MAXUS ENERGY CORP /DE/, 10-Q, 1995-05-15

MAXUS ENERGY CORP /DE/
10-Q, 1995-05-15
CRUDE PETROLEUM & NATURAL GAS

Previous: MERIDIAN BANCORP INC, 10-Q, 1995-05-15

Next: MERISEL INC /DE/, 10-Q, 1995-05-15

<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

________________

FORM 10-Q

(Mark One)

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ending March 31, 1995

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES AND EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER 1-8567-2

MAXUS ENERGY CORPORATION
(Exact name of registrant as specified in its charter)

DELAWARE 75-1891531
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

717 NORTH HARWOOD STREET, DALLAS, TEXAS 75201-6594
(Address of principal executive offices) (Zip Code)

(214) 953-2000
(Registrant's telephone number, including area code)

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL
REPORTS REQURIED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 DURING THE PRECEDING 12 MONTHS, AND (2) HAS BEEN SUBJECT TO THE
FILING REQUIREMENTS FOR THE PAST 90 DAYS.

YES /X/ NO / /

Shares of Common Stock outstanding at April 28, 1995: 135,610,272

<PAGE> 2
PART I. FINANCIAL INFORMATION

The accompanying consolidated financial statements have not been examined by
independent accountants, but in the opinion of the management of Maxus Energy
Corporation (the "Company" or "Maxus") all adjustments (consisting only of
normal accruals) necessary for a fair presentation of the consolidated results
of operations, consolidated balance sheets and consolidated statements of cash
flows at the date and for the periods indicated have been included.

<PAGE> 3
MAXUS ENERGY CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited) (in millions, except per share)

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
Three Months Ended March 31, 1995 1994
-----------------
<S> <C> <C>
REVENUES
Sales and operating revenues $142.5 $187.1

Other revenues, net 9.6 6.0
- -------------------------------------------------------------------------
152.1 193.1
-----------------

COSTS AND EXPENSES
Operating expenses 62.1 61.7
Gas purchase costs 12.7 43.5
Exploration, including exploratory dry holes 8.1 9.3
Depreciation, depletion and amortization 29.9 38.2
General and administrative expenses 7.5 9.3
Taxes other than income taxes 3.1 4.3
Interest and debt expenses 24.1 22.5
Pre-merger costs 42.4
- -------------------------------------------------------------------------
189.9 188.8
-----------------

INCOME (LOSS) BEFORE INCOME TAXES (37.8) 4.3
INCOME TAXES 19.1 15.5
- -------------------------------------------------------------------------
NET LOSS (56.9) (11.2)

Dividend requirement on preferred stock (9.6) (12.3)
- -------------------------------------------------------------------------
LOSS APPLICABLE TO COMMON SHARES ($66.5) ($23.5)
=========================================================================

NET LOSS PER COMMON SHARE ($0.49) ($0.17)
=========================================================================

AVERAGE COMMON SHARES OUTSTANDING (IN MILLIONS) 135.5 134.5
</TABLE>

See Notes to Consolidated Financial Statements (Unaudited).

<PAGE> 4
MAXUS ENERGY CORPORATION
CONSOLIDATED BALANCE SHEET
(in millions, except shares)

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
March 31, December31,
1995 1994
---------------------------
ASSETS (Unaudited)
<S> <C> <C>
Current Assets
Cash and cash equivalents $91.6 $40.6
Short-term investments 65.0 103.8
Receivables, less doubtful receivables 127.8 152.4
Taxes receivable 13.7 23.8
Inventories 28.6 27.9
Restricted cash 48.5 46.4
Prepaids and other current assets 19.4 18.7
- --------------------------------------------------------------------------------------
Total Current Assets 394.6 413.6
Properties and Equipment, less accumulated depreciation
and depletion of $1,638.0 in 1995 and $1,611.0 in 1994 1,110.7 1,088.4
Investments and Long-Term Receivables 41.5 40.2
Restricted Cash 79.9 94.2
Intangible assets, less accumulated amortization
of $14.5 in 1995 and $14.2 in 1994 35.5 35.8
Deferred Income Taxes 9.4 9.4
Deferred Charges 20.5 25.1
- --------------------------------------------------------------------------------------
$1,692.1 $1,706.7
======================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Long-term debt $4.7 $4.7
Securities sold under repurchase agreements
Accounts payable 49.8 65.1
Accrued liabilities 169.8 101.2
- --------------------------------------------------------------------------------------
Total Current Liabilities 224.3 171.0
Long-Term Debt 970.9 970.9
Deferred Income Taxes 199.7 199.3
Other Liabilities and Deferred Credits 158.7 149.4
$9.75 Redeemable Preferred Stock, $1.00 par value
Authorized and issued shares--1,250,000 125.0 125.0
Stockholders' Equity
$2.50 Preferred Stock, $1.00 par value
Authorized shares--5,000,000
Issued shares--3,500,000 3.5 3.5
$4.00 Preferred Stock, $1.00 par value
Authorized shares--5,915,017
Issued shares--4,356,958 and 4,358,658 4.4 4.4
Common Stock, $1.00 par value
Authorized shares--300,000,000
Issued shares--135,897,899 and 135,694,722 135.9 135.7
Paid-in capital 966.1 988.1
Accumulated deficit (1,073.2) (1,016.4)
Minimum pension liability (18.3) (18.3)
Valuation reserve on marketable securities (1.3) (2.4)
Common Treasury Stock, at cost--310,535 and 295,995 (3.6) (3.5)
- --------------------------------------------------------------------------------------
Total Stockholders' Equity 13.5 91.1
- --------------------------------------------------------------------------------------
$1,692.1 $1,706.7
======================================================================================
</TABLE>

See Notes to Consolidated Financial Statements (Unaudited). The Company uses
the successful efforts method to account for its oil and gas producing
activities.

<PAGE> 5
MAXUS ENERGY CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited) (in millions)

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Three Months Ended March 31, 1995 1994
-----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ($56.9) ($11.2)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation, depletion and amortization 29.9 38.2
Dry hole costs 1.0
Deferred income taxes 0.4 0.2
Gain on sale of assets (1.7)
Postretirement benefits 1.4 1.8
Pre-merger costs 42.4
Other 1.3 2.9
Changes in components of working capital:
Receivables 23.8 25.8
Inventories, prepaids and other current assets (1.4) (0.2)
Accounts payable (15.1) (23.5)
Accrued liabilities 26.3 1.2
Taxes payable / receivable 10.1 (1.1)
-----------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 61.5 34.1
- ------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for properties and equipment--including
dry hole costs (53.6) (55.5)
Expenditures for investments (5.1)
Proceeds from sale of assets 2.1 0.4
Proceeds from sale/maturity of short-term investments 63.4 4.2
Purchases of short-term investments (24.6) (2.8)
Restricted cash 12.2 11.5
Other 9.8 (1.7)
-----------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 9.3 (49.0)
- ------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Interest rate swap 3.4 (5.9)
Net borrowings from joint venture partners 0.3
Proceeds from issuance of short-term debt 30.0
Repayment of short-term debt (33.9)
Proceeds from issuance of long-term debt 61.3
Repayment of long-term debt (0.1)
Stock rights redemption (13.6)
Redemption of preferred stock (62.5)
Dividends paid (9.6) (12.3)
-----------------
NET CASH USED IN FINANCING ACTIVITIES (19.8) (23.1)
- ------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 51.0 (38.0)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 40.6 128.7
- ------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $91.6 $90.7
==========================================================================================
</TABLE>

See Notes to Consolidated Financial Statements (Unaudited).

