<PAGE>
Total 17 Pages
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 1-13446
-------------------------------------------------------
Barrett Resources Corporation
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 84-0832476
- ------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1125 Seventeenth Street, Suite 2400, Denver, Colorado 80202
- ------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(303) 297-3900
- ------------------------------------------------------------------------------
(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
----- -----
There were 25,071,475 shares of the registrant's $.01 par value common
stock outstanding as of November 10, 1995.
<PAGE>
BARRETT RESOURCES CORPORATION
-----------------------------
INDEX
-----
PART I. FINANCIAL INFORMATION PAGE
----
Item 1. Financial Statements
Consolidated Condensed Balance
Sheets - September 30, 1995 and
September 30, 1994............................ 3
Consolidated Condensed Statements of
Income - Three Months Ended
September 30, 1995 and 1994................... 4
Consolidated Condensed Statements of
Income - Nine Months Ended
September 30, 1995 and 1994................... 5
Consolidated Condensed Statements of
Cash Flows - Nine Months Ended
September 30, 1995 and 1994................... 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations ................................. 11
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of
Security Holders............................... 16
Item 6. Exhibits and Reports on Form 8-K .............. 16
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
--------------------
BARRETT RESOURCES CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
(in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 18,532 $ 12,348
Receivables 25,017 34,522
Inventory, at lower of average cost or market 540 643
Other current assets 507 1,099
-------- --------
Total current assets 44,596 48,612
Property and equipment, net 285,556 261,424
Other assets -- 916
-------- --------
$330,152 $310,952
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 9,283 $ 24,587
Due to oil and gas property owners 15,149 16,091
Accrued and other liabilities 7,489 5,433
-------- --------
Total current liabilities 31,921 46,111
Other long-term liabilities -- 1,017
Post-retirement benefits -- 927
Long-term debt 85,000 53,000
Deferred income taxes 24,269 21,726
Stockholders' equity:
Preferred stock, $.001 par value: 1,000,000
shares authorized, none outstanding -- --
Common stock, $.01 par value: 35,000,000
shares authorized; 25,058,114 issued
(24,673,419 at December 31, 1994) 250 246
Additional paid-in capital 85,364 79,297
Retained earnings 103,427 109,304
Treasury stock, at cost (79) (676)
-------- --------
Total stockholders' equity 188,962 188,171
-------- --------
$330,152 $310,952
======== ========
</TABLE>
See accompanying notes.
3
<PAGE>
BARRETT RESOURCES CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
(in thousands, except per share)
<TABLE>
<CAPTION>
Three Months Ended
---------------------------
September 30, September 30,
1995 1994
------------ -------------
<S> <C> <C>
Revenues:
Oil and gas production $ 21,963 $16,761
Trading revenues 4,846 7,389
Revenue from gas gathering 408 72
Interest income 190 233
Other income 170 663
-------- --------
27,577 25,118
Operating expenses:
Lease operating expense 8,379 6,086
Cost of trading 4,670 7,067
Depreciation, depletion and amortization 7,692 5,042
General and administrative 3,561 3,888
Interest expense 1,273 144
Other expense 184 57
Merger costs 13,207 -
-------- --------
38,966 22,284
-------- --------
Income (loss) for the period before income taxes (11,389) 2,834
Provision for income taxes 459 753
-------- --------
Net (loss) income for the period $(11,848) $ 2,081
======== ========
Net (loss) income per common share and common
share equivalent $ (.47) $ .10
======== ========
Weighted average number of shares of common stock
and common stock equivalents 25,081 21,757
======== ========
</TABLE>
See accompanying notes.
4
<PAGE>
BARRETT RESOURCES CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
(in thousands, except per share)
<TABLE>
<CAPTION>
Nine Months Ended
----------------------------
September 30, September 30,
1995 1994
------------- -------------
<S> <C> <C>
Revenues:
Oil and gas production $70,481 $56,601
Trading revenues 20,156 17,382
Revenue from gas gathering 917 202
Interest income 529 733
Other income 594 1,135
------- -------
92,677 76,053
Operating expenses:
Lease operating expense 25,418 19,007
Cost of trading 19,385 16,773
Depreciation, depletion and amortization 23,625 16,307
General and administrative 10,255 11,369
Interest expense 3,284 402
Other expense 568 275
Merger costs 13,207 --
------- -------
95,742 64,133
------- -------
Income (loss) for the period before income taxes (3,065) 11,920
Provision for income taxes 2,812 3,430
------- -------
Net (loss) income for the period $(5,877) $ 8,490
======= =======
Net (loss) income per common share and common
share equivalent $ (.23) $ .39
======= =======
Weighted average number of shares of common stock
and common stock equivalents 25,020 21,757
======= =======
</TABLE>
See accompanying notes.
