SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year ended DECEMBER 31, 1993
Commission file number 1-959
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
THE LOUISIANA LAND AND EXPLORATION COMPANY
Exact name of registrant as specified in its charter
MARYLAND 72-0244700
State or other jurisdiction of I.R.S. Employer
incorporation or organization Identification No.
909 POYDRAS STREET, NEW ORLEANS, LA. 70112
Address of principal executive offices Zip Code
Registrant's telephone number, including area code 504-566-6500
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE ON WHICH
TITLE OF EACH CLASS REGISTERED
Capital Stock, $.15 par New York Stock Exchange
value (including Capital Toronto Stock Exchange
Stock Purchase Rights) London Stock Exchange
The Stock Exchanges of Geneva,
Zurich and Basle
8-1/4% Notes due 2002 New York Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE
(continued)
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Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
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 and
(2) has been subject to such filing requirements for the past 90
days. YES X . NO .
State the aggregate market value of the voting stock held by
non-affiliates of the registrant.
Aggregate Market Value
Class of Voting Stock at February 4, 1994
Capital Stock, $.15 par value $1,352,009,000
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of the latest practicable
date.
Outstanding at
Class February 4, 1994
Capital Stock, $.15 par value 33,178,132 shares
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II: The Registrant's Annual Report to Shareholders for
1993
Part III: The Registrant's Proxy Statement for its Annual Meeting
of Stockholders to be held on May 12, 1994
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PART I
Index
Page
Number
_________________________________________________________________
3 Items 1 and 2. Business and Properties.
3 The Company
3 1993 Acquisitions
4 Contributions of Principal Products
5 Petroleum Operations
6 General
7 Sales
8 Oil and Gas Properties
9 Oil and Gas Reserves
9 Exploration Activities
13 Development Activities
16 Drilling Activities at December 31, 1993
16 Oil and Gas Wells
18 Crude and Condensate, Plant Products and Natural Gas
Production and Prices Realized
19 Refining and Marketing Operations
20 Regulation
20 Federal Energy Regulatory Commission
20 Environmental Matters
22 Miscellaneous
22 Employees
22 Item 3. Legal Proceedings.
22 Item 4. Submission of Matters to a Vote of Security
Holders.
23 Executive Officers of the Registrant
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ITEMS 1 AND 2. BUSINESS AND PROPERTIES.
The Company
The Louisiana Land and Exploration Company and Subsidiaries
(LL&E or the Company) is engaged principally in the exploration for
and the development and production of petroleum natural resources.
The major portion of LL&E's petroleum operations are conducted in
the continental United States, the federal offshore area in the
Gulf of Mexico, the North Sea, Canada, Colombia and Indonesia. LL&E
also owns a refinery in Alabama, and also processes natural gas.
1993 Acquisitions
In September 1993, LL&E acquired all of the issued and
outstanding common stock of NERCO Oil & Gas, Inc. ("NERCO") for a
cash purchase price of approximately $354 million plus associated
expenses. The acquisition added net proved domestic reserves of
approximately 219 billion cubic feet of natural gas and
approximately 10.7 million barrels of liquids. As of December 31,
1993, NERCO's assets included interests in approximately 196
thousand gross productive acres (123 thousand net) and
approximately 237 thousand gross undeveloped acres (186 thousand
net); productive wells totaled 96 gross (51.6 net) gas wells and 30
gross (17.3 net) oil wells. NERCO also held royalty interests in
4 gas wells.
In December 1993, LL&E completed the acquisition of a 11.26%
working interest in Block 16/17 in the U.K. North Sea ("T-Block")
for approximately $187 million in cash. T-Block contains two oil
fields which are under development: the Tiffany Field and the
satellite field, Toni. Production from both fields initially came
onstream in late 1993. The development of two additional fields,
Thelma and Southeast Thelma (for which proved reserves have not
been recorded, is in the advanced stage. The acquisition added net
proved reserves of approximately 12 billion cubic feet of natural
gas and approximately 15.6 million barrels of liquids. As of
December 31, 1993 T-Block consisted of approximately 2 thousand
gross productive acres (.2 thousand net) and approximately 52
thousand gross undeveloped acres (6 thousand net); productive oil
wells totaled 7 gross (.8 net).
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Contributions of Principal Products
The table below sets forth the principal products and their
contribution to the operating revenues of LL&E's petroleum
operations for the periods indicated. Reference is made to Note 14
of "Notes to Consolidated Financial Statements" in the Company's
Annual Report to Shareholders for 1993 (page 23 of Exhibit 13 filed
herewith) for additional information on LL&E's operations.
<TABLE>
<CAPTION>
(Millions of dollars)
19931 1992 1991
_______________________________________________________________________________________
<S> <C> <C> <C>
Crude and condensate ............................. $ 210.0 215.1 257.0
Natural gas ...................................... 146.0 92.0 85.9
Refined products2 ................................ 400.2 441.9 432.8
Other petroleum products ......................... 14.1 16.8 20.8
_______________________________________________________________________________________
Total .......................................... $ 770.3 765.8 796.5
_______________________________________________________________________________________
1 Includes NERCO Oil & Gas since October 1, 1993.
2 After elimination of intracompany transfers to the Company's refinery. In 1993, 1992 and
1991, such transfers were valued at $22.4, $20.7 and $18.7, respectively (see "SALES").
</TABLE>
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Petroleum Operations
LL&E employs a staff of petrotechnical professionals to
initiate, evaluate, plan and execute LL&E's petroleum activities.
Typically, the actual tasks of exploration and development, such as
seismic surveys and drilling, are performed by independent
specialized contractors, under the direction of LL&E's professional
staff. LL&E's principal domestic exploration activities at
December 31, 1993 were in the Gulf of Mexico, Louisiana and
Wyoming. Outside the United States, LL&E's principal exploration
activities were in the North Sea, Canada, Colombia, Algeria and
Yemen.
In the United States, LL&E has working interests in
development and producing operations principally in Alabama,
Florida, Louisiana, Wyoming and the federal offshore area in the
Gulf of Mexico. Outside the United States, LL&E has working
interests in development and producing operations in the
Netherlands and United Kingdom sectors of the North Sea, Canada,
Colombia and Indonesia.
The majority of LL&E's working interest activities occur on
property leased from others, which leaseholds are acquired by
paying a signature bonus, delay rental and production royalty to
the owner of the mineral rights. In 1993, working interest
revenues accounted for 87% of LL&E's total oil and gas revenues.
LL&E receives income from royalties from production by others
of oil and gas from portions of the properties LL&E owns and leases
in south Louisiana. In addition, LL&E receives income from
geophysical options and the leasing of mineral rights to explore
undeveloped portions of these properties.
CLAM Petroleum Company (CLAM), a 50%-owned, unconsolidated
affiliate, is engaged in oil and gas exploration, development and
production activities in the Netherlands sector of the North Sea.
The tables on the following pages set forth LL&E's 50% equity
interest in the operations of CLAM.
LL&E Petroleum Marketing, Inc. (LPM), a wholly owned
subsidiary, owns and operates a refinery in Mobile, Alabama. The
refinery utilizes various sources of feedstocks including Company-
owned and -controlled crude oil which is acquired on a competitive
basis with other domestic and foreign high gravity crudes from
third parties.
LL&E Gas Marketing, Inc. (LGM) a wholly owned subsidiary,
markets gas downstream to local distributors and other customers.
Gas temporarily or permanently released from long-term pipeline
contracts, "new" undedicated gas and, to a very limited extent,
purchased third-party gas, is aggregated by LGM and then sold under
both short- and long-term agreements. Prices received for this gas
are generally not regulated. Development of this downstream
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marketing activity allows LL&E entry into markets not previously
available and reduces LL&E's reliance on pipelines to market gas,
thus affording LL&E greater overall control of its natural gas
reserves.
GENERAL
LL&E's petroleum operations are subject to all of the risks
and uncertainties normally incident to exploration for and
development of oil and gas. Significant capital expenditures are
required in connection with such operations, with capital
expenditures for offshore operations typically being substantially
greater than for similar operations onshore. LL&E's earnings and
the scope of its future exploration and development programs will
be effected by the extent to which state and federal legislation
and regulations applicable to the petroleum industry impact
incentives for exploration and production, and permit the recovery
of revenues sufficient to meet increasing costs and to expand
operations. The marketability of offshore production is limited by
the availability of marine transportation facilities, which are
barge or pipeline for oil, but only pipeline for gas. In instances
where there are no gas pipelines in an area of production, LL&E
must await the permitting, certification and construction of
pipeline facilities before deliveries of gas can commence. A
portion of LL&E's petroleum operations is conducted in foreign
countries where LL&E is also subject to regulation, risks of a
political nature and other risks. LL&E's oil and gas production is
from properties in jurisdictions in which well drilling and
production are regulated or subject to limitations by governmental
production and conservation authorities.
The oil and gas industry is highly competitive in all phases,
including the search for and development of new sources of supply
and the refining and marketing of crude oil and petroleum products.
The oil and gas industry also competes with other industries that
supply energy and fuel, and LL&E competes with a number of major
integrated oil companies and other companies having greater
resources. LL&E participates in bidding for federal leases on the
U.S. Outer Continental Shelf, as well as for leases (concessions)
in other countries; participation in the bidding for these leases
is extremely competitive.
The principal raw materials and supplies required directly by
LL&E for its petroleum operations, other than refining and natural
gas processing, are generally available through multiple sources
and acquired through specialized independent contractors. The
refinery and gas processing operations' principal raw materials are
crude oil and natural gas, a portion of which is Company-owned and
- -controlled. Internally generated fuels and electricity are the
principal energy requirements for the petroleum operations and the
refinery and electricity is the principal energy requirement at the
gas processing plants. No serious problems currently exist with
respect to the availability of any of these items.
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SALES
The availability of a ready market for oil and gas depends
upon numerous factors beyond the Company's control, including the
production of crude oil and gas by others, crude oil imports, the
marketing of competitive fuels, the proximity and capacity of oil
and gas pipelines, the availability of treatment facilities, the
regulation of allowable production by governmental authorities and
the regulation by the Federal Energy Regulatory Commission (FERC)
and various state agencies of the transportation and marketing of
natural gas transported or sold in interstate commerce (see
"Regulation").
Liquids
During 1993, LL&E's crude oil, condensate and plant products
production were sold into various domestic and international
markets at prices competitive for the area and for quality of
production. In some instances, crude oil, condensate and plant
products were traded from area to area and were then sold to third
parties or transferred to the Company's refinery. LL&E charged
transfers of proprietary production to its refinery at appropriate
market prices. The 1993 sales period has seen dramatic price
fluctuations with crude oil prices falling to below $14/BBL in late
1993 from nearly $21/BBL earlier in the year. Overall, crude oil
prices averaged approximately $18.47/BBL at Cushing, Oklahoma for
West Texas Intermediate. This price was approximately $2/BBL below
the price averaged in 1992.
Natural Gas
In the past, most of LL&E's sales of natural gas were made to
various gas pipeline companies, both interstate and intrastate, and
were typically under long-term take-or-pay contracts subject to the
regulations of the FERC. With the advent of FERC Order 436/500 and
Order 636, the structure of the industry has changed dramatically,
allowing producers access to downstream markets previously held by
the pipeline companies. Like other producers, the Company may now
enter into contracts directly with aggregators, local distribution
companies (LDC's), industrial users and other downstream customers
and contract with the pipeline companies solely for transportation
purposes. As of February 1, 1994, less than 10% of LL&E's natural
gas production was being sold to interstate pipeline companies.
Development of this downstream marketing activity has allowed the
Company to gain entry into markets not previously available and has
reduced the Company's reliance on pipelines to market natural gas.
All of this has afforded LL&E greater overall control of its
natural gas reserves.
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Refined Products
LL&E's refinery products, which include three grades of
gasoline, naphtha, two grades of No. 2 fuel oil, turbine fuel and
atmospheric residuum, are generally sold in the spot market,
wholesale markets, or under short-term contracts. Products are
either sold in local or Gulf Coast markets or exchanged in return
for products in pipeline markets.
OIL AND GAS PROPERTIES
Information presented under the heading "Oil and Gas
Properties" in the Company's Annual Report to Shareholders for 1993
(page 46 of Exhibit 13 filed herewith) is incorporated herein by
reference.
Working Interest Properties
At December 31, 1993, LL&E had working interests in
approximately 664 thousand gross (303 thousand net) productive
acres and approximately 11.4 million gross (6.3 million net)
undeveloped acres. The total unamortized cost to LL&E of such
undeveloped acreage at December 31, 1993 was $57.6 million.
Through its affiliate, CLAM Petroleum Company, LL&E had working
interests in approximately 42 thousand gross (5 thousand net)
productive acres and approximately 806 thousand gross (184 thousand
net) undeveloped acres, all located in the Netherlands sector of
the North Sea.
Leaseholds held by LL&E in the United States on privately
owned lands generally reserve to the lessor a 12-1/2% to 16-2/3%
royalty interest in the production from such lands. Federal leases
offshore in the Outer Continental Shelf are acquired by sealed
bids, and generally provide for a royalty of 16-2/3% of the value
of production. Federal leases onshore generally are acquired by
payment of a filing fee and provide for a royalty of 16-2/3% of the
value of production. The primary terms of LL&E's leases vary
generally from 3 to 10 years (five years in the case of federal
offshore leases), but such leases are automatically extended by
production for as long thereafter as production continues. Most of
LL&E's leaseholds in Canada are on governmental lands and the
royalty rates may vary from time to time by governmental action.
Royalty Properties
At December 31, 1993, LL&E owned approximately 594 thousand
acres in fee lands in south Louisiana of which approximately 109
thousand acres were leased to various other companies for oil and
gas exploration, development and production. Of those leased to
others, approximately 94 thousand acres are productive and yielded
a weighted average royalty to LL&E of 25%. In addition, LL&E holds
State of Louisiana leases covering approximately 56 thousand
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productive acres which have been assigned to Texaco Inc. under a
contract (1928 Texaco Contract). Under the 1928 Texaco Contract,
which also covers certain fee lands owned by LL&E, LL&E is entitled
to receive a 25% royalty interest in the production from the
acreage subject to the lease. LL&E is obligated to pay to the
lessor of the leasehold interests subject to the 1928 Texaco
Contract a royalty which is, in most cases, 12-1/2% of the proceeds
from production for such property.
Of the approximately 485 thousand fee acres not leased to
others, LL&E conducts operations on approximately 1.1 thousand
productive acres; the balance of the fee acreage is classified as
undeveloped. From time to time, LL&E conducts exploratory
activities on this undeveloped fee acreage.
OIL AND GAS RESERVES
Information regarding LL&E's oil and gas reserves is presented
in Part II, Item 8. - "Financial Statements and Supplementary
Data." LL&E and its oil and gas subsidiaries are required to
report, at varying times, estimates of oil and gas reserve data
with various governmental authorities and agencies, including the
Federal Energy Regulatory Commission. The basis for reporting
estimates of reserves to these authorities and agencies may not be
comparable to that presented because of the nature of the various
reports required. The major sources of noncomparability include
differences in the times as of which such estimates are made and
differences in the definition of the reporting unit, such as,
gross, net, total operator, lease by lease, reservoir by reservoir.
EXPLORATION ACTIVITIES
Working Interest
The Company's exploration expenditures totaled $60 million in
1993: $17 million was spent on gathering and evaluating seismic
data, almost $3 million was expended for unproved leases in the
United States and overseas, and $40 million was expended for
participation in 62 wells. Of this total, 39 wells were successful
completions: 30 oil and 9 gas.
In the Gulf of Mexico, successful exploratory efforts in 1993
included the drilling of two gas discoveries on contiguous blocks
at South Pass Blocks 34 and 47 where LL&E has a 35% working
interest. Installation of a production platform to develop these
two discoveries is currently under study. At South Marsh Island
Block 154, NERCO participated with a 50% working interest in a high
volume gas discovery in July. A production facility was installed
in October and, by year end, two wells were producing at a combined
rate of 85 million cubic feet of gas and 3,000 barrels of
condensate per day.
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In south Louisiana, five successful exploratory wells were
drilled and completed during 1993. At Palmetto Bayou, the CL&F #1
well logged pay in five zones and was completed flowing 4.3 million
cubic feet of gas and 122 barrels of oil per day. At East Lake
Washington, the Cockrell-Moran #C-1 produced at 1.4 million cubic
feet of gas per day and the Fina #2 well at Bay Baptiste
encountered pay in two zones for a combined rate of 3.5 million
cubic feet of gas per day and 72 barrels of oil per day. LL&E's
working interests in these wells is 50%, 30% and 25%, respectively.
The expanding use of 3-D seismic technology in the onshore
south Louisiana environment is accelerating the redevelopment of
large, complex fields and the exploration of adjacent acreage.
Through year-end 1993, 205 square miles of south Louisiana 3-D data
had been acquired with the majority on or adjoining LL&E's fee
acreage. Additional surveys covering 92 square miles are scheduled
for 1994 and plans for acquisition of another 115 square miles are
under discussion with partners.
In Canada, LL&E participated in the drilling of 38 working
interest wells during 1993, of which 25 were successfully
completed. An exploratory success in the Peace River Arch oil
field at Earring in central Alberta early in 1993 led to the
drilling of 12 additional wells. Late in 1993, LL&E agreed to sell
certain oil and gas producing properties, undeveloped acreage and
seismic data in southeastern Alberta for approximately $43 million,
which resulted in a pretax gain of approximately $24 million. The
sale, closed in late December, included daily production totaling
about 2,200 barrels of oil and less than two million cubic feet of
gas.
In Indonesia, the interpretation of the first 3-D seismic
survey on the KAKAP license resulted in the identification of
several prospective features that will be tested in future years.
In Colombia, the Company completed interpretation of seismic
and surface geological data gathered on an exploratory lease
acquired in 1992 in the Barzalosa area of the Upper Magdalena
Valley. An exploratory well in the area is scheduled to begin
drilling in the second quarter of 1994.
In Yemen, over 450 kilometers of seismic data was acquired and
analyzed during 1993 on Block 9 where LL&E holds a 17% working
interest. A number of drillable prospects were mapped and two
wells were scheduled for drilling in early 1994. The first of
these, the Jarshah-1, was spud on December 31, 1993 and completed
drilling in less than four weeks. While this well was non-
productive, potential remains for the other identified prospects.
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In Algeria, LL&E's 1993 seismic program successfully acquired
over 900 miles of seismic data on Blocks 215 and 405 in the
Ghadames Basin. Interpretation of this data has resulted in
several prospects. As originally contemplated, the Company farmed-
out a 35% interest in its holdings in the two blocks. LL&E will
continue as operator and retain a 65% working interest. Several
oil discoveries being developed in blocks adjacent to Block 405
have greatly increased the potential of the area. Initial drilling
is expected on Block 405 in late 1994.
In Tunisia, LL&E entered into an agreement with the government
for oil and gas exploration in the one million acre Ramla block,
about 80 miles offshore in the Gulf of Gabes. The agreement
provides for the acquisition of seismic data and the drilling of
one well during the initial four-year term of the contract.
Initial seismic acquisition is expected to begin in early 1994.
LL&E will carry 50% of the exploration costs. The Tunisian
government has the right to participate for up to a 50% interest in
the development of a discovery.
In Australia, two shallow exploratory wells drilled in Block
EP-341 in the offshore Carnarvon Basin were unsuccessful. Seismic
studies continue on two other concessions in other regions of the
country.
In Papua New Guinea, initial geological and remote sensing
data is being interpreted on the LL&E-operated, 2.6 million acre
PPL-150 concession on the northern coast of the island.
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During the years 1991 through 1993, LL&E and CLAM participated
in the drilling of exploratory wells with the results set forth in
the table below.
<TABLE>
<CAPTION>
Net wells
Oil Gas Dry
1993 1992 1991 1993 1992 1991 1993 1992 1991
_______________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LL&E and Subsidiaries:
Domestic:
Offshore Gulf of
Mexico............. .5 - 1.0 1.8 - 2.2 1.4 1.0 3.0
Colorado............. - - - - - - - .5 -
Louisiana............ .7 .4 1.0 1.1 2.2 3.2 1.8 2.5 5.8
Oklahoma............. - - - - 4.9 - - 5.2
Texas................ - - - - - .5 - - .5
Wyoming.............. - - - - - - - .7 2.3
North Sea:
United Kingdom....... .1 - - - - - .1 .1 .1
Other Foreign:
Australia............ - - - - - - .6 - -
Canada............... 13.9 12.4 13.1 1.0 .3 1.6 7.4 7.3 11.3
Colombia............. - .3 - - - - - - -
Egypt................ - - - - - - - .2 .5
Papua New Guinea..... - - - - - - - - .5
_______________________________________________________________________________________
Total............. 15.2 13.1 15.1 3.9 2.5 12.4 11.3 12.3 29.2
_______________________________________________________________________________________
CLAM (50%)
Netherlands-North Sea.. - - - - - - .1 .1 .3
_______________________________________________________________________________________
</TABLE>
Royalty Interest
During 1993, the following exploratory wells were drilled by
others on LL&E's fee and leasehold acreage.
<TABLE>
<CAPTION>
Gross wells
Oil Gas Dry
_______________________________________________________________________________________
<S> <C> <C> <C>
Domestic:
Louisiana....................................................... 0 6 0
Wyoming......................................................... 1 1 1
Other Foreign - Canada............................................ 3 2 6
_______________________________________________________________________________________
Total ........................................................ 4 9 7
_______________________________________________________________________________________
</TABLE>
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DEVELOPMENT ACTIVITIES
Working Interest
Development of the Company's oil and gas properties in 1993
resulted in the expenditures of almost $80 million for
participation in 22 wells and the installation of platforms and
facilities in the United States and overseas. Successful
development drilling resulted in 9 oil and 12 gas wells. In
addition, $19 million was spent in the acquisition of additional
working interests in proved properties in the United States and
overseas.
Successful production enhancement programs based on 3-D
seismic and field studies were conducted in mature fields in the
Gulf of Mexico during 1993. The most prominent of these programs
was undertaken at Vermilion Block 331 where a total of eight wells
were drilled resulting in a gross production increase of 28.4
million cubic feet of gas and 2,500 barrels of oil per day. LL&E
has a 25% working interest in this field, half of which is burdened
by a 90% net profits interest.
At the LL&E-operated Madden Deep Unit in central Wyoming,
construction of the Lost Cabin Gas Plant commenced in August 1993.
This facility is being built to process natural gas from the
Madison Formation below 24,000 feet. Two wells have been drilled
to this horizon, the Bighorn 1-5 in 1985 and the Bighorn 2-3 in
1988 and limited production tests have indicated the potential for
significant additional gas reserves and production in the Madison
Formation. Both wells will initially be placed on production upon
completion of the plant at a combined rate of 50 million cubic feet
per day. Recent test of these two wells indicated combined flow
potential of 77 million cubic feet per day.
The estimated cost of the facility is $62 million with
complete project costs expected to total approximately $80 million,
with initial treating capacity of over 50 million cubic feet per
day. Plant products will include natural gas, sulfur and carbon
dioxide. Facility expansion has been contemplated in the plant's
design to accommodate production from any additional deep wells
drilled. Mechanical completion of the plant is expected in
December 1994 with startup in early 1995. LL&E will have a 37%
interest in the plant.
The 70,000 acre Madden Deep Unit currently produces gas from
numerous intervals within four horizons ranging in depth from 5,500
to 18,000 feet. The 1993 development program included the drilling
of four infill wells, which tested at daily rates ranging from 2.1
to 5 million cubic feet of gas, and the workover of seven gas wells
and two service wells. LL&E's working interest varies by producing
horizon but averages 30% fieldwide. Plans for continued
development during 1994 include drilling four additional infill
wells and the workover of approximately 15 wells. A 3-D seismic
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survey covering a 37 square mile area of the field is scheduled for
completion in 1994. The program is designed to aid in the ongoing
development of shallow gas reserves, enhance exploitation of
undrilled acreage within the Madden Deep Unit and further delineate
the Madison structure.
In the U.K. North Sea, the culmination of years of exploratory
drilling and field development efforts occurred in December 1993
when production commenced from the East Brae field, the third major
platform in the Brae Complex and the largest developed to-date.
LL&E owns an average 6% working interest in the Brae complex. East
Brae is a gas condensate field and production is expected to build
throughout 1994 as additional wells are brought. Utilizing the gas
cycling technology developed at North Brae, natural gas produced at
East Brae will initially be recycled into the East Brae reservoir
to enhance liquids production. Gas sales from the Brae complex is
expected to commence in late 1994.
Elsewhere in the U.K. North Sea, a plan of development was
submitted to the U.K. Department of Energy for the Beinn
gas/condensate field in late 1993. Beinn was discovered in 1987
when a successful exploratory well established the production
potential of the Middle Jurassic formations at Brae. Upper
Jurassic reservoirs had accounted for all Brae production prior to
the Beinn discovery. In 1992 and 1993, two successful confirmation
wells drilled from the Brae "B" platform have each encountered over
200 feet of Middle Jurassic pay. A third appraisal well was
drilling at year end. A new 3-D seismic study will be conducted
over the field to assist in determining the optimum locations of
additional development wells. The Beinn accumulation partially
underlies the North Brae field and development will utilize the
North Brae "B" platform. Because of the existing infrastructure,
development costs of the reserves is expected to be very low.
In the Netherlands sector of the North Sea, LL&E participates
in natural gas exploration and development through its 50%-owned
affiliate, CLAM. In June, the L12/15 gas field commenced
production and is currently producing at a gross daily rate of 72
million cubic feet. LL&E has a 7.5% working interest in the field
through CLAM. LL&E increased its ownership at the Kotter and
Logger oil fields through reserve acquisitions. LL&E's current
working interest in Kotter and Logger is now 31.88% and 37.5%,
respectively.
In Indonesia, development of the KG and KRA oil fields in the
KAKAP Production Sharing Contract offshore in the Republic of
Indonesia is underway and on schedule. LL&E's net 15% share of
production averaged over 1,300 barrels per day in 1993 and is
expected to increase in early 1995 when the two new fields begin
production.
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In Colombia, the first of three planned development wells in
the Casanare Contract Area in the Llanos Basin began drilling
shortly before year-end 1993. LL&E's net production from its
interest in the Casanare Association Contract Area temporarily
decreased from 2,300 barrels per day in 1992 to 1,900 barrels per
day in 1993 due to pipeline access limitations and more stringent
salt water disposal requirements.
During the years 1991 through 1993, LL&E and CLAM participated
in the drilling of development wells with the results set forth in
the table below.
<TABLE>
<CAPTION>
Net wells
Oil Gas Dry
1993 1992 1991 1993 1992 1991 1993 1992 1991
_______________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LL&E and Subsidiaries:
Domestic:
Offshore Gulf of
Mexico ............ 1.5 .2 .6 1.9 1.0 .5 .3 - -
Louisiana ........... .5 1.6 .5 - - .9 - .5 .6
Wyoming ............. - - .4 1.3 .3 - - - -
North Sea:
Netherlands.......... - .1 .4 - - - - - -
United Kingdom ...... .1 .2 .2 - - - - .2 -
Other Foreign:
Colombia ............ - .3 .3 - - - - - -
_______________________________________________________________________________________
Total ............. 2.1 2.4 2.4 3.2 1.3 1.4 .3 .7 .6
_______________________________________________________________________________________
CLAM (50%)
Netherlands-North Sea.. - .2 - .2 .1 .1 - - -
_______________________________________________________________________________________
</TABLE>
Royalty Interest
During 1993, the following development wells were drilled by others on
LL&E's fee and leasehold acreage.
<TABLE>
<CAPTION>
Gross wells
Oil Gas Dry
_______________________________________________________________________________________
<S> <C> <C> <C>
Domestic-Louisiana................................................. 8 6 1
_______________________________________________________________________________________
</TABLE>
<PAGE>
DRILLING ACTIVITIES AT DECEMBER 31, 1993
Working Interest
The table below sets forth the working interest wells in the
process of drilling at December 31, 1993 by LL&E and by CLAM.
<TABLE>
<CAPTION>
Wells drilling
Gross Net
_______________________________________________________________________________________
<S> <C> <C>
LL&E and Subsidiaries:
Domestic .......................................................... 5 2.0
North Sea ......................................................... 2 .2
_______________________________________________________________________________________
Total .......................................................... 7 2.2
_______________________________________________________________________________________
CLAM (50%) Netherlands-North Sea .................................... - -
_______________________________________________________________________________________
</TABLE>
Royalty Interest
There was one Domestic well being drilled by others at
December 31, 1993 in which LL&E has a royalty interest.
OIL AND GAS WELLS
Working Interest
The table below shows the number of productive oil and gas
wells in which working interests are held by LL&E and by CLAM as of
December 31, 1993.
<TABLE>
<CAPTION>
Oil wells Gas wells
Gross Net Gross Net
_______________________________________________________________________________________
<S> <C> <C> <C> <C>
LL&E and Subsidiaries:
Domestic ..................................... 1,546 179.6 373 141.8
North Sea .................................... 51 6.8 - -
Other Foreign ................................ 71 18.4 10 4.9
_______________________________________________________________________________________
Total ..................................... 1,6681 204.8 3832 146.7
_______________________________________________________________________________________
CLAM (50%) Netherlands-North Sea ............... - - 55 3.4
_______________________________________________________________________________________
1 Includes 39 dual completion wells.
2 Includes 34 dual completion wells.
</TABLE>
<PAGE>
<PAGE>
Royalty Interest
The table below shows the number of productive oil and gas
wells drilled by others in whose production LL&E had a royalty
interest as of December 31, 1993.
