SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) April 24, 1997
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UNOCAL CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-8483 95-3825062
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(Commission File Number) (I.R.S. Employer Identification No.)
2141 Rosecrans Avenue, Suite 4000, El Segundo, California 90245
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(Address of Principal Executive Offices) (Zip Code)
(310) 726-7600
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(Registrant's Telephone Number, Including Area Code)
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Item 5. OTHER EVENTS.
On April 24, 1997 the following news release was issued:
UNOCAL EARNINGS RISE 16% ON HIGHER GAS
PRODUCTION, IMPROVED OIL AND GAS PRICES
El Segundo, Calif., April 24, 1997 -- Unocal Corporation today reported
first quarter 1997 net earnings of $144 million, or 57 cents per common share,
up 16 percent from $124 million, or 47 cents per common share, in the same
period a year ago.
Earnings from operations, excluding special items (detailed in the
attached tables), were $190 million, or 76 cents per common share, up 58 percent
from $120 million, or 45 cents per common share, in the first quarter 1996.
"We continued to show increased natural gas production in the first
quarter, reflecting the success of our focus on key strategic projects in
Southeast Asia," said Roger C. Beach, Unocal chairman and chief executive
officer. Natural gas production in the Far East was up 35 percent, or 208
million cubic feet (mmcf) per day, over the first quarter 1996.
In Thailand, net natural gas production averaged 623 mmcf per day in
the first quarter, up 42 percent from a year ago, following the start-up of a
new pipeline system. In Indonesia, net natural gas production (including host
country share) rose 22 mmcf per day to 182 mmcf per day, primarily because of
increases from the Santan and Sepinggan fields.
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<PAGE>
Unocal also reported a 15 percent increase in crude oil and condensate
production from its Thailand and Indonesia operations.
Beach noted that the first quarter operating results reflect
significantly higher average sales prices for crude oil and natural gas.
Worldwide, Unocal's average sales price for crude and condensate was $20.81 per
barrel, compared with $16.93 in 1996, while the sales price for natural gas
averaged $2.51 per thousand cubic feet, compared with $2.27 for the same period
last year.
"We completed the sale of our West Coast downstream operations at the
end of the first quarter," Beach said. "This sale transformed Unocal into the
world's largest publicly traded independent energy resource company -- first in
production and reserves -- with a strong focus on international project
development."
Unocal's balance sheet at the end of the first quarter 1997 showed cash
and cash equivalents of more than $1.7 billion, including the proceeds received
from the sale of its West Coast downstream assets. Earlier this month, Duff &
Phelps Credit Rating Co. raised the company's senior unsecured debt rating to
"A-" (Single-A-Minus), and the commercial paper rating to "D-1-" (D-One-Minus),
reflecting Unocal's strong financial condition.
Beach also noted that the company was moving ahead with its announced
$400 million common stock buyback program. By the end of the first quarter,
Unocal had repurchased approximately 1.2 million shares for $46 million.
Unocal Corporation is the world's largest independent exploration and
production company with hydrocarbon reserves of more than 9.8 trillion cubic
feet of natural-gas-equivalent (1.6 billion barrels-of-oil-equivalent) and major
oil and gas production activities in Asia and the U.S. Gulf of Mexico.
