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): August 20, 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 File Number) Identification No.)
of incorporation)
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>
Item 5. OTHER EVENTS.
Press Releases. The information set forth in the press release of the
registrant dated July 24, 1996, which is filed as an exhibit hereto, is
incorporated herein by reference.
Voluntary Retirement Program. From September 1 through October 1,
1996, Union Texas Petroleum Holdings, Inc. and its subsidiaries (the "Company")
are offering a Voluntary Retirement Program to 77 of its 1,100 employees who are
either nearing retirement eligibility or are already eligible, providing such
employees the opportunity to retire with enhanced benefits. This program is
being offered to Houston-based employees who, as of October 31, 1996, are salary
grade 14 or below, are at least age 48, have five or more years of service, and
are either already eligible for retirement or are within three years of
retirement eligibility. The program is not being offered to the Company's
officers and senior level employees. The actual cost of the program will be
included as a charge to the Company's 1996 third quarter earnings. The Company
does not believe that such charge will have a material impact on its full year
earnings. There are no plans to follow this program with an involuntary
termination program. The Company will continue to examine manpower needs in the
future and make adjustments as necessary.
Stock Repurchase Program. On April 27, 1994, the Company's Board of
Directors authorized the repurchase of up to 2,000,000 shares of the Company's
common stock and pursuant thereto, the Company has repurchased 1,601,236 shares
as of August 16, 1996. Of this total, 655,000 shares have been repurchased since
July 1, 1996. For more information, see the Company's previously filed public
reports.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibit:
Exhibit
Number Description
- ------ -----------
99.1 Press release dated July 24, 1996
<PAGE>
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/ Alan R. Crain, Jr.
Alan R. Crain, Jr.
Vice President and General Counsel
Date: August 20, 1996
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
- ------ -----------
99.1 Press release dated July 24, 1996
Contact: Carol L. Cox
(713) 968-2714
UNION TEXAS PETROLEUM REPORTS SUBSTANTIALLY HIGHER
EARNINGS FOR 1996 SECOND QUARTER, ON TRACK
FOR RECORD PRODUCTION IN 1996
Increased Volumes and Higher Prices for
Crude Oil and LNG Boost 1996 Second Quarter Earnings
Houston, July 24, 1996 -- Union Texas Petroleum Holdings, Inc.
(NYSE:UTH) today reported substantially higher results for the second quarter of
1996, with earnings of 35 cents per share compared to 23 cents per share in
1995's corresponding period. Net income for 1996's second quarter was $31
million, up from $20 million in the same period a year ago.
For the first six months of 1996, Union Texas also recorded higher
results from a year ago, with earnings of 90 cents per share in the first half
of 1996 compared to 76 cents per share in 1995's same period. Net income for
1996's first six months was $78 million, up from $67 million in 1995's
corresponding period.
HIGHER VOLUMES, INCREASED PRICES FOR OIL AND LNG
Chairman and CEO John Whitmire attributed Union Texas' higher earnings
in 1996's second quarter primarily to increased crude oil volumes in the U.K.
North Sea, improved prices for crude oil and liquefied natural gas (LNG), and
higher LNG
<PAGE>
volumes in Indonesia. "During the second quarter of 1996, we experienced a 36%
gain from year-ago levels in crude oil and gas sales volumes at our operations
in the U.K. North Sea, which primarily reflects our acquisition of an interest
in the Alba oil field in July 1995. We also benefited from a 4% increase in
worldwide oil prices over 1995's second quarter, averaging $18.14 per barrel in
1996's second quarter compared to $17.40 per barrel a year ago. In Indonesia,
our average sales price for LNG rose to $3.41 per thousand cubic feet in 1996's
second quarter versus $3.19 a year ago. In addition, the company benefited from
lower dry hole cost."
At its petrochemical operations in the United States, Union Texas said
that lower ethylene margins in 1996's second quarter compared to year-ago levels
were partially offset by higher ethylene sales volumes. Union Texas' ethylene
margins averaged 6 cents per pound of ethylene in 1996's second quarter compared
to 16 cents during 1995's corresponding period. However, the company's average
ethylene margins for 1996's second quarter were double its ethylene margins for
1996's first quarter, which averaged 3 cents per pound.
