SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1996
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ............to............
Commission file number 1-959
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
NO CHANGE
Former name, former address and former fiscal year, if
changed since last report
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes X . No .
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Outstanding at
Class August 1, 1996
CAPITAL STOCK, $.15 PAR VALUE 34,138,709 SHARES
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THE LOUISIANA LAND AND EXPLORATION COMPANY
INDEX
Page
Number
_________________________________________________________________
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
(The June 30, 1996 and 1995 consolidated financial state-
ments included in this filing on Form 10-Q have been
reviewed by KPMG Peat Marwick LLP, independent auditors, in
accordance with established professional standards and
procedures for such a review. The report of KPMG Peat
Marwick LLP commenting upon their review is included
herein.)
Consolidated Balance Sheets - June 30, 1996 and
December 31, 1995............................. 3
Consolidated Statements of Earnings - three months
and six months ended June 30, 1996 and 1995... 4
Consolidated Statements of Cash Flows - six months
ended June 30, 1996 and 1995.................. 5
Notes to Consolidated Financial Statements........ 6-7
Independent Auditors' Review Report............... 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................... 9-12
Petroleum Segment Information......................... 13
Operating Data........................................ 14-15
Part II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K............ 16
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<TABLE>
Part I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
THE LOUISIANA LAND AND EXPLORATION COMPANY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
(Millions of dollars)
June 30, December 31,
ASSETS 1996 1995
_____________________________________________________________________________________
<S> <C> <C>
CURRENT ASSETS:
Cash, including cash equivalents (June 30,
1996-$3.0; December 31, 1995-$1.0) $ 11.7 10.3
Accounts and notes receivable, principally trade 132.5 143.6
Income taxes receivable .5 .2
Inventories 43.0 38.7
Prepaid expenses 14.2 12.9
Deferred income taxes .9 .9
_____________________________________________________________________________________
TOTAL CURRENT ASSETS 202.8 206.6
_____________________________________________________________________________________
Investments in affiliates 15.1 19.9
Property, plant and equipment 3,185.9 3,120.9
Less accumulated depletion, depreciation and amortization (1,981.5) (1,913.3)
_____________________________________________________________________________________
NET PROPERTY, PLANT AND EQUIPMENT 1,204.4 1,207.6
_____________________________________________________________________________________
Other assets 33.0 33.6
_____________________________________________________________________________________
$ 1,455.3 1,467.7
_____________________________________________________________________________________
LIABILITIES AND STOCKHOLDERS' EQUITY
_____________________________________________________________________________________
CURRENT LIABILITIES:
Accounts payable and accrued expenses 208.1 199.8
Income taxes payable 6.4 .8
_____________________________________________________________________________________
TOTAL CURRENT LIABILITIES 214.5 200.6
_____________________________________________________________________________________
Deferred income taxes 62.2 49.6
Long-term debt 592.4 691.6
Other liabilities 158.5 155.2
_____________________________________________________________________________________
STOCKHOLDERS' EQUITY:
Capital stock 5.1 5.0
Additional paid-in capital 36.8 14.8
Retained earnings 386.5 352.8
_____________________________________________________________________________________
428.4 372.6
Loans to ESOP (.7) (1.9)
_____________________________________________________________________________________
TOTAL STOCKHOLDERS' EQUITY 427.7 370.7
_____________________________________________________________________________________
$ 1,455.3 1,467.7
_____________________________________________________________________________________
See accompanying notes to consolidated financial statements.
</TABLE>
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<TABLE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(Millions, except per share data)
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1996 1995 1996 1995
_____________________________________________________________________________________
<S> <C> <C> <C> <C>
REVENUES:
Oil and gas $135.8 115.3 283.5 224.4
Refined products 110.2 93.2 225.0 175.4
Gain on sale of oil and gas properties .3 2.2 .3 2.2
Other 1.1 2.4 4.8 4.2
_____________________________________________________________________________________
247.4 213.1 513.6 406.2
_____________________________________________________________________________________
COSTS AND EXPENSES:
Lease operating and facility expenses 27.9 29.9 57.9 59.4
Refinery cost of sales and operating
expenses 101.7 91.8 216.1 171.4
Dry holes and exploratory charges 21.8 16.9 43.3 32.1
Depletion, depreciation and amortization 44.6 39.0 88.1 75.9
Taxes, other than on earnings 6.3 6.3 12.5 12.7
General, administrative and other
expenses 9.7 9.8 19.3 20.5
Interest and debt expenses 8.9 9.6 18.1 19.0
_____________________________________________________________________________________
220.9 203.3 455.3 391.0
_____________________________________________________________________________________
Earnings before income taxes 26.5 9.8 58.3 15.2
Income tax expense 9.3 3.4 20.5 5.3
_____________________________________________________________________________________
NET EARNINGS $ 17.2 6.4 37.8 9.9
_____________________________________________________________________________________
EARNINGS PER SHARE $ 0.50 0.19 1.11 0.30
_____________________________________________________________________________________
AVERAGE SHARES 34.2 33.5 34.0 33.5
_____________________________________________________________________________________
CASH DIVIDENDS PER SHARE $ 0.06 0.06 0.12 0.12
_____________________________________________________________________________________
See accompanying notes to consolidated financial statements.
