PART II
Item 5. Market for Registrant's Common Equity and Shareholder
Matters
Refer to Item 12 for a description of the Registrant's Equity.
Refer to Item 1 for a description of the Indonesian Participating
Units.
Item 6. Selected Financial Data
The following financial data was derived from the audited
consolidated financial statements of the Company and should be read
in conjunction with the consolidated financial statements and
related notes included elsewhere herein.
1993 1992 1991 1990 1989
(millions of dollars)
Operating revenues $201 $206 $208 $203 $146
Earnings (loss) from
continuing operations 30 24 18 7 (15)
Net earnings 30 24 18 11 11
Total assets 449 472 500 519 608
Debt and security
subject to
mandatory redemption 33 32 31 50 111
See Note 2(e) to Notes to Consolidated Financial Statements.
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
Cash flow from operations amounted to $81.5 million in 1993,
compared to 1992 cash flow of $93.4 million. Capital expenditures
of $40.1 million were primarily spent on continued development
drilling in the Badak, Nilam, Mutiara and Semberah fields as was
the case in 1992. Net capital distributions in 1993 to the
partners from the Company were $41.1 million (1992, $58.2 million).
On January 5, 1994, the Company redeemed its 8-1/4 percent
convertible subordinated guaranteed debentures, originally due in
1995, in the amount of $36.4 million at a loss of $3.1 million.
The redemption was funded through contributions from the partners
of the Company.
The Company's ability to generate cash is primarily dependent
on the prices it receives for the sale of LNG, and to a lesser
extent, the sale of crude oil and LPG. In the event cash generated
from operations is not sufficient to meet capital investment and
other requirements, any shortfall will be funded through additional
cash contributions by the partners. The Company cannot predict
with any degree of certainty the prices it will receive in 1994 and
future years for its crude oil and LNG. The Company's financial
condition, operating results and liquidity will be materially
affected by any significant fluctuations in sales prices.
LNG sales are made under five principal long-term contracts
and several short- and medium-term contracts with Japanese, Korean
and Taiwanese industrial and utility companies. Sales pursuant to
the fourth long-term contract (Train F LNG Sales Contract)
commenced in the first quarter of 1994; sales under the fifth long-
term contract will commence in July 1994. The long-term contracts
contain take-or-pay provisions that generally require that the
purchasers either take the contracted quantities or pay for such
quantities if not taken; such provisions tend to support the
Company's ability to generate cash. During 1993, 127 net
equivalent cargoes were shipped, of which 107 were under these
long-term contracts. In 1994, the Company anticipates shipping
approximately 135 net equivalent cargoes.
The sixth processing train (Train F) was completed in November
1993 and will supply the LNG required for the fourth long-term LNG
sales contract signed in October 1990 with Osaka Gas, Tokyo Gas and
Toho Gas for the sale of at least 2,020 trillion BTUs over a
twenty-year period commencing in 1994.
In January of 1990, certain of the buyers under the 1973 Sales
Contract agreed to increase their purchased commitments during the
years 1997 through 1999 by approximately 667 trillion BTUs. The
LNG Plant will provide 67.1 percent of the additional quantities
and the Arun Plant the remainder.
In May of 1991, Pertamina signed an LNG sales contract with
Korea Gas Corporation for the sale of at least 2,044 trillion BTUs
over a twenty-year period commencing in July 1994, at a price
similar to the LNG element of the 1973 LNG Sales Contract. The LNG
Plant will provide 50 percent and the Arun Plant 50 percent of the
LNG requirements for the contract.
In December of 1991, Pertamina entered into an LNG sales
contract with several Japanese buyers (the Medium City Gas
Companies) for the sale of 358 trillion BTUs over a twenty-year
period commencing in 1996. The LNG Plant will provide 50 percent
of the LNG requirements for the contract.
The debottlenecking of Trains A through D was completed in
1993. Capacity tests on all four trains exceeded design rates such
that the four trains are now capable of LNG production rates
comparable to the recently completed Train F, an increase of 14
percent or 22 cargoes in total.
The Company's operating and capital expenditures are directed
toward the Joint Venture. Capital expenditures of the Joint
Venture relate to the exploration and development of the oil and
gas fields. In 1994, the Company's share of the Joint Venture
expenditures is expected to total $56 million, including $3 million
of exploration expenditures and $35 million of development
expenditures. The 1994 budgeted expenditures primarily reflect
continued development drilling required to maintain gas
deliverability.
The Company can give no assurance as to the future trend of
its business and earnings, or as to future events and developments
that could affect the Company in particular or the oil industry in
general. These include such matters as environmental quality
control standards, new discoveries of hydrocarbons and the demand
for petroleum products. Furthermore, the Company's business could
be profoundly affected by future events including price changes or
controls, payment delays, increased expenditures, legislation and
regulations affecting the Company's business, expropriation of
assets, renegotiation of contracts with foreign governments,
political instability, currency exchange and repatriation losses,
taxes, litigation, the competitive environment and international
economic and political developments including actions of members of
the Organization of Petroleum Exporting Countries (OPEC).
The Company's revenues are predominately based on the market
price of crude oil, which is denominated in U. S. dollars. Certain
operating costs, taxes and capital costs represent commitments
settled in foreign currency. Currency exchange rate fluctuations
on transactions in currencies other than U. S. dollars are
recognized as adjustments to the U. S. dollar cost of the
transaction.
The Company is unaware of any unrecorded environmental claims
as at December 31, 1993 which would have a material impact upon the
Company's financial condition or operations.
Results of Operations
1993 Compared to 1992
Net earnings for the year 1993 were $30.5 million as compared
to $23.7 million in 1992. Cash flow from operations for 1993 was
$81.5 million (1992, $93.4 million).
Oil and gas production revenues for 1993 were $200.6 million,
or lower by $5.3 million when compared to 1992 revenues of $205.9
million. The increase in the Joint Venture's share of delivered
LNG sales volumes was not sufficient to offset a decline in the
average LNG sales price. The quantity of LNG delivered from the
LNG Plant was 621 trillion BTU's (216 cargoes) in 1993 as compared
to 606 trillion BTU's (211 cargoes) in 1992. The Joint Venture's
interest in the LNG delivered was 369 trillion BTU's (127 net
equivalent cargoes) in 1993 as compared to 363 trillion BTU's (124
net equivalent cargoes) in 1992. The average LNG sales price,
excluding transportation charges, declined to $2.82 per million
BTU's in 1993 as compared to $3.00 per million BTU's in 1992.
