<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number: 0-9808
PLAINS RESOURCES INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-2898764
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1600 SMITH STREET
HOUSTON, TEXAS 77002
(Address of principal executive offices)
(Zip Code)
(713) 654-1414
(Registrant's telephone number, including area code)
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 [ ]
15,325,527 shares of common stock $.10 par value, issued and outstanding at
November 6, 1995.
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PLAINS RESOURCES INC. AND SUBSIDIARIES
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART I. FINANCIAL INFORMATION
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
Condensed Consolidated Balance Sheets:
September 30, 1995 and December 31, 1994......................... 3
Condensed Consolidated Statements of Operations:
For the three and nine months ended September 30, 1995 and 1994.. 4
Condensed Consolidated Statements of Cash Flows:
For the nine months ended September 30, 1995 and 1994............ 5
Notes to Condensed Consolidated Financial Statements.............. 6
MANAGEMENT'S DISCUSSION AND ANALYSIS................................ 8
PART II. OTHER INFORMATION......................................... 15
</TABLE>
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PLAINS RESOURCES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1995 1994
-------------- -------------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 5,071 $ 1,291
Cash in compensating balance account --- 1,500
Accounts receivable and other 37,417 33,370
Inventory 3,956 5,525
--------- ------------
Total current assets 46,444 41,686
--------- ------------
PROPERTY AND EQUIPMENT
Oil and natural gas properties - full cost method:
Subject to amortization 278,686 265,123
Not subject to amortization 37,722 35,779
Downstream assets, primarily crude oil terminal and storage facility 32,595 32,266
Other property and equipment 6,419 6,090
--------- ------------
355,422 339,258
Less allowance for depreciation, depletion and amortization (133,064) (121,656)
--------- ------------
222,358 217,602
--------- ------------
OTHER ASSETS 8,359 7,616
--------- ------------
$ 277,161 $ 266,904
========= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and other current liabilities $ 39,412 $ 36,282
Interest payable 6,820 3,617
Royalties payable and drilling advances 4,972 4,702
Notes payable and other current obligations 1,526 1,550
--------- ------------
Total current liabilities 52,730 46,151
BANK DEBT 50,000 45,100
SUBORDINATED DEBT 100,000 100,000
OTHER LONG-TERM LIABILITIES 4,692 8,254
--------- ------------
207,422 199,505
--------- ------------
SERIES C CUMULATIVE CONVERTIBLE PREFERRED STOCK,
STATED AT LIQUIDATION PREFERENCE
--- 20,937
--------- ------------
NON-REDEEMABLE PREFERRED STOCK, COMMON STOCK
AND OTHER STOCKHOLDERS' EQUITY
Preferred stock, stated at liquidation preference 481 481
Common stock, $.10 par value, 50,000,000 shares authorized;
issued and outstanding 15,325,527 shares at September 30, 1995
and 11,593,457 shares at December 31, 1994 1,532 1,159
Additional paid-in capital 111,325 89,274
Accumulated deficit (43,599) (44,452)
--------- ------------
69,739 46,462
--------- ------------
$ 277,161 $ 266,904
========= ============
</TABLE>
See notes to condensed consolidated financial statements.
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PLAINS RESOURCES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands,
except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- ---------------------
1995 1994 1995 1994
--------- -------- -------- ---------
<S> <C> <C> <C> <C>
REVENUE
Oil and natural gas sales $ 15,136 $15,065 $ 45,614 $ 42,498
Marketing, transportation and storage 88,354 51,095 246,632 141,360
Interest and other income 117 64 264 148
-------- ------- --------- ---------
103,607 66,224 292,510 184,006
-------- ------- --------- ---------
EXPENSES
Production expenses 7,253 7,552 21,160 20,666
Purchases, transportation and storage 86,610 49,606 241,794 136,586
General and administrative 1,753 1,689 5,527 5,336
Depreciation, depletion and amortization 4,113 4,117 12,238 12,141
Interest expense 3,395 3,051 10,075 9,496
-------- ------- --------- ---------
103,124 66,015 290,794 184,225
-------- ------- --------- ---------
NET INCOME (LOSS) $ 483 $ 209 $ 1,716 $ (219)
======== ======= ========= =========
Net income (loss) per common and common equivalent share
(see Note 5) $.03 $.02 $.10 $(.02)
======== ======= ========= =========
Weighted average number of common and common equivalent shares 16,174 11,814 15,951 11,591
======== ======= ========= =========
</TABLE>
See notes to condensed consolidated financial statements.
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PLAINS RESOURCES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------
1995 1994
---------- -----------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 14,585 $ 19,072
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the sale of oil and natural gas properties 1,827 314
Payment for acquisition, exploration and development costs (16,885) (32,170)
Payment for additions to other property and assets (887) (2,029)
--------- ---------
Net cash used in investing activities (15,945) (33,885)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt 23,750 58,300
Proceeds from short-term debt - 10,385
Proceeds from capital stock, options and warrants 545 20,810
Principal payments of long-term debt (18,850) (50,900)
Principal payments of short-term debt - (19,991)
Payments of other long-term liabilities (1,509) (124)
Other 1,204 (141)
--------- ---------
Net cash provided by financing activities 5,140 18,339
--------- ---------
Net increase in cash and cash equivalents 3,780 3,526
Cash and cash equivalents, beginning of period 1,291 3,783
--------- ---------
Cash and cash equivalents, end of period $ 5,071 $ 7,309
========= =========
</TABLE>
See notes to condensed consolidated financial statements.
Page 5 of 17
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PLAINS RESOURCES INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
(UNAUDITED)
NOTE 1--ACCOUNTING POLICIES
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with the instructions to interim financial reporting as
prescribed by the Securities and Exchange Commission. For further information,
refer to the consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1994, filed
with the Securities and Exchange Commission.
All material adjustments consisting only of normal recurring adjustments which,
in the opinion of management, were necessary for a fair statement of the results
for the interim periods have been reflected. Certain reclassifications have
been made to the prior year statements to conform with the current year
presentation. The Company evaluates the capitalized costs of its oil and
natural gas properties on an ongoing basis and has utilized the most recently
available information to estimate its reserves at September 30, 1995, in order
to determine the realizability of such capitalized costs. Future events,
including drilling activities, product prices and operating costs, may affect
future estimates of such reserves.
NOTE 2--REVOLVING CREDIT FACILITY
In June 1995, the Company's revolving credit facility (the "Credit Facility")
and borrowing base thereunder was increased to $65 million from $55 million.
The Credit Facility, as amended, consists of a $65 million revolving credit
loan, which matures on June 30, 1996, with a final maturity of April 1, 1998.
