UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
--------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-8704
HOWELL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 74-1223027
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1111 Fannin, Suite 1500, Houston, Texas 77002
(Address of principal executive offices) (Zip Code)
(713) 658-4000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding on each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at April 30, 1999
- ----------------------------- -------------------------------
Common Stock, $1.00 par value 5,471,782
This report contains 14 pages
<PAGE>
HOWELL CORPORATION AND SUBSIDIARIES
Form 10-Q
INDEX
Page No.
-------
Part I. Financial Information
Item 1. Consolidated Statements of Operations --
Three months ended March 31, 1999 and 1998 (unaudited) 3
Consolidated Balance Sheets --
March 31, 1999 (unaudited) and December 31, 1998 4
Consolidated Statements of Cash Flows --
Three months ended March 31, 1999 and 1998 (unaudited) 5
Notes to Consolidated Financial Statements (unaudited) 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
Part II.Other Information
Item 4. Results of Votes of Security Holders 13
Item 6. Exhibits and Reports on Form 8-K 14
<PAGE>
PART I. FINANCIAL INFORMATION
(ITEM 1)
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Howell Corporation and Subsidiaries
Three Months Ended
March 31,
1999 1998
(In thousands, except
per share amounts)
Revenues................................ $8,878 $14,267
-------- --------
Cost and expenses:
Lease operating expenses.............. 5,888 8,277
Depreciation, depletion, and
amortization...................... 2,114 3,632
Ceiling test write-down............... - 66,118
General and administrative expenses... 1,240 2,068
-------- --------
9,242 80,095
-------- --------
Other income (expense):
Interest expense...................... (2,271) (2,672)
Interest income....................... 38 12
Net earnings of investees............. 65 120
Other-net............................. (130) (11)
-------- --------
(2,298) (2,551)
-------- --------
Loss before income taxes................ (2,662) (68,379)
Income tax benefit...................... (895) (23,223)
-------- --------
Net loss from continuing operations..... (1,767) (45,156)
-------- --------
Discontinued operations:
Net earnings from Howell Hydrocarbons
(less applicable income taxes of $695) 1,350 -
-------- --------
Net loss................................ (417) (45,156)
Less: Preferred stock dividends....... (604) (604)
-------- --------
Net loss applicable to common shares.... $(1,021) $(45,760)
======== ========
Basic (loss) earnings per common share:
Continuing operations................. $ (0.43) $(8.37)
Discontinued operations............... 0.25 -
-------- --------
Net loss per common share (basic)..... $ (0.18) $(8.37)
======== ========
Weighted average shares outstanding 5,472 5,465
(basic)................................. ======== ========
Diluted (loss) earnings per common share:
Continuing operations................. $ (0.43) $(8.37)
Discontinued operations............... 0.25 -
-------- --------
Net loss per common share (diluted)... $ (0.18) $(8.37)
======== ========
Weighted average shares outstanding 5,472 5,465
(diluted)............................... ======== ========
Cash dividends per common share......... $ 0.04 $ 0.04
======== ========
See accompanying Notes to Consolidated Financial Statements.