Crude oil sales volumes of 1.93 million barrels were higher by 7
percent in 1993 as compared to 1992's 1.8 million barrels, while
the average crude oil realized sales price of $17.99 per barrel was
lower than 1992 by $2.64 per barrel.
Production costs of $18.8 million were lower than 1992 costs
by about $6.8 million. This improvement in production costs was
caused by a provision included in 1992 related to the Company's
prior years' windfall profits tax liability. After a re-evaluation
of the ultimate exposure on this tax liability, the Company has
reversed $3.5 million as being no longer required. At the same
time, the Company has provided an offsetting amount for the
potential exposure in a royalty dispute.
Depletion , depreciation and amortization of $52.7 million was
lower than 1992 by $4.6 million primarily as a result of a lower
depletion rate associated with the increase in proved reserves that
more than offset the higher level of LNG volumes delivered.
Exploration costs, including dry holes, of $4.9 million were
lower than 1992 by $4.2 million due to a lower level of seismic and
dry hole costs.
General and administrative expenses of $1.8 million were $1.0
million lower than last year's $2.8 million due to the absence of
certain non-recurring charges. Both interest expense and interest
income were in line with last year's results. Other income in 1992
included a non-recurring benefit due to the favorable disposition
of a legal action.
The effective tax rates for 1993 and 1992 were 74 percent and
78 percent respectively. These rates were the aggregate of
Indonesian source income taxed at a 56 percent rate, and certain
expenses attributable to the Unimar activities which are not
deductible in the partnership.
1992 Compared to 1991
Net earnings for 1992 were $23.7 million as compared to $18.3
million in 1991. Revenues of $205.9 million in 1992 were lower by
$1.9 million when compared to last year as an increase in the Joint
Venture's share of delivered LNG volumes was not sufficient to
offset a decline in the average LNG price. The quantity of LNG
delivered from the LNG Plant increased to 606 trillion BTUs (211
cargoes) in 1992 from 564 trillion BTUs (197 cargoes) in 1991. The
Joint Venture's interest in the LNG delivered was 363 trillion BTUs
(126 net equivalent cargoes) in 1992 as compared to 354 trillion
BTUs (123 net equivalent cargoes) in 1991. The average unit LNG
price, excluding delivery charges, declined to $3.00 per million
BTUs in 1992 from $3.16 per million BTUs in 1991. The average
realized crude oil price decreased slightly to $20.63 per barrel in
1992 from $20.64 per barrel in 1991, while crude oil sales volumes
increased 36 percent to 1.8 million barrels.
Production costs of $25.6 million increased $5.0 million and
included an amount related to a proposed adjustment by the U. S.
federal tax authorities relating to the Company's prior years'
windfall profit tax liability.
Depletion, depreciation and amortization of $57.3 million
declined $4.2 million principally as a result of a lower depletion
rate associated with an increase in proved developed reserves that
more than offset the impact of the higher level of volumes
delivered.
Exploration costs of $9.1 million decreased $0.6 million over
last year's costs.
General and administrative expenses of $2.8 million were $0.3
million lower than last year's level. Interest expense of $4.7
million declined $5.0 million primarily as a result of the payoff
of an Indonesian Production Payment bank loan in 1991. Interest
income of $0.6 million was $0.7 million lower than 1991 primarily
as a result of declining interest rates on short-term deposits.
Other income of $1.2 million in 1992 principally represented
the reversal of a provision due to a favorable disposition of
certain legal action. In 1991, other (expense) of $0.9 million was
mainly a provision for residual domestic operations costs.
The effective tax rates relating to continuing operations for
the 1992 and 1991 periods were 78 percent and 82 percent
respectively. These rates were the aggregate of Indonesian source
income taxed at a 56 percent rate and certain expenses attributable
to Unimar activities not deductible in the partnership. The
decrease in the effective rate is principally the result of
decreased non-deductible interest expense.
In 1992, the Company adopted Financial Accounting Standards
Board (FASB) Statement No. 109, "Accounting for Income Taxes". The
effect of adopting Statement 109 was to decrease net income by $0.3
million and $2.6 million for the years ended December 31, 1991 and
1990 respectively. Refer to Note 2(e) of the Notes to Consolidated
Financial Statements for further discussion of the effects of this
adoption.
In 1992, the Company adopted FASB Statement No. 106,
"Employers' Accounting for Postretirement Benefits Other Than
Pensions". The effect of adopting the new rules did not
significantly impact the Company's profits. Postretirement benefit
costs for 1991 and 1990, which were recorded on a cash basis, have
not been restated.
Item 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT AUDITORS
To The Partners of
Unimar Company
We have audited the accompanying consolidated balance sheets of
Unimar Company and subsidiaries as of December 31, 1993 and 1992,
and the related consolidated statements of earnings, cash flows and
partners' capital for each of the three years in the period ending
December 31, 1993. Our audits also included the financial
statement schedules listed in the Index at Item 14(a). These
financial statements and schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion
on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
As more fully described in the notes to the consolidated financial
statements, the Company has material transactions with its partners
and affiliates.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of Unimar Company and subsidiaries at December
31, 1993 and 1992, and the consolidated results of their operations
and their cash flows for each of the three years in the period
ended December 31, 1993, in conformity with generally accepted
accounting principles. Also, in our opinion, the related financial
statement schedules, when considered in relation to the basic
financial statements taken as a whole, present fairly in all
material respects the information set forth therein.
