<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 or 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended MARCH 31, 1996 Commission file number 0-10697
DORCHESTER HUGOTON, LTD.
(Exact name of registrant as specified in its charter)
Texas 75-1829064
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
9696 Skillman Street, Suite 320-LB 42, Dallas, Texas 75243-8200
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 340-3443
None
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
--- ---
As of April 30, 1996, 10,744,380 Depositary Receipts for Units of
Limited Partnership Interest were outstanding.
Page 1 of 10
<PAGE> 2
DORCHESTER HUGOTON, LTD.
(A Texas Limited Partnership)
QUARTERLY REPORT ON FORM 10-Q
MARCH 31, 1996
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Balance Sheets, March 31, 1996 and December 31, 1995
(Unaudited)
Condensed Statements of Earnings for the Three Months Ended
March 31, 1996 and 1995 (Unaudited)
Condensed Statements of Cash Flows for the Three Months Ended
March 31, 1996 and 1995 (Unaudited)
Notes to Condensed Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
SIGNATURES
Page 2 of 10
<PAGE> 3
DORCHESTER HUGOTON, LTD.
(A Texas Limited Partnership)
PART I
ITEM 1
CONDENSED BALANCE SHEETS
(Unaudited)
MARCH 31, 1996 AND DECEMBER 31, 1995
(In Thousands of Dollars)
<TABLE>
<CAPTION>
MARCH 31, 1996 DECEMBER 31, 1995
------------------ -----------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and temporary cash investments $ 40 $ 183
Investments - available for sale 2,201 2,190
Accounts receivable 3,520 3,197
Prepaid expenses and other current assets 93 136
---------- ----------
TOTAL CURRENT ASSETS 5,854 5,706
NET PROPERTY AND EQUIPMENT 13,780 13,895
---------- ----------
TOTAL ASSETS $ 19,634 $ 19,601
========== ==========
LIABILITIES AND PARTNERSHIP CAPITAL
CURRENT LIABILITIES:
Accounts payable and other current liabilities $ 645 $ 1,001
Production and property taxes payable 272 231
Royalties payable 315 297
Distributions payable to Unitholders 1,848 1,848
---------- ----------
TOTAL CURRENT LIABILITIES 3,080 3,377
Long-term debt 644 1,725
---------- ----------
TOTAL LIABILITIES 3,724 5,102
PARTNERSHIP CAPITAL 15,910 14,499
---------- ----------
TOTAL LIABILITIES AND PARTNERSHIP CAPITAL $ 19,634 $ 19,601
========== ==========
</TABLE>
The accompanying condensed notes are an
integral part of these financial statements.
Page 3 of 10
<PAGE> 4
DORCHESTER HUGOTON, LTD.
(A Texas Limited Partnership)
CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(In Thousands of Dollars)
<TABLE>
<CAPTION>
Three Months
Ended
March 31,
-------------------------------------
1996 1995
---------------- ---------------
<S> <C> <C>
NET OPERATING REVENUES $ 4,697 $ 3,311
--------------- -------------
COSTS AND EXPENSES:
Operating, including production taxes 813 772
Depletion, depreciation and amortization 381 400
General and administrative 141 133
Management fees 106 96
Interest 31 43
Other income, net (21) (22)
--------------- -------------
TOTAL COSTS AND EXPENSES 1,451 1,422
--------------- -------------
NET EARNINGS $ 3,246 $ 1,889
=============== =============
NET EARNINGS PER UNIT (IN DOLLARS) $ 0.30 $ 0.17
=============== =============
</TABLE>
The accompanying condensed notes are an
integral part of these financial statements.
Page 4 of 10
<PAGE> 5
DORCHESTER HUGOTON, LTD.
