<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
___________________________
Date of Report (Date of earliest event reported): January 30, 1996
UNION TEXAS PETROLEUM HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 1-9019 76-0040040
(State or other (Commission (I.R.S. Employer
jurisdiction of incorporation) File Number) Identification No.)
1330 Post Oak Boulevard, Houston, Texas 77056
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (713) 623-6544
<PAGE> 2
Item 5. OTHER EVENTS.
Press Release. The information set forth in the press releases of
the registrant dated January 24, 1996 and January 26, 1996, which are filed as
exhibits hereto, are incorporated herein by reference.
Australian Exploration Permit. A subsidiary of Union Texas
Petroleum Holdings, Inc. (the "Company") has entered into an agreement to
acquire from Pasminco Australia Limited an 80% working interest in the onshore
Exploration Permit 373, comprised of 81 blocks covering approximately 1.6
million acres in the Canning Basin of Western Australia. The permit has an
initial exploration period expiring in April 1998. The Company will serve as
operator of the permit.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits:
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
99.1 Press release dated January 24, 1996
99.2 Press release dated January 26, 1996
</TABLE>
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
UNION TEXAS PETROLEUM
HOLDINGS, INC.
By: /s/ Newton W. Wilson, III
-----------------------------------
Newton W. Wilson, III
General Counsel,
Vice President-Administration
and Secretary
Date: January 30, 1996
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
99.1 Press release dated January 24, 1996
99.2 Press release dated January 26, 1996
</TABLE>
<PAGE> 1
EXHIBIT 99.1
UNION TEXAS PETROLEUM
(LETTERHEAD)
NEWS RELEASE
Contact: Carol L. Cox
(713) 968-2714
UNION TEXAS PETROLEUM REPORTS SIGNIFICANTLY HIGHER
EARNINGS FOR 1995 FULL YEAR AND FOURTH QUARTER
Houston, January 24, 1996 -- Union Texas Petroleum Holdings, Inc.
today reported 1995 earnings of $1.17 per share, more than 50% above the 76
cents per share earned in 1994. Net income was $102 million for 1995, versus
$67 million in 1994.
"1995 was marked by a number of solid achievements at Union Texas,"
said Chairman and CEO John Whitmire. "During 1995, the company benefited from
increased oil volumes in the U.K. North Sea with the acquisition of an interest
in the Alba field, higher ethylene margins and sales volumes at its U.S.
petrochemical business, and improved oil and gas sales prices. In addition,
Union Texas replaced approximately 150% of its 1995 worldwide production and
made progress in its joint venture exploration program toward a potential
commercial development at Alaska's Western Colville area."
Mr. Whitmire, who joined Union Texas in January 1996, said, "Union
Texas performed very well in 1995, and I am looking forward to an exciting year
for the company in 1996. We will capitalize on Union Texas' strengths,
including its good reputation in the industry, its strong financial position
and solid core businesses, as we focus on creating value for our shareholders."
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<PAGE> 2
2.
FOURTH QUARTER EARNINGS
For the fourth quarter of 1995, Union Texas reported net income of $24
million or 27 cents per share, compared to $17 million or 20 cents per share
for the same period in 1994. The company's 1995 fourth quarter results were
favorably affected by higher oil and gas sales volumes in the U.K. North Sea
and Pakistan, partially offset by lower liquefied natural gas (LNG) volumes in
Indonesia, increased interest expense and decreased ethylene margins. Sales
and operating revenues for the fourth quarter of 1995 totaled $214 million,
level with the same period in 1994.
1995 FULL-YEAR RESULTS
For the full year 1995, Union Texas said its earnings benefited from
higher oil volumes in the U.K. North Sea, higher ethylene margins and sales
volumes at its U.S. petrochemical operations, and improved oil and gas sales
prices, partially offset by increased exploration expenses, higher interest
expense and lower LNG volumes. During 1995, Union Texas had an expanded
exploration program and, as a result, recorded about $77 million in exploration
expenses versus $54 million in 1994. The company's sales and operating
revenues for the full-year 1995 were $852 million, compared to $748 million in
1994.
With all of its oil and gas producing operations located overseas, the
company said its worldwide oil and gas sales prices averaged $16.05 per barrel
and $2.65 per thousand cubic feet in 1995, respectively, compared to $14.94 per
barrel and $2.48 per thousand cubic feet in 1994. For the full year 1995,
Union Texas' ethylene prices averaged about 25 cents per pound of ethylene
versus 20 cents in 1994, which yielded average margins of 13 cents per pound in
1995 compared to 6 cents per pound in 1994. Ethylene sales volumes increased
to 462 million pounds in 1995, up from 436 million pounds in 1994.