<PAGE> 6

MAXUS ENERGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FIRST QUARTER 1995
(UNAUDITED)

MERGER

On February 28, 1995, the Company entered into a merger agreement (the
"Merger Agreement") with YPF Sociedad Anonima ("YPF"), a sociedad
anonima organized under the laws of the Republic of Argentina, and YPF
Acquisition Corp. ("YPFA Corp."), a wholly owned subsidiary of YPF.
Pursuant to the Merger Agreement, YPFA Corp. commenced a tender offer
to purchase all of the outstanding shares of the Company's common
stock, $1.00 par value (the "Common Stock"), at a price of $5.50 per
share in cash (the "Offer"). Following the expiration of the Offer on
March 30, 1995, approximately 88.5% of the Common Stock was purchased
by YPFA Corp. In connection with the Offer, record holders of Common
Stock as of March 22, 1995 also received a cash payment of $0.10 per
share, or an aggregate of approximately $14 million, upon the
redemption of the rights attached to shares of Common Stock. A special
meeting of the stockholders of the Company has been set for June 8,
1995 to vote on the adoption of the Merger Agreement. Upon such
adoption and subject to certain conditions, each share of Common Stock
outstanding and not previously acquired in the Offer will be converted
into a right to receive the same price of $5.50 per share and YPFA
Corp. will be merged into the Company (the "Merger"). Under the terms
of the Merger Agreement, all of the Company's preferred stock will
remain outstanding.

PRE-MERGER COSTS

The Company's 1995 first-quarter operating results reflect $42.4
million of pre-merger costs associated with the pending Merger. Such
costs, which included expenses associated with financial consulting and
legal services, severance payments pursuant to change of control
agreements and payments for surrender of stock options and restricted
stock, were recorded in accrued liabilities in the consolidated balance
sheet.

TAKE-OR-PAY OBLIGATION

In March 1995, the Company received approximately $14.0 million from
the purchaser of Northwest Java gas volumes to settle its 1994
take-or-pay obligation. After fulfillment of 1995 contract
requirements, any excess quantities will be used to offset the 1994
take-or-pay settlement. The settlement was recorded as deferred
revenue, which is included in Other Liabilities in the consolidated
balance sheet. The deferred revenue will be recognized in the income
statement as gas quantities are purchased which fulfill the take-or-pay
obligation.

<PAGE> 7
MAXUS ENERGY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION FIRST QUARTER 1995

SIGNIFICANT EVENT

RESULTS OF OPERATIONS

Maxus reported a net loss of $57 million for the first quarter of 1995
or, after preferred dividends, a loss of 49 cents per share of Common
Stock, compared to a net loss of $11 million or, after preferred
dividends, a loss of 17 cents per share of Common Stock for the first
quarter of 1994. The first quarter 1995 results reflect $42 million of
pre-merger costs associated with the pending YPF Merger. Such costs
included expenses associated with financial consulting and legal
services, severance payments pursuant to change of control agreements
and payments for surrender of stock options and restricted stock.

Sales and operating revenues for the first quarter of 1994 were $143
million, compared to $187 million for the same period a year ago. The
loss of production from properties divested in 1994 and lower volumes
of purchased gas negatively impacted revenues $45 million. Lower U.S.
natural gas prices also negatively impacted revenues $12 million.
These declines were partially offset by first quarter 1995 revenue of
$8 million from South America. Initial sales from the Company's South
American operations were recorded in the third quarter 1994.

Net worldwide crude oil production was 60 thousand barrels per day
("mbpd") in the first quarter 1995, compared to 69 mbpd in the same
quarter a year ago. Domestic crude oil volumes declined four mbpd
during the period due to the loss of production from the divested
properties. Crude oil sales from the Company's Indonesian operations
were also down 12 mbpd during the period primarily as a result of lower
entitlements due to higher prices and lower production. Production
from South America of seven mbpd partially offset these declines.

U.S. natural gas sales for the first quarter of 1995 were 167 million
cubic feet per day ("mmcfpd"), a decrease of 208 mmcfpd over the first
quarter 1994. The decline was driven by the loss of production from
divested properties and lower volumes of gas purchased for resale. The
average gas price received in the United States was $1.45 per thousand
cubic feet ("mcf") in the first quarter 1995 as compared to $2.24 per
mcf a year ago.

Northwest Java gas volumes of 40 mmcfpd in the first quarter 1995 were
eight mmcfpd higher than the first quarter 1994. Gas realizations
improved to $2.65 per mcf during the first quarter 1995 from $1.81 per
mcf during the same period last year due to the change in contract
terms which increased the price received for "old" gas production from
$0.20 per mcf to $2.65 per mcf on January 1, 1995.

Natural gas liquids sales in the United States for the first quarter
1995 were 18 mbpd, a slight decrease over first quarter last year. The
average sales price for U.S. natural gas liquids in the first quarter
of 1995 was $10.38 per barrel, an increase of $1.15 per barrel from
1994.

<PAGE> 8
Gas purchase costs were $31 million lower in the first quarter of 1995
as compared to first quarter 1994 due to the reduction in volumes of
gas purchased for resale as well as lower prices.

Depreciation, depletion and amortization ("DD&A") of $30 million for
the first quarter 1995 was $8 million lower than the same period last
year. Approximately $11 million of DD&A from divested properties was
included in the first quarter 1994. Partially offsetting this decline
was $4 million of DD&A associated with South American operations
included in the first quarter 1995.

Income tax expense was $19 million and $16 million in the first
quarters of 1995 and 1994, respectively. The increase in income tax
expense was primarily due to higher Indonesian taxes as a result of
increased taxable income from the Company's Indonesian operations.

FINANCIAL CONDITION

The Company's net cash provided by operating activities was $62 million
in the first quarter of 1995 compared to $34 million in the first
quarter of 1994. Net cash from operating activities before working
capital changes declined $14 million during 1995 primarily as a result
of the loss of cash flow from divested properties. Net working capital
requirements, however, provided an additional $42 million primarily due
to lower oil and gas receivables of $17 million, a $9 million tax
refund and higher accrued liabilities.

The Company began the year with $41 million of cash and cash
equivalents. For the first three months of 1995, cash provided by
operations was $62 million, short-term investment maturities were $39
million, the release of restricted cash provided $12 million and the
settlement of a natural gas take-or-pay obligation in Northwest Java
provided $14 million. After funding expenditures for properties and
equipment of $54 million and the stock rights redemption of $14
million, and paying preferred dividends of $10 million, the balance of
cash and cash equivalents increased $51 million over year end 1994. In
the first three months of 1994, 1993 year-end cash balances of $129
million, $34 million of cash provided by operations, net borrowings of
$52 million and the release of $12 million in restricted cash were used
to redeem a portion of the Company's $9.75 Cumulative Convertible
Preferred Stock, fund expenditures for properties and equipment and pay
preferred dividends.

Expenditures for properties and equipment, including dry hole costs,
were $54 million for the first three months of 1995 as compared to $56
million for the same period last year. Spending in Ecuador was $19
million lower than last year due to completion of the initial phases of
the project in 1994, partially offset by a $13 million acquisition of
producing properties in the U.S. during the first quarter of 1995.

Working capital declined $72 million from December 31, 1994, $42
million of which was due to the accrual for pre-merger costs associated
with the Merger with YPF and the $14 million payment for the redemption
of the rights attached to the Common Stock.

FUTURE OUTLOOK

In connection with the Merger, The Chase Manhattan Bank (National
Association) ("Chase") has agreed to provide two credit facilities
aggregating up to $425 million to certain subsidiaries of Maxus. A
credit facility of up to $250 million will be made available to the
Company's subsidiary, Midgard Energy Company ("Midgard"), and a credit
facility of up to $175 million will be made available to the Company's
subsidiaries, Northwest Java, Inc. ("Java") and Southeast Sumatra, Inc.
("Sumatra"). Funds from these facilities, along with up to $125
million of the Company's available cash, will be used to repay loans
obtained by YPFA Corp. from Chase under a $550 million credit facility
used to acquire the entire common equity interest in the Company and to
effect the Merger. The loans made under the Midgard facility will be
repaid in up to 28 consecutive quarterly installments beginning March
31, 1997. The loans made under the Java/Sumatra facility will be
repaid in up to 24 consecutive quarterly installments beginning March
31, 1997. As a result of the additional debt, the Company's interest
expense will increase approximately $35 million per year.

The Company currently projects total program spending (capital
expenditures plus exploration expenses) for 1995 to be approximately
$240 million, $61 million of which was spent during the first quarter
of 1995.