<TABLE>
<CAPTION>
Gross wells
Oil Gas
_______________________________________________________________________________________
<S> <C> <C>
Domestic .......................................................... 620 219
Other Foreign ..................................................... 7 6
_______________________________________________________________________________________
Total .......................................................... 6271 2252
_______________________________________________________________________________________
1 Includes 30 dual completion wells.
2 Includes 14 dual completion wells.
</TABLE>
<PAGE>
<PAGE>
CRUDE AND CONDENSATE, PLANT PRODUCTS AND NATURAL GAS PRODUCTION
AND PRICES REALIZED
The production and average price information for the years
1991 through 1993 presented under the heading "Oil and Gas
Operating Data" in the Company's Annual Report to Shareholders for
1993 (page 44 of Exhibit 13 filed herewith) is incorporated herein
by reference.
Lifting Cost per Equivalent Barrel of Production
The table below presents the average annual production
(lifting) cost per equivalent barrel of production (excluding
royalty interest production) for LL&E and for CLAM for the periods
indicated. For the purpose of this calculation, natural gas and
plant products are converted to equivalent barrels of oil, based on
an estimate of their relative BTU content, at the ratios of 6:1 and
1.56:1, respectively.
<TABLE>
<CAPTION>
1993 1992 1991
_______________________________________________________________________________________
<S> <C> <C> <C>
LL&E and Subsidiaries:
Domestic .............................................. $4.69 5.51 5.08
North Sea ............................................. 9.20 7.62 6.09
Other Foreign ......................................... 5.64 5.43 5.06
_______________________________________________________________________________________
CLAM
Netherlands-North Sea ................................. $3.07 4.05 3.04
_______________________________________________________________________________________
</TABLE>
Production (lifting) cost, as defined by the Securities and
Exchange Commission, consists of costs incurred to operate and
maintain wells and related equipment and facilities, as well as
property and production taxes. It does not include depletion,
depreciation, and amortization of capitalized acquisition,
exploration and development costs, general and administrative
expenses, interest expense or income taxes. Accordingly,
production (lifting) cost reflected in the above table does not
represent the total cost involved in producing a barrel of oil.
<PAGE>
<PAGE>
REFINING AND MARKETING OPERATIONS
General
The Company operates a crude oil refinery and terminal in
Mobile, Alabama. Refinery capability consists of the following
units: Atmospheric and Vacuum Distillation, Distillate
Hydrodesulfurization, Sulfur Recovery, Catalytic Reforming and
Light Naphtha Isomerization. This equipment is designed to handle
both high- and low-sulfur feedstocks. The Company's crude oil
terminal is located in Mobile Harbor and can accept vessels up to
35 feet draft. The terminal is connected to the refinery by
parallel crude and product lines (approximately seven miles each in
length) and can accept and load both crude oil and refined
products.
Of the $9.3 million in refinery capital expenditures during
1993, $1.9 million was spent completing construction of a
distillate hydrotreating facility, $2.0 million was associated with
a vacuum tower upgrade project and the remainder was related to
miscellaneous capital improvements and safety and environmental
items. In 1994, $8.5 million has been budgeted for capital
projects including $5 million toward profit enhancement and the
balance to maintenance, safety and environmental items.
In 1993, the refinery processed an average of 46,800 barrels
per day of crude oil and remained under the Independent Producers
status during the year. The decline in industry refinery margins
(excluding retail), which began in 1992, continued in 1993.
Efforts in 1993 were concentrated on cutting costs and improving
quality, which are expected to improve the refinery's 1994
competitive position.
Sales and Prices Realized
The sales and average price information for the years 1991
through 1993 presented under the heading "Refining and Marketing
Operating Data" in the Company's Annual Report to Shareholders for
1993 (page 45 of Exhibit 13 filed herewith) is incorporated herein
by reference.<PAGE>
<PAGE>
Regulation
FEDERAL ENERGY REGULATORY COMMISSION
Natural gas prices are subject to regulation by the Federal
Energy Regulatory Commission (FERC) pursuant to the Natural Gas Act
of 1938, as amended, and the Natural Gas Policy Act of 1978 (NGPA).
Effective December 1, 1978, the NGPA defined certain categories of
natural gas and established price ceilings on all first sales of
gas, whether interstate or intrastate, for most categories. Price
controls on certain categories of gas were removed on various dates
through July 1, 1987.
On July 26, 1989, the Natural Gas Wellhead Decontrol Act of
1989 was enacted. This legislation amended the Natural Gas Policy
Act of 1978, effectively removing wellhead price controls on new
wells or wells not covered by a gas contract immediately and all
maximum lawful price controls by January 1, 1993. As a result of
these legislative acts, none of the Company's natural gas
production is currently subject to wellhead price regulation and
virtually all of it is priced at competitive market levels.
In April of 1992, the FERC issued its Order 636 (followed by
revisions 636-A and 636-B) on comparability of pipeline services.
The order is intended to eliminate certain competitive advantages
interstate pipelines may have in selling gas and further move the
industry toward a more efficient, competitive market environment.
Among other things, Order 636 requires interstate pipelines to
unbundle the various services that they have provided in the past,
such as gas supply, gathering, transmission and storage, and offer
these services individually to their customers. For producers, the
net result should be increased gas sales opportunities. Order 636
has withstood several challenges in the courts and the timetable
outlined in the order calls for implementation by the winter of
1993-94.
ENVIRONMENTAL MATTERS
The protection of our environment has always been a
consideration of LL&E and has involved additional operating and
facility costs. As federal, state and local environmental statutes
evolve, LL&E implements design changes and incorporates pollution
control devices at its facilities in response to environmental
considerations. This has impacted the cost of new facilities and
equipment and has been considered a normal, recurring cost of
LL&E's ongoing operations and not an extraordinary cost of
compliance with governmental regulations. Notwithstanding that
these normally recurring costs are not separately identified, LL&E
believes that the amount of presently known expenditures that will
be incurred primarily for environmental controls over the next two
to three years will not have a material adverse effect on its
results of operations, cash flow or financial position. However,
as additional laws or regulations regarding the protection of the
<PAGE>
<PAGE>
environment are adopted, become effective, or are hereafter
interpreted, there is no assurance that they will not have such an
effect.
As a result of anticipated new regulations promulgated under
the Clean Air Act Amendments of 1990 (CAAA), additional costs may
be incurred at the Company's refining operations and larger
production facilities. These regulations are expected to be
finalized over the next two to five years with implementation
taking effect on a regulatory schedule in future years. Since the
Company's operations are located in areas currently classified as
attainment areas for criteria air pollutants, and most of the
Company's operations are below the expected threshold levels of
hazardous air emissions to be regulated, at this time the Company
does not believe that the cost of compliance with the new CAAA
regulations will have a material adverse effect on its results of
operations, cash flow or financial position.
LL&E has received notice from the Environmental Protection
Agency (EPA) that the Company is one of many Potentially
Responsible Parties (PRP) under the Comprehensive Environmental
Response, Compensation and Liability Act, as amended, with respect
to three National Priorities List sites in Abbeville, Louisiana
known as the "D.L. Mud", "Gulf Coast Vacuum" and "PAB Oil and
Chemical" sites. Additionally, in 1993, the Company acquired NERCO
Oil & Gas, Inc. (NERCO), which is also named a PRP at the Gulf
Coast Vacuum and the D.L. Mud sites. With respect to the Gulf
Coast Vacuum site, the Company has entered into a de minimis
Consent Agreement with EPA on behalf of itself and NERCO, which
agreement is currently lodged for public comment. With respect to
D.L. Mud, the Company believes that its liability, if any, is de
minimis and has been informed that the parent of the former site
owner has assumed all costs of cleanup for the site. With respect
to the PAB Oil and Chemical site, based on the Company's evaluation
of the potential total cleanup costs, its estimate of its potential
exposure, and the viability of the other PRP's, the Company
believes that any costs ultimately required to be borne by it at
this site will not have a material adverse effect on its results of
operations, cash flow or financial position.
In view of recent prosecutions of other oil companies under
the Inventory Update Rule promulgated under the Toxic Substances
Control Act, the Company is currently evaluating whether it is also
subject to such reporting requirements and has notified, and is
meeting with, the appropriate regulatory authorities with respect
to its investigation. Based on currently available information,
the Company believes that sanctions, if any, will not have a
material adverse effect on its results of operations, cash flow or
financial position.
<PAGE>
<PAGE>
Miscellaneous
EMPLOYEES
At December 31, 1993, LL&E had 846 employees.
ITEM 3. LEGAL PROCEEDINGS.
Information presented in Note 15 under the heading "Notes to
Consolidated Financial Statements" in the Company's Annual Report
to Shareholders for 1993 (page 24 of Exhibit 13 filed herewith) is
incorporated herein by reference. See also "Environmental
Matters."
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
<PAGE>
<PAGE>
EXECUTIVE OFFICERS OF THE REGISTRANT
NAME AGE POSITIONS
_________________________________________________________________
H. Leighton Steward (59)
Chairman of the Board, President
and Chief Executive Officer
since 1989.
Richard A. Bachmann (49)
Director since 1989.
Executive Vice President, Finance
and Administration and Chief
Financial Officer since 1985.
John F. Greene (53)
Director since 1989.
Executive Vice President,
Exploration and Production
since 1985.
Jerry D. Carlisle (48) Vice President and Controller
since 1984.
Robert J. Chebul (46) Vice President since July, 1991.
Held various managerial
positions, including
District Manager from 1988 to
1991.
E. J. Leidner, Jr. (57) Vice President since 1986.
John O. Lyles (48)
Vice President since 1992.
Vice President and Treasurer
from 1984 to 1992.
Joel M. Wilkinson (58)
Vice President since 1988.
John A. Williams (49) Vice President since 1988.
Frederick J. Plaeger, II (40)
General Counsel and Corporate
Secretary since 1992.
Corporate Secretary and Senior
Counsel from 1989 to 1992.
Partner in the law firm of
Milling, Benson, Woodward,
Hillyer, Pierson and Miller
from 1985 to 1989.
Louis A. Raspino (42)
Treasurer since 1992.
Assistant Treasurer from 1984 to
1992.
Each officer holds office until the first meeting of the Board
of Directors following the annual meeting of shareholders and
until his successor shall have been elected and qualified, or until
he shall have resigned or been removed as provided in the LL&E By-
Laws. No family relationship exists between any of the above
listed executive officers or between any such executive officer and
any Director of LL&E.<PAGE>
<PAGE>
PART II
Index
Page
Number
__________________________________________________________________
25 Item 5. Market for the Registrant's Common Equity
and Related Stockholder Matters.
25 Item 6. Selected Financial Data.
25 Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
25 Item 8. Financial Statements and Supplementary Data.
25 Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
<PAGE>
<PAGE>
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
Information presented under the caption "Capital Stock,
Dividends and Other Market Data" in the Company's Annual Report to
Shareholders for 1993 (page 35 of Exhibit 13 filed herewith) and
information presented under the caption "Market Price and Dividend
Data" in the Company's Annual Report to Shareholders for 1993 (page
49 of Exhibit 13 filed herewith) are incorporated herein by
reference.
ITEM 6. SELECTED FINANCIAL DATA.
Information presented under the caption "Selected Financial
Data" in the Company's Annual Report to Shareholders for 1993 (page
48 of Exhibit 13 filed herewith) is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Information presented under the heading "Financial Review" in
the Company's Annual Report to Shareholders for 1993 (under the
heading "Management's Discussion and Analysis" on page 29 of
Exhibit 13 filed herewith) is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The consolidated financial statements of The Louisiana Land
and Exploration Company and Subsidiaries, together with the report
thereon of KPMG Peat Marwick dated February 9, 1994, and the
supplementary data referred to in Item 14(a)(1) hereof, which are
contained in the Company's Annual Report to Shareholders for 1993
(Exhibit 13 filed herewith), are incorporated herein by reference.
The report of KPMG Peat Marwick covering the aforementioned
consolidated financial statements refers to the adoption of the
methods of accounting for income taxes and postretirement benefits
other than pensions prescribed by Statement of Financial Accounting
Standards Nos. 109 and 106, respectively. The consolidated
financial statements of MaraLou Netherlands Partnership and
Subsidiary (a 50%-owned affiliate accounted for under the equity
method), together with the report thereon of KPMG Peat Marwick
dated January 28, 1994, as referred to in Item 14(a)(1) hereof, are
included herein and filed herewith. The report of KPMG Peat
Marwick covering the aforementioned consolidated financial
statements refers to the adoption of the method of accounting for
income taxes prescribed by Statement of Financial Accounting
Standard No. 109.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
<PAGE>
<PAGE>
PART III
Index
Page
Number
__________________________________________________________________
27 Item 10. Directors and Executive Officers of the Registrant.
27 Item 11. Executive Compensation.
27 Item 12. Security Ownership of Certain Beneficial Owners and
Management.
27 Item 13. Certain Relationships and Related Transactions.
<PAGE>
<PAGE>
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information relating to directors of the Registrant will be
contained in the definitive Proxy Statement for its Annual Meeting
of Stockholders to be held on May 12, 1994, which the Registrant
will file pursuant to Regulation 14A not later than 120 days after
December 31, 1993, and such information is incorporated herein by
reference in accordance with General Instruction G(3) of Form 10-K.
Information relating to executive officers of the Registrant
appears at page 23 of this Annual Report on Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION.
Information relating to the compensation of the Registrant's
executive officers and directors will be contained in the
definitive Proxy Statement referred to above in "Item 10.
Directors and Executive Officers of the Registrant," and such
information is incorporated herein by reference in accordance with
General Instruction G(3) of Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
Information relating to beneficial ownership of securities will
be contained in the definitive Proxy Statement referred to above in
"Item 10. Directors and Executive Officers of the Registrant," and
such information is incorporated herein by reference in accordance
with General Instruction G(3) of Form 10-K.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information relating to transactions with management and others
and certain business relationships regarding directors will be
contained in the definitive Proxy Statement referred to above in
"Item 10. Directors and Executive Officers of the Registrant," and
such information is incorporated herein by reference in accordance
with General Instruction G(3) of Form 10-K.
<PAGE>
<PAGE>
PART IV
Index
Page
Number
__________________________________________________________________
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K.
29 (a)(1) Financial Statements and Supplementary Data
49 Independent Auditors' Report
50 (a)(2) Financial Statement Schedules:
50 Schedule V - Property, Plant and Equipment
51 Schedule VI - Accumulated Depletion, Depreciation
and Amortization
52 Schedule X - Supplementary Earnings Statement
Information
All other schedules are omitted as the required
information is inapplicable or the information is
presented in the consolidated financial statements
or related notes.
53 (a)(3) Index to Exhibits
56 (b) Reports on Form 8-K
57 Signatures
<PAGE>
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
AND SUBSIDIARIES
Financial Statements and Supplementary Data
(Item 14 (a)(1))
The following financial statements and supplementary data
included in the Company's Annual Report to Shareholders for 1993
are incorporated herein by reference in response to Item 8:
Page in
Exhibit 13
filed herewith
Financial Statements:
Consolidated Balance Sheets 3
Consolidated Statements of Earnings (Loss) 4
Consolidated Statements of Stockholders' Equity 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
Report of Management 26
Independent Auditors' Report 27
Unaudited Supplemental Data:
Data on Oil and Gas Activities 36
Quarterly Data 50
The following financial statements of 50% or Less Owned Persons
required by Regulation S-X, Rule 3-09, are included herein and
filed herewith in response to Item 8:
Page herein
MaraLou Netherlands Partnership and its wholly-owned
consolidated subsidiary, CLAM Petroleum Company:
Independent Auditors' Report 31
Consolidated Balance Sheets 32
Consolidated Statements of Income 33
Consolidated Statements of Partners' Capital 34
Consolidated Statements of Cash Flows 36
Notes to Consolidated Financial Statements 38
<PAGE>
<PAGE>
MARALOU NETHERLANDS PARTNERSHIP
AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993, 1992 AND 1991
(WITH INDEPENDENT AUDITORS' REPORT THEREON)
<PAGE>
<PAGE>
Independent Auditors' Report
The Partners
MaraLou Netherlands Partnership:
We have audited the accompanying consolidated balance sheets of
MaraLou Netherlands Partnership and subsidiary as of December 31,
1993 and 1992, and the related consolidated statements of income,
partners' capital, and cash flows for each of the years in the
three-year period ended December 31, 1993. These consolidated
financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of MaraLou Netherlands Partnership and subsidiary as of
December 31, 1993 and 1992, and the results of their operations and
their cash flows for each of the years in the three-year period
ended December 31, 1993 in conformity with generally accepted
accounting principles.
As discussed in note 4 to the consolidated financial statements,
the Partnership adopted the provisions of the Financial Accounting
Standards Board's Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes" in 1993.
/s/ KPMG Peat Marwick
KPMG Peat Marwick
Houston, Texas
January 28, 1994
<PAGE>
<PAGE>
<TABLE>
MARALOU NETHERLANDS PARTNERSHIP
Consolidated Balance Sheets
December 31, 1993 and 1992
(Expressed in U.S. Dollars)
<CAPTION>
ASSETS 1993 1992
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 11,476,689 $ 18,485,764
Accounts receivable 12,538,332 15,600,647
Accounts receivable - net profits (Note 10) 327,160 -
Materials and supplies 6,910 6,845
Other current assets 51,913 13,524
Amounts due from operator of joint venture - 997,424
Total current assets 24,401,004 35,104,204
Long-term receivable (Note 11) 5,619,856 5,941,726
Property, plant and equipment, at cost, based on
the successful efforts method of accounting for
oil and gas properties (Note 3) 349,664,531 341,015,932
Less accumulated depletion, amortization
and depreciation 184,677,406 170,576,573
Net property, plant and equipment 164,987,125 170,439,359
Deferred charges 249,523 269,343
$ 195,257,508 $ 211,754,632
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable - affiliated companies $ 63,960 $ 71,857
Accounts payable - net profits interest (Note 10) - 228,091
Accrued liabilities (Note 11) 8,912,609 8,051,676
Amounts due to operator of joint venture 3,667,149 -
Government royalties payable 1,408,245 2,352,904
Income taxes payable (Note 4) 12,617,010 5,281,794
Total current liabilities 26,668,973 15,986,322
Long-term debt (Note 6) 87,800,000 97,800,000
Deferred income taxes (Note 4) 18,772,886 21,429,633
Deferred liability - platform abandonment 20,432,039 19,864,602
Minority interest (Note 1) 2,229,013 3,251,326
Partners' capital:
Marathon Petroleum Netherlands, Ltd. 12,675,404 19,709,480
LL&E (Netherlands), Inc. 12,675,404 19,709,480
Foreign currency translation adjustment (Note 5) 14,003,789 14,003,789
Total partners' capital 39,354,597 53,422,749
$ 195,257,508 $ 211,754,632
See Accompanying Notes To Consolidated Financial Statements
/TABLE
<PAGE>
<PAGE>
<TABLE>
MARALOU NETHERLANDS PARTNERSHIP
Consolidated Statements of Income
Years Ended December 31, 1993, 1992 and 1991
(Expressed in U.S. Dollars)
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Revenues:
Sales $ 61,152,082 $ 82,902,883 $ 111,883,626
Interest income 4,465,502 2,722,500 2,873,994
Total revenues 65,617,584 85,625,383 114,757,620
Costs and expenses:
Costs and operating expenses 12,349,387 17,514,115 17,435,375
Exploration expenses, including dry
hole costs (Note 11) 3,336,263 3,981,650 2,975,337
Depletion, amortization and
depreciation 14,100,833 15,424,731 16,702,440
General and administrative expenses
(Note 11) 4,950,135 5,522,838 5,332,698
Royalty expense 960,585 2,419,101 2,983,663
Net profits interest (Note 10) 336,356 1,202,888 1,259,829
Interest expense 7,222,385 7,983,685 7,271,586
Foreign exchange loss/(gain) (763,957) (53,951) 392,044
Reimbursement of exploration costs,
including interest (Note 11) - 263,056 -
Total costs and expenses 42,491,987 54,258,113 54,352,972
Income before income taxes 23,125,597 31,367,270 60,404,648
Provision for income taxes (Note 4) 12,192,472 17,524,381 30,264,968
Income after income taxes 10,933,125 13,842,889 30,139,680
Minority interest (Note 1) 797,688 1,665,693 157,226
Income before cumulative effect of
change in accounting principle 10,135,437 12,177,196 29,982,454
Cumulative effect of change in
accounting principle for income
taxes (Note 4) 6,003,589 - -
Net income $ 4,131,848 $ 12,177,196 $ 29,982,454
See Accompanying Notes To Consolidated Financial Statements
</TABLE>
<PAGE>
<PAGE>
<TABLE> MARALOU NETHERLANDS PARTNERSHIP
Consolidated Statements of Partners' Capital
Years Ended December 31, 1993, 1992 and 1991
(Expressed in U.S. Dollars)
<CAPTION>
Marathon
Petroleum L.L.&E.
Netherlands, Inc. (Netherlands), Inc. Total
<S> <C> <C> <C>
Capital, January 1, 1993 $19,709,480 $19,709,480 $39,418,960
Net income 2,065,924 2,065,924 4,131,848
Distribution to Partners (9,100,000) (9,100,000) (18,200,000)
Capital before adjustments $12,675,404 $12,675,404 $25,350,808
Foreign currency translation
adjustment 14,003,789
Capital, December 31, 1993 $39,354,597
</TABLE>
<TABLE>
<CAPTION>
Marathon
Petroleum L.L.&E.
Netherlands, Inc. (Netherlands), Inc. Total
<S> <C> <C> <C>
Capital, January 1, 1992 $20,470,882 $20,470,882 $ 40,941,764
Net income 6,088,598 6,088,598 12,177,196
Distribution to Partners (6,850,000) (6,850,000) (13,700,000)
Capital before adjustments $19,709,480 $19,709,480 39,418,960
Foreign currency translation
adjustment 14,003,789
Capital, December 31, 1992 $ 53,422,749
</TABLE>
(Continued)
<PAGE>
<PAGE>
<TABLE>
MARALOU NETHERLANDS PARTNERSHIP
Consolidated Statements of Partners' Capital (Continued)
Years Ended December 31, 1993, 1992 and 1991
(Expressed in U.S. Dollars)
<CAPTION>
Marathon
Petroleum L.L.&E.
Netherlands, Inc. (Netherlands), Inc. Total
<S> <C> <C> <C>
Capital, January 1, 1991 $13,749,858 $13,749,858 $27,499,716
Net income 14,991,227 14,991,227 29,982,454
Capital Contribution 10,229,797 10,229,797 20,459,594
Distribution to Partners (18,500,000) (18,500,000) (37,000,000)
Capital before adjustments $20,470,882 $20,470,882 40,941,764
Foreign currency translation
adjustment 14,003,789
Capital, December 31, 1991 $54,945,553
See Accompanying Notes To Consolidated Financial Statements
/TABLE
<PAGE>
<PAGE>
<TABLE>
MARALOU NETHERLANDS PARTNERSHIP
Consolidated Statements of Cash Flows
Years Ended December 31, 1993, 1992 and 1991
(Expressed in U.S. Dollars)
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Cash flows from operating activities:
Net income accruing to MaraLou partners $ 4,131,848 $ 12,177,196 $ 29,982,454
Net (loss)/income accruing to minority
shareholders, net of cash distributions (1,022,312) 295,694 157,226
Adjustments to reconcile net income to
net cash provided by operating activities:
Depletion, amortization, depreciation
and abandonment 14,668,271 16,280,290 20,130,591
Dry hole costs 1,325,018 2,523,479 687,256
Deferred income taxes (7,951,542) 2,511,807 1,300,000
Exchange loss (gain) (175,868) (127,738) 575,469
Interest on EBN repayment 665,428 1,076,991 797,326
Cumulative effect of change in accounting
principle 6,003,589 - -
Decrease (increase) in accounts
receivable 2,175,071 943,544 (5,024,650)
Increase in accounts receivable - net
profits (326,001) - -
Decrease (increase) in materials and
supplies (65) 69 (6,914)
Decrease (increase) in other current
assets (161,390) (380,539) 102,260
Decrease (increase) in deferred charges 18,201 (240,457) 5,127
(Decrease) increase in accounts
payable-affiliates (6,535) 5,077 (9,943)
(Decrease) increase in accounts
payable-net profits (228,091) 20,517 (58,967)
Increase (decrease) in accrued
liabilities 677,612 (123,115) (42,673)
Increase (decrease) in amounts due to
operator of joint venture 4,676,131 (2,462,784) (226,976)
(Decrease) increase in government
royalties payable (865,267) (869,050) 557,026
(Decrease) increase in income taxes
payable 8,415,273 (3,489,638) (3,055,851)
Net cash provided by operating
activities $ 32,019,371 $ 28,141,343 $ 45,868,761
Cash flows from investing activities:
Capital expenditures $ (9,973,617)$(20,034,768) $(22,572,339)
Net cash used in investing activities (9,973,617) (20,034,768) (22,572,339)
</TABLE>
(Continued)
<PAGE>
<PAGE>
<TABLE>
MARALOU NETHERLANDS PARTNERSHIP
Consolidated Statements of Cash Flows (Continued)
Years Ended December 31, 1993, 1992 and 1991
(Expressed in U.S. Dollars)
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Cash flows from financing activities:
Borrowing under revolving credit
agreement $ - $ - $ 6,000,000
Repayments under revolving credit
agreement (10,000,000) (6,000,000) (200,000)
Borrowings from other bank sources - - 6,000,000
Repayments to other bank sources - - (6,000,000)
Reduction of note receivable by minority
shareholders in CLAM - 5,629,000 6,000,000
Cash distribution to partners (18,200,000) (13,700,000) (37,000,000)
Net cash used in financing activities (28,200,000) (14,071,000) (25,200,000)
Effect of exchange rate on cash (854,829) 1,010,031 (204,671)
Net decrease in cash and cash equivalents (7,009,075) (4,954,394) (2,108,249)
Cash and cash equivalents at beginning of
year $ 18,485,764 $ 23,440,158 $ 25,548,407
Cash and cash equivalents at end of year $ 11,476,689 $ 18,485,764 $ 23,440,158
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest $ 5,543,844 $ 5,224,193 $ 6,980,086
Foreign taxes 13,746,175 17,125,660 29,076,627
Federal taxes (1,155,157) 2,345,247 3,525,000
Supplemental schedule of noncash investing and financing activities:
Contribution of North Sea license
interests by LL&E Netherlands
Petroleum Company $ - $ - $ 11,629,000
Note receivable-Marathon Petroleum
Netherlands, Ltd. for purchase of
newly issued shares of CLAM stock - - 5,629,000
Long-term receivable for EBN
reimbursement (321,870) 1,327,240 4,614,486
Accrued liability established for
repayment to EBN (191,527) (2,334,052) (5,468,166)
See Accompanying Notes To Consolidated Financial Statements
</TABLE>
<PAGE>
<PAGE>
MARALOU NETHERLANDS PARTNERSHIP
Notes to Consolidated Financial Statements
December 31, 1993, 1992 and 1991
1. Organization and summary of significant accounting policies
Organization and ownership:
MaraLou Netherlands Partnership (MaraLou), a Texas general
partnership, was formed on March 27, 1985 by LL&E
(Netherlands), Inc. (LL&E Netherlands) and Marathon Petroleum
Netherlands, Ltd. (Marathon Netherlands) for the purpose of
owning their interests in CLAM Petroleum Company (CLAM) and
for the purpose of purchasing the outstanding shares of CLAM
held by Netherlands-Cities Services, Inc. On March 27, 1985
both partners agreed to contribute their respective ten
thousand shares of CLAM to MaraLou. These shares were
transferred to MaraLou on June 21, 1985. The remaining shares
held by Netherlands-Cities Services, Inc. were acquired by
MaraLou for $85,381,881 on March 29, 1985. The acquisition
has been accounted for using the purchase method of accounting
effective January 1, 1985.
On December 6, 1991 an agreement was concluded whereby LL&E
Netherlands Petroleum Company, an affiliated company to LL&E
Netherlands - both of which are wholly owned subsidiaries of
Louisiana Land and Exploration Company, contributed
Netherlands North Sea license interests and other assets
valued at $11,629,000 for five hundred newly issued shares of
CLAM stock. For financial reporting purposes, the
contribution made by LL&E Netherlands Petroleum Company in
excess of its calculated minority interest is reflected in
Partners' capital as an addition to the LL&E Netherlands
capital balance. MaraLou made a cash contribution of
$11,629,000 for an additional five hundred newly issued shares
of CLAM stock. The contributed cash is to be used to develop
the North Sea license interest contributed by LL&E Netherlands
Petroleum Company. MaraLou subsequently sold all of its newly
issued shares of CLAM stock to Marathon Netherlands, a partner
in MaraLou, which purchased the shares with a note valued at
$11,629,000, on which $6,000,000 was paid in 1991 and
$6,000,000, inclusive of interest, was paid in 1992. These
newly issued shares of CLAM stock have been pledged as
security for MaraLou and CLAM's revolving credit agreement
(see Note 6).
CLAM Petroleum Company, a Delaware Corporation, was formed in
October 1975 by LL&E Netherlands, Marathon Netherlands and
Netherlands-Cities Service, Inc. (stockholders) for the
purpose of owning their interest in certain licenses and
agreements covering hydrocarbon operations in The Netherlands
and for the purpose of entering into agreements with lending
institutions to finance such interest. Effective May 24, 1976
the stockholders assigned their interests and obligations
under the licenses and related agreements to CLAM. CLAM has
no operations outside the oil and gas industry or in areas
other than The Netherlands North Sea.<PAGE>
<PAGE>
The financial statements reflect the consolidation of CLAM
Petroleum Company (the Company) with MaraLou for the period
from January 1, 1985. The financial statements also reflect
the interests and earnings of the minority shareholders, LL&E
Netherlands Petroleum Company and Marathon Netherlands.
Currently, MaraLou has no interests other than in the
operation of CLAM.
