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UNITED STATES
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): October 22, 1997
UNION TEXAS PETROLEUM HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 1-9019 76-0040040
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
</TABLE>
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 release
of the registrant dated October 22, 1997, which is filed as an exhibit hereto,
is incorporated herein by reference.
The press release contains forward-looking statements within
the meaning of and in reliance upon the "safe harbor" provisions of the Private
Securities Litigation Reform Act, as set forth in Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended, that involve risks and uncertainties, including price
volatility, exploration, development, operational, implementation and
opportunity risks, changes to tax laws and rates, and other factors described
from time to time in the registrant's publicly available SEC reports, which
could cause actual results to differ materially.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits:
Exhibit
Number Description
- ------ -----------
99.1 Press release dated October 22, 1997
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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: October 22, 1997
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INDEX TO EXHIBITS
Exhibit
Number Description
- ------ -----------
99.1 Press release dated October 22, 1997
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[UNION TEXAS PETROLEUM LETTERHEAD]
[LOGO]
UNION TEXAS PETROLEUM REPORTS 1997 THIRD QUARTER RESULTS
Houston, October 22, 1997 - Union Texas Petroleum Holdings, Inc.
(NYSE: UTH) today reported earnings of 57 cents per share for the third quarter
of 1997, compared to 39 cents per share for the same period in 1996. Net
income for 1997's third quarter totaled $48 million, versus $34 million in the
corresponding period a year ago.
During the third quarter of 1997, Union Texas recorded certain
non-cash tax items, including a $24 million benefit for U.S. alternative
minimum tax credits, a $19 million favorable effect from net operating loss
(NOL) carryforwards, and a $14 million charge related to changes in U.K.
corporate taxes. Excluding these tax items, earnings for 1997's third quarter
were 23 cents per share or $19 million in net income.
For the first nine months of 1997, Union Texas reported earnings of
$1.61 per share, compared to $1.28 per share in 1996's same period. Net income
for 1997's first nine months was $137 million, compared to $112 million in
1996's corresponding period. Excluding the impact of the tax items, Union
Texas' earnings for the first nine months of 1997 were $1.28 per share or $108
million in net income.
1997 THIRD QUARTER RESULTS
In the third quarter of 1997, the independent energy company's
earnings were adversely affected by higher exploration expenses for new
ventures, an anticipated decline in liquefied natural gas (LNG) sales volumes
in Indonesia, lower crude oil prices in the U.K. North Sea, and decreased gas
prices in Indonesia and Pakistan compared to 1996's same quarter. The company
benefited from lower interest expense and higher ethylene margins from its U.S.
petrochemicals operations in the third quarter of 1997 compared to the same
period in 1996. Sales and operating revenues for 1997's third quarter totaled
$183 million, versus $227 million in 1996's corresponding quarter.
Union Texas said its average sales price for oil declined from $19.56
per barrel in the third quarter of 1996 to $16.76 in 1997's third quarter. The
company's average sales price for natural gas,
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including Indonesian LNG, also fell during 1997's third quarter to $2.78 per
thousand cubic feet compared to $3.09 in 1996's same period.
At its petrochemicals operations in Louisiana, Union Texas' ethylene
margins averaged about 10 cents per pound in 1997's third quarter, up from 8
cents in 1996's same quarter. Union Texas attributed the increased margins
primarily to lower feedstock costs.
1997 FIRST NINE MONTHS RESULTS
Union Texas said its performance for the first nine months of 1997 was
negatively affected by an anticipated decline in LNG sales volumes in
Indonesia, higher exploration expenses, and lower oil prices in the U.K. North
Sea. Partially offsetting these impacts were lower interest expense, higher
ethylene margins, increased prices for U.K. natural gas and Indonesian LNG,
and improved oil sales volumes in Pakistan. In 1997's first nine months, Union
Texas' sales and operating revenues were $677 million, down from $709 million
for the same period in 1996. On a full year basis, the amount of natural gas
supplied by Union Texas and its co-venturers to an Indonesian LNG plant is
anticipated to decline in 1997 by about 15% as compared to 1996 levels due
primarily to the reduction of deliveries under the venture's first contract in
which the venture had a higher participation interest.