</TABLE>
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<TABLE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Millions of dollars)
<CAPTION>
Six months ended
June 30,
1996 1995
_____________________________________________________________________________________
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 37.8 9.9
Adjustments to reconcile to cash flows
from operations:
Gain on sale of oil and gas properties (.3) (2.2)
Depletion, depreciation and amortization 88.1 75.9
Deferred income taxes 12.6 -
Dry holes and impairment charges 22.3 18.0
Other 6.1 .9
_____________________________________________________________________________________
166.6 102.5
Changes in operating assets and liabilities:
Net decrease in receivables 10.4 17.2
Net (increase) decrease in inventories (4.3) 6.4
Net (increase) decrease in prepaid items (1.3) 2.0
Net increase (decrease) in payables 7.8 (28.6)
Other (2.1) (.3)
_____________________________________________________________________________________
NET CASH FLOWS FROM OPERATING ACTIVITIES 177.1 99.2
_____________________________________________________________________________________
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (99.7) (101.6)
Proceeds from asset sales .5 6.3
Other .5 (6.1)
_____________________________________________________________________________________
NET CASH FLOWS FROM INVESTING ACTIVITIES (98.7) (101.4)
_____________________________________________________________________________________
CASH FLOWS FROM FINANCING ACTIVITIES:
Additions to long-term debt - 29.1
Repayments of long-term debt (99.2) (32.6)
Advances against cash surrender value 9.6 9.0
Dividends (4.1) (4.0)
Repayment of loans to ESOP 1.2 1.7
Other 15.5 (4.8)
_____________________________________________________________________________________
NET CASH FLOWS FROM FINANCING ACTIVITIES (77.0) (1.6)
_____________________________________________________________________________________
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ 1.4 (3.8)
_____________________________________________________________________________________
See accompanying notes to consolidated financial statements.
</TABLE>
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THE LOUISIANA LAND AND EXPLORATION COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting only of
normal recurring accruals) necessary to present fairly the financial
position as of June 30, 1996, and the results of operations and cash
flows for the three-month and six-month periods ended June 30, 1996
and 1995.
Maryland General Corporate Law was amended whereby repurchased stock
of a corporation constitutes authorized but unissued stock rather than
treasury stock. Accordingly, effective January 1, 1994, the par value
of treasury stock ($.7 million) has been reclassed as a reduction of
capital stock issued. The cost of treasury stock in excess of par
value has been charged to additional paid-in capital($81.5 million),
to the extent avaliable, and the balance ($82.2 million) has been
charged to retained earnings. All capital stock transactions
subsequent to Janaury 1, 1994 are reflected as either issuances or
retirements of capital stock. This change in the law had no effect
on total stockholders' equity.
2. For the three months ended June 30, 1996 and 1995, interest costs
incurred were $11.8 million and $14.0 million, respectively, of which
$2.9 million and $4.4 million, respectively, were capitalized as part
of the cost of property, plant and equipment. For the six months
ended June 30, 1996 and 1995, interest costs incurred were $24.4
million and $27.6 million, respectively, of which $6.3 million and
$8.6 million, respectively, were capitalized as part of the cost of
property, plant and equipment.
3. Earnings 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 exercise of stock
options.
4. In accordance with Regulation S-X, Rule 3-09, the audited consolidated
financial statements of the Company's 50%-owned affiliate, MaraLou
Netherlands Partnership (MaraLou) and its wholly-owned consolidated
subsidiary, CLAM Petroleum Company (CLAM), were filed with the
Company's Annual Report on Form 10-K for the year ended December 31,
1995.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Accordingly, the following unaudited summarized consolidated income
statement information for MaraLou and its consolidated subsidiary,
CLAM, for the three-month and six-month periods ended June 30, 1996
and 1995 are presented in accordance with Regulation S-X, Rule
10-01(b).
<TABLE>
<CAPTION>
(Unaudited)
Three months ended Six months ended
June 30, June 30,
1996 1995 1996 1995
________________________________________________________________________________
<S> <C> <C> <C> <C>
Gross revenues $ 21.4 20.7 53.1 45.7
________________________________________________________________________________
Operating profit 7.4 7.8 24.3 20.3
________________________________________________________________________________
Net earnings 3.8 2.8 11.8 8.2
________________________________________________________________________________
</TABLE>
5. The Company has been notified by the U.S. Environmental Protection
Agency that it is one of many Potentially Responsible Parties (PRP)
with respect to certain 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 the results of
operations, cash flow or financial position of the Company.
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.