5
<PAGE>
BARRETT RESOURCES CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
----------------------------
September 30, September 30,
1995 1994
------------- -------------
<S> <C> <C>
Cash flows from operations:
Net (loss) income $ (5,877) $ 8,490
Adjustments needed to reconcile to
net cash provided by operations:
Depreciation, depletion, and amortization 23,625 16,307
Deferred income taxes 2,543 3,070
Other (770) 142
-------- --------
19,521 28,009
Change in current assets and liabilities:
Decrease in current receivables 9,505 3,262
Decrease in other current assets 432 57
Increase (decrease) in accounts payable (15,305) 2,487
Decrease in amounts due to oil and gas
property owners (942) (3,176)
Increase (decrease) in accrued and other
liabilities 3,242 (1,226)
-------- --------
Net cash flow provided by operations 16,453 29,413
-------- --------
Cash flows from investing activities:
Maturity of short-term investments -- 13,320
Purchase of short-term investments -- (11,322)
Proceeds from sale of oil and gas properties 209 454
Acquisition of property and equipment (46,945) (49,197)
Other -- 91
-------- --------
Net cash flow used in investing activities (46,736) (46,654)
-------- --------
Cash flows from financing activities:
Proceeds from issuance of common stock 6,413 287
Treasury stock issued (purchased) 250 (525)
Borrowings on long-term debt 69,000 2,500
Payments on long-term debt (37,000) (3,500)
Dividends paid (1,179) (1,764)
Other (1,017) 299
-------- --------
Net cash flow provided by (used in) financing
activities 36,467 (2,703)
-------- --------
Increase (decrease) in cash and cash equivalents 6,184 (19,944)
Cash and cash equivalents at beginning of period 12,348 29,569
-------- --------
Cash and cash equivalents at end of period $ 18,532 $ 9,625
======== ========
</TABLE>
See accompanying notes.
6
<PAGE>
BARRETT RESOURCES CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
September 30, 1995
1. UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
In the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments necessary to present
fairly the financial position of Barrett Resources Corporation and its
wholly-owned subsidiaries, collectively referred to as the "Company", as of
September 30, 1995 and the results of operations and cash flows for the
periods presented. All such adjustments are of a normal recurring nature.
The results of operations for the periods presented are not necessarily
indicative of the results for the full year.
On July 18, 1995, the Company changed its fiscal year-end from September 30
to December 31. A transition report for the period October 1, 1994 through
December 31, 1994 was filed with the Securities & Exchange Commission.
During the three months ended December 31, 1994, the Company reported
revenues of $15 million and net income of $207,000.
2. MERGER
On July 18, 1995 Plains Petroleum Company ("Plains") was merged with and
into Barrett Energy Inc., a wholly-owned subsidiary of Barrett Resources
Corporation ("Barrett"), pursuant to the Agreement of Merger dated May 2,
1995. As a result of the merger, Plains became a wholly-owned subsidiary
of the Company. Approximately 12.8 million shares of Barrett common stock
were issued in exchange for all of the outstanding common stock of Plains.
In connection with the merger, Barrett's authorized number of shares of
common stock was increased to 35 million. The merger was accounted for as
a pooling of interests, and accordingly, the accompanying financial
statements have been restated to include the accounts and operations of
Plains for all periods prior to the merger.
Plains used the successful efforts method of accounting for its oil and gas
exploration and development activities. In conjunction with the merger,
Plains adopted the full cost method used by Barrett resulting in net
property and equipment increasing $29.8 million due to the capitalization
of exploration costs, reversal of impairment and adjustments of
depreciation, depletion and amortization expense for periods prior to the
merger. The effect of the change was to increase net income for 1995 prior
to the merger by $1.3 million. The financial statements for 1994 have been
retroactively restated for the change in accounting method which resulted
in an increase in net income of $1.1 million. Retained earnings and
deferred income taxes have been adjusted for the effect of the retroactive
application of the new method.
