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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
450 North Fifth Street, N. W.
Washington, D. C. 20549
FORM U-3A-2
-----------
File No. 69-262
Statement by Holding Company Claiming Exemption Under Rule U-3A-2 from the
Provisions of the Public Utility Holding Company Act of 1935.
NATIONAL GAS & OIL COMPANY
- --------------------------------------------------------------------------------
(Name of company)
hereby files with the Securities and Exchange Commission, pursuant to Rule 2,
its statement claiming exemption as a holding company from the provisions of the
Public Utility Holding Company Act of 1935, and submits the following
information:
1. Name, state or organization, location and nature of business of
claimant and every subsidiary thereof, other than any exempt wholesale
generator (EWG) or foreign utility company in which claimant directly
or indirectly holds an interest.
National Gas & Oil Company (claimant) is incorporated in the
State of Ohio and is located at 1500 Granville Road, Newark,
Ohio 43055.
Claimant is a holding company, holding:
(1) 100% of the common stock of National Gas & Oil Corporation
("National Gas") an intrastate gas public utility engaged in
the distribution of natural gas in East Central Ohio.
(2) 100% of the common stock of Producers Gas Sales, Inc.
("Producers Gas Sales"), a company engaged in the marketing of
natural gas from off-system suppliers to off-system customers.
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(3) 100% of the common stock of NGO Development Corporation
("NGO Development"), an oil and gas production and development
company.
2. A brief description of the properties of claimant and each of its
subsidiary public utility companies used for the generation,
transmission and distribution of electric energy for sale, or for the
production, transmission and distribution of natural or manufactured
gas, indicating the location of principal generating plants,
transmission lines, producing fields, gas manufacturing plants, and
electric and gas distribution facilities, including all such properties
which are outside the State in which claimant and its subsidiaries are
organized and all transmission or pipelines which deliver or receive
electric energy or gas at the borders of such State.
The claimant was organized on March 24, 1981 for the purpose
of serving as the holding company for National Gas & Oil
Corporation, National Production Corporation, which has been
merged into NGO Development Corporation, Producers Gas Sales,
Inc., NGO Development Corporation, Coshocton Energy
Corporation, a subsidiary of NGO Development which was merged
into NGO Development effective January 1, 1995, and any other
future subsidiaries. It holds the shares of stock of the above
named companies, cash, intercompany notes, two office,
warehouse, shop buildings in Zanesville, Ohio and the
corporate offices in Newark, Ohio.
National Gas & Oil Corporation owns and operates a system
consisting of approximately 1,319 miles of distribution,
transmission and gathering mains, ranging in size from one
inch to 16 inches in diameter. The mains are located on
easements or private rights-of-way. In addition, the Company
owns and operates five gathering compressor stations and one
distribution (main line boost) compressor station consisting
of 1,597 brake horsepower. Four of these compressor stations
are situated on lands totaling 19.27 acres owned by National
Gas.
Complementing the above pipeline and compressor station
facilities, National Gas also owns and operates three
underground natural gas storage fields. These fields have a
combined estimated reservoir capacity of 6,373,000 Mcf, and
consist of 53 wells and seven compressors, totaling 3,155
brake horsepower. The majority of the subsurface rights are
held by lease with 955.39 acres held in fee.
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National Gas owns workhouses, garages, offices, shops and
various metering and regulating buildings in its operating
area. These facilities are located on 35.42 acres and are
owned in fee.
NGO Development properties consist of 633 wholly or
partly-owned producing gas and oil wells.
3. The following information for the last calendar year with respect to
claimant and each of its subsidiary public utility companies:
(a) Number of kwh. of electric energy sold (at retail or wholesale),
and Mcf of natural or manufactured gas distributed at retail.
Distributed to retail customers 2,945,773 Mcf of natural gas
in 1997.
(b) Number of kwh. of electric energy and Mcf of natural or
manufactured gas distributed at retail outside the State in which each
such company is organized.
In 1997, did not sell natural gas to any retail customers
outside the State, pursuant to Federal Energy Regulatory
Commission fuel oil displacement program 18CFR284.200 et seq.
(c) Number of kwh. of electric energy and Mcf of natural or
manufactured gas sold at wholesale outside the State in which such
company is organized, or at the State line.