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INDEPENDENT AUDITORS' REVIEW REPORT
The Board of Directors
The Louisiana Land and Exploration Company:
We have reviewed the consolidated balance sheet of The Louisiana Land and
Exploration Company and subsidiaries as of June 30, 1996, and the related
consolidated statements of earnings and cash flows for the three-month and
six-month periods ended June 30, 1996 and 1995. These consolidated
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical
procedures to financial data and making inquiries of persons responsible
for financial and accounting matters. It is substantially less in scope
than an audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly, we do
not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the consolidated financial statements referred to above
for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of The Louisiana Land and
Exploration Company and subsidiaries as of December 31, 1995, and the
related consolidated statements of earnings, stockholders' equity, and
cash flows for the year then ended (not presented herein); and in our
report dated February 2, 1996, we expressed an unqualified opinion on
those consolidated financial statements. In our opinion, the information
set forth in the accompanying consolidated balance sheet as of
December 31, 1995, is fairly presented, in all material respects, in
relation to the consolidated balance sheet from which it has been derived.
/KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
New Orleans, Louisiana
August 9, 1996
<PAGE>
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
REVIEW OF OPERATIONS
Second quarter and first half 1996 net earnings totaled $17.2 million
and $37.8 million, respectively, up significantly from the net earnings
of $6.4 million and $9.9 million for the respective 1995 periods. Both
1995 periods benefitted from after-tax gains from the sales of oil and gas
properties of approximately $1.4 million. The improvement in 1996 net
earnings was primarily attributable to higher natural gas prices and
volumes, and higher refinery operating profits.
OIL AND GAS OPERATIONS
Revenues from the Company's oil and gas operations for the second
quarter of 1996 were up $21 million from the second quarter of 1995.
Natural gas revenues were up almost $19 million as a result of higher
prices ($14 million) and deliveries ($5 million). Liquids revenues were
up $2 million primarily due to higher crude oil volumes.
In the first half of 1996 revenues from the Company's oil and gas
operations were up $59 million from the comparable 1995 period. Natural
gas revenues were up $55 million as a result of higher prices ($45
million) and deliveries ($10 million). Liquids revenues were up $4
million as a result of higher crude oil prices ($7 million), which more
than offset the effect of reduced volumes ($1 million).
Crude oil volumes in the second quarter increased 1200 barrels per day
(BPD) from the 1995 quarter. However, in the first half of 1996, volumes
declined 600 barrels per day from the comparable 1995 period. Domestic and
North Sea operations were up 1100 BPD and 400 BPD, respectively, in the
second quarter and down 300 BPD and 500 BPD, respectively, in the first
half. New wells onstream at south Louisiana and Brae Complex properties
contributed significantly to Domestic and North Sea volumes for both 1996
periods. However, natural production declines at mature properties and
downtime due to drilling, maintenance and repair activities partially
offset these production increases in the second quarter and resulted in
decreases for the 1996 first half. Volumes from other foreign operations
in 1996 benefitted from new wells coming onstream in mid-1995 from the
KAKAP concession, offshore Indonesia. However, this production from new
wells was offset by the effect of the 1995 sale of the Company's Canadian
properties.
<PAGE>
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. (CONTINUED)
Natural gas deliveries were up 33 million and 35 million cubic feet per
day in the second quarter and first half of 1996, respectively, due to
higher domestic and North Sea production. Domestic deliveries were up due
to new wells onstream, the return to production of wells shut-in for
repairs and maintenance, and weather-related demand for natural gas which
resulted in the return to production of domestic wells voluntarily
curtailed during the 1995 periods due to low prices. The higher domestic
deliveries were partially offset by the effects of natural declines at
mature producing properties and wells shut-in during 1996 for repairs and
maintenance. North Sea deliveries were up in both periods due to
increased demand caused by colder than normal weather. Also, contributing
to the increases, were higher volumes from the Company's 50%-owned
affiliate, CLAM Petroleum Company. Other foreign production, reflecting
the sale of the Company's Canadian properties, was down in both 1996
periods.
Lease operating and facility expenses were down in both 1996 periods
as reductions in operating costs and second quarter workover costs offset
higher facilities expenses. Depletion, depreciation and amortization
(DD&A) was up $6 million and $12 million in the 1996 second quarter and
first half, respectively, as a result of DD&A associated with new wells
onstream. Dry holes and exploratory charges increased in both 1996
periods due primarily to the write-off of unsuccessful exploratory wells
and higher seismic costs incurred. General, administrative and other
expenses were down due to the Company's continuing efforts to minimize
expenses. Interest and debt expenses were lower in both periods as a
decline in interest incurred on a lower debt level was partially offset
by reduced interest capitalized on qualifying projects.
REFINING OPERATIONS
Refining operations resulted in a $7.8 million pretax operating profit
for the second quarter of 1996, which was up significantly from the $.4
million pretax operating profit reported in the comparable 1995 quarter.
The favorable impact of higher sales volumes ($17 million) more than
offset the effect of higher crude oil feedstock costs ($9 million) and
operating expenses ($1 million).
