<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, 1997
-------------
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, 1997
Common Stock, $.01 Par Value 17,171,804
---------------------------- ----------
<PAGE>
ARCH PETROLEUM INC.
INDEX
Page
Part I. FINANCIAL INFORMATION Number
Item 1.
CONSOLIDATED BALANCE SHEETS -
June 30, 1997 and December 31, 1996.................. 3
CONSOLIDATED STATEMENTS OF OPERATIONS -
Three and six months ended June 30, 1997 and 1996.... 5
CONSOLIDATED STATEMENTS OF CASH FLOWS -
Six months ended June 30, 1997 and 1996.............. 6
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS................. 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............................................. N/A
b. Reports on Form 8-K.................................. 10
SIGNATURES......................................................... 12
2
<PAGE>
ARCH PETROLEUM INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(UNAUDITED) (AUDITED)
ASSETS JUNE 30, DECEMBER 31,
1997 1996
------------- -------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 2,740,000 $ 3,192,000
Accounts receivable - trade 12,035,000 15,948,000
Accounts receivable - related parties 91,000 275,000
Prepaid expenses and other 1,404,000 968,000
------------ ------------
Total current assets 16,270,000 20,383,000
Property and Equipment, at cost:
Oil and gas properties accounted for by the
successful efforts method 88,835,000 81,620,000
Natural gas pipelines 12,617,000 12,361,000
Furniture, fixtures and other equipment 1,178,000 1,038,000
------------ ------------
102,630,000 95,019,000
Less accumulated depletion, depreciation
and amortization 22,801,000 19,617,000
------------ ------------
Net property and equipment 79,829,000 75,402,000
Accounts receivable - related parties 1,643,000 1,551,000
Notes receivable - related parties 1,816,000 1,759,000
Deferred income taxes 907,000 705,000
Other 967,000 1,239,000
------------ ------------
$101,432,000 $101,039,000
============ ============
</TABLE>
The accompanying condensed notes are an integral part of these consolidated
financial statements.
3
<PAGE>
ARCH PETROLEUM INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(UNAUDITED) (AUDITED)
LIABILITIES AND SHAREHOLDERS' EQUITY JUNE 30, DECEMBER 31,
1997 1996
------------- -------------
<S> <C> <C>
Current Liabilities:
Accounts payable $ 14,192,000 $ 16,253,000
Accounts payable - related parties 1,230,000 1,911,000
Current maturities of long-term debt 1,111,000 1,119,000
Preferred stock dividends payable 311,000 311,000
------------ ------------
Total current liabilities 16,844,000 19,594,000
Long-term debt, less current maturities 33,151,000 30,134,000
Deferred revenue 11,544,000 12,528,000
Convertible subordinated notes 5,000,000 5,000,000
Deferred federal income taxes 4,000,000 3,450,000
Other liabilities 235,000 186,000
Minority interest in consolidated subsidiaries 1,528,000 1,082,000
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,
17,271,804 issued and outstanding 172,000 172,000
Additional paid-in capital 6,012,000 6,012,000
Employee notes for stock purchases (1,054,000) (1,022,000)
Treasury stock, 100,000 shares (206,000) (206,000)
Cumulative translation adjustment (18,000) 37,000
Retained earnings 4,224,000 4,072,000
------------ ------------
9,130,000 9,065,000
------------ ------------
$101,432,000 $101,039,000
============ ============
</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,
------------------------- -------------------------
1997 1996 1997 1996
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
REVENUES:
Oil and gas sales $ 5,170,000 $ 5,364,000 $11,464,000 $11,073,000
Pipeline sales 21,705,000 16,869,000 48,147,000 30,667,000
Gain on sale of properties - 1,037,000 - 1,037,000
Interest and other 199,000 146,000 382,000 471,000
----------- ----------- ----------- -----------
27,074,000 23,416,000 59,993,000 43,248,000
COSTS AND EXPENSES:
Oil and gas lease operations 1,887,000 2,176,000 3,989,000 4,338,000
Natural gas purchases and
pipeline operations 20,883,000 15,598,000 46,207,000 29,017,000
Exploration 127,000 127,000 202,000 178,000
Depletion, depreciation and
amortization 1,766,000 1,591,000 3,434,000 3,267,000
General and administrative 1,430,000 1,518,000 2,667,000 2,669,000
Interest 819,000 685,000 1,583,000 1,362,000
Foreign currency transaction (gain) loss (66,000) 10,000 41,000 (29,000)
Minority interest in income
of consolidated subsidiaries 141,000 372,000 448,000 410,000
----------- ----------- ----------- -----------
26,987,000 22,077,000 58,571,000 41,212,000
----------- ----------- ----------- -----------
Income before income taxes
and dividends 87,000 1,339,000 1,422,000 2,036,000
Income tax expense 32,000 401,000 466,000 610,000
----------- ----------- ----------- -----------
Net income before dividends 55,000 938,000 956,000 1,426,000
Dividends on preferred stock 400,000 400,000 800,000 800,000
----------- ----------- ----------- -----------
Net income (loss) $ (345,000) $ 538,000 $ 156,000 $ 626,000
=========== =========== =========== ===========
Net income (loss) per common share $(0.02) $0.03 $0.01 $0.04
=========== =========== =========== ===========