Cash equivalents:
Cash equivalents of $11,133,745, $18,721,023 and $23,638,318
at December 31, 1993, 1992 and 1991 respectively, consist of
Eurodollar and Euroguilder investments. For purposes of the
statements of cash flows, MaraLou considers all highly liquid
debt instruments with original maturities of three months or
less to be cash equivalents.
Joint venture agreements:
CLAM, together with unrelated parties, has interests in
certain prospecting and production licenses and related
operating agreements which provide for the joint conduct of
seismic, geological, exploration and development activities on
the continental shelf of The Netherlands. The accompanying
financial statements include CLAM's share of operations as
reported to it by the operator of the joint venture. The
amounts reported by the operator of the joint venture are
subject to an annual audit by the non-operators. The audit
for the year 1992 has been conducted with the non-operators
awaiting the operator's initial response to the audit report.
Petroleum exploration and development costs:
CLAM follows the successful efforts method of accounting for
oil and gas properties. Exploration expenses, including
geological and geophysical costs, prospecting costs, carrying
costs and exploratory dry hole costs are charged against
income as incurred. The acquisition costs of unproved
properties are capitalized with appropriate provision for
impairment based upon periodic assessments of such properties.
All development costs, including development dry hole costs,
are capitalized. Capitalized costs are adjusted annually for
cash adjustments relating to changes in CLAM's share in gas
reserve estimates (see Note 7).
Depletion, amortization and depreciation:
Depletion is provided under the unit-of-production method
based upon estimates of proved developed reserves.
Depreciation is based on estimated useful life. Reserve
determinations are management's best estimates and generally
are related to economic and operating conditions. Depletion
and depreciation rates are adjusted for future estimated
salvage values.
CLAM property, plant and equipment retirements:
Upon sale or retirement of property, plant and equipment, the
cost and related accumulated depletion, amortization and
depreciation are eliminated from the accounts and the gain or
loss is reflected in income.
<PAGE>
<PAGE>
CLAM platform abandonment amortization:
Platform abandonment amortization is provided under the unit-
of-production method based upon estimates of proved-developed
reserves. Amortization rates are adjusted for future
estimated abandonment costs. Platform abandonment
amortization is charged to operating expense.
2. Related party transactions
CLAM transactions with related parties consisted of charges
for geological, geophysical and administrative services
rendered by an affiliate under two service contracts and
administrative services rendered by another affilate. Such
charges were approximately $2,512,536, $2,530,608 and
$2,267,479 for 1993, 1992 and 1991, respectively. Salaries
and related social charges included therein amounted to
$1,685,046, $1,858,876 and $1,512,633 for 1993, 1992 and 1991,
respectively.
MaraLou transactions with related parties consisted of charges
for administrative services rendered by an affiliate amounting
to $55,800, $58,200 and $57,600 in 1993, 1992 and 1991,
respectively.
3. Property, plant and equipment
Changes in property, plant and equipment for the years ended
December 31, 1993, 1992 and 1991 are as follows (in thousands
of U.S. dollars):
<TABLE>
<CATION>
Balance Additions Dry Hole Balance
12/31/92 (Reductions) Costs 12/31/93
<S> <C> <C> <C> <C>
Concession $ 12,231 $ (553) $ - $ 11,678
Well and platforms 246,086 16,053 - 262,139
Incomplete construction 11,985 (8,707) - 3,278
Uncompleted wells 17,245 1,720 (1,325) 17,640
Pipelines 48,403 36 - 48,439
Gas processing facilities 3,952 1,422 - 5,374
Furniture and fixtures 1,113 3 - 1,116
$ 341,015 $ 9,974 $ (1,325) $ 349,664
Depletion and amortization $ 169,631 $ 14,014 $ - $ 183,645
Depreciation-furniture and
fixtures 945 87 - 1,032
$ 170,576 $ 14,101 $ - $ 184,677
Net property, plant
and equipment $ 170,439 $ 164,987
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Balance Additions Dry Hole Balance
12/31/91 (Reductions) Costs 12/31/92
<S> <C> <C> <C> <C>
Concession $ 12,231 $ - $ - $ 12,231
Wells and platforms 233,339 12,747 - 246,086
Incomplete construction 15,039 (3,054) - 11,985
Uncompleted wells 15,228 4,540 (2,523) 17,245
Pipelines 42,847 5,556 - 48,403
Gas processing facilities 3,751 201 - 3,952
Furniture and fixtures 1,070 43 - 1,113
$ 323,505 $ 20,033 $ (2,523) $ 341,015
Depletion and amortization $ 154,292 $ 15,339 $ - $ 169,631
Depreciation-furniture and
fixtures 860 85 - 945
$ 155,152 $ 15,424 $ - $ 170,576
Net property, plant
and equipment $ 168,353 $ 170,439
</TABLE>
<TABLE>
<CAPTION>
Balance Additions Dry Hole Balance
12/31/90 (Reductions) Costs 12/31/91
<S> <C> <C> <C> <C>
Concession $ 602 $ 11,629 $ - $ 12,231
Wells and platforms 206,443 26,896 - 233,339
Incomplete construction 8,540 6,499 - 15,039
Uncompleted wells 29,679 (13,764) (687) 15,228
Pipelines 40,216 2,631 - 42,847
Gas processing facilities 3,634 117 - 3,751
Furniture and fixtures 744 326 - 1,070
$ 289,858 $ 34,334 $ (687) $ 323,505
Depletion and amortization $ 137,625 $ 16,667 $ - $ 154,292
Depreciation-furniture and
fixtures 692 168 - 860
$ 138,317 $ 16,835 $ - $ 155,152
Net property, plant
and equipment $ 151,541 $ 168,353
</TABLE>
<PAGE>
<PAGE>
4. Federal and foreign income taxes
MaraLou is a partnership and, therefore, does not pay income
taxes. Since CLAM (wholly owned by MaraLou) is a corporation,
income taxes included in the accompanying consolidated
financial statements have been determined utilizing applicable
domestic and foreign tax rates.
The FASB has issued Statement of Financial Accounting Standard
(SFAS) No. 109, "Accounting for Income Taxes" which superseded
SFAS No. 96. "Accounting for Income Taxes." The adoption of
SFAS 109 caused an additional deferred income tax liability of
$6,003,589 as of January 1, 1993, which has been recorded as
a cumulative effect of change in accounting principle. Prior
year consolidated financial statements have not been adjusted
and are based on SFAS No. 96.
SFAS 109 requires a change from the deferred method of
accounting for income taxes to the asset and liability method.
Under the new method, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to
differences between the financial statements carrying amounts
of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using
enacted tax rates applicable to those years in which the
temporary differences between financial statement carrying
amounts and tax bases are expected to be recovered or settled.
The effect of a change in tax rates on deferred tax assets and
liabilities is recognized in income in the period when the
change is enacted.
Under the deferred method of accounting for income taxes which
was applied in 1992 and prior years, deferred income taxes
applicable to each year's net temporary differences were
provided based on the tax rates in effect during that year and
no adjustments were made to the deferred income tax liability
amounts for subsequent changes in tax rates.
Dutch investment incentive premiums (WIR) are credited to
foreign income tax in the year in which they are claimed.
CLAM incurred WIR premium expense of $60,331 and $371,771 in
1993 and 1992, respectively.
<PAGE>
<PAGE>
Details of federal and foreign income taxes (in thousands of
U.S. dollars) are as follows:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Current tax expense:
Federal $(2,471) $ 1,063 $ 2,189
Foreign 22,615 13,950 26,776
Deferred tax expense (benefit):
Federal (2,544) (2,800) 1,300
Foreign (5,408) 5,311 -
Total provision for income taxes $12,192 $ 17,524 $30,265
</TABLE>
Total income tax expense differed from the amounts computed by
applying the U.S. Federal income tax rate of 35 and 34 percent
for 1993 and 1992, respectively, to income before income taxes
of CLAM as a result of the following (in thousands of U.S.
dollars):
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Computed "expected" tax expense $ 8,094 $ 12,188 $22,392
Increase (reduction) in income taxes
resulting from:
Foreign tax greater than federal
income tax 5,651 2,668 6,176
Increase in deferred tax valuation
allowance 1,452 2,328 1,300
Carryback of foreign tax credits (3,629) - -
Other 624 340 397
Provision for income taxes $ 12,192 $ 17,524 $30,265
</TABLE>
<PAGE>
<PAGE>
Temporary differences between the financial statement carrying
amounts and tax bases of assets and liabilities that give rise
to significant portions of the deferred tax assets and
liabilities at December 31, 1993 and 1992 relate to the
following (in thousands of U.S. dollars):
<TABLE>
<CAPTION>
U.S. - Deferred 1993 1992
<S> <C> <C>
Deferred Tax Assets:
Foreign tax credit carryover $ 3,805 $ -
Benefit for foreign deferred taxes 6,199 -
Abandonment accrual 7,151 -
Valuation allowance (8,860) -
Other, net - 427
Total deferred tax assets $ 8,295 $ 427
Deferred Tax Liabilities:
Property, plant and equipment differences
in depreciation and amortization $ 20,932 $ 16,622
Total deferred tax liabilities $ 20,932 $ 16,622
Total U.S. - deferred $ 12,637 $ 16,195
</TABLE>
<TABLE>
<CAPTION>
Foreign State Profit Share - Deferred
<S> <C> <C>
Deferred Tax Assets:
Abandonment accrual $ 4,769 $ -
Morgan loan currency revaluation 5,287 -
Valuation allowance (3,292) -
Total deferred tax assets $ 6,764 $ -
Deferred Tax Liabilities:
Property, plant and equipment differences
in depreciation and amortization $ 12,899 $ 5,234
Total deferred tax liabilities $ 12,899 $ 5,234
Total Foreign State Profit Share - deferred $ 6,135 $ 5,234
</TABLE>
The Company's 1993 and 1992 current tax liability was
determined on a regular tax basis.
The amount of unused foreign tax credit carryforward available
on an alternative minimum tax (AMT) basis was $23,354,336 at
December 31, 1993. The carryforward expires $5,660,000 in
1994, $5,417,000 in 1995, $5,117,000 in 1996, $3,355,000 in
1997 and $3,805,000 in 1998. The Company did not pay any AMT
in 1992 or 1993.
<PAGE>
<PAGE>
5. CLAM foreign currency translation adjustment
As of January 1, 1983 CLAM adopted Statement of Financial
Accounting Standards No. 52, "Foreign Currency Translation"
(SFAS No. 52), under which the functional currency is deemed
to be the Dutch guilder. Effective January 1, 1987 CLAM
changed its functional currency from the Dutch guilder to the
U.S. dollar. The change was precipitated by the significant
effect on CLAM's operation of a new dollar-driven gas sales
contract which was effective January 1, 1987 and the Tax
Reform Act of 1986. In accordance with SFAS No 52 there is no
restatement of prior years' financial statements and the
translated amounts for nonmonetary assets as of December 31,
1986 have become the accounting basis for those assets in the
year of the change.
6. Debt
On July 25, 1985 MaraLou and CLAM entered into a revolving
credit agreement, which was amended and restated as of June
19, 1992, with a syndicate of major international banks to
fund the purchase by MaraLou of CLAM shares previously owned
by Netherlands-Cities Service, Inc. and to provide working
capital for CLAM. The banks' total commitment as of
December 31, 1993 and December 31, 1992 was $110,000,000.
Interest is paid, at the borrower's option, based on the prime
rate, the London Interbank Offered Rate (LIBOR), or an
adjusted CD rate. A contractual margin is added to LIBOR and
CD based borrowings. The all-in interest rates for CLAM for
December 31, 1993 and December 31, 1992 were 3.9375% and
4.125%, respectively. During the revolving credit period, the
borrowers are obligated to pay a commitment fee of 1/4% on the
unused committed portion of the facility. All of the CLAM
common stock held by MaraLou has been pledged as security for
the facility. In addition, under certain circumstances
MaraLou can exercise an option to purchase the shares held by
LL&E Netherlands Petroleum Company and Marathon Petroleum
Netherlands, Ltd. for a nominal amount. The option agreement
has been assigned to the banks as security for the facility.
The credit agreement permits CLAM and MaraLou to incur total
debt up to an agreed borrowing base which at December 31, 1993
and December 31, 1992 was $145,000,000. The agreement
provides that the borrowing base is reduced periodically over
the term of the facilty which is currently scheduled to expire
on January 1, 2000. The borrowing base and the scheduled
reductions may be adjusted based on a redetermination of the
net present value of the projections of certain cash flows
included in an Engineering Report prepared by petroleum
engineers.
The outstanding balances for MaraLou and CLAM, respectively,
were $-0- and $87,800,000, at December 31, 1993 of which $-0-
was due within one year. The outstanding balances for MaraLou
and CLAM, respectively, were $-0- and $97,800,000 at
December 31, 1992. At December 31, 1993, the required
<PAGE>
<PAGE>
reductions to the borrowing base in each of the next five
years are $-0- in 1994, $-0- in 1995, $-0- in 1996,
$19,800,000 in 1997, $30,000,000 in 1998 and $38,000,000
thereafter.
CLAM has an unsecured combined short-term loan and overdraft
facility of Dfl. 80,000,000 ($41,152,263 at year-end exchange
rate). On December 31, 1993 and December 31, 1992 the
outstanding balances relating to this facility were $-0-.
Interest rates are determined at the time borrowings are made.
7. Annual evaluation of gas reserves
Under the provisions of the Joint Development Operating
Agreement to which CLAM is a party, an annual estimate of gas
reserves is to be made and agreed upon by the Area Management
Committee. Based upon such estimate, each participant's
investment in the area properties, as defined, is to be
adjusted so that a participant's investment is in proportion
to its interest in the remaining reserves. Adjustments to the
investments are made in cash in the year following the date
the reserve revision is agreed upon.
In 1992, the Area Management Committee agreed to freeze each
participant's interest through 1994, at the level agreed upon
in 1992. A new gas reserve estimate will be agreed upon in
1995.
8. Reserves of oil and gas (unaudited)
CLAM's share of proven gas reserves at January 1, 1994 and
1993 are 317,737 MMCF and 343,432 MMCF, respectively.
9. Major customer
CLAM has one major customer from which it derives 98% of its
sales revenue. CLAM was required under its production license
to offer its production first to this customer, which is
partially owned by The Netherlands government.
Unitization and natural gas sales agreements were executed
July 29, 1987 for the K12 - K15 "B" structure. CLAM is a K15
Block participant, however this property is operated by a K12
Block participant. This gas is also sold to the major
customer.
10. Net profits interest agreement
CLAM entered into an agreement dated November 1, 1981 which
requires CLAM to pay a portion of its net profits ("net
profits interest") to an unrelated party in exchange for a
7-1/2% participation interest in certain blocks. The "net
profits interest" is equal to one twenty-fourth (1/24) of
CLAM's revenues from the contract area, after various
deductions, as defined in the agreement.
<PAGE>
<PAGE>
11. Issuance of production licenses
In March 1990, a production license was granted by the
Minister of Economics Affairs of the Netherlands covering the
L12a and L12b/L15b blocks. As a result, the Dutch Government,
through Energie Beheer Nederland (EBN) (a Dutch company
wholly-owned by the Dutch Government) exercised its option to
participate 40% in the L12a block and 50% in the L12b/L15b
block. CLAM was subsequently reimbursed $10,628,572 during
1990, all of which was included in income because there were
costs associated with these blocks which had been written-off
in prior years. Components of the reimbursement were:
Exploration well cost (previously
written off as dry wells) $ 5,595,076
Exploration administrative expense 1,818,220
Interest 3,215,276
Total reimbursement $10,628,572
In 1991, it was determined that the portion of the above noted
reimbursement allocable to trapping unit L12-FC, within blocks
L12b/l15b, would be refunded to EBN as production on this
trapping unit is not expected to commence within the 48-month
requirement stipulated by the contractual agreement with EBN
(the Agreement). The refundable amount, which CLAM expects to
repay in 1994, was recorded as a long-term receivable of $3.6
million, interest expense of $1.5 million and an accrued
liability of $5.1 million. The Agreement calls for EBN to
reimburse the funds to CLAM net of interest upon first
production from trapping unit L12-FC, which is expected to
occur in 1997.
In 1992, it was determined that the portion of the above noted
reimbursement allocable to trapping units L12-FA and L12-FB,
within blocks L12a and L12b/L15b, would be refunded to EBN as
production on these trapping units are not expected to
commence within the 48-month requirement stipulated by the
Agreement. The refundable amount for L12-FA and L12-FB, which
CLAM expects to repay in 1994, was recorded as a long-term
receivable of $0.5 and $1.6 million, respectively, interest
expense $0.2 million and $0.6 million, respectively and an
accrued liability of $0.7 million and $2.2 million
respectively. The Agreement calls for EBN to reimburse the
respective funds to CLAM net of interest upon first production
from trapping units L12-FA and L12-FB, which is expected to
occur in 2000 and 1998, respectively.
<PAGE>
<PAGE>
12. Disclosures about fair value of financial instruments
Cash and Cash Equivalents, Receivables, Due from Operator of
Joint Venture, Due to Affiliated Company, Accounts Payable,
and Due to Operator of Joint Venture
- The carrying amount approximates fair value because of
the short maturity of these instruments.
Long-Term Receivable
- The estimated fair value of the Company's long-term
receivable is as follows (in thousands of U.S. Dollars):
At December 31, 1992
Carrying Estimated
Amount Fair Value
Long-term receivable $5,620 $3,681
The fair value of the long-term receivable was based on
discounted cash flows.
Long-Term Debt Due to Banks
- The carrying amount approximates fair value because of
the variable rate of interest associated with this debt.
<PAGE>
<PAGE>
Independent Auditors' Report
The Board of Directors and Stockholders
The Louisiana Land and Exploration Company:
Under date of February 9, 1994, we reported on the consolidated
balance sheets of The Louisiana Land and Exploration Company and
subsidiaries as of December 31, 1993 and 1992, and the related
consolidated statements of earnings (loss), stockholders' equity,
and cash flows for each of the years in the three-year period ended
December 31, 1993, as contained in the Annual Report to
Shareholders for 1993. As discussed in Notes 11 and 12 to the
consolidated financial statements, the Company adopted the methods
of accounting for income taxes and postretirement benefits other
than pensions prescribed by Statements of Financial Accounting
Standards Nos. 109 and 106, respectively. These consolidated
financial statements and our report thereon are incorporated by
reference in the Annual Report on Form 10-K for the year 1993. In
connection with our audits of the aforementioned consolidated
financial statements, we also audited the related consolidated
financial statement Schedules V, VI and X. These financial
statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statement schedules based on our audits.
In our opinion, such financial statement schedules, when considered
in relation to the basic consolidated financial statements taken as
a whole, present fairly, in all material respects, the information
set forth therein.
/s/ KPMG Peat Marwick
KPMG Peat Marwick
New Orleans, Louisiana
February 9, 1994
<PAGE>
<PAGE>
<TABLE>
Item 14(a)(2)
SCHEDULE V
THE LOUISIANA LAND AND EXPLORATION COMPANY
AND SUBSIDIARIES
Property, Plant and Equipment
Years Ended December 31, 1993, 1992 and 1991
(Millions of dollars)
<CAPTION>
Balance at Balance
beginning Additions Retire- Other changes* at end
Classification of period at cost ments Add Deduct of period
_______________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Year ended December 31, 1993:
Petroleum properties:
Proved $1,988.2 108.1 116.4 551.4 - 2,531.3
Unproved 78.1 52.3 21.3 56.6 38.2 127.5
Refining and marketing 205.0 18.4 - .1 4.8 218.7
_______________________________________________________________________________________
2,271.3 178.8 137.7 608.1 43.0 2,877.5
Other properties 59.3 3.5 .1 6.7 .4 69.0
_______________________________________________________________________________________
$2,330.6 182.3 137.8 614.8 43.4 2,946.5
_______________________________________________________________________________________
Year ended December 31, 1992:
Petroleum properties:
Proved 1,957.0 110.6 140.1 60.7 - 1,988.2
Unproved 111.5 47.2 32.0 - 48.6 78.1
Refining and marketing 174.6 27.6 .2 3.0 - 205.0
_______________________________________________________________________________________
2,243.1 185.4 172.3 63.7 48.6 2,271.3
Other properties 56.3 4.4 .5 - .9 59.3
_______________________________________________________________________________________
$2,299.4 189.8 172.8 63.7 49.5 2,330.6
_______________________________________________________________________________________
Year ended December 31, 1991:
Petroleum properties:
Proved 1,832.1 94.6 2.7 33.0 - 1,957.0
Unproved 130.0 74.3 59.8 - 33.0 111.5
Refining and marketing 158.6 15.5 (.5) - - 174.6
_______________________________________________________________________________________
2,120.7 184.4 62.0 33.0 33.0 2,243.1
Other properties 52.0 4.8 .5 - - 56.3
_______________________________________________________________________________________
$2,172.7 189.2 62.5 33.0 33.0 2,299.4
_______________________________________________________________________________________
* Principally transfers between accounts except for:
"Other changes - Add" in the year ended December 31, 1993 which includes the acquisitions
of oil and gas properties (see Note 2 of "Notes to Consolidated Financial Statements")
as follows: Proved - $508.2; Unproved - $56.6.
"Other changes - Add" in the year ended December 31, 1992 which includes $14.2 million
of deferred Federal income taxes attributed to the cost of certain acquired proved
properties as a result of differences between their assigned values and their Federal
income tax bases.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
Item 14(a)(2)
SCHEDULE VI
THE LOUISIANA LAND AND EXPLORATION COMPANY
AND SUBSIDIARIES
Accumulated Depletion, Depreciation and Amortization
Years Ended December 31, 1993, 1992 and 1991
(Millions of dollars)
<CAPTION>
Net
Additions retire-
Balance at charged ments Balance
beginning to (impair- Other changes* at end
Classification of period expense ment) Add Deduct of period
_______________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Year ended December 31, 1993:
Petroleum properties:
Proved $1,204.7 113.5 97.5 - - 1,220.7
Unproved 12.0 - 1.0 - - 11.0
Refining and marketing 107.1 6.5 - - - 113.6
_______________________________________________________________________________________
1,323.8 120.0 98.5 - - 1,345.3
Other properties 32.6 6.4 (1.2) - - 40.2
_______________________________________________________________________________________
$1,356.4 126.4 97.3 - - 1,385.5
_______________________________________________________________________________________
Provisions for dismantle-
ment $ 29.3 3.4 - 4.3 1.3 35.7
_______________________________________________________________________________________
Year ended December 31, 1992:
Petroleum properties:
Proved $1,165.0 94.8 55.0 1.8 1.9 1,204.7
Unproved 16.0 - 2.4 - 1.6 12.0
Refining and marketing 101.0 4.9 - 1.2 - 107.1
_______________________________________________________________________________________
1,282.0 99.7 57.4 3.0 3.5 1,323.8
Other properties 27.5 4.9 .3 .7 .2 32.6
_______________________________________________________________________________________
$1,309.5 104.6 57.7 3.7 3.7 1,356.4
_______________________________________________________________________________________
Provisions for dismantle-
ment $ 27.4 1.9 - - - 29.3
_______________________________________________________________________________________
Year ended December 31, 1991:
Petroleum properties:
Proved 1,066.9 105.1 8.3 1.3 - 1,165.0
Unproved 21.2 - 3.9 - 1.3 16.0
Refining and marketing 94.7 5.8 (.5) - - 101.0
_______________________________________________________________________________________
1,182.8 110.9 11.7 1.3 1.3 1,282.0
Other properties 22.6 3.9 (1.0) - - 27.5
_______________________________________________________________________________________
$1,205.4 114.8 10.7 1.3 1.3 1,309.5
_______________________________________________________________________________________
Provisions for dismantle-
ment $ 25.9 1.5 - - - 27.4
_______________________________________________________________________________________
* Principally transfers between accounts, except in the year ended December 31, 1993 where
"Other changes - Add/Deduct" in Provisions for Dismantlement represent provisions related
to property acquisitions and dispositions.
/TABLE
<PAGE>
<PAGE>
<TABLE>
Item 14(a)(2)
SCHEDULE X
THE LOUISIANA LAND AND EXPLORATION COMPANY
AND SUBSIDIARIES
Supplementary Earnings Statement Information
Years Ended December 31, 1993, 1992 and 1991
(Millions of dollars)
<CAPTION>
1993 1992 1991
_______________________________________________________________________________________
<S> <C> <C> <C>
Maintenance and repairs $ 19.9 19.3 24.3
_______________________________________________________________________________________
Taxes, other than income taxes:
Oil and gas severance and excise 16.9 16.4 16.6
Property 3.2 3.4 3.5
Payroll 3.0 2.8 2.7
Franchise 1.7 1.8 1.7
_______________________________________________________________________________________
$ 24.8 24.4 24.5
_______________________________________________________________________________________
</TABLE>
<PAGE>
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
AND SUBSIDIARIES
Index to Exhibits
(Item 14(a)(3))
The following Exhibits have been filed with the Securities and
Exchange Commission:
Exhibit 2.1 Stock Purchase Agreement, dated as of July 18,
1993, between NERCO, Inc. and The Louisiana Land
and Exploration Company (excluding the schedules
thereto, which will be made available to the
Securities and Exchange Commission upon request).
(Incorporated by reference to Exhibit 2.1 to the
Registrant's Current Report on Form 8-K dated
September 2, 1993, as amended, Commission File No.
1-959.).
Exhibit 2.2 Sale and Purchase Agreement, dated as of August 19,
1993, between British Gas Exploration and
Production Limited and LL&E (U.K.) Inc. (excluding
the schedules thereto, which will be made available
to the Securities and Exchange Commission upon
request). (Incorporated by reference to Exhibit
2.2 to the Registrant's Current Report on Form 8-K
dated September 2, 1993, as amended, Commission
File No. 1-959.).
Exhibit 2.3 Amendment, dated October 12, 1993, to Sale and
Purchase Agreement in Exhibit 2.2 herein.
Exhibit 3(a) Certificate of Incorporation (Incorporated by
reference to Exhibit 1-3(a) to the Registrant's
Registration Statement No. 2-45541 on Form S-1);
Articles Supplementary pursuant to Section 3-
603(d)(4) of the Maryland General Corporation Law
(Incorporated by reference to Exhibit 3(b) to the
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1983 - Commission File No.
1-959); Articles of Amendment of Charter dated May
30, 1985 (Incorporated by reference to Exhibit 3(b)
to the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1985 - Commission File
No. 1-959.); Articles of Amendment of Charter dated
May 12, 1988 (Incorporated by reference to Exhibit
3(c) to the Registrant's Form 8 dated April 24,
1989 - Commission File No. 1-959.).
Exhibit 3(b) By-Laws (Incorporated by reference to Exhibit (1)
to the Registrant's Current Report on Form 8-K
dated October 1, 1989 - Commission File No. 1-
959.).
(continued)<PAGE>
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
AND SUBSIDIARIES
Index to Exhibits (continued)
(Item 14(a)(3))
Exhibit 4(a) Rights Agreement dated as of May 25, 1986 among the
Registrant and The Bank of New York (as Rights
Agent) - (Incorporated by reference to Exhibit 4(a)
to the Registrant's Current Report on Form 8-K
dated May 25, 1986 - Commission File No. 1-959.).
Exhibit 4(b) Indenture dated as of June 15, 1992 among the
Registrant and Texas Commerce Bank National
Association (as Trustee) (Incorporated by reference
to Exhibit 4.1 to the Registrant's Registration
Statement No. 33-50991 on Form S-3, as amended.).
Exhibit 10(a) Form of Termination Agreement with Senior
Management Personnel (Incorporated by reference to
Exhibit 10(b) to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1982 -
Commission File No. 1-959.).
Exhibit 10(b) The Louisiana Land and Exploration Company 1982
Stock Option Plan as adopted (Incorporated by
reference to Exhibit A to the Registrant's
definitive Proxy Statement dated March 26, 1982)
and the amendment thereto dated December 8, 1982
(Incorporated by reference to Exhibit 10(c) to the
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1982 - Commission File No.
1-959.).
Exhibit 10(c) The Louisiana Land and Exploration Company 1988
Long-Term Stock Incentive Plan as amended
(Incorporated by reference to Exhibit A to the
Registrant's definitive Proxy Statement dated March
22, 1993).
Exhibit 10(d) Deferred Compensation Plan for Directors
(Incorporated by reference to Exhibit 10(d) to the
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1982 - Commission File No.
1-959.).
Exhibit 10(e) Pension Agreement, dated November 10, 1988
(Incorporated by reference to Exhibit 10(f) to the
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1988 - Commission File
No. 1-959.).
(continued)
<PAGE>
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
AND SUBSIDIARIES
Index to Exhibits (continued)
(Item 14(a)(3))
Exhibit 10(f) The Louisiana Land and Exploration Company 1990
Stock Option Plan for Non-Employee Directors as
adopted (Incorporated by reference to Exhibit A to
the Registrant's definitive Proxy Statement dated
March 26, 1990).
Exhibit 10(g) Form of The Louisiana Land and Exploration Company
Deferred Compensation Arrangement for Selected Key
Employees (Incorporated by reference to Exhibit
10(i) to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1990 -
Commission File No. 1-959.).
Exhibit 10(h) Retirement Plan for Directors of The Louisiana Land
and Exploration Company dated March 1, 1987
(Incorporated by reference to Exhibit 10(j) to the
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1990 - Commission File No.
1-959.).
Exhibit 10(i) The LL&E Special Termination Benefit Plan
(Incorporated by reference to Exhibit 10(j) to the
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1992 - Commission File No.
1-959.).
Exhibit 10(j) The LL&E Supplemental Excess Plan (Incorporated by
reference to Exhibit 10(k) to the Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1992 - Commission File No. 1-959.).
Exhibit 10(k) Form of Compensatory Benefits Agreement
(Incorporated by reference to Exhibit 10(l) to the
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1992 - Commission File No.
