UNIMAR COMPANY
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Earnings
For the Three Months ended
March 31, 1995 and March 31, 1994 . . . . .1
Condensed Consolidated Balance Sheets as of
March 31, 1995 and December 31, 1994. . . .2
Condensed Consolidated Statements of
Cash Flows for the Three Months ended
March 31, 1995 and March 31, 1994 . . . . .3
Notes to Condensed Consolidated Financial
Statements as of March 31, 1995 . . . . . .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)
<CAPTION>
Three Months Ended
March 31,
1995 1994
<S> <C> <C>
Oil and gas production revenues $60,539 $55,151
Production costs 5,772 4,892
Depletion, depreciation and amortization 12,191 14,859
Exploration costs including dry holes (18) 16
Operating profit 42,594 35,384
General and administrative expenses (326) (291)
Other income and expense 105 47
Earnings before income taxes and
extraordinary item 42,373 35,140
Income tax expense
Current 28,927 24,051
Deferred (726) 1,271
28,201 25,322
Earnings before extraordinary item 14,172 9,818
Extraordinary loss on redemption of debt - 3,108
Net earnings $14,172 $ 6,710
See accompanying Notes to Condensed Consolidated Financial
Statements.
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UNIMAR COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Thousands of dollars)
<CAPTION>
March 31, December 31,
1995 1994
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,175 $ 3,421
Accounts and notes receivable 8,744 5,882
Inventories 12,889 12,467
Other current assets 5,574 2,682
Total current assets 30,382 24,452
Property, plant and equipment, at cost:
Oil and gas properties
(successful efforts method) 1,028,762 1,023,546
Other 2,126 2,113
1,030,888 1,025,659
Less: accumulated depreciation and
depletion 643,772 631,499
Net property, plant and equipment 387,116 394,160
Other assets 3,704 3,567
$ 421,202 $ 422,179
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable $ 2,330 $ 2,620
Advances from joint venture partners 99 1,629
Accrued liabilities 13,986 14,987
Income taxes 15,514 11,326
Total current liabilities 31,929 30,562
Deferred income taxes 162,240 162,966
Other liabilities 11,012 10,403
Partners' capital 296,021 298,248
Less: demand notes receivable 80,000 80,000
216,021 218,248
$ 421,202 $ 422,179
See accompanying Notes to Condensed Consolidated Financial Statements.
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UNIMAR COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Thousands of dollars)
(Unaudited)
<CAPTION>
Three Months Ended
March 31,
1995 1994
<S> <C> <C>
Net earnings $ 14,172 $ 6,710
Adjustments to reconcile to net cash
provided by operating activities:
Loss on extraordinary item - 3,108
Depletion, depreciation and amortization 12,273 14,961
Deferred income taxes (726) 1,271
Exploratory dry hole costs (22) (3)
Working capital and other (2,806) 692
Net cash provided by operating activities 22,891 26,739
Investment activities:
Capital expenditures (5,207) (4,553)
Net cash used in investing activities (5,207) (4,553)
Financing activities:
Repayment of debt - (36,400)
Capital contributions (distributions)-net (16,400) 14,300
Net cash used in financing activities (16,400) (22,100)
Decrease in advances from joint
venture partners (1,530) (1,521)
Decrease in cash and cash equivalents (246) (1,435)
Cash and cash equivalents
at beginning of quarter 3,421 8,284
Cash and cash equivalents at end of quarter $ 3,175 $ 6,849
IPU distributions paid $ 5,281 $ 4,096
Interest paid $ 0 $ 300
Income taxes paid $ 24,739 $ 25,264
See accompanying Notes to Condensed Consolidated Financial Statements.
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UNIMAR COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 1995
(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 1994 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.
(3) In March 1995, the Financial Accounting Standards Board
("FASB") released Statement of Financial Accounting Standards
No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of," which set forth
the criteria for impairment of plant, property and equipment
and other long-lived assets. Adoption of the Statement is
required for years beginning after December 15, 1995. The
Company is currently reviewing the Statement; however, the
Company believes that the pronouncement will have no material
impact on the financial statements of the Company.
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UNIMAR COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements, Continued
March 31, 1995
(Unaudited)
(4) The table below outlines the calculation of the Indonesian
Participating Unit (IPU) participation payment for the first
quarter of 1995.
