SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
May 11, 1999
(Date of Report - Date of earliest event reported)
KERR-MCGEE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-3939 73-0311467
(State of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
Kerr-McGee Center
Oklahoma City, Oklahoma 73125
(Address of principal executive offices) (Zip Code)
(405) 270-1313
(Registrant's telephone number)
<PAGE>
Item 5. Other Events
On May 11, 1999, Kerr-McGee Corporation issued a press release to
report in conjunction with the annual stockholders' meeting the retirement of
Robert L. Keiser as chairman and as a member of the board of directors of
Kerr-McGee Corporation effective June 1, 1999. In addition, the company
announced the resignation of Richard M. Rompala from its board of directors. A
copy of the press release is attached as Exhibit 99.1
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
99.1 Press Release dated May 11, 1999.
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 hereunto duly authorized.
KERR-MCGEE CORPORATION
By: (Deborah A. Kitchens)
Deborah A. Kitchens
Vice President and Controller
Dated: May 12, 1999
EXHIBIT INDEX
Exhibit No. Description
99.1 Press Release dated May 11, 1999.
Kerr-McGee Reports 1998 Accomplishments and
1999 Plan at Annual Meeting
OKLAHOMA CITY (May 11, 1999) - In 1998, Kerr-McGee Corp. (NYSE: KMG)
focused on the growth of its worldwide oil and gas exploration and production
business and titanium dioxide pigment operations, Luke R. Corbett, Kerr-McGee
chief executive officer, told stockholders at the company's annual meeting in
Oklahoma City today.
"A year ago, we announced Kerr-McGee's long-term strategy to
concentrate on our two core businesses," Corbett said. "Through a significant
merger, divestiture of our coal operations, two acquisitions and strategic
alliances, we have become the fifth-largest independent oil and gas producer in
the United States, complemented by a strong and growing titanium dioxide pigment
business."
Kerr-McGee's specific 1998 accomplishments outlined during the meeting
include:
- - Start of production at four fields in the Gulf of Mexico and one field
in Indonesia.
- - Purchase of Gulf Canada's U.K. oil and gas assets increasing daily
production in the North Sea by approximately 50% and prospect inventory
by about 35 licenses.
- - Development of a strategic alliance with CanOxy providing access to
infrastructure and drilling expertise in Yemen.
- - Increase of Kerr-McGee's inventory in the Gulf of Mexico to
approximately 500 blocks, of which 230 are in deep water.
- - Record operating profit from Kerr-McGee's titanium dioxide business.
- - Acquisition of an 80% interest in Bayer AG's European titanium
dioxide pigment business, increasing Kerr-McGee's equity pigment
capacity by 50% to 310,000 metric tons per year and establishing a
production presence in Europe.
- - Increased worldwide pigment sales volumes by 36%.
- - Record sales, on an equity basis, of 265,000 metric tons of pigment.
- - Startup of the third major expansion at the Hamilton, Miss.,
pigment plant, which will increase production capacity by
approximately 20% to 178,000 metric tons.
- - Completion of the sale of the company's coal business.
In conjunction with the meeting, Robert L. Keiser, former chairman and
chief executive officer of Oryx Energy Company, who has been serving as chairman
of the combined company, announced his retirement as chairman and as a member of
the board of directors of Kerr-McGee effective June 1, 1999. The board named
Corbett to the position of chairman and chief executive officer of Kerr-McGee.
"My commitment to work with Luke Corbett and the Kerr-McGee management
team to achieve the transition goals of our merged companies has been completed.
I am retiring with confidence that Kerr-McGee has the right strategy, assets and
people to compete on a global basis," Keiser said.
"Bob Keiser has been a leader and supportive partner throughout the
merger, and we wish him well in his retirement," added Corbett.
Kerr-McGee also announced that Richard M. Rompala has resigned from its
board of directors. Rompala, who is chairman, chief executive officer and
president of The Valspar Corporation, left the board because of other business
responsibilities. He has served on the Kerr-McGee board since 1996.
During the annual meeting, Kerr-McGee's plans for operations and future
growth were highlighted.
- - Average daily production levels for 1999 are estimated at 190,000
barrels of oil and 580 million cubic feet of gas and are projected to
grow by approximately 5% in 2000.
- - Capital expenditures for oil and gas in 1999 are expected to total
approximately $430 million. About one-third will be spent in each the
Gulf of Mexico and in the North Sea, with the remaining
one-third split between United States onshore and other
international areas.
- - Exploration expense is estimated at $140 million, with 25 to 30
exploratory wells planned in the Gulf of Mexico, North Sea and other
selected areas around the world.
- - Kerr-McGee will continue its focus on opportunities in the
deepwater Gulf of Mexico and plans include drilling four to five
deepwater prospects.
- - Kerr-McGee projects another record year for titanium dioxide
shipments based on a full year of results in Europe and the
expanded capacity in the second half of the year at the Hamilton
plant.
- - Kerr-McGee will examine incremental expansion at existing
locations and acquisition opportunities as consolidation continues
in the pigment industry.
- - Chemical capital expenditures in 1999 are expected to total $110
million, with 88% spent on the pigment business.
- - The Hamilton pigment plant implemented a productivity improvement
process in 1998 to improve margins, independent of price. The goal was
to lower overall cost of production by at least $100 per metric ton.
To date, the plant has achieved in excess of $75 per metric ton of
savings and expects to surpass the $100-per-metric-ton target before
the end of 1999. This process is being implemented at Kerr-McGee's
three other titanium dioxide plants.
Kerr-McGee is on target to realize the projected synergies associated
with the Oryx merger and will continue to focus on cost reduction in both its
oil and gas and chemical businesses.
A $1 per barrel change in the price of oil will affect annual operating
profit by approximately $70 million pretax and earnings and cash flow by about
$40 million, which equals approximately 45 cents per share. A 10-cent per
thousand cubic feet change in the price of natural gas will impact the operating
profit by about $21 million pretax and earnings and cash flow by about $14
million or 16 cents per share. In the titanium dioxide business, a change of 5
cents per pound ($110 per metric ton) impacts operating profit by $37 million,
and earnings and cash flow by $23 million, or 25 cents in earnings per share.
"We anticipate annual cash flow to average about $1 billion over the
next five years," said Corbett. "We are projecting yearly expenditures of about
$700 million for capital, $155 million for dividends and $150 million for debt
reduction and other corporate purposes. Kerr-McGee's and Oryx's combined net
debt at year-end 1998 was $2.1 billion, or 60% of capitalization. The company
has set a goal to reduce its net debt-to-capitalization ratio to less than 50%
within five years."
(Forward-looking statements in this news release depend on certain
events, risks and uncertainties that may be outside the company's control, such
as the success of the oil and gas exploration and production program, acceptance
of consumer products for which Kerr-McGee's chemical business supplies raw
materials, general economic conditions and other risks discussed in the
company's Form 10-K and Form 10-Q, filed with the Securities and Exchange
Commission. Actual results and developments may differ from those expressed or
implied in this news release.)
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CONTACT: Debbie Schramm
(405) 270-2877