ACTIVE EXPLORATION PROGRAM
"Union Texas is in a very active stage of our exploration program,"
said Chairman and CEO John Whitmire. "During the remainder of 1997, we expect
to participate in nine exploration wells in new areas for Union Texas including
China's Bohai Bay and Algeria. We also are involved in several seismic
programs in areas such as onshore Kazakhstan, Italy, Bolivia, Greece and
elsewhere which will be important for our exploration activities in 1998 and
beyond. And, we continue to add new exploration concessions to our portfolio.
Union Texas has recently joined a concession in the Ghadames Basin in
southwestern Tunisia, which complements our existing interests in blocks in the
Ghadames trend across the border in Algeria. We also are working on a number
of other possible investment opportunities in both the upstream and downstream
segments of our global 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.
This news release contains forward-looking statements within the
meaning of the Securities Litigation Reform Act that involve risks and
uncertainties, including exploration, development,
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operational and implementation risks, changes to tax laws and rates, 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 SEPTEMBER 30,
--------------------------------
1997 1996
------ ------
<S> <C> <C>
Earnings per share $0.57 $0.39
Net income $ 48 $ 34
Sales and operating revenues $ 183 $ 227
Average common shares outstanding 84.8 87.0
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
1997 1996
----- -----
<S> <C> <C>
Earnings per share $1.61 $1.28
Net income $ 137 $ 112
Sales and operating revenues $ 677 $ 709
Average common shares outstanding 85.1 87.4
</TABLE>
Additional financial and operating information on the attached pages.
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UNION TEXAS PETROLEUM
FINANCIAL SUMMARY
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THIRD QUARTER FIRST NINE MONTHS
------------- -----------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C>
Sales and operating revenues $ 183 $ 227 $ 677 $ 709
Net income $ 48 $ 34 $ 137 $ 112
Major operations(a)
Indonesia $ 24 $ 33 $ 83 $ 99
U.K. North Sea $ (9)(b) $ 10 $ 45(b) $ 51
Pakistan $ 5 $ 11 $ 19 $ 20
Petrochemicals $ 8 $ 5 $ 16 $ 13
Earnings per share of common stock $ .57 $ .39 $ 1.61 $1.28
Discretionary cash flow(c) $ 74 $ 71 $ 297 $ 287
Major operations(a)
Indonesia $ 34 $ 47 $ 123 $ 139
U.K. North Sea $ 33 $ 23 $ 158 $ 146
Pakistan $ 10 $ 13 $ 33 $ 29
Petrochemicals $ 13 $ 10 $ 29 $ 24
Average common shares outstanding 84.8 87.0 85.1 87.4
</TABLE>
See footnotes on page 7.
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UNION TEXAS PETROLEUM
DISCRETIONARY CASH FLOW SUMMARY(C)
(AMOUNTS IN MILLIONS)
<TABLE>
<CAPTION>
THIRD QUARTER FIRST NINE MONTHS
------------- -----------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income $ 48 $ 34 $ 137 $ 112
Less: Equity partnership income $ 5 $ 8 $ 17 $ 22
Add:
DD&A $ 48 $ 49 $ 153 $ 152
Deferred taxes $ (40) $ (24) $ (52) $ (23)
Exploration expenses $ 16 $ 9 $ 48 $ 33
Equity DCF(d) $ 7 $ 11 $ 28 $ 35
Discretionary cash flow $ 74 $ 71 $ 297 $ 287
See footnotes on page 7.
