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 SEPTEMBER 30, 1997
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 October 22, 1997
CAPITAL STOCK, $.15 PAR VALUE 34,622,664 SHARES
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THE LOUISIANA LAND AND EXPLORATION COMPANY
INDEX
Page
Number
_________________________________________________________________
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
(The September 30, 1997 and 1996 consolidated financial
statements 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 - September 30, 1997 and
December 31, 1996............................. 3
Consolidated Statements of Earnings - three months
and nine months ended September 30, 1997
and 1996...................................... 4
Consolidated Statements of Cash Flows - nine months
ended September 30, 1997 and 1996............. 5
Notes to Consolidated Financial Statements........ 6-9
Independent Auditors' Review Report............... 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................... 11-13
Petroleum Segment Information......................... 14
Operating Data........................................ 15-16
Part II. OTHER INFORMATION:
Item 4. Submission of Matters to a Vote of Security
Holders.................................. 17
Item 6. Exhibits and Reports on Form 8-K............ 17
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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)
September 30, December 31,
ASSETS 1997 1996
_____________________________________________________________________________________
<S> <C> <C>
CURRENT ASSETS:
Cash, including cash equivalents (September 30,
1997-$3.8; December 31, 1996-$1.2) $ 14.2 9.0
Accounts and notes receivable, principally trade 85.1 150.7
Income taxes receivable .7 -
Prepaid expenses 10.5 10.7
Deferred income taxes .7 .7
_____________________________________________________________________________________
TOTAL CURRENT ASSETS 111.2 171.1
_____________________________________________________________________________________
Investments in affiliates 8.8 8.1
Property, plant and equipment 3,201.7 3,100.6
Less accumulated depletion, depreciation and amortization (2,000.4) (1,940.9)
_____________________________________________________________________________________
NET PROPERTY, PLANT AND EQUIPMENT 1,201.3 1,159.7
_____________________________________________________________________________________
Other assets 30.7 25.9
_____________________________________________________________________________________
$ 1,352.0 1,364.8
_____________________________________________________________________________________
LIABILITIES AND STOCKHOLDERS' EQUITY
_____________________________________________________________________________________
CURRENT LIABILITIES:
Accounts payable and accrued expenses 103.4 138.9
Income taxes payable 2.0 9.4
_____________________________________________________________________________________
TOTAL CURRENT LIABILITIES 105.4 148.3
_____________________________________________________________________________________
Deferred income taxes 85.3 78.4
Long-term debt 483.3 505.7
Other liabilities 159.7 157.8
_____________________________________________________________________________________
STOCKHOLDERS' EQUITY:
Capital stock 5.2 5.1
Additional paid-in capital 60.7 44.6
Retained earnings 452.4 424.9
_____________________________________________________________________________________
TOTAL STOCKHOLDERS' EQUITY 518.3 474.6
_____________________________________________________________________________________
$ 1,352.0 1,364.8
_____________________________________________________________________________________
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 Nine months ended
September 30, September 30,
1997 1996 1997 1996
_____________________________________________________________________________________
<S> <C> <C> <C> <C>
REVENUES:
Oil and gas $135.3 136.7 440.5 420.2
Refined products - 38.5 - 263.5
Gain on sale of petroleum assets .2 1.7 .6 2.0
_____________________________________________________________________________________
135.5 176.9 441.1 685.7
_____________________________________________________________________________________
COSTS AND EXPENSES:
Lease operating and facility expenses 28.7 30.2 89.8 88.1
Refinery cost of sales and operating
expenses - 38.3 - 254.4
Dry holes and exploratory charges 31.5 25.8 107.3 69.1
Depletion, depreciation and amortization 43.4 42.7 132.0 130.8
Taxes, other than on earnings 5.5 5.3 17.0 17.8
General, administrative and other
expenses 10.4 10.1 29.5 29.4
_____________________________________________________________________________________
119.5 152.4 375.6 589.6
_____________________________________________________________________________________
16.0 24.5 65.5 96.1
OTHER INCOME (EXPENSE):
Interest and debt expenses (8.1) (8.3) (22.5) (26.4)
Other income (expense),net .1 2.3 7.9 7.1
_____________________________________________________________________________________
Earnings before income taxes 8.0 18.5 50.9 76.8
Income tax expense 1.8 4.8 17.3 25.3
