SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 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
Commission file number 2-72014
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Seagull Thrift Plan
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>
SEAGULL THRIFT PLAN
ANNUAL REPORT ON FORM 11-K
FOR THE YEAR ENDED DECEMBER 31, 1997
INDEX
<TABLE>
<S> <C>
Page
Financial Statements and Exhibits: Number
--------------
Financial Statements
Independent Auditors' Report........................................................ 1
Statements of Net Assets Available for Plan Benefits................................ 2
Statements of Changes in Net Assets Available for Plan Benefits..................... 3
Notes to Financial Statements....................................................... 4
Supplemental Schedules.................................................................. 12
Signatures.............................................................................. 14
Exhibits:
Consent of Independent Auditors......................................................... 16
</TABLE>
NOTE: Plan financial statements have been prepared in
accordance with Item 4 under "Required Information"
of Annual Report on Form 11-K.
<PAGE>
INDEPENDENT AUDITORS' REPORT
THE ADMINISTRATIVE COMMITTEE
SEAGULL THRIFT PLAN:
We have audited the accompanying statements of net assets available for plan
benefits of the Seagull Thrift Plan (the "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 two-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 of the Plan as
of December 31, 1997 and 1996, and the changes in net assets available for plan
benefits for each of the years in the two-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 of assets held
for investment purposes and reportable transactions 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.
/s/ KPMG Peat Marwick LLP
Houston, Texas
June 19, 1998
<PAGE>
Seagull Thrift Plan
Statements of Net Assets Available for Plan Benefits
(Amounts in Thousands Except Share Data)
<TABLE>
<S> <C> <C>
December 31,
--------------------------------------
1997 1996
------------------ ----------------
Investments at fair value:
Seagull Energy Corporation common stock, 267,212 shares and 208,407 shares,
respectively, (cost $5,763 and $3,785, respectively).................... $ 5,511 $ 4,592
Mutual funds (cost $16,258 and $11,916, respectively) .................... 18,146 13,024
Money market fund......................................................... 2,768 2,721
Participant loans......................................................... 866 588
------------------ ----------------
27,291 20,925
Cash and cash equivalents.................................................... 119 -
Contributions receivable from employer....................................... 126 113
------------------ ----------------
Net assets available for plan benefits....................................... $ 27,536 $ 21,038
================== ================
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
Seagull Thrift Plan
Statements of Changes in Net Assets Available for Plan Benefits
(Amounts in Thousands)
<TABLE>
<S> <C> <C>
Year Ended December 31,
--------------------------------------------
1997 1996
------------------- ------------------
Investment income:
Dividends.............................................................. $ 354 $ 323
Interest from:
Participant loans.................................................... 58 48
Other................................................................ - 8
Long-term capital gain distributions................................... 932 1,123
Short-term capital gain distributions.................................. 48 262
Other ................................................................. 11 -
------------------- ------------------
Net investment income.............................................. 1,403 1,764
Net realized gains (losses) on:
Seagull common stock .................................................. 14 (185)
Other investments ..................................................... 384 (148)
Net unrealized appreciation (depreciation) of:
Seagull common stock .................................................. (259) 285
Other investments...................................................... 1,891 313
------------------- ------------------
Net Plan income.................................................... 3,433 2,029
Contributions:
Company matching....................................................... 1,303 948
Participant............................................................ 3,490 1,910
------------------- ------------------
Total contributions................................................ 4,793 2,858
Withdrawals and terminations.............................................. (1,728) (2,381)
------------------- ------------------
Net increase....................................................... 6,498 2,506
Net assets available for plan benefits:
Beginning of year...................................................... 21,038 18,532
------------------- ------------------
End of year............................................................ $ 27,536 $ 21,038
=================== ==================
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
SEAGULL THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING BASIS. The accompanying financial statements of the
Seagull Thrift Plan (the "Plan") are prepared on the accrual basis of
accounting.
GLOBAL MERGER. On October 3, 1996, the shareholders of Seagull Energy
Corporation ("Seagull" or the "Company") and Global Natural Resources Inc.