(A Texas Limited Partnership)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(In Thousands of Dollars)
<TABLE>
<CAPTION>
1996 1995
------------- ------------
<S> <C> <C>
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES $ 3,050 $ 3,853
------------ -----------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchases of property and equipment, net of retirements (267) (148)
Cash received on sale of other property and equipment -0- 18
------------ -----------
CASH FLOWS USED IN INVESTING ACTIVITIES (267) (130)
CASH FLOWS USED IN FINANCING ACTIVITIES:
Distributions paid to Unitholders (1,845) (1,863)
Additions to long-term debt 3,766 1,000
Reductions of long-term debt (4,847) (2,525)
Other -0- (123)
------------ -----------
CASH FLOWS USED IN FINANCING ACTIVITIES (2,926) (3,511)
------------ -----------
INCREASE (DECREASE) IN CASH AND TEMPORARY CASH INVESTMENTS (143) 212
CASH AND TEMPORARY CASH INVESTMENTS AT JANUARY 1, 183 -0-
------------ -----------
CASH AND TEMPORARY CASH INVESTMENTS AT MARCH 31, $ 40 $ 212
============ ===========
</TABLE>
The accompanying condensed notes are an
integral part of these financial statements.
Page 5 of 10
<PAGE> 6
DORCHESTER HUGOTON, LTD.
(A Texas Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. The condensed financial statements reflect all adjustments (consisting
only of normal and recurring adjustments) which are, in the opinion of
management, necessary for a fair presentation of the Partnership's
financial position and operating results for the interim periods.
Interim period results are not necessarily indicative of the results
for the calendar year. Please refer to Management's Discussion and
Analysis of Financial Condition and Results of Operations for
additional information. The weighted average number of Units
outstanding for each of the periods was 10,744,380.
2. Prior to May 1, 1994, the Partnership's Oklahoma natural gas
production was sold under the 1946 Gas Purchase Contract, as amended,
(the "Contract") to Natural Gas Pipeline Company of America or its
assigns (collectively referred to as "NGPL"). Such gas was also
subject to a June 16, 1982 Gas Processing Agreement (the "Agreement")
between the Partnership and Parker & Parsley Petroleum Company
entities (successor to Damson Oil Corporation and Dorchester Master
Limited Partnership) (collectively referred to as "P&P" or as "Parker
& Parsley"). As a result, the Partnership's Oklahoma gas production
was processed in P&P's Hooker, Oklahoma gas processing plant where
natural gas liquids were extracted and the remaining gas ("residue
gas") was delivered and sold to NGPL at the plant outlet. The
extraction of natural gas liquids requires the consumption of some gas
as fuel and the extraction itself shrinks the gas production in both
volume and heating value (referred to as "fuel and shrinkage"). The
Agreement provided, among other things, that P&P operate the
Partnership's gas gathering pipelines, that P&P retain the natural gas
liquids extracted, and that the Partnership would receive for fuel and
shrinkage incurred the value of the gas produced at the wellhead
(including severance taxes) less amounts received for residue gas
sales to NGPL. The Agreement terminated upon termination of the
Partnership's Contract with NGPL on May 1, 1994.
On May 1, 1990, the Partnership instituted legal action in Wharton
County, Texas District Court against NGPL seeking cancellation of the
Contract and damages. In early December, 1992, the Partnership
settled its litigation against NGPL and amended the Contract. The
amended Contract provided that NGPL would pay for the residue gas from
the Partnership's Oklahoma properties at an indexed market price. The
Contract was subsequently terminated by NGPL effective May 1, 1994.
The processor of the Partnership's Oklahoma gas, P&P, previously
intervened in the litigation in Wharton County, Texas claiming certain
rights under the Contract, the Agreement and to the Partnership's gas
gathering pipeline system in Oklahoma.
In 1986, pursuant to a preferential right to purchase in an August 23,
1982 Operating Agreement between the Partnership and a predecessor to
P&P, the Partnership acquired additional interests in Texas County,
Oklahoma (the "1986 Transaction"). On November 2, 1993, the Oklahoma
Court of Appeals affirmed the decision of the Texas County, Oklahoma
District Court granting the Partnership quiet title to all personal
and real property interests acquired by the Partnership in the 1986
Transaction. P&P continues to attempt to dispute the impact of that
decision. Additionally, on April 20, 1994 the Partnership was granted
an injunction by the Texas County, Oklahoma District Court to enjoin
P&P from interfering with the Partnership's May 1, 1994 operation of
low pressure gas pipeline gathering facilities. On May 8, 1996 the
Partnership received notice that on May 7, 1996 the Oklahoma Court of
Appeals reversed the injunction previously granted the Partnership.