For the first half of 1996, refining operations resulted in a $7.5
million pretax operating profit, which was up significantly from the $1.8
million pretax operating profit reported in the comparable 1995 period.
Higher sales volumes ($44 million) and product prices ($4 million) more
than offset the effect of higher crude oil feedstock costs ($40 million)
and operating expenses ($3 million).
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES
In the first half of 1996, the Company generated approximately $177
million in cash from operations which, along with available cash, was used
for capital projects ($100 million), repayment of long-term debt ($99
million) and dividends ($4 million).
In 1995, the Company initiated a hedging program designed to minimize
the price risks associated with future natural gas and crude oil
production. This program utilizes futures, forwards, options and swap
contracts in series of transactions designed to set a floor price for
future production and at the same time allow the Company to participate
in market price increases above a set level over the floor price. At June
30, 1996, approximately 48 trillion British Thermal Units (BTU) of
domestic gas production for the remainder of 1996 were covered by a series
of transactions designed to set an average floor price of $1.79 per
million BTU and at the same time allow the Company to participate in
natural gas price increases above the floor price and outside of specific
ranges. The Company's non-participation in price increases above the
floor price was limited to $0.19 per million BTU. For 1997, approximately
90 trillion BTU of domestic gas production were similarly hedged at an
average floor price of $1.84 per million BTU with the Company's non-
participation in price increases above the floor price limited to $0.17
per million BTU. While these transactions have no carrying value, their
fair value, represented by the estimated amount that would be required to
terminate the contracts, were net costs of $6.1 million for the 1996
hedges and $1.2 million for the 1997 hedges. (The Company estimates that
its domestic natural gas production averages approximately 1.07 million
BTU for each thousand cubic feet.) In addition, approximately 6.9 million
barrels of the Company's worldwide 1996 crude oil production for the
remainder of 1996 were similarly hedged at an average floor price of
$18.03 per barrel with the Company's non-participation in price increases
above the floor price limited to $1.29 per barrel. These transactions
also do not have carrying values, but their fair value at June 30, 1996
amounted to a net benefit of $.8 million.
On June 28, 1996, the Company amended its $450 million revolving credit
agreement with a syndicate of banks to reduce the banks' commitments to
$350 million, extend the maturity for one year to June 30, 2001, reduce
interest rates and fees and improve other terms and conditions favorable
to the Company.
Effective July 31, 1996, the Company completed the sale of its crude
oil refinery and terminal near Mobile, Alabama for a pretax gain of
approximately $2 million. The proceeds from the sale of the refinery and
associated inventories were used to reduce long-term debt by approximately
$70 million.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. (CONTINUED)
The Company expects to fund its 1996 expenditures, including an
increased level of capital and exploration expenditures of approximately
$240 million, primarily from operating cash flows. The Company's
expenditures are continually reviewed, and revised as necessary, based on
perceived current and long-term economic conditions.
CAPITAL STOCK, DIVIDENDS AND OTHER MARKET DATA
As more fully discussed in Note 14 of "Notes to Consolidated Financial
Statements" in the Company's 1995 Annual Report to Shareholders, the
Company's Board of Directors in 1986 declared a dividend to shareholders
consisting of Capital Stock Purchase Rights ("Rights") issued under the
Shareholder Rights Agreement ("Agreement") to protect shareholders. At
its regularly scheduled meeting held on May 9, 1996, the Board of
Directors has amended and restated the terms of the Agreement to extend
the expiration date to June 6, 2006, increase the exercise price of Rights
to $175, lower the ownership threshold at which Rights become exercisable
to 20% and eliminate the provision that excluded an all-cash offer made
to shareholders for all outstanding shares.
NOTE: The accompanying consolidated financial statements and notes
thereto included in Item 1. of this Form 10-Q and the petroleum
segment information and operating data following this Item 2. are
an integral part of this discussion and analysis and should be
read in conjunction herewith.
