<PAGE>
As filed with the Securities and Exchange Commission on April 10, 1995
Registration No. 33-_________
_____________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
HONDO OIL & GAS COMPANY
(Exact name of registrant as specified in its charter)
Delaware 95-1998768
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
410 East College Boulevard, Roswell, New Mexico 88201
(Address of principal executive offices) (Zip Code)
William W. Daily Non-Qualified Stock Option
(Full title of the Plan)
Charles B. McDaniel
Hondo Oil & Gas Company
410 East College Boulevard
Roswell, New Mexico 88201
(Name and address of agent for service)
(505) 625-8700
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Share Price Fee
______________________________________________________________________
Common Stock,
$1.00 par value 25,000 (1) $7.50 $187,500 $100.00
(1) This Registration Statement covers, in addition to the number of
shares of Common Stock stated above, options or rights to purchase or
acquire the shares of Common Stock that may be granted under the Plan,
and, pursuant to Rule 416, an additional indeterminate number of
shares which by reason of certain events specified in the Plan may
become subject to the Plan.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3 Incorporation of Documents by Reference
The following documents filed with the Securities and
Exchange Commission (the "Commission") by Registrant are incorporated
by reference herein:
(a) Annual Report on Form 10-K for the fiscal year ended
September 30, 1994.
(b) Quarterly Report on Form 10-Q for the quarter ended
December 31, 1994 and Current Reports on Form 8-K dated
November 29, 1994 and March 3, 1995.
(c) The Company's Form 8A dated September 3, 1985, with
respect to the Company's Common Stock and any amendment or
report filed for the purpose of updating such description.
All documents filed by Registrant pursuant to sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934 subsequent
to the date of the Registration Statement, and prior to the filing of
a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in the
Registration Statement and to be part hereof from the respective dates
of filing. Any statement contained herein or in a document, all or a
portion of which is incorporated or deemed to be incorporated by
reference herein, shall be deemed to be modified or superseded for
purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies
or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or amended, to
constitute a part of this Registration Statement.
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ITEM 4 Description of Securities
The Common Stock of Registrant is registered under Section 12
of the Securities Exchange Act of 1934, and, therefore, the
description of securities is omitted.
ITEM 5 Interests of Named Experts and Counsel
Certain matters with respect to the validity of the Common
Stock offered hereby have been passed upon for Registrant by C.B.
McDaniel. Mr. McDaniel is an officer and a director of Registrant,
and has been granted certain stock options under the Registrant's 1993
Stock Incentive Plan.
ITEM 6 Indemnification of Directors and Officers
Section 145 of the General Corporation Law of Delaware empowers
Registrant to indemnify, subject to the standards and exceptions set
forth therein, any person in connection with any action, suit or
proceeding brought or threatened by reason of the fact that the person
is or was a director, officer, employee or agent of Registrant, or is
or was serving as such with respect to another corporation at the
request of Registrant. Article XII of Registrant's Bylaws provides
that Registrant shall (and may with respect to agents and employees of
Registrant) indemnify and hold harmless to the fullest extent
permitted by the laws of Delaware any and all persons who serve or who
have served at any time as directors or officers of Registrant, or who
at the request of Registrant serve or at any time have served as
directors, officers, employees or agents of another corporation or of
a partnership, joint venture, trust or other enterprise, including
service with respect to employee benefit plans, and their respective
heirs, executors and administrators against all costs, expenses,
liabilities and losses (including attorney's fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid in settlement)
reasonably incurred or suffered by such persons in connection
therewith whether the basis of such proceeding is alleged action or
inaction in an official capacity or in any other capacity seeking
indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board of Directors of Registrant. The Registrant
has purchased an insurance policy or policies insuring directors and
officers of the Registrant and its subsidiaries against certain of the
liabilities described in this Item.
Article Fifteenth of Registrant's Certificate of Incorporation
limits the liability of Registrant's directors to the full extent
permitted under Delaware law. Directors are not liable for monetary
damages for breach of fiduciary duty as a director except (i) for any
breach of the director's duty of loyalty to the Registrant or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
for unlawful payment of a dividend or unlawful stock purchase or
redemption, or (iv) for any transaction from which the director
derived an improper personal benefit.
