<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the Quarterly Period Ended June 30, 1996
-----------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
Commission File No. 0-9976
ARCH PETROLEUM INC.
(Exact name of registrant as specified in its charter)
Delaware 83-0248900
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
777 Taylor Street, Suite II, Fort Worth, Texas 76102
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (817) 332-9209
________________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- ------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at July 31, 1996
Common Stock, $.01 Par Value 17,171,604
---------------------------- ----------
<PAGE>
ARCH PETROLEUM INC.
INDEX
Page
Part I. FINANCIAL INFORMATION Number
Item 1.
CONSOLIDATED BALANCE SHEETS (Unaudited) -
June 30, 1996 and December 31, 1995........................ 3
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) -
Three months and six months ended June 30, 1996 and 1995... 5
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) -
Six months ended June 30, 1996 and 1995.................... 6
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)................................................ 7
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS........................ 8
Part II. OTHER INFORMATION
Item 1.
Legal Proceedings.......................................... N/A
Item 2.
Changes in Securities...................................... N/A
Item 3.
Defaults upon Senior Securities............................ N/A
Item 4.
Submission of Matters to a Vote of Security Holders........ N/A
Item 5.
Other Information.......................................... N/A
Item 6.
Exhibits and Reports on Form 8-K
a. Exhibits...................................... None
b. Reports on Form 8-K........................... None
SIGNATURES............................................................ 11
2
<PAGE>
ARCH PETROLEUM INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS JUNE 30, DECEMBER 31,
1996 1995
----------- ------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 1,476,000 $ 2,574,000
Accounts receivable - trade 9,781,000 6,986,000
Accounts receivable - related parties 24,000 -
Prepaid expenses and other 947,000 542,000
----------- -----------
Total current assets 12,228,000 10,102,000
Property and Equipment, at cost:
Oil and gas properties accounted for by the
successful efforts method 78,097,000 66,375,000
Natural gas pipelines 11,634,000 11,448,000
Furniture, fixtures and other equipment 1,029,000 957,000
----------- -----------
90,760,000 78,780,000
Less accumulated depletion, depreciation
and amortization 16,287,000 12,968,000
----------- -----------
Net property and equipment 74,473,000 65,812,000
Accounts receivable - related parties 1,269,000 939,000
Notes receivable - related parties 1,702,000 1,645,000
Other 1,104,000 1,174,000
----------- -----------
$90,776,000 $79,672,000
=========== ===========
</TABLE>
The accompanying condensed notes are an integral part of these consolidated
financial statements.
3
<PAGE>
ARCH PETROLEUM INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY JUNE 30, DECEMBER 31,
1996 1995
----------- ------------
<S> <C> <C>
Current Liabilities:
Accounts payable $ 8,685,000 $ 9,552,000
Accounts payable - related parties 1,691,000 75,000
Current maturities of long-term debt 1,117,000 1,111,000
Preferred stock dividends payable 311,000 311,000
----------- -----------
Total current liabilities 11,804,000 11,049,000
Deferred revenue 13,912,000 16,037,000
Long-term debt, less current maturities 27,455,000 17,821,000
Convertible subordinated notes 5,000,000 5,000,000
Deferred federal income taxes 2,321,000 1,711,000
Note payable - minority interest holder 694,000 -
Other liabilities 391,000 -
Minority interest in consolidated subsidiaries 870,000 459,000
Exchangeable convertible preferred stock,
$.01 par value, 727,273 shares
authorized, issued and outstanding 20,000,000 20,000,000
Shareholders' Equity:
Preferred stock, $.01 par value, 1,000,000 shares
authorized, 727,273 issued as exchangeable
convertible preferred stock - -
Common stock, $.01 par value, 50,000,000 shares authorized,
17,171,604 and 17,141,404 shares issued and outstanding,
respectively 172,000 172,000
Additional paid-in capital 6,012,000 5,944,000
Employee notes for stock purchases (994,000) (965,000)
Treasury Stock, 100,000 shares (206,000) (206,000)
Cumulative translation adjustment 72,000 -
Retained earnings 3,273,000 2,650,000
----------- -----------
8,329,000 7,595,000
----------- -----------
$90,776,000 $79,672,000
=========== ===========
</TABLE>
The accompanying condensed notes are an integral part of these financial
statements.