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<TABLE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
PETROLEUM SEGMENT INFORMATION
(Millions of dollars)
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1996 1995 1996 1995
_____________________________________________________________________________________
<S> <C> <C> <C> <C>
Sales to unaffiliated customers:
Domestic $207.3 172.8 426.2 325.4
North Sea 33.0 31.4 70.1 66.3
Other foreign 6.0 6.4 12.5 10.2
_____________________________________________________________________________________
246.3 210.6 508.8 401.9
Interest and other income 1.1 2.5 4.8 4.3
_____________________________________________________________________________________
Total revenues $247.4 213.1 513.6 406.2
_____________________________________________________________________________________
Earnings before income taxes:
Operating profit (loss):
Domestic 38.7 25.7 80.4 44.4
North Sea 10.0 7.0 22.1 17.4
Other foreign (2.9) (4.5) (7.2) (8.2)
_____________________________________________________________________________________
45.8 28.2 95.3 53.6
Other income (expense), net (19.3) (18.4) (37.0) (38.4)
_____________________________________________________________________________________
Earnings before income taxes $ 26.5 9.8 58.3 15.2
_____________________________________________________________________________________
Capital expenditures:
Exploration:
Domestic 26.0 11.1 43.9 22.8
North Sea .8 .4 .8 .4
Other foreign 4.3 4.3 6.4 8.2
_____________________________________________________________________________________
31.1 15.8 51.1 31.4
_____________________________________________________________________________________
Development:
Domestic 20.9 16.1 31.1 28.4
North Sea 4.3 4.4 10.3 7.1
Other foreign 2.4 3.2 4.8 7.0
_____________________________________________________________________________________
27.6 23.7 46.2 42.5
_____________________________________________________________________________________
58.7 39.5 97.3 73.9
Refining and marketing .3 .5 .6 1.6
_____________________________________________________________________________________
59.0 40.0 97.9 75.5
Capitalized interest 2.9 4.4 6.3 8.6
Other .3 .9 .8 2.4
_____________________________________________________________________________________
$ 62.2 45.3 105.0 86.5
_____________________________________________________________________________________
</TABLE>
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<TABLE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
OPERATING DATA
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1996 1995 1996 1995
_____________________________________________________________________________________
<S> <C> <C> <C> <C>
OIL AND GAS OPERATIONS1
CRUDE AND CONDENSATE2
Production (thousands of barrels per day):
Domestic 21.7 20.6 20.8 21.1
North Sea 16.1 15.7 16.2 16.7
Other foreign 3.9 4.2 3.9 3.6
_____________________________________________________________________________________
41.7 40.5 40.9 41.4
_____________________________________________________________________________________
Average price received (per barrel):
Domestic $19.29 19.13 19.18 18.49
North Sea 18.33 18.30 18.55 17.76
Other foreign 17.40 16.38 17.55 14.93
Consolidated 18.74 18.52 18.77 17.88
_____________________________________________________________________________________
PLANT PRODUCTS
Production (thousands of barrels per day):
Domestic 2.1 2.9 2.0 3.1
North Sea .9 .9 .9 1.0
_____________________________________________________________________________________
3.0 3.8 2.9 4.1
_____________________________________________________________________________________
Average price received (per barrel):
Domestic $12.53 11.50 12.45 11.37
North Sea 14.26 12.39 15.39 14.26
Consolidated 13.06 11.70 13.37 12.05
_____________________________________________________________________________________
NATURAL GAS
Production (millions of cubic feet per day):
Domestic 272.1 248.8 263.6 240.8
North Sea 28.3 20.6 33.1 24.0
Other foreign - 2.2 - 2.3
CLAM Petroleum Company 44.3 39.7 52.2 46.6
_____________________________________________________________________________________
344.7 311.3 348.9 313.7
_____________________________________________________________________________________
Average price received (per MCF):
Domestic $ 2.23 1.65 2.54 1.58
North Sea 2.17 2.34 2.19 2.37
Other foreign - .61 - .67
CLAM Petroleum Company 2.64 2.78 2.75 2.61
Consolidated 2.27 1.83 2.54 1.79
_____________________________________________________________________________________
1 Includes the Company's 50% equity interest in its unconsolidated affiliate, CLAM
Petroleum Company.
2 Before the elimination of intercompany transfers.
</TABLE>
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<TABLE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
OPERATING DATA (CONTINUED)
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1996 1995 1996 1995
_____________________________________________________________________________________
<S> <C> <C> <C> <C>
REFINING OPERATIONS
Refining Operating Profit:
Revenues:
Refined products* $117.9 101.1 239.0 191.6
Other .2 .1 .3 .1
_____________________________________________________________________________________
118.1 101.2 239.3 191.7
_____________________________________________________________________________________
Cost and expenses:
Cost of sales* 98.2 89.6 207.4 167.6
Operating expenses 11.2 10.1 22.7 20.0
Depreciation .5 .4 .9 .8
Taxes, other than income .4 .7 .8 1.5
_____________________________________________________________________________________
110.3 100.8 231.8 189.9
_____________________________________________________________________________________
$ 7.8 .4 7.5 1.8
_____________________________________________________________________________________
*Before the elimination of intercompany
transfers to the Company's refinery $ 7.7 7.9 14.0 16.2
_____________________________________________________________________________________
Sales (thousands of barrels per day) 58.0 49.7 60.6 49.6
_____________________________________________________________________________________
Average price received (per barrel) $22.36 22.33 21.66 21.33