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<PAGE> 3
3.
WORLDWIDE OPERATIONS HIGHLIGHTS
The company's oil sales in the U.K. North Sea were enhanced with the
July 1995 acquisition of a 15.5% working interest in the Alba field. Union
Texas' share of daily oil sales in the U.K. North Sea rose by more than 25% in
the fourth quarter of 1995 from the same period of 1994. Along with boosting
Union Texas' production volumes and reserves, the Alba acquisition complements
the company's October 1994 purchase of a 9.42% unit interest in the Britannia
gas development project, which will enhance Union Texas' U.K. North Sea
production with its anticipated start-up in late 1998.
The Union Texas-operated joint venture in Pakistan set a production
record in 1995, the venture's sixth such record since 1989. During 1995, the
group produced an average of approximately 21,000 barrels of oil and 174
million cubic feet of gas a day gross, which represented a 12% and 6% increase,
respectively, from 1994 levels. Union Texas' net share of production from its
Pakistan operations in 1995 was about 26%. At the company's joint venture
operations in Indonesia, LNG sales volumes were down by about 8% in 1995
compared to 1994.
Union Texas' proved worldwide reserves at year-end 1995 increased to
435 million barrels of oil equivalent, up from 411 million barrels at the end
of 1994. A substantial portion of the increased reserves was attributed to the
Alba acquisition, which accounted for about 45 million barrels in proved oil
reserves net to Union Texas as of July 1, 1995. The company also recorded
reserve additions and revisions for its other interests in the U.K. North Sea,
Indonesia and Pakistan. The company's 1995 production set a record for its
international operations, growing to about 46 million barrels of oil equivalent
compared to 45 million barrels in 1994. Over a
- more -
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4.
three-year period of 1993-95, the company replaced about 187% of its worldwide
production at a cost of about $4.38 per barrel of oil equivalent.
U.S. PETROCHEMICAL OPERATIONS
At its petrochemical operations, Union Texas' ethylene margins
averaged about 13 cents per pound of ethylene for the full-year 1995, compared
to 6 cents in 1994. During the fourth quarter of 1995, ethylene margins
declined to an average of 6 cents per pound, down from about 12 cents per pound
in 1994's corresponding period, reflecting an increase in U.S. ethylene
inventory levels from the extremely low levels in the fourth quarter of 1994.
Union Texas said its ethylene margins in December 1995 averaged about four
cents per pound.
One of the largest independent producers located in the U.S.,
Houston-based Union Texas Petroleum Holdings, Inc. (NYSE: UTH) explores for and
produces oil and gas overseas primarily in the U.K. North Sea, Indonesia and
other strategic areas. The company also has petrochemicals interests in the
U.S. Union Texas celebrated its 100th anniversary in January 1996.
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5.
Comparative financial highlights follow (amounts in millions, except per share
data):
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
------------------
1995 1994
------ ------
<S> <C> <C>
Net income. . . . . . . . . . . . . . . . . . . . . . . . $ 24 $ 17
Earnings per share. . . . . . . . . . . . . . . . . . . . $ .27 $ .20
Sales and operating revenues. . . . . . . . . . . . . . . $ 214 $ 214
Average common shares outstanding. . . . . . . . . . . . . 87.6 87.6
</TABLE>
<TABLE>
<CAPTION>
FULL YEAR ENDED
DECEMBER 31,
----------------
1995 1994
------ ------
<S> <C> <C>
Net income . . . . . . . . . . . . . . . . . . . . . . . . $ 102 $ 67
Earnings per share . . . . . . . . . . . . . . . . . . . . $1.17 $ .76
Sales and operating revenues. . . . . . . . . . . . . . . . $ 852 $ 748
Average common shares outstanding . . . . . . . . . . . . . 87.7 87.6
</TABLE>
Additional financial and operating information appears on the attached pages.
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6.
UNION TEXAS PETROLEUM
FINANCIAL SUMMARY
(amounts in millions, except per share data)
<TABLE>
<CAPTION>
FOURTH QUARTER FULL YEAR
---------------------- ---------------------
1995 1994 1995 1994
------ ------- ------- -------
<S> <C> <C> <C> <C>
Sales and operating revenues $ 214 $ 214 $ 852 $ 748
Net income $ 24 $ 17 $ 102 $ 67
Major operations(a)
Indonesia $ 21 $ 26 $ 95 $ 94
U.K. North Sea $ 19 $ 7 $ 46 $ 27
Pakistan $ 2 $ 1 $ 14 $ 10
Petrochemicals $ 4 $ 9 $ 38 $ 15
Earnings per share of common stock $ .27 $ .20 $ 1.17 $ .76
Discretionary cash flow(b) $ 87 $ 76 $ 367 $ 295
Major operations(a)
Indonesia $ 29 $ 40 $ 147 $ 154
U.K. North Sea $ 62 $ 39 $ 183 $ 142
Pakistan $ 5 $ 3 $ 26 $ 22
Petrochemicals $ 7 $ 15 $ 63 $ 28
Average common shares 87.6 87.6 87.7 87.6
</TABLE>
SEE FOOTNOTES ON PAGE 8.