OPERATING SUMMARY(E)
THIRD QUARTER FIRST NINE MONTHS
------------- -----------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net crude oil sales (MBBLS/D)
U.K. North Sea 33 37 41 41
Indonesia 6 6 6 6
Pakistan 6 6 7 6
Average crude oil prices (per BBL)
U.K. North Sea $16.70 $20.11 $17.43 $18.76
Indonesia $18.30 $18.63 $19.74 $18.59
Pakistan $15.73 $17.32 $17.16 $16.58
Net natural gas sales (MMCF/D)
Indonesian LNG 176 222 183 225
U.K. North Sea 4 18 29 33
Pakistan 32 41 36 42
Average natural gas prices (per MCF)
Indonesian LNG $ 3.20 3.47 $ 3.55 $ 3.39
U.K. North Sea(f) $ 2.38 2.21 $ 2.93 $ 2.39
Pakistan $ 1.55 2.36 $ 1.64 $ 1.64
Ethylene (per LB)
Sales price $ .23 .23 $ .24 $ .21
Margins $ .10 .08 $ .10 $ .06
Sales volumes (MLBS/D)(g) 1,432 1,385 1,264 1,381
</TABLE>
See footnotes on page 7.
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UNION TEXAS PETROLEUM
CONSOLIDATED STATEMENT OF OPERATIONS
(AMOUNTS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THIRD QUARTER FIRST NINE MONTHS
----------------- ----------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Sales and operating revenues $ 183 $ 227 $ 677 $ 709
Interest income and other revenue 1 1 4 2
Net earnings of equity investees 5 8 17 22
----- ----- ----- -----
Total revenues $ 189 $ 236 $ 698 $ 733
Costs and other deductions:
Product costs and operating
expenses 69 81 231 242
Exploration expense 16 9 48 33
Depreciation, depletion and
amortization 48 49 153 153
Selling, general and administrative
expenses 8 6 20 19
Interest expense(h) 1 6 7 20
----- ----- ----- -----
Income before taxes 47 85 239 266
Income taxes (benefit) (1) 51 102 154
----- ----- ----- -----
Net income $ 48 $ 34 $ 137 $ 112
===== ===== ===== =====
Earnings per share of common stock $ .57 $ .39 $1.61 $1.28
===== ===== ===== =====
Dividends per share of common stock $ .05 $ .05 $ .15 $ .15
===== ===== ===== =====
Weighted average number of shares
outstanding 84.8 87.0 85.1 87.4
===== ===== ===== =====
</TABLE>
See footnotes on page 7.
SELECTED BALANCE SHEET DATA
(AMOUNTS IN MILLIONS)
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997 DECEMBER 31, 1996
------------------ -----------------
<S> <C> <C>
Total assets $1,978 $1,942
Long-term debt $ 619 $ 558
Shareholders' equity $ 657 $ 586
</TABLE>
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FOOTNOTES
(a) Excludes corporate items and other worldwide exploration ventures.
(b) Includes a $14 million charge related to changes in U.K. corporate taxes.
(c) 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
interests.
(d) Equity DCF reflects the company's estimated share of discretionary cash
flow primarily from its equity interest in the Unimar partnership.
(e) Excludes the Unimar equity partnership.
(f) Excludes capacity charge of $25 million and $23 million in the first nine
months of 1997 and 1996, respectively, from the North and South gas fields
in the U.K. North Sea.
(g) Represents Union Texas' 41.67% net interest in the jointly-owned Geismar
ethylene plant in Louisiana.
(h) Interest expense is net of amounts capitalized of $11 million and $7
million in the third quarter of 1997 and 1996, respectively, and
$28 million and $19 million for the first nine months of 1997 and 1996,
respectively.
# # #
For additional information, contact:
Carol Cox, media John Zimmerman, analysts and investors
713-968-2714 713-968-2740
For more information on Union Texas, visit our Web site at
http://www.uniontexas.com on the Internet.
To add or delete a name from Union Texas' fax list for press releases,
please contact Union Texas at (fax) 713-968-2711 or (phone) 713-968-2716.
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