Sales and operating revenues for 1996's second quarter totaled $223
million, up from $200 million a year ago, due principally to increased oil
volumes in the U.K. North Sea, higher oil and LNG prices and improved Indonesian
LNG volumes.
1996 FIRST HALF EARNINGS
Union Texas said its performance for the first half of 1996 also was
favorably affected by higher volumes in the U.K. North Sea, improved prices for
crude oil and LNG, increased LNG volumes in Indonesia, and lower dry hole
expense. For the
<PAGE>
first half of 1996, Union Texas' sales and operating revenues were $481 million,
compared to $440 million a year ago.
"We've posted some strong operational and financial results for the
first half of 1996. During my first six months with Union Texas, I have been
impressed with the high quality of the company's assets as demonstrated by Union
Texas' strong cash flow from operations in 1996's first half. Our worldwide
operations achieved a 10% gain in production volumes during the first six months
of 1996 over year-ago levels, and we are on track to exceed 1995's record
production. Our higher production volumes for 1996's first half are largely
attributed to our Alba acquisition. We continue to be very pleased with Alba's
strong performance as evidenced by the venture's plans to expand Alba's
production facilities to handle up to 100,000 gross barrels of oil a day by
year-end 1996," said Whitmire.
"During the first half of 1996, we also reorganized our operations to
clearly focus our efforts on expanding our portfolio of opportunities to grow
Union Texas and create value for our shareholders. I'm looking forward in the
upcoming months to seeing Union Texas take advantage of several new growth
opportunities."
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.
<PAGE>
This news release may contain forward-looking statements that involve
risks and uncertainties, including price volatility, operational and
implementation risks, and other factors described from time to time in the
company's publicly available SEC reports, which could cause actual results to
differ materially.
Comparative financial highlights follow (amounts in millions, except per share
data):
<TABLE>
<CAPTION>
Three Months Ended June 30,
1996 1995
---- ----
<S> <C> <C>
Earnings per share. . . . . . . . . . . . . . . . . . . . . $0.35 $0.23
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . $ 31 $ 20
Sales and operating revenues . . . . . . . . . . . . . . . . . $ 223 $ 200
Average common shares outstanding. . . . . . . . . . . . . . . 87.5 87.7
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended June 30,
1996 1995
---- ----
<S> <C> <C>
Earnings per share. . . . . . . . . . . . . . . . . . . . . . $0.90 $0.76
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . $ 78 $ 67
Sales and operating revenues. . . . . . . . . . . . . . . . . $ 481 $ 440
Average common shares outstanding . . . . . . . . . . . . . . 87.6 87.7
</TABLE>
Additional financial and operating information appears on the attached pages.
<PAGE>
UNION TEXAS PETROLEUM
FINANCIAL SUMMARY
(amounts in millions, except per share data)
<TABLE>
<CAPTION>
SECOND QUARTER FIRST HALF
-------------- ----------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales and operating revenues $ 223 $ 200 $ 481 $440
Net income $ 31 $ 20 $ 78 $ 67
Major operations (a)
Indonesia $ 28 $ 26 $ 65 $ 54
U.K. North Sea $ 12 $ 5 $ 41 $ 23
Pakistan $ 3 $ 4 $ 9 $ 8
Petrochemicals $ 5 $ 12 $ 8 $ 24
Earnings per share of
common stock $ 0.35 $0.23 $ 0.90 $ 0.76
Discretionary cash flow (b) $ 103 $ 84 $ 215 $196
Major operations (a)
Indonesia $ 41 $ 41 $ 92 $ 85
U.K. North Sea $ 59 $ 29 $ 123 $ 81
Pakistan $ 8 $ 7 $ 16 $ 15
Petrochemicals $ 9 $ 20 $ 14 $ 39
Average common shares 87.5 87.7 87.6 87.7
outstanding
</TABLE>
See footnotes on page 8.