7
<PAGE>
Certain reclassifications have been made to the historical consolidated
financial statements of the separate companies to conform the financial
statements to a comparable presentation. There were no intercompany
transactions between Barrett and Plains. Separate results, including the
conversion to full cost for Plains and to a December 31 year-end for
Barrett, for the periods indicated are (in 000's):
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1995
Barrett Plains* Total
----------- ------- --------
<S> <C> <C> <C>
Operating Revenues $ 56,854 $35,823 $92,677
========== ======= =======
Net Income (Loss) $(8,389)** $ 2,512 $(5,877)
========== ======= =======
* Represents revenues and earnings of Plains prior to the July 18, 1995
merger.
** Includes merger costs and expenses totaling $11.9 million after taxes.
Nine Months Ended September 30, 1994
Barrett Plains Total
----------- ------- --------
Operating Revenues $31,428 $44,625 $76,053
=========== ======= ========
Net Income (Loss) $ 3,324 $ 5,166 $ 8,490
=========== ======= ========
</TABLE>
3. MERGER COSTS AND EXPENSES
In connection with the merger, approximately $13.2 million of merger costs
and expenses were incurred and have been charged to expense in the third
quarter ending September 30, 1995. These nonrecurring costs and expenses
consist of the following: (1) payments of $7.4 million to investment
bankers and for other professional fees; (2) $5.2 million for severance and
employee benefit costs for approximately 38 employees, including seven
officers of Plains, terminated through consolidation of administrative and
operational functions; (3) a non-cash credit of approximately $.9 million
associated with the termination of Plain's postretirement benefit plans and
other related benefit plans; and (4) other merger related costs of $1.3
million. Approximately $3.2 million of these charges had not been
disbursed as of September 30, 1995.
8
<PAGE>
4. INCOME TAXES
Provisions for income taxes were calculated in accordance with FAS No. 109
which provides that a deferred tax liability or asset be determined based
on the timing differences between the basis used for financial versus tax
reporting of assets and liabilities as measured by the effective tax rates.
The estimated tax for the periods ended September 30, 1995 is computed
excluding non-deductible merger costs.
5. LONG-TERM DEBT
On July 19, 1995, a new credit agreement was entered into with a consortium
of six banks replacing the previously existing separate lines of credit of
the Company and Plains. The credit agreement provides for an unsecured
revolving line of credit of $200 million, with a current borrowing base of
$160 million, which is to be redetermined semiannually. The line of credit
has a four year term ending July 1999.
The Company is required to pay interest only during the revolving period.
At its option, the Company has elected to use the London interbank
eurodollar rate (LIBOR) plus a spread ranging from .5% to 1% depending on
the Company's borrowings relative to its borrowing base. At September 30,
1995 the Company's effective LIBOR rate, on an outstanding balance of $85
million, was 6.64% per annum.
6. CAPITALIZED INTEREST
During the nine months ended September 30, 1995, the Company borrowed
against the line of credit to fund its oil and gas activities. The Company
capitalizes interest costs on amounts expended on assets during the period
in which activities are occurring to place the asset in service. Amounts
spent to develop properties included in the full cost center of oil and gas
properties are excluded from the interest capitalization computation.
Total interest costs incurred for the quarter ended September 30, 1995 were
$1,345,000. Of this amount, $72,000 was capitalized to the specific
projects and $1,273,000 was recorded as interest expense. For the nine
month period, $296,000 was capitalized and $3,284,000 was recorded as
interest expense.
9
<PAGE>
7. COMMITMENTS AND CONTINGENCIES
On November 2, 1994, a putative class action was filed in Delaware Chancery
Court. In that case, entitled Miller v. Cody, et.al., the plaintiff has
---------------
alleged that certain named former directors of Plains, and Plains, have,
among other things, breached their fiduciary duties of Plains by
unreasonably amending the Plains rights agreement and otherwise acting to
entrench themselves in office. Plaintiff seeks various forms of injunctive
relief, damages and an award of plaintiff's costs and disbursements. A
similar case, filed on October 21, 1994, was voluntarily dismissed without
prejudice by the plaintiff.