Weighted average common and
common equivalent shares
outstanding 17,285,000 17,231,000 17,287,000 17,234,000
=========== =========== =========== ===========
</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,
---------------------------
1997 1996
------------ -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 956,000 $ 1,426,000
Adjustments to reconcile to net cash from operations:
Depletion, depreciation and amortization 3,434,000 3,267,000
Deferred revenue (739,000) (1,198,000)
Deferred income taxes 357,000 610,000
Interest on notes receivable and other (90,000) (97,000)
Minority interest in net income of consolidated subsidiaries 448,000 410,000
Gain on sale of properties - (1,037,000)
Foreign currency transaction (gain) loss 41,000 (29,000)
----------- ------------
4,407,000 3,352,000
Change in accounts receivable 4,097,000 (1,848,000)
Change in other current assets 388,000 (385,000)
Change in accounts receivable - related parties (92,000) (330,000)
Change in accounts payable and other current liabilities (3,135,000) (246,000)
Production payment remedy adjustment (245,000) (927,000)
----------- ------------
Net operating cash flows 5,420,000 (384,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (7,865,000) (3,759,000)
Proceeds from sale of properties - 1,585,000
Notes receivable and other assets (216,000) 12,000
Investment in subsidiary - (7,645,000)
----------- ------------
Net investing cash flows (8,081,000) (9,807,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from bank borrowing 6,000,000 21,504,000
Payments of bank debt (3,064,000) (12,305,000)
Payment of preferred stock dividends (800,000) (800,000)
Proceeds from note payable - minority interest holder 73,000 694,000
----------- ------------
Net financing cash flows 2,209,000 9,093,000
----------- ------------
Change in cash and cash equivalents (452,000) (1,098,000)
Cash and cash equivalents at beginning of period 3,192,000 2,574,000
----------- ------------
Cash and cash equivalents at end of period $ 2,740,000 $ 1,476,000
=========== ============
</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 1997
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,
1996. The Company extended the maturity date of notes receivable from certain
key employees to May 13, 1999. The results of operations for the three months
and six months ended June 30, 1997 and 1996 are not necessarily indicative of
the results to be expected for a full year.
On July 10, 1997, the Company entered into an agreement to sell it's entire
50% membership interest in Onyx Pipeline Company, L.C. and its affiliates
(together "Onyx"). The transaction was closed on July 31, 1997, and is
effective June 30, 1997. The proceeds consist of a $6.0 million sales price
plus a $1.8 million repayment to the Company for advances formerly made to Onyx
for pipeline construction and other costs. The Company reduced its domestic
long term debt by $7.8 million, concurrently, and will recognize a pre-tax book
gain of approximately $6.0 million in the third quarter. See Item 5 for further
discussion of the transaction.
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
- -------------------------------
In 1997 the Company's principal sources of funds were $5.0 million from
operations and $2.2 million, net of repayments, from its Revolvers. These funds
were primarily consumed by funding $6.4 million of development in existing U.S.
properties, primarily in New Mexico and North Texas, and $1.5 million for the
drilling of wells in Canada, including construction of supporting facilities and
pipelines.
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 $20.5 million and $11.0 million against the
Domestic and Canadian Revolvers at June 30, 1997, 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 Revolver facility is $50.0 million. The borrowing base was redetermined and
amended effective June 1, 1997, and the borrowing base is currently U.S. $21.0
million and Canadian $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 effective interest rate
realized was 8.12% at June 30, 1997.
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 (9.00% at June 30, 1997). Interest on
the unpaid principal amount of the note is payable quarterly. The unpaid
principal ($1.9 million at June 30, 1997), is payable in eighteen quarterly
installments ending on March 31, 1999. Current maturities of the Onyx Note total
$1.1 million at June 30, 1997. 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.
On July 31, 1997, the Company closed the sale of its interest in Onyx and
realized approximately $7.8 million in cash. The Company will recognize a gain
of approximately $6.0 million on the transaction in the third quarter. The
transaction is more fully described in Item 5. The $7.8 million proceeds were
used to pay down the Domestic Revolver as of July 31, 1997. As a result of the
sale of Onyx, the Company is no longer a party to the Onyx Note described above
and does not guarantee that facility as of July 31, 1997. All collateral
requirements and security instruments formerly associated with the Onyx Note are
released and clear as regards the Company as of July 31, 1997.