<PAGE>
CONSOLIDATED BALANCE SHEETS
Howell Corporation and Subsidiaries
March 31, December 31,
1999 1998
(Unaudited)
(In thousands, except share data)
Assets
Current assets:
Cash and cash equivalents................. $ 23 $5,871
Trade accounts receivable, less allowance
for doubtful accounts of
$156 in 1999 and 1998................. 8,748 9,230
Income tax receivable..................... - 5,701
Deferred income taxes..................... 3,725 3,408
Other current assets...................... 410 577
-------- --------
Total current assets.................... 12,906 24,787
-------- --------
Property, plant and equipment:
Oil and gas properties, utilizing the
full-cost method of accounting........ 360,824 385,048
Unproven properties....................... 38,554 43,263
Other..................................... 2,682 2,653
Less accumulated depreciation, depletion
and amortization...................... (309,406) (309,330)
-------- --------
Net property and equipment.............. 92,654 121,634
-------- --------
Investment in investees..................... 16,933 16,908
Other assets................................ 2,822 2,962
======== ========
Total assets............................ $125,315 $166,291
======== ========
Liabilities and Shareholders' Equity
Current liabilities:
Current portion of long-term debt......... $ - $22,000
Accounts payable.......................... 8,949 8,639
Accrued liabilities....................... 4,611 5,520
-------- --------
Total current liabilities............... 13,560 36,159
-------- --------
Other liabilities........................... 1,217 1,261
-------- --------
Long-term debt.............................. 84,906 102,000
-------- --------
Commitments and contingencies
Shareholders' equity:
Preferred stock, $1 par value; 690,000
shares issued and outstanding,
liquidation value of $34,500,000........ 690 690
Common stock, $1 par value; 5,471,782
shares issued and outstanding in 1999
and 1998................................ 5,472 5,472
Additional paid-in capital................ 40,829 40,829
Retained (deficit) earnings............... (21,359) (20,120)
-------- --------
Total shareholders' equity.............. 25,632 26,871
======== ========
Total liabilities and shareholders'equity $125,315 $166,291
======== ========
See accompanying Notes to Consolidated Financial Statements.
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Howell Corporation and Subsidiaries
Three Months Ended March 31,
1999 1998
(In thousands)
OPERATING ACTIVITIES:
Net loss from continuing operations............ $(1,767) $(45,156)
Adjustments for non-cash items:
Depreciation, depletion and amortization..... 2,114 69,750
Deferred income taxes........................ (317) (22,479)
Equity in earnings of investees - net of
amortization.............................. (65) (120)
Dividends received from Genesis.............. 40 39
------- --------
Earnings from continuing operations plus
non-cash operating items.................. 5 2,034
Changes in components of working capital from
operations:
Decrease (increase) in trade accounts
receivable................................ 472 (4,660)
Decrease in federal income tax receivables... 5,701 -
Decrease (increase) in other current assets.. 167 (25)
Increase in accounts payable................. 197 2,362
(Decrease) increase in accrued and other
liabilities............................... (930) 3,777
(Decrease) increase in income tax payable.... (582) 1,164
------- --------
Cash provided by continuing operations......... 5,030 4,652
Cash provided by discontinued operations....... 2,032 -
------- --------
Cash provided by operating activities.......... 7,062 4,652
------- --------
INVESTING ACTIVITIES:
Proceeds from the disposition of oil and gas
properties.................................. 27,541 -
Additions to property, plant and equipment..... (675) (3,979)
Other, net..................................... 140 (232)
------- --------
Cash provided by (utilized in) investing
activities.................................. 27,006 (4,211)
------- --------
FINANCING ACTIVITIES:
(Repayments) borrowings under revolving credit
agreement, net.............................. (39,094) 2,200
Cash dividends:
Common shareholders....................... (219) (219)
Preferred shareholders.................... (603) (604)
-------- -------
Cash (utilized in) provided by financing
activities.................................. (39,916) 1,377
------- -------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS................................. (5,848) 1,818
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD. 5,871 56
------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD....... $ 23 $ 1,874
======= =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Net cash paid for:
Interest....................................... $ 2,348 $ 1,731
======= =======
Income taxes................................... $ 16 $ -
======= =======
See accompanying Notes to Consolidated Financial Statements
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Howell Corporation and Subsidiaries
March 31, 1999 and 1998
Note 1 - Basis of Financial Statement Preparation
The unaudited consolidated financial statements included herein have been
prepared by Howell Corporation (the "Company"), pursuant to the rules and
regulations of the Securities and Exchange Commission and in accordance with
generally accepted accounting principles. In the opinion of management, all
adjustments (all of which are normal and recurring) have been made which are
necessary for a fair statement of the results of operations for the three months
ended March 31, 1999 and 1998. The results of operations for the three months
ended March 31, 1999 are not necessarily indicative of results to be expected
for the full year. The accounting policies followed by the Company are set forth
in Note 1 to the consolidated financial statements in its Annual Report on form
10-K for the year ended December 31, 1998. These consolidated financial
statements should be read in conjunction with the financial statements and notes
thereto included in the Company's latest Form 10-K.