On May 3, 1995, the same day Plains announced it had an executed Merger
Agreement with the Company, a putative class action, entitled Crandon
-------
Capital Partners v James A. Miller, et.al., was filed in Delaware Chancery
-----------------------------------
Court against Plains and the then-current members of its Board of
Directors. In this suit it is alleged that, among other things, the
consideration to be paid Plains' stockholders pursuant to the Merger
Agreement is inadequate and "substantially below the fair or inherent value
of Plains." Plaintiff seeks various forms of declaratory and injunctive
relief, damages and an award of plaintiff's costs and disbursements.
As to both of these cases, Plains and its former directors deny the
allegations of wrongdoing in the complaints and intend to pursue a vigorous
defense.
8. SUPPLEMENTAL DISCLOSURE
Non-cash transactions for the nine month period ended September 30, 1995
consist of the following:
Treasury stock issued for 401K contribution $ 54
Treasury stock retired 367
10
<PAGE>
BARRETT RESOURCES CORPORATION
For the Quarter Ended
September 30, 1995
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
On July 18, 1995 the Company consummated the merger of a wholly owned
subsidiary of the Company with Plains by issuing 12.8 million shares of its
common stock to the former Plains stockholders. As a result of this
merger, Plains became a wholly owned subsidiary of the Company. Also, on
July 18, 1995 the Company changed its fiscal year-end from September 30 to
December 31 effective January 1, 1995. The merger is being accounted for
using the pooling of interests method. The pooling of interests method
combines the previously reported results as though the combination occurred
at the beginning of the periods being presented. Merger costs have been
expensed in the period in which the merger was consummated which is the
quarter ended September 30, 1995. The financial statements included in
this Form 10-Q, have been restated and adjusted for the merger with Plains
and the change in fiscal year end. Due to this restatement, the financial
statements included in this 10-Q are not comparable to the financial
statements for the same periods as presented in previously filed documents.
Liquidity and Capital Resources
- -------------------------------
As of September 30, 1995, total assets were $330.2 million, property and
equipment was $285.6 million and stockholders' equity was $189.0 million.
Combining the separate balance sheets as of December 31, 1994, total assets
were $311.0 million, property and equipment was $261.4 million and
stockholders' equity was $188.2 million. The increases in both total
assets and property and equipment are primarily due to investments in oil
and gas properties by both companies during the nine month period. The
increase is partially funded by additional borrowing under the line of
credit.
As of September 30, 1995 the outstanding balance under the bank line of
credit was $85 million, a net increase of $32 million from the combined
balance at December 31, 1994. On July 19, 1995 the Company entered into a
$200 million credit agreement to replace the previously existing lines of
credit. The line of credit matures in July 1999 and is funded by a
consortium of six banks. The line of credit is unsecured and provides for
interest rates based on LIBOR or prime rates at the Company's option. The
availability under the Credit Agreement is based on the bank's review of
the Company's oil and gas properties. The current borrowing base is $160
million determined from a review of the oil and gas reserves as of December
31, 1994 for Plains and March 31, 1995 for Barrett. The borrowing base is
scheduled to be reviewed in early 1996 based on the Company's December 31,
1995 reserves.
11
<PAGE>
At December 31, 1994 the combined balance sheet reported other long-term
liabilities of $1,017,000 and post-retirement benefits liability of
$927,000 from Plains. The related benefit and retirement plans were
terminated and the liabilities discharged or eliminated.
During the nine months ended September 30, 1995 the Company generated cash
flow from operations before working capital changes of $16.5 million
compared to $29.0 million for the nine months ended September 30, 1994.
The decrease is due to the merger costs incurred in the third quarter of
1995 that were only partially offset by increased cash flow from oil and
gas production.
During the nine month period the Company invested $46.9 million in property
and equipment compared to $49.2 million for the comparable period of 1994.
During the nine months ended September 30, 1995 the Company received $6.4
million from the issuance of common stock from employees exercising options
to purchase shares of the Company's common stock. A majority of the
proceeds were from former Plains' employees exercising their options before
the expiration date associated with termination of their employment.