("Global") approved a merger of a wholly owned subsidiary of Seagull into Global
(the "Global Merger"). As a result of the Global Merger, the employees of Global
became eligible to participate in the Plan, effective January 1, 1997, and the
Plan was amended to give such employees credit for their service with Global.
EXPENSES. All expenses incident to the administration of the Plan and
related trust fund (the "Trust Fund") may be paid by Seagull and, if not paid by
the Company, are paid by the Plan. In both 1997 and 1996, the Company elected to
pay all such expenses, although the Company, at its option, can discontinue this
practice at any time.
INVESTMENTS. On each valuation date, as such term is defined in the
Plan, securities held by the Plan are valued at fair value based upon published
market prices, and the increase or decrease in the fair value of securities
held, plus any net income or loss of the Plan, is allocated to the participants'
accounts. Security transactions are recorded on a trade-date basis and realized
and unrealized investment gains and losses are determined separately based on
average revalued cost (the weighted average of the fair value of the shares or
units held at the beginning of the plan year and the historical cost of the
shares of units acquired since the beginning of the plan year). Realized gains
and losses reported on withdrawals of securities by participants are based on
the difference between fair values of the withdrawn securities at the valuation
date and average revalued cost to the participant.
USE OF ESTIMATES. The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates, judgments and assumptions that affect the reported amounts of assets
and liabilities as of the date of the financial statements and additions and
deductions to net assets available for plan benefits during the reporting
period. Actual results could differ from those estimates.
2. PLAN PURPOSE AND DESCRIPTION
The purpose of the Plan is to provide a convenient means for the
Company's employees to provide additional security for their retirement by
investing in securities of the Company and in other investments and to provide a
means by which participating employees may elect to defer the receipt of a
percentage of their base compensation. Effective September 1, 1996, the Plan was
amended and restated to incorporate all existing amendments and make certain
other technical amendments.
<PAGE>
SEAGULL THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
The Plan incorporates a qualified cash or deferred arrangement within
the meaning of Section 401(k) of the Internal Revenue Code of 1986, as amended
(the "Code"). The Plan allows the employee to defer the receipt of an integral
percentage from 1% to 14% of his compensation beginning the first day of the
month coincident with or immediately following the completion of one hour of
service, not to exceed the annual limit on "Cash or Deferred Contributions"
($9,500 in 1997 and 1996) imposed by Section 402(g) of the Code. The annual
limit for 1998 is $10,000. Such Cash or Deferred Contributions are deemed to be
contributions by the Company for all purposes. With respect to each
participating employee who has completed one year of service with the Company,
the Company contributes as of the end of each month "Company Matching
Contributions" in an amount equal to 100% of the Cash or Deferred Contributions
made on behalf of such participating employee not in excess of 6% of his
compensation during such month. Pursuant to provisions of the Plan prior to
January 1, 1987, participating employees could make after-tax contributions to
the Plan ("Member Contributions"). The Plan provides for an additional optional
annual contribution to the Plan by the Company at the discretion of its Board of
Directors ("Company Discretionary Contributions") and, if necessary to satisfy
applicable provisions of the Code, an additional contribution on behalf of
"non-highly compensated" participants. For the years ended December 31, 1997 and
1996, no such contributions were made.
At December 31, 1997, participants could elect to have contributions, both
Cash or Deferred and Company Matching Contributions, invested in one or more of
the available funds, which are described in Note 4.