On September 30, 1995, the Company had $50 million in borrowings and a $1
million standby letter of credit outstanding under the Credit Facility.
NOTE 3--UNCOMMITTED SECURED DEMAND TRANSACTIONAL LINE OF CREDIT FACILITY
In August 1995, the Company's marketing subsidiary established an $80 million
Uncommitted Secured Demand Transactional Line of Credit (the "Transactional
Facility") with two banks. The purpose of the Transactional Facility is to
provide standby letters of credit to support the purchase of crude oil for
resale and borrowings to finance crude oil inventory which has been hedged
against future price risk. The Transactional Facility is secured by all of the
assets of the marketing subsidiary and is guaranteed by the Company. The
Company's guarantee is secured by a $1 million standby letter of credit issued
on behalf of the Company. At September 30, 1995, approximately $28 million in
letters of credit were outstanding under the Transactional Facility.
PMCT, Inc. ("PMCT"), a wholly owned subsidiary of the Company, has established a
$20 million sublimit (the "Sublimit") within the Transactional Facility for
standby letters of credit and borrowings to finance crude oil purchased in
connection with operations at the Company's crude oil terminal and storage
facility in Cushing, Oklahoma. Under the terms of the Sublimit, all purchases
of crude oil inventory financed are required to be hedged against future price
risk on terms acceptable to the lenders. Standby letters of credit and
borrowings under the Sublimit are secured by all of the assets of PMCT. At
September 30, 1995, no letters of credit or borrowings were outstanding under
the Sublimit.
Page 6 of 17
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Letters of credit under the Transactional Facility are generally issued for
sixty day periods and bear fees of 1.5% per annum. Borrowings incur interest at
the option of the borrower at (i) the Base Rate, as defined, plus 5/8% or (ii)
LIBOR plus 2%. All financings under the Transactional Facility, which expires in
August 1996, are at the discretion of the lenders. Aggregate cash borrowings
by both subsidiaries are limited to $20 million.
NOTE 4--PREFERRED STOCK
In July 1994, the Company sold in a private placement 200,000 shares of Series C
Cumulative Convertible Preferred Stock (the "Series C Preferred Stock") for net
proceeds of approximately $20 million. On May 25, 1995, all outstanding shares
of the Series C Preferred Stock, including accrued dividends, were converted
into approximately 3.6 million shares of the Company's common stock (the "Common
Stock").
On October 31, 1995, all outstanding shares of the Company's $1.30 Cumulative
Convertible Preferred Stock (the "$1.30 Preferred Stock") were redeemed for
$10.325 per share. The Company paid a total of $496,000, including unpaid
dividends, to redeem the $1.30 Preferred Stock. As a result of this redemption
and the conversion of the Series C Preferred Stock, all outstanding preferred
stock has been eliminated.
NOTE 5--EARNINGS PER SHARE
Earnings per share is based on the weighted average number of common and common
equivalent shares of Common Stock outstanding. Common equivalent shares include
employee stock options and warrants. For purposes of the earnings per share
calculation, Common Stock issued upon the conversion of the Series C Preferred
Stock is included in the weighted average number of shares outstanding effective
January 1, 1995.
Earnings per share for the three and nine months ended September 30, 1994, has
been restated to reflect the payment of 1994 accrued dividends on the Series C
Preferred Stock through the issuance of additional shares of the Series C
Preferred Stock. Prior to the restatement, the Company had previously reported
a net loss of $.02 and $.06 per common share for the three and nine months ended
September 30, 1994, respectively. The previously reported amounts were
calculated as if the accrued dividends on the Series C Preferred Stock would be
paid in cash.
Page 7 of 17
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MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Three month periods ended September 30, 1995 and 1994
For the quarter ended September 30, 1995, the Company reported net income of
$483,000, or $.03 per share, on total revenue of $103.6 million. This compares
with net income of $209,000, or $.02 per share, on total revenue of $66.2
million for the third quarter of 1994. Earnings per share for the 1994 period
has been restated to reflect the payment of 1994 accrued dividends on the
Company's Series C Cumulative Convertible Preferred Stock (the "Series C
Preferred Stock") through the issuance of additional shares of the Series C
Preferred Stock. Prior to the restatement, the Company had previously reported
a net loss of $.02 per common share for the three months ended September 30,
1994. The Company reported an increase in the weighted average number of common
and common equivalent shares outstanding between the two periods as a result of
the 1995 second quarter conversion of the Series C Preferred Stock, originally
issued in July 1994. Approximately 16.2 million shares were assumed to be
outstanding during the third quarter of 1995 for purposes of the earnings per
share calculation as compared to 11.8 million shares outstanding during the
third quarter of 1994.
Cash flow from operations (net income plus noncash expenses) increased 6% to
$4.6 million for the third quarter of 1995 as compared to $4.3 million for the
1994 period. Earnings before interest, taxes, depreciation, depletion and
amortization ("EBITDA") increased 8% to $8.0 million versus $7.4 million in last
year's third quarter.
The following table sets forth certain operating information of the Company for
the periods presented:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
------------------------------
1995 1994
-------------- --------------
<S> <C> <C>
(in thousands, except per unit
data) (unaudited)
AVERAGE DAILY VOLUMES
Barrels of oil:
LA Basin 7.5 7.3
S. Florida 3.6 3.1
Other 0.4 0.6
------ ------
Total 11.5 11.0
====== ======
Mcf of natural gas:
LA Basin 4.5 4.4
Other 2.9 5.3
------ ------
Total 7.4 9.7
====== ======
Barrels of oil equivalent ("BOE"):
LA Basin 8.3 8.0
S. Florida 3.6 3.1
Other 0.8 1.5
------ ------
Total 12.7 12.6
====== ======
AVERAGE SALES PRICE
Per barrel of oil $13.72 $13.70
Per Mcf of natural gas $ .94 $ 1.39
Per BOE $12.94 $13.00
PRODUCTION EXPENSES PER BOE $ 6.20 $ 6.52
UPSTREAM GENERAL AND
ADMINISTRATIVE EXPENSES PER BOE $ 0.98 $ 0.97
</TABLE>
Page 8 of 17
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Oil and natural gas production for the third quarter of 1995 increased to 1.17
million BOE, as compared to the 1.16 million BOE produced in last year's third
quarter. Oil production, the Company's principal product, increased 5% to 1.06
million barrels from 1.01 million barrels produced during the third quarter of
1994 as a result of the Company's continuing focus on the development and
exploitation of its principal properties. Natural gas production decreased from
.9 billion cubic feet to .7 billion cubic feet in the current year quarter
primarily as a result of natural decline in the Company's Gulf Coast properties.