<PAGE> 9
Funding for the remaining 1995 spending program is expected to be
provided by cash from operations. The Company anticipates that it will
be able to meet its obligations, including its indebtedness to Chase,
during 1995; however, pursuant to the Merger Agreement, in the event
the Company should be unable to meet its obligations when due, whether
upon maturity or otherwise, including for this sole purpose preferred
stock dividends and redemption payments, YPF has agreed, for a period
of nine years following the effectiveness of the Merger, to fund the
Company in an amount necessary to permit the Company to meet its
obligations. This obligation is limited to the amount of the debt
service for the obligation arising from the acquisition loans or
refinancing loans and will be reduced by the amount of any capital
contribution received by the Company after the Merger is completed and
with the net proceeds of any sale by the Company of Common Stock or
nonredeemable preferred stock after the Merger.

In addition, YPF has informed the Company that it will guarantee
payment of the Company's long-term financial obligations, which
amounted to approximately U.S.$1 billion as of the time of the
acquisition, provided that, in certain cases discussed below, consents
are obtained. Holders of the Company's debt securities issued under
Indentures dated as of April 1, 1988 and November 1, 1990, respectively
(the "Indentures"), between the Company and Chemical Bank, as trustee,
are being asked to consent to a single modification of a definition
appearing in the Indentures so that, as a result of the guarantees, YPF
will not subject itself to the terms of the Indentures (including
their covenant and default provisions) in addition to guaranteeing the
debt. Indebtedness to be covered by the guarantees consists of the
Company's outstanding 11 1/4%, 11 1/2% and 8 1/2% Sinking Fund
Debentures, its outstanding 9 7/8%, 9 1/2 % and 9 3/8% Notes and its
outstanding medium-term notes.

Certain information regarding the financial condition and results of
operations of YPF, presented in its 1994 Annual Report and first
quarter 1995 press release, is set forth below. This financial
information should be read in conjunction with, and is qualified in its
entirety by reference to, YPF's financial statements and the notes
thereto for the year ended December 31, 1994, which have been filed
with the Securities and Exchange Commission ("SEC") on Form 6-K, and
YPF's financial statements and the notes thereto for the three months
ended March 31, 1995, which are expected to be filed with the SEC
during the week of May 14, 1995.

1994 March 31, 1995
---- --------------
(amounts in millions of pesos) (1)
<S> <C> <C>
Summarized Balance Sheet Data (at period end) (2)
Current assets.................................... 1,097 1,239
Non-current assets................................ 6,412 6,748
Current liabilities............................... 1,395 1,629
Long-term debt.................................... 641 659
Long-term debt.................................... 641 659
Other non-current liabilities..................... 387 370

Summarized Statement of Income Data (2)
Sales............................................. 4,192 1,049
Operating income ................................. 708 210
Net income........................................ 538 177
</TABLE>
______________________________
(1) Under Argentine law, the Central Bank is obligated to sell dollars
to any person who so requires at a rate of one peso per dollar.

(2) Based on generally accepted accounting principles in Argentina,
which differ in certain respects from generally accepted
accounting principles in the United States.

Maxus is in the process of determining the impact of the Merger and
the allocation of the YPF purchase price on its Financial Statements.

<PAGE> 10
PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K.

(a) Exhibits.

3(ii).1 -- Amendment to the By-Laws of the Company

3(ii).2 -- By-Laws of the Company, as amended

27.1 -- Financial Data Schedule

(b) Reports on Form 8-K During the Quarter.

None.

SIGNATURE

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.

MAXUS ENERGY CORPORATION

By: G. R. Brown

G. R. Brown, Vice President
and Controller, on behalf of
the registrant and as its
chief accounting officer

May 12, 1995

<PAGE> 11

Exhibit Index

<TABLE>
<CAPTION>
Exhibit Title Exhibit No.
<S> <C>
Amendment to the By-Laws of the Company 3(ii).1

By-Laws of the Company, as amended 3(ii).2

Financial Data Schedule 27.1
</TABLE>

<PAGE> 1
Exhibit 3(ii).1

Resolved, that the By-Laws of Maxus Energy Corporation be, and hereby they are,
amended as follows:

By-Law 5 is amended to read as follows:

5. Special Meetings. Special meetings of the stockholders for any
purpose may be called by the President and shall be promptly called by the
President or by the Secretary at the written request of a majority of the Board
of Directors upon not fewer than 10 nor more than 60 days' written notice. The
request shall be sent to the President and the Secretary and shall state the
purposes of the proposed meeting. Special meetings of holders of the
outstanding Preferred Stock may be called in the manner and for the purposes
provided in the resolutions of the Board of Directors providing for the issue
of such stock (a "Preferred Stock Designation"). Business transacted at
special meetings shall be confined to the purposes stated in the notice.

By-Law 15 is amended by adding after section (d) thereof the following section
(e):

(e) Chairman of the Board. The Board may elect one of its members Chairman
of the Board, who shall preside at all meetings of the Board. The Chairman of
the Board shall also preside at all meetings of stockholders unless the Board
of Directors designates another person to preside.

By-Laws 19, 20 and 21 are amended to read as follows:

19. Resignation. Any Director may resign at any time by giving
written notice of his resignation to the President or the Secretary.

20. Meetings. Immediately after the adjournment of the annual
meeting of the stockholders each year, the Directors elected thereat shall,
without notice, convene the annual meeting of Directors for the organization of
the Board of Directors, the election of officers and members of committees and
the transaction of any other business which may properly come before the
meeting. If a quorum of the Board of Directors shall not be present, the
President shall call a meeting for such purposes as promptly as is practicable.
Except as otherwise provided in this By-Law 20, Directors may hold their
regular and special meetings at such times and places and have one or more
offices and keep the books of the Corporation at such places as the Board of
Directors determines.

21. Notices. No notice of regular meetings of the Board of
Directors need be given. Special meetings of the Board of Directors may be
called by the President upon notice to each Director, given either in person or
by mail, telephone, telegram, telex or similar medium of communication; special
meetings shall be called by the President or the Secretary on like notice, on
the written request of three Directors. At least 24 hours' notice of special
meetings shall be given to each Director.

1
<PAGE> 2
By-Laws 24 through 36 are amended to read as follows:

24. Executive Officers. At the annual meeting of the Board of
Directors each year, or such other times as the Board of Directors may
determine, the Board of Directors may elect the following executive officers:

President
One or more Vice Presidents
General Counsel
Treasurer
Controller

25. Authority of the Board of Directors. The executive officers
shall have the duties, responsibilities and authorities as are reflected in
these By-Laws or in resolutions of the Board of Directors, but at all times the
actions of the executive officers shall be subject to the review, delegation,
redetermination, direction and control of the Board of Directors. Any number
of executive offices may be held by the same person. The President shall be a
member of the Board of Directors. At any meeting the Board of Directors may
elect additional executive officers, fill vacancies and, by vote of a majority
of the whole Board of Directors, remove any executive officer.

26. Term of Office. An executive officer shall hold office until he
retires, resigns or is removed by majority vote of the whole Board of
Directors. An officer may resign at any time by giving written notice of his
resignation to the President or the Secretary.

27. Compensation of Executive Officers. The executive officers shall
receive such compensation as shall be fixed by the Board of Directors.

28. Other Officers and Agents. The President may appoint the
Secretary, such Assistant Secretaries, Assistant Treasurers, Assistant
Controllers, Deputy General Counsels, Assistant General Counsels and other
officers and agents as the President shall deem necessary or proper in the
conduct of the affairs of the Corporation with such designations, titles,
seniority, duties and responsibilities as he shall deem advisable. The
President shall report appointments of other officers and agents to the Board
of Directors.

29. Direction and Compensation of Other Officers. All officers and
agents appointed by the President shall perform their duties under the
direction of the President and shall receive compensation as from time to time
shall be fixed by the President and shall hold their offices at the pleasure of
the President.

30. Bond. If required by the Board of Directors, any and every
officer or agent shall give the Corporation a bond in a sum and with one or
more sureties satisfactory to the Board of Directors for the faithful
performance of the duties of his office and for the restoration to the
Corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the Corporation.

31. President. The President shall be the chief executive officer of
the Corporation. He

2
<PAGE> 3
shall have such duties and responsibilities as may be assigned to him by the
Board of Directors. He shall be the senior officer of the Corporation and
shall have overall responsibility for the management and direction of the
business and affairs of the Corporation. In addition, he shall perform such
other duties and services and shall have such other authority and
responsibilities as shall be assigned to or required of him from time to time
by the Board of Directors or the Executive Committee of the Board of Directors.