Such reversal does not determine ownership of the pipelines but does
reverse the earlier decision that allowed the Partnership to operate
and maintain the pipelines based upon the finding that ownership of the
pipelines has already been determined. Also on November 2, 1993, the
Court of Appeals remanded, for a new trial, a 1990 jury finding of
fraud which had awarded the Partnership $4,715,326 related to the 1986
Transaction. The Oklahoma Supreme Court granted certiorari on March
21, 1994. On June 19, 1995, the Oklahoma Supreme Court withdrew and
denied certiorari. Consequently, the sole issue of fraud by P&P will
be retried in Texas County, Oklahoma. No retrial date has been set.
Additionally, on January 10, 1994 the Oklahoma Court of Appeals
decision became final which had reversed a judgment awarding the
Partnership $724,082 based on P&P's underpayment for fuel and shrinkage
at the Hooker gas processing plant during the period of November 1988
through March 1991. Subsequently, P&P was awarded and received $91,402
in attorney's fees from the Partnership. None of the Court of Appeals'
decisions are expected to have any material adverse affect on the
Partnership's financial position or operating results. The Partnership
has not recognized any of the prior judgment amounts in its favor in
its financial statements.
Page 6 of 10
<PAGE> 7
DORCHESTER HUGOTON, LTD.
(A Texas Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
On December 22, 1993 the Texas County, Oklahoma District Court issued
a partial summary judgment with respect to disputed matters between
the Partnership and P&P regarding gathering and processing the
Partnership's Oklahoma gas and the Agreement. The partial summary
judgment ruled that (1) the Partnership owns the Oklahoma gas
pipeline gathering system, (2) there are no processing rights other
than the Agreement, whereby P&P gathers and processes the
Partnership's Oklahoma gas, (3) the Agreement was still in effect, and
(4) payments for fuel and shrinkage under the Agreement are to be
based upon the same price per MMBTU as paid the Partnership for its
Oklahoma gas sales plus applicable taxes. The issue of ownership of
the pipelines has also been the subject of proceedings discussed in the
previous paragraph. On May 1, 1994 the Agreement terminated
concurrently with the termination of the Partnership's 1946 Gas
Purchase Contract with NGPL. On August 26, 1994, P&P and the
Partnership stipulated by agreement that (among other issues) the
amount of underpayment due the Partnership for fuel and shrinkage
during the period January 1993 through April 1994 to be either
$4,837,046 or $6,558,036 depending upon the Court's determination of
proper severance tax applicability. A hearing including these issues
was conducted October 18, 1994. On September 21, 1995 the Texas
County, Oklahoma District Court issued its Final Judgment and Order
favorably awarding the Partnership $6,588,036 plus interest for
underpayment by P&P for fuel and shrinkage. The Court's ruling also
reaffirmed its previous decisions that the Partnership owns the
Oklahoma gas pipeline gathering system and P&P had no rights to process
the gas after the May 1, 1994 expiration of the Agreement. On October
6, 1995 P&P filed a supersedeas bond. On October 13, 1995 P&P filed an
appeal contesting all of the District Court's findings and P&P seeks to
reduce or eliminate the supersedeas bond. On December 13, 1995 the
Texas County, Oklahoma District Court denied Parker & Parsley's motion
to reduce or eliminate the supersedeas bond and awarded the Partnership
$104,446 in attorneys' fees and expenses. Parker & Parsley has appealed
all substantive decisions. The Partnership has not recognized any of
the prior judgment amounts in its favor in its financial statements.