1-959.).
Exhibit 10(l) Amended and Restated Revolving Credit and Term Loan
Agreement dated as of September 22, 1993 among the
Registrant, the Banks listed therein, Morgan
Guaranty Trust Company of New York, as Agent, and
Texas Commerce Bank National Association and
NationsBank of Texas, N.A., as Co-Agents
(Incorporated by reference to Exhibit 10 to the
Registrant's Registration Statement No. 33-50161 on
Form S-3, as amended.).
(continued)
<PAGE>
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
AND SUBSIDIARIES
Index to Exhibits (continued)
(Item 14(a)(3))
Exhibit 11 Computation of Primary and Fully Diluted Earnings
(Loss) Per Share - Years Ended December 31, 1993,
1992 and 1991.
Exhibit 13 Annual Report to Shareholders for 1993.
Exhibit 21 Subsidiaries of the Registrant.
Exhibit 23 Consent of Experts.
Exhibit 24 Powers of Attorney.
Certain debt instruments have not been filed. The Company agrees
to furnish a copy of such agreement(s) to the Commission upon
request.
Reports on Form 8-K
Quarter Ended December 31, 1993
(Item 14(b))
A Current Report on Form 8-K was filed on September 2, 1993, Items
5 and 7 of which were amended on Form 8-K/A filed on October 7,
1993. A Current Report on Form 8-K dated October 29, 1993 was
filed containing the press release relating to the unaudited
financial results for the Registrant's fiscal quarter ended
September 30, 1993.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
THE LOUISIANA LAND AND EXPLORATION
COMPANY
(Registrant)
Date: February 18, 1994 By /s/ Frederick J. Plaeger, II
__________________________________
Frederick J. Plaeger, II
General Counsel and Corporate
Secretary
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
Date: February 18, 1994 *H. Leighton Steward
_____________________________________
H. Leighton Steward
Director, Chairman of the Board,
President and Chief Executive Officer
(Principal Executive Officer)
Date: February 18, 1994 *Leland C. Adams
_____________________________________
Leland C. Adams
Director
Date: February 18, 1994 *Richard A. Bachmann
_____________________________________
Richard A. Bachmann
Director, Executive Vice President,
Finance and Administration
(Principal Financial Officer)
Date: February 18, 1994 *John F. Greene
_____________________________________
John F. Greene
Director, Executive Vice President,
Exploration and Production
Date: February 18, 1994 *Eamon M. Kelly
_____________________________________
Eamon M. Kelly
Director
<PAGE>
<PAGE>
Date: February 18, 1994 *Victor A. Rice
_____________________________________
Victor A. Rice
Director
Date: February 18, 1994 *Orin R. Smith
_____________________________________
Orin R. Smith
Director
Date: February 18, 1994 *Arthur R. Taylor
_____________________________________
Arthur R. Taylor
Director
Date: February 18, 1994 *W. R. Timken, Jr.
_____________________________________
W. R. Timken, Jr.
Director
Date: February 18, 1994 *Carlisle A.H. Trost
_____________________________________
Carlisle A.H. Trost
Director
Date: February 18, 1994 *E. L. Williamson
_____________________________________
E. L. Williamson
Director
Date: February 18, 1994 *Jerry D. Carlisle
_____________________________________
Jerry D. Carlisle
Vice President and Controller
(Principal Accounting Officer)
*/s/ Frederick J. Plaeger, II
_________________________________________
Frederick J. Plaeger, II
General Counsel and Corporate Secretary
(As attorney-in-fact for each of the
persons indicated)
<PAGE>
<PAGE>
________________________________________________________________
________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
__________________________
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
__________________________
THE LOUISIANA LAND AND EXPLORATION COMPANY
(Exact name of registrant as specified in its charter)
EXHIBITS
________________________________________________________________
________________________________________________________________
<PAGE>
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
AND SUBSIDIARIES
Index to Exhibits
(Item 14(a)(3))
The following Exhibits have been filed with the Securities and
Exchange Commission:
Exhibit 2.1 Stock Purchase Agreement, dated as of July 18,
1993, between NERCO, Inc. and The Louisiana Land
and Exploration Company (excluding the schedules
thereto, which will be made available to the
Securities and Exchange Commission upon request).
(Incorporated by reference to Exhibit 2.1 to the
Registrant's Current Report on Form 8-K dated
September 2, 1993, as amended, Commission File No.
1-959.).
Exhibit 2.2 Sale and Purchase Agreement, dated as of August 19,
1993, between British Gas Exploration and
Production Limited and LL&E (U.K.) Inc. (excluding
the schedules thereto, which will be made available
to the Securities and Exchange Commission upon
request). (Incorporated by reference to Exhibit
2.2 to the Registrant's Current Report on Form 8-K
dated September 2, 1993, as amended, Commission
File No. 1-959.).
Exhibit 2.3 Amendment, dated October 12, 1993, to Sale and
Purchase Agreement in Exhibit 2.2 herein.
Exhibit 3(a) Certificate of Incorporation (Incorporated by
reference to Exhibit 1-3(a) to the Registrant's
Registration Statement No. 2-45541 on Form S-1);
Articles Supplementary pursuant to Section 3-
603(d)(4) of the Maryland General Corporation Law
(Incorporated by reference to Exhibit 3(b) to the
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1983 - Commission File No.
1-959); Articles of Amendment of Charter dated May
30, 1985 (Incorporated by reference to Exhibit 3(b)
to the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1985 - Commission File
No. 1-959.); Articles of Amendment of Charter dated
May 12, 1988 (Incorporated by reference to Exhibit
3(c) to the Registrant's Form 8 dated April 24,
1989 - Commission File No. 1-959.).
Exhibit 3(b) By-Laws (Incorporated by reference to Exhibit (1)
to the Registrant's Current Report on Form 8-K
dated October 1, 1989 - Commission File No. 1-
959.).
(continued)
<PAGE>
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
AND SUBSIDIARIES
Index to Exhibits (continued)
(Item 14(a)(3))
Exhibit 4(a) Rights Agreement dated as of May 25, 1986 among the
Registrant and The Bank of New York (as Rights
Agent) - (Incorporated by reference to Exhibit 4(a)
to the Registrant's Current Report on Form 8-K
dated May 25, 1986 - Commission File No. 1-959.).
Exhibit 4(b) Indenture dated as of June 15, 1992 among the
Registrant and Texas Commerce Bank National
Association (as Trustee) (Incorporated by reference
to Exhibit 4.1 to the Registrant's Registration
Statement No. 33-50991 on Form S-3, as amended.).
Exhibit 10(a) Form of Termination Agreement with Senior
Management Personnel (Incorporated by reference to
Exhibit 10(b) to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1982 -
Commission File No. 1-959.).
Exhibit 10(b) The Louisiana Land and Exploration Company 1982
Stock Option Plan as adopted (Incorporated by
reference to Exhibit A to the Registrant's
definitive Proxy Statement dated March 26, 1982)
and the amendment thereto dated December 8, 1982
(Incorporated by reference to Exhibit 10(c) to the
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1982 - Commission File No.
1-959.).
Exhibit 10(c) The Louisiana Land and Exploration Company 1988
Long-Term Stock Incentive Plan as amended
(Incorporated by reference to Exhibit A to the
Registrant's definitive Proxy Statement dated March
22, 1993).
Exhibit 10(d) Deferred Compensation Plan for Directors
(Incorporated by reference to Exhibit 10(d) to the
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1982 - Commission File No.
1-959.).
Exhibit 10(e) Pension Agreement, dated November 10, 1988
(Incorporated by reference to Exhibit 10(f) to the
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1988 - Commission File
No. 1-959.).
(continued)
<PAGE>
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
AND SUBSIDIARIES
Index to Exhibits (continued)
(Item 14(a)(3))
Exhibit 10(f) The Louisiana Land and Exploration Company 1990
Stock Option Plan for Non-Employee Directors as
adopted (Incorporated by reference to Exhibit A to
the Registrant's definitive Proxy Statement dated
March 26, 1990).
Exhibit 10(g) Form of The Louisiana Land and Exploration Company
Deferred Compensation Arrangement for Selected Key
Employees (Incorporated by reference to Exhibit
10(i) to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1990 -
Commission File No. 1-959.).
Exhibit 10(h) Retirement Plan for Directors of The Louisiana Land
and Exploration Company dated March 1, 1987
(Incorporated by reference to Exhibit 10(j) to the
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1990 - Commission File No.
1-959.).
Exhibit 10(i) The LL&E Special Termination Benefit Plan
(Incorporated by reference to Exhibit 10(j) to the
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1992 - Commission File No.
1-959.).
Exhibit 10(j) The LL&E Supplemental Excess Plan (Incorporated by
reference to Exhibit 10(k) to the Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1992 - Commission File No. 1-959.).
Exhibit 10(k) Form of Compensatory Benefits Agreement
(Incorporated by reference to Exhibit 10(l) to the
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1992 - Commission File No.
1-959.).
Exhibit 10(l) Amended and Restated Revolving Credit and Term Loan
Agreement dated as of September 22, 1993 among the
Registrant, the Banks listed therein, Morgan
Guaranty Trust Company of New York, as Agent, and
Texas Commerce Bank National Association and
NationsBank of Texas, N.A., as Co-Agents
(Incorporated by reference to Exhibit 10 to the
Registrant's Registration Statement No. 33-50161 on
Form S-3, as amended.).
(continued)
<PAGE>
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
AND SUBSIDIARIES
Index to Exhibits (continued)
(Item 14(a)(3))
Exhibit 11 Computation of Primary and Fully Diluted Earnings
(Loss) Per Share - Years Ended December 31, 1993,
1992 and 1991.
Exhibit 13 Annual Report to Shareholders for 1993.
Exhibit 21 Subsidiaries of the Registrant.
Exhibit 23 Consent of Experts.
Exhibit 24 Powers of Attorney.
Certain debt instruments have not been filed. The Company agrees
to furnish a copy of such agreement(s) to the Commission upon
request.
<PAGE>
<PAGE>
EXHIBIT 2.3
<PAGE>
<PAGE>
Exhibit 2.3
AMENDMENT TO SALE AND PURCHASE AGREEMENT
THIS AGREEMENT is made on the 12th day of October, 1993 BETWEEN:-
(1) BRITISH GAS EXPLORATION AND PRODUCTION LIMITED (registered in
England under number 902239) whose registered office is at
Rivermill House, 152 Grosvenor Road, London SW1V 3JL (the
"Seller");
(2) LL&E (U.K.) INC. whose principal place of business is at LL&E
House, 40A Dover Street, London W1X 3RB ("LL&E"); and
(3) MURPHY PETROLEUM LIMITED (registered in England under number
811102) whose registered office is at Winston House, Dollis
Park, Finchley, London N3 1HZ ("Murphy").
WHEREAS:
(A) By a sale and purchase agreement dated 12th August, 1993
between the Seller and LL&E (the "SPA"), the Seller agreed to
sell to LL&E, subject to certain conditions contained in the
SPA, certain Assets (as defined in the SPA) referable to a
fourteen percent interest under the Operating Agreement (as
defined in the SPA).
(B) LL&E and Murphy have requested the Seller to suspend the SPA
for the time being to enable the Seller to sell to Murphy that
portion of the Assets referable to a two point seven four
percent. (2.74%) interest under the Operating Agreement (the
"Murphy interest") and to LL&E that portion of the Assets
referable to an eleven point two six percent. (11.26%)
interest under the Operating Agreement (the "LL&E interest")
and the Seller has agreed, subject to and on the terms and
conditions of this Agreement, so to suspend the SPA.
(C) It is the intention of the parties that the Seller be in no
worse position as a result of entering into this Agreement
than if it had proceeded with the SPA in the form entered into
by it with LL&E on 12th August, 1993.
(D) All relevant pre-emption rights pursuant to the Operating
Agreement in respect of the transactions contemplated in this
Agreement have been waived.
IN CONSIDERATION of the mutual promises and undertakings herein
contained on the part of the parties hereto IT IS AGREED as
follows:
1. Definitions
In this Agreement terms and expressions defined in either the
LL&E Agreement or the Murphy Agreement, as appropriate, shall,
unless the context otherwise requires, bear the same meanings
herein.
<PAGE>
<PAGE>
2. Undertaking
2.1 LL&E and Murphy acknowledge and are aware that the Seller, in
entering into this Agreement, is relying on the following
undertaking.
LL&E and Murphy hereby undertake for themselves or either of
them that as a result of the Seller entering into this
Agreement they will put the Seller fully and effectively into
a position which is no worse than it would have been in had it
proceeded with the SPA with LL&E, such undertaking to include
without limitation payment of all costs (including legal
costs), charges and expenses whatsoever which are necessarily
suffered or incurred by the Seller in relation to the
enforcement of this Agreement, the LL&E Agreement or the
Murphy Agreement (each as defined below) or any related or
subsequent agreement (including those referred to as Further
Documentation in the LL&E Agreement and the Murphy Agreement).
The Seller shall not be entitled to make a claim under this
undertaking unless it has first served on LL&E and Murphy
written notice of the matter complained of within 30 days of
becoming aware of the same (giving such outline details as
shall then be reasonably practicable).
2.2 The undertaking contained in clause 2.1 above shall expire
twenty four (24) months after the later of the Completion
Dates (as revised pursuant to this Agreement, if appropriate)
save in respect of claims made prior to such expiry date, such
claims to be pursued with reasonable expedition.
2.3 Murphy shall not be obligated under the undertaking contained
in clause 2.1 above for the failure of LL&E to complete the
sale and purchase under the LL&E Agreement, save and to the
extent that such failure is caused or contributed to by a
breach by Murphy of its obligations under clause 6.4 below.
2.4 LL&E shall not be obligated under the undertaking contained in
clause 2.1 above for the failure of Murphy to complete the
sale and purchase under the Murphy Agreement, save and to the
extent that such failure is caused or contributed to by a
breach by LL&E of its obligations under clause 6.4 below.
3. SPA
3.1 The SPA shall not be terminated by the execution of this
Agreement but shall be suspended and it shall remain suspended
until either (a) the Seller is to enforce its rights under the
SPA in accordance with clause 6.2.1, 6.2.2 or 6.3.1 below
(whereupon it shall come into full force and effect again) or
(b) Completion (except a Completion which is deemed not to
have occurred pursuant to the provisions of clause 6 below)
occurs of either the LL&E Agreement or the Murphy Agreement
(whereupon the SPA shall terminate automatically). Neither
the Seller nor LL&E shall have any obligations to each other
or to any other person under the SPA while it so suspended.
3.2 During such period as the SPA is not in full force and effect
(being when it is either suspended or terminated the
provisions of Parts 1 and 2 of the Schedule hereto shall apply
as agreements in place of the SPA as provided in clauses 4 and
5 below.
<PAGE>
<PAGE>
4. LL&E Agreement
In respect of the sale to LL&E there shall be in effect an
agreement on the terms as set out in Part 1 of the Schedule
hereto, and the provisions applying to that Schedule shall be
called the "LL&E Agreement".
5. Murphy Agreement
In respect of the sale to Murphy there shall be in effect an
agreement on the terms as set out in Part 2 of the Schedule
hereto, and the provisions applying to that Schedule shall be
called the "Murphy Agreement".
6. Completion
6.1 Completion of each of the LL&E Agreement and the Murphy
Agreement (each and "Agreement" and together the "Agreement")
will take place simultaneously and, notwithstanding anything
in each of the Agreements, Completion of each Agreement shall,
except as provided below, be dependent upon Completion of the
other save only for the provisions of this clause.
Upon each of the LL&E Agreement and the Murphy Agreement being
completed in all respects subject only to the inter-dependence
provision in this clause, this clause shall automatically fall
away and Completion of each of the Agreements shall be deemed
to have occurred.
If, but for the provisions of this clause, and except as
provided below, one of the Agreements would have been
completed but not the other, the first such Agreement shall be
deemed not to have been completed, all documents which may
have been executed as a part of such Completion shall be null
and void and any amounts transferred to the Seller shall be
returned immediately without interest.
6.2 The exceptions referred to in clause 6.1 above are:
6.2.1 If LL&E has not for whatsoever reason completed the
sale and purchase under the LL&E Agreement
(ignoring, for this purpose, the inter-dependence
provision in clause 6.1 above) but, save for such
provision, Murphy would have completed the Murphy
Agreement, any amounts transferred to the Seller
shall be returned immediately without interest and
the Seller shall have the option exercisable within
7 days following the date when Murphy would have
completed the Murphy Agreement (ignoring for this
purpose the inter-dependence provision in clause
6.1 above) by notice in writing to the parties
hereto either: (a) to declare that the inter-
dependence provision in clause 6.1 above is waived
and that the sale and purchase under the Murphy
Agreement is to be completed, or (b) to declare
that the inter-dependence provision in clause 6.1
above is not waived. If the Seller does not give a
notice within 7 days exercising either option (a)
or (b) above, it shall at the expiry of such 7 day
period be deemed to have exercised option (b).
<PAGE>
<PAGE>
If the Seller exercises option (a) above, the
Murphy Agreement shall be completed (the "revised
Completion Date"), as soon as the relevant Further
Documentation is available and shall contain such
amendments as are reasonably necessary to reflect
that Completion of only one Agreement is taking
place, and on the revised Completion Date Murphy
shall transfer to the Seller all amounts due under
the Murphy Agreement (save that the Completion Date
for the purposes of clause 3.2.3 of the Murphy
Agreement shall be the actual date of Completion),
the Seller shall be entitled to enforce its rights
against LL&E under the LL&E Agreement and the SPA
shall terminate. If the Seller exercises or is
deemed to have exercised option (b) above, this
Agreement shall be deemed to have rescinded and the
Seller shall be entitled to enforce its rights
against LL&E under the SPA. For the avoidance of
doubt, LL&E and Murphy shall upon such deemed
rescission be released from the undertaking given
by them under clause 2.1 above.
6.2.2 If Murphy has not for whatsoever reason completed
the sale and purchase under the Murphy Agreement
(ignoring, for this purpose, the inter-dependence
provision in clause 6.1 above) but, save for such
provision, LL&E would have completed the sale and
purchase under the LL&E Agreement, any amounts
transferred to the Seller shall be returned
immediately without interest and the Seller shall
have the option exercisable within 7 days following
the date when LL&E would have completed the LL&E
Agreement (ignoring for this purpose the inter-
dependence provision in clause 6.1 above) by notice
in writing to the parties hereto either: (a) to
declare that the inter-dependence provision in
clause 6.1 above is waived and that the sale and
purchase under the LL&E Agreement is to be
completed, or (b) to declare that the inter-
dependence provision in clause 6.1 above is not
waived. If the Seller does not give a notice
within 7 days exercising either option (a) or (b)
above, it shall at the expiry of such 7 day period
be deemed to have exercised option (b).
If the Seller exercises option (a) above, the LL&E
Agreement shall be completed (the "revised
Completion Date"), as soon as the relevant Further
Documentation is available and shall contain such
amendments as are reasonably necessary to reflect
that Completion of only one Agreement is taking
place, and on the revised Completion Date LL&E
shall transfer to the Seller all amounts due under
the LL&E Agreement (save that the Completion Date
for the purposes of clause 3.2.3 of the LL&E
Agreement shall be the actual date of Completion),
the Seller shall be entitled to enforce its rights
against Murphy under the Murphy Agreement and the
SPA shall terminate. If the Seller exercises or is
deemed to have exercised option (b) above, this
<PAGE>
<PAGE>
Agreement shall be deemed to have been rescinded
and the Seller shall be entitled to enforce its
rights against LL&E under the SPA. For the
avoidance of doubt, LL&E and Murphy shall upon such
deemed rescission be released from the undertaking
given by them under clause 2.1 above.
6.3 If Completion has not taken place under either the Murphy
Agreement or the LL&E Agreement by 1st December 1993 (or such
later date as the parties may agree in writing) the Seller
shall have the option exercisable by written notice to the
parties hereto or either:
6.3.1 rescinding this Agreement and enforcing the
Seller's rights against LL&E under the SPA and for
the avoidance of doubt LL&E and Murphy shall
thereupon be released from the undertaking given by
them under clause 3.1 above; or
6.3.2 enforcing its rights against LL&E under the LL&E
Agreement and against Murphy under the Murphy
Agreement.
6.4 Each of the parties shall use reasonable endeavors with all
due despatch to procure the satisfaction of the conditions
necessary for Completion to be achieved including the
obtaining of any amended version of the Further Documents.
7. Notices
7.1 Any notice or other document to be served under or in
connection with this Agreement may be delivered or sent by
first class recorded delivery post or telex or facsimile
process to the party to be served at his address, to his telex
or facsimile number appearing below or at such other address
or to such other number as he may have notified to the other
parties in accordance with this clause.
British Gas Exploration Address: 100 Thames Valley Park
Drive
and Production Limited Reading
Barks RG6 1PT
Fax No: 0434 292100
Telex: 846231
Attention: Dr. Y. O. Barton
LL&E (U.K.) Inc. Address: LL&E House
48A Dover Street
London W1X 3RB
Fax No: 071 499 0677
Telex: 267436
Attention: Dr. J. A. Williams
Murphy Petroleum Limited Address: Winston House
Dollis Park
London N3 1HZ
Fax No: 081 349 4443
Telex: 21970
Attention: Managing Director
<PAGE>
<PAGE>
7.2 Any notice or document shall be deemed to have been served:
7.2.1 if delivered, at the time of delivery; or
7.2.2 if posted, at 10:00 a.m. on the second business day
after it was put into the post; or
7.2.3 if sent by telex or facsimile process, at the
expiration of two hours after the time of despatch,
if despatched before 3:00 p.m. on any business day,
and in any other case at 10:00 a.m. on the business
day following the date of despatch.
7.3 In proving service of a notice or document it shall be
sufficient to prove that delivery was made or that the
envelope containing the notice or document was properly
addressed and posted as a prepaid first class recorded
delivery letter or that the telex or facsimile message was
properly addressed and despatched as the case may be.
7.4 For the purposes of this paragraph, a business day is a day
other than a Saturday or statutory holiday on which banks are
or, as the context may require, were generally open for
business in England and New York.
8. Counterpart Execution
This Agreement may be executed in any number of counterparts,
all of which taken together shall constitute one and the same
agreement and any party may enter into this agreement by
executing a counterpart.
9. Supremacy
if any conflict or inconsistency arises between provisions in
the body of this Agreement and those contained in Parts 1 and
2 of the Schedule hereto or the SPA, then the provisions in
the body of this Agreement shall prevail.
10. Proper Law
This Agreement shall be governed by and construed in
accordance with English law. The parties hereto submit to the
exclusive jurisdiction of the English courts.
<PAGE>
<PAGE>
IN WITNESS whereof the parties hereto have executed this Agreement
the day and year first above written.
Signed by J. G. REID )
for and on behalf of )
BRITISH GAS EXPLORATION ) J. G. REID
AND PRODUCTION LIMITED )
Signed by B. WRATHMELL )
for and on behalf of )
LL&E (U.K.) INC. ) B. WRATHMELL
Signed by I. IQBAL )
for and on behalf of )
MURPHY PETROLEUM LIMITED) I. IQBAL
<PAGE>
EXHIBIT 11
<PAGE>
<PAGE>
<TABLE>
Exhibit 11
THE LOUISIANA LAND AND EXPLORATION COMPANY
Computation of Primary and Fully Diluted
Earnings (Loss) Per Share
Years Ended December 31, 1993, 1992 and 1991
<CAPTION>
(Millions, except per
share data)
1993 1992 1991
_______________________________________________________________________________________
<S> <C> <C> <C>
PRIMARY EARNINGS (LOSS) PER SHARE:
Earnings (loss) before extraordinary item and cumulative
effect of changes in accounting principles $ 12.7 (1.2) 20.9
Loss on early retirement of debt (3.3) (5.6) -
Changes in accounting principles .2 - -
_______________________________________________________________________________________
Net earnings (loss) $ 9.6 (6.8) 20.9
_______________________________________________________________________________________
Weighted average shares outstanding 29.4 28.3 28.2
Incremental shares attributable to outstanding
stock options .1 - .1
_______________________________________________________________________________________
Weighted average shares, as adjusted 29.5 28.3 28.3
_______________________________________________________________________________________
Primary earnings (loss) per share before extraordinary
item and cumulative effect of changes in accounting
principles $ 0.43 (0.04) 0.74
Loss on early retirement of debt (0.11) (0.20) -
Changes in accounting principle 0.01 - -
_______________________________________________________________________________________
PRIMARY EARNINGS (LOSS) PER SHARE $ 0.33 (0.24) 0.74
_______________________________________________________________________________________
_______________________________________________________________________________________
FULLY DILUTED EARNINGS (LOSS) PER SHARE:
Earnings (loss) before extraordinary item N/A $ (1.2) 20.9
Add back interest expense applicable to convertible
subordinated debentures, net of income taxes 1.8 1.4
_______________________________________________________________________________________
.6 22.3
Loss on early retirement of debt (5.6) -
_______________________________________________________________________________________
Net earnings (loss) , as adjusted N/A $ (5.0) 22.3
_______________________________________________________________________________________
Weighted average shares outstanding 28.3 28.2
Incremental shares attributable to outstanding
stock options - .1
Shares attributable to assumed conversion of
convertible subordinated debentures .3 .4
_______________________________________________________________________________________
Weighted average shares, as adjusted N/A 28.6 28.7
_______________________________________________________________________________________
Fully diluted earnings (loss) per share before
extraordinary item N/A $ 0.02 0.77
Loss on early retirement of debt (0.19) -
_______________________________________________________________________________________
FULLY DILUTED EARNINGS (LOSS) PER SHARE N/A $(0.17)* 0.77*
_______________________________________________________________________________________
* This calculation is submitted in accordance with Regulation S-K item 601(b)(11) although
it is contrary to APB Opinion No. 15 because it produces an anti-dilutive result.
</TABLE>
<PAGE>
<PAGE>
EXHIBIT 13
<PAGE>
<PAGE>
EXHIBIT 13
1993 ANNUAL REPORT TO SHAREHOLDERS
(INCORPORATED BY REFERENCE INTO
ANNUAL REPORT ON FORM 10-K FOR THE
FISCAL YEAR ENDED DECEMBER 31, 1993)
<PAGE>
<PAGE>
_________________________________________________________________
FINANCIAL REPORT:
Page
herein
Consolidated Balance Sheets 3
Consolidated Statements of
Earnings (Loss) 4
Consolidated Statements of
Stockholders' Equity 5
Consolidated Statements of
Cash Flows 6
Notes to Consolidated Financial
Statements 7
Report of Management 26
Independent Auditors' Report 27
Unaudited Supplemental Data 28
<PAGE>
<PAGE>
<TABLE>
_________________________________________________________________________________________
CONSOLIDATED BALANCE SHEETS The Louisiana Land and Exploration
Company and Subsidiaries
December 31, 1993 and 1992
(Millions of dollars)
ASSETS 1993 1992
_________________________________________________________________________________________
<S> <C> <C>
CURRENT ASSETS:
Cash, including cash equivalents (1993-$15.5; 1992-$32.7) $ 33.3 40.5
Accounts and notes receivable, principally trade 109.7 74.6
Income taxes receivable 5.2 5.8
Inventories (note 5) 26.8 25.6
Prepaid expenses 12.7 6.3
Deferred income taxes (note 11) 2.6 -
_________________________________________________________________________________________
Total current assets 190.3 152.8
_________________________________________________________________________________________
Investments in affiliates (note 6) 23.5 31.1
Net property, plant and equipment, at cost, under the
successful efforts method of accounting for oil
and gas properties (note 7) 1,561.0 974.2
Other assets 63.9 51.0
_________________________________________________________________________________________
$ 1,838.7 1,209.1
_________________________________________________________________________________________
LIABILITIES AND STOCKHOLDERS' EQUITY
_________________________________________________________________________________________
Current liabilities:
Accounts payable and accrued expenses 170.9 158.1
Income taxes payable 3.8 6.9
Deferred income taxes (note 11) - 8.0
_________________________________________________________________________________________
Total current liabilities 174.7 173.0
_________________________________________________________________________________________
Deferred income taxes (note 11) 151.2 148.8
Long-term debt (note 8) 734.5 343.0
Other liabilities 178.5 127.7
_________________________________________________________________________________________
Contingencies and commitments (notes 10, 12, 13 and 15)
STOCKHOLDERS' EQUITY (NOTES 8 AND 13):
_________________________________________________________________________________________
Capital stock of $.15 par value. Authorized-100,000,000
shares; issued-38,004,537 shares 5.7 5.7
Additional paid-in capital 82.9 41.5
Retained earnings 684.4 704.5
_________________________________________________________________________________________
773.0 751.7
Loans to ESOP (note 8) (8.8) (11.8)
Cost of capital stock in treasury-4,831,574 shares in
1993 and 9,656,167 shares in 1992 (note 13) (164.4) (323.3)
_________________________________________________________________________________________
TOTAL STOCKHOLDERS' EQUITY 599.8 416.6
_________________________________________________________________________________________
$ 1,838.7 1,209.1
_________________________________________________________________________________________
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
_________________________________________________________________________________________
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) The Louisiana Land and Exploration
Company and Subsidiaries
Years ended December 31, 1993, 1992 and 1991
(Millions, except per share data)
<CAPTION>
1993 1992 1991
_________________________________________________________________________________________
<S> <C> <C> <C>
REVENUES:
Oil and gas $ 370.1 323.9 363.7
Refined products 400.2 441.9 432.8
Gain on sale of Canadian oil and gas
properties (note 2) 23.5 - -
Other (interest, 1993-$3.4; 1992-$3.6; 1991-$4.6) 21.6 21.6 28.8
_________________________________________________________________________________________
815.4 787.4 825.3
_________________________________________________________________________________________
COSTS AND EXPENSES:
Lease operating and facility expenses 106.8 98.5 96.4
Refinery cost of sales and operating expenses 403.4 424.3 415.1
Dry holes and exploratory charges 48.8 41.5 74.6
Depletion, depreciation and amortization 129.8 106.5 116.3
Taxes, other than on earnings 24.7 24.4 24.5
General, administrative and other expenses 49.0 42.3 48.2
Interest and debt expenses (note 9) 28.3 24.6 16.9
Restructuring and other nonrecurring
charges/credits (note 4) - 27.4 -
_________________________________________________________________________________________
790.8 789.5 792.0
_________________________________________________________________________________________
Earnings (loss) before income taxes 24.6 (2.1) 33.3
Income tax expense (benefit) (note 11) 11.9 (0.9) 12.4
_________________________________________________________________________________________
Earnings (loss) before extraordinary
item and cumulative effect of changes
in accounting principles 12.7 (1.2) 20.9
Extraordinary item: loss on early retirement
of debt (note 8) (3.3) (5.6) -
Cumulative effect on years prior to 1993
of change in accounting principle for
income taxes (note 11) 13.7 - -
Cumulative effect on years prior to 1993
of change in accounting principle for
postretirement benefits other than
pensions (note 12) (13.5) - -
_________________________________________________________________________________________
NET EARNINGS (LOSS) $ 9.6 (6.8) 20.9
_________________________________________________________________________________________
Primary and fully diluted earnings (loss) per
share before extraordinary item and cumulative
effect of changes in accounting principles 0.43 (0.04) 0.74
Extraordinary item: loss on early retirement
of debt (0.11) (0.20) -
Change in accounting principle for income taxes 0.47 - -
Change in accounting principle for post-
retirement benefits (0.46) - -
_________________________________________________________________________________________
PRIMARY AND FULLY DILUTED EARNINGS (LOSS) PER SHARE $ 0.33 (0.24) 0.74
_________________________________________________________________________________________
AVERAGE SHARES 29.5 28.4 28.3
_________________________________________________________________________________________
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
<PAGE>
<TABLE>
________________________________________________________________________________________
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY The Louisiana Land and Exploration
Company and Subsidiaries
Years ended December 31, 1993, 1992 and 1991
(Millions of dollars, except per share data)
<CAPTION>
Additional Loans to Treasury stock
paid-in Retained ESOP Number of
capital earnings (Note 8) shares Cost
_________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1990 $40.7 $747.0 $(17.4) 9,802,002 $(327.3)
Net earnings - 20.9 - - -
Cash dividends ($1.00 per
share) - (28.3) - - -
Repayment of loans to ESOP - - 2.6 - -
Other .6 - - (83,977) 2.0
_________________________________________________________________________________________
Balance at December 31, 1991 41.3 739.6 (14.8) 9,718,025 (325.3)
Net loss - (6.8) - - -
Cash dividends ($1.00 per
share) - (28.3) - - -
Repayment of loans to ESOP - - 3.0 - -
Other .2 - - (61,858) 2.0
_________________________________________________________________________________________
Balance at December 31, 1992 41.5 704.5 (11.8) 9,656,167 (323.3)
Net earnings - 9.6 - - -
Sale of treasury stock 40.7 - - (4,400,000) 148.1
Cash dividends ($1.00 per
share) - (29.8) - - -
Repayment of loans to ESOP - - 3.0 - -
Purchase of treasury stock - - - 40,247 (1.5)
Other .7 .1 - (464,840) 12.3
_________________________________________________________________________________________
Balance at December 31, 1993 $82.9 $684.4 $ (8.8) 4,831,574 $(164.4)
_________________________________________________________________________________________
Capital stock of $.15 par value was unchanged during the three-year period ended December
31, 1993.
