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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
<TABLE>
<S> <C> <C>
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
</TABLE>
FOR THE TRANSITION PERIOD FROM ________ TO ________ .
COMMISSION FILE NUMBER 0-8565
MARINE PETROLEUM TRUST
(Exact name of registrant as specified in its charter)
<TABLE>
<C> <C>
TEXAS 75-6008017
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
NATIONSBANK OF TEXAS, N.A. 75283-0241
P.O. BOX 830241, DALLAS, TEXAS (Zip Code)
(Address of principal executive offices)
</TABLE>
Registrant's telephone number, including area code (800) 985-0794
None
(Former name, former address and former fiscal year
if changed since last report)
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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 number of units of beneficial interest outstanding as of the last
practicable date.
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<CAPTION>
Title of Each Class of Units Number of Units of Beneficial Interest
of Beneficial Interest December 31, 1996
---------------------------- --------------------------------------
<C> <C>
UNITS OF BENEFICIAL INTEREST 2,000,000
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PART I. FINANCIAL INFORMATION
MARINE PETROLEUM TRUST AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1996 AND JUNE 30, 1996
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1996 1996
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<S> <C> <C>
Current Assets:
Cash and cash equivalents................................. $2,015,995 $2,020,695
Oil and gas royalties receivable.......................... 724,515 587,925
Receivable from affiliate................................. 79,415 102,726
---------- ----------
Total current assets.............................. 2,819,925 2,711,346
---------- ----------
Investment in affiliate..................................... 252,377 266,482
Office equipment, at cost less accumulated depreciation..... 622 971
Producing oil and gas properties............................ 7 7
---------- ----------
$3,072,931 $2,978,806
========== ==========
LIABILITIES AND TRUST EQUITY
Current Liabilities:
Accounts payable.......................................... $ 895,724 $ 895,724
Employment tax payable.................................... 2,135 2,459
Income taxes payable...................................... 12,370 10,670
---------- ----------
Total current liabilities......................... 910,229 908,853
Trust Equity:
Corpus -- authorized 2,000,000 units of beneficial
interest,
issued 2,000,000 units at nominal value................ 8 8
Undistributed income...................................... 2,162,694 2,069,945
---------- ----------
Total trust equity................................ 2,162,702 2,069,953
---------- ----------
$3,072,931 $2,978,806
========== ==========
</TABLE>
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MARINE PETROLEUM TRUST AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS AND SIX MONTHS ENDED DECEMBER 31, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
---------------------- ------------------------
1996 1995 1996 1995
---------- -------- ---------- ----------
<S> <C> <C> <C> <C>
Income:
Oil and gas royalties.................... $1,085,760 $543,819 $1,946,771 $1,079,625
Equity in earnings of affiliate.......... 79,284 92,915 150,696 184,237
Interest income of subsidiary............ 22,794 23,470 48,878 46,891
---------- -------- ---------- ----------
$1,187,838 $660,204 2,146,345 $1,310,753
---------- -------- ---------- ----------
Expenses:
General and administrative............... 47,881 36,870 75,739 57,506
---------- -------- ---------- ----------
Income before Federal income taxes....... 1,139,957 623,334 2,070,606 1,253,247
Federal income taxes of subsidiary....... 2,500 -- 5,500 --
---------- -------- ---------- ----------
Net income............................... $1,137,457 $623,334 $2,065,106 $1,253,247
========== ======== ========== ==========
Net income per unit........................ $ .57 $ .31 $ 1.03 $ .63
========== ======== ========== ==========
Distributions per unit..................... $ .49 $ .29 $ .99 $ .56
========== ======== ========== ==========
</TABLE>
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MARINE PETROLEUM TRUST AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1996 AND 1995
(UNAUDITED)
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income................................................ $ 2,065,106 $ 1,253,247
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation........................................... 349 350
Changes in assets and liabilities:
Royalties receivable................................. (136,590) (29,921)
Receivable from affiliate............................ 23,311 6,269
Employment tax payable............................... (324) (2,459)
Federal income taxes payable......................... 1,700 (3,000)
----------- -----------
Net cash provided by operating activities......... 1,953,552 1,224,486
----------- -----------
Cash flows provided by (used in) investing activities:
Decrease (increase) in undistributed earnings of
affiliate........................................... 14,105 (37,867)
Cash flows from financing activities -- distributions to
unitholders............................................... (1,972,357) (1,128,790)
----------- -----------
Net increase (decrease) in cash and cash
equivalents.................................... (4,700) 57,829
----------- -----------
Cash and cash equivalents at beginning of period............ 2,020,695 1,661,312
----------- -----------
Cash and cash equivalents at end of period.................. $ 2,015,995 $ 1,719,141
=========== ===========
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MARINE PETROLEUM TRUST AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996
(UNAUDITED)
ACCOUNTING POLICIES
The financial statements include the financial statements of Marine
Petroleum Trust (the "Trust") and its wholly-owned subsidiary are condensed, and
should be read in conjunction with the annual report for the fiscal year ended
June 30, 1996. The financial statements included herein are unaudited, but in
the opinion of management include all adjustments necessary for a fair
presentation of the results of operations for the periods indicated.