Upon termination of employment prior to age sixty-five for reasons
other than total and permanent disability or death, a participant is entitled to
receive 100% of his Cash or Deferred, Member and Rollover Contributions, if any,
as well as earnings (or losses) attributable thereto. The participant is also
entitled to receive a percentage of the value of the Company Matching
Contributions and Company Discretionary Contributions, if any, and earnings (or
losses) attributable thereto ("Company Contribution Account") in accordance with
the following vesting schedule:
<TABLE>
<S> <C>
Years of Percentage of Company Contribution
Vesting Service Account to be Distributed
- ---------------------------------------------------- -----------------------------------------------------
Less than 2 years 0%
2 years 25%
3 years 40%
4 years 55%
5 years 70%
6 years 85%
7 years or more 100%
</TABLE>
<PAGE>
SEAGULL THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
Effective March 20, 1998, the Plan was amended to reflect the following
vesting schedule:
<TABLE>
<S> <C>
Years of Percentage of Company Contribution
Vesting Service Account to be Distributed
- ---------------------------------------------------- -----------------------------------------------------
Less than 1 year 0%
1 year 20%
2 years 40%
3 years 60%
4 years 80%
5 years or more 100%
</TABLE>
One thousand or more hours of service during a calendar year
constitutes a year of vesting service for such employee. For terminations prior
to age sixty-five due to total and permanent disability, death and terminations
on or after age sixty-five, a participant is considered fully vested and
receives 100% of the balance in his Company Contribution Account.
Forfeitures are applied to reduce the Company's Matching Contributions next
coming due. For the year ended December 31, 1997 and 1996, $48,000 and $45,000,
respectively, of forfeitures were applied to reduce the Company's Matching
Contributions.
The Company has the power to terminate the Plan at any time. If the
Plan is terminated, a participant will be considered fully vested in the balance
of his Company Contribution Account and distribution of all account balances
will occur in accordance with the provisions of the Plan.
3. DISTRIBUTIONS
During the years ended December 31, 1997 and 1996, 51 and 59
participants, respectively, terminated employment with the Company and
accordingly received distributions from the Plan. The distributions made during
1997 and 1996 were as follows:
<TABLE>
<S> <C> <C>
1997 1996
------------------ ----------------
(Amounts in thousands except share amounts)
Cash $1,495 $2,326
Seagull Energy Corporation Common Stock (1,996 and 411 shares in 1997 and 1996,
respectively) 40 4
------------------ ----------------
$1,535 $2,330
================== ================
</TABLE>
<PAGE>
SEAGULL THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
The above distributions include the terminated employees' vested
portion of the Company Contribution Account.
During the years ended December 31, 1997 and 1996, five and one
participants, respectively, withdrew portions of the balances of their Member
Contribution Accounts or Cash or Deferred Accounts totaling, $145,000 and
$6,000, respectively, as permitted by the Plan.
4. INVESTMENT PROGRAMS
Funds in which current contributions are invested are as follows:
Seagull Stock Fund - A fund invested in the common stock of the
Company.
Fidelity Magellan Fund - A mutual fund seeking capital appreciation by
investing primarily in common stocks and securities
convertible to common stocks.
Fidelity Advisor Intermediate Bond Fund - Mutual fund seeking income
through investments in investment-grade, fixed income
securities.
Equity Income Fund - A mutual fund seeking income by investing in
income-producing common stocks, preferred stocks and
convertible securities.
Fidelity Advisor Growth Opportunities Fund - A mutual fund seeking
long-term capital growth through investments in growth,
cyclical and value stocks and securities convertible to
common stocks.
Franklin Balance Sheet Investment Fund - A mutual fund seeking capital
appreciation and income through securities which represent
intrinsic values not reflected in the current market price of
such securities and/or present opportunities for high income.
Templeton Foreign Fund - A mutual fund investing in stocks and debt
obligations of companies and governments outside the United
States.
Money Market Fund - A fund invested in such general money market
investments (other than common stock or other securities of
the Company) as the Plan's trustee may determine.
At December 31, 1997, the Seagull Stock Fund, the Fidelity Magellan
Fund, the Equity Income Fund, the Fidelity Advisor Growth Opportunities Fund and
the Money Market Fund each represented greater than five percent of Plan assets.