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
_________________________________________________________________________________________
CONSOLIDATED STATEMENTS OF CASH FLOWS The Louisiana Land and Exploration
Company and Subsidiaries
Years ended December 31, 1993, 1992 and 1991
(Millions of dollars)
<CAPTION>
1993 1992 1991
_________________________________________________________________________________________
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $ 9.6 (6.8) 20.9
Adjustments to reconcile to cash flows from
operations:
Changes in accounting principles, net (.2) - -
Gain on sale of Canadian oil and gas properties (23.5) - -
Restructuring and other nonrecurring charges/
credits - 27.4 -
Extraordinary item: Loss on early retirement
of debt 3.3 8.4 -
Depletion, depreciation and amortization 129.8 106.5 116.3
Deferred income taxes 9.2 2.2 4.9
Dry holes and impairment charges 21.8 19.2 50.2
Other 22.2 5.8 7.1
_________________________________________________________________________________________
172.2 162.7 199.4
Changes in operating assets and liabilities,
net of acquisitions:
Net (increase) decrease in receivables 4.3 44.8 (3.4)
Net increase in inventories (4.9) (1.8) (3.7)
Net (increase) decrease in prepaid items (5.0) 3.4 (15.8)
Net increase (decrease) in payables 2.7 (27.0) 24.8
Other 9.6 (3.4) 7.9
_________________________________________________________________________________________
Net cash flows from operating activities 178.9 178.7 209.2
_________________________________________________________________________________________
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions (note 2) (547.9) - -
Capital expenditures (note 3) (171.7) (153.8) (189.2)
Proceeds from asset sales (notes 2 and 4) 43.7 48.5 2.2
Other (46.4) (11.0) 6.3
_________________________________________________________________________________________
Net cash flows from investing activities (722.3) (116.3) (180.7)
_________________________________________________________________________________________
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of treasury stock 188.8 - -
Additions to long-term debt 492.0 100.0 -
Repayments of long-term debt (104.6) (116.8) (6.0)
Dividends (29.8) (28.3) (28.3)
Repayment of loans to ESOP 3.0 3.0 2.6
Purchase of treasury stock (1.5) - -
Other (11.7) (6.5) -
_________________________________________________________________________________________
Net cash flows from financing activities 536.2 (48.6) (31.7)
_________________________________________________________________________________________
Increase (decrease) in cash and cash equivalents $ (7.2) 13.8 (3.2)
_________________________________________________________________________________________
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>
_________________________________________________________________
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Louisiana Land and
Exploration Company
and Subsidiaries
December 31, 1993, 1992 and 1991
_________________________________________________________________
1. Summary of Significant Accounting Policies
a. Principles of Consolidation
The consolidated financial statements include the accounts of the
Company and its subsidiaries. All significant intercompany
transactions and balances have been eliminated in consolidation.
Investments in affiliates are accounted for under the equity
method. Certain amounts have been reclassified to conform to the
current period's presentation.
b. Petroleum Operations
The Company uses the successful efforts method of accounting for
its oil and gas operations. The costs of unproved leaseholds are
capitalized pending the results of exploration efforts.
Significant unproved leasehold costs are assessed periodically, on
a property-by-property basis, and a loss is recognized to the
extent, if any, that the cost of the property has been impaired.
The costs of individually insignificant unproved leaseholds
estimated to be nonproductive are amortized over estimated holding
periods based on historical experience. Exploratory dry holes and
geological and geophysical charges are expensed. Depletion of
proved leaseholds and amortization and depreciation of the costs of
all development and successful exploratory drilling are provided
by the unit-of- production method based upon estimates of proved
and proved-developed oil and gas reserves, respectively, for each
property. The estimated costs of dismantling and abandoning
offshore and significant onshore facilities are provided currently
using the unit-of-production method; such costs for other onshore
facilities are insignificant and are expensed as incurred. The
costs of refining and processing equipment and facilities are
depreciated on a straight-line basis over their estimated useful
lives.
The Company uses the entitlement method for recording natural gas
sales revenues. Under the entitlement method of accounting,
revenue is recorded based on the Company's net working interest in
field production. Deliveries of natural gas in excess of the
Company's working interest are recorded as liabilities while under-
deliveries are recorded as receivables. Such amounts are
immaterial.
The Company's anticipated purchases and sales of crude oil and
refined petroleum products and its committed foreign currency
expenditures may be hedged against market risks through the use of
forward/futures contracts. The gains and losses on these contracts
are recognized upon the expiration of the contract and are included
in the valuation of the anticipated transactions being hedged. A
default by a counterparty to a contract would expose the Company to
<PAGE>
<PAGE>
market risks for the quantity of the contract. There is no
material risk to the Company as a result of these contracts and the
Company does not anticipate nonperformance by any of the
counterparties.
c. Functional Currency
The foreign exploration and production operations of the Company's
subsidiaries and its foreign affiliate, CLAM Petroleum Company, are
considered an extension of the parent company's operations. The
assets, liabilities and operations of these companies are therefore
measured using the United States dollar as the functional currency.
As a result, foreign currency translation/transaction adjustments
(which were not material) are included in net earnings.
d. Income Taxes
The Company and its domestic subsidiaries file a consolidated
federal income tax return.
The Company adopted, effective January 1, 1988, Statement of
Financial Accounting Standards No. 96 ("SFAS No. 96") - "Accounting
For Income Taxes". Under the liability method specified by SFAS
No. 96, the deferred tax liability is determined based on the
difference between the financial statement and tax bases of assets
and liabilities as measured by existing tax rates which are
presumed to be in effect when these differences reverse. Deferred
tax expense is the result of changes in the liability for deferred
taxes.
In February 1992, Statement of Financial Accounting Standards No.
109 ("SFAS No. 109") - "Accounting for Income Taxes" was issued.
SFAS No. 109 supersedes SFAS No. 96. SFAS No. 109 was adopted
effective as of January 1, 1993. The Company applied the
provisions of the SFAS No. 109 without restating prior years'
financial statements. For the Company, the most significant change
in SFAS No. 109 as compared to SFAS No. 96 is that deferred tax
assets will now be recognized and measured based on the likelihood
of realization of a tax benefit in future years. Under SFAS No.
109, deferred tax assets are initially recognized for differences
between the financial statement carrying amounts and tax bases of
assets and liabilities that will result in future deductible
amounts and operating loss and tax credit carryforwards. A
valuation allowance would then be established to reduce that
deferred tax asset if it is more likely than not that the related
tax benefits will not be realized. Under SFAS No. 96, the
recognition of deferred tax benefits was limited to benefits that
would offset deferred tax liabilities and benefits that could be
realized through carryback to recover taxes paid for the current
year or prior years.
e. Earnings (Loss) Per Share
Primary earnings (loss) per share are calculated on the weighted
average number of shares outstanding during each period for capital
stock and, when dilutive, capital stock equivalents, which assumes
<PAGE>
<PAGE>
exercise of stock options. Fully diluted earnings (loss) per share
are calculated on the same basis, but also assumes conversion, when
dilutive, of the convertible subordinated debentures for the period
outstanding prior to the call for redemption on September 25, 1992,
and elimination of the related interest expense, net of income
taxes.
2. 1993 Acquisitions and Dispositions
In September 1993, the Company completed the acquisition of all of
the issued and outstanding common stock of NERCO Oil & Gas, Inc.
("NERCO") for a cash purchase price of approximately $354 million
plus associated expenses. The acquisition was financed initially
through the credit facility discussed in Note 8. The cost of the
acquisition was allocated under the purchase method of accounting
based on the fair value of the assets acquired and liabilities
assumed.
The results of NERCO's operations were consolidated with the
Company's effective October 1, 1993. Pro forma combined results of
operations of the Company and NERCO, including appropriate purchase
accounting adjustments for the years ending December 31, 1993 and
1992, as though the acquisition had taken place on January 1 of the
respective years, are as follows:
<TABLE>
<CAPTION>
(Millions, except
per share data)
1993 1992
________________________________________________________________________________________
<S> <C> <C>
Revenues $ 907.1 926.1
________________________________________________________________________________________
Earnings (loss) before extraordinary items and cumulative effect
of changes in accounting principles (.3) (11.5)
________________________________________________________________________________________
Net earnings (loss) (3.4) (17.1)
________________________________________________________________________________________
Primary and fully diluted earnings (loss) per share $ (0.09) (0.53)
________________________________________________________________________________________
</TABLE>
In December 1993, the Company acquired an 11.26% working interest
in Block 16/17 in the U.K. North Sea ("T-Block") from British Gas
Exploration and Production Limited for approximately $187 million
in cash. The purchase was financed initially through the credit
facility discussed in Note 8. Initial production from T-Block came
onstream in late 1993 and had an insignificant impact on results of
operations.
In December 1993, the Company completed the sale of certain oil and
gas producing properties, undeveloped acreage and seismic data
located in southern Alberta, Canada for approximately $42.8 million
resulting in a gain, net of associated expenses, of approximately
$23.5 million (before income taxes of $10.3 million). The
properties sold generated revenues of $12.1 million and $15.3
million and pretax earnings of $1.2 million and $1.6 million in
1993 and 1992, respectively.
<PAGE>
<PAGE>
3. Cash Flows
All of the Company's cash investments are highly liquid short-term
debt instruments and are considered to be cash equivalents. These
cash investments are carried in the accompanying balance sheets at
cost plus accrued interest, which approximates fair value. Cash
flows related to hedging activities through forward/futures
contracts are classified in the same categories as that from the
items being hedged.
In 1992, the Company acquired certain proved properties for
approximately $36 million and incurred a short-term liability which
was outstanding at year end, the settlement of which is included in
1993 cash flows from investing activities.
4. Restructuring and Other Nonrecurring Charges/Credits
In 1992, the Company recorded a charge of $52.4 million (before
income tax benefits of approximately $17.8 million) against
earnings to provide for the restructuring of its oil and gas
operations. This charge included provisions for estimated losses
on the disposition of selected domestic properties of $47.6 million
(both developed and undeveloped) and costs associated with staff
retirements, reductions and related transition expenses of $4.8
million. The Company completed the sale of substantially all of
the selected properties for a purchase price of $48.1 million.
In addition, during 1992 the Company reduced its litigation accrual
for the State of Louisiana gas royalty claim by $25 million (before
an income tax charge of $8.5 million). See Note 15.
5. Inventories
<TABLE>
<CAPTION>
(Millions of dollars) 1993 1992
_________________________________________________________________________________________
<S> <C> <C>
Refinery inventories at lower of (last-in,
first-out) cost or market $24.1 24.6
_________________________________________________________________________________________
Repair parts, supplies and other, at lower of
average cost or market 2.7 1.0
_________________________________________________________________________________________
$26.8 25.6
_________________________________________________________________________________________
</TABLE>
At December 31, 1993, the LIFO cost of refinery inventories
exceeded their current market values which resulted in a non-cash
charge to earnings of $6.5 million (before income tax benefits of
$2.3 million) which is included in "Refinery Cost of Sales and
Operating Expenses" in the accompanying Consolidated Statements of
Earnings (Loss).
<PAGE>
<PAGE>
<TABLE>
6. Investments in Affiliates
<CAPTION>
Investment
% (Millions of dollars)
Investee Industry Location owned 1993 1992
_________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
MaraLou (CLAM
Petroleum Oil &
Company) Gas North Sea 50% $20.8 28.3
_________________________________________________________________________________________
Other Various U.S. Various 2.7 2.8
_________________________________________________________________________________________
$23.5 31.1
_________________________________________________________________________________________
</TABLE>
The Company's equity in earnings of affiliates, which is included
in "Other Revenues" in the accompanying Consolidated Statements of
Earnings (Loss), amounted to $2.4 million, $6.9 million and $15
million in 1993, 1992 and 1991, respectively. Cash dividends
received from MaraLou/CLAM in 1993, 1992 and 1991 totaled $10
million, $7.5 million and $18.5 million, respectively.
The consolidated financial position of MaraLou and its wholly owned
subsidiary, CLAM, as of December 31, 1993 and 1992 and the results
of their operations for each of the years in the three-year period
ended December 31, 1993 are summarized below.
<TABLE>
<CAPTION>
(Millions of dollars) 1993 1992
_________________________________________________________________________________________
<S> <C> <C>
Current assets $ 24.4 35.1
_________________________________________________________________________________________
Noncurrent assets 170.9 176.7
_________________________________________________________________________________________
Current liabilities 26.7 16.0
_________________________________________________________________________________________
Noncurrent liabilities 129.2 142.4
_________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
(Millions of dollars) 1993 1992 1991
_________________________________________________________________________________________
<S> <C> <C> <C>
Gross revenues $ 61.1 82.9 111.9
_________________________________________________________________________________________
Operating profit 30.1 42.4 70.5
_________________________________________________________________________________________
Earnings before cumulative effect of
change in accounting principle 10.9 13.8 30.0
_________________________________________________________________________________________
Net earnings 4.9 13.8 30.0
_________________________________________________________________________________________
</TABLE>
MaraLou applied the provisions of SFAS No. 109 as of January 1,
1993 without restating prior years' financial statements. Upon
adoption, MaraLou recorded a non-cash charge to earnings of $6
million ($3 million net to the Company's interest).
The common stock of CLAM is pledged as collateral under a revolving
credit agreement between MaraLou and a group of banks. The credit
agreement is nonrecourse to the partners of MaraLou.
<PAGE>
<PAGE>
7. Property, Plant and Equipment
<TABLE>
<CAPTION>
(Millions of dollars) 1993 1992
_________________________________________________________________________________________
<S> <C> <C>
Petroleum properties:
Proved $2,531.3 1,988.2
_________________________________________________________________________________________
Unproved 127.5 78.1
_________________________________________________________________________________________
Refining and marketing 218.7 205.0
_________________________________________________________________________________________
2,877.5 2,271.3
Other properties 69.0 59.3
_________________________________________________________________________________________
2,946.5 2,330.6
Less accumulated depletion, depreciation and amortization 1,385.5 1,356.4
_________________________________________________________________________________________
$1,561.0 974.2
_________________________________________________________________________________________
</TABLE>
8. Long-term Debt
<TABLE>
<CAPTION>
(Millions of dollars) 1993 1992
_________________________________________________________________________________________
<S> <C> <C>
Revolving Credit Facility $160.0 -
_________________________________________________________________________________________
7-5/8% Debentures due 2013 100.0 -
_________________________________________________________________________________________
7.65% Debentures due 2023 200.0 -
_________________________________________________________________________________________
Term Loan with banks (net of unamortized discount
of $4.1 in 1992) 133.5 195.4
_________________________________________________________________________________________
8-1/4% Notes due 2002 100.0 100.0
_________________________________________________________________________________________
Industrial Development Revenue Refunding Bonds, 1983 Series,
due December 1993, interest at 8.6% - 20.5
_________________________________________________________________________________________
Loan Agreement with banks - 15.0
_________________________________________________________________________________________
Notes payable to bank for financing of leveraged ESOP 8.8 11.8
_________________________________________________________________________________________
Commercial paper notes 32.0 -
_________________________________________________________________________________________
Other issues .2 .3
_________________________________________________________________________________________
Total long-term debt 734.5 343.0
_________________________________________________________________________________________
</TABLE>
The fair value of the Company's long-term debt as of December 31,
1993 is estimated to be approximately $744 million based on the
quoted market prices for the same or similar issues or on the
current rates offered to the Company for debt of similar
maturities.
Debt maturities for the next five years follows.
<TABLE>
<CAPTION>
(Millions of dollars)
_________________________________________________________________________________________
<S> <C>
1994 $ -
_________________________________________________________________________________________
1995 -
_________________________________________________________________________________________
1996 81.4
_________________________________________________________________________________________
1997 95.3
_________________________________________________________________________________________
1998 95.3
_________________________________________________________________________________________
</TABLE>
<PAGE>
<PAGE>
To finance the aforementioned NERCO and T-Block acquisitions (see
Note 2), refinance certain existing indebtedness and fund general
corporate activities, the Company entered into a $790 million
credit facility with a syndicate of banks in September 1993.
Commitments under the agreement originally consisted of (i) a $540
million Revolving Credit Facility and (ii) a $250 million Term Loan
Facility (which was utilized and repaid and is no longer available
to the Company). The Revolving Credit Facility was subsequently
reduced to $450 million and will be reduced by approximately $24
million quarterly from June 1994 through September 1999. Amounts
outstanding under the Revolving Credit Facility bear interest at
fluctuating rates subject to certain options chosen in advance by
the Company. Borrowings under the Revolving Credit Facility and
the Term Loan Facility during 1993 were at an average interest
rates of 5%. A commitment fee of 1/4% is charged on the unused
portion of the facility. Bank fees and other costs associated with
this facility totaled $8.1 million of which $6.7 million was
charged to interest and debt expenses in the fourth quarter of
1993. The balance will be written off during the first quarter of
1994, at which time the Company intends to renegotiate the
facility.
In June 1992, the Company registered under the Securities and
Exchange Commission's shelf registration rules $300 million of
senior unsecured debt securities to be issued from time to time on
terms to be then determined. In June 1992, the Company sold $100
million of 8-1/4% Notes due 2002. In April 1993, the Company
completed its second $100 million public offering of debt
securities under the existing shelf registration filed in 1992 with
the issuance of 7-5/8% Debentures due 2013. In November 1993, the
Company registered up to $500 million of senior unsecured debt
securities under the Securities and Exchange Commission's shelf
registration rules, which included the $100 million available under
the shelf registration filed in 1992. In December 1993, the
Company completed a $200 million public offering with the issuance
of 7.65% Debentures due 2023.
The Company's $20 million Loan Agreement, the $15 million balance
of which was repaid in December 1993, was with a group of banks in
the form of a revolving credit loan. The interest rate varied with
time and market conditions and was determined by the banks subject
to certain options chosen in advance by the Company. A commitment
fee of 1/4% was charged on the unused portion of the loan during
the revolving credit period. Borrowings under this agreement
during 1993 and 1992 were at average interest rates of 4% and 4.5%,
respectively.
In November 1987, the Company created a leveraged employee stock
ownership plan (ESOP) within an existing employee savings plan. To
fund the ESOP, in 1987 and 1988 the Company borrowed $10.2 million
and $14 million, respectively, from a bank (unsecured) and loaned
the proceeds to the ESOP. The ESOP then used the proceeds to
acquire shares of the Company's capital stock (374,678 in 1987;
<PAGE>
<PAGE>
461,690 in 1988) at average market prices of $27.125 and $30.25,
respectively. The capital stock issued was taken from the
Company's treasury at a cost of $30 per share; the differences
between treasury stock cost and value were recorded in additional
paid-in capital. The loans to the ESOP are on substantially the
same terms and conditions as the Company's bank loans and, in
addition, are secured by the Company's capital stock owned by the
ESOP. The ESOP will repay the loans (plus interest) with the
proceeds from the Company's monthly contributions and quarterly
dividends paid on the capital stock. The Company's bank loans will
be similarly repaid monthly through 1995. The interest rates vary
with time and market conditions and are determined by the bank
subject to certain options chosen in advance by the Company. The
average interest rates for both loans in 1993 and 1992 were 3.1%
and 3.7%, respectively.
During 1993, the average monthly balance of commercial paper notes
outstanding was $38.8 million; the maximum amount outstanding
during that period was $94 million. Commercial paper borrowings
during 1993 and 1992 were at average interest rates of 3.3% and
4.3%, respectively. The Company's commercial paper program was
supported by a $100 million revolving line of credit, which
required a commitment fee of 1/4% per annum. No borrowings were
made under the line of credit. As of September 1993, the
commercial paper program is supported by the unused portion of the
aforementioned Revolving Credit Facility.
In September 1992, the Company announced the call for early
retirement of the 8-1/2% Convertible Subordinated Debentures due
September 2000. The redemption completed at a price of 101.66% of
principal and the premium, along with unamortized discount,
resulted in an extraordinary loss of $5.6 million, after income tax
benefits of $2.8 million. The Term Loan with banks, which was
retired in January 1994, bore interest at 8.92% (discounted to
yield 10.7%), was unsecured and was payable in July 1994. The
balance has been excluded from current liabilities as the Company
refinanced the balance due on a long-term basis utilizing the
Revolving Credit Facility. The early retirement was completed at
a price of 102.4% of principal and the premium, along with
unamortized discount, resulted in an extraordinary loss of $3.3
million, after income tax benefits of $1.7 million.
9. Interest and Debt Expenses
For the years ended December 31, 1993, 1992 and 1991, interest
costs incurred, which were essentially the same as interest
payments, were $47 million, $37.5 million and $39.5 million,
respectively, of which $18.7 million, $12.9 million and $22.6
million, respectively, were capitalized as part of the cost of
property, plant and equipment.
<PAGE>
<PAGE>
In 1992 and 1993, the Company participated in interest rate swaps
(which were to terminate in 1994 and 1996, respectively) having a
notional principal amount totaling $200 million. Under the
agreements, the Company received an annual fixed rate and paid a
variable rate based on the six-month London Interbank Offering
Rate. The rates payable were recalculated in June and December of
each year and the amounts received/paid were credited/charged to
interest expense. In September 1993, the Company terminated both
agreements and deferred a gain of approximately $3.6 million which
will be recognized over the remaining terms of the respective
agreements as reductions of interest expense.
10. Foreign Currency Contracts
The Company hedges its committed British pound expenditures in the
U.K. North Sea through the purchase of forward contracts. At
December 31, 1993, forward contracts outstanding totaled $24.6
million. The fair value of these contracts, which represents the
Company's cost to offset its forward position, is estimated to be
approximately $1 million as of December 31, 1993.
11. Income Taxes
As explained in Note 1(d), the Company adopted SFAS No. 109
effective January 1, 1993. Upon adoption, the Company recorded a
non-cash credit to earnings of $13.7 million which represented the
recognition of deferred tax assets existing at December 31, 1992.
With the enactment of the Budget Reconciliation Act of 1993, the
Federal statutory corporate income tax rate was increased from 34%
to 35% retroactive to January 1, 1993. As a result, the Company
increased its deferred income tax liabilities as of January 1, 1993
with a non-cash charge to income tax expense of $3 million.
The components of earnings (loss) before income taxes were taxed
under the following jurisdictions:
<TABLE>
<CAPTION>
(Millions of dollars) 1993 1992 1991
_________________________________________________________________________________________
<S> <C> <C> <C>
Domestic $ 9.7 (15.9) 18.5
_________________________________________________________________________________________
Foreign 14.9 13.8 14.8
_________________________________________________________________________________________
$ 24.6 (2.1) 33.3
_________________________________________________________________________________________
</TABLE>
<PAGE>
<PAGE>
Components of income tax expense (benefit) are as follows:
<TABLE>
<CAPTION>
(Millions of dollars) 1993 1992 1991
_________________________________________________________________________________________
<S> <C> <C> <C>
Current tax expense (benefit):
Federal $ (3.5) (7.3) 4.4
_________________________________________________________________________________________
State (.3) .1 (.8)
_________________________________________________________________________________________
Foreign 6.5 1.3 3.9
_________________________________________________________________________________________
2.7 (5.9) 7.5
_________________________________________________________________________________________
Deferred tax expense (benefit):
Federal 9.2 3.8 6.3
_________________________________________________________________________________________
Foreign - 1.2 (1.4)
_________________________________________________________________________________________
9.2 5.0 4.9
_________________________________________________________________________________________
$ 11.9 (0.9) 12.4
_________________________________________________________________________________________
</TABLE>
Tax expense (benefit) differs from the amounts computed by applying
the U.S. Federal tax rate (1993 - 35%; 1992-91 - 34%) to earnings
(loss) before income tax. The reasons for the differences are as
follows:
<TABLE>
<CAPTION>
(Millions of dollars) 1993 1992 1991
_________________________________________________________________________________________
<S> <C> <C> <C>
Computed "expected" tax expense (benefit) $ 8.6 (.7) 11.3
_________________________________________________________________________________________
Increases (reductions) in taxes resulting from:
Increase in Federal income tax rate 3.0 - -
_________________________________________________________________________________________
Equity in earnings of foreign affiliates (7.4) (1.3) (1.2)
_________________________________________________________________________________________
Foreign income taxes, net of Federal income tax
benefit 8.4 3.1 5.0
_________________________________________________________________________________________
Employee benefit plans (.9) (1.2) (2.1)
_________________________________________________________________________________________
Percentage depletion (.1) (.3) (.3)
_________________________________________________________________________________________
Other .3 (.5) (.3)
_________________________________________________________________________________________
$ 11.9 (.9) 12.4
_________________________________________________________________________________________
</TABLE>
As a result of the prospective adoption of SFAS No. 109 effective
January 1, 1993, the following additional disclosures are presented
as of and for the year ended December 31, 1993.
Total income tax expense (benefit) was allocated as follows:
<TABLE>
<CAPTION>
(Millions of dollars) 1993
_________________________________________________________________________________________
<S> <C>
Income before extraordinary item and changes in accounting
principles $ 11.9
_________________________________________________________________________________________
Loss on early retirement of debt (1.7)
_________________________________________________________________________________________
Change in accounting principle for income taxes (13.7)
_________________________________________________________________________________________
Change in accounting principle for postretirement benefits (7.0)
_________________________________________________________________________________________
Stockholders' equity for compensation expense for tax purposes
in excess of amount recognized for financial reporting purposes (1.8)
_________________________________________________________________________________________
$ (12.3)
_________________________________________________________________________________________
</TABLE>
<PAGE>
<PAGE>
The significant components of deferred income tax expense
attributable to income from continuing operations are as follows:
<TABLE>
<CAPTION>
(Millions of dollars) 1993
_________________________________________________________________________________________
<S> <C>
Deferred tax expense (exclusive of the effects of other components
listed below) $ 6.2
_________________________________________________________________________________________
Adjustments to deferred tax assets and liabilities for increase in
Federal income tax rate 3.0
_________________________________________________________________________________________
$ 9.2
_________________________________________________________________________________________
</TABLE>
The tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and deferred tax
liabilities are as follows:
<TABLE>
<CAPTION>
(Millions of dollars) 1993
_________________________________________________________________________________________
<S> <C>
Deferred tax asset:
Deferred foreign tax credits $ 22.8
_________________________________________________________________________________________
Foreign tax credit carryforwards 10.2
_________________________________________________________________________________________
Alternative minimum tax credit carryforward 5.2
_________________________________________________________________________________________
Employee benefits 18.7
_________________________________________________________________________________________
Other 12.8
_________________________________________________________________________________________
Total gross deferred tax assets 69.7
Less valuation allowance (17.8)
_________________________________________________________________________________________
Net deferred tax assets 51.9
_________________________________________________________________________________________
Deferred tax liabilities:
Property, plant and equipment, principally due to differences in
depreciation and capitalized interest (178.7)
_________________________________________________________________________________________
Other (21.8)
_________________________________________________________________________________________
Total gross deferred tax liabilities (200.5)
_________________________________________________________________________________________
$(148.6)
_________________________________________________________________________________________
</TABLE>
The net change in the valuation allowance for the year ended
December 31, 1993 was an increase of $3 million. This change was
made to provide for uncertainties surrounding the realization of
certain foreign tax credit carryforwards. The remaining balance of
the deferred tax assets should be realized through future operating
results and the reversal of taxable temporary differences.