_____________________________________________________________________________________
NET EARNINGS $ 6.2 13.7 33.6 51.5
_____________________________________________________________________________________
EARNINGS PER SHARE $ 0.18 0.40 0.97 1.51
_____________________________________________________________________________________
AVERAGE SHARES 34.8 34.4 34.6 34.1
_____________________________________________________________________________________
CASH DIVIDENDS PER SHARE $ 0.06 0.06 0.18 0.18
_____________________________________________________________________________________
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>
Nine months ended
September 30,
1997 1996
_____________________________________________________________________________________
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 33.6 51.5
Adjustments to reconcile to cash flows
from operations:
Gain on sale of petroleum assets (.6) (2.0)
Depletion, depreciation and amortization 132.0 130.8
Deferred income taxes 6.9 19.8
Dry holes and impairment charges 66.5 41.6
Other (.1) 13.0
_____________________________________________________________________________________
238.3 254.7
Changes in operating assets and liabilities,
net of the 1996 sale of refining assets:
Net (increase) decrease in receivables 61.5 (18.8)
Net increase in inventories - (4.2)
Net decrease in prepaid items .2 3.7
Net increase (decrease) in payables (41.4) 33.7
Other 4.4 (.6)
_____________________________________________________________________________________
NET CASH FLOWS FROM OPERATING ACTIVITIES 263.0 268.5
_____________________________________________________________________________________
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (247.6) (164.4)
Proceeds from asset sales 6.5 70.4
Other (.5) (9.8)
_____________________________________________________________________________________
NET CASH FLOWS FROM INVESTING ACTIVITIES (241.6) (103.8)
_____________________________________________________________________________________
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (22.4) (186.2)
Advances against cash surrender value - 9.6
Dividends (6.1) (6.1)
Repayment of loans to ESOP - 1.7
Other 12.3 18.3
_____________________________________________________________________________________
NET CASH FLOWS FROM FINANCING ACTIVITIES (16.2) (162.7)
_____________________________________________________________________________________
INCREASE IN CASH AND CASH EQUIVALENTS $ 5.2 2.0
_____________________________________________________________________________________
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 September 30, 1997, and the results of operations and
cash flows for the three-month and nine-month periods ended September
30, 1997 and 1996. Certain amounts have been reclassified to conform
with the current period's presentation.
2. On July 31, 1996, the Company completed the sale of its crude oil
refinery and terminal near Mobile, Alabama, including crude oil and
refined product inventories, for approximately $70 million resulting
in a pretax gain of approximately $2 million. The net book value of
refinery property, plant and equipment at that date totaled approxi-
mately $33 million. The following table sets forth the refinery
operating results for the periods indicated.
<TABLE>
<CAPTION>
(Unaudited)
Periods ended
September 30, 1996
One Seven
(Millions of dollars) Month Months
_______________________________________________________________________________
<S> <C> <C>
REFINING OPERATIONS
Refining Operating Profit (Loss):
Revenues:
Refined products* $ 41.4 280.4
Other - .3
_______________________________________________________________________________
41.4 280.7
_______________________________________________________________________________
Cost and expenses:
Cost of sales* 37.3 244.7
Operating expenses 3.9 26.6
Depreciation .2 1.1
Taxes, other than income .1 .9
_______________________________________________________________________________
41.5 273.3
_______________________________________________________________________________
$ (.1) 7.4
_______________________________________________________________________________
*Before the elimination of intercompany
transfers to the Company's refinery $ 2.9 16.9
_______________________________________________________________________________
</TABLE>
3. For the three months ended September 30, 1997 and 1996, interest costs
incurred were $9.7 million and $10.8 million, respectively, of which
$1.6 million and $2.5 million, respectively, were capitalized as part
of the cost of property, plant and equipment. For the nine months
ended September 30, 1997 and 1996, interest costs incurred were $28.4
million and $35.2 million, respectively, of which $5.9 million and
$8.8 million, respectively, were capitalized as part of the cost of
property, plant and equipment. <PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. As prescribed by Accounting Principles Board Opinion No. 15, "Earnings
Per Share" ("Opinion No. 15"), 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.
