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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO
__________________
COMMISSION FILE NUMBER 0-11871
FULL TITLE OF THE PLAN AND THE ADDRESS OF THE PLAN,
IF DIFFERENT FROM THAT OF THE ISSUER NAMED BELOW:
AMERICAN EXPLORATION 401(K) PLAN
NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND THE
ADDRESS OF ITS PRINCIPAL EXECUTIVE OFFICE:
AMERICAN EXPLORATION COMPANY
1331 LAMAR, SUITE 900
HOUSTON, TEXAS 77010-3088
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<PAGE>
AMERICAN EXPLORATION 401(K) PLAN
TABLE OF CONTENTS
------------
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Report of Independent Public Accountants ...................................................................... 2
Financial Statements:
Statements of Net Assets Available for Benefits, with Fund Information,
as of December 31, 1995 and 1994....................................................................... 3
Statements of Changes in Net Assets Available for Benefits, with Fund Information,
for the Years Ended December 31, 1995 and 1994......................................................... 4
Notes to Financial Statements.......................................................................... 5
Supplemental Schedules:
Schedule I - Schedule of Assets Held for Investment Purposes as of December 31, 1995................... 9
Schedule II - Schedule of Reportable Transactions for the Year Ended December 31, 1995................. 10
Signatures .................................................................................................... 11
</TABLE>
1
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Retirement Committee
of the American Exploration 401(k) Plan:
We have audited the accompanying statements of net assets available for
benefits of the American Exploration 401(k) Plan as of December 31, 1995 and
1994, and the related statements of changes in net assets available for benefits
for the years then ended. These financial statements and the schedules referred
to below are the responsibility of the Retirement Committee. Our responsibility
is to express an opinion on these financial statements and schedules based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for benefits of the
American Exploration 401(k) Plan as of December 31, 1995 and 1994, and the
changes in net assets available for benefits for the years then ended, in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes as of December 31, 1995, included as Schedule I, and
reportable transactions for the year ended December 31, 1995, included as
Schedule II, are presented for purposes of additional analysis and are not a
required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The Fund Information included in the statement of net assets available for
benefits and the statement of changes in net assets available for benefits is
presented for purposes of additional analysis rather than to present the net
assets available for benefits and changes in net assets available for benefits
of each fund. The supplemental schedules and Fund Information have been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Houston, Texas
June 14, 1996
2
<PAGE>
AMERICAN EXPLORATION 401(K) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
AS OF DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED
-----------------------------------------------------------------------------------------------------------
T. ROWE PRICE TRUST COMPANY
-------------------------------------------------------------------------------------------
AMERICAN GROWTH INTERNATIONAL NEW GROWTH PRIME STABLE
EXPLORATION STOCK STOCK INCOME AND INCOME RESERVE VALUE LOAN
COMMON STOCK FUND, INC. FUND, INC. FUND, INC. FUND, INC. FUND, INC. FUND, INC. FUND
------------- ----------- ----------- ----------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at
market value...... $ 184,105 $1,588,410 $ 292,465 $ 596,376 $ 94,448 $ 409,470 $ 107,851 $ 109,006
------------- ---------- ----------- ----------- ---------- ----------- --------- -----------
NET ASSETS AVAILABLE
FOR BENEFITS as of
December 31, 1995... $ 184,105 $1,588,410 $ 292,465 $ 596,376 $ 94,448 $ 409,470 $ 107,851 $ 109,006
============= ========== =========== =========== ========== =========== ========= ===========
ASSETS
Investments, at
market value........ $ 151,547 $1,074,751 $ 211,730 $ 446,530 $ 37,714 $ 443,538 $ 89,102 $ 66,357
------------- ---------- ----------- ----------- ---------- ----------- --------- -----------
NET ASSETS
AVAILABLE FOR
BENEFITS as of
December 31, 1994... $ 151,547 $1,074,751 $ 211,730 $ 446,530 $ 37,714 $ 443,538 $ 89,102 $ 66,357
============= ========== =========== =========== ========== =========== ========= ===========
</TABLE>
(Table continued below)
NONPARTICIPANT-
DIRECTED
------------
AMERICAN
EXPLORATION
COMMON STOCK TOTAL
------------ ----------
ASSETS
Investments, at
market value...... $ 511,002 $3,893,133
------------ ----------
NET ASSETS AVAILABLE
FOR BENEFITS as of
December 31, 1995... $ 511,002 $3,893,133
============ ==========
ASSETS
Investments, at
market value........ $ 332,300 $2,853,569
------------ ----------
NET ASSETS
AVAILABLE FOR
BENEFITS as of
December 31, 1994... $ 332,300 $2,853,569
============ ==========
The accompanying notes are an integral part of
these financial statements.