/S/ ERNST & YOUNG
Houston, Texas
February 28, 1994<PAGE>
<TABLE>
UNIMAR COMPANY AND SUBSIDIARIES
Consolidated Balance Sheet
December 31, 1993 and 1992
(Thousands of dollars)
<CAPTION>
1993 1992
<S>
ASSETS
Current assets: <C> <C>
Cash and cash equivalents $ 8,284 $ 6,461
Accounts and notes receivable 11,604 15,931
Inventories 10,886 15,143
Other current assets 2,381 1,051
Total current assets 33,155 38,586
Property, plant and equipment, at cost:
Oil and gas properties
(successful efforts method) 991,901 955,299
Other 3,283 3,431
995,184 958,730
Less: accumulated depreciation and depletion 580,807 528,043
Net property, plant and equipment 414,377 430,687
Other assets 1,252 2,421
$448,784 $471,694
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Current maturities of long term debt $ 33,292 $ -
Accounts payable 3,229 9,265
Advances from joint venture partners 3,589 2,063
Accrued liabilities 9,314 14,035
Income and other taxes 19,280 22,921
Total current liabilities 68,704 48,284
Long-term debt - 31,818
Deferred income taxes 167,206 170,371
Other liabilities 10,048 7,642
Partners' capital 282,826 293,579
Less: demand notes receivable 80,000 80,000
202,826 213,579
$448,784 $471,694
See accompanying Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
UNIMAR COMPANY AND SUBSIDIARIES
Consolidated Statement of Earnings
Years ended December 31, 1993, 1992 and 1991
(Thousands of dollars)
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Oil and gas production revenues $200,588 $205,897 $207,846
Production costs 18,751 25,600 20,557
Depletion, depreciation and
amortization 52,710 57,275 61,491
Exploration costs including dry holes 4,947 9,066 9,634
Operating profit 124,180 113,956 116,164
General and administrative
expenses (1,778) (2,819) (3,143)
Interest expense (4,542) (4,701) (9,707)
Interest income 309 605 1,330
Other income (expense) 18 1,236 (915)
Earnings before income taxes 118,187 108,277 103,729
Income tax expense (benefit)
Current 90,876 90,121 91,074
Deferred (3,164) (5,520) (5,599)
87,712 84,601 85,475
Net earnings $ 30,475 $ 23,676 $ 18,254
See accompanying Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
UNIMAR COMPANY AND SUBSIDIARIES
Consolidated Statement of Cash Flows
Years ended December 31, 1993, 1992 and 1991
(Thousands of dollars)
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Net earnings $ 30,475 $ 23,676 $ 18,254
Adjustments to reconcile to net cash
provided by operating activities:
Depletion, depreciation and
amortization 53,087 57,622 61,805
Deferred income taxes (3,164) (5,520) (5,599)
Exploratory dry hole costs 3,365 6,444 9,201
Interest accretion 1,473 1,294 1,130
LNG price refund - - (212)
(Increase) Decrease in operating
receivables 4,327 (6,153) 3,756
(Increase) Decrease in inventories 4,257 4,372 (4,368)
Increase (Decrease) in operating
payables and accruals (14,526) 10,880 (13,525)
Increase in other operating assets
and liabilities 2,245 789 854
Other - - (32)
Net cash provided by operating
activities 81,539 93,404 71,264
Investment activities:
Capital expenditures (40,142) (39,217) (55,849)
Net cash used in investing activities (40,142) (39,217) (55,849)
Financing activities:
Capital contributions (distributions) -
net (41,100) (58,240) 62,110
Debt repaid - - (78,925)
Redemption of ENSTAR Indonesia, Inc.
participating preferred stock - - (1,375)
Net cash used in financing activities (41,100) (58,240) (18,190)
Increase (Decrease) in advances from
joint venture partners 1,526 165 (3,268)
Net increase (decrease) in cash and
cash equivalents 1,823 (3,888) (6,043)
Cash and cash equivalents at beginning
of year 6,461 10,349 16,392
Cash and cash equivalents at end
of year $ 8,284 $ 6,461 $ 10,349
IPU distributions paid $ 17,569 $ 17,352 $ 19,139
Interest paid $ 3,072 $ 3,405 $ 7,613
Income taxes paid $ 88,787 $ 83,473 $ 98,015
See accompanying Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
UNIMAR COMPANY AND SUBSIDIARIES
Consolidated Statement of Changes in Partners' Capital
Years ended December 31, 1993, 1992 and 1991
(Thousands of dollars)
<CAPTION>
Ultrastar Unistar,
Inc. Inc. Total
<S> <C> <C> <C>
Balance, January 1, 1991 $117,773 $129,032 $246,805
Contributions 33,055 33,055 66,110
Cash distributions (2,000) (2,000) (4,000)
Redemption of subsidiary's
preferred stock 1,253 1,254 2,507
ENSTAR pension liability
adjustment (658) (659) (1,317)
Net earnings 9,127 9,127 18,254
Balance, December 31, 1991 158,550 169,809 328,359
Contributions 7,480 7,480 14,960
Cash distributions (36,600) (36,600) (73,200)
ENSTAR pension liability
adjustment (108) (108) (216)
Net earnings 11,838 11,838 23,676
Balance, December 31, 1992 141,160 152,419 293,579
Contributions 13,550 13,550 27,100
Cash distributions (34,100) (34,100) (68,200)
ENSTAR pension liability
adjustment (64) (64) (128)
Net earnings 15,238 15,238 30,476
Balance, December 31, 1993 $135,784 $147,043 $282,827
See accompanying Notes to Consolidated Financial Statements.
/TABLE
<PAGE>
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(in thousands of dollars unless otherwise indicated)
(1) THE COMPANY
Unimar Company (the Company) is a general partnership
organized under the Texas Uniform Partnership Act, whose
partners are Unistar, Inc., a Delaware corporation and a
direct subsidiary of Union Texas Petroleum Holdings, Inc.
(UTPH), a Delaware corporation, and LASMO (Ustar), Inc.
(Ultrastar), a Delaware corporation and an indirect wholly-
owned subsidiary of LASMO plc (LASMO), a public limited
company organized under the laws of England. Each partner
shares equally in the Company's net earnings, distributions
and capital contributions.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Presentation
The Company's consolidated financial statements include
the accounts of the Company and its subsidiaries
including its proportionate share of the activities of
an Indonesian joint venture (the Joint Venture). All
significant intercompany accounts and transactions have
been eliminated.
(b) Inventories
Inventories primarily consist of materials and supplies
and are generally priced at the lower of cost (moving
average cost method) or net realizable value.
(c) Accounting for Oil and Gas Properties
Oil and gas exploration, development and production
activities are accounted for by the successful efforts
method of accounting. Under this method of accounting,
the cost of acquiring undeveloped oil and gas leasehold
acreage, including lease bonuses, brokers' fees and
other related costs are capitalized. Provisions for
impairment of undeveloped oil and gas leases are based
on periodic evaluation and exploratory experience.
Costs to drill and equip exploratory wells that find
proved reserves are capitalized while costs associated
with unsuccessful exploratory wells are expensed.