Deferred tax expense (benefit) included the following components,
the disclosure of which was prescribed by the now-superseded SFAS
No. 96:
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
(Millions of dollars) 1992 1991
_________________________________________________________________________________________
<S> <C> <C>
Restructuring and other special charges/credits $ (1.8) 2.0
_________________________________________________________________________________________
Intangible development and exploration costs 10.1 9.7
_________________________________________________________________________________________
Interest 2.2 6.1
_________________________________________________________________________________________
Depreciation (9.8) (7.8)
_________________________________________________________________________________________
Depletion .7 1.0
_________________________________________________________________________________________
Foreign taxes 1.2 (1.4)
_________________________________________________________________________________________
Equity in earnings of affiliates (.4) 1.8
_________________________________________________________________________________________
Alternative minimum tax credit carryforward 2.2 (6.7)
_________________________________________________________________________________________
Employee benefit plans .1 (2.2)
_________________________________________________________________________________________
Partnerships - 1.1
_________________________________________________________________________________________
Other .5 1.3
_________________________________________________________________________________________
$ 5.0 4.9
_________________________________________________________________________________________
</TABLE>
For the years ended December 31, 1993, 1992 and 1991, the Company's
net cash payments (refunds) of income taxes totaled $7.1 million,
$(.6) million and $6.5 million, respectively.
At December 31, 1993 the Company has foreign tax credit
carryforwards for Federal income tax purposes of $10.2 million
which are available through 1998 to offset future Federal income
taxes, if any. The Company also has alternative minimum tax credit
carryforwards of $5.2 million which are available to reduce Federal
regular income taxes, if any, over an indefinite period.
12. Retirement Benefits
The Company has a noncontributory defined benefit pension plan
covering all eligible employees, with benefits based on years of
service and the employee's highest three-year average monthly
earnings. The Company's funding policy is intended to provide for
both benefits attributed to service to-date and for those expected
to be earned in the future. Plan assets consist primarily of
stocks, bonds and short-term cash investments. Since the spin-off
of the pension plan of a discontinued subsidiary in 1985 and the
contribution of excess assets remaining after purchasing annuities
for affected employees, the pension plan did not require funding
through the year ended December 31,1992. A minimum amount of
funding was required in 1993.
As a result of an early retirement incentive program and a
reduction in force in 1992, benefit obligations of $4.2 million
were settled from plan assets, including $1.1 million of early
retirement incentive costs included in the restructuring charge
described in Note 4. The settlement of the pension obligations
related to the restructuring program resulted in a loss of $.3
million, which was also included in the restructuring charge.
<PAGE>
<PAGE>
The following tables set forth the plan's funded status and amounts
recognized in the statements of financial position and results of
operations at December 31:
<TABLE>
<CAPTION>
(Millions of dollars) 1993 1992
_________________________________________________________________________________________
<S> <C> <C>
Accumulated benefit obligation, including vested benefits
of $16.8 and $10.0 $ 17.6 10.4
_________________________________________________________________________________________
Projected benefit obligation (27.1) (15.5)
Plan assets at fair market value 13.0 12.9
_________________________________________________________________________________________
Plan assets over (under) projected benefit obligation (14.1) (2.6)
_________________________________________________________________________________________
Additional minimum liability (2.8) -
_________________________________________________________________________________________
Unrecognized net loss from past experience different
from that assumed and effects of changes in assumptions 13.5 4.1
_________________________________________________________________________________________
Unrecognized net asset being recognized over 15 years (1.2) (1.4)
_________________________________________________________________________________________
Prepaid (accrued) pension cost $ (4.6) .1
_________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
(Millions of dollars) 1993 1992 1991
_________________________________________________________________________________________
<S> <C> <C> <C>
Service cost $ 1.8 1.6 1.3
_________________________________________________________________________________________
Interest cost 1.4 1.3 1.0
_________________________________________________________________________________________
Actual gain on plan assets (1.3) (1.1) (1.9)
_________________________________________________________________________________________
Net amortization and deferral .1 (.6) .3
_________________________________________________________________________________________
Net pension expense $ 2.0 1.2 .7
_________________________________________________________________________________________
Discount rate 7-1/4% 9% 9%
_________________________________________________________________________________________
Compensation increase 5% 5% 5%
_________________________________________________________________________________________
_________________________________________________________________________________________
Return on assets 9% 9% 9%
_________________________________________________________________________________________
</TABLE>
The Company has postretirement medical and dental care plans for
all eligible retirees and their dependents with eligibility based
on age and years of service upon retirement. The Company also
maintains a Medicare Part B reimbursement plan and life insurance
coverage for a closed group of retirees of a former subsidiary for
which estimated benefits of approximately $4.7 million were accrued
at December 31, 1992. Effective January 1, 1993, the Company
adopted Statement of Financial Accounting Standards No. 106 (SFAS
No. 106) - "Employers' Accounting for Postretirement Benefits Other
than Pensions", which changed the Company's practice of accounting
for postretirement benefits on a pay-as-you-go (cash) basis by
requiring accrual, during the years that the employee renders the
necessary service, of the expected cost of providing those benefits
to an employee and the employee's beneficiaries and covered
dependents. Upon adoption, the Company recorded a transition
liability of approximately $20.5 million ($13.5 million after
income taxes) as a one-time, non-cash charge against earnings.
<PAGE>
<PAGE>
The postretirement benefit plans are unfunded and the Company
continues to fund claims on a cash basis. The following tables set
forth the amounts recognized in the statements of financial
position and results of operations.
<TABLE>
<CATION>
December 31, January 1,
(Millions of dollars) 1993 1993
_________________________________________________________________________________________
<S> <C> <C>
Accumulated postretirement benefit obligation:
_________________________________________________________________________________________
Retirees $ (20.6) (20.3)
_________________________________________________________________________________________
Employees eligible to retire (2.7) (1.1)
_________________________________________________________________________________________
Other employees (5.0) (3.8)
_________________________________________________________________________________________
(28.3) (25.2)
Unrecognized net loss 2.3 -
_________________________________________________________________________________________
Accrued postretirement benefit cost $ (26.0) (25.2)
_________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
(Millions of dollars) 1993 1992 1991
_________________________________________________________________________________________
<S> <C> <C> <C>
Service cost $ .8 - -
_________________________________________________________________________________________
Interest cost 2.1 - -
_________________________________________________________________________________________
Pay-as-you-go cost - .9 .7
_________________________________________________________________________________________
Net postretirement benefit cost $ 2.9 .9 .7
_________________________________________________________________________________________
</TABLE>
Assumptions utilized to measure the accumulated postretirement
obligation at December 31, and January 1, 1993 were: discount
rates of 7.25% and 8.5%, respectively; health care cost trend rates
of 14% declining over 10 years to 5% and 6%, respectively, and held
constant thereafter. A 1% increase in the assumed trend rates
would have resulted in increases in the accumulated postretirement
benefit obligation at December 31, and January 1, 1993 of $2.6
million and $2.1 million, respectively; the aggregate of service
cost and interest cost for the year ended December 31, 1993 would
have increased by $.4 million.
13. Capital Stock, Options and Rights
In November 1993, the Company completed a public offering of 4.4
million shares of capital stock at a price of $44.625 per share.
The capital stock was taken from the Company's treasury at an
average cost of $33.125 per share. The excess of net proceeds over
the cost of treasury stock issued was credited to additional paid-
in-capital. The net proceeds of the offering, after underwriting
commissions and expenses, were approximately $188.8 million.
In May 1988, the 1988 Long-term Stock Incentive Plan (1988 Plan)
was approved by the shareholders to replace the 1982 Stock Option
Plan (1982 Plan). Under the 1988 Plan, as amended, the Company may
grant to officers and key employees stock options, stock
appreciation rights, performance shares, performance units,
restricted stock or restricted stock units for up to 2.8 million
shares (plus the 22,274 shares not awarded under the 1982 Plan) of
the Company's capital stock. As prescribed by both Plans, stock
<PAGE>
<PAGE>
options are exercisable at the market price on the date of the
grant, generally over a two-year period at the rate of 50% each
year commencing on the first anniversary of the date of grant; all
options expire ten years from the date of grant. In 1993 and 1992,
options for 277,700 shares and 600,400 shares were granted,
respectively. The restricted stock and performance shares awarded
under the 1988 Plan entitle the grantee to the rights of a
shareholder, including the right to receive dividends and to vote
such shares, but the shares are restricted as to sale, transfer or
encumbrance. Restricted stock is issued to the grantee over
varying periods after a one-year waiting period has expired. In
1993, awards were granted for 34,250 shares of restricted stock.
In 1992, no awards were granted. The performance cycle consists of
a three-year period, beginning with the year of grant, at the end
of which certain performance goals must be attained by the Company
for the unrestricted performance shares to be issued to the
grantee. Awards granted in 1993 and 1992 for performance shares
amounted to 18,900 shares and 26,600 shares, respectively.
Performance shares issued in 1993 and 1992 amounted to 15,257
shares and 19,000 shares, respectively. Restricted stock and
performance share awards are "compensatory" awards and the Company
accrued compensation expense of $.7 million, $1 million and $.8
million in 1993, 1992 and 1991, respectively.
In May 1990, the 1990 Stock Option Plan for Non-Employee Directors
(1990 Plan) was approved by the shareholders, under which the
Company will grant stock options to non-employee directors for up
to 150,000 shares of the Company's capital stock. As prescribed by
the 1990 Plan, the options are exercisable at the market price at
the date of grant over a two-year period at the rate of 50% each
year commencing on the first anniversary of the date of grant; all
options expire ten years from the date of grant. Awards for 20,000
shares were granted in both 1993 and 1992.
At December 31, 1993, 1,254,638 shares of capital stock were
reserved for future grants under all Plans.
<PAGE>
<PAGE>
Total grants outstanding under the Plans and the changes therein
for the periods indicated follows.
<TABLE>
<CAPTION>
Number Option
of shares price range
__________________________________________________________________________________________
<S> <C> <C> <C> <C><C>
Outstanding at December 31, 1991 1,222,718 $21 - 45 1/2
__________________________________________________________________________________________
Granted 647,000 29 3/4 - 38 15/16
__________________________________________________________________________________________
Cancelled (97,475) 29 3/4 - 39 11/16
__________________________________________________________________________________________
Exercised (52,890) 21 - 31 1/2
__________________________________________________________________________________________
Outstanding at December 31, 1992 1,719,353 27 1/8 - 45 1/2
__________________________________________________________________________________________
Granted 330,850 44 3/8 - 45 7/16
__________________________________________________________________________________________
Cancelled (6,354) 29 3/4 - 45 7/16
__________________________________________________________________________________________
Exercised (453,085) 27 1/8 - 39 11/16
__________________________________________________________________________________________
Outstanding at December 31, 1993 1,590,764 27 1/8 - 45 7/16
__________________________________________________________________________________________
Exercisable at December 31, 1993 973,631 27 1/8 - 45 1/2
__________________________________________________________________________________________
Weighted average prices:
Outstanding at December 31, 1993 35 11/16
Exercisable at December 31, 1993 34 5/16
__________________________________________________________________________________________
</TABLE>
In 1986, the Company's Board of Directors declared a dividend to
shareholders consisting of one Capital Stock Purchase Right on each
outstanding share of capital stock. A Right will also be issued
with each share of capital stock that becomes outstanding prior to
the time the Rights become exercisable or expire. If a person or
group acquires beneficial ownership of 20% or more, or announces a
tender offer that would result in beneficial ownership of 20% or
more, of the shares of outstanding capital stock, the Rights become
exercisable ten days thereafter and each Right will entitle its
holder to purchase one share of capital stock for $90.
If the Company is acquired in a business combination transaction,
each Right not owned by the 20% holder will entitle its holder to
purchase, for $90, common shares of the acquiring company having a
market value of $180. Alternatively, if a 20% holder were to
acquire the Company by means of a reverse merger in which the
Company and its capital stock survive or were to engage in certain
"self- dealing" transactions, or if a person or group were to
acquire 30% or more of the outstanding capital stock (other than
pursuant to a cash offer for all shares), each Right not owned by
the acquiring person would entitle its holder to purchase, for $90,
capital stock of the Company having a market value of $180. Each
Right can be redeemed by the Company for $.05, subject to the
occurrence of certain events and other restrictions, and expires in
1996. These Rights may cause substantial ownership dilution to a
person or group who attempts to acquire the Company without
approval of the Company's Board of Directors. The Rights should
not interfere with a business combination transaction that has been
approved by the Board of Directors.<PAGE>
<PAGE>
<TABLE>
14. Petroleum Segment Information
<CAPTION>
(Millions of dollars) 19931 1992 1991
_________________________________________________________________________________________
<S> <C> <C> <C>
Sales to unaffiliated customers:
Domestic $ 692.9 686.2 697.8
North Sea 40.3 46.4 64.2
Other foreign2 60.6 33.2 34.5
_________________________________________________________________________________________
793.8 765.8 796.5
Interest and other income 21.6 21.6 28.8
_________________________________________________________________________________________
Total revenues $ 815.4 787.4 825.3
_________________________________________________________________________________________
Earnings (loss) before income taxes:
Operating profit (loss):
Domestic3 79.2 39.7 67.5
North Sea (7.7) 13.1 17.2
Other foreign2 16.5 (2.9) (9.5)
_________________________________________________________________________________________
88.0 49.9 75.2
Other income (expense), net (63.4) (52.0) (41.9)
_________________________________________________________________________________________
Earnings (loss) before income taxes $ 24.6 (2.1) 33.3
_________________________________________________________________________________________
Identifiable industry assets:
Domestic 1,089.6 705.1 841.3
North Sea 523.2 280.3 245.1
Other foreign 99.5 107.6 64.4
_________________________________________________________________________________________
1,712.3 1,093.0 1,150.8
Other assets 126.4 116.1 102.0
_________________________________________________________________________________________
Total assets $1,838.7 1,209.1 1,252.8
_________________________________________________________________________________________
Depletion, depreciation and amortization:
Petroleum 123.4 101.6 111.5
Other 6.4 4.9 4.8
_________________________________________________________________________________________
$ 129.8 106.5 116.3
_________________________________________________________________________________________
Capital expenditures:
Exploration:
Domestic 31.2 22.7 51.7
North Sea 1.8 3.2 1.5
Other foreign 10.0 12.7 13.5
_________________________________________________________________________________________
43.0 38.6 66.7
_________________________________________________________________________________________
Development:
Domestic 58.0 47.9 52.9
North Sea 37.6 27.9 24.7
Other foreign 3.1 30.5 2.0
_________________________________________________________________________________________
98.7 106.3 79.6
_________________________________________________________________________________________
Refining and marketing 18.4 27.6 15.5
_________________________________________________________________________________________
160.1 172.5 161.8
Capitalized interest 18.7 12.9 22.6
Other 3.5 4.4 4.8
_________________________________________________________________________________________
$ 182.3 189.8 189.2
_________________________________________________________________________________________
1 Includes NERCO Oil & Gas, Inc. since October 1, 1993.
2 In 1993, Canadian oil and gas properties were sold for $42.8, which resulted in a gain
of $23.5. See Note 2.
3 In 1992, restructuring and other nonrecurring charges/credits totaled $27.4.
See Note 4.
/TABLE
<PAGE>
<PAGE>
15. Contingencies
Texaco Litigation
In August 1989, the State of Louisiana, in connection with its
claim against Texaco Inc. and certain of its subsidiaries
("Texaco") in the Texaco bankruptcy proceedings, filed an Amended
and Restated Objection, Amended and Restated Proof of Claim and
Complaint naming, as class action defendants, all persons having
overriding royalty, working or other mineral interests in State
mineral leases held by Texaco. The State sought cancellation of
certain interests in State mineral leases, including the interests
of class members.
In July 1991, the Company entered into an agreement with Texaco
which resolved all claims and issues related to certain Department
of Energy matters. Following this settlement, the previously
established accrual for the DOE matter, net of certain litigation
expenses, was retained with respect to loss contingencies
associated with the State of Louisiana gas royalty claim.
In January 1992, the Company was added as a defendant as a result
of its ownership of royalty interests in State mineral leases
subleased to Texaco and its ownership of overriding royalty and
working interests in other State leases with Texaco. The State
asserted a monetary claim of $210.9 million in principal and $264.8
million in interest, plus penalties, damages equal to double the
amount of royalties allegedly due, and attorneys' fees, against
Texaco and the Company based on Texaco's alleged improper
calculation of royalties on six State leases which Texaco has
operated under subleases from the Company. The monetary amount of
the State's claims substantially exceeds the amounts provided for
in the financial statements. However, the Company believes that
the State's claims are significantly overstated. The State further
asserted claims for cancellation of the State mineral leases
subleased to Texaco based on Texaco's alleged conduct in operating
those leases. Lease cancellation is an extraordinary remedy under
Louisiana Law. The Company has filed a cross claim against Texaco
asserting contractual and legal claims for indemnity, reimbursement
and damages from Texaco for any amounts claimed by the State or any
other losses sustained as a result of the State's action.
On February 9, 1994, the Louisiana State Mineral Board
preliminarily approved an agreement among the State of Louisiana,
Texaco and the Company settling all claims asserted in the
litigation. The settlement is subject to a ten day public comment
period, after which it will be considered for final approval by the
State Mineral Board and then reviewed for fairness by the U.S.
District Court for the Middle District of Louisiana, where the
claims are pending. Under the terms of the settlement agreement,
the Company will make a $5 million cash payment upon approval of
the settlement by the Federal District Court and will agree to a
reduction of an immaterial amount of future payments to the Company
by Texaco related to the Company's 8-1/3% net profits interest (for
which the Company has no cost basis) on a limited number of the
Company's Louisiana properties. The Company expects, if the
<PAGE>
<PAGE>
settlement agreement is approved as contemplated in its present
form, that the amounts provided in the financial statements for
this litigation will exceed the amount of the cash payment to be
made under the agreement. In the opinion of Management, the
ultimate liability with respect to the Texaco litigation will not
have a material adverse effect on the results of operations, cash
flow or financial position of the Company.
Other
The Company has been notified by the U.S. Environmental Protection
Agency that it is one of many Potentially Responsible Parties
("PRP") at three National Priorities List sites. Based on its
evaluation of the potential total cleanup costs, its estimate of
its potential exposure, and the viability of the other PRP's, the
Company believes that any costs ultimately required to be borne by
it at these sites will not have a material adverse effect on its
results of operations, cash flow or financial position.
The Company is subject to other legal proceedings, claims and
liabilities which arise in the ordinary course of its business. In
the opinion of Management, the amount of ultimate liability with
respect to these actions will not have a material adverse effect on
results of operations, cash flow or financial position of the
Company.
<PAGE>
<PAGE>
_________________________________________________________________
REPORT OF MANAGEMENT
_________________________________________________________________
The consolidated financial statements of The Louisiana Land and
Exploration Company and subsidiaries and the related information
included in this Annual Report have been prepared by Management in
accordance with generally accepted accounting principles and
include certain estimates and judgments which Management considers
appropriate. To meet its responsibilities for the fair
presentation of consolidated financial statements, Management
maintains a system of internal controls, including internal
accounting controls, considered appropriate in view of the costs
associated with the benefits to be derived. In addition, the Audit
Committee meets periodically with the Company's Management, the
internal auditors and KPMG Peat Marwick, independent auditors, to
review and discuss audit activities and results, internal control
procedures and other matters relative to accounting and financial
reporting.
Based on the results of these procedures, Management is of the
opinion that the system of internal controls in effect during the
year ended December 31, 1993 provided reasonable assurance that all
transactions were executed in accordance with Management's
authorizations, that assets were safeguarded from loss and
unauthorized use and that the accounting records and financial
statements properly reflect the transactions of the Company.
H. Leighton Steward Richard A. Bachmann
Chairman, President and Executive Vice President and
Chief Executive Officer Chief Financial Officer
<PAGE>
<PAGE>
_________________________________________________________________
INDEPENDENT AUDITORS' REPORT
_________________________________________________________________
The Board of Directors and Stockholders
The Louisiana Land and Exploration Company:
We have audited the accompanying consolidated balance sheets of The
Louisiana Land and Exploration Company and subsidiaries as of
December 31, 1993 and 1992, and the related consolidated statements
of earnings (loss), stockholders' equity, and cash flows for each
of the years in the three-year period ended December 31, 1993.
These consolidated financial statements are the responsibility of
the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of The Louisiana Land and Exploration Company and
subsidiaries as of December 31, 1993 and 1992, and the results of
their operations and their cash flows for each of the years in the
three-year period ended December 31, 1993 in conformity with
generally accepted accounting principles.
As discussed in Notes 11 and 12 to the consolidated financial
statements, the Company adopted the methods of accounting for
income taxes and postretirement benefits other than pensions
prescribed by Statements of Financial Accounting Standards Nos. 109
and 106, respectively.
/s/ KPMG Peat Marwick
KPMG Peat Marwick
New Orleans, Louisiana
February 9, 1994<PAGE>
<PAGE>
_________________________________________________________________
UNAUDITED SUPPLEMENTAL DATA:
Page
herein
Management's Discussion and Analysis 29
Data on Oil and Gas Activities 36
Oil and Gas Operating Data 44
Refining and Marketing Operating Data 45
Oil and Gas Properties 46
Wells Drilled 47
Selected Financial Data 48
Market Price and Dividend Data 49
Quarterly Data 50
<PAGE>
<PAGE>
_________________________________________________________________
MANAGEMENT'S DISCUSSION AND ANALYSIS
_________________________________________________________________
REVIEW OF OPERATIONS (1993 VS 1992)
Gross revenues in 1993 were up $28 million as an increase in oil
and gas revenues of $46 million and a $24 million pretax gain on
the sale of certain Canadian oil and gas assets more than offset a
$40 million decline in refining revenues, lower crude marketing
gains and reduced equity in the earnings of the Company's 50%-owned
affiliate, CLAM Petroleum Company (CLAM). CLAM's reduced earnings
for 1993 reflect the adverse effect of reduced gas prices, lower
gas deliveries and a one-time noncash charge of $6 million to
income taxes ($3 million net to the Company) for the adoption SFAS
No. 109.
Before inclusion of nonrecurring after-tax items netting to a
charge of $1.3 million, an extraordinary loss on early retirement
of debt of $3.3 million and the favorable effect of two accounting
changes amounting to $.2 million, the Company generated earnings of
$14 million in 1993. This represents a decline from the comparable
1992 earnings of $18.9 million, which was also exclusive of
nonrecurring after-tax items totaling $20.1 million and an
extraordinary loss of $5.6 million on the early retirement of debt
in 1992. The nonrecurring items in 1993 consisted of the
aforementioned $23.5 million ($13.2 million after tax) gain on the
sale of certain oil and gas properties, undeveloped acreage and
seismic data located in southern Alberta, Canada reduced by a $6.5
million ($4.2 million after tax) charge for the write-down of
refinery inventories to market value, a $6.7 million ($4.3 million
after tax) charge for the write-off of costs associated with the
interim financing provided by banks for the acquisitions of NERCO
and T-Block, a $3 million income tax charge to recognize the
retroactive rate change enacted in the Budget Reconciliation Act of
1993 and the effect of the aforementioned noncash charge of $6
million ($3 million net to the Company) to the earnings of CLAM.
The inclusion of the nonrecurring and extraordinary items resulted
in net earnings of $9.6 million in 1993, as compared to the $6.8
million net loss incurred in the prior year.
Oil and Gas Operations
Revenues from oil and gas operations were up $46 million from 1992.
Natural gas revenues, up almost $55 million as a result of higher
domestic gas prices ($29 million) and deliveries ($25 million),
accounted for much of the increase. Liquids revenues, however,
were down $5 million. Although crude oil volumes increased in 1993
($22 million), this revenue gain was more than offset by declining
worldwide crude oil prices ($26 million).
<PAGE>
<PAGE>
Domestic natural gas deliveries were up almost 40 million cubic
feet per day from the prior year period. The improvement in
domestic natural gas deliveries was due to the acquisition of
NERCO, new domestic wells coming onstream and the return to
production of wells previously shut-in for repairs and maintenance.
These increases were partially offset by the effects of natural
declines at mature producing properties.
Crude oil volumes in 1993 were higher due to a 2,400 barrel per day
(BPD) increase in domestic operations, a 300 BPD increase in North
Sea operations and an 800 BPD increase in other foreign operations.
The increase in domestic operations resulted primarily from the
acquisition of NERCO, the purchase of additional working interests
in producing properties, new domestic wells coming onstream, and
increased production from domestic wells that were shut-in for
repairs and maintenance during the prior year. Volumes were up in
the North Sea primarily as a result of the purchase of additional
working interests in producing properties and the production from
T-Block beginning in mid-December 1993. The year-end 1992
acquisition of a working interest in the KAKAP Field in Indonesia
resulted in higher volumes from other foreign areas. These
production increases were partially offset by natural declines at
domestic and foreign properties.
Lease operating and facility expenses increased $8 million during
the current year primarily due to operating expenses associated
with properties and increased working interests acquired in late
1992 and in 1993 and higher operating and repair and maintenance
costs on older properties. These were partially offset by lower
workover charges and the inclusion in 1992 of a $3 million
nonrecurring charge for the uninsured costs associated with a gas
well blowout. Depletion, depreciation and amortization (DD&A) was
$23 million higher in 1993 than in the prior year due primarily to
DD&A on properties and increased working interests acquired in late
1992 and in 1993. Dry holes and exploratory charges were up over
$7 million in the current year due to increases in seismic costs
incurred, lease impairment and unsuccessful exploratory wells.
General, administrative and other expenses increased over $6
million from the prior year primarily due to the initial accrual of
current year costs associated with postretirement benefits other
than pensions and increased personnel costs. Interest and debt
expenses increased over $3 million due to higher interest expense
associated with the increased debt level and the aforementioned
write-off of debt issue costs. These additional costs were
partially offset by interest capitalized on a greater investment in
qualifying projects.
Refining and Marketing Operations
Refining operations resulted in a loss in 1993. Lower revenues
from a decline in product prices ($49 million), a write-down of
refinery inventories of over $6 million and higher operating
expenses ($4 million) more than offset the favorable impact of
<PAGE>
<PAGE>
higher sales volumes ($9 million) and lower feedstock prices ($30
million) resulting in a $10 million pretax operating loss. The
refinery had generated a pretax operating profit of $10 million in
the prior year. A $3 million profit from crude oil marketing
activities partially offset the operating loss, but was also lower
than in the prior year.
REVIEW OF OPERATIONS (1992 VS 1991)
Gross revenues in 1992 were down $38 million from the comparable
prior year as higher refining revenues were more than offset by
reduced oil and gas revenues, a decline in crude marketing gains
and a lower equity in the earnings of the Company's 50%-owned
affiliate, CLAM Petroleum Company (CLAM). The reduction in CLAM's
earnings resulted from reduced gas prices and lower gas deliveries
due to a major pipeline maintenance program. These revenue
declines more than offset the significant reductions in operating
costs and expenses (before the restructuring charges) resulting
from the Company's cost-cutting efforts.
Nevertheless, the Company generated earnings of $18.9 million
before the inclusion of nonrecurring after-tax items totaling $20.1
million and an extraordinary loss of $5.6 million on an early
retirement of debt. This represents a decline of 10% from the
comparable net earnings of 1991. The nonrecurring items consisted
of $52.4 million ($34.6 million after tax) for the restructuring of
the Company's domestic oil and gas operations and $3 million ($2
million after tax) for the uninsured costs associated with a gas
well blowout (after being reduced by $2.5 million in the fourth
quarter). The Company also reduced its litigation accrual for the
State gas royalty claim $25 million ($16.5 million after tax). The
inclusion of the nonrecurring items resulted in a net loss of $6.8
million in 1992.
Oil and Gas Operations
Revenues from oil and gas operations benefitted from rising gas
prices since the 1992 second quarter. Such price gains, however,
were offset by average oil prices that were below those in 1991 and
lower oil and gas volumes. As a result, revenues from oil and gas
operations were $32 million lower than in the prior year. Crude
oil revenues were down $32 million due to lower prices in 1992 ($8
million) and lower volumes produced ($24 million). Natural gas
revenues were over $5 million higher in 1992 due to price increases
($11 million) but this was offset to an extent by the elimination
of revenues generated in 1992 by the properties recently sold and
reduced volumes.
<PAGE>
<PAGE>
Crude oil volume declines in 1992 were attributable to an 1,100
barrel per day (BPD) decline in domestic operations, a 2,100 BPD
decline in North Sea operations and a 200 BPD decline in other
foreign operations. The decline in domestic operations was
primarily due to wells shut-in for maintenance and repairs,
hurricane related production interruptions and natural declines at
mature producing properties. These declines more than offset
volumes from new wells coming onstream. In foreign areas, volumes
were down primarily as a result of natural declines.