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<PAGE>
NEWS RELEASE UNOCAL CORPORATION
CONDENSED CONSOLIDATED EARNINGS STATEMENT
(UNAUDITED)
For the Three Months
Ended March 31
----------------------
Dollars in millions except per share amounts 1997 1996
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Total revenues ....................................... $ 1,456 $ 1,201
Costs and other deductions ........................... 1,119 976
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Earnings from continuing operations
before income taxes ............................... 337 225
Income taxes ......................................... 149 94
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Earnings from continuing operations .................. 188 131
Loss from discontinued operations .................. -- (7)
Loss on disposal ..................................... (44) --
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Loss from discontinued operations .................... $ (44) $ (7)
Net earnings ........ .......................... $ 144 $ 124
Dividends on preferred stock ......................... -- 9
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Net earnings applicable to common shares ............. $ 144 $ 115
Earnings/(loss) per common share
assuming no dilution (a)
Continuing operations ......................... $ 0.75 $ 0.50
Discontinued operations ....................... (0.18) (0.03)
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Net earnings/(loss) per share ........................ $ 0.57 $ 0.47
(a) Based on weighted average common shares
outstanding (in millions) 251 247
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CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
March 31 Dec. 31
Millions of dollars 1997 1996
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Assets
Cash and cash equivalents ............................ $1,749 $ 217
Net assets of discontinued operations (c) ........... -- 1,774
Other current assets ................................. 1,747 1,237
Investments and long-term receivables ................ 1,232 1,206
Properties - net ..................................... 4,577 4,590
Other assets ......................................... 125 99
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Total assets ............................... $9,430 $9,123
Liabilities and Equity
Current portion of long-term debt
and capital lease obligations ..................... $ 406 $ 118
Other current liabilities ............................ 1,607 1,504
Long-term debt and capital lease obligations ......... 2,814 2,940
Deferred income taxes ................................ 286 348
Other deferred credits and liabilities ............... 1,465 1,416
Convertible preferred securities ..................... 522 522
Stockholders' equity ................................. 2,330 2,275
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Total liabilities and equity ............... $9,430 $9,123
(c) Excludes retained working capital.
Table 1
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<PAGE>
NEWS RELEASE UNOCAL CORPORATION
CONDENSED CONSOLIDATED CASH FLOWS
(INCLUDES DISCONTINUED OPERATIONS)
(UNAUDITED) For the Three Months
Ended March 31
-----------------------
Millions of dollars 1997 1996
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Cash flows from operating activities
Cash flow from operations ........................... $ 394 $ 386
Working capital and other changes
related to operations ............................. (60) (128)
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Net cash provided by operating activities ....... 334 258
Cash flows from investing activities
Capital expenditures (includes dry hole costs) ..... (286) (222)
Proceeds from sale of discontinued operations ....... 1,390 --
Proceeds from asset sales ........................... 16 51
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Net cash provided by/(used in)
investing activities ........................... 1,120 (171)
Cash flows from financing activities
Net increase in long-term debt
and capital lease obligations ......... 175 152
Dividends paid ...................................... (50) (59)
Repurchase of common stock .......................... (46) --
Other ............................................... (1) 12
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Net cash provided by financing activities ....... 78 105
Increase in cash and cash equivalents .................. 1,532 192
Cash and cash equivalents at beginning of period ....... 217 94
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Cash and cash equivalents at end of period ............. $ 1,749 $ 286
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CONDENSED CAPITAL EXPENDITURES
(UNAUDITED)
Millions of dollars
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United States Exploration & Production ............... $ 33 $ 68
International Exploration & Production ............... 163 86
Geothermal Operations ................................ 20 14
Diversified Business Group ........................... 9 6
New Ventures ......................................... 5 11
Corporate & Unallocated .............................. 7 5
Discontinued Operations .............................. 49 32
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Total ....................................... $286 $222
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DEPRECIATION, DEPLETION & AMORTIZATION
(UNAUDITED)
Millions of dollars
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Depreciation, Depletion & Amortization
Continuing operations ....................... $211 $212
Table 2
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<PAGE>
NEWS RELEASE UNOCAL CORPORATION
RESULTS OF OPERATIONS FOR
EXPLORATION AND PRODUCTION ACTIVITIES
(UNAUDITED)
For the Three Months
Ended March 31, 1997
