)
<PAGE>
ENSTAR NATURAL GAS COMPANY
THRIFT INVESTMENT PLAN
Notes to Financial Statements
(9) PARTICIPANT DIRECTED INVESTMENT PROGRAMS
The Plan provides for participant directed investment of their
contributions. The following identifies amounts relating to participant
directed programs for net assets available for Plan benefits at December
31, 1997 and 1996 and changes in net assets available for Plan benefits
for the years ended December 31, 1997, 1996 and 1995:
<TABLE>
<S> <C> <C> <C> <C> <C>
Scudder
Scudder Growth Scudder
Scudder Large Value Scudder and Pathway
Allocation of Plan Assets Global Company Income Income Series -
to Investment Programs Fund Fund Fund Fund Balanced
----------- ---------- ----------- --------- ----------
December 31, 1997:
Assets:
Investments:
Common stock of Seagull Energy
Corporation, 15,814 shares
(cost $268,018) $ - - - - -
Mutual funds(cost $10,053,286) 1,308,127 2,608,390 1,575,873 3,271,955 920,597
Scudder Stable Value Fund - - - - -
Scudder Stock Index Fund - - - - -
Participant loans 40,898 43,554 19,706 56,579 12,897
Contributions receivable:
Employee 3,485 3,717 2,232 4,521 1,834
Employer 1,211 1,349 757 1,586 742
----------- ---------- ----------- --------- ----------
4,696 5,066 2,989 6,107 2,576
----------- ---------- ----------- --------- ----------
Distributions payable - - - - -
Other - - - - -
Net assets available
for Plan benefits $ 1,353,721 2,657,010 1,598,568 3,334,641 936,070
=========== ========== =========== ========= ==========
</TABLE>
11 (Continued)
<PAGE>
ENSTAR NATURAL GAS COMPANY
THRIFT INVESTMENT PLAN
Notes to Financial Statements
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Franklin
Scudder Balance Scudder
Stock Seagull Sheet Templeton Stable
Allocation of Plan Assets Index Stock Investment Foreign Value
to Investment Programs Fund Fund Fund Fund Fund Total
---------- --------- ---------- --------- ---------- -----------
December 31, 1997:
Assets:
Investments:
Common stock of Seagull Energy
Corporation, 15,814 shares
(cost $268,018) $ - 326,167 - - - $ 326,167
Mutual funds (cost $10,053,286) - - 1,030,991 167,463 - 10,883,396
Scudder Stable Value Fund - - - - 8,687,468 8,687,468
Scudder Stock Index Fund 260,159 - - - - 260,159
Participant loans 11,146 14,560 38,058 10,441 150,010 397,849
Contributions receivable:
Employee 738 938 2,585 939 12,306 33,295
Employer 298 335 888 310 4,742 12,218
---------- --------- ---------- --------- ---------- -----------
1,036 1,273 3,473 1,249 17,048 45,513
---------- --------- ---------- --------- ---------- -----------
Distributions payable - - - - (263,000) (263,000)
Other - (358) - - - (358)
Net assets available
for Plan benefits $ 272,341 341,642 1,072,522 179,153 8,591,526 $20,337,194
========== ========= ========== ========= ========== ===========
</TABLE>
(Continued)
<PAGE>
ENSTAR NATURAL GAS COMPANY
THRIFT INVESTMENT PLAN
Notes to Financial Statements
<TABLE>
<S> <C> <C> <C> <C> <C>
Scudder
Scudder Growth
Scudder Capital Scudder and Scudder
Allocation of Plan Assets Global Growth Income Income Development
to Investment Programs Fund Fund Fund Fund Fund
----------- ----------- ----------- ----------- -----------
December 31, 1996:
Assets:
Investments:
Common stock of Seagull Energy
Corporation, 18,588 shares
(cost $397,107) $ - - - - -
Mutual funds (cost $8,082,110) 1,021,202 1,902,184 1,328,700 2,395,021 1,045,678
Scudder Stable Value Fund - - - - -
Participant loans 47,622 38,996 22,432 42,794 33,022
Contributions receivable:
Employee 3,881 3,777 2,299 4,415 2,125
Employer 856 978 599 1,026 473
----------- ----------- ----------- ----------- -----------
4,737 4,755 2,898 5,441 2,598