1995
First Quarter
(Thousands of dollars)
Positive cash flow:
Gas receipts $ 54,338
Oil and condensate receipts 7,819
Other non-revenue cash receipts
from Joint Venture 1,082
Total positive cash flow 63,239
Less negative cash flow:
Expenditures to Joint Venture 14,986
Indonesian income taxes 27,145
Total negative cash flow 42,131
Net positive cash flow from
23.125% interest in Joint Venture $ 21,108
Net cash flow for benefit of
IPU holders* $ 5,174
Participation Payment per IPU* $ .48
* Each IPU is entitled to 1/14,077,747 of 32% of net positive
cash flow until September 25, 1999. As of March 31, 1995,
there were 10,778,590 IPUs issued and outstanding.
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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 1994 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,
1995 amounted to $22.9 million as compared to $26.7 million for the
same period in 1994. Capital expenditures and distributions to the
partners for the first quarter of 1995 were $5.2 million and $16.4
million, respectively. For the three months ended March 31, 1994,
capital expenditures and partners' contributions to the Company
were $4.6 million and $14.3 million, respectively.
The Company's share of the 1995 Indonesian Joint Venture
expenditures is expected to be approximately $49 million of which
$29 million is anticipated for development expenditures. During
the first three months of 1995, approximately $15 million was
called by the Joint Venture as compared to $14 million for the
three months ended March 31, 1994.
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. LNG and LPG are primarily
sold under long term contracts whose prices are indexed by a basket
of world crudes. 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 and as such, any
change in world crude prices.
Results of Operations
Quarter Ended March 31, 1995
Compared to Quarter Ended March 31, 1994
For the first quarter of 1995, revenues were $60.5 million,
compared to $55.2 million in 1994. The increase in revenues was
primarily attributable to a 14 percent increase in the average
price per million BTUs received for LNG and a 12 percent increase
in the realized price per barrel of crude oil. The average price
received per million BTUs of LNG for the first quarter of 1995
increased to $2.73 per million BTUs as compared to $2.40 for the
UNIMAR COMPANY AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations, Continued
same period in 1994. The average realized crude oil price
increased $1.86 to $17.50 per barrel in the first quarter of 1995
from $15.64 per barrel in the first quarter of 1994. The prices
received by the Company for its products reflected the increase in
world wide crude oil prices which occurred during the past twelve
months.
Gross LNG Sales increased by five cargoes to 74 cargoes in the
first quarter of 1995 as compared to the same quarter in 1994;
however, the Joint Venture's share of the LNG sold decreased to 114
trillion BTUs (38.8 net equivalent cargoes) from 120 trillion BTUs
(40.8 net equivalent cargoes) as more of the LNG sold in the first
quarter of 1995 was under those contracts in which the Joint
Venture has a lower net revenue sharing interest. Furthermore, the
Joint Venture expects to deliver fewer net equivalent cargoes
during 1995 than were delivered in 1994. Crude oil volumes net to
the Company increased 10 percent to 469 thousand barrels for the
quarter ended March 31, 1995. The final settlement with Pertamina,
the Indonesian national oil company, relating to 1994 production
was recorded in the quarter ended March 31, 1995. The final
settlement was favorable, although $1.4 million lower than the
1993 adjustment recorded in the first quarter of 1994.
Depletion, depreciation and amortization decreased $2.7
million due to the lower LNG production volumes discussed above.
Additionally, lower depletion rates resulted from a higher level of
reserves due to reserve additions which were booked in the fourth
quarter of 1994.
Indonesian income tax expense in the first quarter of 1995
increased $2.9 million to $28.2 million from $25.3 million in the
first quarter of 1994. The increase in current income tax expense
in the first quarter of 1995 was primarily due to higher first
quarter revenues and a lower favorable tax final settlement. The
effective tax rates for the 1995 and 1994 first quarters were 67
percent and 72 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 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.
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PART II. OTHER INFORMATION
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(27)-1- Financial Data Schedule for the three months
ended March 31, 1995.
(b) 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
and the officer duly
authorized to sign on behalf
of the registrant.)
DATE: May 11, 1995
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<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNIMAR COMPANY FINANCIAL STATEMENTS FILED WITH FORM 10-Q FILED ON
MAY 11, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 3,175
<SECURITIES> 0
<RECEIVABLES> 8,744
<ALLOWANCES> 0
<INVENTORY> 12,889
<CURRENT-ASSETS> 30,382
<PP&E> 1,030,888
<DEPRECIATION> 643,772
<TOTAL-ASSETS> 421,202
<CURRENT-LIABILITIES> 31,929
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 421,202
<SALES> 60,539
<TOTAL-REVENUES> 60,539
<CGS> 17,963
<TOTAL-COSTS> 17,945
<OTHER-EXPENSES> 326
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14
<INCOME-PRETAX> 42,373
<INCOME-TAX> 28,201
<INCOME-CONTINUING> 14,172
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,172
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
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