Reclassifications
Certain reclassifications have been made to the 1998 financial presentation to
conform with the 1999 presentation.
Note 2 - New Accounting Standards
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS 133"). SFAS 133 establishes accounting and
reporting standards for derivative instruments and hedging activities that
require an entity to recognize all derivatives as an asset or liability measured
at its fair value. Depending on the intended use of the derivative, changes in
its fair value will be reported in the period of change as either a component of
earnings or a component of other comprehensive income. SFAS 133 is effective for
all fiscal quarters of fiscal years beginning after June 15, 1999. Earlier
application of SFAS 133 is encouraged, but not prior to the beginning of any
fiscal quarter that begins after issuance of the Statement. Retroactive
application to periods prior to adoption is not allowed. The Company has not
quantified the impact of adoption on its financial statements or the date it
intends to adopt.
Note 3 - Financial Instruments and Hedging Activities
In order to mitigate the effects of future price fluctuations, the Company from
time to time used a limited program of hedging its crude oil production. Crude
oil futures and options contracts are used as the hedging tools. Changes in the
market value of the futures transactions are deferred until the gain or loss is
recognized on the hedged transactions. The Company was not engaged in a hedging
program during the first quarter of 1999 or 1998.
The Company has entered into two hedging programs during the second quarter of
1999. The first program is a purchase of a put option and a sale of a call
option covering 1,750 barrels of oil per day effective April 1, 1999, through
December 31, 1999. The strike prices are $15.00 per barrel for the put option
and $17.00 per barrel for the call option. The second program is a purchase of a
put option and sale of a call option also covering 1,750 barrels of oil per day
effective from May 1, 1999, through December 31, 1999. The strike prices are
$14.50 per barrel for the put option and $18.80 per barrel for the call option.
There are no premiums associated with either of these programs.
Note 4 - Accumulated Depreciation, Depletion and Amortization
During the first quarter of 1998 a pre-tax write-down of the Company's oil and
gas properties of $66.1 million was required as a result of lower energy prices.
On an after-tax basis, the write-down amounted to $43.6 million. When compared
to 1998, the Company's depletion rate for the three months ended March 31, 1999,
was $2.20 per equivalent barrel versus a pre write-down rate of $3.23 for the
same period ended March 31, 1998.
Note 5 - Acquisitions & Dispositions
On January 4, 1999, the Company sold its right to participate in the future
earnings of Specified Fuels & Chemicals, Inc. ("SFC") for $2.0 million. SFC
acquired the Company's research and reference fuel business in July 1997. The
sale and results of the research and reference fuel business have been
classified as discontinued operations in the accompanying consolidated financial
statements. Discontinued Operations had a gain of $1.4 million for the three
months ended March 31, 1999, primarily as a result of the sale.
On January 29, 1999, the Company sold its interest in the LaBarge field, located
in southwestern Wyoming, for $15.8 million. The effective date was January 1,
1999. The project consists of three Federal units, 17 producing wells, a field
gathering system, a dehydration plant, a 32-mile dehydrated raw gas pipeline,
and a gas processing plant. In addition to natural gas, the properties produce
carbon dioxide, helium and sulfur. The Company owned a 4.8% working interest in
the Fogarty Creek Unit which contains 12 gross wells (0.6 net wells) which
produce from depths between 14,500 to 17,000 feet.
On March 19, 1999, the Company sold its interests in the Grass Creek Unit in Hot
Springs County, Wyoming, and the Pitchfork Unit in Park County, Wyoming for $12
million, net of closing adjustments. The Company owned a 25% working interest at
Pitchfork and various working interests ranging from 13.08% to 43.14% in
different producing horizons at Grass Creek.