Through January 25, 1994, the Wharton County, Texas District Court
ruled that (1) P&P is not liable to the Partnership for excess
extraction of natural gas liquids prior to January 1, 1993 (2) the
1982 Gas Processing Agreement expired on January 1, 1993, and (3) P&P
is not a party to the Partnership's contract covering Oklahoma gas
sales. Issues of ownership of the gas pipeline gathering system and
any gas processing rights (other than the Agreement) in Oklahoma were
dismissed for various reasons including lack of subject matter
jurisdiction. All other remaining issues were dismissed and
attorney's fees in the amount of $208,000 were awarded to P&P. Both
the Partnership and P&P appealed portions of the Court's decisions and
the Partnership has provided a supersedeas bond in the amount of
$242,000 related to attorneys fees with prospective interest. On
October 5, 1995 the Thirteenth Court of Appeals in Corpus Christi,
Texas issued an opinion which remanded to the Wharton County District
Court for further proceedings the issues of (1) ownership of the gas
pipeline gathering system and (2) ownership of rights to process the
gas produced by the Partnership's Oklahoma gas wells. Additionally,
the Appellate Court affirmed the Wharton District Court's decision
terminating on January 1, 1993, the 1982 Gas Processing Agreement
whereby the Partnership's Oklahoma gas was processed in the P&P Hooker
Oklahoma Plant until May 1, 1994. Also, the Court affirmed the
Wharton County District Court's decision that Parker & Parsley was not
liable to the Partnership for previous overextraction at the Hooker
Oklahoma Plant. The Court also affirmed, but slightly reduced, the
trial court's award of attorney's fees of $200,000 to P&P. Dorchester
Hugoton is seeking further appellate court review.
On May 11, 1994 the Partnership instituted legal action in Texas
County, Oklahoma District Court against P&P for breach of the
preferential right to purchase clause in an August 23, 1982 Operating
Agreement between the Partnership and a predecessor to P&P. A
production payment and a right to participate in new wells were
reserved by P&P predecessors in their June, 1986 sale of interests in
Texas County, Oklahoma properties to the Partnership, and such
interests are claimed by P&P. The Partnership is contesting
conveyances made between P&P's predecessors (Damson and Dorchester
Master Limited Partnership) and P&P with respect to the production
payment and participation right. The Partnership is requesting such
production payment and participation right be subject to specific
performance enabling exercise of the Partnership's rights under the
preferential right to purchase. Generally the right to participate in
new wells is limited to a maximum working interest of 5%. At present,
the Partnership believes no wells have been drilled which would be
subject to such participation. The Partnership believes it is
reasonably possible that the Partnership will prevail against P&P
Page 7 of 10
<PAGE> 8
DORCHESTER HUGOTON, LTD.
(A Texas Limited Partnership)
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
claims. A production payment may be owed to P&P if the Partnership is
unsuccessful. However, the exact amount of any such payment that might
be due is not currently known. As of March 1, 1994, the amount that
could be owed might range between $600,000 to $1,000,000. Although not
calculable, an estimated additional range of $900,000 to $1,300,000
could be owed for the period from March 1, 1994 through February 29,
1996. Future projections of any production payment amount utilize
annual calculations through February based on a table of declining
volumes and the amount that unknown future gas prices exceed a table of
rising prices. P&P has asserted the production payment amount owed to
be $1,394,505 through February 28, 1994. Should the Partnership
successfully maintain the right to purchase, the determination of
whether to purchase would depend on the purchase price which is
unknown.
On May 19, 1994 P&P instituted legal action in the 116th Judicial
District of Dallas County, Texas asserting that Dorchester Hugoton
owed and had not paid a production payment, had improperly failed to
allow P&P to participate in the 1993 drilling of a replacement well in
Texas County, Oklahoma and asserting other claims of tortious
interference and unfair competition, apparently by virtue of the
Partnership's operation of its low pressure gas pipeline. On July 11,
1994 the Dallas County District Court denied the Partnership's motion
to stay or abate due to identical claims in Oklahoma. On March 28,
1995, a motion by P&P for partial summary judgment was denied by the
Dallas court. By agreement with P&P all litigation in the Dallas
County, Texas suit has been deferred until completion of all identical
litigation in Texas County, Oklahoma. In Oklahoma, the trial
regarding the Partnership's right to exercise the preferential right
to purchase both the production payment and right to participate in
new wells awaits rescheduling by the Court. All other matters, such
as the amount to be paid in exercising the preferential right or the
amount of a production payment, if any, are delayed until issuance of
a ruling following the pending Oklahoma trial.