Oil and natural gas revenues remained constant at $15.1 million for the third
quarter of 1995 as increased production volumes were offset by slightly lower
average product prices. The Company's average wellhead price, which represents
a combination of fixed and floating price sales arrangements and incorporates
location and quality discounts from benchmark New York Mercantile Exchange
("NYMEX") prices, decreased approximately 1% to $12.94 per BOE for the quarter
ended September 30, 1995. The average crude oil spot price on the NYMEX for the
third quarter of 1995 was $17.74 per barrel, $.75 below the $18.49 per barrel
average for the 1994 third quarter. However, the Company's average crude oil
price increased slightly to $13.72 per barrel as a result of its hedging
activities and improved basis differentials for certain of its crude oil
production. The Company's average natural gas price decreased 32% to $0.94 per
thousand cubic feet ("Mcf") during the third quarter of 1995 as compared to
$1.39 per Mcf received in the 1994 quarter.
The Company routinely maintains fixed price arrangements on a significant
portion of its crude oil production. Approximately 67% of the Company's current
crude oil production volumes are hedged at a NYMEX index price (before location
and quality discounts) of approximately $18.13 per barrel through mid-1996.
Financial swap arrangements and futures transactions entered into by the Company
to hedge production are included in the product prices discussed in the
preceding paragraph. Such transactions (which do not include fixed price,
physical delivery arrangements) had the effect of decreasing the average price
per BOE by $.18 in the third quarter of 1995 and 1994.
The Company's downstream segment reported an aggregate gross profit of $1.74
million for the third quarter of 1995, reflecting an approximate 17% increase
over the $1.49 million reported for the 1994 quarter. Gross revenues were
$88.35 million and $51.10 million for the respective periods. Excluding
contango market inventory transactions, gross profit from base level marketing,
transportation, storage and terminalling activities increased approximately 50%
in the 1995 third quarter to $1.74 million, compared to $1.17 million last year.
Such increase in base level activities is primarily attributable to improved
market access made available by the Company's new crude oil storage and
terminalling facility in Cushing, Oklahoma (the "Cushing Terminal").
Construction of the Cushing Terminal was completed in December 1993. Total
crude oil volumes marketed and terminalled during the 1995 third quarter were
46,000 barrels per day and 37,000 barrels per day, respectively, as compared
with average daily volumes of 31,000 barrels and 27,000 barrels in last year's
third quarter. For the third quarter of 1995, marketing and transportation
accounted for gross profit of $1.47 million with terminalling and storage
activities accounting for the balance.
Unit production expenses declined 5% to $6.20 per BOE in the current period as
compared to $6.52 per BOE in last year's third quarter. Unit production
expenses will vary throughout each year due to seasonal demand charges for peak
electricity usage and periodic workover expenses associated with the Company's
production and exploitation activities. Annual unit production expenses were
$7.36, $6.65 and $6.15 per BOE in 1992, 1993 and 1994, respectively. The unit
expense reductions are primarily the result of the Company's ongoing focus on
cost reduction and cost control and increased production volumes. Total
production expenses decreased to $7.25 million from $7.55 million for the third
quarter of 1994.
Page 9 of 17
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Excluding general and administrative ("G&A") expenses related to the Company's
downstream activities, unit upstream G&A expenses were $.98 per BOE for the
quarter ended September 30, 1995, as compared to $.97 per BOE for the 1994
respective period. On an annual basis, unit upstream G&A expenses were $2.48,
$1.34 and $1.04 per BOE in 1992, 1993 and 1994, respectively. Total G&A
expenses, including downstream activities, were $1.75 million for the three
months ended September 30, 1995, compared to $1.69 million for the 1994 period.
Depreciation, depletion and amortization ("DD&A") expense remained constant at
$4.11 million for the quarters ended September 30, 1995 and 1994. Increased
DD&A attributable to higher production volumes was partially offset by a lower
DD&A rate ($3.00 per BOE in the 1995 quarter versus $3.10 per BOE in the 1994
quarter). Interest expense for the quarter ended September 30, 1995, increased
to $3.40 million from $3.05 million reported for the comparative prior year
quarter. The increase is primarily due to higher outstanding debt levels and a
higher average interest rate.
Nine month periods ended September 30, 1995 and 1994
For the nine months ended September 30, 1995, the Company reported net income of
$1.7 million, or $.10 per share, on total revenue of $292.5 million. This
compares to a net loss of $219,000, or $.02 per share, on total revenue of
$184.0 million for the first nine months of 1994. Earnings per share for the
1994 period has been restated to reflect the payment of 1994 accrued dividends
on the Series C Preferred Stock through the issuance of additional shares of the
Series C Preferred Stock. Prior to the restatement, the Company had previously
reported a net loss of $.06 per common share for the nine months ended September
30, 1994. The Company reported an increase in the weighted average number of
common and common equivalent shares outstanding between the two periods as a
result of the 1995 second quarter conversion of the Series C Preferred Stock,
originally issued in July 1994. Approximately 16.0 million shares were assumed
to be outstanding during the first nine months of 1995 for purposes of the
earnings per share calculation as compared to 11.6 million shares outstanding
during the 1994 comparative period.
Cash flow from operations (net income plus noncash expenses) increased 17% to
$13.9 million for the nine months ended September 30, 1995 versus $11.9 million
for the 1994 period. EBITDA increased 12% to $24.0 million as compared to $21.4
million reported in the first nine months of 1994. Net cash provided by
operating activities, as reported in the consolidated statements of cash flows,
decreased to $14.6 million for the nine months ended September 30, 1995 as
compared to $19.1 million for the 1994 comparative period. Included in the 1994
amount is approximately $9.4 million of proceeds from the sale of crude oil
inventory, primarily attributable to contango market inventory transactions.
The market for similar types of crude oil inventory transactions was not
available during the 1995 period.