The properties sold during the first quarter of 1999 were not considered to be
integral to the Company's future. The cumulative proceeds from these events,
totaling $29.8 million, have been used to eliminate term debt and reduce other
bank debt.
Note 6 - Litigation
Several royalty owners filed lawsuits against the Company in Alabama and
Mississippi concerning pricing in the North Frisco City Field. The lawsuits
allege the Company violated its contracts with the plaintiffs by not paying the
plaintiffs ". . . the highest available price for oil." Damages claimed by the
plaintiffs include approximately $3.8 million and are based on numerous damage
theories including, but not limited to, allegations of breach of contract and
fraud. The complaints also seek unspecified punitive damages in the Alabama
lawsuits and $7 million in punitive damages in the Mississippi lawsuit. The
Company filed answers denying all charges. On July 28, 1997, the Company settled
the Mississippi lawsuit. On March 30, 1998, a tentative settlement was reached
with the Alabama class representative. On May 5, 1999, the Alabama court
approved the settlement. The amounts to be paid in settlement are not
material to the Company's financial condition, results of operations or cash
flows.
There are various other lawsuits and claims against the Company, none of which,
in the opinion of management, will have a materially adverse effect on the
Company.
Note 7 - (Loss) Earnings per Share
Basic earnings per common share amounts are calculated using the average number
of common shares outstanding during each period. Diluted earnings per share
assumes conversion of dilutive convertible preferred stocks and exercise of all
stock options having exercise prices less than the average market price of the
common stock using the treasury stock method.
The tables below present the reconciliation of the numerators and denominators
in calculating diluted earnings per share ("EPS") from continuing operations in
accordance with Statement of Financial Accounting Standards No. 128.
Three Months Ended March 31, 1999
Increase
in Earnings
Number per
Increase of Incremental
in Income Shares Share
---------- --------- -----------
Options................... - - -
Dividends on convertible
preferred stock........ $ 603,750 2,090,909 $0.29
Computation of Diluted Earnings per Share
Net Loss
Available
from
Continuing Common
Operations Shares Per Share
----------- --------- ---------
$(2,370,750) 5,471,782 $(0.43)
Common stock options..... - - -
----------- --------- ---------
$(2,370,750) 5,471,782 $(0.43) No Effect
Dividends on convertible
preferred stock.......... 603,750 2,090,909 -
=========== ========= =========
$(1,767,000) 7,562,691 $(0.23) Antidilutive
=========== ========= =========
Note: Because diluted EPS from continuing operations increases from $(0.43) to
$(0.23) when convertible preferred shares are included in the computation, those
convertible preferred shares are antidilutive and are ignored in the computation
of diluted EPS. Therefore, diluted EPS is reported as $(0.43).
Three Months Ended March 31, 1998
Increase
in Earnings
Number per
Increase of Incremental
in Income Shares Share
---------- --------- ---------
Options.................. - 144,910 -
Dividends on convertible
preferred stock........ $ 603,750 2,090,909 $0.29
Computation of Diluted Earnings per Share
Net Loss
Available
from
Continuing Common
Operations Shares Per Share
----------- --------- ---------
$(45,759,750) 5,464,642 $(8.37)
Common stock options..... - 144,910 -
------------ --------- ---------
$(45,759,750) 5,609,552 $(8.16) Antidilutive
Dividends on convertible
preferred stock.......... 603,750 2,090,909 -
============ ========= =========
$(45,156,000) 7,700,461 $(5.86) Antidilutive
============ ========= =========
Note: Because diluted EPS increases from $(8.37) to $(8.16) when common stock
options are included and also increases from $(8.16) to $(5.86) when convertible
preferred shares are included in the computation, those common stock options and
convertible preferred shares are antidilutive and are ignored in the computation
of diluted EPS. Therefore, diluted EPS is reported as $(8.37).