----------- ----------- ----------- ----------- -----------
Net assets available
for Plan benefits $1,073,561 1,945,935 1,354,030 2,443,256 1,081,298
=========== =========== =========== =========== ===========
</TABLE>
12 (Continued)
<PAGE>
ENSTAR NATURAL GAS COMPANY
THRIFT INVESTMENT PLAN
Notes to Financial Statements
<TABLE>
<S> <C> <C> <C> <C>
Scudder
Managed Scudder
Retirement Seagull Stable
Allocation of Plan Assets Trust- Stock Value
to Investment Programs Balanced Fund Fund Total
---------- -------- ---------- -----------
December 31, 1996:
Assets:
Investments:
Common stock of Seagull Energy
Corporation, 18,588 shares
(cost $397,107) $ - 408,930 - $ 408,930
Mutual funds (cost $8,082,110) 819,048 - - 8,511,833
Scudder Stable Value Fund - - 8,479,487 8,479,487
Participant loans 11,895 6,612 126,224 329,597
Contributions receivable:
Employee 2,203 782 12,837 32,319
Employer 557 215 3,120 7,824
---------- -------- ---------- -----------
2,760 997 15,957 40,143
---------- -------- ---------- -----------
Net assets available
for Plan benefits $ 833,703 416,539 8,621,668 $17,769,990
========== ======== ========== ===========
</TABLE>
(Continued)
<PAGE>
ENSTAR NATURAL GAS COMPANY
THRIFT INVESTMENT PLAN
Notes to Financial Statements
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Scudder Scudder
Large Growth Scudder
Allocation by Investment Scudder Company Scudder and Scudder Pathway Seagull
Program of Changes in Net Global Value Income Income Development Series- Stock
Assets Available for Plan Benefits Fund* Fund* Fund* Fund* Fund Balanced Fund
---------- ---------- ---------- --------- ---------- ----------- --------
Year ended December 31, 1997:
Contributions:
Employee $ 135,057 146,795 77,022 155,086 84,981 43,014 27,719
Employer 32,399 36,680 20,326 40,163 19,591 13,176 7,526
---------- ---------- ---------- --------- ---------- ----------- --------
Total contributions 167,456 183,475 97,348 195,249 104,572 56,190 35,245
---------- ---------- ---------- --------- ---------- ----------- --------
Investment income:
Interest income 5,677 5,201 2,056 5,617 2,497 1,103 870
Dividend income 211,308 186,292 84,747 301,253 62,794 40,293 -
Net appreciation (depreciation)
in fair value of investments:
Seagull Energy Corporation
common stock 81,360
Other investments (22,155) 415,251 33,274 406,710 18,959 57,057 -
---------- ---------- ---------- --------- ---------- ----------- --------
Total net investment
income 194,830 606,744 120,077 713,580 84,250 98,453 82,230
---------- ---------- ---------- --------- ---------- ----------- --------
Distributions:
Employee withdrawals 20,557 179,595 85,866 150,002 159,558 25,423 10,891
---------- ---------- ---------- --------- ---------- ----------- --------
Excess of contributions
and investment income
over distributions 341,729 610,624 131,559 758,827 29,264 129,220 106,584
Net transfers among funds (61,569) 100,451 112,979 132,558 (1,110,562) 806,850 (181,481)
---------- ---------- ---------- --------- ---------- ----------- --------
Net increase (decrease)
in net assets available
for Plan benefits 280,160 711,075 244,538 891,385 (1,081,298) 936,070 (74,897)
Net assets available for Plan benefits
at beginning of year 1,073,561 1,945,935 1,354,030 2,443,256 1,081,298 - 416,539
---------- ---------- ---------- --------- ---------- ----------- --------
Net assets available for Plan benefits
at end of year $1,353,721 2,657,010 1,598,568 3,334,641 - 936,070 341,642
========== ========= ========= ========= ========== =========== =========
</TABLE>
*Investments in this Fund exceed 5% of net assets available for Plan benefits at
December 31, 1997.