Page 10 of 17
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The following table sets forth certain operating information of the Company for
the periods presented:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------------
1995 1994
--------------- -------------
<S> <C> <C>
(in thousands, except per unit
data) (unaudited)
AVERAGE DAILY VOLUMES
Barrels of oil:
LA Basin 7.5 7.3
S. Florida 3.5 2.5
Other 0.4 0.5
------ ------
Total 11.4 10.3
====== ======
Mcf of natural gas:
LA Basin 4.5 4.6
Other 3.5 5.5
------ ------
Total 8.0 10.1
====== ======
Barrels of oil equivalent:
LA Basin 8.3 8.1
S. Florida 3.5 2.5
Other 1.0 1.4
------ ------
Total 12.8 12.0
====== ======
AVERAGE SALES PRICE
Per barrel of oil $13.88 $13.72
Per Mcf of natural gas $ 1.02 $ 1.40
Per BOE $13.07 $12.98
PRODUCTION EXPENSES PER BOE $ 6.06 $ 6.31
UPSTREAM GENERAL AND
ADMINISTRATIVE EXPENSES PER BOE $ 1.06 $ 1.12
</TABLE>
Oil and natural gas production for the first nine months of 1995 increased to
3.49 million BOE, up 7% over the 3.27 million BOE produced in last year's
comparative period. Oil production, the Company's principal product, increased
approximately 11% to 3.12 million barrels from 2.81 million barrels produced
during the first nine months of 1994 as a result of the Company's continuing
focus on the development and exploitation of its principal properties and the
acquisition of the remaining 50% working interest in its properties in the
Sunniland Trend of South Florida (the "Sunniland Trend Properties") effective
May 1, 1994. Natural gas production decreased from 2.76 billion cubic feet to
2.20 billion cubic feet in the current year period primarily as a result of
natural decline in the Company's Gulf Coast properties.
Oil and natural gas revenues increased approximately 7% to $45.61 million versus
$42.50 million for the first nine months of 1994 due to increased production
volumes and slightly higher average product prices. The Company's average
wellhead price, which represents a combination of fixed and floating price sales
arrangements and incorporates location and quality discounts from benchmark
NYMEX prices, increased 1% to $13.07 per BOE for the nine months ended September
30, 1995. Such increase is attributable to an increase in the spot crude oil
price in 1995 which was offset by lower average natural gas prices. The
Company's average oil price was $13.88 per barrel for the first nine months of
1995 versus $13.72 per barrel in the prior year comparative period. The
Company's average natural gas price decreased 27% to $1.02 per Mcf during the
first nine months of 1995 as compared to $1.40 per Mcf received in the 1994
period.
The Company routinely maintains fixed price arrangements on a significant
portion of its crude oil production. Approximately 67% of the Company's current
crude oil production volumes are hedged
Page 11 of 17
<PAGE>
at a NYMEX index price (before location and quality discounts) of approximately
$18.13 per barrel through mid-1996. Financial swap arrangements and futures
transactions entered into by the Company to hedge production are included in the
product prices discussed in the preceding paragraph. Such transactions (which
do not include fixed price, physical delivery arrangements) had the effect of
decreasing the average price per BOE by $.35 in the first nine months of 1995
and increasing the average price per BOE by $0.23 in the 1994 comparative
period.
Aggregate gross profit from the Company's downstream operations was $4.84
million for the nine months ended September 30, 1995, versus $4.77 million in
the prior year period. Gross revenues were $246.63 million and $141.36 million
for the respective periods. Excluding contango market inventory transactions,
gross profit from base level marketing, transportation, storage and terminalling
activities increased approximately 36% in the first nine months of 1995 to $4.78
million as compared to $3.50 million last year. Gross profit from contango
related activities was $60,000 in the 1995 period versus $1.27 million in 1994.
The increase in base level activities is primarily attributable to improved
market access made available by the Cushing Terminal. Total crude oil volumes
marketed and terminalled during the first nine months of 1995 were 45,000
barrels per day and 38,000 barrels per day, respectively, as compared with
average daily volumes of 26,000 barrels and 30,000 barrels in last year's
comparative period. For the nine months ended September 30, 1995, marketing and
transportation accounted for gross profit of $3.96 million with terminalling and
storage activities accounting for the balance.
Unit production expenses decreased approximately 4% to $6.06 per BOE in the
first nine months of 1995 as compared to $6.31 per BOE in last year's
comparative period. Unit production expenses will vary throughout each year due
to seasonal demand charges for peak electricity usage and periodic workover
expenses associated with the Company's production and exploitation activities.
Annual unit production expenses were $7.36, $6.65 and $6.15 per BOE in 1992,
1993 and 1994, respectively. The unit expense reductions are primarily the
result of the Company's ongoing focus on cost reduction and cost control and
increased production volumes. Total production expenses increased to $21.16
million from $20.67 million for the first nine months of 1994 primarily as a
result of increased production volumes.
Excluding G&A expenses related to the Company's downstream activities, unit
upstream G&A expenses declined 5% to $1.06 per BOE for the nine months ended
September 30, 1995. On an annual basis, unit upstream general and
administrative expenses were $2.48, $1.34 and $1.04 per BOE in 1992, 1993 and
1994, respectively. Total G&A expenses, including downstream activities, were
$5.53 million for the nine months ended September 30, 1995, compared to $5.34
million for the 1994 period.
DD&A expense increased slightly to $12.24 million for the first nine months of
1995. Increased DD&A attributable to higher production volumes was partially
offset by a lower DD&A rate ($3.00 per BOE in the 1995 period versus $3.19 per
BOE in the 1994 period). Interest expense for the nine months ended September
30, 1995, increased to $10.08 million from $9.50 million reported for the
comparative prior year period. The increase is primarily due to a higher
average interest rate and higher outstanding debt levels.
CAPITAL RESOURCES, LIQUIDITY AND FINANCIAL CONDITION
In July 1994, the Company sold in a private placement 200,000 shares of its
Series C Preferred Stock for net proceeds of approximately $20 million. On May
25, 1995, all outstanding shares of the Series C Preferred Stock, including
accrued dividends, were converted into approximately 3.6 million shares of the
Company's common stock (the "Common Stock"). On October 31, 1995, all 48,070
outstanding
Page 12 of 17
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shares of the Company's $1.30 Cumulative Convertible Preferred Stock (the "$1.30
Preferred Stock") were redeemed for $10.325 per share. As a result of these
transactions, all outstanding preferred stock and the corresponding $2.2 million
annual dividend obligation have been eliminated. Approximately 15.3 million
shares of Common Stock were outstanding as of October 31, 1995.
In June 1995, the Company's revolving credit facility (the "Credit Facility")
and borrowing base thereunder was increased to $65 million from $55 million.
The Credit Facility, as amended, consists of a $65 million revolving credit
loan, which matures on June 30, 1996, with a final maturity of April 1, 1998.
On September 30, 1995, the Company had $50 million in borrowings and a $1
million standby letter of credit outstanding under the Credit Facility.
In August 1995, the Company's marketing subsidiary established an $80 million
Uncommitted Secured Demand Transactional Line of Credit (the "Transactional
Facility") with two banks. The purpose of the Transactional Facility is to
provide standby letters of credit to support the purchase of crude oil for
resale and borrowings to finance crude oil inventory which has been hedged
against future price risk. The Transactional Facility is secured by all of the
assets of the marketing subsidiary and is guaranteed by the Company. The
Company's guarantee is secured by a $1 million standby letter of credit issued
on behalf of the Company. At September 30, 1995, approximately $28 million in
letters of credit were outstanding under the Transactional Facility.