3
<PAGE>
AMERICAN EXPLORATION 401(K) PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
PARTICIPANT-DIRECTED
-----------------------------------------------------------------------------------------------------------
T. ROWE PRICE TRUST COMPANY
-------------------------------------------------------------------------------------------
AMERICAN GROWTH INTERNATIONAL NEW GROWTH PRIME STABLE
EXPLORATION STOCK STOCK INCOME AND INCOME RESERVE VALUE LOAN
COMMON STOCK FUND, INC. FUND, INC. FUND, INC. FUND, INC. FUND, INC. FUND, INC. FUND
------------- ----------- ----------- ----------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSETS AVAILABLE
FOR BENEFITS as of
December 31, 1993... $ 211,826 $1,172,165 $ - $ 561,047 $ - $ 609,184 $ - $ 66,155
------------- ---------- ----------- ----------- ---------- ----------- --------- -----------
ADDITIONS:
Dividends.......... - 94,489 12,566 34,685 1,852 17,410 5,032 -
Employer
contributions..... - - - - - - - -
Employee
contributions..... 44,868 288,982 81,229 115,645 24,374 91,712 21,023 -
Employee loan
interest income... 98 1,801 716 617 180 464 92 -
Employee loan
principal
payments.......... 2,210 21,645 7,240 9,502 2,735 4,897 1,240 (49,469)
Interfund
transfers, net.... (27,017) (87,845) 142,879 (87,470) 22,277 (44,271) 81,447 -
Net appreciation
(depreciation)
in fair value
of investment..... (60,519) (90,498) (20,265) (46,211) (1,885) - - -
------------- ---------- ----------- ----------- ---------- ----------- --------- -----------
Total............ (40,360) 228,574 224,365 26,768 49,533 70,212 108,834 (49,469)
------------- ---------- ----------- ----------- ---------- ----------- --------- -----------
DEDUCTIONS:
Withdrawals........ 18,719 301,389 12,385 131,734 11,069 211,738 19,732 10,799
Employee loans..... 1,200 24,599 250 9,551 750 24,120 - (60,470)
------------- ---------- ----------- ----------- ---------- ----------- --------- -----------
Total............ 19,919 325,988 12,635 141,285 11,819 235,858 19,732 (49,671)
------------- ---------- ----------- ----------- ---------- ----------- --------- -----------
NET ASSETS AVAILABLE
FOR BENEFITS as of
December 31, 1994... $ 151,547 $1,074,751 $ 211,730 $ 446,530 $ 37,714 $ 443,538 $ 89,102 $ 66,357
------------- ---------- ----------- ----------- ---------- ----------- --------- -----------
ADDITIONS:
Dividends.......... - 76,763 8,607 35,696 4,777 21,498 6,152 -
Employer
contributions..... - - - - - - - -
Employee
contributions..... 44,045 222,871 95,070 81,475 37,529 81,756 19,126 -
Employee loan
interest income... 205 3,728 790 625 310 596 65 -
Employee loan
principal
payments.......... 1,225 27,591 7,950 7,464 4,807 4,514 753 (54,304)
Interfund
transfers, net.... (4,845) 42,247 (30,070) 5,680 8,796 (22,512) 704 -
Net appreciation
(depreciation) in
fair value of
investment........ 32,237 286,410 17,459 52,056 12,522 - - -
------------- ---------- ----------- ----------- ---------- ----------- --------- -----------
Total............ 72,867 659,610 99,806 182,996 68,741 85,852 26,800 (54,304)
------------- ---------- ----------- ----------- ---------- ----------- --------- -----------
DEDUCTIONS:
Withdrawals........ 37,909 88,391 12,641 27,335 10,237 92,350 7,391 5,252
Employee loans..... 2,400 57,560 6,430 5,815 1,770 27,570 660 (102,205)
------------- ---------- ----------- ----------- ---------- ----------- --------- -----------
Total............ 40,309 145,951 19,071 33,150 12,007 119,920 8,051 (96,953)
------------- ---------- ----------- ----------- ---------- ----------- --------- -----------
NET ASSETS AVAILABLE
FOR BENEFITS as of