Other exploratory expenditures, including geological
and geophysical costs and annual lease rentals are
expensed as incurred. Costs incurred to drill and equip
productive wells, including development dry holes and
related production facilities are capitalized.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(c) Accounting for Oil and Gas Properties (continued)
Depreciation, depletion, and amortization of successful
oil and gas exploration wells and all development costs
are determined under the unit-of-production method
based on estimated recoverable proved developed
reserves. Leasehold costs of producing properties are
depleted on the unit-of-production method based on
estimated proved developed and undeveloped reserves.
The Company generally provides for depreciation of
other property, plant and equipment on a straight-line
method over the estimated useful life of the assets.
The range of rates used to calculate depreciation is 2-
1/2 percent to 11 percent on buildings and 3 percent to
33-1/3 percent for other property items.
(d) LNG Revenue Recognition
The Company recognizes its share of liquefied natural
gas (LNG) revenues net of Pertamina's plant operating
costs, transportation charges and project debt service.
(e) Income and Other Taxes
The Company is a partnership and, therefore, does not
pay income taxes. Since the Company's subsidiaries are
corporations, income taxes included in the accompanying
financial statements represent the domestic and foreign
taxes applicable to such entities.
The Company's subsidiary, ENSTAR Corporation (ENSTAR),
and its subsidiaries file a consolidated Federal
corporate income tax return.
Certain income and expense items are recorded during
different periods for financial statement and income
tax purposes. Deferred income taxes are provided for
these differences.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(e) Income and Other Taxes (continued)
The Company follows the Statement of Financial
Accounting Standards No. 109 (Statement 109),
"Accounting for Income Taxes." Under Statement 109,
the liability method is used in accounting for income
taxes. Under this method, deferred tax assets and
liabilities are determined based on differences between
financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax
rates and laws that will be in effect when the
differences are expected to reverse. An impairment
evaluation, with reserves recorded as necessary for any
tax benefit not expected to be realized, is required of
deferred tax assets. A current tax expense or benefit
is recognized for estimated taxes payable or refundable
on tax returns for the current year.
(f) Concentrations of Credit Risk
Financial instruments which may subject the Company to
concentrations of credit risk consist principally of
short-term investments and trade receivables. The
Company's excess cash is invested in time deposits with
major banks. Thesedeposi ts are purchased at a
maturity of three months or less, and have minimal
risk.
The Company's receivables consist primarily of the
revenues derived from the sale of LNG under long-term
contracts with utility and industrial companies in
Japan, Taiwan and Korea. The buyers of the LNG make
payment in United States dollars to a U.S. bank as
trustee for the Joint Venture and other parties. The
trustee, after deducting plant operating costs,
transportation charges and project debt service from
the gross LNG sales proceeds, distributes the net
proceeds to the Joint Venture participants and other
parties. The Company's trade receivables at December
31, 1993 result principally from sales of LNG and oil
and are considered current and collectible, and
collateral is not required to secure such receivables.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(g) Fair Value of Financial Instruments
The Company has various types of financial instruments
consisting of cash and cash equivalents, accounts
receivable, accounts payable, and accrued liabilities.
The carrying amount approximates fair value because of
the short maturity of these instruments.
(h) Foreign Currency
The functional currency for translating the accounts of
foreign subsidiaries is the U. S. dollar. Transaction
gains and losses resulting from the effect of exchange
rate fluctuations on transactions in currencies other
than the functional currency are included in the
determination of net income.
(3) INDONESIAN OIL AND GAS PROPERTIES
The Company, through its subsidiaries, has a 23.125 percent
interest in, and is the operator of, the Joint Venture that
has certain oil and gas exploration and production rights in
Indonesia through a Production Sharing Contract (PSC) which
was amended and extended in 1990 until August 7, 2018 with
Pertamina, the state petroleum enterprise of the Republic of
Indonesia.
Virginia Indonesia Company (VICO), a subsidiary of the
Company, is the operator of the Joint Venture and is
responsible for conducting exploration and development
activities within the PSC area. The cost of such activities
is funded by the Joint Venture partners to VICO. In
addition to operating management responsibility, the
operator acts as a custodian of Joint Venture cash received
from its partners until disbursed in payment of operating
and capital expenditures. At December 31, 1993 and 1992,
cash and cash equivalents included $3,589 and $2,063,
respectively, advanced from the other Joint Venture
partners.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(3) INDONESIAN OIL AND GAS PROPERTIES (continued)
In addition, other subsidiaries of UTPH and LASMO each own a
26.25 percent interest in the Joint Venture. The PSC
permits the Joint Venture to recover their costs of
exploration, development and production - including general
and administrative expenses - from oil and gas revenues as
follows: capital costs are based on recoverable double-
declining balance depreciation over various useful lives,
which average fourteen years; non-capital costs are
recovered in the year incurred. The Joint Venture, and thus
the Company, has no ownership interest in oil and gas
reserves but rather receives revenues from the sale of oil,
condensate, LPG and LNG in accordance with the PSC. The
Joint Venture is required to sell out of its share of
production 8.5 percent (7.2 percent after August 7, 1998) of
the total oil and gas condensate production from the
contract area for Indonesian domestic consumption. Such
amounts were purchased for domestic use in 1993, 1992 and
1991. The sales price for the domestic market consumption
is $0.20 per barrel with respect to fields commencing
production prior to February 23, 1989. For fields
commencing production after that date, domestic market
consumption is priced at 10 percent of the weighted average
price of crude oil sold from such fields. However, for the
first sixty consecutive months of production from new
fields, domestic market consumption is priced at the
official Indonesian crude price. The Semberah field which
commenced production in December 1991 is exempt from the
domestic obligation pricing until December 1996. In
addition, the share of revenues from the sale of gas after
cost recovery through August 7, 1998, will remain at 35
percent to the Joint Venture after Indonesian income taxes
and 65 percent to Pertamina. The split after August 7,
1998, will be 25 percent to the Joint Venture after
Indonesian income taxes and 75 percent to Pertamina for gas
sales under the 1973 and 1981 LNG Sales Contracts, Korean
carryover quantities and seven 1986 LPG Sales Contracts to
the extent that the gas to fulfill these contracts is
supplied from the Badak or Nilam fields; after August 7,
1998, all other LNG sales contract revenues will be split 30
percent after Indonesian income taxes to the Joint Venture
and 70 percent to Pertamina. Based on current and projected
oil production, the revenue split from oil sales after cost
recovery through August 7, 2018, will remain at 15 percent
to the Joint Venture after Indonesian income taxes and 85
percent to Pertamina. These revenue splits are based on
Indonesian income taxes of 56 percent through August 7,
1998, and 48 percent thereafter.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(3) INDONESIAN OIL AND GAS PROPERTIES (continued)
Pertamina currently sells liquefied natural gas to Japanese,
Korean and Taiwanese utility and industrial customers
primarily under five long-term contracts that expire in
1999, 2003, 2009, 2013 and 2014, respectively. Contracted
sales of LNG to these customers approximated 73 percent, 75
percent, and 74 percent of the Company's revenues in 1993,
1992 and 1991, respectively.