<PAGE>
SEAGULL THRIFT PLAN
NOTES TO FINANCIAL STATEMENTS
Participants may elect to participate in more than one fund. The
following table summarizes the number of employees participating in each fund at
December 31, 1997 and 1996:
<TABLE>
<S> <C> <C>
December 31,
----------------------------------------------
Fund 1997 1996
- ------------------------------------------------------------------- -------------------- --------------------
Seagull Stock Fund 260 245
Fidelity Magellan Fund 348 325
Fidelity Advisor Intermediate Bond Fund 50 35
Fidelity Advisor Growth Opportunities Fund 196 155
Equity Income Fund 314 307
Franklin Balance Sheet Investment Fund 140 105
Templeton Foreign Fund 118 96
Money Market Fund 219 235
</TABLE>
5. FEDERAL INCOME TAXES
On April 22, 1997, the Internal Revenue Service (the "IRS") issued a
determination letter to the effect that the Sixth Amendment to the Plan,
generally effective January 1, 1995, and the amendment and the restatement of
the Plan, effective September 1, 1996, met the requirements of Section 401(a) of
the Code. Subsequent to the adoption of the restatement of the Plan, the Plan
has been amended (i) as required by the Agreement and Plan of Merger by and
among Seagull, GNR Merger Corporation, a wholly owned subsidiary of Seagull, and
Global dated as of July 22, 1996, (ii) as required by the Small Business Job
Protection Act of 1996 and the Taxpayer Relief Act of 1997, and (iii) to revise
the vesting schedule. Within the time period specified by Section 401(b) of the
Code, an application will be submitted to the IRS for a determination as to the
qualified status of the Plan these amendments. The Administrative Committee of
the Plan and the Company believe 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,
a participant in the Plan is not subject to federal income taxes on the
participant's share of contributions to the Plan by the Company or the
participant's share of income earned by the Plan until it is withdrawn by or
distributed to the participant. In addition, the Trust Fund is exempt from
taxation under Section 501(a) of the Code, and the Company is entitled to deduct
for federal income tax purposes the amount of its contributions to the Plan.
<PAGE>
Seagull Thrift Plan
Notes to Financial Statements
6. Participant Directed Investments The Plan provides for participant
directed investments 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 then ended.
Allocation of Plan Assets and Liabilities to Investment Programs
(Amounts in Thousands except Share and Unit Data)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
Fidelity
Seagull Fidelity Advisor Equity
Stock Magellan Intermediate Income
Fund Fund Bond Fund Fund
------- --------- ----------- ---------
December 31, 1997:
Investments - at fair value:
Seagull common stock (cost $5,763).. $ 5,511 $ - $ - $ -
Mutual funds (cost $16,258)......... - 7,889 481 6,114
Money Market Fund................... - - - -
Participant loans................... 119 283 20 141
------- --------- ----------- ---------
Total investments............... 5,630 8,172 501 6,255
Cash and cash equivalents............. - 41 - 78
Contributions receivable from employer 21 33 2 26
------- --------- ----------- ---------
Net assets available for plan benefits $ 5,651 $8,246 $ 503 $ 6,359
======= ========= =========== =========
Number of units or shares............. 267,212 82,810 45,373 237,352
======= ========= =========== =========
December 31, 1996:
Investments - at fair value:
Seagull common stock (cost $3,785).. $ 4,592 $ - $ - $ -
Mutual funds (cost $11,916)......... - 6,751 133 5,527
Money Market Fund................... - - - -
Participant loans................... 133 205 1 99
------- --------- ----------- ---------
Total investments............... 4,725 6,956 134 5,626
Cash and cash equivalents............. - - - -
Contributions receivable from employer 23 42 1 25
------- --------- ----------- ---------
Net assets available for plan benefits $ 4,748 $6,998 $ 135 $ 5,651
======= ========= =========== =========
Number of units or shares............. 208,407 83,705 12,632 252,133
======= ========= =========== =========
</TABLE>
<PAGE>
Allocation of Plan Assets and Liabilities to Investment Programs
(Amounts in Thousands except Share and Unit Data)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
Fidelity Franklin
Advisor Balance
Growth Sheet Templeton Money
Opportunities Investment Foreign Market