<PAGE>
UNION TEXAS PETROLEUM
DISCRETIONARY CASH FLOW SUMMARY(b)
(amounts in millions)
SECOND QUARTER FIRST HALF
---------------- -----------
1996 1995 1996 1995
---- ---- ---- ----
Net income ......................... $ 31 $ 20 $ 78 $ 67
Less: Equity partnership
income ..................... $ (5) $ (5) $ (15) $ (11)
Add: DD&A .......................... $ 49 $ 38 $ 104 $ 85
Deferred taxes ................ $ 8 $ (1) $ 1 $ (4)
Exploration expenses .......... $ 10 $ 22 $ 24 $ 38
Unimar equity DCF (c) ......... $ 10 $ 10 $ 23 $ 21
Discretionary cash flow ............ $ 103 $ 84 $ 215 $ 196
See footnotes on page 8
OPERATING SUMMARY (d)
SECOND QUARTER FIRST HALF
---------------- ------------
1996 1995 1996 1995
---- ---- ---- ----
Net crude oil sales (MBBLS/D)
U.K. North Sea 41 29 43 33
Indonesia 4 6 6 6
Pakistan 5 6 6 6
Average crude oil prices (per BBL)
U.K. North Sea $18.27 $17.79 $18.18 $16.98
Indonesia $19.07 $17.85 $18.56 $17.56
Pakistan $16.24 $14.90 $16.20 $14.77
Net natural gas sales (MMCF/D)
Indonesian LNG 214 202 227 222
U.K. North Sea 22 24 40 34
Pakistan 42 45 43 44
Average natural gas prices (per MCF)
Indonesian LNG $ 3.41 $ 3.19 $ 3.36 $ 3.13
U.K. North Sea (e) $ 2.25 $ 2.85 $ 2.43 $ 2.96
Pakistan $ 1.29 $ 1.30 $ 1.29 $ 1.30
Ethylene (per LB)
Sales price $ .21 $ .28 $ .20 $ .28
Margins $ .06 $ .16 $ .05 $ .16
Sales volumes (MLBS/D)(f) 1,577 1,298 1,379 1,318
See footnotes on page 8.
<PAGE>
UNION TEXAS PETROLEUM
CONSOLIDATED STATEMENT OF OPERATIONS
(amounts in millions, except per share amounts)
<TABLE>
<CAPTION>
SECOND QUARTER FIRST HALF
-------------- -----------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Sales and operating revenues $ 223 $ 200 $ 481 $ 440
Interest income and other revenues 1 --- 1 ---
Net earnings of equity investee 6 5 15 11
----- ----- ---- ----
Total revenues 230 205 497 451
Costs and other deductions:
Product costs and operating expenses 81 74 161 153
Exploration expenses 10 22 24 38
Depreciation, depletion and
amortization 49 38 104 85
Selling, general and administrative
expenses 7 6 12 12
Interest expense (g) 7 5 15 10
--- --- ---- ----
Income before income taxes 76 60 181 153
-- -- --- ---
Income taxes 45 40 103 86
Net income $ 31 $ 20 $ 78 $ 67
==== ==== ==== ====
Earnings per share of common stock $ .35 $ .23 $ .90 $ .76
===== ===== ===== =====
Dividends per share of common stock $ .05 $ .05 $ .10 $ .10
===== ===== ===== =====
Weighted average number of shares
outstanding 87.5 87.7 87.6 87.7
==== ==== ==== ====
</TABLE>
SELECTED BALANCE SHEET DATA
(amounts in millions)
JUNE 30, 1996 DECEMBER 31, 1995
------------- -----------------
Total assets $1,839 $1,837
Long-term debt 644 712
Shareholders' equity 489 424
<PAGE>
FOOTNOTES
(a) Excludes corporate items and other worldwide exploration 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 $6 million and $6 million in the second
quarter of 1996 and 1995, respectively, and $23 million and $23 million
in the first half of 1996 and 1995, 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.
(g) Interest expense is net of amounts capitalized of $6 million and $6
million in the second quarter of 1996 and 1995, respectively, and $12
million and $11 million in the first half of 1996 and 1995, respectively.
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