4
<PAGE>
ARCH PETROLEUM INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ --------------------------
1996 1995 1996 1995
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
REVENUES:
Oil and gas sales $ 5,364,000 $ 4,666,000 $11,073,000 $ 7,870,000
Natural gas transportation and
distribution 16,869,000 11,973,000 30,667,000 22,645,000
Gain on sale of properties 1,037,000 - 1,037,000 -
Interest, overhead fees and other 146,000 174,000 471,000 345,000
----------- ----------- ----------- -----------
23,416,000 16,813,000 43,248,000 30,860,000
COSTS AND EXPENSES:
Lease operations 2,176,000 1,888,000 4,338,000 3,501,000
Natural gas purchases and
pipeline operations 15,598,000 11,365,000 29,017,000 21,666,000
Exploration 127,000 19,000 178,000 323,000
Depletion, depreciation and
amortization 1,591,000 1,266,000 3,267,000 2,197,000
General and administrative 1,518,000 1,073,000 2,669,000 2,018,000
Interest 685,000 470,000 1,362,000 860,000
Foreign currency transaction (gain) loss 10,000 - (29,000) -
Minority interest in income
of consolidated subsidiaries 372,000 73,000 410,000 60,000
----------- ----------- ----------- -----------
22,077,000 16,154,000 41,212,000 30,625,000
----------- ----------- ----------- -----------
Net income before income taxes
and dividends 1,339,000 659,000 2,036,000 235,000
Deferred federal income tax expense 401,000 224,000 610,000 79,000
----------- ----------- ----------- -----------
Net income before dividends 938,000 435,000 1,426,000 156,000
Dividends on preferred stock 400,000 400,000 800,000 800,000
----------- ----------- ----------- -----------
Net income (loss) $ 538,000 $ 35,000 $ 626,000 $ (644,000)
=========== =========== =========== ===========
Net income (loss) per common share $ 0.03 $ - $ 0.04 $ (0.04)
=========== =========== =========== ===========
Weighted average common and
common equivalent shares
outstanding 17,231,000 17,167,000 17,234,000 17,176,000
=========== =========== =========== ===========
</TABLE>
The accompanying condensed notes are an integral part of these consolidated
financial statements.
5
<PAGE>
ARCH PETROLEUM INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
---------------------------
1996 1995
------------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income 1,426,000 $ 156,000
Adjustments to reconcile to net cash from operations:
Gain on sale of properties (1,037,000) -
Depletion, depreciation and amortization 3,267,000 2,197,000
Deferred revenue (1,198,000) (1,670,000)
Deferred income taxes 610,000 79,000
Interest on notes receivable and other (97,000) (98,000)
Foreign currency transaction gain (29,000) -
Minority interest in net income of consolidated subsidiaries 410,000 60,000
------------ -----------
3,352,000 724,000
Change in accounts receivable (1,848,000) (1,181,000)
Change in other current assets (385,000) 92,000
Change in accounts receivable - related parties (330,000) (550,000)
Change in accounts payable and other current liabilities (246,000) (907,000)
Production payment remedy adjustment (927,000) (119,000)
------------ -----------
Net operating cash flows (384,000) (1,941,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures, net of retirements (3,759,000) (3,152,000)
Proceeds from sale of properties 1,585,000 -
Notes receivable and other assets 12,000 (80,000)
Investment in subsidiary (7,645,000) -
------------ -----------
Net investing cash flows (9,807,000) (3,232,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from bank borrowing 21,504,000 7,200,000
Payments of bank debt (12,305,000) (1,456,000)
Payment of preferred stock dividends (800,000) (800,000)
Purchase of treasury shares - (205,000)
Proceeds from note payable - minority interest holder 694,000 -
------------ -----------
Net financing cash flows 9,093,000 4,739,000
Change in cash and cash equivalents (1,098,000) (434,000)
Cash and cash equivalents at beginning of period 2,574,000 1,553,000
------------ -----------
Cash and cash equivalents at end of period $ 1,476,000 $ 1,119,000
============ ===========
</TABLE>
The accompanying condensed notes are an integral part of these consolidated
financial statements.
6
<PAGE>
ARCH PETROLEUM INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
In the opinion of Arch Petroleum Inc. (the "Company"), the accompanying
consolidated financial statements, which have not been audited by independent
public accountants, contain all adjustments necessary to present fairly the
Company's consolidated financial position, the results of its operations and its
cash flows for the periods reported. The consolidated financial statements
include the accounts of the Company and its subsidiaries. All significant
intercompany balances and transactions are eliminated. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted. Certain prior amounts have been reclassified to conform with 1996
presentation. It is suggested that these consolidated financial statements be
read in conjunction with the consolidated financial statements and footnotes
thereto included in the Company's Annual Report on Form 10-K as of December 31,
1995. The results of operations for the three months and six months ended June
30, 1996 and 1995 are not necessarily indicative of the results to be expected
for a full year.