32. Vice Presidents. Each Vice President, however titled, shall
perform such duties and services and shall have such authority and
responsibilities as shall be assigned to or required of him from time to time
by the Board of Directors, the Executive Committee of the Board of Directors or
the President.

33. Secretary and Assistant Secretaries. (a) The Secretary shall
attend all meetings of the stockholders and all meetings of the Board of
Directors and record all proceedings of the meetings of the stockholders and of
the Board of Directors, and he shall perform like duties for the standing
committees when requested by the Board of Directors or the President. He shall
give, or cause to be given, notice of all meetings of the stockholders and
meetings of the Board of Directors. He shall perform such duties as may be
prescribed to him by the President. He shall have charge of the seal of the
Corporation and authority to affix the seal to any instrument. He or any
Assistant Secretary may attest to the corporate seal by handwritten or
facsimile signature. The Secretary shall keep and account for all books,
documents, papers and records of the Corporation except those for which some
other officer or agent has been designated or is otherwise properly
accountable. He shall have authority to sign stock certificates.

(b) Assistant Secretaries, in the order of their seniority, shall
assist the Secretary and, if the Secretary is unavailable or fails to act,
perform the duties and exercise the authorities of the Secretary.

34. Treasurer and Assistant Treasurers. (a) The Treasurer shall have
the custody of the funds and securities belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Treasurer with
the prior approval of the Chairman or the President. He shall disburse the
funds and pledge the credit of the Corporation as may be directed by the Board
of Directors and shall render to the Board of Directors and the President, as
and when required by them, or any of them, an account of all his transactions
as Treasurer.

(b) Assistant Treasurers, in the order of their seniority, shall
assist the Treasurer and, if the Treasurer is unable or fails to act, perform
the duties and exercise the powers of the Treasurer.

35. Controller and Assistant Controllers. (a) The Controller shall
be the chief accounting officer of the Corporation. He shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
Corporation in accordance with accepted accounting methods and procedures. He
shall initiate periodic audits of the accounting records, methods and systems
of the Corporation. He shall render to the Board of Directors and the
President, as and when required by them, or any of them, a statement of the
financial condition of the

3
<PAGE> 4
Corporation.

(b) Assistant Controllers, in the order of their seniority, shall
assist the Controller and, if the Controller is unable or fails to act, perform
the duties and exercise the powers of the Controller.

36. General Counsel and Deputy and Assistant General Counsels. (a)
The General Counsel shall be the chief legal officer of the Corporation. He
shall provide legal counsel and advice to the Board of Directors and to the
officers with respect to compliance with applicable laws and regulations. He
shall also provide or obtain legal defense of the Corporation. He shall render
to the Board of Directors and the President, as and when required by them, or
any of them, a report on the status of claims against, and pending litigation
of, the Corporation.

(b) Deputy and Assistant General Counsels, in the order of their
seniority, shall assist the General Counsel and, if the General Counsel is
unable or fails to act, perform the duties and exercise the powers of the
General Counsel.

By-Law 39 is amended to read as follows:

39. Form of Certificates. The certificates representing stock of the
Corporation shall be numbered and shall be entered in the books of the
Corporation as they are issued. They shall exhibit the holder's name and
number of shares and shall be mechanically signed with a facsimile of the
signature of the President or a Vice President, and a facsimile of the
signature of the Secretary or an Assistant Secretary, and shall also be signed
by, or bear the facsimile signature of, a duly authorized officer or agent of
any properly designated transfer agent of the Corporation. Such certificates
may be issued and delivered notwithstanding that the person whose facsimile
signature appears thereon shall have ceased to be such officer at the time the
certificates are issued and delivered.

<PAGE> 1
Exhibit 3(ii).2

MAXUS ENERGY
CORPORATION

BY-LAWS

AS AMENDED
APRIL 21, 1995

_______________________________________________

MAXUS ENERGY CORPORATION DALLAS, TEXAS 75201
<PAGE> 2
MAXUS ENERGY CORPORATION

BY-LAWS

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
OFFICES
1. Delaware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Dallas and Elsewhere . . . . . . . . . . . . . . . . . . . . . . . . 1
STOCKHOLDERS' MEETINGS
3. Place . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
4. Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
5. Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . 1
6. Notice of Stockholder Business . . . . . . . . . . . . . . . . . . . 1
7. Inspectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
8. Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
9. Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
10. List of Stockholders . . . . . . . . . . . . . . . . . . . . . . . . 3
11. Order of Business . . . . . . . . . . . . . . . . . . . . . . . . . 3
NOMINATION OF DIRECTOR CANDIDATES
12. Notification of Nominees . . . . . . . . . . . . . . . . . . . . . . 3
13. Substitution of Nominees . . . . . . . . . . . . . . . . . . . . . . 4
14. Compliance with Procedures . . . . . . . . . . . . . . . . . . . . . 4
DIRECTORS
15. Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . 4
16. Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . 6
17. Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
18. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
19. Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
20. Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
21. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
22. Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
23. Committees of the Board of Directors . . . . . . . . . . . . . . . . 7
OFFICERS
24. Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . 8
25. Authority of the Board of Directors . . . . . . . . . . . . . . . . 8
26. Term of Office . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
27. Compensation of Executive Officers . . . . . . . . . . . . . . . . . 8
28. Other Officers and Agents . . . . . . . . . . . . . . . . . . . . . 8
</TABLE>

ii
<PAGE> 3
<TABLE>
<S> <C>
29. Direction and Compensation of Other Officers . . . . . . . . . . . . 8
30. Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
31. President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
32. Vice Presidents . . . . . . . . . . . . . . . . . . . . . . . . . . 9
33. Secretary and Assistant Secretaries . . . . . . . . . . . . . . . . 9
34. Treasurer and Assistant Treasurers . . . . . . . . . . . . . . . . . 9
35. Controller and Assistant Controllers . . . . . . . . . . . . . . . . 10
36. General Counsel and Deputy and Assistant
General Counsels . . . . . . . . . . . . . . . . . . . . . . . . . . 10
INDEMNIFICATION
37. Damages and Expenses . . . . . . . . . . . . . . . . . . . . . . . . 10
38. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
STOCK RECORDS
39. Form of Certificates . . . . . . . . . . . . . . . . . . . . . . . . 14
40. Classes of Stock: Rights . . . . . . . . . . . . . . . . . . . . . . 14
41. Transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
42. Lost Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 15
43. Record Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
GENERAL
44. Contracts, Checks, Etc. . . . . . . . . . . . . . . . . . . . . . . 15
45. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
46. Annual Statement . . . . . . . . . . . . . . . . . . . . . . . . . . 15
47. Form of Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 16
48. Seal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
49. By-Law Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . 16
50. Certificate of Incorporation and Applicable Law . . . . . . . . . . . 16
</TABLE>

iii
<PAGE> 4
BY-LAWS

OFFICES

1. Delaware. The Corporation's registered office in the State of
Delaware shall be in the City of Wilmington, County of New Castle, State of
Delaware, and the name of the registered agent in charge thereof is The
Corporation Trust Company.

2. Dallas and Elsewhere. The Corporation shall also have an office
at such place in the City of Dallas, County of Dallas, State of Texas, and may
also have offices at such other places, as the Board of Directors may from time
to time appoint or the business of the Corporation may require.

STOCKHOLDERS' MEETINGS

3. Place. Meetings of the stockholders shall be held at such place
as the Board of Directors shall determine.

4. Annual Meeting. The annual meeting of the stockholders for the
election of Directors, the receiving of reports and the transaction of such
other business as may properly be brought before the meeting shall be held on
such date and at such time as the Board of Directors determines.