5. 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,
1996.
Accordingly, the following unaudited summarized consolidated income
statement information for MaraLou/CLAM for the three-month and nine-
month periods ended September 30, 1997 and 1996 are presented in
accordance with Regulation S-X, Rule 10-01(b).
<TABLE>
<CAPTION>
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
1997 1996 1997 1996
________________________________________________________________________________
<S> <C> <C> <C> <C>
Gross revenues $17.1 16.5 66.0 69.6
________________________________________________________________________________
Operating profit 7.7 7.3 34.4 31.6
________________________________________________________________________________
Net earnings (loss) $ 5.0 2.2 13.8 14.0
________________________________________________________________________________
</TABLE>
6. The Company uses derivative commodity instruments to manage commodity
price risks associated with future natural gas and crude oil production
but does not use them for speculative purposes. The Company's
commodity price hedging 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 allowed the Company to
participate in market price increases above a set level over the floor
price and outside of specific ranges. To qualify as a hedge,these
contracts must correlate to anticipated future production such that the
Company's exposure to the effects of price changes is reduced. The
Company uses the accrual method of accounting for derivative commodity
instruments. At inception, the contract premiums paid are recorded as
prepaid expenses and, upon settlement of the hedged production month,
are included with the gains and losses on the contracts in oil and gas
revenues.
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
At September 30, 1997, approximately 22 trillion BTU of domestic
natural gas production for the remainder of 1997 were covered by a
series of transactions designed to set an average floor price of $1.86
per million BTU with the Company's nonparticipation in market price
increases above the floor price limited to $0.18 per million BTU. For
1998, approximately 57 trillion BTU of domestic natural gas were
similarly hedged at an average floor price of $1.80 per million BTU
with the Company's nonparticipation in market price increases above
the floor price limited to $0.24 per million BTU. For 1999,
approximately 38 trillion BTU of domestic natural gas were similarly
hedged at an average floor price of $1.79 per million BTU with the
Company's nonparticipation in market price increases above the floor
price limited to $0.23 per million BTU. While these transactions have
nominal carrying values, their fair value, represented by the
estimated amount that would be required to terminate the contracts,
were a net cost of $3.0 million for the 1997 hedges, a net cost of
$2.7 million for the 1998 hedges and a net benefit of $.6 million for
1999 hedges. (The Company estimates that its domestic natural gas
production averages approximately 1.07 million BTU for each thousand
cubic feet.) In addition, approximately 1.8 million barrels of the
Company's worldwide crude oil production for the remainder of 1997
were similarly hedged at an average floor price of $17.82 per barrel
with the Company's nonparticipation in market price increases above
the floor price limited to $1.29 per barrel. For 1998, approximately
2.0 million barrels of the Company's worldwide crude oil production
were similarly hedged at an average floor price of $19.38 per barrel
with the Company's nonparticipation in market price increases above
the floor price limited to $2.25 per barrel. These transactions also
have nominal carrying values, but their fair value at September 30,
1997 amounted to a net cost of $.5 million for the 1997 hedges and a
net benefit of $1.3 million for the 1998 hedges.
7. 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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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
8. In June 1997, the Company refinanced its existing $350 million
Revolving Credit Facility with a Revolving Credit Facility of a like
amount, the primary objectives of which were to avail the Company of
lower market pricing, extend the maturity by one year to 2002 and
improve other terms and conditions favorable to the Company. However,
as a result of the combination of the Company with Burlington
Resources, Inc. (BR), the Revolving Credit Facility automatically
terminated on October 23, 1997. Further, the Company's commercial
paper program was also terminated on that date and outstanding
commercial paper totaling approximately $83 million was retired by BR.