Effective January 31, 1996, the Company acquired 100% of the outstanding
common stock of Trax Petroleum Limited ("Trax"), a Canadian oil and gas
exploration and development company headquartered in Calgary, Alberta, Canada.
The results of Trax have been consolidated with the Company beginning February
1, 1996. The following unaudited pro forma information has been prepared as if
the acquisition had occurred at the beginning of each period presented, and is
provided for comparative purposes only. The pro forma information presented is
not necessarily indicative of the combined financial results as they may be in
the future or as they might have been for the period had the acquisition been
consummated at the beginning of such period.
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-------------------
(In thousands except per share data) 1996 1995
-------- ---------
<S> <C> <C>
Revenues $43,475 $32,076
Net income (loss) before dividends 1,366 (915)
Net income (loss) per common share $ 0.03 $ (0.10)
</TABLE>
The Company has two bank credit facilities: the Third Restated Revolving
Credit Loan Agreement among the Company and Bank One, Texas, N.A., the Agent
bank, and other banks (the "Domestic Revolver") and the Credit Agreement among
Trax and Bank of Montreal, the Canadian Agent bank, and other financial
institutions (the "Canadian Revolver" and, together with the Domestic Revolver,
the "Revolvers"). The two credit facilities are separate bank revolvers. The
lenders in the Domestic Revolver (the "U.S. lenders") and the lenders in the
Canadian Revolver (the "Canadian lenders" and, together with the U.S. lenders,
the "Lenders") have entered into an associated Intercreditor Agreement.
The Revolvers' borrowing base is the amount that the Lenders commit to loan to
the Company based on the designated loan value established by the Lenders at
their sole discretion and assigned to certain of the Company's oil and gas
properties which serve as collateral for any loan which may be outstanding under
the Revolvers. The Domestic Revolver facility is $50.0 million and the borrowing
base is currently $30.0 million. The Canadian Revolver's initial commitment is
U.S. $11.0 million. The Revolvers' borrowing base is reviewed semiannually by
the Lenders at their discretion. A commitment fee of one half of one percent of
the unused borrowing base accrues and is payable quarterly. The Revolvers mature
on May 1, 1998. Borrowings under the Revolvers will, at the Company's option,
bear interest either at the Lenders' Base Rate or a rate based on the London
Interbank Offered Rate (LIBOR). The average actual interest rate was 7.94% at
June 30, 1996.
Effective April 30, 1996, the Company sold its working and royalty interests
in certain oil and gas properties located in West Texas for net proceeds of
$1,570,000. The Company recognized a pre-tax gain of $1,037,000 on the sale of
the properties. The sold properties represented less than 3% of the Company's
total reserves (equivalent barrel basis) as of January 1, 1996.
7
<PAGE>
ARCH PETROLEUM INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
With the exception of historical information, the matters discussed herein are
forward-looking statements that involve risks and uncertainties including, but
not limited to, oil and gas price fluctuations, economic conditions, interest
rate fluctuations, the regulatory and political environments and other risks
indicated in filings with the Securities and Exchange Commission.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
At June 30, 1996, the Company's total assets increased to $90.8 million from
$79.7 million at December 31, 1995. The assets of Trax (acquired January 31,
1996) accounted for $9.5 million of the increase. In addition, oil and gas
properties (excluding Trax) increased $2.6 million primarily as a result of
successful development drilling and recompletion of existing wells in New
Mexico.
In 1996 the Company's principal sources of funds were $9.2 million from its
Revolvers and $1.6 million from sale of properties. These funds were
primarily consumed by funding $7.6 million for the acquisition of Trax and
funding $3.8 million of development in existing properties, primarily in New
Mexico. Discretionary cash flows (net income adjusted for non-cash charges)
increased to $3.4 million in 1996, compared to $0.7 million in 1995, reflecting
increased oil and gas sales and improved margins on pipeline sales.
Discretionary cash flows are available for capital expenditures, debt service
and dividend payments.
The Company's Revolvers are in place for use by the Company at its discretion
including drilling, development and acquisition of oil and gas properties. The
Company has borrowed $17.0 million and $8.5 million against the Domestic and
Canadian Revolvers at June 30, 1996, respectively. The Revolvers' borrowing base
is the amount that the Lenders commit to loan to the Company based on the
designated loan value established by the Lenders at their sole discretion and
assigned to certain of the Company's oil and gas properties which serve as
collateral for any loan which may be outstanding under the Revolvers. The
Domestic revolver facility is $50.0 million and the borrowing base is currently
$30.0 million. The Canadian Revolver's initial commitment is U.S. $11.0 million.