6. Notice of Stockholder Business. At an annual meeting of the
stockholders, only such business shall be conducted as shall have been properly
brought before the meeting. To be properly brought before an annual meeting,
business must be (a) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board of Directors, (b) otherwise
properly brought before the meeting by or at the direction of the Board of
Directors, or (c) otherwise properly

1
<PAGE> 5
be requested to be brought before the meeting by a stockholder. For business
to be properly requested to be brought before an annual meeting by a
stockholder, the stockholder must have given timely notice thereof in writing
to the Secretary of the Corporation. To be timely, a stockholder's notice must
be delivered to or mailed and received at the principal executive offices of
the Corporation, not less than 80 days prior to the meeting; provided, however,
that in the event that the date of the meeting is not publicly announced by the
Corporation by mail, press release or otherwise more than 90 days prior to the
meeting, notice by the stockholder to be timely must be delivered to the
Secretary of the Corporation not later than the close of business on the tenth
day following the day on which such announcement of the date of the meeting was
communicated to stockholders. A stockholder's notice to the Secretary shall
set forth as to each matter the stockholder proposes to bring before the annual
meeting (a) a brief description of the business desired to be brought before
the annual meeting and the reasons for conducting such business at the annual
meeting, (b) the name and address, as they appear on the Corporation's books,
of the stockholder proposing such business, (c) the class and number of shares
of the Corporation which are beneficially owned by the stockholder, and (d) any
material interest of the stockholder in such business. Notwithstanding
anything in the By-Laws to the contrary, no business shall be conducted at an
annual meeting except in accordance with the procedures set forth in this
By-Law 6. The chairman of an annual meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting and in accordance with the provisions of this By-Law 6, and
if he should so determine, he shall so declare to the meeting and any such
business not properly brought before the meeting shall not be transacted.

7. Inspectors. The Board of Directors shall appoint inspectors of
election to act as judges of the voting and to determine those entitled to vote
at any stockholders' meeting, or any adjournment thereof, in advance of such
meeting, but if the Board of Directors fails to make such appointments or if an
appointee fails to serve, the chairman of the stockholders' meeting may appoint
substitute inspectors.

8. Quorum. Except as otherwise provided in a Preferred Stock
Designation, the holders of stock having a majority of voting power entitled to
vote at any stockholders' meeting, present in person or represented by proxy,
shall constitute a quorum for the transaction of business thereat. If,
however, such majority shall not be present or represented at any meeting of
the stockholders, the stockholders entitled to vote thereat, present in person
or represented by proxy, shall have power to adjourn the meeting from time to
time without notice, other than announcement at the meeting of the time and
place of the adjourned meeting, until the requisite amount of voting stock
shall be present or represented or the meeting has been adjourned permanently.
At such adjourned meeting, at which the requisite amount of voting stock shall
be present or represented, any business may be transacted which might have been
transacted at the meeting as originally called.

9. Voting. At each meeting of the stockholders, every stockholder
having the right to vote shall be entitled to vote in person or by proxy
appointed by a legally sufficient instrument. The vote for Directors, the vote
upon any questions set forth in the Proxy Statement for the meeting and the
vote upon any other action of business at the discretion of the chairman of the
stockholders' meeting shall be by written ballot. The vote upon any other
question before the meeting shall be

2
<PAGE> 6
by written ballot upon the demand of stockholders voting at least 15% of the
shares represented at the meeting. All questions, except election or removal
of Directors or as otherwise provided in these By-Laws, the Certificate of
Incorporation of the Corporation (the "Certificate of Incorporation") or the
Preferred Stock Designation for any series of Preferred Stock, shall be decided
by a majority vote of those shares present or represented and voting, and, with
respect to any election or question to be decided by any class of stock voting
as a class, by a majority vote of those shares present or represented and
voting of that class.

10. List of Stockholders. A complete list of the stockholders
entitled to vote at any meeting shall be available for examination by such
persons for any proper purpose, for such period of time and at such place as is
required by law.

11. Order of Business. Unless otherwise determined by the Board of
Directors prior to the meeting, the chairman of the stockholders' meeting shall
determine the order of business and shall have the authority in his discretion
to regulate the conduct of any such meeting, including, without limitation, by
imposing restrictions on the persons (other than stockholders of the
Corporation or their duly appointed proxies) who may attend any such
stockholders' meeting, whether any stockholder or his proxy may be excluded
from any stockholders' meeting based upon any determination by the chairman, in
his sole discretion, that any such person has unduly disrupted or is likely to
disrupt the proceedings thereat, and the circumstances in which any person may
make a statement or ask questions at any stockholders' meeting.

NOMINATION OF DIRECTOR CANDIDATES

12. Notification of Nominees. Subject to the rights of holders of
any class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation, nominations for the election of Directors may be
made by the Board of Directors or a committee appointed by the Board of
Directors or by any stockholder entitled to vote in the election of Directors
generally. However, any stockholder entitled to vote in the election of
Directors generally may nominate one or more persons for election as Directors
at a meeting only if written notice of such stockholder's intent to make such
nomination or nominations has been received by the Secretary of the Corporation
not less than 80 days in advance of such meeting; provided, however, that in
the event that the date of the meeting was not publicly announced by the
Corporation by mail, press release or otherwise more than 90 days prior to the
meeting, notice by the stockholder to be timely must be delivered to the
Secretary of the Corporation not later than the close of business on the tenth
day following the day on which such announcement of the date of the meeting was
communicated to stockholders. Each such notice shall set forth: (a) the name
and address of the stockholder who intends to make the nomination and of the
person or persons to be nominated; (b) a representation that the stockholder is
a holder of record of stock of the Corporation entitled to vote for the
election of Directors on the date of such notice and intends to appear in
person or by proxy at the meeting to nominate the person or persons specified
in the notice; (c) a description of all arrangements or understandings between
the stockholder and each nominee and any other person or persons

3
<PAGE> 7
(naming such person or persons) pursuant to which the nomination or nominations
are to be made by the stockholder; (d) such other information regarding each
nominee proposed by such stockholder as would be required to be included in a
proxy statement filed pursuant to the proxy rules of the Securities and
Exchange Commission, had the nominee been nominated, or intended to be
nominated, by the Board of Directors; and (e) the consent of each nominee to
serve as a director of the Corporation if so elected.

13. Substitution of Nominees. In the event that a person is validly
designated as a nominee in accordance with By-Law 12 and shall thereafter
become unable or unwilling to stand for election to the Board of Directors, the
Board of Directors or the stockholder who proposed such nominee, as the case
may be, may designate a substitute nominee upon delivery, not fewer than five
days prior to the date of the meeting for the election of such nominee of a
written notice to the Secretary setting forth such information regarding such
substitute nominee as would have been required to be delivered to the Secretary
pursuant to By-Law 12 had such substitute nominee been initially proposed as a
nominee. Such notice shall include a signed consent to serve as a Director of
the Corporation, if elected, of each such substitute nominee.

14. Compliance with Procedures. If the chairman of the meeting for
the election of Directors determines that a nomination of any candidate for
election as a Director at such meeting was not made in accordance with the
applicable provisions of By-Laws 12 and 13, such nomination shall be void;
provided, however, that nothing in By-Laws 12 or 13 shall be deemed to limit
any voting rights upon the occurrence of dividend arrearages provided to
holders of Preferred Stock pursuant to the Preferred Stock Designation for any
series of Preferred Stock.

DIRECTORS

15. Board of Directors.

(a) Number, election and terms. Except as otherwise fixed by, or
pursuant to the provisions of, Article Fourth of the Certificate of
Incorporation relating to the rights of the holders of any class or series of
stock having a preference over the Common Stock as to dividends or upon
liquidation to elect additional Directors under specified circumstances, the
number of the Directors of the Corporation shall be fixed from time to time by
the Board of Directors but shall be no fewer than twelve nor more than sixteen.
The Directors, other than those who may be elected by the holders of any class
or series of stock having a preference over the Common Stock as to dividends or
upon liquidation, shall be classified, with respect to the time for which they
severally hold office, into three classes, as nearly equal in number as
possible, as determined by the Board of Directors of the Corporation. At the
annual meeting of the stockholders held in 1985, one class shall be originally
elected for a term expiring at the annual meeting of stockholders to be held in
1986, another class shall be originally elected for a term expiring at the
annual meeting of stockholders to be held in 1987, and another class shall be
originally elected for a term expiring at the annual meeting of stockholders to
be held in 1988, with each member of each class to hold office until his
successor

4
<PAGE> 8
is elected and qualified. At each succeeding annual meeting of the
stockholders of the Corporation, the successors of the class of Directors whose
term expires at that meeting shall, subject to Section (b) of this By-Law 15,
be elected by plurality vote by written ballot to hold office for a term
expiring at the annual meeting of stockholders held in the third year following
the year of their election.