Neither sold or distributed natural nor manufactured gas at
wholesale outside of Ohio in 1997.
(d) Number of kwh. of electric energy and Mcf of natural or
manufactured gas purchased outside the State in which each such company
is organized or at the state line.
Purchased from its interstate suppliers at the state line or
within the boundary of Ohio, approximately 3,313,818 Mcf of
natural gas.
4. The following information for the reporting period with respect to
claimant and each interest it holds directly or indirectly in an EWG or
a foreign utility company, stating monetary amounts in United States
dollars:
(a) Name, location, business address and description of the facilities
used by the EWG or foreign utility company for the generation,
transmission and
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distribution of electric energy for sale or for the distribution at
retail of natural or manufactured gas.
Not applicable.
(b) Name of each system company that holds an interest in such EWG or
foreign utility company; and description of the interest held.
Not applicable.
(c) Type and amount of capital invested, directly or indirectly, by
the holding company claiming exemption; any direct or indirect
guarantee of the security of the EWG or foreign utility company by the
holding company claiming exemption; and any debt or other financial
obligation for which there is recourse, directly or indirectly, to the
holding company claiming exemption or another system company, other
than the EWG or foreign utility company.
Not applicable.
(d) Capitalization and earnings of the EWG or foreign utility company
during the reporting period.
Not applicable.
(e) Identify any service, sales or construction contract(s) between
the EWG or foreign utility company and a system company, and describe
the services to be rendered or goods sold and fees or revenues under
such agreement(s).
Not applicable.
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EXHIBIT A
- ---------
A consolidating statement of income and surplus of the claimant and its
subsidiary companies for the last calendar year, together with a consolidating
balance sheet of claimant and its subsidiary companies as of the close of such
calendar year are attached hereto and made a part hereof.
EXHIBIT C
- ---------
An organizational chart showing the relationship of each EWG or foreign
utility company to associate companies in the holding-company system is not
required with this filing.
SIGNATURE
The Company has caused this statement to be duly signed on its behalf
by its authorized officer in the city of Newark and State of Ohio, on the 25th
day of February, 1998.
National Gas & Oil Company
--------------------------
(Name of claimant)
By: /s/ Todd P. Ware
-----------------------------------------
Todd P. Ware
Vice President, Chief Financial Officer,
and Secretary
Attest:
/s/ Scott Lauka
- -----------------------
Name, title and address of officer to whom notices and correspondence
concerning this statement should be addressed:
Todd P. Ware
Vice President, Chief Financial Officer, and Secretary
1500 Granville Road, P. O. Box 4970, Newark, Ohio 43058-4970
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Exhibit A
NATIONAL GAS & OIL COMPANY
CONSOLIDATED STATEMENT OF
INCOME
<TABLE>
<CAPTION>
For the years ended December 31,
-------------------------------------------------
1997 1996 Variation
----------- ----------- -----------
<S> <C> <C> <C>
OPERATING REVENUES: $69,719,954 $61,072,324 $ 8,647,630
OPERATING EXPENSES:
Purchased gas 48,790,126 39,195,754 9,594,372
Operation and maintenance 9,339,134 8,878,355 460,779
Depreciation, depletion and amortization 2,163,823 3,552,756 (1,388,933)