<PAGE>
PART I. FINANCIAL INFORMATION
(ITEM 2)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following is a discussion of the Company's financial condition, results of
operations, capital resources and liquidity. This discussion and analysis should
be read in conjunction with the Consolidated Financial Statements of the Company
and the notes thereto.
RESULTS OF CONTINUING OPERATIONS
The Company's principal business segment is oil and gas production. Results of
continuing operations for the three months ended March 31, 1999 and 1998, are
discussed below.
Oil and Gas Production
Three Months Ended March 31,
1999 1998
Revenues (in thousands):
Sales of oil and natural gas................ $ 8,676 $ 13,441
Sales of LaBarge other products............. 180 491
Gas marketing............................... 20 220
Minerals leasing and other.................. 2 115
======= ========
Total revenues......................... $ 8,878 $ 14,267
======= ========
Operating (loss) profit (in thousands)...... $ (364) $(65,828)
======= ========
Operating information:
Average net daily production:
Oil and NGL (Bbls)...................... 9,031 10,221
Natural gas (Mcf)....................... 8,801 13,242
Average sales prices:
Oil and NGL (per Bbl)................... $ 9.01 $ 12.18
Natural gas (per Mcf)................... $ 1.70 $ 1.88
Revenues for three months ended March 31, 1999, decreased $5.4 million when
compared to the three-month period ended March 31, 1998, primarily due to the a
26% decrease in the average oil price and a 10% decrease in the average gas
price. Also, contributing to the decrease in revenues was the sale of the
LaBarge project in January 1999 and sale of the mineral interest in December
1998.
Operating expenses decreased 34% during the first quarter of 1999 when compared
to the pre write-down operating expenses during the first quarter of 1998. The
primary reason for the decrease was a $1.5 million decrease in the standard
depletion expense, a $1.3 million decrease in lifting costs and production
taxes, and a decrease in LaBarge expenses of $0.6 million resulting from its
sale in the first quarter of 1999. Also contributing to the decrease in expenses
was a reduction in General and Administrative expenses due to an increase in
billable expenses and overhead associated with the Wyoming purchase as well as
the elimination of the management fee paid to Amoco during the first two months
of 1998. Partially offsetting these General and Administrative reductions was an
increase in salaries and benefits also resulting from the additional employees
added as a result of the Wyoming purchase.
The Company has entered into two hedging programs beginning during the second
quarter of 1999. The first program is a purchase of a put option and a sale of a
call option covering 1,750 barrels of oil per day effective April 1, 1999,
through December 31, 1999. The strike prices are $15.00 per barrel for the put
option and $17.00 per barrel for the call option. The second program is a
purchase of a put option and sale of a call option also covering 1,750 barrels
of oil per day effective from May 1, 1999, through December 31, 1999. The strike
prices are $14.50 per barrel for the put option and $18.80 per barrel for the
call option. There are no premiums associated with either of these programs.
Operating profits increased $65.5 million during the first quarter of 1999
primarily due to first quarter 1998 pre-tax non-cash write-down of $66.1
million. On an after-tax basis, the write-down amounted to $43.6 million.
Excluding the first quarter 1998 write-down, operating profits decreased $0.7
million when comparing the first quarter of 1999 to the same period of 1998. The
effect of decreased revenues during 1999 were partially offset by a
corresponding reduction of operating expenses during 1999.
Crude Oil Marketing
The Company retains a direct and indirect interest in Genesis Crude Oil, L.P.,
Genesis Energy, L.P., and Genesis Energy, L.L.C. (collectively referred to
hereinafter as "Genesis"). As a result of the Company's interest, the Company
recognized a net loss in Genesis of $0.1 million during the first three months
of 1999. This represents a decrease of $0.2 million from the first three months
of 1998.