(b) Cumulative Voting In Certain Circumstances. In any election of
Directors of the Corporation on or after the date on which the Corporation
becomes aware that any 30% Stockholder (as defined below) has become a 30%
Stockholder, and until such time as no 30% Stockholder any longer exists, there
shall be cumulative voting for election of Directors so that any holder of
shares of the Corporation entitled to vote generally in the election of
Directors may cumulate the voting power represented by his shares and give one
candidate a number of votes equal to the number of Directors to be elected
multiplied by the number of votes to which such shares are entitled, or
distribute such votes on the same principle among as many candidates for
election as such holder of shares determines. For the purposes of this Section
(b) of By-Law 15, a 30% Stockholder shall mean any person (other than the
Corporation and any other corporation of which a majority of the voting power
of the capital stock entitled to vote generally in the election of directors is
owned, directly or indirectly, by the Corporation) who or which is the
beneficial owner, directly or indirectly of 30% or more of the voting power of
all shares of the Corporation entitled to vote generally in the election of
Directors.

For the purpose of this By-Law 15:

(1) A "person" shall mean any individual, firm, corporation
or other entity.

(2) A person shall be a "beneficial owner" of any shares of
stock of the Corporation:

(i) which such person or any of its Affiliates or
Associates (as hereinafter defined) beneficially owns,
directly or indirectly; or

(ii) which such person or any of its Affiliates or
Associates (as defined in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as in
effect on January 1, 1985) has (A) the right to acquire
(whether such right is exercisable immediately or only after
the passage of time), pursuant to any agreement, arrangement
or understanding or upon the exercise of conversion rights,
exchange rights, warrants or options, or otherwise, or (B) the
right to vote pursuant to any agreement, arrangement or
understanding;

(iii) which is beneficially owned, directly or
indirectly, by any other person with which such person or any
of its Affiliates or Associates has any agreement, arrangement
or understanding for the purpose of acquiring, holding, voting
or disposing of any shares of stock of the Corporation;
provided, however, that no person shall be deemed to be a
"beneficial owner" of any shares of Voting Stock solely by
reason of such person's right to vote or to acquire such
Voting Stock pursuant to any agreement or instrument approved
by a majority of the Board of Directors.

5
<PAGE> 9
(3) In determining whether a person is a holder of 30% or
more of the voting power of all shares of the Corporation
entitled to vote generally in the election of Directors
pursuant to Section (b) of this By-Law 15, any class of such
shares outstanding shall be deemed to include any such shares
deemed owned through application of paragraph (2) of this
Section (b) but shall not include any other securities of such
class which may be issuable pursuant to any agreement,
arrangement or understanding, or upon exercise of conversion
rights, warrants or options, or otherwise.

(c) Newly created directorships and vacancies. Except as otherwise
provided for or fixed by or pursuant to the provisions of Article Fourth of the
Certificate of Incorporation relating to the rights of the holders of any class
or series of stock having a preference over the Common Stock as to dividends or
upon liquidation to elect directors under specified circumstances, newly
created directorships resulting from any increase in the number of Directors
and any vacancies on the Board of Directors resulting from death, resignation,
disqualification, removal or other cause shall be filled only by the
affirmative vote of a majority of the remaining Directors then in office, even
though less than a quorum of the Board of Directors. Any Director elected in
accordance with the preceding sentence shall hold office for the remainder of
the full term of the class of Directors in which the new directorship was
created or the vacancy occurred and until such Director's successor shall have
been elected and qualified. No decrease in the number of Directors
constituting the Board of Directors shall shorten the term of any incumbent
Director.

(d) Removal. Subject to the rights of any class or series of stock
having a preference over the Common Stock as to dividends or upon liquidation
to elect Directors under specified circumstances, any Director may be removed
from office only by the affirmative vote of the holders of at least 80% of the
combined voting power of the outstanding shares of stock entitled to vote
generally in the election of Directors, voting together as a single class;
provided that notwithstanding the foregoing provisions of this Section (d), if
at any time when cumulative voting is permitted pursuant to Section (b) of this
By-Law 15 less than the entire Board of Directors is to be removed, no Director
may be removed from office if the votes cast against his removal would be
sufficient to elect him as a Director if then cumulatively voted at an election
of the class of Directors of which he is a part.

(e) Chairman of the Board. The Board may elect one of its members
Chairman of the Board, who shall preside at all meetings of the Board. The
Chairman of the Board shall also preside at all meetings of stockholders unless
the Board of Directors designates another person to preside.

16. Responsibilities. The business and affairs of the Corporation
shall be managed under the direction of the Board of Directors.

17. Powers. In addition to the powers and authorities expressly
conferred by these By-Laws, the Board of Directors may exercise all such powers
of the Corporation and do all such lawful acts and things as are not by statute
or by the Certificate of Incorporation or by these By-Laws directed or required
to be exercised or done by the stockholders.

6
<PAGE> 10
18. Compensation. The Board of Directors may establish such
compensation for, and reimbursement of the expenses of, Directors for
attendance at meetings of the Board of Directors or committees, or for other
services by Directors to the Corporation, as the Board of Directors may
determine.

19. Resignation. Any Director may resign at any time by giving
written notice of his resignation to the President or the Secretary.

21. Notices. No notice of regular meetings of the Board of Directors
need be given. Special meetings of the Board of Directors may be called by the
President upon notice to each Director, given either in person or by mail,
telephone, telegram, telex or similar medium of communication; special meetings
shall be called by the President or the Secretary on like notice, on the
written request of three Directors. At least 24 hours' notice of special
meetings shall be given to each Director.

22. Quorum. Subject to the provisions of Section (c) of By-Law 15,
at all meetings of the Board of Directors, a majority of the total number of
Directors shall constitute a quorum for the transaction of business and, except
for the designation of committees (as provided in By-Law 23) and the removal of
executive officers (as provided in By-Law 25), the act of a majority of the
Directors present at any meeting at which there is a quorum shall be the act of
the Board of Directors. If a quorum is not present, a majority of the
Directors present may adjourn the meeting without notice other than
announcement until a quorum is present.

23. Committees of the Board of Directors. The Board of Directors, by
resolution passed by a majority of the whole Board of Directors, may designate
one or more committees, each committee to consist of two or more Directors. A
committee shall have and exercise the powers of the Board of Directors in the
direction of the management of the business and affairs of the Corporation to
the extent provided in the resolution. Each committee shall have such name as
may be determined by the Board of Directors. Except as may be otherwise
provided in a resolution or resolutions duly adopted by the Board of Directors,
a majority of the members of a committee shall constitute a quorum and a
majority vote of the members at a meeting at which a quorum is present shall be
the act of the committee. A committee shall keep minutes of its proceedings,
and shall report its proceedings to the Board of Directors when required or
when requested by a Director to do so.

7
<PAGE> 11

OFFICERS

President
One or more Vice Presidents
General Counsel
Treasurer
Controller

27. Compensation of Executive Officers. The executive officers shall
receive such compensation as shall be fixed by the Board of Directors.

8
<PAGE> 12
money and other property of whatever kind in his possession or under his
control belonging to the Corporation.

31. President. The President shall be the chief executive officer of
the Corporation. He shall have such duties and responsibilities as may be
assigned to him by the Board of Directors. He shall be the senior officer of
the Corporation and shall have overall responsibility for the management and
direction of the business and affairs of the Corporation. In addition, he
shall perform such other duties and services and shall have such other
authority and responsibilities as shall be assigned to or required of him from
time to time by the Board of Directors or the Executive Committee of the Board
of Directors.

33. Secretary and Assistant Secretaries.

(a) The Secretary shall attend all meetings of the stockholders and
all meetings of the Board of Directors and record all proceedings of the
meetings of the stockholders and of the Board of Directors, and he shall
perform like duties for the standing committees when requested by the Board of
Directors or the President. He shall give, or cause to be given, notice of all
meetings of the stockholders and meetings of the Board of Directors. He shall
perform such duties as may be prescribed to him by the President. He shall
have charge of the seal of the Corporation and authority to affix the seal to
any instrument. He or any Assistant Secretary may attest to the corporate seal
by handwritten or facsimile signature. The Secretary shall keep and account
for all books, documents, papers and records of the Corporation except those
for which some other officer or agent has been designated or is otherwise
properly accountable. He shall have authority to sign stock certificates.