The July 18, 1995 merger with Plains substantially increased the Company's
reserves and productive capacity. As of December 31, 1994 Plains' proved
reserve estimates were 313 Bcf of gas and 11 million barrels of oil
compared to the Company's reported proved reserve estimates as of March 31,
1995 of 226 Bcf of gas and 900,000 barrels of oil. The Company's
productive capacity has increased, compared to the prior year's combined
separate operations, due to the Cave Gulch discovery in the Wind River
Basin, the acquisition of producing properties in Wyoming (Plains) and the
sales line extension in the Piceance Basin. These events occurred in the
fourth quarter of 1994. During the current year, the Company has continued
to increase its productive capacity in the Cave Gulch field.
In conjunction with the merger, the Company is continuing to evaluate its
properties and integrate the combined operations. While continuing its oil
and gas activities, the Company is formulating its future strategy based on
the current asset base and prospect potential of the combined companies.
The Company has taken steps to reduce duplicative operation overhead and
general and administrative expenses. The full effect of overhead reduction
will be realized in future periods.
The Company is evaluating its activities in light of the opportunities
available to it and the current prices for oil and gas production.
Management intends to remain active in oil and gas activities but will
adjust its plans as warranted with consideration to financing available and
market conditions. Management believes its anticipated cash flow and
borrowing availabilities will adequately fund its anticipated exploration
and development activities.
12
<PAGE>
Results of Operations
- ---------------------
The following discussion of operating results is based on historical
consolidated financial information that has been restated as though the
companies of the above discussed merger had been combined from inception.
After incurring one-time merger costs of $13.2 million, the Company
experienced a net loss of $11.8 million for the third quarter ended
September 30, 1995 as compared with net income of $2.1 million for the same
period in 1994. For the nine month period September 30, 1995, the net loss
totaled $5.9 million compared with net income of $8.5 million for 1994.
These losses are primarily due to one-time merger costs of $13.2 million,
and also include an increase in interest expense resulting from a larger
amount of long-term debt. Excluding the one-time merger costs and the
related income tax benefit, net income for the quarter and nine month
periods ending September 30, 1995 was $31,000 and $6.0 million,
respectively.
Total revenues for the quarter were $27.6 million, up 10 percent compared
to $25.1 million for the third quarter of 1994. For the nine month periods
of 1995 and 1994, total revenues were up 22 percent from $76.1 million to
$92.7 million. Increased oil and gas production was the primary
contributing factor in the increases of revenue.
Production revenue for the third quarter of 1995 increased from $17 million
in 1994 to $22 million. Production revenues and related volumes and average
prices during the periods presented were as follows:
<TABLE>
<CAPTION>
Nine Months Ended Quarter Ended
September 30 September 30
----------------- ----------------
1995 1994 1995 1994
------- ------- ------- -------
<S> <C> <C> <C> <C>
Gas Revenues (000's) $50,095 $44,103 $15,333 $12,266
Gas Production (Bcf) 33.9 23.4 11.0 7.1
Average Price per Mcf $ 1.48 $ 1.88 $ 1.40 $ 1.72
Oil Revenues (000's) $20,386 $12,498 $ 6,630 $ 4,495
Oil Production (MBbls) 1,288 911 436 294
Average Price per barrel $ 15.82 $ 13.72 $ 15.20 $ 15.30
</TABLE>
(Note: Bcf = billion cubic feet; Mcf = thousand cubic feet; MBbls =
thousand barrels)
Third quarter gas revenues increased 25 percent as compared with the same
period in 1994 principally due to higher production volumes (up 55 percent)
offsetting a 19 percent decline in average prices. For the nine month
period gas revenues were up by approximately $6 million (14 percent). A 45
percent increase in production volumes was partially offset by a 21 percent
decline in average prices. Operation of the Piceance Basin gas plant and
gathering system extension and the Cave Gulch project in the Wind River
Basin, both of which commenced in late 1994, contributed significantly to
the increases in production volumes.
13
<PAGE>
Both oil revenues and production volumes increased approximately 48 percent
in the third quarter of 1995 from the comparable period in 1994 with oil
prices virtually unchanged for the quarter. A 41 percent increase in oil
production volumes accompanied by higher average oil prices (up $2.10 per
barrel) caused oil revenues for the first nine months of 1995 to be up by
63 percent over the same period in the previous year. The increase in
production is primarily attributed to the acquisition of certain oil
properties by Plains in late 1994.