DISCRETIONARY CASH FLOW SUMMARY
(amounts in millions)
<TABLE>
<CAPTION>
FOURTH QUARTER FULL YEAR
----------------------- ------------------
1995 1994 1995 1994
------- -------- ------ ------
<S> <C> <C> <C> <C>
Net income $ 24 $ 17 $ 102 $ 67
Less: Equity partnership income $ (4) $ (5) $ (21) $ (20)
Add: DD&A $ 55 $ 45 $ 192 $ 168
Deferred taxes $ (12) $ (5) $ (19) $ (12)
Exploration expenses $ 17 $ 14 $ 77 $ 54
Unimar equity DCF(c) $ 7 $ 10 $ 36 $ 38
Discretionary cash flow $ 87 $ 76 $ 367 $ 295
</TABLE>
SEE FOOTNOTES ON PAGE 8.
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7.
OPERATING SUMMARY(d)
<TABLE>
<CAPTION>
FOURTH QUARTER FULL YEAR
--------------------- --------------------
1995 1994 1995 1994
-------- ------ ------- -------
<S> <C> <C> <C> <C>
Net crude oil sales (MBBLS/D)
U.K. North Sea 47 37 40 34
Indonesia 6 5 6 6
Pakistan 5 4 6 5
Average crude oil prices (per BBL)
U.K. North Sea $15.97 $16.18 $16.14 $14.99
Indonesia $16.98 $16.00 $17.14 $15.78
Pakistan $13.70 $12.98 $14.24 $13.43
Net natural gas sales (MMCF/D)
Indonesian LNG 183 205 205 222
U.K. North Sea 51 36 34 24
Pakistan 46 40 45 43
Average natural gas prices (per MCF)
Indonesian LNG $ 2.92 $ 2.92 $ 3.03 $ 2.85
U.K. North Sea(e) $ 2.57 $ 2.91 $ 2.78 $ 2.57
Pakistan $ 1.31 $ 1.03 $ 1.32 $ 1.07
Ethylene (per LB)
Sales price $ .18 $ .25 $ .25 $ .20
Margins $ .06 $ .12 $ .13 $ .06
Sales volumes (MLBS/D)(f) 1,253 1,341 1,267 1,195
</TABLE>
SEE FOOTNOTES ON PAGE 8.
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8.
FOOTNOTES
(a) Excludes corporate items and other worldwide ventures.
(b) Discretionary cash flow (DCF) is net income (less equity partnership
income) excluding depreciation, deferred taxes, and exploration expenses,
plus the company's estimated share of discretionary cash flow from its
equity interest in its Unimar partnership's Indonesian operations.
(c) Unimar equity DCF reflects the company's estimated share of discretionary
cash flow from its equity interest in its Unimar partnership's Indonesian
operations.
(d) Excludes the Unimar equity partnership.
(e) Excludes capacity charge of $35 million and $32 million in 1995 and 1994,
respectively, from the North and South Sean gas fields in the U.K. North
Sea.
(f) Represents Union Texas' 41.67% net interest in the jointly-owned Geismar
ethylene plant in Louisiana.
# # #
<PAGE> 1
EXHIBIT 99.2
UNION TEXAS PETROLEUM
(LETTERHEAD)
NEWS RELEASE
Contact: Carol Cox
(713) 968-2714
UNION TEXAS PETROLEUM ANNOUNCES $220 MILLION
CAPITAL BUDGET FOR 1996
Houston, January 26, 1996 -- The Board of Directors of Union Texas
Petroleum Holdings, Inc. has approved a 1996 capital spending budget of
approximately $220 million, up about 28% from $172 million spent in 1995, with
the increase being earmarked primarily for development activities in 1996. In
addition to the $172 million in capital expenditures in 1995, Union Texas spent
an additional $270 million for the acquisition of a 15.5% working interest in
the U.K. North Sea's Alba oil field.
John Whitmire, Chairman and CEO, said, "Our 1996 capital budget
reflects our sharp focus on building shareholder value through several
development projects which will enhance Union Texas' oil and gas production in
the years ahead as well as exploration activities at our worldwide operations."