34. Treasurer and Assistant Treasurers.

(a) The Treasurer shall have the custody of the funds and securities
belonging to the Corporation and shall deposit all moneys and other valuable
effects in the name and to the credit of the Corporation in such depositories
as may be designated by the Treasurer with the prior approval of the Chairman
or the President. He shall disburse the funds and pledge the credit of the
Corporation as may be directed by the Board of Directors and shall render to
the Board of Directors and the President, as and when required by them, or any
of them, an account of all his transactions as Treasurer.

9
<PAGE> 13
(b) Assistant Treasurers, in the order of their seniority, shall
assist the Treasurer and, if the Treasurer is unable or fails to act, perform
the duties and exercise the powers of the Treasurer.

35. Controller and Assistant Controllers.

(a) The Controller shall be the chief accounting officer of the
Corporation. He shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation in accordance with accepted
accounting methods and procedures. He shall initiate periodic audits of the
accounting records, methods and systems of the Corporation. He shall render to
the Board of Directors and the President, as and when required by them, or any
of them, a statement of the financial condition of the Corporation.

(b) Assistant Controllers, in the order of their seniority, shall
assist the Controller and, if the Controller is unable or fails to act, perform
the duties and exercise the powers of the Controller.

36. General Counsel and Deputy and Assistant General Counsels.

(a) The General Counsel shall be the chief legal officer of the
Corporation. He shall provide legal counsel and advice to the Board of
Directors and to the officers with respect to compliance with applicable laws
and regulations. He shall also provide or obtain legal defense of the
Corporation. He shall render to the Board of Directors and the President, as
and when required by them, or any of them, a report on the status of claims
against, and pending litigation of, the Corporation.

INDEMNIFICATION

37. Damages and Expenses.

(a) Actions, Suits or Proceedings Other Than by or in the Right of
the Corporation. The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Corporation)
by reason of the fact that he is or was or has agreed to become a Director,
officer, employee or agent of the Corporation, or is or was serving or has
agreed to serve at the request of the Corporation as a Director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity, against costs, charges, expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him or on his behalf in connection with such action,

10
<PAGE> 14
suit or proceeding and any appeal therefrom, if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not meet the standards of conduct set forth in
this Section (a).

(b) Actions or Suits by or in the Right of the Corporation. The
Corporation shall indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the Corporation to procure a judgment in its favor by reason of
the fact that he is or was or has agreed to become a Director, officer,
employee or agent of the Corporation, or is or was serving or has agreed to
serve at the request of the Corporation as a Director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, or by reason of any action alleged to have been taken or omitted in
such capacity, against costs, charges and expenses (including attorney's fees)
actually and reasonably incurred by him or on his behalf in connection with the
defense or settlement of such action or suit and any appeal therefrom, if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Corporation unless and only to
the extent that the Court of Chancery of Delaware or the court in which such
action or suit was brought shall determine upon application that, despite the
adjudication of such liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
costs, charges and expenses which the Court of Chancery or such other court
shall deem proper.

(c) Indemnification for Costs, Charges and Expenses of Successful
Party. Notwithstanding the other provisions of this By-Law 37, to the extent
that a Director, officer, employee or agent of the Corporation has been
successful on the merits or otherwise, including, without limitation, the
dismissal of an action without prejudice, in defense of any action, suit or
proceeding referred to in Sections (a) and (b) of this By-Law 37, or in the
defense of any claim, issue or matter therein, he shall be indemnified against
all costs, charges and expenses (including attorneys' fees) actually and
reasonably incurred by him or on his behalf in connection therewith.

(d) Determination of Right to Indemnification. Any indemnification
under Sections (a) and (b) of this By-Law 37 (unless ordered by a court) shall
be paid by the Corporation unless a determination is made (1) by the Board of
Directors by a majority vote of a quorum consisting of Directors who were not
parties to such action, suit or proceeding, or (2) if such a quorum is not
obtainable, or even if obtainable a quorum of disinterested Directors so
directs, by independent legal counsel in a written opinion, or (3) by the
stockholders, that indemnification of the Director, officer, employee or agent
is not proper in the circumstances because he has not met the applicable
standards of conduct set forth in Sections (a) and (b) of this By-Law 37.

(e) Advance of Costs, Charges and Expenses. Costs, charges and
expenses (including

11
<PAGE> 15
attorneys' fees) incurred by a person referred to in Sections (a) and (b) of
this By-Law 37 in defending a civil or criminal action, suit or proceeding
(including investigations by any government agency and all costs, charges and
expenses incurred in preparing for any threatened action, suit or proceeding)
shall be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding; provided, however, that the payment of such costs,
charges and expenses incurred by a Director or officer in his capacity as a
Director or officer (and not in any other capacity in which service was or is
rendered by such person while a Director or officer) in advance of the final
disposition of such action, suit or proceeding shall be made only upon receipt
of an undertaking by or on behalf of the Director or officer to repay all
amounts so advanced in the event that it shall ultimately be determined that
such Director or officer is not entitled to be indemnified by the Corporation
as authorized in this By-Law 37. No security shall be required for such
undertaking and such undertaking shall be accepted without reference to the
recipient's financial ability to make repayment. The repayment of such charges
and expenses incurred by other employees and agents of the Corporation which
are paid by the Corporation in advance of the final disposition of such action,
suit or proceeding as permitted by this Section (e) may be required upon such
terms and conditions, if any, as the Board of Directors deems appropriate. The
Board of Directors may, in the manner set forth above, and subject to the
approval of such Director, officer, employee or agent of the Corporation,
authorize the Corporation's counsel to represent such person, in any action,
suit or proceeding, whether or not the Corporation is a party to such action,
suit or proceeding.

(f) Procedure for Indemnification. Any indemnification under Sections
(a), (b), or (c) or advance of costs, charges and expenses under Section (e) of
this By-Law 37 shall be made promptly, and in any event within 60 days, upon
the written request of the Director, officer, employee or agent directed to the
Secretary of the Corporation. The right to indemnification or advances as
granted by this By-Law 37 shall be enforceable by the Director, officer,
employee or agent in any court of competent jurisdiction if the Corporation
denies such request, in whole or in part, or if no disposition thereof is made
within 60 days. Such person's costs and expenses incurred in connection with
successfully establishing his right to indemnification or advances, in whole or
in part, in any such action shall also be indemnified by the Corporation. It
shall be a defense to any such action (other than an action brought to enforce
a claim for the advance of costs, charges and expenses under Section (e) of
this By-Law 37 where the required undertaking, if any, has been received by the
Corporation) that the claimant has not met the standard of conduct set forth in
Sections (a) or (b) of this By-Law 37, but the burden of proving that such
standard of conduct has not been met shall be on the Corporation. Neither the
failure of the Corporation (including its Board of Directors, its independent
legal counsel, and its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he has met the applicable standard of conduct set
forth in Sections (a) and (b) of this By-Law 37, nor the fact that there has
been an actual determination by the Corporation (including its Board of
Directors, its independent legal counsel, and its stockholders) that the
claimant has not met such applicable standard of conduct, shall be a defense to
the action or create a presumption that the claimant has not met the applicable
standard of conduct.

(g) Other Rights; Continuation of Right to Indemnification. The
indemnification provided by this By-Law 37 shall not be deemed exclusive of any
other rights to which a person seeking

12
<PAGE> 16
indemnification may be entitled under any law (common or statutory), agreement,
vote of stockholders or disinterested Directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding
office or while employed by or acting as agent for the Corporation, and shall
continue as to a person who has ceased to be a Director, officer, employee or
agent and shall inure to the benefit of the estate, heirs, executors and
administrators of such person. All rights to indemnification under this By-Law
37 shall be deemed to be a contract between the Corporation and each Director,
officer, employee or agent of the Corporation who serves or served in such
capacity at any time while this By-Law 37 is in effect. No amendment or repeal
of this By-Law 37 or of any relevant provisions of the Delaware General
Corporation Law or any other applicable laws shall adversely affect or deny to
any Director, officer, employee or agent any rights to indemnification which
such person may have, or change or release any obligations of the Corporation,
under this By-Law 37 with respect to any costs, charges, expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement which arise
out of an action, suit or proceeding based in whole or substantial part on any
act or failure to act, actual or alleged, which takes place before or while
this By-Law 37, as adopted by the Board of Directors of the Corporation on
April 17, 1986, is in effect. The provisions of this Section (g) shall apply
to any such action, suit or proceeding whenever commenced, including any such
action, suit or proceeding commenced after any amendment or repeal of this
By-Law 37.