Domestic natural gas deliveries were down 7% from the prior year
period due to natural declines, hurricane related production
interruptions and elimination of volumes related to the properties
recently sold. These declines more than offset volumes from new
wells coming onstream.
Lease operating and facility expenses rose above the prior year
level primarily due to increased operating expenses on new and
existing properties and the inclusion of the aforementioned charges
associated with a gas well blowout. These were offset to an extent
by lower workover and repair charges. Depletion, depreciation and
amortization (DD&A) was almost $10 million lower in 1992 due to the
elimination of DD&A on those properties sold and reduced DD&A on
mature properties due to declining production rates. These
reductions were partially offset by the increases in DD&A
associated with new producing properties. Dry holes and
exploratory charges were almost $33 million lower than in the 1991
period due to the reduction in exploration activities in both
domestic and foreign areas and a higher exploratory success ratio.
General, administrative and other expenses were reduced 12% in 1992
due primarily to the cost-cutting efforts associated with the
restructuring program. Although interest incurred in 1992
benefitted from the lower rates charged on the Company's variable
rate debt, interest and debt expenses were significantly higher in
1992 due primarily to the reduction in development projects which
qualified for interest capitalization.
Refining and Marketing Operations
Although refined product demand in 1992 improved from the 1991
period, refining operating results declined by 8% from 1991 due to
reduced margins. Higher revenues from increased sales volumes ($42
million) were partially offset by lower prices ($31 million) during
1992 as compared to 1991. However, increased feedstock costs
offset the revenue gains resulting in lower pretax operating
profit. Profits from crude oil marketing activities were also
lower than in the prior year primarily due to higher acquisition
costs on crude purchased for resale relative to final sales prices
and the absence of forward sales in 1992.
<PAGE>
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
In 1993, the Company generated approximately $179 million in cash
from operations which, with the proceeds from the equity and debt
offerings and the sale of Canadian oil and gas properties, was
utilized for the acquisition of NERCO and T-Block, exploration and
development projects ($172 million), the repayment of $105 million
of long-term debt, payments for prior year accrued capital
expenditures included in other investing activities ($36 million)
and dividends ($30 million).
In April 1993, the Company completed its second $100 million public
offering of debt securities under an existing shelf registration
filed in 1992 under the Securities and Exchange Commission's rules
with the issuance of 7-5/8% Debentures due 2013. Part of the net
proceeds of approximately $98 million was applied to the payment of
the $66 million installment of the term loan with banks due in July
1993; the balance was used for general corporate purposes.
In September 1993, the Company completed the acquisition of NERCO
for approximately $354 million in cash. The properties acquired
include working interests averaging over 50% in 50 producing oil
and gas fields located predominately in the Gulf of Mexico, a
substantial portion of which are operated by NERCO. Also, included
in the acquisition are NERCO's interests in leases on 53
undeveloped blocks in the Gulf.
In December 1993, the Company acquired an 11.26% working interest
in T-Block (Block 16/17 in the U.K. North Sea) from British Gas
Exploration and Production Limited for approximately $187 million
in cash. T-Block contains two oil fields which are under
development: the Tiffany Field and the satellite field, Toni.
Production from both fields initially came onstream in late 1993.
The development of two additional fields, Thelma and Southeast
Thelma, is in the advanced planning stage.
To finance the NERCO and T-Block acquisitions, refinance certain
existing indebtedness and fund general corporate activities, the
Company entered into a $790 million credit facility with a
syndicate of banks in September 1993. Availability under the
agreement originally consisted of (i) a $540 million Revolving
Credit Facility and (ii) a $250 million Term Loan Facility (which
was utilized and repaid and is no longer available to the Company).
The Revolving Credit Facility was subsequently reduced to $450
million and will be reduced by approximately $24 million quarterly
from June 1994 through September 1999.
In November 1993, the Company completed a public offering of 4.4
million shares of capital stock at a price of $44.625 per share.
The capital stock was taken from the Company's treasury at an
average cost of $33.125 per share. The net proceeds of the
offering, after underwriting commissions and expenses, were
approximately $189 million and were utilized for the repayment of
indebtedness and for general corporate purposes.
<PAGE>
<PAGE>
In November 1993, the Company filed a registration statement on
Form S-3 to register up to $500 million of debt securities under
the Securities and Exchange Commission's shelf registration rules,
which included the $100 million available under the shelf
registration filed in 1992. In December, the Company completed an
offering of $200 million of 7.65% Debentures due 2023. The net
proceeds of the offering, after underwriting commissions and
expenses, were approximately $198 million and were utilized for the
repayment of indebtedness and for general corporate purposes.
In December 1993, the Company completed the sale of certain oil and
gas producing properties, undeveloped acreage and seismic data
located in southern Alberta, Canada for approximately $43 million.
Part of the proceeds was utilized to retire the $15 million balance
of the Loan Agreement with a group of banks. The balance of the
proceeds was utilized for general corporate purposes.
The Company expects that its 1994 capital and exploration program,
presently estimated at approximately $248 million, will be financed
substantially by internally generated funds. Such expenditures are
continually reviewed, and revised as necessary, based on perceived
current and long-term economic conditions. The only significant
long-term debt due in 1994, the $133.5 million balance of the Term
Loan with banks which was due in July 1994, was refinanced in
January 1994 with the proceeds of a Revolving Credit Facility
drawdown.
As explained in Note 15 of "Notes to Consolidated Financial
Statements," the State of Louisiana had asserted claims against the
Company in its capacity as sublessor to Texaco of certain State
leases, based upon Texaco's alleged royalty miscalculations. In
February 1994, a preliminary settlement was agreed to by all
parties under which the Company will make a $5 million cash
payment, which is less than the amounts provided in the financial
statements for this litigation. As also explained in Note 15, the
Company has been notified by the U.S. Environmental Protection
Agency that it is one of many Potentially Responsible Parties at
three National Priorities List sites. In the opinion of
Management, the ultimate liability with respect to these matters
will not have a material adverse effect on the results of
operations, cash flow or financial position of the Company.
In November 1992, Statement of Financial Accounting Standards No.
112 ("SFAS No. 112") - "Employers Accounting for Postemployment
Benefits" was issued. SFAS No. 112, which will be effective for
1994, prescribes the accrual of benefits provided to former or
inactive employees after employment but before retirement.
Application of SFAS No. 112 will not have a material adverse effect
on the Company's results of operations, cash flow or financial
position.
<PAGE>
<PAGE>
CAPITAL STOCK, DIVIDENDS AND OTHER MARKET DATA
The Company's capital stock is listed and traded on the New York
Stock Exchange, the Toronto Stock Exchange, the London Stock
Exchange and the Swiss Stock Exchanges (Basle, Geneva and Zurich).
As of February 4, 1994, there were 8,130 holders of record. The
quarterly market prices for the past two years and the cash
dividends paid in each period are presented in the table on page
50.
As disclosed elsewhere, 4.4 million of the Company's treasury
shares were issued in a public offering completed in November 1993.
(See Note 13 of "Notes to Consolidated Financial Statements".) The
remaining 4.8 million shares being held as treasury shares
continued to afford the Company greater financial flexibility to
respond to financing and other opportunities that might arise.
The Company has arranged financings totaling approximately $24
million for its ESOP and has sold a total of 836,368 shares of
treasury stock to the ESOP. (See Note 8 of "Notes to Consolidated
Financial Statements.")
In 1986, the Company's Board of Directors declared a dividend to
shareholders consisting of one Capital Stock Purchase Right on each
outstanding share of capital stock. These rights may cause
substantial ownership dilution to a person or group who attempts to
acquire the Company without approval of the Company's Board of
Directors. The rights should not interfere with a business
combination transaction that has been approved by the Board of
Directors. (See Note 13 of "Notes to Consolidated Financial
Statements.")
The Company has reserved 1,254,638 shares of its capital stock for
future grants and exercises of stock options. (See Note 13 of
"Notes to Consolidated Financial Statements.")
NOTE:
The accompanying consolidated financial statements and
notes thereto and the unaudited supplemental data are an
integral part of this discussion and analysis and should
be read in conjunction herewith.
<PAGE>
<PAGE>
_________________________________________________________________
DATA ON OIL AND GAS ACTIVITIES (Unaudited)
_________________________________________________________________
The tables below set forth estimates of the proved reserves
attributable to the working and royalty interests of the Company
(net of royalties payable to other parties) along with a summary of
the changes in the quantities of proved reserves during the periods
indicated. Also set forth is the Company's 50% equity interest in
the proved reserves of CLAM Petroleum Company. There have been no
significant changes in the estimates of proved reserves since
December 31, 1993.
<TABLE>
<CAPTION>
Liquids (Millions of barrels)
North Other
Domestic Sea CLAM Foreign Total
_________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Proved reserves at December 31, 1990 45.1 28.6 .4 13.7 87.8
Revisions of previous estimates 6.0 (.1) - (1.6) 4.3
Purchase of reserves in place - - - - -
Extensions, discoveries and
other additions 4.2 .2 - 1.5 5.9
Production (8.2) (3.2) - (2.2) (13.6)
Sales of reserves in place (.1) - - - (.1)
_________________________________________________________________________________________
Proved reserves at December 31, 1991 47.0 25.5 .4 11.4 84.3
Revisions of previous estimates 5.3 (.6) - - 4.7
Purchase of reserves in place 2.6 - - 5.8 8.4
Extensions, discoveries and
other additions 3.0 2.8 - .6 6.4
Production (7.9) (2.5) - (2.1) (12.5)
Sales of reserves in place (.6) - - - (.6)
_________________________________________________________________________________________
Proved reserves at December 31, 1992 49.4 25.2 .4 15.7 90.7
Revisions of previous estimates (2.8) (.2) - 2.5 (.5)
Purchase of reserves in place 11.9 17.5 - - 29.4
Extensions, discoveries and
other additions 1.7 - - .8 2.5
Production (8.8) (2.5) - (2.4) (13.7)
Sales of reserves in place (.2) - - (5.1) (5.3)
_________________________________________________________________________________________
Proved reserves at December 31, 1993 51.2 40.0 .4 11.5 103.1
_________________________________________________________________________________________
Proved-developed reserves at
December 31,
_________________________________________________________________________________________
1991 42.4 9.2 .3 9.1 61.0
_________________________________________________________________________________________
1992 46.8 6.1 .3 10.4 63.6
_________________________________________________________________________________________
1993 47.0 36.9 .3 5.7 89.9
_________________________________________________________________________________________
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Gas (Billions of cubic feet)
North Other
Domestic Sea CLAM Foreign Total
_________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Proved reserves at December 31, 1990 513.1 126.6 200.9 11.5 852.1
Revisions of previous estimates 32.8 (3.1) 5.4 (.8) 34.3
Purchase of reserves in place .2 - - - .2
Extensions, discoveries and
other additions 30.3 - - 1.5 31.8
Production (54.9) (.1) (17.8) (1.6) (74.4)
Sales of reserves in place (.6) - - - (.6)
_________________________________________________________________________________________
Proved reserves at December 31, 1991 520.9 123.4 188.5 10.6 843.4
Revisions of previous estimates 9.7 (4.6) (6.6) (.2) (1.7)
Purchase of reserves in place 3.2 - - - 3.2
Extensions, discoveries and
other additions 14.7 15.8 - .6 31.1
Production (51.3) (.1) (14.8) (1.8) (68.0)
Sales of reserves in place (53.1) - - - (53.1)
_________________________________________________________________________________________
Proved reserves at December 31, 1992 444.1 134.5 167.1 9.2 754.9
Revisions of previous estimates 20.5 (3.2) (.6) 1.0 17.7
Purchase of reserves in place 221.6 11.5 - - 233.1
Extensions, discoveries and
other additions 12.2 - - 2.6 14.8
Production (65.6) (.1) (12.6) (1.9) (80.2)
Sales of reserves in place (1.2) - - (3.2) (4.4)
_________________________________________________________________________________________
Proved reserves at December 31, 1993 631.6 142.7 153.9 7.7 935.9
_________________________________________________________________________________________
Proved-developed reserves at
December 31,
1991 331.8 38.2 128.9 10.5 509.4
_________________________________________________________________________________________
1992 270.9 35.3 112.7 9.2 428.1
_________________________________________________________________________________________
1993 405.9 132.9 118.9 7.7 665.4
_________________________________________________________________________________________
</TABLE>
The table below sets forth estimates of the domestic sulphur
reserves attributable to the interests of the Company as of
December 31:
<TABLE>
<CAPTION>
Proved-
(Thousands of long tons) Proved developed
_________________________________________________________________________________________
<S> <C> <C>
1991 591.2 225.5
_________________________________________________________________________________________
1992 608.3 242.6
_________________________________________________________________________________________
1993 583.6 226.1
_________________________________________________________________________________________
</TABLE>
<PAGE>
<PAGE>
_________________________________________________________________
Standardized Measure of Discounted Future Net Cash Flows and
Changes Therein Relating to Proved Oil and Gas Reserves
The following supplemental data on the Company's oil and gas
activities were prepared in accordance with the Financial
Accounting Standards Board's (FASB) Statement of Financial
Accounting Standards No. 69 - "Disclosures About Oil and Gas
Producing Activities." Estimated future net cash flows are
determined by: (1) applying the respective year-end oil and gas
prices to the Company's estimates of future production of proved
reserves; (2) deducting estimates of the future costs of
development and production of proved reserves based on the assumed
continuation of the cost levels and economic conditions existing at
the respective year-end; and (3) deducting estimates of future
income taxes based on the respective year-end and future statutory
tax rates. Present value is determined using the FASB-prescribed
discount rate of 10% per annum.
Although the information presented is based on the Company's best
estimates of the required data, the methods and assumptions used in
preparing the data were those prescribed by the FASB. Although
unrealistic, they were specified in order to achieve uniformity in
assumptions and to provide for the use of reasonably objective
data. It is important to note here that this information is
neither fair market value nor the present value of future cash
flows and it does not reflect changes in oil and gas prices
experienced since the respective year-end. It is primarily a tool
designed by the FASB to allow for a reasonable comparison of oil
and gas reserves and changes therein through the use of a
standardized method. Accordingly, the Company cautions that this
data should not be used for other than its intended purpose.
<PAGE>
<PAGE>
<TABLE>
_________________________________________________________________________________________
STANDARDIZED MEASURE AT DECEMBER 31, 1993:
<CAPTION>
North Other
(Millions of dollars) Domestic Sea Foreign Total
_________________________________________________________________________________________
<S> <C> <C> <C> <C>
Future cash inflows $2,153.6 933.2 160.1 3,246.9
Future production and development costs (996.1) (287.3) (110.2) (1,393.6)
Future income tax expenses (228.1) (149.8) (9.6) (387.5)
_________________________________________________________________________________________
Future net cash flows 929.4 496.1 40.3 1,465.8
10% annual discount for estimated timing
of cash flows (347.6) (180.9) (13.9) (542.4)
_________________________________________________________________________________________
Standardized measure of discounted future
net cash flows $ 581.8 315.2 26.4 923.4
_________________________________________________________________________________________
CLAM $ - 51.8 - 51.8
_________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL SOURCES OF CHANGE DURING 1993:
(Millions of dollars)
_________________________________________________________________________________________
<S> <C>
Sales and transfers, net of production costs $ (225.9)
Net change in prices and production costs (209.6)
Extensions, discoveries and improved recovery,
less related costs 25.6
Net change in future development costs (114.3)
Previously estimated development costs
incurred during the year 56.6
Revisions of previous reserve estimates 10.1
Purchase of reserves in place 514.4
Sales of reserves in place (24.1)
Accretion of discount 101.3
Net change in income taxes 100.6
Other (12.7)
_________________________________________________________________________________________
Net change $ 222.0
_________________________________________________________________________________________
</TABLE>
<PAGE>
<PAGE>
<TABLE>
_________________________________________________________________________________________
STANDARDIZED MEASURE AT DECEMBER 31, 1992:
<CAPTION>
North Other
(Millions of dollars) Domestic Sea Foreign Total
_________________________________________________________________________________________
<S> <C> <C> <C> <C>
Future cash inflows $1,794.9 779.0 276.6 2,850.5
Future production and development costs (715.7) (261.0) (145.0) (1,121.7)
Future income tax expenses (292.4) (241.4) (38.2) (572.0)
_________________________________________________________________________________________
Future net cash flows 786.8 276.6 93.4 1,156.8
10% annual discount for estimated timing
of cash flows (313.9) (113.6) (27.9) (455.4)
_________________________________________________________________________________________
Standardized measure of discounted future
net cash flows $ 472.9 163.0 65.5 701.4
_________________________________________________________________________________________
CLAM $ - 65.1 - 65.1
_________________________________________________________________________________________
</TABLE>
<TABLE>
PRINCIPAL SOURCES OF CHANGE DURING 1992:
<CAPTION>
(Millions of dollars)
_________________________________________________________________________________________
<S> <C>
Sales and transfers, net of production costs $(203.3)
Net change in prices and production costs (9.2)
Extensions, discoveries and improved recovery,
less related costs 57.9
Net change in future development costs 12.3
Previously estimated development costs
incurred during the year 70.5
Revisions of previous reserve estimates 47.6
Purchase of reserves in place 61.7
Sales of reserves in place (52.2)
Accretion of discount 69.1
Net change in income taxes 3.3
Other (47.1)
_________________________________________________________________________________________
Net change $ 10.6
_________________________________________________________________________________________
</TABLE>
<PAGE>
<PAGE>
<TABLE>
_________________________________________________________________________________________
STANDARDIZED MEASURE AT DECEMBER 31, 1991:
<CAPTION>
North Other
(Millions of dollars) Domestic Sea Foreign Total
_________________________________________________________________________________________
<S> <C> <C> <C> <C>
Future cash inflows $1,793.3 783.4 179.9 2,756.6
Future production and development costs (691.2) (340.6) (79.1) (1,110.9)
Future income tax expenses (294.0) (200.3) (13.2) (507.5)
_________________________________________________________________________________________
Future net cash flows 808.1 242.5 87.6 1,138.2
10% annual discount for estimated timing
of cash flows (296.1) (126.5) (24.8) (447.4)
_________________________________________________________________________________________
Standardized measure of discounted future
net cash flows $ 512.0 116.0 62.8 690.8
_________________________________________________________________________________________
CLAM $ - 79.8 - 79.8
_________________________________________________________________________________________
</TABLE>
<TABLE>
PRINCIPAL SOURCES OF CHANGE DURING 1991:
<CAPTION>
(Millions of dollars)
_________________________________________________________________________________________
<S> <C>
Sales and transfers, net of production costs $(234.6)
Net change in prices and production costs (641.4)
Extensions, discoveries and improved recovery,
less related costs 74.1
Net change in future development costs (34.4)
Previously estimated development costs
incurred during the year 79.3
Revisions of previous reserve estimates 63.0
Accretion of discount 106.0
Net change in income taxes 154.9
Other 63.8
_________________________________________________________________________________________
Net change $(369.3)
_________________________________________________________________________________________
</TABLE>
<PAGE>
<PAGE>
<TABLE>
_________________________________________________________________________________________
Results of Operations for Oil and Gas Activities
<CAPTION>
Years ended December 31:
North Other
1993 (Millions of dollars) Domestic1 Sea Foreign2 Total
_________________________________________________________________________________________
<S> <C> <C> <C> <C>
Revenues $ 290.03 40.3 60.6 390.9
Production costs (81.2) (24.9) (17.8) (123.9)
Exploration expenses (31.4) (3.8) (13.6) (48.8)
DD&A (86.2) (19.3) (12.7) (118.2)
_________________________________________________________________________________________
91.2 (7.7) 16.5 100.0
Income tax (expense) benefit (32.0) 1.5 (6.8) (37.3)
_________________________________________________________________________________________
Earnings (loss)4 $ 59.2 (6.2) 9.7 62.7
_________________________________________________________________________________________
CLAM5 $ - 2.3 - 2.3
_________________________________________________________________________________________
1992 (Millions of dollars)
_________________________________________________________________________________________
Revenues 238.73 46.4 33.2 318.3
Production costs (76.8) (20.0) (18.2) (115.0)
Exploration expenses (30.5) (4.1) (6.9) (41.5)
DD&A and restructuring charge (104.1) (9.2) (11.0) (124.3)
_________________________________________________________________________________________
27.3 13.1 (2.9) 37.5
Income tax (expense) benefit (8.5) (8.4) .9 (16.0)
_________________________________________________________________________________________
Earnings (loss)4 $ 18.8 4.7 (2.0) 21.5
_________________________________________________________________________________________
CLAM5 $ - 6.4 - 6.4
_________________________________________________________________________________________
1991 (Millions of dollars)
_________________________________________________________________________________________
Revenues 249.83 64.2 34.5 348.5
Production costs (75.9) (21.7) (16.3) (113.9)
Exploration expenses (53.6) (4.6) (16.4) (74.6)
DD&A (74.8) (20.7) (11.3) (106.8)
_________________________________________________________________________________________
45.5 17.2 (9.5) 53.2
Income tax expense (14.3) (7.0) (.7) (22.0)
_________________________________________________________________________________________
Earnings (loss)4 $ 31.2 10.2 (10.2) 31.2
_________________________________________________________________________________________
CLAM5 $ - 14.0 - 14.0
_________________________________________________________________________________________
1 Includes NERCO Oil & Gas, Inc. since October 1, 1993.
2 In 1993, Canadian oil and gas properties were sold for $42.8, which resulted in a gain of
$23.5 (before income taxes of $10.3).
3 Includes intercompany transfers to the Company's refinery of $22.4, $20.7 and $18.7 in 1993,
1992 and 1991, respectively.
4 Excludes other income, general and administrative expenses and interest and debt expenses.
5 Represents the Company's equity in CLAM's net earnings after U.S. income taxes. See Note
6 of "Notes to Consolidated Financial Statements."
</TABLE>
<PAGE>
<PAGE>
<TABLE>
_________________________________________________________________________________________
Costs Incurred in Oil and Gas Activities
<CAPTION>
Years ended December 31:
North Other
1993 (Millions of dollars) Domestic Sea Foreign Total
_________________________________________________________________________________________
<S> <C> <C> <C> <C>
Property acquisition:
Proved $ 364.2 159.4 - 523.6
Unproved 4.5 40.8 1.2 46.5
Exploration 39.1 2.1 17.7 58.9
Development 52.2 24.2 3.1 79.5
_________________________________________________________________________________________
460.0 226.5 22.0 708.5
Capitalized interest 3.9 14.8 - 18.7
_________________________________________________________________________________________
$ 463.9 241.3 22.0 727.2
_________________________________________________________________________________________
CLAM $ - 5.2 - 5.2
_________________________________________________________________________________________
1992 (Millions of dollars)
_________________________________________________________________________________________
Property acquisition:
Proved 8.3 - 27.5 35.8
Unproved 2.5 - 8.1 10.6
Exploration 29.8 3.5 7.8 41.1
Development 39.5 27.9 3.1 70.5
_________________________________________________________________________________________
80.1 31.4 46.5 158.0
Capitalized interest 4.0 8.9 - 12.9
_________________________________________________________________________________________
$ 84.1 40.3 46.5 170.9
_________________________________________________________________________________________
CLAM $ - 10.7 - 10.7
_________________________________________________________________________________________
1991 (Millions of dollars)
_________________________________________________________________________________________
Property acquisition:
Proved .2 - - .2
Unproved 6.9 - 1.5 8.4
Exploration 53.1 2.0 17.1 72.2
Development 52.7 24.7 2.0 79.4
_________________________________________________________________________________________
112.9 26.7 20.6 160.2
Capitalized interest 14.7 7.8 .1 22.6
_________________________________________________________________________________________
$ 127.6 34.5 20.7 182.8
_________________________________________________________________________________________
CLAM $ - 18.2 - 18.2
_________________________________________________________________________________________
</TABLE>
<PAGE>
<PAGE>
<TABLE>
_________________________________________________________________________________________
OIL AND GAS OPERATING DATA1
<CAPTION>
Years ended December 31:
19932 1992 1991 1990 1989
_________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
CRUDE AND CONDENSATE3
Production (barrels per day):
Domestic:
Working interest 17,586 15,308 16,439 17,085 17,909
Royalty interest 4,161 4,070 4,070 4,041 4,406
_________________________________________________________________________________________
21,747 19,378 20,509 21,126 22,315
North Sea (working interest) 6,529 6,258 8,352 10,283 9,760
Other foreign (working interest) 6,509 5,674 5,896 6,652 5,072
_________________________________________________________________________________________
34,785 31,310 34,757 38,061 37,147
_________________________________________________________________________________________
Average price received (per barrel):
Domestic $ 16.96 19.14 20.13 22.69 17.94
North Sea 16.20 19.11 19.96 23.13 17.42
Other foreign 14.40 14.98 14.53 18.89 15.75
Consolidated 16.34 18.38 19.14 22.15 17.50
_________________________________________________________________________________________
NATURAL GAS
Production (thousands of cubic feet
per day):
Domestic:
Working interest 155,917 119,050 124,592 126,610 136,864
Royalty interest 23,861 21,146 25,666 24,771 22,342
_________________________________________________________________________________________
179,778 140,196 150,258 151,381 159,206
North Sea (working interest) 156 236 283 349 325
Other foreign (working interest) 5,316 4,871 4,388 4,918 5,527
CLAM Petroleum Company 34,608 40,485 48,772 46,330 53,045
_________________________________________________________________________________________
219,858 185,788 203,701 202,978 218,103
_________________________________________________________________________________________
Average price received (per MCF):
Domestic $ 2.19 1.75 1.53 1.74 1.96
North Sea 1.51 1.92 1.91 2.48 1.85
Other foreign 1.27 0.84 1.03 1.13 1.05
CLAM Petroleum Company 2.35 2.73 3.08 2.76 2.19
Consolidated 2.19 1.94 1.89 1.96 1.99
_________________________________________________________________________________________
PLANT PRODUCTS
Production (barrels per day):
Domestic (working interest) 2,377 2,294 2,145 2,197 2,520
North Sea (working interest) 352 461 510 612 377
Other foreign (working interest) 29 39 33 29 55
_________________________________________________________________________________________
2,758 2,794 2,688 2,838 2,952
_________________________________________________________________________________________
Average price received (per barrel):
Domestic $ 11.26 13.07 14.89 14.31 9.40
North Sea 12.62 14.47 16.93 15.36 10.65
Other foreign 11.97 12.68 13.12 13.70 4.58
Consolidated 11.44 13.29 15.26 14.53 9.47
_________________________________________________________________________________________
1 Includes the Company's 50% equity interest in its unconsolidated affiliate,
CLAM Petroleum Company.