Fund Fund Fund Fund Total
------------- ---------- --------- --------- -------
December 31, 1997:
Investments - at fair value:
Seagull common stock (cost $5,763).. $ - $ - $ - $ - $ 5,511
Mutual funds (cost $16,258)......... 1,842 1,112 708 - 18,146
Money Market Fund................... - - - 2,768 2,768
Participant loans................... 59 60 17 167 866
------------- ---------- --------- --------- -------
Total investments............... 1,901 1,172 725 2,935 27,291
Cash and cash equivalents............. - - - - 119
Contributions receivable from employer 17 9 5 13 126
------------- ---------- --------- --------- -------
Net assets available for plan benefits $ 1,918 $ 1,181 $ 730 $ 2,948 $27,536
============= ========== ========= ========= =======
Number of units or shares............. 43,402 33,169 71,183 2,768,331
============= ========== ========= =========
December 31, 1996:
Investments - at fair value:
Seagull common stock (cost $3,785).. $ - $ - $ - $ - $ 4,592
Mutual funds (cost $11,916)......... 355 86 172 - 13,024
Money Market Fund................... - - - 2,721 2,721
Participant loans................... 22 1 - 127 588
------------- ---------- --------- -------- -------
Total investments............... 377 87 172 2,848 20,925
Cash and cash equivalents............. - - - - -
Contributions receivable from employer 4 2 2 14 113
------------- ---------- --------- --------- -------
Net assets available for plan benefits $ 381 $ 89 $ 174 $ 2,862 $21,038
============= ========== ========= ========= =======
Number of units or shares............. 10,067 3,027 16,602 2,720,716
============= ========== ========= =========
</TABLE>
<PAGE>
Seagull Thrift Plan
Notes to Financial Statements
Statement of Changes in Net Assets Available for Plan Benefits
(Amounts in Thousands)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
Fidelity
Seagull Fidelity Advisor Equity
Stock Magellan Intermediate Income
Fund Fund Bond Fund Fund
------- --------- ----------- ---------
Year Ended December 31, 1997:
Investment income:
Dividends ................................. $ - $ 100 $ 16 $ 55
Interest from:
Participant loans ....................... 9 16 - 11
Other ................................... - - - -
Long-term capital gain distributions ...... - 419 - 349
Short-term capital gain distributions ..... - - - -
Other ..................................... - - - 10
------- --------- ----------- ---------
Net investment income ................... 9 535 16 425
Net realized gain on:
Seagull common stock ...................... 14 - - -
Other investments ......................... - 190 1 145
Net unrealized appreciation (depreciation) of:
Seagull common stock ...................... (259) - - -
Other investments ......................... - 1,003 5 745
------- --------- ----------- ---------
Net Plan income ......................... (236) 1,728 22 1,315
Contributions:
Company matching .......................... 224 331 21 282
Participant ............................... 491 684 80 561
------- --------- ----------- ---------
Total Contributions ....................... 715 1,015 101 843
Withdrawals and terminations ................ (322) (551) (8) (322)
Transfers among funds ....................... 746 (944) 253 (1,128)
------- --------- ----------- ---------
Net increase ............................ 903 1,248 368 708
Net assets available for plan benefits:
Beginning of year ......................... 4,748 6,998 135 5,651
------- --------- ----------- ---------
End of Year ............................... $5,651 $8,246 $503 $6,359
======= ========= =========== =========
</TABLE>
<PAGE>
Seagull Thrift Plan
Notes to Financial Statements
Statement of Changes in Net Assets Available for Plan Benefits
(Amounts in Thousands)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
Fidelity Franklin
Advisor Balance
Growth Sheet Templeton Money
Opportunities Investment Foreign Market
Fund Fund Fund Fund Total
------------- ---------- --------- --------- -------
Year Ended December 31, 1997:
Investment income:
Dividends ................................. $ 20 $ 11 $ 23 $ 129 $ 354
Interest from:
Participant loans ....................... 6 3 2 11 58
Other ................................... - - - - -
Long-term capital gain distributions ...... 96 56 12 - 932
Short-term capital gain distributions ..... - - 48 - 48
Other ..................................... 1 - - - 11
------------- ---------- --------- --------- --------