PMCT, Inc. ("PMCT"), a wholly owned subsidiary of the Company, has established
a $20 million sublimit (the "Sublimit") within the Transactional Facility for
standby letters of credit and borrowings to finance crude oil purchased in
connection with operations at the Cushing Terminal. Under the terms of the
Sublimit, all purchases of crude oil inventory financed are required to be
hedged against future price risk on terms acceptable to the lenders. Standby
letters of credit and borrowings under the Sublimit are secured by all of the
assets of PMCT. At September 30, 1995, no letters of credit or borrowings were
outstanding under the Sublimit.
Letters of credit under the Transactional Facility are generally issued for
sixty day periods and bear fees of 1.5% per annum. Borrowings incur interest at
the option of the borrower at (i) the Base Rate, as defined, plus 5/8% or (ii)
LIBOR plus 2%. All financings under the Transactional Facility, which expires in
August 1996, are at the discretion of the lenders. Aggregate cash borrowings
by both subsidiaries are limited to $20 million.
At September 30, 1995, the Company had a working capital deficit of
approximately $6.29 million compared to a deficit of $4.47 million at December
31, 1994. The Company has historically operated with a working capital deficit
due primarily to ongoing capital expenditures that have been financed through
cash flow and the Credit Facility.
Investing and Financing Activities
Net cash flows used in investing activities were $15.95 million and $33.89
million for the nine months ended September 30, 1995 and 1994, respectively.
Investing activities include payments for acquisition, exploration and
development costs of $16.89 million and $32.17 million for these same periods,
respectively. Such payments for the 1994 period include approximately $11.5
million related to the cash portion of the acquisition of the Sunniland Trend
Properties. Also included in investing activities are proceeds from the sale of
certain minor properties of $1.83 million and $.31 million for the nine months
ended September 30, 1995 and 1994, respectively.
Page 13 of 17
<PAGE>
Net cash provided by financing activities amounted to $5.14 million and $18.34
million for the nine months ended September 30, 1995 and 1994, respectively.
Financing activities during 1994 include approximately $20 million in proceeds
from the Series C Preferred Stock. Proceeds, net of payments, from long-term
borrowings for the nine months ended September 30, 1995 and 1994, were $4.90
million and $7.40 million, respectively. Included in both years are net
proceeds from borrowings under the Credit Facility as a result of acquisition,
exploration and development activities, while 1994 also includes an $11.5
million bridge loan incurred to finance the acquisition of the Sunniland Trend
Properties. Such loan was repaid in July 1994 with proceeds from the sale of
the Series C Preferred Stock. Short-term debt transactions during the 1994
period reflect borrowings and repayments associated with contango crude oil
inventory transactions.
Changing Oil and Natural Gas Prices
The Company believes that with the Cushing Terminal and its crude oil and
natural gas reserve base it has the available capital resources, including
external sources of financing, to fund its capital programs. However, the
Company is heavily dependent on crude oil prices which have historically been
volatile. During 1995, the posted price for WTI crude oil has ranged from a
high of $19.00 in April to a low of $15.00 in July. Although the Company's
long-term sales arrangements for its crude oil production substantially
mitigated the impact of crude oil price declines in 1993 and 1994, future crude
oil price declines would have a negative impact on the Company's overall
results, and therefore its liquidity. Further, low crude oil prices could
affect the Company's ability to raise capital on favorable terms. The Company
routinely maintains fixed price arrangements on a significant portion of its
crude oil production. Approximately 67% of the Company's current crude oil
production volumes are hedged at a NYMEX index price (before location and
quality discounts) of approximately $18.13 per barrel through mid-1996.
Page 14 of 17
<PAGE>
PART II. OTHER INFORMATION
Item 1 - Legal Proceedings
On April 27, 1992, the Company and certain of its officers and directors and a
former director and officer were named as defendants in a lawsuit filed in the
United States District Court for the Southern District of Texas captioned
Judith Rubinstein and Howard Greenwald v. Collins, et al., C.A. No. H-92-1297.
The complaint brings a class action (the class period of which is October 23,
1991 though April 13, 1992) for, among other things, alleged violations of
Sections 10(b) and 20(a) of the Exchange Act and state law fraud and negligent
misrepresentation, arising out of certain alleged misrepresentations and
omissions in the Company's disclosures regarding its onshore natural gas
exploration activities. The plaintiffs, who purport to have purchased their
Common Stock in open market transactions (300 and 375 shares, respectively),
contend the class is entitled to approximately $30 million for compensatory
damages and punitive damages in an unspecified amount. The Company filed a
motion to dismiss in July 1992. On August 24, 1992, the Court entered an
Order of Dismissal and a Final Judgment dismissing the plaintiffs' complaint
for failure to state a claim under the federal securities laws and/or under
the common law of the State of Texas. On September 10, 1992, the plaintiffs
filed a Notice of Appeal of the District Court's judgment with the United
States Court of Appeals for the Fifth Circuit (No. 92-2736). On May 5, 1994,
the Fifth Circuit Court ruled, among other things, that the plaintiffs had
sufficiently pleaded claims under the federal securities laws and under Texas
common law and reversed the trial court's dismissal and remanded the case to
the trial court for further proceedings.
On July 27, 1993, a second case similar to the Rubinstein case described in
the preceding paragraph was filed in the United States District Court for the
Southern District of Texas captioned Gloria Moroson v. Collins, et al., C.A.
No. H-93-2305, naming the Company and certain of its officers and directors
and a former director and officer as defendants. The complaint brings a class
action (the class period of which is May 11, 1992 through August 14, 1992)
for, among other things, alleged violations of Sections 10(b) and 20(a) of the
Exchange Act and for state law fraud and negligent misrepresentation, arising
out of certain alleged misrepresentations and omissions in the Company's
disclosures regarding its onshore natural gas exploration activities. The
plaintiff, who purports to have purchased 50 shares of Common Stock in an open
market transaction, contends the class is entitled to approximately $60
million for compensatory damages and punitive damages in an unspecified
amount. These amounts are alleged to be in addition to the damages claimed in
the Rubinstein case. In June 1994, the trial court granted the Company's
motion to consolidate the Rubinstein and Moroson cases. On September 1, 1995,
the Company and the other defendants moved for summary judgment on all claims
alleged by plaintiffs in these consolidated cases. This motion is scheduled
to be heard by the court on November 30,1995. No trial date has been set for
these cases. Although the Company believes these complaints to be without
merit and intends to vigorously defend these lawsuits, an adverse judgment
could have a material adverse effect on the Company.