Since December 31, 1996 through the date of this report, the Company
successfully completed twenty-eight wells in Texas, New Mexico and Alberta as
part of its 1997 drilling program. In the United States, twenty-six new wells
have been drilled and completed (nine during the second quarter). In Canada
during the first quarter, two wells have been completed successfully.
The Company believes it has sufficient cash and unused borrowing base in
the Revolvers to fund its anticipated drilling, development and acquisition
programs for 1997 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,
8
<PAGE>
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, 1997 COMPARED TO
------------------------------------------
SIX MONTHS ENDED JUNE 30, 1996
------------------------------
The Company recorded net income before dividends of $956,000 in 1997 as
compared to net income of $1,426,000 before dividends in 1996. The decrease in
net income was entirely attributable to the gain on sale of certain oil and gas
properties recognized in 1996.
Pipeline sales increased $17,480,000 in 1997 as compared to 1996, but were
offset by an increase in natural gas purchases of $17,190,000. The increase in
sales and purchases is due primarily to the increase in volumes delivered to a
major customer of Onyx. Gross margin increased to $2,324,000 in 1997 as compared
to $2,026,000 in 1996.
Revenues from oil and gas sales increased $391,000 in 1997 as compared to
1996. Oil production increased to 307,000 barrels in 1997 as compared to
280,000 barrels in 1996, resulting in a $539,000 increase in sales. The Company
has begun realizing production from the new wells drilled in the first quarter
of 1997. The average price received for oil was $20.58 in 1997 as compared to
$20.06 in 1996, resulting in a $160,000 increase in sales. Gas production in
1997 decreased to 2,684,000 Mcf as compared to 3,419,000 Mcf in 1996, resulting
in a $1,171,000 decrease in sales. The decrease in gas production is
attributable primarily to the reduced allowable production from the Keystone
Ellenburger field ("Keystone"). The average price received for gas increased to
$1.92 in 1997 as compared to $1.59 in 1996, resulting in a $869,000 increase in
sales. The average price received for gas excluding certain production payment
volumes was $2.67 in 1997 as compared to $2.11 in 1996.
Lease operating expenses ("LOE") related to oil and gas properties
decreased $349,000, attributable in part to improved efficiencies in the
Company's Canadian operations. Lifting costs per equivalent barrel increased in
1997 to $5.29 from $5.10 in 1996, as a result of decreased gas production from
Keystone. Interest expense increased $221,000 as a result of the increased
outstanding bank debt during 1997.
THREE MONTHS ENDED JUNE 30, 1997 COMPARED TO
--------------------------------------------
THREE MONTHS ENDED JUNE 30, 1996
--------------------------------
The Company recorded net income before dividends of $55,000 in 1997 as
compared to net income of $938,000 before dividends in 1996. The decrease in
net income was attributable primarily to the gain on sale of oil and gas
properties recognized in 1996 as well as lower margins on pipeline sales in
1997.
Pipeline sales increased $4,836,000 in 1997 as compared to 1996, but were
offset by an increase in natural gas purchases of $5,264,000. The increase in
sales and purchases is due primarily to the increase in volumes delivered to a
major customer of Onyx. Gross margin decreased to $1,028,000 in 1997 as
compared to $1,456,000 in 1996.
Revenues from oil and gas sales decreased $194,000 in 1997 as compared to
1996. Oil production increased to 165,000 barrels in 1997 as compared to
143,000 barrels in 1996, resulting in a $473,000 increase in sales. The Company
has begun realizing production from the new wells drilled in the first quarter
of 1997. The average price received for oil was $19.34 in 1997 as compared to
$21.11 in 1996, resulting in a $293,000 decrease in sales. Gas production in
1997 decreased to 1,171,000 Mcf as compared to 1,475,000 Mcf in 1996, resulting
in a $484,000 decrease in sales. The decrease in gas production is attributable
primarily to the reduced allowable production from Keystone. The average price
received for gas increased to $1.69 in 1997 as compared to $1.59 in 1996,
resulting in a $111,000 increase in sales. The average price received for gas
excluding certain production payments volumes was $2.17 in 1997 as compared to
$2.14 in 1996.
Lease operating expenses related to oil and gas properties decreased
$289,000 reflecting lower operating costs in the Company's U.S. operations.
Lifting costs per equivalent barrel decreased in 1997 to $5.24 from $5.60 in
1996, primarily as a result of the increased oil production from the Company's
drilling program.