9. On October 22, 1997, the shareholders of the Company approved a
definitive agreement to combine with Burlington Resources Inc. (BR)
in a transaction accounted for under the pooling of interests method
of accounting for business combinations. Under the terms of the
agreement, a wholly owned subsidiary of BR merged into the Company and
the Company's shareholders received 1.525 shares of BR common stock
for each Company share held and the Company became a wholly owned
subsidiary of BR. The transaction is expected to qualify as a tax-
free reorganization. At September 30, 1997, the Company has deferred
approximately $2.7 million of costs related to the merger, which was
expensed upon consummation of the merger.
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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 September 30, 1997, and the
related consolidated statements of earnings and cash flows for the three-
month and nine-month periods ended September 30, 1997 and 1996. 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, 1996, 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 7, 1997, 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, 1996, 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
November 7, 1997
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995
Statements, other than historical facts, contained in this Quarterly
Report on Form 10-Q, including statements of estimated oil and gas
production and reserves, drilling plans, future cash flows, anticipated
capital expenditures and Management's strategies, plans and objectives,
are "forward looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Although the Company believes that its
forward looking statements are based on reasonable assumptions, it
cautions that such statements are subject to a wide range of risks and
uncertainties incident to the exploration for, acquisition, development
and marketing of oil and gas, and it can give no assurance that its
estimates and expectations will be realized. Important factors that could
cause actual results to differ materially from the forward looking
statements include, but are not limited to, changes in production volumes,
worldwide demand, and commodity prices for petroleum natural resources;
the timing and extent of the Company's success in discovering, acquiring,
developing and producing oil and gas reserves; risks incident to the
drilling and operation of oil and gas wells; future production and
development costs; the effect of existing and future laws, governmental
regulations and the political and economic climate of the United States
and foreign countries in which the Company operates; the effect of hedging
activities; and conditions in the capital markets. Other risk factors are
discussed elsewhere in this Form 10-Q, including those risk factors
described in Note 8 of "Notes to Consolidated Financial Statements" and
in the Company's Form 10-K.
REVIEW OF OPERATIONS
Third quarter net earnings totaled $6.2 million compared with the $13.7
million earned in third quarter of 1996. For the first nine months of
1997, net earnings totaled $33.6 million in comparison to net earnings of
$51.5 million in the year-earlier period. The decline in net earnings
resulted primarily from lower liquids and domestic natural gas prices in
the 1997 third quarter, higher exploratory costs in both 1997 periods and
the inclusion in the comparable 1996 periods of operating results from the
Company's Mobile refinery, which was sold in July 1996.
<PAGE>
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. (CONTINUED)
OIL AND GAS OPERATIONS
Revenues from the Company's oil and gas operations were down $1 million
from the third quarter of 1996 due to lower liquids revenues. Liquids
revenues were down $3 million due to lower crude oil prices ($6 million).
Higher crude oil volumes ($3 million) partially offset the impact of lower
prices. Natural gas revenues were up $1 million primarily as a result of
higher domestic deliveries.
In the first nine months of 1997, revenues from the Company's oil and
gas operations were up $20 million from comparable 1996 period. Liquids
revenues were up $4 million primarily due to the higher worldwide crude
oil prices. Natural gas revenues were up $16 million as a result of
higher domestic deliveries ($20 million), partially offset by lower prices
($4 million).
Crude oil volumes in the third quarter increased 2300 barrels per day
(BPD) from the 1996 quarter. However, in the first nine months of 1997,
volumes declined 200 BPD from the comparable 1996 period. Crude volumes
from other foreign operations were up 1800 BPD and 900 BPD in both 1997
periods due to new wells onstream at the KAKAP concession, offshore
Indonesia. North Sea operations were up 2000 BPD in the 1997 third
quarter and down 900 BPD in the 1997 first nine months as new production
onstream at the T-Block complex offset in the third quarter the effect of
natural declines and partially offset natural declines in the first nine
months. Domestic volumes were down 1500 BPD and 200 BPD, respectively,
in the third quarter and first nine months of 1997 with natural declines
and the effect of properties sold more than offsetting new wells onstream
in south Louisiana and the Gulf of Mexico.