(h) For purposes of this By-Law:

(1) "the Corporation" shall include any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had
continued, would have had power and authority to indemnify its
Directors, officers, and employees or agents, so that any person who
is or was a Director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent
corporation as a Director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under the provisions of this By-Law
37 with respect to the resulting or surviving corporation as he would
have with respect to such constituent corporation if its separate
existence had continued;

(2) "other enterprises" shall include employee benefit plans,
including but not limited to any employee benefit plan of the
Corporation;

(3) "serving at the request of the Corporation" shall include
any service which imposes duties on, or involves services by, a
Director, officer, employee, or agent of the Corporation with respect
to an employee benefit plan, its participants, or beneficiaries,
including acting as a fiduciary thereof;

(4) "fines" shall include any penalties and any excise or
similar taxes assessed on a person with respect to an employee benefit
plan;

(5) A person who acted in good faith and in a manner he
reasonably believed

13
<PAGE> 17
to be in the interest of the participants and beneficiaries of an
employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in
Sections (a) and (b) of this By-Law 37;

(6) Service as a partner, trustee or member of management or
similar committee of a partnership or joint venture, or as a Director,
officer, employee or agent of a corporation which is a partner,
trustee or joint venturer, shall be considered service as a Director,
officer, employee or agent of the partnership, joint venture, trust or
other enterprise.

(i) Savings Clause. If this By-Law 37 or any portion hereof shall be
invalidated on any ground by a court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each Director, officer, employee and
agent of the Corporation as to costs, charges and expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement with respect
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative, including an action by or in the right of the Corporation, to
the full extent permitted by any applicable portion of this By-Law 37 that
shall not have been invalidated and to the full extent permitted by applicable
law.

38. Insurance. The Corporation shall purchase and maintain insurance
on behalf of any person who is or was or has agreed to become a Director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a Director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against any
liability asserted against him and incurred by him or on his behalf in any such
capacity, or arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability under the
provisions of By-Law 37, provided that such insurance is available on
acceptable terms as determined by a vote of a majority of the entire Board of
Directors.

STOCK RECORDS

40. Classes of Stock: Rights. The designations, preferences and
relative participating, optional or other special rights of the various classes
of stock or series thereof, and the qualifications, limitations or restrictions
thereof, shall be set forth in full or summarized on the face

14
<PAGE> 18
or back of the certificates which the Corporation issues to represent its
stock, or in lieu thereof, such certificates shall set forth the office of the
Corporation from which the holders of certificates may obtain a copy of such
information.

41. Transfers. Subject to restrictions on the transfer of stock,
the Corporation shall make transfers of stock on its books upon surrender of
the certificate for the shares to the Corporation or its duly appointed
transfer agent duly endorsed by the stockholder named in the certificate or his
duly authorized attorney.

42. Lost Certificates. An executive officer may direct a new
certificate to be issued in place of certificates theretofore issued by the
Corporation and alleged to have been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the person claiming the certificate of stock to
be lost, stolen or destroyed. As a condition precedent to the issuance
thereof, the officer may require the claimant to advertise the alleged loss,
theft or destruction in such manner as the officer may require and to give the
Corporation a bond in such sum as he may direct as indemnity against any claim
that may be made against the Corporation with respect to the certificate
alleged to have been lost, stolen or destroyed or the issuance of the new
certificate.

43. Record Dates. The Board of Directors may fix in advance a date,
not more than 60 days nor fewer than 10 days prior to the date of any meeting
of stockholders, nor more than 60 prior to the date for the payment of any
dividend, or the date for the allotment of rights, or the date when any change
or conversion or exchange of capital stock shall go into effect, as a record
date for the determination of the stockholders entitled to notice of, and to
vote at, any such meeting and any adjournment thereof, or entitled to receive
payment of any such dividend, or to any such allotment of rights, or to
exercise the rights in respect of any such change, conversion or exchange of
capital stock and in such case such stockholders and only such stockholders as
shall be stockholders of record on the date so fixed shall be entitled to such
notice of, and to vote at, such meeting and any adjournment thereof, or to
receive payment of such dividend, or to receive such allotment of rights, or to
exercise such rights, as the case may be, notwithstanding any transfer of any
stock on the books of the Corporation after any such record date fixed as
aforesaid.

GENERAL

44. Contracts, Checks, Etc. All contracts, agreements, checks,
drafts, notes, bonds, bills of exchange and orders for the payment of money
shall be signed or endorsed by the persons whom the Board of Directors
prescribes therefor.

45. Fiscal Year. The fiscal year of the Corporation shall be the
calendar year, except as otherwise determined from time to time by the Board of
Directors.

46. Annual Statement. The Board of Directors shall cause an
independent public accountant, selected from time to time by the Board of
Directors, to examine in accordance with

15
<PAGE> 19
generally accepted auditing standards, prior to the annual meeting of the
stockholders in each year, the books and records of the Corporation and the
financial statements for the preceding fiscal year, which statements shall set
forth the financial position as of the close of, and the results of operations
of the Corporation for, the preceding fiscal year, and the Board of Directors
shall cause such accountant or firm of accountants to render to the Board of
Directors its opinion with respect thereto. The Board of Directors shall cause
copies of the financial statements together with the opinion to be sent to all
stockholders entitled to vote at the annual meeting in the year succeeding the
year to which the financial statements apply and to be available to
stockholders attending the annual meeting.

47. Form of Notices. Whenever notice is required to be given to any
Director or officer or stockholder, such notice may be given either in person
or by mail, telephone or telegram, telex or similar medium of communication,
except as provided in By-Law 6, By-Law 12 or By-Law 21. Except as provided in
By-Law 6, By-Law 12 or By-Law 21, if mailed, the notice will be deemed given
when deposited in the United States mail, postage prepaid, addressed to the
stockholder, officer or Director at such address as appears on the books of the
Corporation, or, in default of other address, to such Director, officer or
stockholder at the General Post Office in the City of Dallas, Texas, or the
City of Cleveland, Ohio. If given in person or by telephone, notice will be
deemed given when communicated, and if given by telegram, telex or similar
medium of communication, notice will be deemed given when properly dispatched.
Any stockholder, Director or officer may waive any notice required to be given
under these By-Laws.

48. Seal. The corporate seal shall have inscribed thereon the name
of the Corporation, the year of its organization and the words "Corporate Seal,
Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.

49. By-Law Amendment. Subject to the provisions of the Certificate
of Incorporation, these By-Laws may be altered, changed, amended or repealed at
any regular meeting of the stockholders (or at any special meeting thereof duly
called for that purpose) by a majority vote of the shares represented and
entitled to vote at such meeting; provided that in the notice of such special
meeting notice of such purpose shall be given. Subject to the laws of the
State of Delaware, the Certificate of Incorporation and these By-Laws, the
Board of Directors may by majority vote of those present at any meeting at
which a quorum is present amend these By-Laws, or enact such other By-Laws as
in their judgement may be advisable for the regulation of the conduct of the
affairs of the Corporation.

50. Certificate of Incorporation and Applicable Law. These By-Laws
are subject to the provisions of the Certificate of Incorporation and
applicable law.

<ARTICLE> 5
<MULTIPLIER> 1,000,000

<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 92
<SECURITIES> 65
<RECEIVABLES> 128
<ALLOWANCES> 1
<INVENTORY> 29
<CURRENT-ASSETS> 395
<PP&E> 1,111
<DEPRECIATION> 1,638
<TOTAL-ASSETS> 1,692
<CURRENT-LIABILITIES> 224
<BONDS> 971
<COMMON> 125
8
136
<OTHER-SE> (130)
<TOTAL-LIABILITY-AND-EQUITY> 1,692
<SALES> 143
<TOTAL-REVENUES> 152
<CGS> 75
<TOTAL-COSTS> 108
<OTHER-EXPENSES> 58
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 24
<INCOME-PRETAX> (38)
<INCOME-TAX> 19
<INCOME-CONTINUING> (57)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (57)
<EPS-PRIMARY> (.49)
<EPS-DILUTED> 0

</TABLE>