UNDISTRIBUTED INCOME
Undistributed income on December 31, 1996 includes $1,499,506 applicable to
the Trust and $663,188 applicable to Marine Petroleum Corporation, the Trust's
wholly-owned subsidiary. Distributions to unitholders are dependent on the
volume and price of oil and gas sold by others and will fluctuate from quarter
to quarter.
ACCOUNTS PAYABLE
Marine Petroleum Corporation has provided an account payable of $895,724 to
cover possible refunds that may be required upon redetermination of gas prices
for royalty payments in prior periods.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION -- LIQUIDITY AND CAPITAL RESOURCES
The Trust is a "royalty trust" with overriding royalty interests in oil and
gas leases in the Gulf of Mexico. The Trust's indenture (and the charter and
by-laws of its subsidiary) expressly prohibit the operation of any kind of trade
or business. All royalties received by the Trust, less administrative expenses,
are distributed quarterly to unitholders. Since the Trust's sole purpose is to
collect and distribute cash collected from royalties, there are no requirements
for capital.
GENERAL
Net income amounted to $.57 per unit in the current quarter ended December
31, 1996. In the comparable period of 1995 net income was $.31 per unit. Net
income increased in the current quarter, primarily due to an increase in oil and
gas production and an increase in the price of both oil and gas.
Since June 30, 1996, the end of the Trust's last fiscal year, operators
have drilled 6 new development wells and have re-entered and re-drilled 4 old
wells. These operations resulted in 9 new oil or gas wells.
The Trust's income from its equity interest in Tidelands Royalty Trust B
(Tidelands) was $.04 per unit in the current quarter and for the comparable
period last year it amounted to $.046 per unit. Tidelands
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experienced a 12% decline in its income from oil and gas royalties for the
quarter ended December 31, 1996 due to a decline in production of both oil and
natural gas.
The Trust's revenues are derived from the oil and gas production activities
of unrelated parties. The Trust's revenues and distributions fluctuate from
period to period based upon factors beyond The Trust's control, including
without limitation the number of productive wells drilled and maintained on
leases subject to the Trust's interest, the level of production over time from
such wells and the prices at which the oil and gas from such wells is sold. The
Trust believes that it will continue to have revenues sufficient to permit
distributions to be made to unitholders for the foreseeable future, although no
assurance can be made regarding the amounts thereof. The foregoing sentence is a
forward-looking statement. Factors that might cause actual results to differ
from expected results include reductions in prices or demand for oil and gas,
which might then lead to decreased production; reductions in production due to
depletion of existing wells or disruptions in service, including as the result
of storm damage to production facilities, blowouts or other production
accidents, and geological changes such as cratering of productive formations;
expiration or release of leases subject to the Trust's interests; and the
discontinuation by parties subject to the contract dated April 30, 1951 between
Tidelands' predecessors and Gulf Oil Corporation of their efforts to obtain
leases in the area that is subject to Tidelands' interests.