Net investment income ................... 123 70 85 140 1,403
Net realized gain on:
Seagull common stock ...................... - - - - 14
Other investments ......................... 34 12 2 - 384
Net unrealized appreciation (depreciation) of:
Seagull common stock ...................... - - - - (259)
Other investments ......................... 158 52 (72) - 1,891
------------- ---------- --------- --------- --------
Net Plan income ......................... 315 134 15 140 3,433
Contributions:
Company matching .......................... 152 86 62 145 1,303
Participant ............................... 741 360 265 308 3,490
------------- ---------- --------- --------- --------
Total Contributions ....................... 893 446 327 453 4,793
Withdrawals and terminations ................ (204) (14) (67) (240) (1,728)
Transfers among funds ....................... 533 526 281 (267) -
------------- ---------- --------- --------- --------
Net increase ............................ 1,537 1,092 556 86 6,498
Net assets available for plan benefits:
Beginning of year ......................... 381 89 174 2,862 21,038
------------- ---------- --------- --------- --------
End of Year ............................... $1,918 $1,181 $730 $2,948 $27,536
============= ========== ========= ========= ========
</TABLE>
<PAGE>
Seagull Thrift Plan
Notes to Financial Statements
Statement of Changes in Net Assets Available for Plan Benefits
(Amounts in Thousands)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
Fidelity
Seagull Fidelity Advisor Equity
Stock Magellan Intermediate Income
Fund Fund Bond Fund Fund
------- --------- ----------- ---------
Year Ended December 31, 1996:
Investment income:
Dividends ................................. $ - 98 1 $ 89
Interest from:
Participant loans ....................... 10 18 - 8
Other ................................... 1 1 - 4
Long-term capital gain distributions ...... - 936 - 187
Short-term capital gain distributions ..... - 243 - 9
------- --------- ----------- ---------
Net investment income ................... 11 1,296 1 297
Net realized gain on:
Seagull common stock ...................... (185) - - -
Other investments ......................... - (430) (1) 282
Net unrealized appreciation (depreciation) of:
Seagull common stock ...................... 285 - - -
Other investments ......................... - (38) - 356
------- --------- ----------- ---------
Net Plan income ......................... 111 828 - 935
Contributions:
Company matching .......................... 202 395 1 219
Participant ............................... 340 645 69 409
------- --------- ----------- ---------
Total Contributions ....................... 542 1,040 70 628
Withdrawals and terminations ................ (368) (967) - (592)
Transfers among funds ....................... 202 (1,386) 65 755
------- --------- ----------- ---------
Net increase ............................ 587 (485) 135 1,726
Net assets available for plan benefits:
Beginning of year ......................... 4,161 7,483 - 3,925
------- --------- ----------- ---------
End of Year ............................... $ 4,748 $ 6,998 $135 $5,651
======= ========= =========== =========
</TABLE>
<PAGE>
Seagull Thrift Plan
Notes to Financial Statements
Statement of Changes in Net Assets Available for Plan Benefits
(Amounts in Thousands)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
Fidelity Franklin
Advisor Balance
Growth Sheet Templeton Money
Opportunities Investment Foreign Market
Fund Fund Fund Fund Total
------------- ---------- --------- --------- -------
Year Ended December 31, 1996:
Investment income:
Dividends ................................. $ 1 $ - $ - $ 134 $ 323
Interest from:
Participant loans ....................... - - - 12 48
Other ................................... - - - 2 8
Long-term capital gain distributions ...... - - - - 1,123
Short-term capital gain distributions ..... 2 7 1 - 262
------------- ---------- --------- --------- -------
Net investment income ................... 3 7 1 148 1,764
Net realized gain on:
Seagull common stock ...................... - - - - (185)
Other investments ......................... - - - - (148)
Net unrealized appreciation (depreciation) of:
Seagull common stock ...................... - - - - 285
Other investments ......................... (3) (5) 4 - 313
------------- ---------- --------- --------- --------