General Taxes 3,631,730 3,400,911 230,819
-----------
Interest Charges 1,260,867 995,589 265,278
----------- ----------- -----------
TOTAL OPERATING EXPENSES 65,185,680 56,023,365 9,162,315
----------- ----------- -----------
Other income 235,190 598,100 (362,910)
INCOME BEFORE FIT 4,769,463 5,647,059 (877,596)
Federal income taxes 1,257,717 1,727,420 (469,703)
----------- ----------- -----------
NET INCOME $ 3,511,746 $ 3,919,639 ($407,893)
=========== =========== ===========
Net income per share $ 0.49 $ 0.54 ($0.05)
=========== =========== ===========
Average number of shares outstanding 7,167,996 7,198,560
=========== ===========
</TABLE>
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NATIONAL GAS & OIL CORPORATION
STATEMENT OF INCOME
<TABLE>
<CAPTION>
For the years ended December 31,
---------------------------------------------------
1997 1996 Variation
------------ ----------- -----------
<S> <C> <C> <C>
OPERATING REVENUES:
Gas sales $ 23,294,600 $22,443,498 $ 851,102
Transportation 6,135,891 5,044,527 1,091,364
------------ ----------- -----------
TOTAL OPERATING REVENUES 29,430,491 27,488,025 1,942,466
------------ ----------- -----------
OPERATING EXPENSES:
Purchased gas 13,988,945 11,289,814 2,699,131
Other 5,582,122 5,397,468 184,654
Maintenance 1,194,700 1,008,869 185,831
Depreciation 811,110 1,898,159 (1,087,049)
General taxes 3,435,215 3,239,331 195,884
------------ ----------- -----------
TOTAL OPERATING EXPENSES 25,012,092 22,833,641 2,178,451
------------ ----------- -----------
OPERATING INCOME 4,418,399 4,654,384 (235,985)
OTHER INCOME & DEDUCTIONS
Interest income 8,663 27,194 (18,531)
Intercompany interest income 286,590 163,476 123,114
Other (40,826) 15,073 (55,899)
------------ ----------- -----------
TOTAL OTHER INCOME & DEDUCTIONS 254,427 205,743 48,684
INCOME BEFORE INTEREST CHARGES 4,672,826 4,860,127 (187,301)
INTEREST CHARGES
Short-term debt 424,854 157,417 267,437
Long-term debt interest expense 373,575 397,800 (24,225)
Other 12,192 22,401 (10,209)
------------ ----------- -----------
TOTAL INTEREST CHARGES 810,621 577,618 233,003
INCOME BEFORE FEDERAL INCOME TAX 3,862,205 4,282,509 (420,304)
FEDERAL INCOME TAX 1,141,763 1,413,545 (271,782)
------------ ----------- -----------
NET INCOME $ 2,720,442 $ 2,868,964 ($148,522)
============ =========== ===========
</TABLE>
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NGO DEVELOPMENT CORPORATION
STATEMENT OF INCOME
<TABLE>
<CAPTION>
For the years ended December 31,
-------------------------------------------------
1997 1996 Variation
----------- ----------- -----------
<S> <C> <C> <C>
OPERATING REVENUES:
Gas sales $36,565,568 $31,207,610 $5,357,958
Oil sales 528,218 680,188 ($151,970)
Service revenue 26,907 42,585 ($15,678)
Other income 114,583 125,386 ($10,803)
----------- ----------- ----------
TOTAL OPERATING REVENUES 37,235,276 32,055,769 $5,179,507
----------- ----------- ----------
OPERATING EXPENSES:
Operation 1,372,604 1,498,941 (126,337)
Depreciation 362,562 365,578 (3,016)
Depletion 936,569 1,230,411 (293,842)
Amortization 0 5,393 (5,393)
Purchased gas 32,129,918 26,175,889 5,954,029
General & administrative 1,091,369 892,886 198,483
General taxes 151,555 139,585 11,970
Intercompany interest charges 102,022 132,490 (30,468)
Interest charges 376,524 353,073 23,451
----------- ----------- ----------
TOTAL OPERATING EXPENSES 36,523,123 30,794,246 5,728,877
INCOME FROM OPERATIONS 712,153 1,261,523 (549,370)
FEDERAL INCOME TAXES 49,619 278,828 (229,209)
----------- ----------- ----------
NET INCOME $ 662,534 $ 982,695 ($320,161)
=========== =========== ==========
</TABLE>
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PRODUCERS GAS SALES, INC.