Pertamina began deliveries of gas in the first quarter of
1994, under the terms of a new twenty-year gas contract with
certain Japanese buyers. The contract calls for delivery of
at least 2,020 trillion BTUs which will settle among the
East Kalimantan producers as a Package IV contract. During
1994, the Company expects the Joint Venture to deliver
approximately 106 trillion BTUs in 36 cargoes or 9.8 net
equivalent cargoes.
Pertamina will begin deliveries of gas in July 1994, under
the terms of a new twenty-year gas contract with Korea Gas
Corporation. The contract calls for delivery of at least
2,044 trillion BTUs of which the Bontang LNG Plant will
supply 50 percent of the contracted volumes and will settle
among the East Kalimantan producers as a Package IV
contract. During 1994, the Company expects the Joint
Venture to deliver approximately 56 trillion BTUs in 19
cargoes or 5.2 net equivalent cargoes.
(4) CASH AND CASH EQUIVALENTS
At December 31, 1993 and 1992, cash and cash equivalents
includes short-term deposits and highly liquid debt
instruments, purchased at a maturity with three months or
less, of $8,284 and $6,461, respectively.
<PAGE>
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(5) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is as follows:
1993 1992
Oil and gas producing properties
Proved properties $991,447 $954,055
Uncompleted wells in progress 454 1,244
991,901 955,299
Less: Accumulated depletion 579,860 527,150
412,041 428,149
Other, net of accumulated depreciation
of $947 in 1993 and $893 in 1992 2,336 2,538
$414,377 $430,687
(6) ACCRUED LIABILITIES
As at December 31, 1993 and 1992, accrued liabilities
consisted of:
1993 1992
Accrued IPU liability $ 4,804 $ 5,219
Indonesian operating accruals 2,358 7,148
Other 2,152 1,668
$ 9,314 $14,035
(7) INCOME AND OTHER TAXES
At December 31, 1993, the Company had investment tax credit
carryovers of $3,524 that expire in 1995 through 2001, net
foreign tax credit carryovers of $22,985 for regular tax
purposes expiring in 1998 and $106,481 for alternative
minimum tax purposes expiring in 1998. The Company has a
minimum tax credit of $12,938 that carries forward
indefinitely. Deferred tax assets of $22,985 and $19,674
for foreign tax credit carryforwards and $3,524 and $3,800
for investment tax credit carryforwards at December 31, 1993
and 1992, respectively, have been offset by a valuation
allowance.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(7) INCOME AND OTHER TAXES (continued)
Deferred income taxes reflect the net tax effects of
temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the
amounts used for income tax purposes. Significant
components of the Company's deferred tax liabilities and
assets as of December 31, 1993 and 1992 are as follows:
1993 1992
Deferred tax liabilities:
Oil and gas proven property costs
capitalized for financial purposes
and deducted for foreign taxes $167,206 $170,371
For financial reporting purposes, income before income taxes
includes the following components:
1993 1992 1991
Pretax income:
U. S. $ (7,026) $(12,089) $ (7,083)
Foreign 125,213 120,366 110,812
$118,187 $108,277 $103,729
Significant components of the provision for income taxes
attributable to continuing operations are as follows:
1993 1992 1991
Current:
Federal $ 2,446 $ 2,942 $ 2,600
Foreign 88,430 87,179 88,474
$90,876 $90,121 $91,074
Deferred:
Federal $ - $ - $ -
Foreign (3,164) (5,520) (5,599)
$(3,164) $(5,520) $(5,599)
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(7) INCOME AND OTHER TAXES (continued)
The reconciliation of income tax attributable to continuing
operations computed at the U.S. federal statutory rates to
income tax expense is:
1993 1992 1991
Tax at U.S. Statutory Rate 35.0% 34.0% 34.0%
Foreign statutory tax rate
in excess of federal
statutory tax rate 21.0% 22.0% 22.0%
Expenses not deductible in
calculating Indonesian
taxes 12.8% 13.1% 20.1%
Unutilized domestic book
losses 2.1% 3.8% 2.3%
Domestic income taxed at
less than foreign statutory
rate 1.2% 2.5% 1.5%
U.S. taxes related to
foreign operations 2.1% 2.7% 2.5%
Total 74.2% 78.1% 82.4%
The Internal Revenue Service (IRS) is continuing its
examination of ENSTAR's 1984 Windfall Profits Tax (WPT)
return. On January 14, 1993, ENSTAR received the report of
the WPT examination changes for the year 1984. In that
report, the agent has proposed adjustments which could, if
sustained, result in additional WPT of approximately $4
million. The IRS has not yet assessed interest on the tax
deficiency which would be due as a result of the assessment.
ENSTAR has prepared a protest vigorously objecting to
certain of the proposed adjustments. The IRS is currently
reviewing the protest. ENSTAR believes that any tax
liability, and interest assessment which may arise as a
result of the WPT examination has been adequately provided
for in the financial statements.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(8) INDONESIAN PARTICIPATING UNITS (IPUs)
The IPUs were issued, with no assigned value, in connection
with the acquisition of ENSTAR in 1984 and represent a
general obligation of the Company to make quarterly
participation payments until September 1999, the amount of
which will be measured by a fixed percentage of Net Cash
Flow (as defined below) from the Joint Venture. While the
amount of the Participation Payments, which are treated as
reductions from revenues, will vary quarter to quarter
depending upon the amount of Net Cash Flow, payment of the
amounts due to the IPU holders is an obligation of the
Company, not dependent upon the discretion of the partners
of the Company. The rights of the IPU holders are those of
a general creditor of the Company and thus the IPU holders
have no equity interest in the Company in the nature of a
general or limited partnership interest or otherwise. The
IPU holders derive no economic benefit from the business
activities of the Company other than the Joint Venture.