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Lonrho Plc, an indirect beneficial owner of the Registrant, has
indemnified the directors of the Registrant against certain
environmental liabilities that are excluded from the liability
insurance policy or policies insuring the Registrant's directors and
officers.
ITEM 7 Exemption from Registration Claimed
Not applicable.
ITEM 8 Exhibits
Exhibits required by Item 601 of Regulation S-K are
incorporated by reference. Refer to Exhibit Index on
page 7.
4 Settlement Agreement and Release dated March 1, 1995,
between William W. Daily and Registrant.
5 Opinion of C.B. McDaniel as to the legality of the
shares of Common Stock being registered, including
consent.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Charles B. McDaniel included in his
opinion filed as Exhibit 5.
ITEM 9 Undertakings
A) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(a) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, unless the information
otherwise required to be included in a post-effective amendment
is contained in a periodic report filed by the Company pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act
of 1934 and incorporated herein by reference;
(b) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement;
(c) To include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement, unless the
information otherwise required to be included in a post-
effective amendment is contained in a periodic report filed by
the Company pursuant to Section 13 or Section 15(d) of the
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Securities Exchange Act of 1934 and incorporated herein by
reference;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
B) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to section 13(a) or
section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that
is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
C) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Roswell, State
of New Mexico, on April 10, 1995.
HONDO OIL & GAS COMPANY
By:/s/ John J. Hoey
_______________________
John J. Hoey
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated.
Signatures Title Date
________________________ ______________________ _______________
/s/ Robert O. Anderson Chairman of the Board, April 10, 1995
Robert O. Anderson Director
/s/ Dieter Bock Director April 10, 1995
Dieter Bock
/s/ John J. Hoey President, Chief April 10, 1995
John J. Hoey Executive Officer, Director
/s/ C.B. McDaniel Secretary, Director April 10, 1995
C.B. McDaniel
/s/ Douglas G. McNair Director April 10, 1995
Douglas G. McNair
/s/ John F. Price Director April 10, 1995
John F. Price
Director
R.W. Rowland
/s/ Robert K. Steer Director April 10, 1995
Robert K. Steer
/s/ Stanton J. Urquhart Vice President April 10, 1995
Stanton J. Urquhart (Principal Financial and
Principal Accounting Officer)
/s/ R.E. Whitten Director April 10, 1995
R.E. Whitten
6
EXHIBIT INDEX
HONDO OIL & GAS COMPANY
REGISTRATION STATEMENT ON FORM S-8
EXHIBIT SUBJECT
------- --------
4 Settlement Agreement and Release
dated March 1, 1995, between
William W. Daily and Registrant.
5 Opinion of C.B. McDaniel as to
the legality of the shares of
Common Stock being registered,
including consent.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Charles B. McDaniel
included in his opinion filed
as Exhibits 5.
7
SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release is executed on March 1, 1995,
by WILLIAM W. DAILY, P.O. Box 2648, Roswell, New Mexico 88202, herein
referred to as Daily, and Hondo Oil & Gas Company, a Delaware
corporation, 410 East College Blvd., Roswell, New Mexico 88201, herein
referred to as Hondo.
RECITALS
A. Daily was employed by Hondo from May 1989 to December 1993 as a
vice president responsible for international operations. On December
31, 1993, the employment relationship was terminated by Hondo.
B. A dispute has arisen over the rights and benefits of Daily
arising from the termination of the employment relationship.
C. On November 15, 1993, the Board of Directors of Hondo awarded to
Daily an option to purchase 25,000 shares of Hondo's common stock at
$7.50 per share under Hondo's 1993 Stock Incentive Plan, subject to
approval of the plan by Hondo's stockholders. The option expired by its
terms without being exercisable upon the termination of the employment
relationship.
D. Daily and Hondo have agreed to compromise and settle any and all
disputes and matters arising out of the employment relationship upon the
terms of this agreement.
AGREEMENT AND RELEASE
Daily and Hondo agree as follows:
1. Purpose; No Admission of Liability. The purpose of this
agreement is to resolve dispute matters between the parties hereto, and
to settle matters in controversy between the parties without litigation
and further expense. Nothing contained herein shall be construed as an
admission by Daily or Hondo of any liability or responsibility for any
matters arising out of the employment relationship.