13 (Continued)
<PAGE>
ENSTAR NATURAL GAS COMPANY
THRIFT INVESTMENT PLAN
Notes to Financial Statements
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Scudder Franklin
Scudder Managed Balance Scudder
Allocation by Investment Stable Retirement Sheet Templeton Stock
Program of Changes in Net Value Trust- Investment Foreign Index Loan
Assets Available for Plan Benefits Fund* Balanced Fund* I Fund Fund Fund Total
---------- --------- --------- --------- -------- -------- -----------
Year ended December 31, 1997:
Contributions:
Employee $ 470,041 8,980 9,269 3,458 5,556 - $ 1,166,978
Employer 124,789 2,269 2,508 1,018 1,345 - 301,790
---------- --------- --------- --------- -------- -------- -----------
Total contributions 594,830 11,249 11,777 4,476 6,901 - 1,468,768
---------- --------- --------- --------- -------- -------- -----------
Investment income:
Interest income 546,519 260 453 104 200 - 570,557
Dividend income - - 18,339 7,446 - - 912,472
Net appreciation (depreciation)
in fair value of investments:
Seagull Energy Corporation
common stock - 81,360
Other investments - 10,767 (21,353) (13,667) 2,591 - 887,434
---------- --------- --------- --------- -------- -------- -----------
Total net investment
income 546,519 11,027 (2,561) (6,117) 2,791 - 2,451,823
---------- --------- --------- --------- -------- -------- -----------
Distributions:
Employee withdrawals 649,343 59,128 1,787 350 - 10,887 1,353,387
---------- --------- --------- --------- -------- -------- -----------
Excess of contributions
and investment income
over distributions 492,006 (36,852) 7,429 (1,991) 9,692 (10,887) 2,567,204
Net transfers among funds (522,148) (796,851) 1,065,093 181,144 262,649 10,887 -
---------- --------- --------- --------- -------- -------- -----------
Net increase (decrease)
in net assets available
for Plan benefits (30,142) (833,703) 1,072,522 179,153 272,341 - 2,567,204
Net assets available for Plan benefits
at beginning of year 8,621,668 833,703 - - - - 17,769,990
---------- --------- --------- --------- -------- -------- -----------
Net assets available for Plan benefits
at end of year $8,591,526 - 1,072,522 179,153 272,341 - $20,337,194
========== ========= ========= ========= ======== ======== ===========
</TABLE>
*Investments in this Fund exceed 5% of net assets available for Plan benefits at
December 31, 1997.
(Continued)
<PAGE>
ENSTAR NATURAL GAS COMPANY
THRIFT INVESTMENT PLAN
Notes to Financial Statements
<TABLE>
<S> <C> <C> <C> <C> <C>
Scudder
Scudder Growth
Allocation by Investment Scudder Capital Scudder and Scudder
Program of Changes in Net Global Growth Income Income Development
Assets Available for Plan Benefits Fund* Fund* Fund* Fund* Fund*
----------- ----------- ----------- ----------- --------------
Year ended December 31, 1996:
Contributions:
Employee $ 117,774 141,401 80,596 136,278 93,224
Employer 23,469 29,691 18,742 29,346 18,397
----------- ----------- ----------- ----------- --------------
Total contributions 141,243 171,092 99,338 165,624 111,621
----------- ----------- ----------- ----------- --------------
Investment income:
Interest income 3,997 3,924 2,380 4,324 2,087
Dividend income 60,677 202,922 91,501 143,132 108,087
Net appreciation (depreciation) in
fair value of investments:
Seagull Energy Corporation
common stock - - - - -
Other investments 55,437 108,537 (44,801) 310,021 (19,808)
----------- ----------- ----------- ----------- --------------
Total net investment
income 120,111 315,383 49,080 457,477 90,366
----------- ----------- ----------- ----------- --------------
Distributions:
Employee withdrawals 53,925 55,693 170,573 213,037 45,150
----------- ----------- ----------- ----------- --------------
Excess of contributions
and investment income
over distributions 207,429 430,782 (22,155) 410,064 156,837
Net transfers among funds 3,584 (82,240) (29,233) (121,089) (27,178)
----------- ----------- ----------- ----------- --------------
Net increase (decrease)
in net assets available
for Plan benefits 211,013 348,542 (51,388) 288,975 129,659
Net assets available for Plan benefits
at beginning of year 862,548 1,597,393 1,405,418 2,154,281 951,639
----------- ----------- ----------- ----------- --------------
Net assets available for Plan benefits
at end of year $1,073,561 1,945,935 1,354,030 2,443,256 1,081,298
=========== =========== =========== =========== ==============
</TABLE>
*Investments in this Fund exceed 5% of net assets available for Plan benefits at
December 31, 1996.