The Revolvers' borrowing base is reviewed semiannually by the Lenders at their
discretion. A commitment fee of one half of one percent of the unused borrowing
base accrues and is payable quarterly. The Revolvers mature on May 1, 1998.
Borrowings under the Revolvers will, at the Company's option, bear interest
either at the Lenders' Base Rate or a rate based on the London Interbank Offered
Rate (LIBOR). The average actual interest rate was 7.94% at June 30, 1996.
The Onyx Term Loan Agreement (the "Onyx Note"), which Onyx entered into with
the Bank of Scotland on March 30, 1994, as amended, is a separate facility and
provided Onyx with $5.0 million. The Onyx Note bears interest at national prime
rate plus one-half of one percent (8.75% at June 30, 1996). Interest on the
unpaid principal amount of the note is payable quarterly and commenced on June
30, 1994. The unpaid principal ($3.1 million at June 30, 1996), is payable in
eighteen quarterly installments ending on March 31, 1999. Current maturities of
the Onyx Note total $1.1 million at June 30, 1996. The Onyx Note is
collaterlized by certain of Onyx's pipelines, gathering facilities and related
transportation contracts. In addition, the Onyx Note is guaranteed by the
Company.
Both the Revolvers and Onyx Note contain normal and standard covenants
generally found in lending agreements. Among other things, these covenants
prohibit the declaration and payment of cash dividends on the Company's common
stock. In addition, the covenants stipulate the maintenance of financial
criteria including: a minimum level of net worth, a certain current ratio, a
certain debt to worth ratio and a defined net income in excess of scheduled
interest and principal payments. The Company and Onyx are currently not in
default with the loan agreements. Neither the Company nor Onyx has any other
unused lines of credit.
8
<PAGE>
The Company has sufficient cash and unused borrowing base in the Revolvers to
fund its anticipated drilling, development and acquisition programs for 1996 as
well as its debt service and preferred stock dividend requirements.
Additionally, the Company expects to meet its current operating cash
requirements from cash flows provided by current operations. Management believes
that the Company can continue to generate, or obtain through other alternatives,
resources sufficient to meet cash requirements for future acquisition
opportunities. The Company operates in an industry that is subject to volatile
prices for its products. Cash flow from operations may be affected to a
significant degree by fluctuations in prices that are brought on by factors
beyond the Company's control.
RESULTS OF OPERATIONS
- ---------------------
SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO
------------------------------------------
SIX MONTHS ENDED JUNE 30, 1995
------------------------------
The Company recorded net income before dividends of $1,426,000 in 1996 as
compared to net income of $156,000 before dividends in 1995. Net income
increased $1,270,000. Net income was increased by the gain on sale of certain
oil and gas properties, as well as increased oil and gas sales and improved
margins on pipeline sales. Net income was reduced by an increase in almost all
costs and expenses.
Pipeline sales increased $8,022,000 in 1996 as compared to 1995, but were
offset by an increase in natural gas purchases of $7,265,000. The increase in
sales and purchases is due primarily to the increase in the cost of gas which
averaged $1.89 in 1996 as compared to $1.49 in 1995. During 1996 natural gas was
sold at an average price of $2.20 as compared to $1.55 in 1995. Gross margin
increased to 7.1% in 1996 as compared to 6.4% in 1995.
Revenues from oil and gas sales increased $3,203,000 in 1996 as compared to
1995. Oil and gas revenues attributable to Trax were $1,115,000 during 1996.
Increased production from the New Mexico properties as a result of the
development and exploitation program and higher average oil and gas prices also
contributed to the increase in sales. Oil production increased to 280,000
barrels in 1996 as compared to 177,000 barrels in 1995, resulting in a
$1,875,000 increase in sales. The increase in oil production is due to the
Company's successful drilling and development program in New Mexico as well as
the Trax production (56,000 barrels). The average price received for oil was
$20.06 in 1996 as compared to $18.19 in 1995, resulting in a $522,000 increase
in sales. Gas production in 1996 as compared to 1995 remained flat; however, the
average price received for gas increased to $1.59 in 1996 as compared to $1.34
in 1995, resulting in a $869,000 increase in sales. The average price received
for gas excluding certain production payment volumes was $2.11 in 1996.
Lease operating expenses ("LOE") related to oil and gas properties increased
$837,000, primarily as a result of the addition of the Trax operations. Trax LOE
was $505,000 during 1996. The new wells successfully completed in New Mexico
also added to LOE. Lifting costs per equivalent barrel (including Trax
operations) increased in 1996 to $4.92 from $4.69 in 1995. Depletion,
depreciation and amortization ("DD&A") increased $1,070,000 in 1996 as a result
of increased production, primarily from the New Mexico operations, as well as
the added Trax Operations. Trax DD&A was $493,000 in 1996.