2. Grant of Option. Hondo agrees to grant to Daily a non-qualified
stock option to purchase 25,000 shares of Hondo's common stock at $7.50
per share. The option shall be exercisable in full beginning on the
date of this agreement and ending on (a) the date one year thereafter,
or (b) three months following completion and testing of (or suspension
or abandonment of efforts to complete and test) the Opon No. 4 Well, and
the public release of information about the results, whichever is later.
The option shall be granted by an agreement in the form of Exhibit A
attached hereto.
Hondo will undertake to register, at Hondo's expense, under the
Securities Act of 1933 the shares subject to the option. Hondo will
file a registration statement for the shares before April 1, 1995, and
use its best efforts to have the registration statement declared
1
effective by the Securities and Exchange Commission as soon as possible
thereafter.
3. Statement of Reasons for Termination. Hondo will provide to
Daily a letter in the form of Exhibit B hereto stating that the
termination of the employment relationship occurred because of economic
considerations of Hondo and not for reasons of cause or fault of Daily.
Hondo agrees that it will not make any statement to anyone regarding the
reasons for termination of the employment relationship contrary to the
statements of the letter.
4. Mutual Release. ln consideration of the undertakings of Hondo in
this agreement, Daily, for himself and his heirs, executors, and
administrators, has remised, released, and forever discharged, and by
these presents does, for himself and his heirs, executors, and
administrators, remise, release, acquit, satisfy, and forever discharge
Hondo, its successors and assigns, of and from all, and all manner of
action and actions, cause and causes of action, suits, debts, dues, sums
of money, accounts, reckonings, bonds, bills, specialties, covenants,
contracts, controversies, agreements, promises, variances, trespasses,
damages, judgments, executions, claims and demands whatsoever, in law,
or in equity, which against Hondo, Daily ever had, now has, or which his
successors, heirs, executors or administrators, hereafter can, shall, or
may have, for, upon, or by reason of any matter, cause, or thing
whatsoever, including, but not limited to, any matter arising out of or
in any way connected with the employment relationship between Daily and
Hondo.
In consideration of the undertakings of Daily in this agreement,
Hondo, for itself and its successors and assigns, has remised, released,
and forever discharged, and by these presents does for itself and its
successors and assigns, remise, release, acquit, satisfy, and forever
discharge Daily, his heirs, executors, and administrators, of and from
all, and all manner of action and actions, cause and causes of action,
suits, debts, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, executions, claims and
demands whatsoever, in law, or in equity, which against Daily, Hondo
ever had, now has, or which its successors and assigns hereafter can,
shall, or may have, for, upon, or by reason of any matter, cause, or
thing whatsoever, including, but not limited to, any matter arising out
of or in any way connected with the employment relationship between
Daily and Hondo.
The mutual releases hereby granted by Hondo and Daily shall not extend
to any action and actions, cause and causes of action, suits, debts,
dues, sums of money, accounts, reckonings, bonds, bills, specialties,
covenants, contracts, controversies, agreements, promises, variances,
trespasses, damages, judgments, executions, claims and demands arising
or occurring, or based upon events occurring, after the date of this
agreement.
5. Confidentiality. The terms of this agreement shall remain
confidential and not be disclosed to anyone by either party except (i)
Hondo may disclose, on a need-to-know basis, the terms of this agreement
2
to its officers and directors; (ii) Daily and Hondo may disclose the
terms of this agreement to their counsel; (iii) Daily may disclose and
use the letter provided by Hondo in the form of Exhibit B for any
purpose; and (iv) Daily and Hondo may disclose such terms of this
agreement as may be necessary to comply with law, regulation or rule,
including rules of the American Stock Exchange, and including, without
limitation, any such disclosure required to accomplish registration of
the shares as contemplated by this agreement; in all cases (except item
[iii] of this paragraph), however, seeking whatever protection of
confidentiality and against further disclosure as are reasonably
available under the law.