_____________________________________________________________________________________
_____________________________________________________________________________________
GROSS WELLS DRILLED
Working Interest
Exploratory:
Oil 0 1 2 1
Gas 3 1 5 8
Dry 4 3 7 4
_____________________________________________________________________________________
7 5 14 13
_____________________________________________________________________________________
Development:
Oil 5 5 10 7
Gas 2 - 3 2
Dry - - - -
_____________________________________________________________________________________
7 5 13 9
_____________________________________________________________________________________
Total working interest 14 10 27 22
Royalty Interest 5 6 7 11
_____________________________________________________________________________________
Total wells 19 16 34 33
_____________________________________________________________________________________
NET WELLS DRILLED
Exploratory:
Oil - .4 .7 .4
Gas 1.1 .3 2.1 3.6
Dry 1.6 .7 2.5 1.4
_____________________________________________________________________________________
2.7 1.4 5.3 5.4
_____________________________________________________________________________________
Development:
Oil .5 .5 1.1 .9
Gas 1.0 - 1.5 .5
Dry - - - -
_____________________________________________________________________________________
1.5 .5 2.6 1.4
_____________________________________________________________________________________
Total net wells 4.2 1.9 7.9 6.8
_____________________________________________________________________________________
/TABLE
<PAGE>
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
Exhibit 10(l)(i) - Amendment No. 1 to Credit Agreement
dated as of June 8, 1995
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K:
On May 10, 1996, the Company filed a Current Report on
Form 8-K to report the amendment and restatement of the
Rights Agreement dated May 25, 1986 between the Company
and First Chicago Trust Company of New York, as Successor
Rights Agent.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
THE LOUISIANA LAND AND EXPLORATION COMPANY
(REGISTRANT)
By: /s/ Jerry D. Carlisle
__________________________________________
JERRY D. CARLISLE
VICE PRESIDENT AND CONTROLLER
(PRINCIPAL ACCOUNTING OFFICER)
Dated: August 13, 1996
EXHIBIT 10(l)(i)
<PAGE>
<PAGE>
Exhibit 10(l)(i)
CONFORMED COPY
AMENDMENT NO. 1 TO CREDIT AGREEMENT
AMENDMENT dated as of June 28, 1996 among THE LOUISIANA
LAND AND EXPLORATION COMPANY (the "Borrower"), the BANKS listed on
the signature pages hereof (the "Banks"), MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, as Agent (the "Agent") and TEXAS COMMERCE BANK
NATIONAL ASSOCIATION and NATIONSBANK OF TEXAS, N.A., as Co-Agents.
W I T N E S S E T H :
WHEREAS, the parties hereto have heretofore entered into
a Credit Agreement dated as of June 8, 1995 (the "Agreement"); and
WHEREAS, the parties hereto desire to amend certain
provisions of the Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise
specifically defined herein, each term used herein that is defined
in the Agreement shall have the meaning assigned to such term in
the Agreement. Each reference to "hereof", "hereunder", "herein",
and "hereby" and each other similar reference and each reference to
"this Agreement" and each other similar reference contained in the
Agreement shall from and after the date hereof refer to the
Agreement as amended hereby.
SECTION 2. Amendments to Definitions. Section 1.01 of
the Agreement is amended as follows:
(a) The definition "Termination Date" is amended by
substituting "June 30, 2001" for "June 30, 2000".
(b) The definition "Debt" is amended to read as follows:
<PAGE>
<PAGE>
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed money,
(ii) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (iii) all obligations of such
Person to pay the deferred purchase price of property or services,
(iv) all obligations of such Person as lessee which are capitalized
in accordance with generally accepted accounting principles, (v)
all non-contingent obligations (and for purposes of Section 5.12
[Negative Pledge] and the definition of Material Debt [Cross
Default], all contingent obligations) of such Person to reimburse
any bank or other Person in respect of amounts paid under a letter
of credit or similar instrument which remain unpaid for more than
five days, (vi) all Debt secured by a Lien on any asset of such
Person, whether or not such Debt is otherwise an obligation of such
Person (quantified, for purposes hereof, as an amount equal to the
lesser of (a) the amount of such Debt and (b) the value (determined
as of the last day of the fiscal year most recently ended) of the
assets securing such Debt), (vii) all Debt of others Guaranteed by
such Person; provided that (x) neither (a) trade or other accounts
payable arising in the ordinary course of business nor (b)
obligations in respect of insurance policies or performance or
surety bonds (including performance or surety bonds in the form of
a letter of credit or similar instrument) which are not themselves
Guarantees of Debt (nor drafts, acceptances or similar instruments
evidencing the same nor obligations in respect of letters of credit
or similar instruments supporting the payment of the foregoing)
shall constitute Debt, it being understood that any obligation
referred to in (b) that is drawn and remains unpaid for more than
90 days shall constitute Debt, except where such obligation is
being contested in good faith by appropriate proceedings, (y) the
Morgan Gold Loans shall not at any time constitute Debt unless, at
such time, for any reason whatsoever, (1) no royalty income shall
have accrued under the Royalty Agreement dated as of December 5,
1984 between Copper Range Company, a Michigan Corporation, and the
Borrower during the three consecutive fiscal quarters of the
Borrower most recently ended prior to such time or (2) any payment
required to have been made to the Borrower under such agreement
prior to such time shall not have been paid on, or within 30 days
after, the date such payment is due and (z) amounts borrowed by the
Borrower under life insurance policies issued to the Borrower and
covering employees or former employees of the Borrower not in
excess of the cash surrender value of such policies shall not
constitute Debt of the Borrower.