RESULTS OF OPERATIONS -- THREE MONTHS ENDED DECEMBER 31, 1996
Net income for the quarter ended December 31, 1996 amounted to $1,137,457,
which was approximately 82% more than the $623,334 realized in the comparable
period of 1995.
The volume of oil sold increased approximately 8% over the comparable
period last year, and the average price per barrel of oil (based on actual
receipts) increased $12.67 to $28.98 per bbl from $16.31 a year ago.
Natural gas volumes sold increased approximately 15% in the current period
from the comparable period last year. Natural gas volumes amounted to 248,056
mcf this period and were 216,529 mcf for the comparable period last year. The
average price increased $.71 to $2.42 per mcf, from $1.71 a year ago.
The Trust's equity in the income of Tidelands decreased approximately 15%
in the current period over the comparable period last year. See "-- General."
The quantities of oil and gas sold and the average prices for oil and gas
(including the equity in Tidelands) for the three month periods ended December
31, 1996 and 1995 are presented in the following table:
<TABLE>
<CAPTION>
1996 1995
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<S> <C> <C>
OIL
Barrels sold.............................................. 19,584 18,193
Average price............................................. $28.98 $16.31
NATURAL GAS
mcf sold.................................................. 248,056 216,529
Average price............................................. $2.42 $1.71
</TABLE>
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RESULTS OF OPERATIONS -- SIX MONTHS ENDED DECEMBER 31, 1996
Net income for the six months ended December 31, 1996 amounted to
$2,065,106, which was approximately 65% more than the $1,253,247 realized in the
comparable period of 1995.
The volume of oil sold in the current six-month period increased
approximately 23% over the comparable period in 1995, and there was an
approximately 49% increase in the average price received. The volume of natural
gas sold in the current period increased approximately 7% over the comparable
period in 1995 and the average price received for natural gas increased to $2.33
per mcf from the $1.64 received during the 1995 period.
Income from the equity interest in Tidelands decreased approximately 18% in
the current six months as compared to the comparable period in 1995. Income from
this source in the six months ended December 31, 1995 amounted to $184,237, but
decreased to $150,696 in the current six months. See "-- General."
The quantities of oil and gas sold and the average prices for oil and gas
(including the equity in Tidelands) for the six-month periods ended December 31,
1996 and 1995 are presented in the following table:
<TABLE>
<CAPTION>
1996 1995
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<S> <C> <C>
OIL
Barrels sold.............................................. 42,685 34,725
Average price............................................. $24.17 $16.22
NATURAL GAS
mcf sold.................................................. 457,024 427,161
Average price............................................. $2.33 $1.64
</TABLE>
PART II. OTHER INFORMATION
There were no events reportable under Part II of the Quarterly Report on
Form 10-Q.
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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.
MARINE PETROLEUM TRUST
NationsBank of Texas, N.A., Trustee
February 10, 1997 By: /s/ PAT COX
Pat Cox, Vice President
February 10, 1997 /s/ R. RAY BELL
R. Ray Bell, Principal Accounting
Officer
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EXHIBIT INDEX
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<CAPTION>
SEQUENTIAL
EXHIBIT PAGE
NUMBER EXHIBIT DESCRIPTION NUMBER
------- ------------------- ------------
<S> <C> <C>
27 -- Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 2,015,995
<SECURITIES> 0
<RECEIVABLES> 724,515
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,819,925
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,072,931
<CURRENT-LIABILITIES> 910,229
<BONDS> 0
<COMMON> 8
0
0
<OTHER-SE> 2,162,694
<TOTAL-LIABILITY-AND-EQUITY> 3,072,931
<SALES> 1,946,771
<TOTAL-REVENUES> 2,146,345
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 75,739
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,070,606
<INCOME-TAX> 5,500
<INCOME-CONTINUING> 2,065,106
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,065,106
<EPS-PRIMARY> 1.03
<EPS-DILUTED> 1.03
</TABLE>