Pursuant to requirements of the Dallas, Texas District Court, the
Partnership and P&P attempted settlement by mediation during August,
1995. On August 21, 1995 the independent mediator declared an
impasse.
On December 20, 1995 the Partnership began legal action in the Texas
County, Oklahoma District Court seeking to quiet the Partnership's
title and seeking a declaratory order that Parker & Parsley has no
participation rights regarding an Oklahoma replacement well completed
by the Partnership in January, 1996. Such action was necessary as P&P
has continued to assert that it had the right to participate to the
extent of 5% in a similar Oklahoma replacement well completed by the
Partnership in 1993. The parties have agreed to abate this proceeding
pending resolution of the same issue regarding the 1993 replacement
well.
3. On July 19, 1994 the Partnership entered into a $15,000,000 unsecured
revolving credit facility (the "Agreement") with Bank One, Texas, N.A.
The Agreement currently has a borrowing base of $4,250,000, which will
be re-evaluated by Bank One at least semi-annually. If, on any such
date, the aggregate amount of outstanding loans and letters of credit
exceed the current borrowing base as most recently determined by Bank
One, the Partnership is required to repay the excess. This credit
facility covers both cash advances and any letters of credit that the
Partnership may need, with interest being charged at the base rate for
Bank One, which was 8.25% on April 29, 1996. All amounts borrowed
under this facility will become due and payable on July 31, 1997. As
of April 29, 1996, letters of credit totaling $267,000 were issued
under the credit facility and the amount borrowed was $1,100,000. The
weighted average amount borrowed under the credit facility during the
first quarter was approximately $265,000.
Page 8 of 10
<PAGE> 9
DORCHESTER HUGOTON, LTD.
(A Texas Limited Partnership)
PART I
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Net cash flows from operating activities during the three months ended March
31, 1996 were $3,050,000 compared to $3,853,000 for the same period of 1995 as
a result of increased timeliness of accounts receivable during the first
quarter of 1995 compared to 1996. Additionally, cash flows were influenced by
natural gas spot market prices which were up compared to the same period last
year.
The Partnership has available a $15,000,000 unsecured revolving credit facility
with a current borrowing base of $4,250,000. Please see Note 3 to the
financial statements for additional information. As of April 30, 1996, letters
of credit totaling $267,000 were issued under the credit facility and the
amount borrowed was $1,100,000. The Partnership's cash position was zero on
January 1, 1995 as a result of cash management practices which minimize
borrowings. The weighted average amount borrowed under the credit facility
during the first quarter was approximately $265,000.
The Partnership's portion of gas sales volumes (in MMCF) and weighted average
BTU adjusted sales prices per MCF were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------------------
MARCH 31,
------------------------ DEC. 31,
1996 1995 1995
-------- --------- ---------
<S> <C> <C> <C>
SALES VOLUMES:
Oklahoma 1,723 1,728 1,745
Kansas 606 525 427
------ ------ ------
TOTAL 2,329 2,253 2,172
====== ====== ======
WEIGHTED AVERAGE BTU ADJUSTED SALES PRICES:
Oklahoma $2.02 $1.47 $1.76
Kansas 1.95 1.40 1.70
OVERALL WEIGHTED AVERAGE $2.00 $1.45 $1.75
</TABLE>
Oklahoma natural gas production volumes were approximately the same during the
current quarter compared to the previous quarter. Kansas natural gas
production volumes were up compared to the fourth quarter of 1995 during which
scheduled modifications to the Kansas compression facility were completed.
Both Oklahoma and Kansas natural gas sales prices were significantly higher
than the previous quarter and the same quarter of 1995.
The Partnership announced May 9, 1996 that the Oklahoma Court of Appeals has
reversed an injunction previously granted in favor of the Partnership
concerning the operation of the gas pipeline system that carries the gas from
the Partnership's Oklahoma gas wells to its compression facilities for
subsequent gas sales. The injunction was initially granted on April 20, 1994.