Domestic natural gas deliveries were up 7 million and 32 million cubic
feet per day in the third quarter and first nine months of 1997, respec-
tively, due to new wells onstream in the Gulf of Mexico and south
Louisiana. The higher deliveries were partially offset by the effects of
natural declines at mature producing properties.
Lease operating and facility expenses, although down in the third
quarter of 1997 due to lower workover costs, were up in the first nine
months of 1997 as higher workover costs and facilities expenses offset
reductions in operating costs and repair charges. Depletion, depreciation
and amortization (DD&A) was up marginally in both 1997 periods as a result
of the DD&A associated with new wells onstream. This increase in DD&A was
partially offset by natural production declines on mature producing
properties. Dry holes and exploratory charges increased due to the write-
off of unsuccessful exploratory wells and higher seismic costs incurred.
Interest and debt expenses were down from the 1996 periods primarily as
a result of the significant reduction in long-term debt over the last
twelve months.
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES
In the first nine months of 1997, the Company generated approximately
$263 million in cash from operations which, along with available cash, was
used for capital projects ($248 million), reductions of long-term debt
($22 million) and dividends paid ($6 million).
In June 1997, the Company refinanced its existing $350 million
Revolving Credit Facility with a Revolving Credit Facility of a like
amount, the primary objectives of which were to avail the Company of lower
market pricing, extend the maturity by one year to 2002 and improve other
terms and conditions favorable to the Company. However, as a result of
the combination of the Company with Burlington Resources, Inc. (BR), the
Revolving Credit Facility automatically terminated on October 23, 1997.
Further, the Company's commercial paper program was also terminated on
that date and outstanding commercial paper totaling approximately $83
million was retired by BR.
CAPITAL STOCK, DIVIDENDS AND OTHER MARKET DATA
On October 22, 1997, the shareholders of the Company approved a
definitive agreement to combine with Burlington Resources, Inc. (BR) in
a transaction accounted for under the pooling of interest method of
accounting for business combinations. Under the terms of the agreement,
a wholly owned subsidiary of BR merged into the Company and the Company's
shareholders received 1.525 shares of BR common stock for each Company
share held and the Company became a wholly owned subsidiary of BR. The
transaction is expected to qualify as a tax-free reorganization.
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 Nine months ended
September 30, September 30,
1997 1996 1997 1996
_____________________________________________________________________________________
<S> <C> <C> <C> <C>
Sales to unaffiliated customers:
Domestic1 $ 93.8 141.1 317.7 567.3
North Sea 33.5 30.3 101.0 100.4
Other foreign 8.2 5.5 22.4 18.0
_____________________________________________________________________________________
Total revenues $ 135.5 176.9 441.1 685.7
_____________________________________________________________________________________
Earnings (loss) before income taxes:
Operating profit (loss):
Domestic1 14.7 33.0 72.7 113.4
North Sea 11.5 7.2 36.2 29.3
Other foreign (.1) (4.0) (6.9) (11.2)
_____________________________________________________________________________________
26.1 36.2 102.0 131.5
Other income (expense), net (18.1) (17.7) (51.1) (54.7)
_____________________________________________________________________________________
Earnings (loss) before income taxes $ 8.0 18.5 50.9 76.8
_____________________________________________________________________________________
Capital expenditures:
Exploration:
Domestic 30.4 36.4 114.3 80.3
North Sea .9 .6 3.5 1.4
Other foreign 8.0 7.7 20.1 14.1
_____________________________________________________________________________________
39.3 44.7 137.9 95.8
_____________________________________________________________________________________
Development:
Domestic 45.1 13.1 74.8 44.2
North Sea 3.6 3.6 13.3 13.9
Other foreign 1.3 2.1 6.9 6.9
_____________________________________________________________________________________
50.0 18.8 95.0 65.0
_____________________________________________________________________________________
89.3 63.5 232.9 160.8
Capitalized interest 1.6 2.5 5.9 8.8
Other 2.3 1.0 4.1 2.4
_____________________________________________________________________________________
$ 93.2 67.0 242.9 172.0
_____________________________________________________________________________________
1 The 1996 periods include the operations of the Company's refinery which was sold in
July 1996. See Note 2 of "Notes to Consolidated Financial Statements."