December 31, 1995.. $ 184,105 $1,588,410 $ 292,465 $ 596,376 $ 94,448 $ 409,470 $ 107,851 $ 109,006
============= ========== =========== =========== ========== =========== ========= ===========
</TABLE>
(Table continued below)
NONPARTICIPANT-
DIRECTED
------------
AMERICAN
EXPLORATION
COMMON STOCK TOTAL
------------ ----------
NET ASSETS AVAILABLE
FOR BENEFITS as of
December 31, 1993... $ 393,697 $3,014,074
------------ ----------
ADDITIONS:
Dividends.......... - 166,034
Employer
contributions..... 192,863 192,863
Employee
contributions..... - 667,833
Employee loan
interest income... - 3,968
Employee loan
principal
payments.......... - -
Interfund
transfers, net.... - -
Net appreciation
(depreciation)
in fair value
of investment..... (151,326) (370,704)
------------ ----------
Total............ 41,537 659,994
------------ ----------
DEDUCTIONS:
Withdrawals........ 102,934 820,499
Employee loans..... - -
------------ ----------
Total............ 102,934 820,499
------------ ----------
NET ASSETS AVAILABLE
FOR BENEFITS as of
December 31, 1994... $ 332,300 $2,853,569
------------ ----------
ADDITIONS:
Dividends.......... - 153,493
Employer
contributions..... 155,421 155,421
Employee
contributions..... - 581,872
Employee loan
interest income... - 6,319
Employee loan
principal
payments.......... - -
Interfund
transfers, net.... - -
Net appreciation
(depreciation) in
fair value of
investment........ 81,796 482,480
------------ ----------
Total............ 237,217 1,379,585
------------ ----------
DEDUCTIONS:
Withdrawals........ 58,515 340,021
Employee loans..... - -
------------ ----------
Total............ 58,515 340,021
------------ ----------
NET ASSETS AVAILABLE
FOR BENEFITS as of
December 31, 1995.. $ 511,002 $3,893,133
============ ==========
4
The accompanying notes are an integral part of
these financial statements.
AMERICAN EXPLORATION 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
(1) DESCRIPTION OF THE PLAN
The following description of the American Exploration 401(k) Plan
(the "Plan") provides only general information. Participants should refer to the
Plan Agreement for a more complete description of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan established effective January
1, 1989. The Plan was established to provide eligible employees with a
convenient way to save on a regular and long-term basis through investment in
various types of accounts.
ELIGIBILITY
All salaried employees are eligible to participate in the Plan on the
first day of the month immediately following the employee's date of hire.
EMPLOYEE CONTRIBUTIONS
Employees may make Salary Deferral Contributions to the Plan, through
payroll deductions, of up to 15% of the employee's base salary, limited to the
maximum total annual contribution allowed by federal tax laws. These
contributions are deducted from the employee's salary each pay period before
federal income taxes are withheld. The Plan also provides for Voluntary Employee
Contributions of up to 10% of the employee's base salary. Such contributions are
made with after-tax dollars. However, the aggregate amount of an employee's
Salary Deferral and Voluntary Employee Contributions for any year may not exceed
15% of the employee's base salary.
An employee's contributions to the Plan may be invested in one or in
a combination of six mutual funds offered under the Plan. In addition, an
employee may choose to invest in the common stock of American Exploration
Company (the "Company"). At any time, an employee may change the mix of his/her
existing investments or change the investments in which future contributions are
placed.