2 Includes NERCO Oil & Gas, Inc. since October 1, 1993.
3 Before the elimination of intercompany transfers.
/TABLE
<PAGE>
<PAGE>
<TABLE>
_________________________________________________________________________________________
REFINING AND MARKETING OPERATING DATA
<CAPTION>
Years ended December 31,:
(Millions of dollars) 1993 1992 1991 1990 1989
_________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Refining operating profit (loss):
Revenues:
Refined products* $ 422.6 462.6 451.5 453.8 360.5
Other 1.9 .3 .2 .7 .2
_________________________________________________________________________________________
424.5 462.9 451.7 454.5 360.7
_________________________________________________________________________________________
Costs and expenses:
Cost of sales* 390.6 413.6 401.4 396.9 315.9
Operating expenses 35.2 31.4 32.4 33.1 28.9
Depreciation 5.2 5.0 4.7 4.5 4.3
Taxes, other than income 3.5 3.3 2.7 3.4 2.9
_________________________________________________________________________________________
434.5 453.3 441.2 437.9 352.0
_________________________________________________________________________________________
(10.0) 9.6 10.5 16.6 8.7
Crude marketing gain (loss) 2.9 5.1 15.0 (10.1) 3.6
_________________________________________________________________________________________
$ (7.1) 14.7 25.5 6.5 12.3
_________________________________________________________________________________________
*Before the elimination of
intercompany transfers to
the Company's refinery $ 22.4 20.7 18.7 22.3 21.3
_________________________________________________________________________________________
Sales (barrels per day):
No. 2 fuel oil 11,471 12,471 11,079 13,162 9,911
Leaded gasoline - - - 14 1,423
Unleaded gasoline 22,747 23,640 21,675 21,618 13,472
Jet fuel 6,488 5,415 5,102 5,595 5,789
Naphtha 5,477 4,922 4,045 6,260 5,847
Other 8,347 6,880 6,987 8,258 11,674
_________________________________________________________________________________________
54,530 53,328 48,888 54,907 48,116
_________________________________________________________________________________________
Average price received (per
barrel) $ 21.24 23.70 25.30 22.65 20.52
_________________________________________________________________________________________
</TABLE>
<PAGE>
<PAGE>
<TABLE>
_________________________________________________________________________________________
OIL AND GAS PROPERTIES
<CAPTION>
December 31, 1993
Productive acreage Undeveloped acreage
(Thousands of acres) Gross Net Gross Net
_________________________________________________________________________________________
<S> <C> <C> <C> <C>
LEASEHOLDS AND OPTIONS
Domestic:
Offshore Gulf of Mexico 343.2 167.6 470.5 315.2
Louisiana 128.7 80.0 34.3 13.7
Mississippi/Alabama/Florida 14.8 11.5 5.5 1.1
Colorado/Utah/New Mexico 1.3 .6 168.8 110.8
Wyoming 44.1 12.6 267.4 110.4
Other 59.5 9.5 77.4 9.0
_________________________________________________________________________________________
591.6 281.8 1,023.9 560.2
_________________________________________________________________________________________
North Sea:
Netherlands 2.7 1.0 103.3 36.0
United Kingdom 19.1 1.2 147.2 12.0
_________________________________________________________________________________________
21.8 2.2 250.5 48.0
_________________________________________________________________________________________
Other foreign:
Algeria - - 1,552.9 1,009.4
Australia - - 2,242.8 557.6
Canada 33.3 16.5 194.1 111.1
Colombia 11.7 1.6 523.7 427.0
France - - 113.4 56.7
Indonesia 5.9 .9 489.7 66.2
Papua New Guinea - - 2,868.4 2,750.5
Tunisia - - 1,021.0 510.5
Yemen - - 1,167.9 198.5
_________________________________________________________________________________________
50.9 19.0 10,173.9 5,687.5
_________________________________________________________________________________________
FEE LANDS 95.0 95.0 499.0 499.0
_________________________________________________________________________________________
CLAM PETROLEUM COMPANY (50%)
Netherlands-North Sea 42.0 5.3 805.9 184.3
_________________________________________________________________________________________
801.3 403.3 12,753.2 6,979.0
_________________________________________________________________________________________
</TABLE>
<PAGE>
<PAGE>
<TABLE>
_______________________________________________________________________________________
WELLS DRILLED
<CAPTION>
Years ended December 31:
1993 1992 1991 1990 1989
_______________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
GROSS WELLS DRILLED (BY LOCATION)
Working interest
Domestic:
Offshore Gulf of Mexico 23 5 18 13 16
Louisiana 10 17 30 28 28
Michigan - - - 1 3
Oklahoma - - 25 25 16
Texas - - 3 - 1
Wyoming 6 2 9 7 6
Other - 1 - - 1
_______________________________________________________________________________________
39 25 85 74 71
_______________________________________________________________________________________
North Sea:
Netherlands 4 5 10 14 6
United Kingdom 5 8 4 8 6
_______________________________________________________________________________________
9 13 14 22 12
_______________________________________________________________________________________
Other foreign:
Canada 38 33 44 44 49
Colombia - 3 2 4 5
Other 2 1 2 2 -
_______________________________________________________________________________________
40 37 48 50 54
_______________________________________________________________________________________
Total working interest 88 75 147 146 137
Royalty interest 35 26 28 31 36
_______________________________________________________________________________________
Total wells 123 101 175 177 173
_______________________________________________________________________________________
</TABLE>
<TABLE>
Gross (Net) Wells Drilled (by type)
<CAPTION>
Exploratory:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Oil 34 (15.2) 26 (13.1) 33 (15.1) 28 (14.4) 43 (19.2)
Gas 18 (3.9) 10 (2.5) 34 (12.4) 40 (15.1) 28 (9.3)
Dry 31 (11.4) 28 (12.4) 74 (29.5) 77 (28.1) 56 (23.5)
_______________________________________________________________________________________
83 (30.5) 64 (28.0) 141 (57.0) 145 (57.6) 127 (52.0)
_______________________________________________________________________________________
Development:
Oil 17 (2.1) 22 (2.6) 23 (2.4) 14 (2.5) 20 (3.6)
Gas 21 (3.4) 6 (1.4) 9 (1.5) 17 (1.7) 19 (2.7)
Dry 2 (.3) 9 (.7) 2 (.6) 1 (-) 7 (.9)
_______________________________________________________________________________________
40 (5.8) 37 (4.7) 34 (4.5) 32 (4.2) 46 (7.2)
_______________________________________________________________________________________
Total wells 123 (36.3) 101 (32.7) 175 (61.5) 177 (61.8) 173 (59.2)
_______________________________________________________________________________________
</TABLE>
<PAGE>
<PAGE>
<TABLE>
_________________________________________________________________________________________
SELECTED FINANCIAL DATA
<CAPTION>
Years ended December 31,:
(Millions of dollars, except per share data)
19931 19922 1991 19902 1989
_________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Revenues $ 815.4 787.4 825.3 874.7 760.6
Operating profit $ 88.0 49.9 75.2 142.1 118.5
Net earnings (loss) $ 9.6 (6.8) 20.9 54.9 44.1
Primary and fully diluted
earnings (loss) per share $ 0.33 (0.24) 0.74 1.94 1.50
Average shares (millions) 29.5 28.4 28.3 28.3 29.4
_________________________________________________________________________________________
Cash flows from operations $ 178.9 178.7 209.2 251.9 268.6
Working capital (deficit):
End of year $ 15.6 (20.2) 24.2 27.2 (11.7)
Current ratio 1.09 .88 1.15 1.17 .94
_________________________________________________________________________________________
Total assets $ 1,838.7 1,209.1 1,252.8 1,226.0 1,199.4
Long-term debt $ 734.5 343.0 347.3 346.1 366.9
Stockholders' equity $ 599.8 416.6 446.5 448.7 416.2
Cash dividends per share $ 1.00 1.00 1.00 1.00 1.00
_________________________________________________________________________________________
1
Includes NERCO Oil & Gas, Inc. since October 1, 1993. In 1993, nonrecurring items resulted
in a charge to net earnings of $1.3, which consisted of: Canadian oil and gas properties were
sold for $42.8, which resulted in a gain of $23.5 ($13.2 after income taxes); refinery
inventories were reduced to market value at year end resulting in a charge of $6.5 ($4.2 after
income taxes); debt issue costs associated with a credit facility were written off resulting
in a charge of $6.7 ($4.3 after income taxes); a $3 income tax charge to recognize the
retroactive rate change enacted in the Budget Reconciliation Act of 1993; and a $3 after-tax
charge to the Company's equity in the earnings of its affiliate due to CLAM's adoption of SFAS
No. 109.
2
In 1992, restructuring and other nonrecurring charges/credits totaled $27.4. See Note 4 of
"Notes to Consolidated Financial Statements." In 1990, nonrecurring charges/credits included
a provision for certain litigation which was offset by credits resulting from the conclusion
of the 1988 restructuring program at a smaller loss than originally estimated and a favorable
settlement of a potential tax claim.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
_________________________________________________________________________________________
MARKET PRICE AND DIVIDEND DATA
<CAPTION>
Quarter ended
March 31 June 30 Sept. 30 Dec. 31
_________________________________________________________________________________________
<S> <C> <C> <C> <C>
1993:
Capital stock price:
High $47 47 7/8 49 47 1/2
Low 31 40 1/2 40 7/8 37 7/8
Cash dividends per share 0.25 0.25 0.25 0.25
_________________________________________________________________________________________
1992:
Capital stock price:
High $33 1/2 37 1/4 40 1/2 38 1/4
Low 25 28 1/2 33 3/4 32 1/2
Cash dividends per share 0.25 0.25 0.25 0.25
_________________________________________________________________________________________
</TABLE>
<PAGE>
<PAGE>
<TABLE>
_________________________________________________________________________________________
QUARTERLY DATA
<CAPTION>
Quarter ended
(Millions, except per share data) March 31 June 30 Sept. 30 Dec. 31
_________________________________________________________________________________________
<S> <C> <C> <C> <C>
1993*:
Revenues $186.9 194.7 193.5 240.3
Costs and Expenses 181.9 184.7 190.9 233.3
_________________________________________________________________________________________
Earnings (loss) before income taxes 5.0 10.0 2.6 7.0
Income tax expense (benefit) 2.3 4.4 4.4 .8
_________________________________________________________________________________________
Earnings (loss) before extraordinary item
and accounting changes 2.7 5.6 (1.8) 6.2
Loss on early retirement of debt - - - (3.3)
Changes in accounting principles .2 - - -
_________________________________________________________________________________________
Net earnings (loss) $ 2.9 5.6 (1.8) 2.9
_________________________________________________________________________________________
Primary and fully diluted earnings (loss)
per share before extraordinary item
and accounting changes 0.09 0.20 (0.06) 0.19
Loss on early retirement of debt - - - (0.10)
Changes in accounting principles 0.01 - - -
_________________________________________________________________________________________
Earnings (loss) per share $ 0.10 0.20 (0.06) 0.09
_________________________________________________________________________________________
Average shares 28.5 28.8 28.9 31.7
_________________________________________________________________________________________
</TABLE>
<TABLE>
<CAPTION>
Quarter ended
(Millions, except per share data) March 31 June 30 Sept. 30 Dec. 31
_________________________________________________________________________________________
<S> <C> <C> <C> <C>
1992**:
Revenues $182.9 192.3 208.5 203.7
Costs and Expenses 221.9 186.1 196.1 185.4
_________________________________________________________________________________________
Earnings (loss) before income taxes (39.0) 6.2 12.4 18.3
Income tax expense (benefit) (13.1) 1.4 4.2 6.6
_________________________________________________________________________________________
Earnings (loss) before extraordinary item (25.9) 4.8 8.2 11.7
Loss on early retirement of debt - - (5.6) -
_________________________________________________________________________________________
Net earnings (loss) $(25.9) 4.8 2.6 11.7
_________________________________________________________________________________________
Primary and fully diluted earnings (loss)
per share before extraordinary item (0.91) 0.17 0.29 0.41
Loss on early retirement of debt - - (0.20) -
_________________________________________________________________________________________
Primary and fully diluted earnings (loss)
per share $(0.91) 0.17 0.09 0.41
_________________________________________________________________________________________
Average shares 28.3 28.3 28.4 28.4
_________________________________________________________________________________________
(continued)
<PAGE>
<PAGE>
*
Includes NERCO Oil & Gas, Inc. since October 1, 1993. In the first quarter of 1993, the
Company recorded a $3 after-tax charge to its equity in the earnings of its affiliate due to
CLAM's adoption of SFAS No. 109. In the third quarter of 1993, the Company recorded a $3
income tax charge to recognize the retroactive rate change enacted in the Budget
Reconciliation Act of 1993. In the fourth quarter of 1993, nonrecurring items resulted in
a net credit to earnings of $10.3 ($4.7 after income taxes), which consisted of: Canadian
oil and gas properties were sold for $42.8, which resulted in a gain of $23.5 ($13.2 after
income taxes); refinery inventories were reduced to market value at year end resulting in a
charge of $6.5 ($4.2 after income taxes); and debt issue costs associated with a credit
facility were written off resulting in a charge of $6.7 ($4.3 after income taxes).
**
In the first quarter of 1992, the Company recorded a $60.4 charge (before income tax benefits
of approximately $20.5) against earnings to provide for the restructuring of its oil and gas
operations. This charge includes provisions for estimated losses on the disposition of
selected domestic properties of $55.6 (both developed and undeveloped) and costs associated
with staff retirements, reductions and related transition expenses of $4.8. In addition, the
Company reduced its litigation accrual for the State of Louisiana gas royalty claim by $25
(before income taxes of $8.5). Also in the first quarter of 1992, the Company recorded a
$5.5 charge (before income tax benefits of $1.9) against earnings to provide for the
estimated uninsured losses associated with a gas well blowout. This charge was reduced by
$2.5 in the fourth quarter. In the third quarter of 1992, the Company completed the sale of
the selected properties for a purchase price of $48.1. The transaction resulted in a gain
of approximately $8 (before income taxes of $2.7) which was applied to the previously
recorded restructuring charges.
</TABLE>
<PAGE>
<PAGE>
EXHIBIT 21
<PAGE>
<PAGE>
<TABLE>
Exhibit 21
THE LOUISIANA LAND AND EXPLORATION COMPANY
AND SUBSIDIARIES
Subsidiaries of the Registrant
December 31, 1993
<CAPTION>
% Ownership Jurisdiction
by Immediate of
Parent Incorporation
_______________________________________________________________________________________
<S> <C> <C>
The Louisiana Land and Exploration Company - Maryland
LL&E Algeria, Ltd. 100 Bermuda
LL&E Australia (Offshore) Pty., Ltd. 100 Australia
LL&E (Australia) Pty., Ltd. 100 Australia
LL&E Canada Holdings, Inc. 100 Delaware
LL&E Canada, Ltd. 100 Canada
LL&E Colombia, Inc. 100 Delaware
LL&E Egypt, Inc. 100 Delaware
LL&E Erave Pty., Ltd. 100 Papua New Guinea
LL&E Espana, Inc. 100 Delaware
LL&E (Europe-Africa-Middle East) Inc. 100 Delaware
LL&E France, S.A. 100 France
LL&E Gas Marketing, Inc. 100 Delaware
LL&E Gippsland Pty., Ltd. 100 Australia
LL&E Holland, Ltd. 100 Canada
LL&E, Inc. 100 Delaware
LL&E Indonesia, Ltd. 100 British Virgin Islands
LL&E International, Inc. 100 Delaware
LL&E Mining, Inc. 100 Delaware
LL&E (Netherlands) Inc. 100 Delaware
MaraLou Netherlands Partnership* 50 Texas
CLAM Petroleum Company 100 Delaware
LL&E Netherlands North Sea, Ltd. 100 Canada
LL&E Netherlands Petroleum Company 100 Delaware
LL&E Overseas Petroleum, Ltd. 100 Delaware
LL&E Petroleum Marketing, Inc. 100 Delaware
LL&E Petroleum Terminals, Inc. 100 Delaware
LL&E Petroleum Resources International, Inc. 100 Delaware
LL&E Pipeline Corporation 100 Delaware
LL&E PNG Pty., Ltd. 100 Papua New Guinea
LL&E Properties, Inc. 100 Texas
Westport Utilities Systems Co., Inc. 100 Louisiana
LL&E Sepik Pty., Ltd. 100 Papua New Guinea
LL&E Suez, Inc. 100 Delaware
LL&E Timor Sea Pty., Ltd. 100 Australia
LL&E Tunisia, Inc. 100 Delaware
LL&E Tunisia, Ltd. 100 Bermuda
LL&E (U.K.) Inc. 100 Delaware
LL&E Yemen, Ltd. 100 Bermuda
</TABLE>
<PAGE>
<PAGE>
<TABLE>
Exhibit 21
(Continued)
THE LOUISIANA LAND AND EXPLORATION COMPANY
AND SUBSIDIARIES
Subsidiaries of the Registrant
December 31, 1993
<CAPTION>
% Ownership Jurisdiction
by Immediate of
Parent Incorporation
_______________________________________________________________________________________
<S> <C> <C>
LLOXY Holdings, Inc. 100 Maryland
LLOXY Production Financing Company, Inc. 100 Delaware
Molokai California Limited 100 California
Kaluakoi Corporation 100 Hawaii
White Pine Leasing, Inc. 100 Delaware
Inexco Oil Company 100 Delaware
Wilson Brothers Drilling Company 100 Delaware
Evangeline Northwest Corporation 100 Oregon
Evangeline Gas Corp. 45 Delaware
* Unconsolidated affiliate accounted for under the equity method.
</TABLE>
<PAGE>
<PAGE>
EXHIBIT 23
<PAGE>
<PAGE>
Exhibit 23
The Board of Directors
The Louisiana Land and Exploration Company:
We consent to incorporation by reference in Registration Statements No.
2-79097, No. 2-98948, No. 33-22108, No. 33-22338 and No. 33-37814 on Form
S-8, No. 33-48339 and No. 33-50991 on Form S-3 and No. 33-6593 on Form S-4
of The Louisiana Land and Exploration Company of our reports dated
February 9, 1994, relating to the consolidated balance sheets of The
Louisiana Land and Exploration Company and subsidiaries as of December 31,
1993 and 1992 and the related consolidated statements of earnings (loss),
stockholders' equity, and cash flows and related schedules for each of the
years in the three-year period ended December 31, 1993 which reports appear
or are incorporated by reference in the December 31, 1993 annual report on
Form 10-K of The Louisiana Land and Exploration Company. Our reports refer
to the adoption of the methods of accounting for income taxes and
postretirement benefits other than pensions prescribed by Statement of
Financial Accounting Standards Nos. 109 and 106, respectively.
We also consent to incorporation by reference in the previously referred to
Registration Statements of our report dated January 28, 1994, relating to
the consolidated balance sheets of MaraLou Netherlands Partnership and
subsidiary as of December 31, 1993 and 1992 and the related consolidated
statements of income, partners' capital, and cash flows for each of the
years in the three-year period ended December 31, 1993 which report appears
in the December 31, 1993 annual report on Form 10-K of The Louisiana Land
and Exploration Company. Our report refers to the adoption of the method
of accounting for income taxes prescribed by Statement of Financial
Accounting Standard No. 109.
/s/ KPMG Peat Marwick
KPMG PEAT MARWICK
New Orleans, Louisiana
February 18, 1994
<PAGE>
<PAGE>
EXHIBIT 24
<PAGE>
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
POWER OF ATTORNEY
WHEREAS, The Louisiana Land and Exploration Company intends to file
with the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended, an Annual Report on Form 10-K;
NOW, THEREFORE, the undersigned in his capacity as a director and
the principal executive officer of The Louisiana Land and Exploration
Company hereby appoints Richard A. Bachmann, Frederick J. Plaeger, II and
Jerry D. Carlisle and each of them severally, his true and lawful attorneys
or attorney with power to act with or without the other and with full power
of substitution and resubstitution, to execute in his name, place, and
stead, in his capacity as a director and the principal executive officer of
The Louisiana Land and Exploration Company, said Annual Report on Form 10-K
and any and all amendments thereto and all instruments necessary or
incidental in connection therewith, and to file or cause to be filed the
same with the Securities and Exchange Commission. Each of said attorneys
shall have full power and authority to do and perform in the name and on
behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done in the premises, as fully to all intents
and purposes as the undersigned might or could do in person. The
undersigned hereby ratifies and approves the acts of said attorneys and each
of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 18th day of February, 1994.
/s/ H. Leighton Steward
_____________________________
H. Leighton Steward<PAGE>
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
POWER OF ATTORNEY
WHEREAS, The Louisiana Land and Exploration Company intends to file
with the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended, an Annual Report on Form 10-K;
NOW, THEREFORE, the undersigned in his capacity as a director of
The Louisiana Land and Exploration Company hereby appoints Richard A.
Bachmann, Frederick J. Plaeger, II and Jerry D. Carlisle and each of them
severally, his true and lawful attorneys or attorney with power to act with
or without the other and with full power of substitution and resubstitution,
to execute in his name, place, and stead, in his capacity as a director of
The Louisiana Land and Exploration Company, said Annual Report on Form 10-K
and any and all amendments thereto and all instruments necessary or
incidental in connection therewith, and to file or cause to be filed the
same with the Securities and Exchange Commission. Each of said attorneys
shall have full power and authority to do and perform in the name and on
behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done in the premises, as fully to all intents
and purposes as the undersigned might or could do in person. The
undersigned hereby ratifies and approves the acts of said attorneys and each
of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 18th day of February, 1994.
/s/ Leland C. Adams
_____________________________
Leland C. Adams
<PAGE>
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
POWER OF ATTORNEY
WHEREAS, The Louisiana Land and Exploration Company intends to file
with the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended, an Annual Report on Form 10-K;
NOW, THEREFORE, the undersigned in his capacity as a director and
the principal financial officer of The Louisiana Land and Exploration
Company hereby appoints Frederick J. Plaeger, II and Jerry D. Carlisle his
true and lawful attorneys or attorney with power to act with or without the
other and with full power of substitution and resubstitution, to execute in
his name, place, and stead, in his capacity as a director and the principal
financial officer of The Louisiana Land and Exploration Company, said Annual
Report on Form 10-K and any and all amendments thereto and all instruments
necessary or incidental in connection therewith, and to file or cause to be
filed the same with the Securities and Exchange Commission. Each of said
attorneys shall have full power and authority to do and perform in the name
and on behalf of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as fully to
all intents and purposes as the undersigned might or could do in person.
The undersigned hereby ratifies and approves the acts of said attorneys and
each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 18th day of February, 1994.
/s/ Richard A. Bachmann
_____________________________
Richard A. Bachmann
<PAGE>
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
POWER OF ATTORNEY
WHEREAS, The Louisiana Land and Exploration Company intends to file
with the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended, an Annual Report on Form 10-K;
NOW, THEREFORE, the undersigned in his capacity as a director of
The Louisiana Land and Exploration Company hereby appoints Richard A.
Bachmann, Frederick J. Plaeger, II and Jerry D. Carlisle and each of them
severally, his true and lawful attorneys or attorney with power to act with
or without the other and with full power of substitution and resubstitution,
to execute in his name, place, and stead, in his capacity as a director of
The Louisiana Land and Exploration Company, said Annual Report on Form 10-K
and any and all amendments thereto and all instruments necessary or
incidental in connection therewith, and to file or cause to be filed the
same with the Securities and Exchange Commission. Each of said attorneys
shall have full power and authority to do and perform in the name and on
behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done in the premises, as fully to all intents
and purposes as the undersigned might or could do in person. The
undersigned hereby ratifies and approves the acts of said attorneys and each
of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 18th day of February, 1994.
/s/ John F. Greene
_____________________________
John F. Greene<PAGE>
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
POWER OF ATTORNEY
WHEREAS, The Louisiana Land and Exploration Company intends to file
with the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended, an Annual Report on Form 10-K;
NOW, THEREFORE, the undersigned in his capacity as a director of
The Louisiana Land and Exploration Company hereby appoints Richard A.
Bachmann, Frederick J. Plaeger, II and Jerry D. Carlisle and each of them
severally, his true and lawful attorneys or attorney with power to act with
or without the other and with full power of substitution and resubstitution,
to execute in his name, place, and stead, in his capacity as a director of
The Louisiana Land and Exploration Company, said Annual Report on Form 10-K
and any and all amendments thereto and all instruments necessary or
incidental in connection therewith, and to file or cause to be filed the
same with the Securities and Exchange Commission. Each of said attorneys
shall have full power and authority to do and perform in the name and on
behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done in the premises, as fully to all intents
and purposes as the undersigned might or could do in person. The
undersigned hereby ratifies and approves the acts of said attorneys and each
of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 18th day of February, 1994.
/s/ Eamon M. Kelly
_____________________________
Eamon M. Kelly
<PAGE>
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
POWER OF ATTORNEY
WHEREAS, The Louisiana Land and Exploration Company intends to file
with the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended, an Annual Report on Form 10-K;
NOW, THEREFORE, the undersigned in his capacity as a director of
The Louisiana Land and Exploration Company hereby appoints Richard A.
Bachmann, Frederick J. Plaeger, II and Jerry D. Carlisle and each of them
severally, his true and lawful attorneys or attorney with power to act with
or without the other and with full power of substitution and resubstitution,
to execute in his name, place, and stead, in his capacity as a director of
The Louisiana Land and Exploration Company, said Annual Report on Form 10-K
and any and all amendments thereto and all instruments necessary or
incidental in connection therewith, and to file or cause to be filed the
same with the Securities and Exchange Commission. Each of said attorneys
shall have full power and authority to do and perform in the name and on
behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done in the premises, as fully to all intents
and purposes as the undersigned might or could do in person. The
undersigned hereby ratifies and approves the acts of said attorneys and each
of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 18th day of February, 1994.
/s/ Victor A. Rice
_____________________________
Victor A. Rice
<PAGE>
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
POWER OF ATTORNEY
WHEREAS, The Louisiana Land and Exploration Company intends to file
with the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended, an Annual Report on Form 10-K;
NOW, THEREFORE, the undersigned in his capacity as a director of
The Louisiana Land and Exploration Company hereby appoints Richard A.
Bachmann, Frederick J. Plaeger, II and Jerry D. Carlisle and each of them
severally, his true and lawful attorneys or attorney with power to act with
or without the other and with full power of substitution and resubstitution,
to execute in his name, place, and stead, in his capacity as a director of
The Louisiana Land and Exploration Company, said Annual Report on Form 10-K
and any and all amendments thereto and all instruments necessary or
incidental in connection therewith, and to file or cause to be filed the
same with the Securities and Exchange Commission. Each of said attorneys
shall have full power and authority to do and perform in the name and on
behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done in the premises, as fully to all intents
and purposes as the undersigned might or could do in person. The
undersigned hereby ratifies and approves the acts of said attorneys and each
of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 18th day of February, 1994.
/s/ Orin R. Smith
_____________________________
Orin R. Smith<PAGE>
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
POWER OF ATTORNEY
WHEREAS, The Louisiana Land and Exploration Company intends to file
with the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended, an Annual Report on Form 10-K;
NOW, THEREFORE, the undersigned in his capacity as a director of
The Louisiana Land and Exploration Company hereby appoints Richard A.
Bachmann, Frederick J. Plaeger, II and Jerry D. Carlisle and each of them
severally, his true and lawful attorneys or attorney with power to act with
or without the other and with full power of substitution and resubstitution,
to execute in his name, place, and stead, in his capacity as a director of
The Louisiana Land and Exploration Company, said Annual Report on Form 10-K
and any and all amendments thereto and all instruments necessary or
incidental in connection therewith, and to file or cause to be filed the
same with the Securities and Exchange Commission. Each of said attorneys
shall have full power and authority to do and perform in the name and on
behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done in the premises, as fully to all intents
and purposes as the undersigned might or could do in person. The
undersigned hereby ratifies and approves the acts of said attorneys and each
of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 18th day of February, 1994.
/s/ Arthur R. Taylor
_____________________________
Arthur R. Taylor
<PAGE>
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
POWER OF ATTORNEY
WHEREAS, The Louisiana Land and Exploration Company intends to file
with the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended, an Annual Report on Form 10-K;
NOW, THEREFORE, the undersigned in his capacity as a director of
The Louisiana Land and Exploration Company hereby appoints Richard A.
Bachmann, Frederick J. Plaeger, II and Jerry D. Carlisle and each of them
severally, his true and lawful attorneys or attorney with power to act with
or without the other and with full power of substitution and resubstitution,
to execute in his name, place, and stead, in his capacity as a director of
The Louisiana Land and Exploration Company, said Annual Report on Form 10-K
and any and all amendments thereto and all instruments necessary or
incidental in connection therewith, and to file or cause to be filed the
same with the Securities and Exchange Commission. Each of said attorneys
shall have full power and authority to do and perform in the name and on
behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done in the premises, as fully to all intents
and purposes as the undersigned might or could do in person. The
undersigned hereby ratifies and approves the acts of said attorneys and each
of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 18th day of February, 1994.
/s/ W. R. Timken, Jr.
_____________________________
W. R. Timken, Jr.
<PAGE>
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
POWER OF ATTORNEY
WHEREAS, The Louisiana Land and Exploration Company intends to file
with the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended, an Annual Report on Form 10-K;
NOW, THEREFORE, the undersigned in his capacity as a director of
The Louisiana Land and Exploration Company hereby appoints Richard A.
Bachmann, Frederick J. Plaeger, II and Jerry D. Carlisle and each of them
severally, his true and lawful attorneys or attorney with power to act with
or without the other and with full power of substitution and resubstitution,
to execute in his name, place, and stead, in his capacity as a director of
The Louisiana Land and Exploration Company, said Annual Report on Form 10-K
and any and all amendments thereto and all instruments necessary or
incidental in connection therewith, and to file or cause to be filed the
same with the Securities and Exchange Commission. Each of said attorneys
shall have full power and authority to do and perform in the name and on
behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done in the premises, as fully to all intents
and purposes as the undersigned might or could do in person. The
undersigned hereby ratifies and approves the acts of said attorneys and each
of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 18th day of February, 1994.
/s/ Carlisle A.H. Trost
_____________________________
Carlisle A.H. Trost
<PAGE>
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
POWER OF ATTORNEY
WHEREAS, The Louisiana Land and Exploration Company intends to file
with the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended, an Annual Report on Form 10-K;
NOW, THEREFORE, the undersigned in his capacity as a director of
The Louisiana Land and Exploration Company hereby appoints Richard A.
Bachmann, Frederick J. Plaeger, II and Jerry D. Carlisle and each of them
severally, his true and lawful attorneys or attorney with power to act with
or without the other and with full power of substitution and resubstitution,
to execute in his name, place, and stead, in his capacity as a director of
The Louisiana Land and Exploration Company, said Annual Report on Form 10-K
and any and all amendments thereto and all instruments necessary or
incidental in connection therewith, and to file or cause to be filed the
same with the Securities and Exchange Commission. Each of said attorneys
shall have full power and authority to do and perform in the name and on
behalf of the undersigned, in any and all capacities, every act whatsoever
necessary or desirable to be done in the premises, as fully to all intents
and purposes as the undersigned might or could do in person. The
undersigned hereby ratifies and approves the acts of said attorneys and each
of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 18th day of February, 1994.
/s/ E. L. Williamson
_____________________________
E. L. Williamson
<PAGE>
<PAGE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
POWER OF ATTORNEY
WHEREAS, The Louisiana Land and Exploration Company intends to file
with the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended, an Annual Report on Form 10-K;
NOW, THEREFORE, the undersigned in his capacity as the principal
accounting officer of The Louisiana Land and Exploration Company hereby
appoints Richard A. Bachmann and Frederick J. Plaeger, II and each of them
severally, his true and lawful attorneys or attorney with power to act with
or without the other and with full power of substitution and resubstitution,
to execute in his name, place, and stead, in his capacity as the principal
accounting officer of The Louisiana Land and Exploration Company, said
Annual Report on Form 10-K and any and all amendments thereto and all
instruments necessary or incidental in connection therewith, and to file or
cause to be filed the same with the Securities and Exchange Commission.
Each of said attorneys shall have full power and authority to do and perform
in the name and on behalf of the undersigned, in any and all capacities,
every act whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or could do in
person. The undersigned hereby ratifies and approves the acts of said
attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 18th day of February, 1994.
/s/ Jerry D. Carlisle
_____________________________
Jerry D. Carlisle
<PAGE>
<PAGE>
[TYPE] COVER
THE LOUISIANA LAND AND EXPLORATION COMPANY
909 Poydras Street
New Orleans, LA 70112
February 22, 1994
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
Pursuant to the requirements of the Securities Exchange Act of 1934, we are
transmitting herewith the attached Annual Report on Form 10-K for the fiscal
year ended December 31, 1993.
Sincerely,
THE LOUISIANA LAND AND EXPLORATION COMPANY
s/Frederick J. Plaeger, II
Frederick J. Plaeger, II
General Counsel and Corporate Secretary