</TABLE>
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<TABLE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
OPERATING DATA
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1997 1996 1997 1996
_____________________________________________________________________________________
<S> <C> <C> <C> <C>
OIL AND GAS OPERATIONS1
CRUDE AND CONDENSATE2
Production (thousands of barrels per day):
Domestic 19.8 21.3 20.8 21.0
North Sea 15.7 13.7 14.5 15.4
Other foreign 5.2 3.4 4.6 3.7
_____________________________________________________________________________________
40.7 38.4 39.9 40.1
_____________________________________________________________________________________
Average price received (per barrel):
Domestic $18.46 20.87 19.83 19.76
North Sea 18.48 19.54 19.25 18.84
Other foreign 17.21 17.93 17.97 17.66
Consolidated 18.31 20.14 19.41 19.21
_____________________________________________________________________________________
PLANT PRODUCTS
Production (thousands of barrels per day):
Domestic 2.8 2.6 2.8 2.2
North Sea .9 .8 .9 .9
_____________________________________________________________________________________
3.7 3.4 3.7 3.1
_____________________________________________________________________________________
Average price received (per barrel):
Domestic $10.68 12.49 13.43 12.46
North Sea 13.72 14.21 17.36 15.03
Consolidated 11.41 12.90 14.35 13.20
_____________________________________________________________________________________
NATURAL GAS
Production (millions of cubic feet per day):
Domestic 296.1 289.4 304.3 272.3
North Sea 26.5 24.1 30.2 30.1
CLAM Petroleum Company 34.3 30.6 41.6 44.9
_____________________________________________________________________________________
356.9 344.1 376.1 347.3
_____________________________________________________________________________________
Average price received (per MCF):
Domestic $ 2.08 2.12 2.30 2.39
North Sea 2.41 2.10 2.58 2.17
CLAM Petroleum Company 2.61 2.93 2.76 2.79
Consolidated 2.15 2.19 2.37 2.42
_____________________________________________________________________________________
1 Includes the Company's 50% equity interest in its unconsolidated affiliate, CLAM
Petroleum Company.
2 Before the elimination of intercompany transfers.
</TABLE>
<PAGE>
<PAGE>
<TABLE>
THE LOUISIANA LAND AND EXPLORATION COMPANY
OPERATING DATA (CONTINUED)
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1997 1996 1997 1996
_____________________________________________________________________________________
<S> <C> <C> <C> <C>
GROSS WELLS DRILLED
Working Interest
Exploratory:
Oil 5 2 12 4
Gas 6 2 14 7
Dry 6 6 16 13
_____________________________________________________________________________________
17 10 42 24
_____________________________________________________________________________________
Development:
Oil 2 5 12 15
Gas 4 4 9 7
Dry - - - -
_____________________________________________________________________________________
6 9 21 22
_____________________________________________________________________________________
Total working interest 23 19 63 46
Royalty Interest 3 4 23 11
_____________________________________________________________________________________
Total wells 26 23 86 57
_____________________________________________________________________________________
NET WELLS DRILLED
Exploratory:
Oil 1.6 1.3 4.1 2.0
Gas 2.2 1.5 5.6 3.6
Dry 2.2 1.7 6.7 4.2
_____________________________________________________________________________________
6.0 4.5 16.4 9.8
_____________________________________________________________________________________
Development:
Oil .7 .6 1.9 1.7
Gas 1.2 .9 2.5 2.4
Dry - - - -
_____________________________________________________________________________________
1.9 1.5 4.4 4.1
_____________________________________________________________________________________
Total net wells 7.9 6.0 20.8 13.9
_____________________________________________________________________________________
</TABLE>
<PAGE>
<PAGE>
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDER.