For the quarter ended September 30, 1995, trading revenues were $4.8
million ($7.4 million in 1994) and $20.0 million for the nine month period
($17.4 million in 1994). The associated costs of trading were $4.6 million
and $7.0 million for the quarters ended September 30, 1995 and 1994,
respectively, and $19.4 million and $16.8 million for the respective nine
months. Gross profit from trading for the quarter decreased to $.2 million
from $.3 million and increased to $.7 million from $.6 million for the nine
months.
General and administrative expenses for the quarter ended September 30,
1995 decreased $.3 million to $3.6 million from the comparable 1994
quarter. For the nine month period, these expenses decreased from $11.4
million to $10.3 million. These decreases are primarily due to personnel
reductions and operating efficiencies attributed to the consolidating
impact of the merger.
Depreciation, depletion and amortization increased from $5.0 million to
$7.7 million for the quarter and from $16.3 million to $23.6 million for
the nine month period. The increases are principally attributed to higher
oil and gas production volumes.
Interest expense for the third quarter increased from $.1 million in 1994
to approximately $1.3 million in 1995. For the nine months ended September
30, 1995, interest was $3.2 million as compared with $.4 million for the
same period in 1994. Increases are directly attributed to additional
borrowing used principally to fund exploration, development and acquisition
of oil and gas properties.
Merger expenses of $13.2 million consist of one-time charges relative to
the merger of Barrett and Plains. These charges include payments to
investment bankers and other professional fees, severance and employee
benefits for 38 employees terminated through the consolidation process and
other related merger costs.
Although the Company experienced a loss for the two periods presented for
1995, a provision for income taxes was recognized due to the tax effects of
the combining of the two separate entities and incurring non-deductible
merger costs.
The Company's largest source of operating income is from sales of its gas
and oil production. Therefore, the levels of the Company's revenues and
earnings are affected by prices at which natural gas and oil are being
14
<PAGE>
sold. This is particularly true with respect to natural gas, which
accounts for approximately 76 percent of the Company's 1995 production
revenues to date. As a result, the Company's operating results for any
prior period are not necessarily indicative of future operating results
because of the fluctuations in gas and oil prices and the lack of
predictability of those fluctuations as well as changes in production
levels.
15
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
A special meeting of stockholders was held on July 18, 1995. At
that meeting, the stockholders approved an amendment to the Company's
Certificate of Incorporation to increase the Company's Certificate of
Incorporation to increase the Company's authorized Common Stock from
17,000,000 shares to 35,000,000 (the "Charter Amendment") and the
issuance of shares of the Company's Common Stock (the "Stock
Issuance") in connection with the Agreement and Plan of Merger (the
"Merger Agreement") among the Company, Barrett Energy Inc., a wholly
owned subsidiary of the Company ("Sub"), and Plains Petroleum Company
("Plains"), including the issuance of shares of the Company's Common
Stock in the merger of Sub with and into Plains which, following the
Merger, constitute options to purchase the Company's Common Stock.
The Charter Amendment was approved by a vote of 9,834,398 shares
voting for and 11,660 shares voting against, with 6,380 abstentions
and 45 broker non-votes. The Stock Issuance was approved by a vote of
9,749,622 shares voting for and 3,840 shares voting against, with
6,027 abstentions and 92,994 broker non-votes.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(A) The following Exhibit is filed as part of this Quarterly Report on
Form 10-Q.
1. Exhibit 27. Financial data schedule.
(B) Reports on Form 8-K
1. During the quarter ended September 30, 1995, a report on Form 8-K
was filed reporting the Company's decision on July 18, 1995 to
change its fiscal year end from September 30 to December 31. The
change in the year end is effective January 1, 1995.
2. During the quarter ended September 30, 1995, a report on Form 8-
K, as amended by reports on Form 8-K/A-1 and Form 8-K/A-2, was
filed reporting the merger on July 18, 1995 of Barrett Energy,
Inc., a wholly owned subsidiary of the Company and Plains
Petroleum Company that resulted in Plains Petroleum Company
becoming a wholly owned subsidiary of the Company.
3. During the quarter ended September 30, 1995, a report on Form 8-K
was filed reporting the post merger combined revenues and net
income for August, 1995.
16
<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.
BARRETT RESOURCES CORPORATION
November 14, 1995 By /s/ Paul M. Rady
--------------------------------
Paul M. Rady
President
November 14, 1995 By /s/ Robert W. Howard
--------------------------------
Robert W. Howard
Senior Vice President - Treasurer
17
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