BRITANNIA GAS DEVELOPMENT PROJECT
Union Texas has budgeted approximately $152 million in 1996 for oil
and gas development projects in the U.K. North Sea, Indonesia and Pakistan, up
from $102 million spent in 1995. A major highlight in Union Texas' 1996
capital budget is the company's participation in the U.K. North Sea's Britannia
gas development
- more -
<PAGE> 2
2.
project, in which Union Texas has a 9.42% unit interest. The company has
earmarked approximately $60 million for additional development drilling and
construction of the platform and facilities for Britannia in 1996. During
1995, Union Texas' share of development costs for Britannia was approximately
$31 million. The largest undeveloped gas field in the U.K., Britannia is
anticipated to commence production in late 1998. Union Texas' total share of
capital required to develop Britannia from 1994 through the end of 1998 is
estimated at about $200 million.
ALBA FIELD
Of the remaining $42 million that Union Texas has earmarked for
development activities in the U.K. North Sea during 1996, approximately $16
million is allocated for development work at the producing Alba oil field,
which overlies a portion of Britannia. Union Texas acquired a 15.5% working
interest in Alba in July 1995. Development plans at Alba for 1996 include a
number of extended-reach wells in the field's southern portion and some
debottlenecking projects on the Alba platform. During 1995, Union Texas spent
about $4 million on development projects at Alba.
INDONESIA OPERATIONS
The independent oil and gas producer has allocated about $37 million
for development projects at its operations in Indonesia, where Union Texas and
its co-venturers supply natural gas to an Indonesian-owned liquefied natural
gas (LNG) plant. During 1996, the venture plans additional development
drilling at its fields, including the Nilam, Semberah and Badak fields. In
1995, Union Texas spent about $40 million on development projects in Indonesia.
PAKISTAN PROJECTS
In Pakistan, development projects also are a key focus for the Union
Texas-operated venture. Union Texas has budgeted about $13 million for
development projects in Pakistan during 1996, which will include additional
development wells and compression equipment to boost natural gas
- more -
<PAGE> 3
3.
production and reserves. Union Texas also has earmarked about $2 million in
its 1996 budget to study and evaluate possible liquefied petroleum gas (LPG)
plant and electrical power generation opportunities in Pakistan where the
company could add value to its hydrocarbon reserve base and capitalize on Union
Texas' 19 years of experience in Pakistan. During 1995, Union Texas spent
about $6 million on development activities in Pakistan.
OTHER OIL AND GAS ACTIVITIES
As part of its 1996 capital plans, Union Texas has budgeted a total of
approximately $21 million for exploration projects in the U.K. North Sea,
Pakistan and Indonesia. The company has also allocated $18 million for its
activities in Alaska, including the Western Colville area on the North Slope.
Union Texas also plans to participate in new venture exploration activities in
offshore Tunisia, Italy, Ireland and Argentina. Overall, the company plans to
spend approximately $50 million on exploration programs during 1996. In 1995,
Union Texas spent a total of about $63 million on its worldwide exploration
activities.
PETROCHEMICALS
At its petrochemical operations in Louisiana, Union Texas has
allocated about $10 million for 1996, which will include a number of projects
to enhance production and efficiency at its jointly-owned ethylene plant.
During 1995, Union Texas spent about $6 million on capital projects in its
petrochemical businesses.
One of the largest independent producers located in the U.S.,
Houston-based Union Texas Petroleum Holdings, Inc. (NYSE: UTH) explores for and
produces oil and gas overseas primarily in the U.K. North Sea, Indonesia and
other strategic areas. The company has petrochemical operations in Louisiana.
Union Texas celebrated its 100th anniversary in January 1996.
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4.
UNION TEXAS PETROLEUM HOLDINGS, INC.
CAPITAL SPENDING(1)
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
PLANNED
1996 1995
------- ------
<S> <C> <C>
UNITED KINGDOM
Exploration $ 8 $ 11
Britannia Development $ 60 $ 31
Other Development $ 42 $ 25
INDONESIA
Exploration $ 5 $ 4
Development $ 37 $ 40
PAKISTAN
Exploration $ 8 $ 8
Development $ 13 $ 6
LPG/Power Plant $ 2 --
ALASKA $ 18 $ 6
OTHER INTERNATIONAL VENTURES(2) $ 16 $ 34
PETROCHEMICALS $ 10 $ 6
CORPORATE $ 1 $ 1
------ -----
TOTAL $220 $172(3)
</TABLE>
(1) Includes the company's equity interests in the Unimar partnership and
excludes capitalized interest.
(2) Primarily includes Tunisia, Italy, Ireland and Argentina.
(3) Does not include $270 million for the acquisition of a 15.5% interest in
the Alba field in the U.K. North Sea.