Item 2 - None
Item 3 - None
Item 4 - None
Page 15 of 17
<PAGE>
Item 5 - None
Item 6 -
A. Exhibits
10(m) Fourth Amendment to Second Amended and Restated Credit Agreement
dated as of August 22, 1995, between Plains Resources Inc.,
Internationale Nederlanden (U.S.) Capital Corporation, The First
National Bank of Boston, Den norske Bank AS, First Interstate Bank of
Texas, N.A., and Texas Commerce Bank National Association.
11(a) Computation of per share earnings for the three and nine months ended
September 30, 1995 and 1994
27. Financial Data Schedule
B. Report on Form 8-K
None
Page 16 of 17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned and thereunto duly authorized.
PLAINS RESOURCES INC.
Date: November 10, 1995 By: /s/ Cynthia A. Feeback
----------------- -------------------------------
Cynthia A. Feeback, Controller and
Principal Accounting Officer
(Principal Accounting Officer)
Page 17 of 17
<PAGE>
EXHIBIT 10(m)
FOURTH AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment") dated as of the 22nd day of August, 1995, by and among PLAINS
RESOURCES INC., a Delaware corporation (the "Company"), INTERNATIONALE
NEDERLANDEN (U.S.) CAPITAL CORPORATION, as Agent ("Agent"), and the Lenders
under the Original Agreement (as defined herein).
W I T N E S S E T H:
WHEREAS, the Company, Agent and Lenders entered into that certain Second
Amended and Restated Credit Agreement dated as of February 11, 1994, as amended
by that certain First Amendment to Second Amended and Restated Credit Agreement
dated as of September 15, 1994, that certain Second Amendment to Second Amended
and Restated Credit Agreement dated as of January 25, 1995, and that certain
Third Amendment to Second Amended and Restated Credit Agreement dated as of June
12, 1995 (as amended, including any schedules thereto, the "Original Agreement")
for the purposes and consideration therein expressed, pursuant to which Lenders
became obligated to make loans to the Company as therein provided; and
WHEREAS, the Company, Agent and Lenders desire to amend the Original
Agreement for the purposes described herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein and in the Original Agreement, in consideration
of the loans which may hereafter be made by Lenders to the Company, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I. -- Definitions and References
(S) 1.1. Terms Defined in the Original Agreement. Unless the context
otherwise requires or unless otherwise expressly defined herein, the terms
defined in the Original Agreement shall have the same meanings whenever used in
this Amendment.
(S) 1.2. Other Defined Terms. Unless the context otherwise requires, the
following terms when used in this Amendment shall have the meanings assigned to
them in this (S) 1.2.
"Amendment" means this Fourth Amendment to Second Amended and Restated
Credit Agreement.
"Credit Agreement" means the Original Agreement as amended hereby.
-1-
<PAGE>
ARTICLE II. -- Amendments
(S) 2.1. Definitions. (a) The definition of "Banque Paribas Facility"
set forth in Section 1.01 of the Original Agreement is hereby deleted. A new
definition of "Bank of Boston/ING Capital Facility" is hereby added to Section
1.01 of the Original Agreement immediately after the definition of "Bank", to
read as follows:
"Bank of Boston/ING Capital Facility" shall mean, collectively, two
uncommitted secured demand transactional line of credit facilities, in an
aggregate amount not to exceed $80,000,000, dated August 15, 1995 among The
First National Bank of Boston, individually and as agent, Internationale
Nederlanden (U.S.) Capital Corporation, the other lenders named therein and
(i) Plains Marketing, and (ii) PMCT, together with the security documents
and other documents and agreements executed in connection with each such
facility.
(b) The definition of "PMCT" set forth in Section 1.01 of the Original
Agreement is hereby amended in its entirety to read as follows:
"PMCT" shall mean PMCT Inc., a Delaware corporation, a Wholly-Owned
subsidiary of the Company.
(S) 2.2. Limitation on Liens. Sections 9.08(j) and 9.08(k) of the
Original Agreement are hereby amended in their entirety to read as follows:
"(j) Liens upon any properties, including all deposit accounts of Plains
Marketing, PMCT or their Wholly-Owned Subsidiaries, securing the Bank of
Boston/ING Capital Facility;"
"(k) one or more letters of credit issued for the account of the Company
that do not in the aggregate at any time exceed a face amount of
$1,000,000, which are issued to secure a guaranty by the Company of the
Indebtedness of Plains Marketing and its Wholly-Owned Subsidiaries under
the Bank of Boston/ING Capital Facility, and Liens securing such guaranty
by the Company in favor of the agent or lenders under the Bank of
Boston/ING Capital Facility upon all securities or other property belonging
to the Company now or hereafter held by such agent or lenders and in all
deposits (general or special, time or demand, provisional or final) and
other sums credited by or due from such agent or lenders to the Company or
subject to withdrawal by the Company; provided, any such securities or
other property belonging to the Company acquired by such agent or lenders
pursuant to the exercise by such agent or lenders of any such Lien shall be
applied first, against the Obligations then due and owing, and then,
against the obligations of the Company under such guaranty;"
(S) 2.3. Limitation on Indebtedness. Section 9.09(e) of the Original
Agreement is hereby amended in its entirety to read as follows:
-2-
<PAGE>
"(e) Indebtedness of Plains Marketing, PMCT and their Wholly-Owned
Subsidiaries under the Bank of Boston/ING Capital Facility, the guaranty by
the Company of such Indebtedness (together with letter of credit
reimbursement obligations of the Company in connection with one or more
letters of credit issued for the account of the Company to secure such
guaranty that do not in the aggregate at any time exceed a face amount of
$1,000,000), other Indebtedness of Plains Marketing, PMCT and their Wholly-
Owned Subsidiaries arising in the ordinary course of their businesses under
crude oil purchase or sale agreements, crude oil future, forward or similar
contracts, or letters of credit supporting such obligations, in an
aggregate amount not in excess of (i) $90,000,000 minus (ii) the
outstanding Indebtedness under the Bank of Boston/ING Capital Facility, and
guaranties by the Company of such other Indebtedness;"
(S) 2.4. Limitation on Indebtedness. Section 9.09(h) of the Original
Agreement is hereby deleted in its entirety and replaced with the phrase
"intentionally omitted".
