UNIMAR COMPANY
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Earnings
March 31, 1994. . . . . . . . . . . . . . .1
Consolidated Balance Sheets
March 31, 1994. . . . . . . . . . . . . . .2
Consolidated Statements of Cash Flow
March 31, 1994. . . . . . . . . . . . . . .3
Notes to Condensed Consolidated Financial
Statements March 31, 1994 . . . . . . . . .4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations. . . . . . . . . . . . . . . . .6
PART II. OTHER INFORMATION
Item 5. Other Information . . . . . . . . . . . . . .8
Item 6. Exhibits and Reports on Form 8-K. . . . . . .8
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . .9
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PART I. FINANCIAL INFORMATION
UNIMAR COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(Thousands of dollars)
(Unaudited)
Three Months Ended
March 31,
1994 1993
Oil and gas production revenues $55,151 $58,298
Production costs 4,892 4,877
Depletion, depreciation and amortization 14,859 14,659
Exploration costs including dry holes 16 810
Operating profit 35,384 37,952
General and administrative expenses (291) (594)
Interest expense (18) (1,175)
Interest income 42 106
Other expense 23 72
Earnings before income taxes and
extraordinary item 35,140 36,361
Income tax expense
Current 24,051 25,952
Deferred 1,271 (395)
25,322 25,557
Net earnings before extraordinary item 9,818 10,804
Extraordinary loss on redemption of debt 3,708 -
Net earnings $ 6,710 $10,804
See accompanying Notes to Condensed Consolidated Financial Statements.<PAGE>
UNIMAR COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Thousands of dollars)
March 31, December 31,
1994 1993
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 6,849 $ 8,284
Accounts and notes receivable 8,015 11,604
Inventories 13,929 10,886
Other current assets 3,434 2,381
Total current assets 32,227 33,155
Property, plant and equipment, at cost:
Oil and gas properties
(successful efforts method) 996,440 991,901
Other 3,239 3,283
999,679 995,184
Less: accumulated depreciation and
depletion 595,707 580,807
Net property, plant and equipment 403,972 414,377
Other assets 1,256 1,252
$437,455 $448,784
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Current maturities of long term debt $ - $ 33,292
Accounts payable 3,075 3,229
Advances from joint venture partners 2,068 3,589
Accrued liabilities 12,367 9,314
Income taxes 18,110 19,280
Total current liabilities 35,620 68,704
Deferred income taxes 168,478 167,206
Other liabilities 9,520 10,048
Partners' capital 303,837 282,826
Less: demand notes receivable 80,000 80,000
223,837 202,826
$437,455 $448,784
See accompanying Notes to Condensed Consolidated Financial Statements.<PAGE>
UNIMAR COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Thousands of dollars)
(Unaudited)
Three Months Ended
March 31,
1994 1993
Net earnings $ 6,710 $ 10,804
Adjustments to reconcile to net cash
provided by operating activities:
Depletion, depreciation and amortization 14,961 14,748
Deferred income taxes 1,271 (395)
Exploratory dry hole costs (3) (18)
Loss on redemption of debt 3,108 -
Interest accretion - 348
Working capital and other 692 (3,699)
Net cash provided by operating activities 26,739 21,788
Investment activities:
Capital expenditures (4,553) (8,262)
Net cash used in investing activities (4,553) (8,262)
Financing activities:
Repayment of debt (36,400) -
Capital contributions (distributions)-net 14,300 (12,600)
Net cash used in financing activities (22,100) (12,600)
Increase (decrease) in advances from joint
venture partners (1,521) 7
Net increase (decrease) in cash and
cash equivalents (1,435) 933
Cash and cash equivalents at beginning of year 8,284 6,461
Cash and cash equivalents at end of quarter $ 6,849 $ 7,394
IPU distributions paid $ 4,096 $ 4,743
Interest paid $ 300 $ 72
Income taxes paid $ 25,264 $ 26,638
See accompanying Notes to Condensed Consolidated Financial Statements.<PAGE>
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 1994
(Unaudited)
(1) 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., a
Delaware corporation, and LASMO (Ustar) Inc., a Delaware
corporation and an indirect wholly-owned subsidiary of LASMO
plc, 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) These condensed consolidated financial statements should be
read in the context of the consolidated financial statements
and notes thereto included in the Company's 1993 annual report
on Form 10-K. In the opinion of management, the accompanying
financial statements contain all adjustments of a normal
recurring nature necessary for a fair presentation. Interim
results are not necessarily indicative of results on an
annualized basis.
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UNIMAR COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements, Continued
March 31, 1994
(Unaudited)
(3) The table below outlines the calculation of the Indonesian
Participating Unit (IPU) participation payment for the first
quarter of 1994.
1994
First Quarter
(Thousands of dollars)
Positive cash flow:
Gas receipts $ 54,931
Oil and condensate receipts 10,493
Other non-revenue cash receipts
from Joint Venture 1,329
Total positive cash flow 66,753
Less negative cash flow:
Expenditures to Joint Venture 14,344
Indonesian income taxes 25,769
Total negative cash flow 40,113
Net positive cash flow from
23.125% interest in Joint Venture $ 26,640
Net cash flow for benefit of
IPU holders* $ 6,467
Participation Payment per IPU* $ .60
* Each IPU is entitled to 1/14,077,747 of 32% of net positive
cash flow. As of March 31, 1994 there were 10,778,590 IPUs
issued and outstanding.