Net Plan income ......................... - 2 5 148 2,029
Contributions:
Company matching .......................... 3 1 1 126 948
Participant ............................... 56 69 53 269 1,910
------------- ---------- --------- --------- -------
Total Contributions ....................... 59 70 54 395 2,858
Withdrawals and terminations ................ - - - (554) (2,381)
Transfers among funds ....................... 322 17 115 (90) -
------------- ---------- --------- --------- -------
Net increase ............................ 381 89 174 (101) 2,506
Net assets available for plan benefits:
Beginning of year ......................... - - - 2,963 18,532
------------- ---------- --------- --------- -------
End of Year ............................... $ 381 $ 89 $ 174 $ 2,862 $21,038
============= ========== ========= ========= =======
</TABLE>
<PAGE>
SEAGULL THRIFT PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1997
(Amounts in Thousands Except Share and Unit Data)
<TABLE>
<S> <C> <C> <C> <C>
Number
of Shares Fair
Description or Units Cost Value
- ---------------------------------------------------------------- --------------- -------------- --------------
Seagull Energy Corporation Common Stock, $.10 par value ........ 267,212 $ 5,167 $ 5,511 (1), (2)
Fidelity Magellan Fund.......................................... 82,810 6,321 7,889 (1)
Fidelity Advisor Intermediate Bond Fund ........................ 45,373 476 481
Equity Income Fund.............................................. 237,352 5,120 6,114 (1)
Fidelity Advisor Growth Opportunities Fund ..................... 43,402 1,686 1,842 (1)
Franklin Balance Sheet Investment Fund.......................... 33,169 1,063 1,112
Templeton Foreign Fund.......................................... 71,183 778 708
Money Market Fund .............................................. 2,768,331 2,768 2,768 (1)
Participant Loans, bearing interest at varying amounts
between 6% and 9% maturing between 1998 and 2004.............. Various 866 866 (2)
-------------- --------------
$24,245 $27,291
============== ==============
</TABLE>
(1) These items represent greater than five percent of plan assets.
(2) Represents a party-in-interest to the Plan.
See accompanying independent auditors' report.
<PAGE>
SEAGULL THRIFT PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
For the Year Ended December 31, 1997
(Amounts in Thousands Except Share and Unit Data)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Total Purchase Net Realized
Description Type Brokerage Fees Cost Price/Proceeds Gain/(Loss)
- --------------------------------- -------- ---------------- --------- --------------------- ----------------
Seagull Stock Fund Purchase - NA $2,707 NA (*)
Seagull Stock Fund Sale - $1,789 1,535 (254) (*)
Fidelity Magellan Fund Purchase - NA 2,044 NA
Fidelity Magellan Fund Sale - 1,771 2,098 327
Fidelity Advisor Growth
Opportunites Fund Purchase - NA 2,050 NA
Fidelity Advisor Growth
Opportunites Fund Sale - 681 755 74
Franklin Balance Sheet
Investment Fund Purchase - NA 1,271 NA
Franklin Balance Sheet
Investment Fund Sale - 300 310 10
Equity Income Fund Purchase - NA 1,657 NA
Equity Income Fund Sale - 1,699 1,960 261
Money Market Fund Purchase - NA 1,509 NA
Money Market Fund Sale - 1,463 1,463 -
(*) Represents a party-in-interest to the Plan.
</TABLE>
See accompanying independent auditors' report.
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the Administrative Committee of the Seagull Thrift Plan has duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
SEAGULL THRIFT PLAN
By /s/ Gordon L. McConnell
Gordon L. McConnell
Member
Administrative Committee
June 29, 1997
<PAGE>
EXHIBIT INDEX
Exhibit Number Description Page
- --------------------------------------------------------------------------------
1. Consent of Independent Auditors 18
Exhibit 1
CONSENT OF INDEPENDENT AUDITORS
The Administrative Committee
Seagull Thrift Plan:
We consent to the incorporation by reference in the registration statement (File
No. 2-72014) on Form S-8 of Seagull Energy Corporation of our report dated June
19, 1998, relating to the statements of net assets available for plan benefits
of the Seagull Thrift Plan (the "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 two-year period ended December 31, 1997, which report
appears in the Plan's Annual Report on Form 11-K for the fiscal year ended
December 31, 1997.
/s/ KPMP Peat Marwick LLP
Houston, Texas
June 29, 1998