(S) 2.5. Plains Marketing Guaranty. Agent and Lenders hereby agree that
any monies, securities or other property of Plains Marketing acquired by Agent
or any Lender pursuant to the exercise by Agent or any Lender of their right of
offset granted by Plains Marketing pursuant to Section 8 of that certain Amended
and Restated Guaranty dated February 11, 1994 by Plains Marketing and other
guarantors in favor of Agent and Lenders, shall be applied first, against the
obligations of Plains Marketing then due and owing under the Bank of Boston/ING
Capital Facility, and then, against the obligations of Plains Marketing under
such Amended and Restated Guaranty.
(S) 2.6. Redemption of $1.30 Cumulative Convertible Preferred Stock.
Lenders hereby consent to the redemption of 48,070 shares of the Company's $1.30
Cumulative Convertible Preferred Stock at the aggregate redemption price of
$481,000, plus any accrued and unpaid dividends thereon otherwise permitted to
be paid by the Company under the Credit Agreement, and waive any Default or
Event of Default arising from such redemption.
(S) 2.7. Termination and Release of Plains Marketing Security Agreement.
Pursuant to that certain Security Agreement dated February 11, 1994 by Plains
Marketing in favor of INCC, individually and as Agent, Plains Marketing pledged
all of the shares of stock of Plains Liquids Transport Inc., Plains Terminal &
Transfer Corporation and PLX Crude Lines Inc. as collateral for the Obligations.
The Company hereby represents and warrants that (i) Plains Liquids Transport
Inc. has been merged into the Company and (ii) the Company is now record holder
of such shares of stock of Plains Terminal & Transfer Corporation and PLX Crude
Lines Inc. In reliance upon the foregoing representation and warranty, Agent
and Lenders do hereby TERMINATE, RELEASE, QUITCLAIM, SURRENDER and DISCHARGE
unto the Company, its successors and assigns, all right, title and interest of
Agent and Lenders in and to the Collateral (as defined in such Security
Agreement) and hereby declares that such Collateral is fully released and
discharged from all liens, security interests and other encumbrances in favor of
Agent or Lenders.
-3-
<PAGE>
ARTICLE III. -- Conditions of Effectiveness
(S) 3.1. Effective Date. This Amendment shall become effective as of the
date first above written when and only when (i) Agent shall have received, at
Agent's office, a counterpart of this Amendment executed and delivered by the
Company and Majority Lenders, (ii) Agent shall have additionally received all of
the following documents, each document (unless otherwise indicated) being dated
the date of receipt thereof by Agent, duly authorized, executed and delivered,
and in form and substance satisfactory to Agent:
(A) Officer's Certificate. A certificate of a duly authorized officer of
the Company to the effect that all of the representations and warranties
set forth in Article IV hereof are true and correct at and as of the date
thereof.
ARTICLE IV. -- Representations and Warranties
(S) 4.1. Representations and Warranties of the Company. In order to
induce Agent and Lenders to enter into this Amendment, the Company represents
and warrants to Agent and Lenders that:
(a) The representations and warranties contained in Section 8 of the
Original Agreement, are true and correct at and as of the time of the
effectiveness hereof.
(b) The Company and the Subsidiaries are duly authorized to execute and
deliver this Amendment and the Company is and will continue to be duly
authorized to borrow and perform its obligations under the Credit
Agreement. The Company and the Subsidiaries have duly taken all corporate
action necessary to authorize the execution and delivery of this Amendment
and to authorize the performance of their respective obligations hereunder.
(c) The execution and delivery by the Company and the Subsidiaries of this
Amendment, the performance by the Company and the Subsidiaries of their
respective obligations hereunder and the consummation of the transactions
contemplated hereby do not and will not conflict with any provision of law,
statute, rule or regulation or of the certificate or articles of
incorporation and bylaws of the Company or any Subsidiary, or of any
material agreement, judgment, license, order or permit applicable to or
binding upon the Company or any Subsidiary, or result in the creation of
any lien, charge or encumbrance upon any assets or properties of the
Company or any Subsidiary, except in favor of Agent for the benefit of
Lenders. Except for those which have been duly obtained, no consent,
approval, authorization or order of any court or governmental authority or
third party is required in connection with the execution and delivery by
the Company or any Subsidiary of this Amendment or to consummate the
transactions contemplated hereby.
-4-
<PAGE>
(d) When this Amendment has been duly executed and delivered, each of the
Basic Documents, as amended by this Amendment, will be a legal and binding
instrument and agreement of the Company and the Subsidiaries, enforceable
in accordance with its terms, (subject, as to enforcement of remedies, to
applicable bankruptcy, insolvency and similar laws applicable to creditors'
rights generally and to general principles of equity).
ARTICLE V. -- Miscellaneous
(S) 5.1. Ratification of Agreements. The Original Agreement, as hereby
amended, is hereby ratified and confirmed in all respects. The Basic Documents,
as they may be amended or affected by this Amendment, are hereby ratified and
confirmed in all respects. Any reference to the Credit Agreement in any Basic
Document shall be deemed to refer to this Amendment also. The execution,
delivery and effectiveness of this Amendment shall not, except as expressly
provided herein, operate as a waiver of any right, power or remedy of Agent or
any Lender under the Credit Agreement or any other Basic Document nor constitute
a waiver of any provision of the Credit Agreement or any other Basic Document.
(S) 5.2. Ratification of Security Documents. The Company, Agent and
Lenders each acknowledge and agree that any and all indebtedness, liabilities or
obligations arising under or in connection with the Notes are Obligations and is
secured indebtedness under, and is secured by, each and every Security Document
to which the Company is a party. The Company hereby re-pledges, re-grants and
re-assigns a security interest in and lien on every asset of the Company
described as collateral in any Security Document.
(S) 5.3. Survival of Agreements. All representations, warranties,
covenants and agreements of the Company herein shall survive the execution and
delivery of this Amendment and the performance hereof, including without
limitation the making or granting of each Loan, and shall further survive until
all of the Obligations are paid in full. All statements and agreements
contained in any certificate or instrument delivered by the Company or any
Subsidiary hereunder or under the Credit Agreement to Agent or any Lender shall
be deemed to constitute representations and warranties by, or agreements and
covenants of, the Company under this Amendment and under the Credit Agreement.
(S) 5.4. Basic Documents. This Amendment is a Basic Document, and all
provisions in the Credit Agreement pertaining to Basic Documents apply hereto.
-5-
<PAGE>
(S) 5.5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND ANY APPLICABLE LAWS OF
THE UNITED STATES OF AMERICA IN ALL RESPECTS, INCLUDING CONSTRUCTION, VALIDITY
AND PERFORMANCE.
(S) 5.6. Counterparts. This Amendment may be separately executed in
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed shall be deemed to constitute one and the same
Amendment.