Interest expense increased $134,000 as a result of the increased
outstanding bank debt during 1997. The effective tax rate increased to 36% in
1997 from 30% in 1996 due to the payment of provincial taxes in Canada during
1997.
9
<PAGE>
PART II.
ITEM 5. OTHER INFORMATION
On July 10, 1997, the Company entered into an agreement to sell it's entire
50% membership interest in Onyx Pipeline Company, L.C. and its affiliates
(together "Onyx"). The transaction was closed on July 31, 1997, and is
effective June 30, 1997. The proceeds consist of a $6.0 million sales price
plus a $1.8 million repayment to the Company for advances formerly made to Onyx
for pipeline construction and other costs. The Company reduced its domestic
long term debt by $7.8 million, concurrently, and will recognize a pre-tax book
gain of approximately $6.0 million ($0.35 per common share) in the third
quarter.
The following unaudited pro forma condensed balance sheet has been prepared
to reflect the sale transaction as of June 30, 1997. This pro forma condensed
balance sheet should be read in conjunction with the other financial statements
and notes thereto included elsewhere in this Form 10-Q.
<TABLE>
<CAPTION>
June 30, 1997
-------------
<S> <C>
PRO FORMA
BALANCE SHEET:
ASSETS:
Cash and cash equivalents $ 2,240,000
Receivables and other current assets 4,569,000
-----------
Total current assets 6,809,000
Net property and equipment at cost 73,573,000
Other assets 5,329,000
-----------
$85,711,000
===========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Accounts payable and accrued expenses $ 6,586,000
Preferred stock dividends payable 311,000
-----------
Total current liabilities 6,897,000
Long-term debt 23,700,000
Deferred revenue 11,544,000
Convertible subordinated notes 5,000,000
Deferred federal income taxes 6,038,000
Other liabilities 235,000
Exchangeable convertible preferred stock 20,000,000
Shareholders' equity 12,297,000
-----------
$85,711,000
===========
</TABLE>
10
<PAGE>
The following unaudited pro forma condensed statements of operations have
been prepared as if the sale transaction had occurred on January 1, 1996 and
that the proceeds from the sale had been used to retire domestic long-term bank
debt. These statements should be read in conjunction with the other financial
statements and notes thereto included elsewhere in this Form 10-Q. Management
believes that the unaudited results of operations are not necessarily indicative
of the financial results as they may be in the future or as they might have
been, had the Company been able to utilize proceeds from the sale to develop
existing leases and to acquire additional oil and gas properties.
<TABLE>
<CAPTION>
Year Ended Six Months Ended
December 31,1996 June 30, 1997
---------------- ----------------
PRO FORMA
STATEMENTS OF OPERATIONS:
<S> <C> <C>
REVENUES:
Oil and gas sales $23,748,000 $11,464,000
Pipeline sales 3,250,000 3,049,000
Interest and other 654,000 350,000
Gain on sale of properties 1,037,000 -
----------- -----------
28,689,000 14,863,000
COSTS AND EXPENSES:
Oil and gas lease operations 8,675,000 4,190,000
Natural gas purchases and pipeline operations 2,853,000 2,770,000
Depletion, depreciation and amortization 6,636,000 3,303,000
General and administrative 4,235,000 2,212,000
Interest 1,879,000 1,122,000
Foreign currency transaction loss 40,000 41,000
----------- -----------
24,318,000 13,638,000
----------- -----------
Net income before income taxes and dividends 4,371,000 1,225,000
Income tax expense 1,408,000 399,000
----------- -----------
Net income 2,963,000 826,000
Dividends on preferred stock 1,600,000 800,000
----------- -----------
Net income available to common shareholders $ 1,363,000 $ 26,000
=========== ===========
Net income available per common share $ 0.08 $ -
=========== ===========
</TABLE>
11
<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, 1997 /s/ Fred Cantu
---------------- -------------------------
Fred Cantu
Treasurer and
Chief Financial Officer
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,740,000
<SECURITIES> 0
<RECEIVABLES> 12,126,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 16,270,000
<PP&E> 102,630,000
<DEPRECIATION> 22,801,000
<TOTAL-ASSETS> 101,432,000
<CURRENT-LIABILITIES> 16,844,000
<BONDS> 0
20,000,000
0
<COMMON> 172,000
<OTHER-SE> 8,958,000
<TOTAL-LIABILITY-AND-EQUITY> 101,432,000
<SALES> 59,611,000
<TOTAL-REVENUES> 59,993,000
<CGS> 50,196,000
<TOTAL-COSTS> 50,196,000
<OTHER-EXPENSES> 3,636,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,583,000
<INCOME-PRETAX> 1,422,000
<INCOME-TAX> 466,000
<INCOME-CONTINUING> 956,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 956,000
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0
</TABLE>