<PAGE>
UNIMAR COMPANY AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following discussion should be read in conjunction with
the business section, consolidated financial statements, notes, and
management's discussion contained in the Company's 1993 annual
report on Form 10-K, and condensed consolidated financial
statements and notes contained in this report.
Liquidity and Capital Resources
Cash flow from operations for the three months ended March 31,
1994 amounted to $26.7 million as compared to $21.8 million for the
same period in 1993. Capital expenditures and partners'
contributions to the Company for the first quarter of 1994 were
$4.6 million and $14.3 million, respectively. For the three months
ended March 31, 1993, capital expenditures and Company
distributions to the partners were $8.3 million and $12.6 million,
respectively.
The Company's share of the 1994 Indonesian Joint Venture
expenditures is expected to be approximately $56 million of which
$38 million is anticipated for capital items. During the first
three months of 1994, approximately $14 million was called by the
Joint Venture as compared to $18 million for the three months ended
March 31, 1993.
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 future
periods for its crude oil and LNG. The Company's financial
condition, operating results and liquidity will be materially
affected by any significant fluctuations in its sales prices.
Results of Operations
Quarter Ended March 31, 1994
Compared to Quarter Ended March 31, 1993
For the first quarter of 1994, revenues were $55.2 million,
compared to $58.3 million in 1993. The decrease in revenues was
primarily attributable to a 15 percent reduction in the average
price per million BTUs received for LNG and a 15 percent decrease
in the realized price per barrel of crude oil. The average price
received per million BTUs of LNG for the first quarter of 1994
decreased to $2.40 per million BTUs as compared to $2.84 for the
same period in 1993. The average realized crude oil price fell
$2.71 to $15.64 per barrel in the first quarter of 1994 from $18.35
UNIMAR COMPANY AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations, Continued
per barrel in the first quarter of 1993. The prices realized by
the Company for its products reflected the decrease in world wide
crude prices which occurred from the first quarter of 1993 to the
first quarter of 1994.
The Joint Venture's share of the LNG delivered from the
Bontang plant in the first quarter of 1994 increased to 120
trillion BTUs (40.8 net equivalent cargoes) from 107 trillion BTUs
(36.4 net equivalent cargoes) in the first quarter of 1993. Total
LNG deliveries from the Bontang plant increased to 199 trillion
BTUs (69 gross cargoes)as compared to 165 trillion BTUs (58 gross
cargoes) in 1993. The increased plant deliveries reflected the
recent completion of Train F and other plant improvements. The
Joint Venture expects to deliver 135 net equivalent cargoes during
1994 as compared to 127 net equivalent cargoes in 1993. Crude oil
volumes net to the Company decreased 7 percent to 428 thousand
barrels as compared to 461 thousand barrels for the quarter ended
March 31, 1993. The first quarter benefitted from a favorable
crude oil revenue final settlement from 1993 reflecting a
reallocation of certain capital expenditures from gas to oil.
Depletion, depreciation and amortization increased $0.2
million due to the higher gas production volumes discussed above.
The increase was offset by lower depletion rates resulting from a
higher level of reserves caused by fourth quarter reserve
additions.
Indonesian income taxes in the first quarter of 1994 decreased
$0.3 million to $25.3 million from $25.6 million in the first
quarter of 1993. The decrease in current income taxes was
primarily due to lower revenues and a favorable tax final
settlement from 1993. Offsetting this, deferred taxes increased
due to higher non-taxable revenues resulting from the 1993 revenue
final settlements as discussed above. The effective tax rates for
the 1994 and 1993 quarters were 79 percent and 70 percent,
respectively. These rates are 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 increase in the effective tax rate for 1994 was
attributable to the loss on redemption of bonds as discussed above.
Extraordinary loss on redemption of debt in 1994 included a
$3.1 million loss on the early redemption of the Company's 8-1/4%
convertible subordinated guaranteed debentures, due originally in
December 1995. These debentures were repaid on January 5, 1994 in
the principal amount of $36.4 million.
<PAGE>
UNIMAR COMPANY AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations, Continued
PART II. Other Information
Item 5. Other Information
Management, budgeting and financial control of Unimar is exercised
by a Management Board consisting of six members, three appointed by
each of the Unistar and LASMO (Ustar), Inc. On April 28, 1994,
Enterprise Oil plc ("Enterprise"), an oil exploration and
production public limited company organized under the laws of
England, announced a proposed takeover bid for LASMO plc, the
parent company of LASMO (Ustar), Inc. which is one of the two
general partners of Unimar. On April 28, 1994 LASMO's Board of
Directors advised shareholders to reject Enterprise's offer.
The holders of the Indonesian Participating Units (IPUs) are
entitled to quarterly payments until September 1999 based on a
percentage of certain net cash flow generated by the Company's
interest in the Indonesian Joint Venture. Revenues of the Joint
Venture are derived principally from the sale of LNG under long
term sales contracts principally with utility and industrial
companies in Japan, South Korea and Taiwan reduced by certain
expenditures and expenses of the Joint Venture and Indonesia Income
Tax. See Note 3 to the Notes to Consolidated Financial Statements
of the 1993 10-K.
Item 6. Exhibits and Reports on Form 8-K
None
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UNIMAR COMPANY
SIGNATURES
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.
UNIMAR COMPANY
By: /S/ GEORGE W. BERKO
George W. Berko
Member of the Management
Board
(principal financial officer)
DATE: May 12, 1994