IN WITNESS WHEREOF, this Amendment is executed as of the date first above
written.
PLAINS RESOURCES INC.
By: /s/ Phillip D. Kramer
-----------------------------
Phillip D. Kramer
Vice President and Treasurer
INTERNATIONALE NEDERLANDEN (U.S.) CAPITAL
CORPORATION, individually as a Lender and as Agent
By: /s/ Christopher R. Wagner
----------------------------------------
Christopher R. Wagner, Senior Associate
THE FIRST NATIONAL BANK OF BOSTON, Lender
By: /s/ George W. Passela
---------------------------------------
George W. Passela, Managing Director
-6-
<PAGE>
DEN NORSKE BANK AS, Lender
By: /s/ Alfred C. Jones, III
---------------------------------------
Name: Alfred C. Jones, III
Title: Senior Vice President
and General Counsel
By: /s/ Philip Kurpiewski
---------------------------------------
Name: Philip Kurpiewski
Title: First Vice President
FIRST INTERSTATE BANK OF TEXAS, N.A., Lender
By: /s/ Ann M. Rhoads
---------------------------------------
Ann M. Rhoads, Vice President
TEXAS COMMERCE BANK NATIONAL ASSOCIATION, Lender
By: /s/ Michael V. Addy
---------------------------------------
Michael V. Addy, Executive Vice President
-7-
<PAGE>
CONSENT AND AGREEMENT
Each of the undersigned Subsidiary Guarantors hereby consents to the
provisions of this Amendment and the transactions contemplated herein and hereby
(i) acknowledge and agree that any and all indebtedness, liabilities or
obligations arising under or in connection with the Notes and the Renewal Notes
are Obligations and is secured indebtedness under, and is secured by, each and
every Security Document to which it is a party, (ii) re-pledges, re-grants and
re-assigns a security interest in and lien on all of its assets described as
collateral in any Security Document and (iii) ratifies and confirms its Amended
and Restated Guaranty dated February 11, 1994 made by it for the benefit of
Agent and Lenders, expressly acknowledges and agrees that such Subsidiary
Guarantor guarantees all indebtedness, liabilities and obligations arising under
or in connection with the Notes and the Renewal Notes pursuant to the terms of
such Amended and Restated Guaranty, and agrees that its obligations and
covenants thereunder are unimpaired hereby and shall remain in full force and
effect.
CALUMET FLORIDA, INC.
a Delaware corporation
By: /s/ Phillip D. Kramer
---------------------------------------
Phillip D. Kramer, Vice President
PLAINS LIQUIDS TRANSPORT INC.,
a Delaware corporation
By: /s/ Phillip D. Kramer
---------------------------------------
Phillip D. Kramer, Vice President
PLAINS MARKETING & TRANSPORTATION INC.,
a Delaware corporation
By: /s/ Phillip D. Kramer
---------------------------------------
Phillip D. Kramer, Vice President
PLAINS RESOURCES INTERNATIONAL INC.,
a Delaware corporation
By: /s/ Phillip D. Kramer
---------------------------------------
Phillip D. Kramer, Vice President
-8-
<PAGE>
PLAINS TERMINAL & TRANSFER CORPORATION,
a Delaware corporation
By: /s/ Phillip D. Kramer
---------------------------------------
Phillip D. Kramer, Vice President
PRI PRODUCING INC.,
a Delaware corporation
By: /s/ Phillip D. Kramer
---------------------------------------
Phillip D. Kramer, Vice President
PLX CRUDE LINES INC.,
a Delaware corporation
By: /s/ Phillip D. Kramer
---------------------------------------
Phillip D. Kramer, Vice President
STOCKER RESOURCES, INC.,
a California corporation
By: /s/ Phillip D. Kramer
---------------------------------------
Phillip D. Kramer, Vice President
STOCKER RESOURCES, L.P.,
a California limited partnership
By: Stocker Resources, Inc.,
its General Partner
By: /s/ Phillip D. Kramer
---------------------------------
Phillip D. Kramer, Vice President
-9-
<PAGE>
EXHIBIT 11(a)
EXHIBIT 11a. - Computation of Per Share Earnings (unaudited) (in thousands,
except per share information)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------- ---------------------
1995 1994/(1)/ 1995 1994/(1)/
-------- ----------- -------- -----------
<S> <C> <C> <C> <C>
Weighted average common shares outstanding 15,286 11,577 13,333 11,570
Incremental shares assumed to be issued 888 237 2,618 21
------- ---------- ------- ----------
Total shares outstanding for calculation 16,174 11,814 15,951 11,591
======= ========== ======= ==========
Net income (loss) as reported $ 483 $ 209 $ 1,716 $ (219)
Deduct dividends on Cumulative Convertible Preferred
Stock (11) (16) (42) (47)
------- ---------- ------- ----------
Net income (loss) available to
common shareholders $ 472 $ 193 $ 1,674 $ (266)
======= ========== ======= ==========
Net income (loss) per share $.03 $.02 $.10 $(.02)
======= ========== ======= ==========
</TABLE>
/(1)/ Earnings per share for the three and nine months ended September 30, 1994,
has been restated to reflect the payment of 1994 accrued dividends on the
Company's Series C Cumulative Convertible Preferred Stock (the "Series C
Preferred Stock") through the issuance of additional shares of the Series
C Preferred Stock. Prior to the restatement, the Company had previously
reported a net loss of $.02 and $.06 per common share for the three and
nine months ended September 30, 1994, respectively. The previously
reported amounts were calculated as if the accrued dividends on the Series
C Preferred Stock would be paid in cash.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM PLAINS
RESOURCES INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET AS OF
SEPTEMBER 30, 1995, AND CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE
NINE MONTHS ENDED SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 5,071
<SECURITIES> 0
<RECEIVABLES> 37,417
<ALLOWANCES> 0
<INVENTORY> 3,956
<CURRENT-ASSETS> 46,444
<PP&E> 355,422
<DEPRECIATION> 133,064
<TOTAL-ASSETS> 277,161
<CURRENT-LIABILITIES> 52,730
<BONDS> 154,692
<COMMON> 1,532
0
481
<OTHER-SE> 67,726
<TOTAL-LIABILITY-AND-EQUITY> 277,161
<SALES> 292,246
<TOTAL-REVENUES> 292,510
<CGS> 262,954
<TOTAL-COSTS> 275,192
<OTHER-EXPENSES> 5,527
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,075
<INCOME-PRETAX> 1,716
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,716
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,716
<EPS-PRIMARY> .10
<EPS-DILUTED> .10
</TABLE>