Concurrently, the Court of Appeals reversed and remanded a companion denial of
an injunction regarding the same pipelines. The Partnership, at its own cost,
has operated, maintained, and paid taxes on the pipeline system since the
initial injunction. Any other amounts which may be owed during the injunction
period await determination of actual ownership of the pipelines. The
Partnership does not believe such amounts, if owed, would have a material
adverse effect on the Partnership's financial position or operating results.
The injunction rulings of the Court of Appeals did not determine ownership of
the pipelines, but did reverse an earlier District Court decision that allowed
Dorchester Hugoton to operate and maintain those pipelines based upon the
finding that ownership of the pipelines had already been determined.
Conversations with Parker & Parsley Petroleum Company entities will be
initiated regarding the near-term operation of the pipelines during the
pendency of litigation over pipeline ownership. The Partnership believes that
its well operations and gas sales can continue uninterrupted in the immediate
future.
As previously discussed in the Partnership's Annual Report on Form 10-K, a new
gas pipeline gathering system to replace the 45+ year-old existing system has
been considered. A new system is estimated to cost approximately $7 to $10
million dollars. In view of the Oklahoma Court of Appeals decision regarding
the existing system, and since the outcome of discussions with Parker & Parsley
and/or further court proceedings are not subject to forecast, the Partnership
announced its intent to immediately proceed with the new gas gathering pipeline
system. Such prompt action will minimize the uncertainty of court actions
and/or outside effects on the Partnership's operations.
As discussed in the Partnership's 1995 Form 10-K and in the Notes to Condensed
Financial Statements within this Form 10-Q, the litigation with various
entities of Parker & Parsley Petroleum Company is continuing. The Partnership
believes the overall litigation issues must be resolved before the Partnership
can make decisions regarding significant capital expenditures for production
enhancement or material changes in its current distribution policy.
Page 9 of 10
<PAGE> 10
DORCHESTER HUGOTON, LTD.
(A Texas Limited Partnership)
OTHER INFORMATION
PART II
ITEM 1. Legal Proceedings:
See Notes to Condensed Financial Statements.
ITEM 5. Other Information:
On May 7, 1996 the Partnership announced a program to purchase from
time to time up to 500,000 of the Partnership's Units (Depositary
Receipts). Such purchases may be made on the open market, in private
transactions, or otherwise. Purchases from the General Partners are
excluded from the repurchase program. All Units repurchased under the
program shall be retired resulting in a decrease in both Units issued
and Units outstanding. No Units will be held as "Treasury Units".
There is no assurance or obligation that the repurchase program will
result in any purchase of Units. The Partnership believes the
repurchase program is a way to enhance the value to our long-term
investors by increasing a Unitholder's equity ownership in natural
gas producing properties rather than attempting alternatives such as
acquisition or exploration programs.
ITEM 6. Exhibits and Reports on Form 8-K:
a) Exhibits
27 Financial Data Schedule
b) Reports on Form 8-K - None.
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.
DORCHESTER HUGOTON, LTD.
------------------------
Registrant
Date: May 9, 1996 /s/ Kathleen A. Rawlings
-----------------------------------------
Kathleen A. Rawlings
Controller (Principal Accounting Officer)
Page 10 of 10
<PAGE> 11
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
NO.
----
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 40
<SECURITIES> 2,201
<RECEIVABLES> 3,520
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,854
<PP&E> 22,338
<DEPRECIATION> 8,558
<TOTAL-ASSETS> 19,634
<CURRENT-LIABILITIES> 3,080
<BONDS> 644
<COMMON> 0
0
0
<OTHER-SE> 15,910
<TOTAL-LIABILITY-AND-EQUITY> 19,634
<SALES> 4,697
<TOTAL-REVENUES> 4,697
<CGS> 1,451
<TOTAL-COSTS> 1,451
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 31
<INCOME-PRETAX> 3,246
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,246
<EPS-PRIMARY> .30
<EPS-DILUTED> .30
</TABLE>