Interest Expense
Interest expense for the three months ended March 31, 1999, decreased $0.4
million from the 1998 level as a result of decreased debt of $54.3 million. The
primary reason for this decrease was the sale of various non-integral
properties.
Provision for Income Taxes
The Company's effective tax rate for the three months ended March 31, 1999 and
1998, was 32% and 34% respectively.
<PAGE>
RESULTS FROM DISCONTINUED OPERATIONS
Technical Fuels and Chemical Processing
On July 31, 1997, the Company completed the previously announced sale and
disposition of Howell Hydrocarbons & Chemicals, Inc. ("HHCI") to Specified Fuels
& Chemicals, Inc. ("SFC") which represented substantially all of the assets of
its research and reference fuels and custom chemical manufacturing business.
The results of the technical fuels and chemical processing business have been
classified as discontinued operations in the accompanying consolidated financial
statements. On January 4, 1999, the company sold its right to participate in the
future earnings of SFC for $2.0 million. Discontinued Operations had a gain of
$1.4 million for the three months ended March 31, 1999, as a result of the sale.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by continuing operations for the three months ended March 31,
1999, was $5.0 million. This compares to $4.7 million of cash provided by
continuing operations in the comparable 1998 period. The Company's debt
decreased by $39.1 million during the first three months of 1999 compared to an
increase in debt of $2.2 million during the first three months of 1998. Capital
expenditures for the three months ended March 31, 1999, were $0.7 million
compared to $4.0 million for the 1998 period.
As a result of successful sales of non-integral properties, the Company's total
debt, all long term, at March 31, 1999, was $84.9 million. At March 31, 1999,
the Company's borrowing base under the terms of its Credit Facility was $89.4
million. On May 17, 1999, the borrowing base under its Credit Facility was re-
determined and increased to $92.0 million.
During the first three months of 1999, the Company paid common dividends of $0.2
million and preferred dividends of $0.6 million.
Year 2000 Date Conversion
The Company has a plan in place that addresses the year 2000 ("Y2K") conversion
issue. The first step in the plan is to evaluate all computer systems used in
its operations. This includes accounting and financial systems, field and
production systems, and other field or office devices that may not be Y2K
compliant. This is followed by a determination of what remedial action is
necessary and initiation of that remedy. The Company has completed corrective
action on major office systems and anticipates completion of corrective action
of field systems in the third quarter of 1999.
The next step is to determine the Y2K status of relevant outside suppliers and
vendors. While the Company cannot control the Y2K corrective action of third
parties, it is in the process of identifying and contacting its critical
suppliers and vendors. Based on their status, the Company will develop
contingency plans. These should be completed by mid 1999.
Based on preliminary estimates, the cost of implementing this plan is
approximately $300,000. It is not certain that this estimate is correct or that
Year 2000 compliance can be achieved. The Company does not expect a significant
disruption in its operations, but actual results could differ greatly from these
expectations. Some areas that could cause differences to occur are the
availability of personnel trained in this area, the ability to identify and
correct all relevant computer code and non-compliant embedded systems and the
degree of interdependence with third-party suppliers and purchasers. Other areas
outside the Company's control such as problems in the utility, banking, or
transportation systems could have a material disruptive effect on the Company's
ability to produce and deliver oil and gas, receive delivery of materials and
supplies, or disburse or receive funds.
One example, of a serious Y2K problem would be the shut down of a field which is
on automated controls and/or a monitoring system. As disclosed above, the
Company has examined such controls and systems in all of its major fields and is
taking corrective action, as appropriate. Nevertheless, the Company intends to
prepare a Y2K contingency plan which will address potential risks in the field,
and possible solutions, including manual intervention or equipment replacement.
The Company is unable to anticipate every potential problem and determine a
contingency for every possible Y2K risk. Should essential services such as
electricity be affected adversely, or if other Y2K problems limit or restrict
production from one of the Company's major fields, it could have a material
adverse affect on the Company.