Each IPU entitles the holder to receive, until 1999, a
quarterly participation payment equal to 1/14,077,747 of 32
percent of net positive cash flow. Net Cash Flow,
attributable to IPU holders, is equal to the product of (i)
a fraction, the numerator of which is equal to the number of
IPUs outstanding on the last business day of such quarterly
period, and the denominator of which is 14,077,747,
multiplied by (ii) 32 percent of specified revenues net of
specified expenditures from the Joint Venture. The above
calculation was the result of negotiations among the parties
to the 1984 merger of ENSTAR Corporation into the Company
and represents the amount of future income from the Joint
Venture that the Company has agreed to pay to the former
stockholders of ENSTAR in the form of payments on the IPUs.
If Net Cash Flow is zero or negative for any quarterly
period, no Participation Payments for that quarter will be
made. The Company maintains an irrevocable letter of credit
for the benefit of the IPU holders in an amount equal to 240
percent of the most recent quarterly distribution. At
December 31, 1993 and 1992, there were 10,778,590 IPUs
issued and outstanding.
<PAGE>
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
Calculation of Net Cash Flow and
Participation Payments
1993 1992
Positive cash flow:
Gas receipts $175,840 $185,006
Oil and condensate receipts 34,741 36,448
Other non-revenue cash receipts from
Joint Venture 9,799 6,712
Total positive cash flow 220,380 228,166
Less negative cash flow:
Expenditures to Joint Venture 66,184 65,425
Indonesian income taxes 85,401 87,815
Total negative cash flow 151,585 153,240
Net positive cash flow from 23.125%
interest in Joint Venture $ 68,795 $ 74,926
Net cash flow for benefit of IPU holders $ 16,922 $ 18,312
Participation Payment per unit $ 1.57 $ 1.70
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(9) LONG-TERM DEBT
Long-term debt, excluding current maturities, consists of
the following:
1993 1992
8-1/4% convertible subordinated
guaranteed debentures, due 1995 $ - $ 31,818
The 8-1/4% convertible subordinated guaranteed debentures,
due in December 1995, were reclassed to Current liabilities
as these debentures were repaid on January 5, 1994 in the
principal amount of $36,400. The loss on redemption of
$3,108 on these debentures will be recognized in the first
quarter of 1994.
(10) BENEFIT PLANS
VICO has a defined contribution retirement plan that covers
its eligible employees. Although VICO expects to provide
an annual contribution based on a percentage of each
eligible employee's salary, the actual contribution is
determined at the end of each year by its Board of
Directors and may vary depending upon circumstances.
Defined contribution pension expense is funded by the Joint
Venture participants and the Company's share of such
expense for the years ended December 31, 1993, 1992 and
1991 was $263, $200 and $168, respectively.
In addition, VICO provides severance pay to its employees
based upon salary and length of service. Such severance
pay is accrued over the service life of the employees and
is funded by the Joint Venture. The Company has provided
approximately $.2 million, $1.4 million and $1.8 million
for the years ended December 31, 1993, 1992 and 1991,
respectively for its share of future severance payments.
The Company has a defined benefit pension plan established
by ENSTAR that covers ENSTAR's former employees who are
considered terminated and fully vested. ENSTAR's pension
funding policy is to contribute an amount meeting the
requirement of the Employees Retirement Income Security
Act. The estimated reconciliation of the funded status of
ENSTAR's pension plan as at December 31, 1993, 1992 and
1991 respectively is as follows:
<PAGE>
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(10) BENEFIT PLANS (continued)
1993 1992 1991
Actuarial present value of:
Vested accumulated benefit
obligation $(17,763) $(16,913) $(16,934)
Projected vested benefit
obligation $(17,763) $(16,913) $(16,934)
Fair value of plan assets 14,902 14,353 14,249
Unfunded projected benefit
obligation (2,861) (2,560) (2,685)
Unrecognized net
loss 1,661 1,533 1,317
Unrecognized net transition
obligation 872 907 941
Adjustment required to
recognize minimum
liability (2,533) (2,440) (2,258)
Accrued pension cost
recognized in the
Consolidated Balance
Sheet $ (2,861) $ (2,560) $ (2,685)
The minimum liability that must be recognized is equal to
the excess of the accumulated benefit obligation over the
fair value of plan assets. A corresponding amount is
recognized as either an intangible asset or a reduction to
Partners' Capital. A reduction of Partners' Capital is
required at December 31, 1993, 1992 and 1991 since the
intangible asset recognized may not exceed the amount of
unrecognized prior service cost.
The pension expense for 1993, 1992 and 1991 is composed of
the following:
1993 1992 1991
Interest cost $ 1,300 $ 1,303 $ 1,207
Expected return on plan
assets (1,107) (1,108) (1,060)
Net amortization and deferral 35 35 35
$ 228 $ 230 $ 182
<PAGE>
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(10) BENEFIT PLANS (continued)
The assumed rate of return used in determining the projected
benefit obligation was 7.5 percent, 8 percent and 8 percent
for 1993, 1992 and 1991, respectively. The assumed long-
term rate of return on plan assets was 8 percent, 8 percent
and 9 percent for 1993, 1992 and 1991. Plan assets are
invested in equity and fixed income securities.
(11) OTHER POSTRETIREMENT BENEFITS
In 1992, the Company adopted FASB Statement No. 106,
"Employers' Accounting for Postretirement Benefits Other
Than Pensions". The effect of adopting the new rules did
not significantly impact the Company's profits.
Postretirement benefit costs for 1991 which were recorded on
a cash basis have not been restated.
(12) REDEMPTION OF PARTICIPATING PREFERRED STOCK OF ENSTAR
INDONESIA, INC.
On March 12, 1991, ENSTAR Indonesia, Inc. redeemed all of
its 1,297,431 outstanding shares of participating preferred
stock, $.01 par value, at an aggregate cost of $1,842 or
$1.42 per share. The aggregate cost included $467 ($.36 per
share) for the semi-annual dividend for the period ending
December 31, 1990 and $1,375 ($1.06 per share) for the stock
redemption. Partners' capital was credited $2,507 for the
excess of the book value of the preferred stock over the
redemption amount.