General and administrative expenses increased $651,000 in 1996 as compared to
1995, primarily as a result of increased personnel costs. Trax general and
administrative expense was $298,000 in 1996. Interest expense increased $502,000
as a result of the increased outstanding bank debt during 1996.
9
<PAGE>
THREE MONTHS ENDED JUNE 30, 1996 COMPARED TO
--------------------------------------------
THREE MONTHS ENDED JUNE 30, 1995
--------------------------------
The Company recorded net income before dividends of $938,000 in 1996 as
compared to net income of $435,000 before dividends in 1995. Net income
increased $503,000. Net income was increased by the gain on sale of certain oil
and gas properties, as well as increased oil and gas sales and improved margins
on pipeline sales. Net income was reduced by increases in all costs and
expenses.
Pipeline sales increased $4,896,000 in 1996 as compared to 1995, but were
offset by an increase in natural gas purchases of $4,185,000. The increase in
sales and purchases is due primarily to the increase in the cost of gas which
averaged $1.76 in 1996 as compared to $1.54 in 1995. During 1996 natural gas was
sold at an average price of $2.29 as compared to $1.61 in 1995. Gross margin
increased to 4.5% in 1996 as compared to 4.1% in 1995.
Revenues from oil and gas sales increased $698,000 in 1996 as compared to
1995. Oil and gas revenues attributable to Trax were $633,000 during 1996. Oil
production increased to 143,000 barrels in 1996 as compared to 90,000 barrels in
1995, resulting in a $1,005,000 increase in sales. The increase in oil
production is due to the Company's successful drilling and development program
in New Mexico as well as the Trax production (34,000 barrels). The average price
received for oil was $21.11 in 1996 as compared to $19.06 in 1995, resulting in
a $293,000 increase in sales. Gas production in 1996 decreased to 1,475,000 Mcf
as compared to 2,136,000 Mcf in 1995, resulting in a $887,000 decrease in sales.
The decrease in gas production is attributable primarily to the Keystone
Ellenburger field ("Keystone"). Effective February 1, 1996, the Railroad
Commission of Texas amended the field rules for Keystone which reduced the
Company's allowable production from its operated leases to 10.1 million cubic
feet of gas per day from 20.1 million cubic feet of gas per day. The average
price received for gas increased to $1.59 in 1996 as compared to $1.34 in 1995,
resulting in a $869,000 increase in sales. The average price received for gas
excluding certain production payment volumes was $2.14 in 1996.
Lease operating expenses ("LOE") related to oil and gas properties increased
$288,000 as a result of the addition of the Trax operations. Trax LOE was
$311,000 during 1996. Lifting costs per equivalent barrel (including Trax
operations) increased in 1996 to $5.38 from $4.23 in 1995, primarily as a result
of the decreased gas production from Keystone. Depletion, depreciation and
amortization ("DD&A") increased $325,000 in 1996 primarily as a result of the
addition of the Trax operations. Trax DD&A was $270,000 in 1996.
General and administrative expenses increased $445,000 in 1996 as compared to
1995, primarily as a result of increased personnel costs. Trax general and
administrative expense was $191,000 in 1996. Interest expense increased $215,000
as a result of the increased outstanding bank debt during 1996.
10
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ARCH PETROLEUM INC.
-------------------
(Registrant)
Date: August 13, 1996 /s/ Fred Cantu
--------------- -------------------
Fred Cantu
Treasurer and
Chief Financial Officer
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,476,000
<SECURITIES> 0
<RECEIVABLES> 9,805,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 12,228,000
<PP&E> 90,760,000
<DEPRECIATION> 16,287,000
<TOTAL-ASSETS> 90,776,000
<CURRENT-LIABILITIES> 11,804,000
<BONDS> 0
20,000,000
0
<COMMON> 172,000
<OTHER-SE> 8,157,000
<TOTAL-LIABILITY-AND-EQUITY> 90,776,000
<SALES> 41,740,000
<TOTAL-REVENUES> 43,248,000
<CGS> 33,355,000
<TOTAL-COSTS> 33,355,000
<OTHER-EXPENSES> 3,445,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,362,000
<INCOME-PRETAX> 2,036,000
<INCOME-TAX> 610,000
<INCOME-CONTINUING> 1,426,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,426,000
<EPS-PRIMARY> 0.04
<EPS-DILUTED> 0
</TABLE>