Forward-looking Statements
Statements contained in this Report and other materials filed or to be filed by
the Company with the Securities and Exchange Commission (as well as information
included in oral or other written statements made or to be made by the Company
or its representatives) that are forward-looking in nature are intended to be
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended, relating to matters such as anticipated operating and financial
performance, business prospects, developments and results of the Company. Actual
performance, prospects, developments and results may differ materially from any
or all anticipated results due to economic conditions and other risks,
uncertainties and circumstances partly or totally outside the control of the
Company, including rates of inflation, oil and natural gas prices, uncertainty
of reserve estimates, rates and timing of future production of oil and gas,
exploratory and development activities, acquisition risks, and changes in the
level and timing of future costs and expenses related to drilling and operating
activities.
Words such as "anticipated", "expect", "estimate", "project", and similar
expressions are intended to identify forward-looking statements.
<PAGE>
PART II. OTHER INFORMATION
Item 4. Results of Votes of Security Holders.
The Annual Meeting of the Shareholders of the Company was held on April 28,
1999, for the following purposes:
To elect three members of the Board of Directors to serve a three-year term as
Class II Directors.
The results of the voting for each of the nominees for director were as
follows:
Shares Authority
For Withheld
Robert M. Ayers, Jr. 4,405,446 264,469
Ronald E. Hall 4,405,446 264,469
Otis A. Singletary 4,403,546 266,369
A simple majority of the shares of common stock represented at the meeting
was required for each nominee to be elected. Therefore, all nominees for
director were elected.
To approve the Howell Corporation Omnibus Stock Awards and Incentive Plan.
The results of the voting on this matter were as follows:
Shares For 3,031,158
Shares Against 627,307
Shares Abstaining 26,485
A simple majority of the shares of common stock represented at the meeting
was required for approval. Therefore, the matter was approved.
To approve the Howell Corporation Nonqualified Stock Option Plan for
Non-Employee Directors.
The results of the voting on this matter were as follows:
Shares For 3,174,251
Shares Against 483,505
Shares Abstaining 27,194
A simple majority of the shares of common stock represented at the meeting
was required for approval. Therefore, the matter was approved.
To ratify the appointment of Deloitte & Touche LLP as independent auditors for
the year ending December 31, 1999.
The results of the voting on this matter were as follows:
Shares For 4,647,396
Shares Against 4,486
Shares Abstaining 7,780
A simple majority of the shares of common stock represented at the meeting
was required for ratification. Therefore, the appointment was ratified.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits - none.
(b) Reports on Form 8-K
A report on Form 8-K/A was filed on April 1, 1999, announcing the
retirement of its term loan and the completed sale of its Grass Creek
and Pitchfork Units.
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.
Howell Corporation
(Registrant)
Date: May 17, 1999 /s/ J. Richard Lisenby
-----------------------
J. Richard Lisenby
Vice President & Chief Financial Officer
(Principal Financial and Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The financial data schedule contains summary financial information
extracted from the Form 10-Q of Howell Corporation for the three months
ended March 31, 1999, and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-END> Mar-31-1999
<CASH> 23
<SECURITIES> 0
<RECEIVABLES> 8748
<ALLOWANCES> 156
<INVENTORY> 40
<CURRENT-ASSETS> 12906
<PP&E> 402060
<DEPRECIATION> 309406
<TOTAL-ASSETS> 125315
<CURRENT-LIABILITIES> 13560
<BONDS> 84906
0
690
<COMMON> 5472
<OTHER-SE> 19470
<TOTAL-LIABILITY-AND-EQUITY> 125315
<SALES> 8878
<TOTAL-REVENUES> 8878
<CGS> 8002
<TOTAL-COSTS> 8002
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2271
<INCOME-PRETAX> (2662)
<INCOME-TAX> (895)
<INCOME-CONTINUING> (1767)
<DISCONTINUED> 1350
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (417)
<EPS-PRIMARY> (0.18)
<EPS-DILUTED> (0.18)
</TABLE>