(13) CLAIMS AND LITIGATION
The Company has pending litigation arising in the ordinary
course of its business. However, none of the litigation is
expected to have a material adverse effect on the Company's
financial position or results of operations. The Company
also has established a reserve of $3.5 million for potential
exposure in a royalty dispute. The Company believes it may
have valid defenses against such claims.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(14) RELATED PARTY TRANSACTIONS
All aspects of the Company's business that are not
associated with the operating management of the Joint
Venture, such as operations, legal, accounting, tax and
other management functions are supplied by employees of the
partners in accordance with management agreements negotiated
among the parties. For the years 1993, 1992 and 1991, the
charges approximated $500, $600 and $800, respectively.
The Company holds demand notes in the amount of $40,000 from
or guaranteed by affiliates of each partner. These funds
will be made available to the Company if additional working
capital is required.
As operator of the Joint Venture, VICO performs services
for the operator of the LNG Plant, P.T. Badak Natural Gas
Liquefaction Company (P.T. Badak). During the years ended
December 31, 1993 and 1992, VICO charged P.T. Badak
approximately $1.5 million and $1.8 million, respectively,
principally for field pipeline maintenance services. Also,
during the same periods, VICO billed P.T. Badak
approximately $32 million and $41 million, respectively, for
engineering services and costs incurred on P.T. Badak's
behalf. The costs include approximately $7.2 million in
1993 and $17.2 million in 1992 relating to the modifications
of Trains A through D at the LNG Plant. Accounts receivable
from P.T. Badak approximated $3.3 million and $3.0 million
at December 31, 1993 and 1992, respectively.
UNIMAR COMPANY AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited)
The following items are contained in this section:
(a) Indonesian oil and gas operations
(b) Interim financial data
(a) INDONESIAN OIL AND GAS OPERATIONS
The Company's estimated net share of Indonesian oil and gas
reserves is shown in Table 1. The estimated proved reserves
of gas and oil and condensate as of December 31, 1993, 1992
and 1991 attributable to the Joint Venture's interest in the
production sharing contract in East Kalimantan were prepared
by petroleum engineers employed by LASMO, an affiliate of
Ultrastar.
Net share estimates are the Company's present best estimates
of the share of proved Indonesian reserves attributable to
revenue the Company would receive, before Indonesian income
taxes, under the terms of the Production Sharing Contract,
as extended through August 7, 2018 based upon assumptions
regarding levels of Joint Venture expenditures over the life
of the project, oil and gas prices, firm contract sales
commitments and potential sales opportunities and upon
numerous other assumptions. The Company has no ownership
interest in the Indonesian reserves in place, but rather
shares in production and revenue from the sale of oil,
condensate, LPG and LNG in accordance with the Production
Sharing Contract. The reserve estimates are subject to
revision as prices fluctuate due to the cost recovery
feature for field and other operating costs under the
Production Sharing Contract and for changes in the
Indonesian income tax rate. Because of the number and range
of these variables, no representation can be made that the
net share estimates set forth below are accurate, and any
changes in such variables will impact such estimates and the
cash flows the Company may realize in the future.
Oil and gas reserves are considered proved if economic
producibility is supported by either actual production or
conclusive formation tests. Proved developed reserves are
reserves that can be expected to be recovered through
existing wells with existing equipment and operating
methods. Proved undeveloped reserves are reserves that are
expected to be recovered from new wells on undrilled acreage
or from existing
INDONESIAN OIL AND GAS OPERATIONS (continued)
wells where a relatively significant expenditure is required
to permit production. These estimates do not include
reserves which may be found by extension of proved areas,
reserves which have been estimated considering known
geological and seismic data and previous experience with
similar reservoirs, or reserves recoverable by secondary or
tertiary recovery methods unless these methods are in
operation and showing successful results. These estimates
include reserves that are not currently under contract, but
which management expects may be marketed during the
remaining period in which the Company has the right to
produce such reserves, but for which there is no assurance
of sales. Estimates of reserves require extensive judgments
of reservoir engineering data and are generally less precise
than other estimates used in connection with financial
reporting. Actual future revenues from proved reserves
estimates may vary significantly from estimated future cash
flows due to changes in prices of oil and gas, and in the
timing of actual production in future periods. Actual
production and development costs will vary from those
estimated due to inflation and other factors.
<PAGE>
INDONESIAN OIL AND GAS OPERATIONS (continued)
TABLE 1
Quantities of Oil and Gas Reserves
(Oil in Thousands of BBLS; Gas in MMCF)
Oil Gas (a)
Proved Developed and Undeveloped
Reserves:
As of December 31, 1990 9,976 1,026,498
Revisions to previous estimates 2,503 66,027
Production (1,329) (81,144)
As of December 31, 1991 11,150 1,011,381
Revisions to previous estimates 1,874 98,117
Production (1,736) (83,158)
As of December 31, 1992 11,288 1,026,340
Revisions to previous estimates 4,044 133,820
Production (1,778) (84,920)
As of December 31, 1993 13,554 1,075,240
Proved Developed Reserves:
As of December 31, 1990 8,450 552,257
As of December 31, 1991 8,792 656,546
As of December 31, 1992 7,632 733,354
As of December 31, 1993 10,281 727,536
(a) Amounts for years prior to 1993 have been restated from a
wet gas basis to a dry gas basis.
INDONESIAN OIL AND GAS OPERATIONS (continued)
Table 2 shows costs incurred in oil and gas property acquisition,
exploration and development activities.
TABLE 2
Costs Incurred in Oil and Gas Property Acquisition,
Exploration and Development Activities
Years ended December 31, 1993, 1992 and 1991
(Thousands of dollars)
1993 1992 1991
Exploration costs $ 5,223 $ 7,193 $11,503
Development costs 36,328 34,407 43,269
Table 3 shows results of operations for oil and gas producing
activities.
TABLE 3
Results of Operations for Oil and Gas Producing Activities
Years ended December 31, 1993, 1992, and 1991
(Thousands of dollars)
1993 1992 1991
Revenues $200,581 $205,847 $207,846
Production costs 17,836 19,068 20,557
Exploration costs 4,947 9,066 9,634
Depreciation, depletion
and amortization 52,710 57,275 61,491
Income tax expense 87,640 81,386 82,804
Results of operations for
producing activities (1) $ 37,448 $ 39,052 $ 33,360
(1) Excludes corporate overhead and interest costs.
<PAGE>
INDONESIAN OIL AND GAS OPERATIONS (continued)
Table 4 shows a standardized measure of discounted future
net cash flows and changes therein relating to proved oil and gas
reserves using an annual discount of 10 percent and the Company's
net share estimates referred to in the preface to Table 1.