--------------------------------
Spirit Other
Millions of dollars Energy Other Far Interna-
76 U.S. East tional Total
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Sales (includes intercompany sales)
Crude oil and condensate .............. $ 98 $56 $117 $45 $316
Natural gas ........................... 228 18 165 14 425
Natural gas liquids ................... 16 1 9 1 27
Other ................................. -- -- -- -- --
------------------------------
Total .......................... 342 75 291 60 768
Other revenue ................................. 3 -- 3 10 16
Gain/(loss) on asset sales .................... 3 -- -- 1 4
------------------------------
Total revenues ........................... 348 75 294 71 788
Production costs .............................. 48 24 30 19 121
Exploration expenses .......................... 10 -- 8 9 27
Dry hole costs ................................ 6 -- 9 1 16
Depreciation, depletion & amortization ........ 102 15 61 17 195
Other operating expenses ...................... 21 2 11 8 42
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Results of operations before income tax ... $161 $34 $175 $17 $387
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For the Three Months
Ended March 31, 1996
-------------------------------
Spirit Other
Energy Other Far Interna-
76 U.S. East tional Total
Sales (includes intercompany sales)
Crude oil and condensate ................ $ 87 $ 94 $ 79 $ 44 $304
Natural gas ............................. 200 26 113 14 353
Natural gas liquids ..................... 13 2 5 1 21
Other ................................... 1 -- -- -- 1
--------------------------------
Total .................................. 301 122 197 59 679
Other revenue ............................... 2 1 -- 6 9
Gain on asset sales ......................... 4 -- -- 6 10
--------------------------------
Total revenues ......................... 307 123 197 71 698
Production costs ............................ 45 48 30 21 144
Exploration expenses ........................ 4 -- 6 11 21
Dry hole costs .............................. 10 -- -- 3 13
Depreciation, depletion & amortization ...... 90 37 47 15 189
Other operating expenses .................... 36 5 7 1 49
--------------------------------
Results of operations before income tax $122 $ 33 $107 $ 20 $282
Table 3
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<PAGE>
NEWS RELEASE UNOCAL CORPORATION
RESULTS OF OPERATIONS FOR
EXPLORATION AND PRODUCTION ACTIVITIES
(UNAUDITED)
For the Three Months
Ended June 30, 1996
-------------------------------------
Spirit Other
Energy Other Far Interna-
Millions of dollars 76 U.S. East tional Total
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Sales (includes intercompany sales)
Crude oil and condensate ........... $ 96 $ 58 $ 104 $ 46 $ 304
Natural gas ........................ 184 17 117 11 329
Natural gas liquids ................ 17 1 4 1 23
Other .............................. 1 -- -- -- 1
-------------------------------------
Total ............................ 298 76 225 58 657
Other revenue ......................... 1 1 (1) 5 6
Gain/(loss) on asset sales ............ 1 110 -- -- 111
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Total revenues ................... 300 187 224 63 774
Production costs ...................... 43 29 33 16 121
Exploration expenses .................. 7 -- 11 9 27
Dry hole costs ........................ 1 -- 2 1 4
Depreciation, depletion & amortization 84 19 69 15 187
Other operating expenses .............. 30 4 10 3 47
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Results of operations
before income tax ............... $ 135 $ 135 $ 99 $ 19 $ 388
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For the Three Months
Ended September 30, 1996
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Spirit Other
Energy Other Far Interna-
76 U.S. East tional Total
-----------------------------------
Sales (includes intercompany sales)
Crude oil and condensate ................. $104 $ 57 $ 95 $ 47 $303
Natural gas .............................. 178 18 132 10 338
Natural gas liquids ...................... 17 1 3 1 22
Other .................................... 1 -- -- -- 1
-------------------------------
Total .................................. 300 76 230 58 664
Other revenue ............................... 5 -- 1 6 12
Gain on asset sales ......................... 3 -- 1 17 21
-------------------------------
Total revenues ......................... 308 76 232 81 697
Production costs ............................ 46 19 31 20 116
Exploration expenses ........................ 8 -- 14 8 30
Dry hole costs .............................. 38 -- 11 1 50
Depreciation, depletion & amortization ...... 94 18 47 14 173
Other operating expenses .................... 34 4 13 -- 51
--------------------------------
Results of operations
before income tax .................... $ 88 $ 35 $116 $ 38 $277
Table 4
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<PAGE>
NEWS RELEASE UNOCAL CORPORATION
RESULTS OF OPERATIONS FOR
EXPLORATION AND PRODUCTION ACTIVITIES
(UNAUDITED)
For the Three Months
Ended December 31, 1996
------------------------------------------
Spirit Other
Energy Other Far Interna-
76 U.S. East tional Total
Millions of dollars ------------------------------------------
Sales (includes intercompany sales)
Crude oil and condensate ........ $ 113 $ 63 $ 117 $ 45 $ 338
Natural gas ..................... 212 23 167 13 415
Natural gas liquids ............. 23 2 7 1 33
Other ........................... 1 -- -- -- 1
------------------------------------------
Total ......................... 349 88 291 59 787
Other revenue ..................... 15 1 1 10 27
Gain/(loss) on asset sales ........ (7) (4) (1) 1 (11)
------------------------------------------
Total revenues ................ 357 85 291 70 803
Production costs .................. 44 26 33 24 127