SECTION 3. Amendment of Section 5.12(g) of the
Agreement. Section 5.12(g) of the Agreement is amended by
replacing $35,000,000 with $75,000,000.
<PAGE>
<PAGE>
SECTION 4. Amendment of Section 9.06(c) of the
Agreement. The first sentence of Section 9.06(c) of the Agreement
is amended to read as follows:
Any Bank may at any time assign to one or more banks or
other institutions (each an "Assignee") all, or a ratable portion
of all, of its rights and obligations under this Agreement and the
Notes, and such Assignee shall assume such rights and obligations,
pursuant to an Assignment and Assumption Agreement substantially in
the form of Exhibit G hereto executed by such Assignee and such
transferor Bank, with (and subject to) the subscribed consent of
the Borrower and the Agent, which shall not be unreasonably
withheld in the case of an assignment to an Assignee in an amount
equivalent to an initial Commitment of not less than $10,000,000;
provided that if an Assignee is an affiliate of such transferor
Bank no such consent shall be required; and provided further that
such assignment may, but need not, include rights of the transferor
Bank in respect of outstanding Money Market Loans.
SECTION 5. Amendment of Pricing Schedule. The Agreement
is further amended by replacing the existing Pricing Schedule
attached thereto with the Pricing Schedule attached hereto.
SECTION 6. Changes in Commitments. With effect from and
including the date this Amendment becomes effective in accordance
with Section 10 of this Amendment, the Commitment of each Bank
shall be the amount set forth opposite the name of such Bank on the
signature pages hereof, as such amount may be reduced from time to
time pursuant to Section 2.09 of the Agreement. Any Bank whose
Commitment is changed to zero shall upon effectiveness cease to be
a Bank party to the Agreement, and all accrued fees and other
amounts payable under the Agreement for the account of such Bank
shall be due and payable on such date; provided that the provisions
of Sections 8.03 and 9.03 shall continue to inure to the benefit of
such Bank.
SECTION 7. Debt Limit. Prior to a determination
pursuant to Section 5.11(b)(ii)(x) of the Agreement on the basis of
the initial Reserve Report hereafter delivered pursuant to Section
5.02(a) thereof, and subject to adjustment in accordance with
Section 5.11(b)(ii)(y) and 5.11(b)(iii) through (v) of the
Agreement, the Debt Limit shall be $620,000,000.
SECTION 8. No Other Waivers or Amendments. Except as
expressly provided herein, this Amendment shall not operate as a
waiver or amendment of any right, power or privilege of the Banks
under the Agreement. Except as expressly modified hereby, all of
the terms and conditions of the Agreement shall remain unaltered
and in full force and effect.
<PAGE>
<PAGE>
SECTION 9. Governing Law. This Amendment shall be
governed by and construed in accordance with the laws of the State
of New York.
SECTION 10. Counterparts; Effectiveness. This Amendment
may be signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument. This Amendment shall become
effective as of the date hereof when the Agent shall have received
duly executed counterparts hereof signed by the Borrower and each
of the Banks (or, in the case of any party as to which an executed
counterpart shall not have been received, the Agent shall have
received telegraphic, telex or other written confirmation from such
party of execution of a counterpart hereof by such party).
<PAGE>
<PAGE>
PRICING SCHEDULE
The "Applicable Margin", "Commitment Fee Rate" and
"Facility Fee Rate" for any day are the respective percentages set
forth below in the applicable row under the column corresponding to
the "Pricing Level" that applies to the Borrower on such day:
Level Level Level Level
Status I II III IV
Applicable Margin 0.20% 0.25% 0.30% 0.50%
Commitment Fee Rate 0.0% 0.0% 0.0% 0.0%
Facility Fee Rate 0.10% 0.125% 0.15% 0.25%
For purposes of this Schedule, the following terms have
the following meanings, subject to the further provisions of this
Schedule:
"Applicable Pricing Rating" means, as to the Borrower at
any date, the higher of the ratings assigned to the Borrower by S&P
and Moody's at such date; provided that if the difference between
such ratings is more than one notch (e.g. more than the difference
between A+ and A), the Applicable Pricing Rating will be the median
rating between them (or if there is no such median rating, the
higher of two intermediate ratings).
"Level I Pricing" exists at any date if, at such date,
the Applicable Pricing Rating is BBB+ (Baa1) or higher.
"Level II Pricing" exists at any date if, at such date,
the Applicable Pricing Rating is BBB (Baa2) or higher.
"Level III Pricing" exists at any date if, at such date,
the Applicable Pricing Rating is BBB- (Baa3) or higher.
"Level IV Pricing" exists at any date if, at such date,
no other Pricing Level applies.
"Pricing Level" refers to the determination of which of
Level I, Level II, Level III or Level IV applies at any date.