Generally, estimated future cash inflows have been computed by
applying year-end prices of oil and gas to estimated future
production of proved oil and gas reserves. Future development
and production costs have been computed by estimating the future
expenditures (based on year-end costs) to be incurred in
developing and producing the proved reserves, assuming
continuation of existing economic conditions. Future income tax
expenses have been calculated by using the year-end statutory tax
rate for Indonesia of 56 percent through August 7, 1998 and 48
percent thereafter. Indonesian net cash flow estimates are the
Company's present best estimates of the share of future net
revenues, after Indonesian taxes and capital and operating
contributions to the Joint Venture, that the Company would
receive if proved reserves are produced under the terms of the
Production Sharing Contract, as extended, based upon assumptions
regarding levels of Joint Venture expenditures over the life of
the project, firm contract sales commitments and potential sales
opportunities and upon numerous other assumptions. Additionally,
the net cash flow estimates include amounts due IPU holders.
Because of the number and range of these variables, no
representation can be made that the net cash flow estimates set
forth below are accurate, and any change in such variables will
impact the cash flows the Company may realize in the future.
TABLE 4
Standardized Measure of Discounted Future Net Cash Flows and
Changes Therein Relating to Proved Oil and Gas Reserves
At December 31, 1993, 1992 and 1991
(Thousands of dollars)
1993 1992 1991
Future cash inflows $2,085,222 $2,627,497 $2,732,366
Future production and
development costs (589,163) (573,047) (556,121)
Future income tax expenses (740,808) (1,037,570) (1,109,377)
Future net cash flows 755,251 1,016,880 1,066,868
10% annual discount for
estimated timing of
cash flows (375,500) (496,070) (516,755)
Standardized measure of
discounted future net
cash flows $ 379,751 $ 520,810 $ 550,113
<PAGE>
INDONESIAN OIL AND GAS OPERATIONS (continued)
The following are the principal sources of changes in the
standardized measure of discounted future net cash flows for
proved reserves during 1993, 1992 and 1991.
1993 1992 1991
(Thousands of dollars)
Standardized measure of discounted
future net cash flows at
beginning of period $ 520,810 $ 550,113 $ 812,554
Sales and transfers of oil and gas
produced, net of production
costs (177,720) (180,139) (178,498)
Net changes in prices and
production costs (367,050) (108,119) (712,766)
Development costs incurred
during the period 36,328 34,407 43,269
Revisions of previous
quantity estimates 104,367 78,074 88,703
Accretion of discount 92,991 100,530 154,079
Net change in income taxes 170,025 45,944 342,772
Standardized measure of discounted
future net cash flows at end
of period $ 379,751 $ 520,810 $550,113
Note: The standardized measure of discounted future net cash
flows at December 31, 1993, 1992 and 1991 included $59,629,
$90,683 and $102,532, respectively, in future net cash
flows attributable to IPU holders.
<PAGE>
<TABLE>
b) INTERIM FINANCIAL DATA (Unaudited)
The following table shows summary quarterly data for 1993, 1992 and 1991:
<CAPTION>
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter
<S> <C> <C> <C> <C>
Year Ended December 31, 1993
Revenues............. $ 58,298 $ 38,834 $ 47,840 $ 55,616
Operating profit..... $ 37,952 $ 21,099 $ 28,331 $ 36,798
Net earnings......... $ 10,804 $ 3,618 $ 5,350 $ 10,703
Year Ended December 31, 1992
Revenues............. $ 52,814 $ 45,518 $ 56,642 $ 50,923
Operating profit..... $ 30,909 $ 25,059 $ 33,456 $ 24,532 (a)
Net earnings......... $ 7,842 $ 6,207 $ 7,766 $ 1,861
Year Ended December 31, 1991
Revenues............. $ 67,160 $ 44,227 $ 59,720 $ 36,739
Operating profit..... $ 43,630 $ 23,372 $ 31,806 $ 17,356
Net earnings......... $ 8,972 $ 1,784 $ 5,339 $ 2,159
(a) Includes a $6,400 provision for prior year's windfall profit tax liability.
/TABLE
<PAGE>
<TABLE>
SCHEDULE V
UNIMAR COMPANY AND SUBSIDIARIES
Property, Plant and Equipment
Years Ended December 31, 1993, 1992 and 1991
(Thousands of dollars)
<CAPTION>
Balance at Balance
Beginning Additions at End
of Period at Cost Retirements of Period
<S> <C> <C> <C> <C>
1993
Oil and gas properties
Indonesia $955,285 $ 39,967 $ (3,365) $991,887
Other 14 - - 14
Other 3,431 175 (323) 3,283
$958,730 $ 40,142 $ (3,688) $995,184
1992
Oil and gas properties
Indonesia $922,751 $ 38,978 $ (6,444) $955,285
Other 14 - - 14
Other 3,317 239 (125) 3,431
$926,082 $ 39,217 $ (6,569) $958,730
1991
Oil and gas properties
United States $ 450 $ - $ (450) $ -
Indonesia 877,613 54,339 (9,201) 922,751
Other 14 - - 14
Other 2,106 1,510 (299) 3,317
$880,183 $ 55,849 $ (9,950) $926,082
</TABLE>
<PAGE>
<TABLE>
SCHEDULE VI
UNIMAR COMPANY AND SUBSIDIARIES
Accumulated Depreciation and Depletion of Property, Plant and Equipment
Years Ended December 31, 1993, 1992 and 1991
(Thousands of dollars)
<CAPTION>
Balance at Charges to Balance
Beginning Costs and Retire- at End
of Period Expenses ments of Period
<S> <C> <C> <C> <C>
1993
Oil and gas properties
Indonesia $527,150 $ 52,710 $ - $579,860
Other 893 377 (323) 947
$528,043 $ 53,087 $ (323) $580,807
1992
Oil and gas properties
Indonesia $469,875 $ 57,275 $ - $527,150
Other 671 347 (125) 893
$470,546 $ 57,622 $ (125) $528,043
1991
Oil and gas properties
United States $ 422 $ 28 $ (450) $ -
Indonesia 408,412 61,463 - 469,875
Other 656 314 (299) 671
$409,490 $ 61,805 $ (749) $470,546
</TABLE>
<PAGE>
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosures.
None