EMPLOYER CONTRIBUTIONS
The Company provides Matching Contributions to the employee's account
of $1.00 for each $1.00 of Salary Deferral Contributions, up to a maximum annual
Matching Contribution of 3% of the employee's base salary or $1,050, whichever
is less. These contributions are made in the form of common stock of the
Company.
The Company may also provide Discretionary Employer Contributions,
which are allocated to each employee's account based upon the ratio of each
employee's base salary to the total base salaries paid to all employees
participating in the Plan. There were no Discretionary Employer Contributions
during 1995 or 1994.
VESTING
Participating employees are always fully vested in all employee and
employer contributions, and such amounts cannot be forfeited for any reason.
DISTRIBUTION OF BENEFITS
An employee, or the employee's beneficiary, is entitled to receive a
single lump sum distribution of the employee's account balance upon the
occurrence of any of the following events: termination of employment with the
Company, death or permanent disability of the employee, retirement or attainment
of the age of 59 1/2. As of December 31, 1995, Net Assets Available for Plan
Benefits included a pending distribution amount of $3,255. There were no pending
distribution amounts at December 31, 1994.
5
AMERICAN EXPLORATION 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
(1) DESCRIPTION OF THE PLAN (Continued)
EMPLOYEES' RIGHTS
Employees may make withdrawals from their accounts in the event of
immediate and significant financial need based on the provisions of the Plan.
Employees may also borrow from their accounts subject to various legal
requirements regarding, among other things, the amount of the loan, the interest
rate to be charged and repayment terms. The rate of interest that will be
charged on a loan is the current Prime Rate plus 1%.
As required by federal tax laws, the Plan is subject to certain
limitations on contributions by highly compensated employees, as defined under
such laws. Such limitations are designed to protect the rights of other
employees. There was no liability to refund employee contributions to highly
compensated employees at December 31, 1995 or 1994.
In addition, the sum of amounts contributed to each of a
participant's accounts in all of the Company's defined contribution plans may
not exceed the lesser of $30,000 or 25% of such participant's compensation.
There was no liability to refund employee contributions due to the effect of
this provision at December 31, 1995 or 1994.
The Plan is also subject to certain provisions which become effective
if more than 60% of the present value of its total assets are allocated to the
accounts of key employees, as defined under federal tax laws. There were no
restrictions due to these "top-heavy" provisions during 1995 or 1994.
(2) SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements are presented on the accrual basis of
accounting.
VALUATION OF INVESTMENTS
The investments of the Plan are stated at fair value based on
published closing quotations as of year-end.
Net appreciation (depreciation) in the fair value of investments
consists of realized and unrealized gains (losses) from investments.
USE OF ESTIMATES
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions which affect the reported amounts of net assets available for Plan
benefits at the date of the financial statements and the reported amounts of
changes in such net assets during the reporting period.
Actual results may differ from those estimates.
(3) REVERSE STOCK SPLIT
On June 13, 1995, the stockholders of the Company approved a
one-for-ten reverse stock split of the Company's common stock. Effective that
day, the 614,982 shares of the Company's common stock which were included in the
Plan's assets were reduced to 61,498 shares of common stock, and the closing
price of the Company's common stock on June 13, 1995 increased by a factor of
ten. Accordingly, the value of any portion of a participant's account which was
invested in the Company's common stock did not change as a result of the reverse
stock split. All references to number of shares of the Company's common stock
have been restated to give retroactive recognition to the reverse stock split.
6
(4) FEDERAL INCOME TAX STATUS
The Plan obtained its latest determination letter on April 29, 1995,
in which the Internal Revenue Service stated that the Plan is in compliance with
the applicable requirements of the Internal Revenue Code. The determination
letter is applicable for amendments to the Plan adopted on or before November 1,
1994. The Plan has not been amended since November 1, 1994. Therefore, the plan
administrator believes the Plan was qualified and the related trust was
tax-exempt as of the financial statement dates.
(5) ADMINISTRATION
The Plan is administered by the Retirement Committee appointed by the
Board of Directors of the Company. The Plan trustee is T. Rowe Price Trust
Company. All administrative expenses of the Plan are borne entirely by the
Company.