14 (Continued)
<PAGE>
ENSTAR NATURAL GAS COMPANY
THRIFT INVESTMENT PLAN
Notes to Financial Statements
<TABLE>
<S> <C> <C> <C> <C>
Scudder
Managed Scudder
Allocation by Investment Retirement Seagull Stable
Program of Changes in Net Trust- Stock Value
Assets Available for Plan Benefits Balanced Fund Fund* Total
----------- ---------- ----------- -------------
Year ended December 31, 1996:
Contributions:
Employee $ 53,692 28,493 478,107 $ 1,129,565
Employer 12,594 6,813 107,552 246,604
----------- ---------- ----------- -------------
Total contributions 66,286 35,306 585,659 1,376,169
----------- ---------- ----------- -------------
Investment income:
Interest income 981 448 491,763 509,904
Dividend income - - - 606,319
Net appreciation (depreciation) in
fair value of investments:
Seagull Energy Corporation
common stock - 20,305 - 20,305
Other investments 98,834 - - 508,220
----------- ---------- ----------- -------------
Total net investment
income 99,815 20,753 491,763 1,644,748
----------- ---------- ----------- -------------
Distributions:
Employee withdrawals 121,767 10,048 355,043 1,025,236
----------- ---------- ----------- -------------
Excess of contributions
and investment income
over distributions 44,334 46,011 722,379 1,995,681
Net transfers among funds 64,080 (153,711) 345,787 -
----------- ---------- ----------- -------------
Net increase (decrease)
in net assets available
for Plan benefits 108,414 (107,700) 1,068,166 1,995,681
Net assets available for Plan benefits
at beginning of year 725,289 524,239 7,553,502 15,774,309
----------- ---------- ----------- -------------
Net assets available for Plan benefits
at end of year $ 833,703 416,539 8,621,668 $ 17,769,990
=========== ========== =========== =============
</TABLE>
*Investments in this Fund exceed 5% of net assets available for Plan benefits at
December 31, 1996.
(Continued)
<PAGE>
ENSTAR NATURAL GAS COMPANY
THRIFT INVESTMENT PLAN
Notes to Financial Statements
<TABLE>
<S> <C> <C> <C> <C> <C>
Scudder
Scudder Growth
Allocation by Investment Scudder Capital Scudder and Scudder
Program of Changes in Net Global Growth Income Income Development
Assets Available for Plan Benefits Fund* Fund* Fund* Fund* Fund*
----------- ----------- ----------- ------------ -----------
Year ended December 31, 1995:
Contributions:
Employee $ 102,559 119,973 71,767 117,698 59,454
Employer 20,544 25,982 17,764 26,411 12,030
----------- ----------- ----------- ------------ -----------
Total contributions 123,103 145,955 89,531 144,109 71,484
----------- ----------- ----------- ------------ -----------
Investment income:
Interest income 2,228 3,891 1,903 3,682 1,568
Dividend income 34,976 229,208 89,715 103,083 81,590
Net appreciation in fair value
of investments:
Seagull Energy Corporation
common stock - - - - -
Other investments 137,141 138,456 116,355 386,250 184,368
----------- ----------- ----------- ------------ -----------
Total net investment
income 174,345 371,555 207,973 493,015 267,526
----------- ----------- ----------- ------------ -----------
Distributions:
Employee withdrawals 231,031 198,547 2,078 133,867 35,508
----------- ----------- ----------- ------------ -----------
Excess of contributions
and investment income
over distributions 66,417 318,963 295,426 503,257 303,502
Net transfers among funds (146,226) 42,260 32,475 74,101 72,323
----------- ----------- ----------- ------------ -----------
Net increase (decrease)
in net assets available
for Plan benefits (79,809) 361,223 327,901 577,358 375,825
Net assets available for Plan benefits
at beginning of year 942,357 1,236,170 1,077,517 1,576,923 575,814
----------- ----------- ----------- ------------ -----------
Net assets available for Plan benefits
at end of year $ 862,548 1,597,393 1,405,418 2,154,281 951,639
=========== =========== =========== ============ ===========
</TABLE>
*Investments in this Fund exceed 5% of net assets available for Plan benefits at
December 31, 1995.
15 (Continued)
<PAGE>
ENSTAR NATURAL GAS COMPANY
THRIFT INVESTMENT PLAN
Notes to Financial Statements
<TABLE>
<S> <C> <C> <C> <C>
Scudder
Scudder Managed
Managed Guaranteed
Allocation by Investment Retirement Seagull Investment
Program of Changes in Net Trust- Stock Contracts
Assets Available for Plan Benefits Balanced Fund Trust* Total
----------- --------- ----------- ------------
Year ended December 31, 1995:
Contributions:
Employee $ 52,488 29,455 475,799 $ 1,029,193
Employer 12,715 6,953 110,653 233,052
----------- --------- ----------- ------------
Total contributions 65,203 36,408 586,452 1,262,245
----------- --------- ----------- ------------
Investment income:
Interest income 407 282 452,070 466,031
Dividend income - - - 538,572
Net appreciation in fair value
of investments:
Seagull Energy Corporation
common stock - 76,626 - 76,626
Other investments 128,928 - - 1,091,498
----------- --------- ----------- ------------
Total net investment
income 129,335 76,908 452,070 2,172,727
----------- --------- ----------- ------------
Distributions:
Employee withdrawals 1,986 4,719 214,531 822,267
----------- --------- ----------- ------------
Excess of contributions
and investment income
over distributions 192,552 108,597 823,991 2,612,705
Net transfers among funds (36,965) (11,583) (26,385) -
----------- --------- ----------- ------------
Net increase (decrease)
in net assets available
for Plan benefits 155,587 97,014 797,606 2,612,705
Net assets available for Plan benefits
at beginning of year 569,702 427,225 6,755,896 13,161,604
----------- --------- ----------- ------------
Net assets available for Plan benefits
at end of year $ 725,289 524,239 7,553,502 $15,774,309
=========== ========= =========== ============
</TABLE>
*Investments in this Fund exceed 5% of net assets available for Plan benefits at
December 31, 1995.