6. Binding Effect; Entire Agreement. This agreement shall enure to
the benefit of, and be binding upon, Daily, his successors, heirs,
executors or administrators. This agreement shall enure to the benefit
of, and be binding upon, Hondo, its successors and assigns. The release
given by Daily to Hondo shall include any obligations and agreements
between Daily and any of Hondo's direct and indirect shareholders,
including, without limitation, Lonrho Plc, and any rights or obligations
granted under options for Lonrho Plc shares granted to Daily by Lonrho
Plc. This agreement constitutes the entire agreement between the
parties hereto, and supersedes any and all prior and contemporaneous
understandings between the parties. This agreement may not be modified
or amended except by a written document expressly referring to this
agreement and signed by both parties.
7. Advice of Counsel. Daily and Hondo acknowledge that each has had
the opportunity to consult with their respective counsel concerning the
subject matter of this agreement and its terms and are acting with the
benefit of their counsel's advice.
8. Choice of Law. This agreement shall be construed and interpreted
in accordance with the laws of the State of New Mexico, without
reference to choice of law provisions thereof that would refer the
courts of the State of New Mexico to the laws of another jurisdiction.
In witness whereof, Daily and Hondo have executed this release at
Roswell, New Mexico, on the day and year first above written.
/s/ William W. Daily
_____________________________
William W. Daily
Hondo Oil & Gas Company
By:/s/ John J. Hoey
______________________________
John J. Hoey
President and CEO
3
EXHIBIT A
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT dated as of the 1st day of March, 1995, between Hondo
Oil & Gas Company, a Delaware corporation (the "Corporation"), and
William W. Daily ("Daily").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Corporation on November 10,
1994, authorized the grant of an option to purchase all or any part of
25,000 authorized but unissued or treasury shares of the common stock,
$1.00 par value, of the Corporation ("Common Stock") to Daily, for and
in consideration of the promises and covenants of Daily made in a
Settlement Agreement and Release between Daily and the Corporation of
even date herewith and upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
made herein and in the Settlement Agreement and Release and the mutual
benefits to be derived herefrom, the parties agree as follows:
1. Grant of Option. Effective March 1, 1995 (the "Award Date"), the
Corporation grants to Daily the right and option to purchase, on the
terms and conditions set forth herein, all or any part of an aggregate
of 25,000 shares of the Common Stock, which will be duly registered with
the appropriate authorities under applicable federal and state
securities laws, at the price of $7.50 per share (the "Option"),
exercisable from time to time, subject to the provisions of this
Agreement, prior to the close of business on (a) the date one year after
the Award Date, or (b) three months following completion and testing (or
suspension or abandonment of efforts to complete and test) of the Opon
No. 4 Well, and the public release of information about the results,
whichever is later (the "Expiration Date").
2. Exercisability of Option. The Option may be exercised as to all
of shares set forth in Section 2 hereof on and after the Award Date.
To the extent Daily does not at any one time purchase all or any part
of the shares to which Daily is entitled, such right shall continue
until the Option terminates or expires. Fractional share interests
shall be disregarded, but may be cumulated. No fewer than 100 shares
may be purchased at any one time, unless the number purchased is the
total number then available for purchase under the Option.
3. Method of Exercise of Option. The Option shall be exercisable by
the delivery to the Corporation of a written notice stating the number
of shares to be purchased pursuant to the Option and accompanied by
payment made in cash for the full purchase price of the shares to be
purchased and any tax withholding, as determined by the Corporation, in
its sole judgement, to be applicable. The Corporation agrees to fully
cooperate with Daily in order that he may participate in a "cashless
exercise" program with a brokerage firm of his choice, and to fully
cooperate with such brokerage firm in the payment of the purchase price
of the shares to be purchased and any applicable tax withholding.
4
4. Adjustments. If there shall occur any extraordinary dividend or
other extraordinary distribution in respect of the Common Stock (whether
in the form of cash, Common Stock, other securities, or other property),
or any recapitalization, stock split (including a stock split in the
form of a stock dividend), reverse stock split, reorganization, merger,
combination, consolidation, split-up, spin-off, combination, repurchase,
or exchange of Common Stock or other securities of the Corporation, or
there shall occur any other like corporate transaction or event in
respect of the Common Stock or a sale of substantially all the assets of
the Corporation as an entirety, then the Corporation shall, in such
manner and to such extent (if any) as is appropriate and equitable, (1)
proportionately adjust any or all of (a) the number, amount and type of
shares of Common Stock (or other securities or property) subject to the
Option, (b) the grant, purchase, or exercise price of the Option, (c)
the securities, cash or other property deliverable upon exercise of the
Option, or (2) in the case of an extraordinary dividend or other
distribution, merger, reorganization, consolidation, combination, sale
of assets, split up, exchange, or spin off, make provision for a cash
payment or for the substitution or exchange of the Option or the cash,
securities or property deliverable to Daily based upon the distribution
or consideration payable to holders of the Common Stock of the
Corporation upon or in respect of such event.