STATEMENT OF INCOME
<TABLE>
<CAPTION>
For the years ended December 31,
-------------------------------------------------
1997 1996 Variation
---------- ----------- -----------
<S> <C> <C> <C>
OPERATING REVENUES:
Gas Sales $4,913,716 $ 8,020,616 ($3,106,900)
Transportation 212,310 (595) 212,905
Other liquid revenues 255,087 225,170 29,917
---------- ----------- -----------
TOTAL OPERATING REVENUES 5,381,113 8,245,191 (2,864,078)
---------- ----------- -----------
OPERATING EXPENSES:
Purchased gas 3,974,868 7,646,756 (3,671,888)
Transportation 547,554 224,965 322,589
Storage expense 339,508 224,433 115,075
General & administrative 163,446 142,303 21,143
General Taxes 18,762 (5,040) 23,802
---------- ----------- -----------
TOTAL OPERATING EXPENSES 5,044,138 8,233,417 (3,189,279)
---------- ----------- -----------
INTEREST INCOME 50,265 60,029 (9,764)
SHORT-TERM DEBT INTEREST 24,694 12,639 12,055
EXPENSE
INTERCOMPANY INTEREST 300,896 168,113 132,783
EXPENSE
OTHER INCOME 47,599 7,681 39,918
---------- ----------- -----------
INCOME (LOSS) BEFORE FEDERAL
INCOME TAX 109,249 (101,268) 210,517
---------- ----------- -----------
FEDERAL INCOME TAX 37,145 34,431 2,714
---------- ----------- -----------
NET INCOME $ 72,104 ($ 66,837) $ 138,941
========== =========== ===========
</TABLE>
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NATIONAL GAS & OIL COMPANY
--------------------------
CONSOLIDATED BALANCE SHEET
--------------------------
ASSETS
------
<TABLE>
<CAPTION>
December 31,
------------
1997
-----------
<S> <C>
PROPERTY, PLANT AND EQUIPMENT: $98,954,425
Less-accumulated depreciation 33,731,292
-----------
NET PROPERTY, PLANT & EQUIPMENT 65,223,133
CURRENT ASSETS:
Cash and cash equivalents 396,301
Short-term investments 2,451,049
Accounts receivable - net 17,728,315
Tax refund receivable 61,727
Gas in underground storage 2,660,177
Materials and supplies, at average cost 1,155,688
Prepaid taxes 3,077,047
Unrecovered gas cost 3,562,763
Prepaid insurance & other 366,627
Deferred taxes 2,668
-----------
Total current assets 31,462,362
-----------
OTHER ASSETS:
Prepaid FIT & other 1,450
Due from ratepayers 298,260
Investment in alestra 136,622
-----------
TOTAL ASSETS $97,121,827
===========
</TABLE>
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NATIONAL GAS & OIL COMPANY
--------------------------
CONSOLIDATED BALANCE SHEET
--------------------------
CAPITALIZATION AND LIABILITIES
------------------------------
<TABLE>
<CAPTION>
December 31,
------------
1997
-----------
<S> <C>
CAPITALIZATION:
Common stock $ 7,363,166
Capital surplus 34,283,091
Retained earnings 4,661,973
Treasury stock (1,978,437)
-----------
Total Capitalization 44,329,793
Long-term debt 8,465,829
-----------
CURRENT LIABILITIES:
Current maturities of long-term debt 3,885,997
Short-term bank loans 11,725,000
Accounts payable 8,151,179
Accrued income and other taxes 4,527,726
Rate refunds due customers 62,093
Deferred taxes 810,783
Other 1,820,756
-----------
Total current liabilities 30,983,534
-----------
DEFERRED CREDITS
Deferred compensation & other 3,416,364
Deferred taxes 8,803,252
Investment tax credits 888,420
Due to ratepayers 234,635
-----------
Total deferred credits and other liabilities 13,342,671
-----------
TOTAL CAPITALIZATION AND LIABILITIES $97,121,827
===========
</TABLE>
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NATIONAL GAS & OIL CORPORATION
------------------------------
CONSOLIDATED BALANCE SHEET
--------------------------
ASSETS
------
<TABLE>
<CAPTION>
December 31,
------------
1997
-----------
<S> <C>
PROPERTY, PLANT AND EQUIPMENT: $69,940,823
Less-accumulated depreciation 22,345,344
-----------
NET PROPERTY, PLANT & EQUIPMENT 47,595,479
CURRENT ASSETS:
Cash and cash equivalents 186,715
Accounts receivable - net 5,540,805
Tax refund receivable 61,727
Gas in underground storage 617,188
Materials and supplies, at average cost 696,737
Prepaid taxes 3,077,047
Unrecovered gas cost 3,562,763
Prepaid insurance & other 168,925
Intercompany accounts 2,242,738
-----------
Total current assets 16,154,645
-----------
OTHER ASSETS:
Due from ratepayers 298,260
-----------