(Continued)
<PAGE>
Schedule I
ENSTAR NATURAL GAS COMPANY
THRIFT INVESTMENT PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1997
<TABLE>
<S> <C> <C> <C>
Carrying
Number of amount
Description shares/terms Cost (market value)
------------ -------------- --------------
Investments:
Common stock - Seagull Energy
Corporation Stock Fund* 15,814 $ 268,018 326,167
-------------- --------------
Mutual funds:
Scudder Global Fund* 46,256 1,331,454 1,308,129
Scudder Large Company Value Fund* 96,003 2,200,357 2,608,391
Scudder Income Fund* 116,991 1,544,106 1,575,874
Scudder Growth and Income Fund* 119,720 2,883,601 3,271,955
Scudder Pathway Series-Balanced* 71,309 865,072 920,599
Templeton Foreign I Fund 16,830 176,414 167,463
Franklin Balance Sheet Investment Fund 30,739 1,052,282 1,030,985
-------------- --------------
Total mutual funds 10,053,286 10,883,396
-------------- --------------
Scudder Stable Value Fund* 8,687,468 8,687,468 8,687,468
Scudder Stock Index Fund* 9,851 253,138 260,159
Participant loans various 397,849 397,849
-------------- --------------
Investments at December 31, 1997 $ 19,659,759 20,555,039
============== ==============
</TABLE>
* Party-in-interest
16
<PAGE>
Schedule II
ENSTAR NATURAL GAS COMPANY
THRIFT INVESTMENT PLAN
Item 27d - Schedule of Reportable Transactions
Year ended December 31, 1997
<TABLE>
<S> <C> <C> <C> <C> <C>
Current value
of asset on Net
Purchase Selling Cost of transaction realized
Description price price asset date gain
------------ ----------- ---------- ------------ --------
Scudder Large Company Value Fund $ 860,535 - - - -
Scudder Large Company Value Fund - 569,579 562,362 569,579 7,217
Scudder Growth and Income Fund 1,133,609 - - - -
Scudder Growth and Income Fund - 663,385 645,029 663,385 18,356
Scudder Development Fund 792,066 - - - -
Scudder Development Fund - 1,986,072 1,967,113 1,856,703 18,959
Scudder Pathway Series-Balanced 969,437 - - - -
Scudder Pathway Series-Balanced - 105,895 104,365 105,895 1,530
Franklin Balance Sheet Investment Fund 1,054,124 - - - -
Franklin Balance Sheet Investment Fund - 1,787 1,840 1,787 (53)
</TABLE>
17
<PAGE>
SIGNATURE
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the Administrative Committee of the ENSTAR Natural Gas Company
Thrift Investment Plan has duly caused this annual report to be signed on
its behalf by the undersigned hereunto duly authorized.
ENSTAR Natural Gas Company
Thrift Investment Plan
/s/ Richard F. Barnes
Date: June 23, 1998 By:
Richard F. Barnes,
Chairman
Administrative Committee
18
<PAGE>
Exhibit Index
Independent Auditors' Consent...................................... Exhibit I
19
EXHIBIT I
Independent Auditors' Consent
The Administrative Committee
ENSTAR Natural Gas Company
Thrift Investment Plan:
We consent to incorporation by reference in the Registration Statement
(File No. 33-14463) on Form S-8 of Seagull Energy Corporation of our
report dated March 27, 1998, relating to the statements of net assets
available for plan benefits of ENSTAR Natural Gas Company Thrift
Investment Plan (Plan) as of December 31, 1997 and 1996 and the related
statements of changes in net assets available for plan benefits for each
of the years in the three-year period ended December 31, 1997 which
report appears in the Plan's December 31, 1997 Annual Report on Form
11-K.
/s/ KPMG Peat Marwick LLP
Anchorage, Alaska
June 23, 1998
20