5. Effect of Death. The Option and all other rights hereunder, to
the extent not exercised, shall not terminate if Daily dies and the
Option may be exercised after death by Daily's personal representative
or beneficiary, provided, however, that in no event may the Option be
exercised by anyone under this Section or otherwise after the Expiration
Date.
6. Consideration to Corporation. The consideration for the granting
of this Option by the Corporation is a Settlement and Release Agreement
dated March 1, 1995, between Daily and the Corporation.
7. Non-Transferability of Option. The Option and any other rights
of Daily under this Agreement are nontransferable.
8. Notices. Any notice to be given under the terms of this
Agreement shall be in writing and addressed to the Corporation at is
principal office located at 410 E. College Boulevard, Roswell, New
Mexico 88201, to the attention of the Corporate Secretary and to Daily
at the address given beneath Daily's signature hereto, or at such other
address as either party may hereafter designate in writing to the other.
5
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed on its behalf by a duly authorized officer and Daily has
hereunto set his hand.
HONDO OIL & GAS COMPANY
(a Delaware corporation)
By______________________
John J. Hoey
President and CEO
________________________
(Signature)
William W. Daily
P.O. Box 2648
Roswell, NM 88202
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EXHIBIT B
TO WHOM IT MAY CONCERN:
This is to advise that William W. Daily was employed by Hondo Oil &
Gas Company as vice president in charge of international operations from
May 1989 to December 1993. Mr. Daily's employment was terminated by
mutual agreement for economic considerations. He was an employee in
good standing at that time.
Hondo Oil & Gas Company
By:_____________________________________
John J. Hoey
President and CEO
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[LETTERHEAD OF HONDO OIL & GAS COMPANY APPEARS HERE]
April 10, 1995
Hondo Oil & Gas Company
410 East College Boulevard
Roswell, NM 88201
Re: Registration Statement on Form S-8
Gentlemen:
At your request, I have examined the form of Registration
Statement on Form S-8 (the "Registration Statement") which you propose
to file with the Securities and Exchange Commission in connection with
the registration under the Securities Act of 1933, as amended, of
25,000 shares of your common stock, $1.00 par value (the "Common
Stock") issuable pursuant to the William W. Daily Non-Qualified Stock
Option. I have examined the proceedings heretofore taken and am
familiar with the proceedings proposed to be taken by you in
connection with the authorization and issuance of the Common Stock to
be sold in a manner described in the Registration Statement.
It is my opinion that, subject to the completion of the
proceedings referred to above, the Common Stock, when issued and sold
by you in accordance with the terms of the William W. Daily Non-
Qualified Stock Option will be legally and validly issued, fully paid
and non-assessable.
I am a member of the State Bar of Texas and express no opinion
herein as to the effect that the laws and decisions of courts of any
jurisdiction other than the United States of America and the State of
Texas may have upon such opinions, except to the extent that the
opinions expressed above may relate to the general corporation laws of
the State of Delaware. The foregoing opinion is subject to and is
qualified in all respects by the statements in this paragraph.
I hereby consent to the use of this opinion as an Exhibit to the
Registration Statement.
Respectively submitted,
/s/ C.B. McDaniel
C.B. McDaniel
CBM/th
[LETTERHEAD OF ERNST & YOUNG LLP APPEARS HERE]
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement on Form S-8 pertaining to the William W. Daily Non-Qualified
Stock Option Plan of Hondo Oil & Gas Company of our report dated
November 9, 1994 with respect to the consolidated financial statements
and schedules of Hondo Oil & Gas Company included in the Annual Report
on Form 10-K for the year ended September 30, 1994, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Denver, Colorado
April 10, 1995