At a Special Meeting of Stockholders held on October 22, 1997,
the Agreement and Plan of Merger dated July 16,1997 among the
Company, Burlington Resources Inc. and BR Acquisition
Corporation, a wholly owned subsidiary of Burlington Resources
Inc., pursuant to which BR Acquisition Corporation will merge
with and into the Company, was approved by a stockholder vote
of: For - 27,745,758; Against - 59,076; Abstaining - 55,314.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
Exhibit 27 - Financial Data Schedules:
Quarter ended September 30, 1997
Quarter ended September 30, 1996 (restated)
(b) Reports on Form 8-K:
On July 17, 1997, the Company filed a Current Report on Form 8-K
which included a press release announcing that the Company had
entered into an agreement and Plan of Merger dated July 16, 1997
among the Company, Burlington Resources Inc. and BR Acquisition
Corporation, a wholly owned subsidiary of Burlington Resources
Inc., pursuant to which BR Acquisition Corporation will merge
with and into the Company.
On October 23, 1997, the Company filed a Current Report on Form
8-K which included the press release of Burlington Resources,
Inc. announcing the approval of the aforementioned Plan of
Merger by the shareholders of the Company and Burlington
Resources, Inc.
<PAGE>
<PAGE>
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/ John E. Hagale
___________________________________________
JOHN E. HAGALE
CHIEF FINANCIAL OFFICER
(PRINCIPAL ACCOUNTING OFFICER)
By: /s/ J. N. Wood
___________________________________________
J N. WOOD
VICE PRESIDENT
Dated: November 13, 1997
<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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 14,200
<SECURITIES> 0
<RECEIVABLES> 85,800
<ALLOWANCES> 0
<INVENTORY> 000
<CURRENT-ASSETS> 111,200
<PP&E> 3,201,700
<DEPRECIATION> 2,000,400
<TOTAL-ASSETS> 1,352,000
<CURRENT-LIABILITIES> 105,400
<BONDS> 483,300
<COMMON> 5,200
0
0
<OTHER-SE> 513,100
<TOTAL-LIABILITY-AND-EQUITY> 1,352,000
<SALES> 441,100
<TOTAL-REVENUES> 441,100
<CGS> 0
<TOTAL-COSTS> 346,100
<OTHER-EXPENSES> 21,600
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 22,500
<INCOME-PRETAX> 50,900
<INCOME-TAX> 17,300
<INCOME-CONTINUING> 33,600
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 33,600
<EPS-PRIMARY> 0.97
<EPS-DILUTED> 0.97
<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. THIS SCHEDULE HAS BEEN
RESTATED TO CONFORM TO FINANCIAL STATEMENTS CLASSIFICATIONS ADOPTED IN
1997.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 12,300
<SECURITIES> 0
<RECEIVABLES> 86,200
<ALLOWANCES> 0
<INVENTORY> 400
<CURRENT-ASSETS> 106,900
<PP&E> 3,062,000
<DEPRECIATION> 1,886,400
<TOTAL-ASSETS> 1,318,000
<CURRENT-LIABILITIES> 138,400
<BONDS> 505,400
<COMMON> 5,100
0
0
<OTHER-SE> 438,500
<TOTAL-LIABILITY-AND-EQUITY> 1,318,000
<SALES> 685,700
<TOTAL-REVENUES> 685,700
<CGS> 0
<TOTAL-COSTS> 560,200
<OTHER-EXPENSES> 22,300
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 26,400
<INCOME-PRETAX> 76,800
<INCOME-TAX> 25,300
<INCOME-CONTINUING> 51,500
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 51,500
<EPS-PRIMARY> 1.51
<EPS-DILUTED> 1.51