Exploration expenses .............. 7 -- 10 16 33
Dry hole costs .................... 13 5 37 9 64
Depreciation, depletion &
amortization .................... 130 54 45 25 254
Other operating expenses .......... 37 5 16 (1) 57
------------------------------------------
Results of operations
before income tax ........... $ 126 $ (5) $ 150 $ (3) $ 268
Table 5
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<PAGE>
NEWS RELEASE UNOCAL CORPORATION
OPERATING HIGHLIGHTS
(UNAUDITED) For the Three Months
Ended March 31
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1997 1996
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Net daily production
Crude oil and condensate
(thousand barrels daily):
United States
Spirit Energy 76 .............................. 48.3 52.2
Other (a) .................................... 33.7 69.1
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Total United States ..................... 82.0 121.3
International
Far East (b) ................................. 93.2 80.9
Other ......................................... 26.7 28.4
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Total International ..................... 119.9 109.3
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Total Worldwide ...................... 201.9 230.6
Natural gas (million cubic feet daily):
United States
Spirit Energy 76 ............................ 909.7 903.9
Other (a) .................................. 155.9 205.9
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Total United States ................... 1,065.6 1,109.8
International
Far East (b) ............................... 805.1 597.6
Other ....................................... 67.6 81.9
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Total International ...................... 872.7 679.5
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Total Worldwide .......................... 1,938.3 1,789.3
Natural gas liquids (thousand barrels daily) (a) 19.4 19.7
Geothermal (million kilowatt-hours daily) ........ 15.9 13.8
Average sales prices
Crude oil and condensate (per barrel):
United States
Spirit Energy 76 ............................ $ 22.52 $ 18.59
Other ....................................... 18.51 15.08
Total United States ................... 20.88 16.55
International
Far East .................................... $ 21.03 $ 17.86
Other ....................................... 20.07 16.93
Total International ................... 20.75 17.52
Total Worldwide .................... $ 20.81$ 16.93
Natural gas (per mcf):
United States
Spirit Energy 76 ............................ $ 2.83 $ 2.56
Other ....................................... 1.35 1.78
Total United States ................... 2.61 2.35
International
Far East .................................... $ 2.40 $ 2.18
Other ....................................... 2.22 1.76
Total International ................... 2.38 2.13
Total Worldwide .......................... $ 2.51 $ 2.27
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(a) Includes production from California
upstream properties of:
Crude oil and condensate ..................... -- 30.2
Natural gas .................................. -- 51.7
Natural gas liquids .......................... -- 0.5
(b) Includes host country share in
Indonesia of:
Crude oil and condensate ..................... 30.0 29.8
Natural gas .................................. 32.6 25.6
Table 6
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<PAGE>
NEWS RELEASE UNOCAL CORPORATION
OPERATING HIGHLIGHTS (continued)
(UNAUDITED)
For the Three Months
Ended March 31
-----------------------
1997 1996
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Agricultural products production volumes (thousand tons)
Ammonia ............................................. 391 351
Urea ................................................ 275 293
Other products ...................................... 177 163
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Total ................................... 843 807
Agricultural products sales volumes (thousand tons)
Ammonia ............................................. 156 94
Urea ................................................ 210 245
Other products ...................................... 252 231
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Total ................................... 618 570
Table 7
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<PAGE>
NEWS RELEASE UNOCAL CORPORATION
EARNINGS BY BUSINESS SEGMENT
(Unaudited)
1st Quarter 1st Quarter
of 1997 of 1996
-------------------------------------
Before- After- Before- After-
Millions of dollars tax tax tax tax
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Exploration and Production
United States
Spirit Energy 76 .................... $ 161 $ 100 $ 122 $ 76
Other ............................... 34 21 33 20
International .......................... 192 103 127 70
Geothermal Operations ...................... 10 6 9 5
Diversified Business Group
Agricultural Products ................ 30 20 25 16
Carbon and Minerals .................. 12 10 26 18
Pipelines ............................ 17 14 30 23
Other ................................ 2 1 1 1
Corporate and Unallocated
Administrative and general expense ... (20) (13) (29) (18)
Net interest expense ................. (54) (42) (72) (50)
Environmental and litigation expense . (18) (11) (23) (14)
New Ventures ......................... (11) (7) (4) (2)
Other ................................ (18) (14) (20) (14)
---------------------------------
Earnings from continuing operations ........ 337 188 225 131
Loss from discontinued Operations .......... (71) (44) (11) (7)
---------------------------------
Total .......................... $ 266 $ 144 $ 214 $ 124
=================================
EXPLORATION AND PRODUCTION - this segment explores for, produces and markets
crude oil, condensate, natural gas and natural gas liquids.