The credit ratings to be utilized for purposes of this
Schedule are those assigned to the senior unsecured long-term debt
securities of the Borrower without third-party credit enhancement,
and any rating assigned to any other debt security of the Borrower
shall be disregarded. The rating in effect at any date is that in
effect at the close of business of such date.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first above written.
THE LOUISIANA LAND AND
EXPLORATION COMPANY
By /s/ Suzanne V. Baer
Title: Vice President &
Treasurer
Commitments
$30,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Vernon M. Ford, Jr.
Title: Vice President
$27,000,000 TEXAS COMMERCE BANK NATIONAL
ASSOCIATION
By /s/ Scott Richardson
Title: Vice President
$27,000,000 NATIONSBANK OF TEXAS, N.A.
By /s/ Paul A. Squires
Title: Senior Vice President
$21,000,000 UNION BANK OF SWITZERLAND,
HOUSTON AGENCY
By /s/ Dan O. Boyle
Title: Managing Director
By /s/ J. Finley Bigerstaff
Title: Assistant Treasurer
<PAGE>
<PAGE>
$21,000,000 WACHOVIA BANK OF GEORGIA, N.A.
By /s/ David K. Alexander
Title: Senior Vice President
$14,000,000 ABN AMRO BANK N.V., HOUSTON AGENCY
By: ABN AMRO North American, Inc.
as agent
By /s/ H. Gene Shiels
Title: Vice President and
Director
By /s/ W. Bryan Chapman
Title: Vice President and
Director
$14,000,000 BANK OF MONTREAL
By /s/ Natasha Glossop
Title: Director, U.S. Corporate
Banking
$14,000,000 THE BANK OF NEW YORK
By /s/ Dennis M. Pidherny
Title: Vice President
$14,000,000 THE BANK OF NOVA SCOTIA
By /s/ F.C.H. Ashby
Title: Senior Manager Loan
Operations
<PAGE>
<PAGE>
$14,000,000 BANQUE PARIBAS HOUSTON AGENCY
By /s/ Barton D. Schouest
Title: Group Vice President
By /s/ Mark M. Green
Title: Vice President
$14,000,000 BARCLAYS BANK PLC
By /s/ Les Bek
Title: Director
$14,000,000 CREDIT LYONNAIS CAYMAN ISLAND
BRANCH
By /s/ Pascal Poupelle
Title: Authorized Signature
$14,000,000 THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Dixon P. Schultz
Title: Vice President
$14,000,000 FIRST NATIONAL BANK OF COMMERCE
By /s/ Nemesio J. Viso
Title: Assistant Vice President
$14,000,000 HIBERNIA NATIONAL BANK
By /s/ Colleen B. Smith
Title: Assistant Vice President
<PAGE>
<PAGE>
$-0- MIDLAND BANK PLC, NEW YORK BRANCH
By /s/ John A. Cleveland
Title: Senior Vice President
$14,000,000 THE INDUSTRIAL BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By /s/ Akijiro Yoshino
Title: Executive Vice President
$-0- MEESPIERSON N.V.
By /s/ Karel Louman
Title: Vice President
$14,000,000 MELLON BANK, N.A.
By /s/ A. Gary Chace
Title: Senior Vice President
$14,000,000 ROYAL BANK OF CANADA
By /s/ Linda M. Stephens
Title: Manager
$14,000,000 SOCIETE GENERALE, SOUTHWEST AGENCY
By /s/ Elizabeth W. Hunter
Title: Vice President
$14,000,000 TORONTO DOMINION (TEXAS), INC.
By /s/ Lisa Allison
Title: Vice President
<PAGE>
<PAGE>
$14,000,000 WHITNEY NATIONAL BANK
By /s/ Robert L. Browning
Title: Senior Vice President
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Vernon M. Ford, Jr.
Title: Vice President
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Co-Agent
By /s/ Scott Richardson
Title: Vice President
NATIONSBANK OF TEXAS, N.A.,
as Co-Agent
By /s/ Paul A. Squires
Title: Senior Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF
EARNINGS OF THE LOUISIANA LAND AND EXPLORATION COMPANY AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 11,700
<SECURITIES> 0
<RECEIVABLES> 133,000
<ALLOWANCES> 0
<INVENTORY> 43,000
<CURRENT-ASSETS> 202,800
<PP&E> 3,185,900
<DEPRECIATION> 1,981,500
<TOTAL-ASSETS> 1,455,300
<CURRENT-LIABILITIES> 214,500
<BONDS> 592,400
<COMMON> 5,100
0
0
<OTHER-SE> 422,600
<TOTAL-LIABILITY-AND-EQUITY> 1,455,300
<SALES> 508,500
<TOTAL-REVENUES> 513,600
<CGS> 0
<TOTAL-COSTS> 417,900
<OTHER-EXPENSES> 19,300
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,100
<INCOME-PRETAX> 58,300
<INCOME-TAX> 20,500
<INCOME-CONTINUING> 37,800
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37,800
<EPS-PRIMARY> 1.11
<EPS-DILUTED> 1.11