7
<PAGE>
SUPPLEMENTAL SCHEDULES
Schedule I
AMERICAN EXPLORATION 401(K) PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1995
<TABLE>
<CAPTION>
HISTORICAL
IDENTITY OF ISSUER DESCRIPTION COST CURRENT VALUE
------------------ ----------- -------------- -------------
<S> <C> <C> <C>
*American Exploration Company Common stock -
61,108 shares $ 1,056,187 $ 695,107
*T. Rowe Price Trust Company Growth Stock Fund,
Inc. - 68,027 shares 1,339,788 1,588,410
*T. Rowe Price Trust Company International Stock Fund,
Inc. - 23,913 shares 290,210 292,465
*T. Rowe Price Trust Company New Income Fund, Inc. -
64,265 shares 573,608 596,376
*T. Rowe Price Trust Company Growth and Income Fund,
Inc. - 4,924 shares 84,795 94,448
*T. Rowe Price Trust Company Prime Reserve Fund,
Inc. - 409,470 shares 409,470 409,470
*T. Rowe Price Trust Company Stable Value Fund,
Inc. - 107,851 shares 107,851 107,851
*American Exploration 401(k) Plan Participants' loans (interest
rates: 7.0% - 10.0%) 109,006 109,006
-------------- ---------------
$ 3,970,915 $ 3,893,133
============== ===============
</TABLE>
* These assets held for investment purposes are with a party in interest.
The foregoing notes to the financial statements are an
integral part of this schedule.
9
<PAGE>
Schedule II
AMERICAN EXPLORATION 401(K) PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
CURRENT
VALUE ON
IDENTITY OF PURCHASE SELLING HISTORICAL TRANSACTION NET GAIN
PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE COST DATE (LOSS)
- -------------- -------------------- ----------- ----------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
American Exploration Common stock - $ 200,896 $ - $ 200,896 $ 200,896 $ -
Company 19,390 shares
T. Rowe Price Growth Stock Fund, 373,199 - 373,199 373,199 -
Trust Company Inc. - 17,259 shares
T. Rowe Price International Stock Fund, 114,951 - 114,951 114,951 -
Trust Company Inc. - 9,774 shares
T. Rowe Price New Income Fund, 142,164 - 142,164 142,164 -
Trust Company Inc. - 16,059 shares
T. Rowe Price Growth and Income Fund, 56,218 - 56,218 56,218 -
Trust Company Inc. - 3,176 shares
T. Rowe Price Prime Reserve Fund, 112,276 - 112,276 112,276 -
Trust Company Inc. - 112,276 shares
T. Rowe Price Stable Value Fund, 28,097 - 28,097 28,097 -
Trust Company Inc. - 28,097 shares
American Exploration Common stock - - 103,670 179,530 103,670 (75,860)
Company 9,892 shares
T. Rowe Price Stable Value Fund, - 145,951 128,283 145,951 17,668
Trust Company Inc. - 6,553 shares
T. Rowe Price International Stock Fund, - 51,677 56,528 51,677 (4,851)
Trust Company Inc. - 4,565 shares
T. Rowe Price New Income Fund, - 44,374 44,432 44,374 (58)
Trust Company Inc. - 5,017 shares
T. Rowe Price Growth and Income Fund, - 12,007 10,971 12,007 1,036
Trust Company Inc. - 665 shares
T. Rowe Price Prime Reserve Fund, - 146,345 146,345 146,345 -
Trust Company Inc. - 146,345 shares
T. Rowe Price Stable Value Fund, - 9,347 9,347 9,347 -
Trust Company Inc. - 9,347 shares
</TABLE>
The foregoing notes to the financial statements are an
integral part of this schedule.
10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Retirement Committee has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
AMERICAN EXPLORATION 401(k) PLAN
Date: June 21, 1996 By: /s/ DAVID B. BROUSSARD
David B. Broussard
Director of MIS and Administration
11
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report included in this Form 11-K into the Company's
previously filed Registration Statement on Form S-8 No. 33-35854.
ARTHUR ANDERSEN LLP
Houston, Texas
June 21, 1996