GEOTHERMAL OPERATIONS - this segment explores for, produces and sells geothermal
resources used to generate electricity.
DIVERSIFIED BUSINESS GROUP:
AGRICULTURAL PRODUCTS - this business unit manufactures and markets
nitrogen-based products for wholesale agricultural and industrial markets
supplying the western United States and the Pacific Rim.
CARBON AND MINERALS - this business unit produces and markets petroleum coke,
graphites, solvents and specialty minerals.
PIPELINES - this business unit principally includes the company's equity
interests in affiliated pipeline companies.
OTHER - principally includes the company's equity interest in The UNO-VEN
Company.
Table 8
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NEWS RELEASE UNOCAL CORPORATION
SPECIAL ADJUSTMENTS
(Unaudited)
1st Quarter 1st Quarter
of 1997 of 1996
----------------------------------
Before- After- Before- After-
Dollars in millions except per share amounts tax tax tax tax
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Reported earnings .......................... $ 266 $ 144 $ 214 $ 124
Less: Special items
Exploration and Production
United States
Spirit Energy
Asset Sales .................. 3 2 4 2
International
Asset Sales .................. 1 1 6 4
Diversified Business Group
Pipelines
Asset Sales .................. -- -- 12 7
Corporate and Unallocated
Asset Sales .................. 6 4 1 1
Environmental provision ...... (14) (9) (10) (6)
Litigation provision ......... -- -- (6) (4)
Discontinued Operations
Net loss on disposal ......... (71) (44) -- --
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Total special items ................... (75) (46) 7 4
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Adjusted earnings .......................... $ 341 $ 190 $ 207 $ 120
Less: Dividends on preferred stock ......... -- 9
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Adjusted net earnings applicable
to common shares ........................ $ 190 $ 111
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Adjusted net earnings
per common share ........................ $0.76 $0.45
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Table 9
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<PAGE>
NEWS RELEASE UNOCAL CORPORATION
EARNINGS BY BUSINESS SEGMENT
EXCLUDING SPECIAL ADJUSTMENTS
(Unaudited)
1st Quarter 1st Quarter
of 1997 of 1996
-----------------------------------
Before- After- Before- After-
Millions of dollars tax tax tax tax
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Exploration and Production
United States
Spirit Energy 76 .................... $ 158 $ 98 $ 118 $ 74
Other ............................... 34 21 33 20
International .......................... 191 102 121 66
Geothermal Operations ...................... 10 6 9 5
Diversified Business Group
Agricultural Products ................ 30 20 25 16
Carbon and Minerals .................. 12 10 26 18
Pipelines ............................ 17 14 18 16
Other ................................ 2 1 1 1
Corporate and Unallocated
Administrative and general expense ... (20) (13) (29) (18)
Net interest expense ................. (54) (42) (72) (50)
Environmental and litigation expense . (4) (2) (7) (4)
New Ventures ......................... (11) (7) (4) (2)
Other ................................ (24) (18) (21) (15)
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Earnings from continuing operations ........ 341 190 218 127
Loss from discontinued Operations .......... -- -- (11) (7)
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Total .......................... $ 341 $ 190 $ 207 $ 120
================================================================================
Table 10
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<PAGE>
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.
UNOCAL CORPORATION
(Registrant)
Date: April 24, 1997 By /s/ CHARLES S. MCDOWELL
-----------------------------
Charles S. McDowell
Vice President and Comptroller
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