TOTAL ASSETS $64,048,384
===========
</TABLE>
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NATIONAL GAS & OIL CORPORATION
------------------------------
CONSOLIDATED BALANCE SHEET
--------------------------
CAPITALIZATION AND LIABILITIES
------------------------------
<TABLE>
<CAPTION>
December 31,
------------
1997
-----------
<S> <C>
CAPITALIZATION:
Common stock $ 2,003,266
Capital surplus 4,530,743
Retained earnings 24,517,504
-----------
Total Capitalization 31,051,513
Long-term debt 5,538,461
-----------
CURRENT LIABILITIES:
Short-term bank loans 10,450,000
Accounts payable 1,120,351
Accrued income and other taxes 4,078,324
Rate refunds due customers 62,092
Deferred taxes 810,783
Other 1,012,322
-----------
Total current liabilities 17,533,872
-----------
DEFERRED CREDITS
Deferred compensation & other 3,416,364
Deferred taxes 5,413,822
Investment tax credits 859,717
Due to ratepayers 234,635
-----------
Total deferred credits and other liabilities 9,924,538
-----------
TOTAL CAPITALIZATION AND LIABILITIES $64,048,384
===========
</TABLE>
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NGO DEVELOPMENT CORPORATION
---------------------------
CONSOLIDATED BALANCE SHEET
--------------------------
ASSETS
------
<TABLE>
<CAPTION>
December 31,
------------
1997
-----------
<S> <C>
PROPERTY, PLANT AND EQUIPMENT: $27,293,820
Less-accumulated depreciation 10,573,406
-----------
NET PROPERTY, PLANT & EQUIPMENT 16,720,414
CURRENT ASSETS:
Cash and cash equivalents (1,458)
Short-term investments 1,528,501
Accounts receivable - net 8,758,342
Materials and supplies, at average cost 458,951
Gas in storage 526,615
Prepaid insurance & other 196,779
Intercompany accounts (4,071,981)
-----------
Total current assets 7,395,749
-----------
OTHER ASSETS:
Prepaid federal income tax & other 1,450
Investment in Alestra 136,622
-----------
TOTAL ASSETS $24,254,235
===========
</TABLE>
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NGO DEVELOPMENT CORPORATION
---------------------------
CONSOLIDATED BALANCE SHEET
--------------------------
CAPITALIZATION AND LIABILITIES
------------------------------
<TABLE>
<CAPTION>
December 31,
------------
1997
-----------
<S> <C>
CAPITALIZATION:
Common stock $ 100,000
Capital surplus 2,271,826
Retained earnings 6,729,048
-----------
Total Capitalization 9,100,874
Long-term debt 2,337,500
-----------
CURRENT LIABILITIES:
Current maturities 3,850,000
Accounts payable 4,355,838
Accrued income and other taxes 332,557
Other 788,952
-----------
Total current liabilities 9,327,347
-----------
DEFERRED CREDITS
Deferred compensation & other 70,287
Deferred taxes 3,389,524
Investment tax credits 28,703
-----------
Total deferred credits and other liabilities 3,488,514
-----------
TOTAL CAPITALIZATION AND LIABILITIES $24,254,235
===========
</TABLE>
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PRODUCERS GAS SALES, INC.
CONSOLIDATED BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
December 31,
------------
1997
-----------
<S> <C>
PROPERTY, PLANT AND EQUIPMENT: $ 0
Less-accumulated depreciation 0
-----------
NET PROPERTY, PLANT & EQUIPMENT 0
CURRENT ASSETS:
Cash and cash equivalents 154,184
Accounts receivable - net 3,429,168
Gas in storage 1,516,374
Prepaid insurance & other 922,692
Intercompany accounts (1,694,938)
-----------
TOTAL ASSETS $ 4,327,480
===========
</TABLE>
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PRODUCERS GAS SALES, INC.
-------------------------
CONSOLIDATED BALANCE SHEET
--------------------------
CAPITALIZATION AND LIABILITIES
------------------------------
<TABLE>
<CAPTION>
December 31,
------------
1997
----------
<S> <C>
CAPITALIZATION:
Common stock $ 500
Capital surplus 0
Retained earnings 311,814
----------
Total Capitalization 312,314
Long-term debt 0
----------
CURRENT LIABILITIES:
Current maturities 0
Short-term bank loans 1,275,000
Accounts payable 2,674,020
Accrued income and other taxes 56,660
Other 9,486
----------
Total current liabilities 4,015,166
----------
TOTAL CAPITALIZATION AND LIABILITIES $4,327,480
==========
</TABLE>
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