<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K
<TABLE>
<C> <S>
(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
</TABLE>
COMMISSION FILE NUMBER 1-9033
------------------------
SUN ENERGY PARTNERS, L.P.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 75-2070723
(State or other jurisdiction of (I.R.S. employer identification number)
incorporation or organization)
13155 NOEL ROAD
DALLAS, TEXAS 75240-5067
(Address of principal executive offices) (Zip code)
</TABLE>
Registrant's telephone number, including area code:
(214) 715-4000
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
<TABLE>
<CAPTION>
Name of Each Exchange
Title of Each Class on Which Registered
- --------------------------------------------------- ---------------------------------------------------
<S> <C>
Depositary Units New York Stock Exchange, Inc.
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy of information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes _X_ No ____
The aggregate market value of the Depositary Units held by nonaffiliates of
the Registrant as of February 28, 1994, was approximately $47 million.
The number of Depositary Units outstanding as of February 28, 1994, was
7,543,100.
- --------------------------------------------------------------------------------
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<PAGE>
CERTAIN ABBREVIATIONS AND OTHER MATTERS
As used herein, the following terms have specific meanings: "m" means
thousand, "mm" means million, "bbl" means barrel, "mb" means thousands of
barrels, "mmb" means millions of barrels, "mcf" means thousand cubic feet,
"mmcf" means million cubic feet, "bcf" means billion cubic feet, "eb" means
equivalent barrel, "mmeb" means millions of equivalent barrels, "b/d" means
barrels per day, "mmcf/d" means million cubic feet per day, "mmbtu" means
million British thermal units, "ED&A" means exploration, development and
acquisition and "FD&A" means finding, development and acquisition.
Natural gas equivalents are determined under the relative energy content
method by using the ratio of 6.0 mcf of natural gas to 1.0 bbl of crude oil,
condensate or natural gas liquids.
With respect to information on the working interest in wells, drilling
locations and acreage, "net" oil and gas wells, drilling locations and acres are
determined by multiplying "gross" oil and gas wells, drilling locations and
acres by Sun Energy Partners, L.P.'s working interest in such wells, drilling
locations or acres.
PART I
ITEMS 1. AND 2. BUSINESS AND PROPERTIES
GENERAL
Sun Energy Partners, L.P. (Sun Energy Partners) engages exclusively in the
exploration and development of oil and gas in the United States. Sun Energy
Partners is controlled by Oryx Energy Company and certain of its affiliates
(together the Company), which is the managing general partner. As of December
31, 1993, the Company owned 98 percent of Sun Energy Partners. The remaining two
percent interest is comprised of limited partnership interests held by public
unitholders in the form of depositary units (Units). Eighty-five percent of the
Company's Board of Directors must approve any additional issuance, sale or
transfer of units which would reduce the Company's holdings below eighty-five
percent of the outstanding units. Sun Energy Partners sold 8.7 million limited
partnership units during 1993 and 11.5 million limited partnership units during
1991 to the Company. It does not expect to sell any additional units in 1994.
Sun Energy Partners' business is conducted through Sun Operating Limited
Partnership, a Delaware limited partnership, and several other operating
partnerships (collectively, the Operating Partnerships). In all of the
partnerships which comprise the Operating Partnerships, Sun Energy Partners
holds a 99 percent interest as the sole limited partner, while the Company holds
a one percent interest as the managing general partner.
Sun Energy Partners and the Operating Partnerships (collectively, the
Partnership), are managed by the Company. The holders of limited partnership
units have no power to direct or participate in the control of the Partnership.
The Company makes all decisions regarding exploration, development, production
and marketing for properties belonging to the Partnership, all decisions
regarding the sale of less than substantially all of such properties or the
acquisition of properties by the Partnership and all other decisions regarding
the Partnership's business or operations.
The Partnership has no officers or employees. Officers and employees of the
Company perform all management functions required for Sun Energy Partners. As of
December 31, 1993, the number of full-time employees of the Company was
approximately 1,500.
The Partnership's strategy is to continue to target as future growth
opportunities those areas where its advanced technological capabilities will
have the greatest impact. The Partnership is focusing its efforts on high
potential Gulf of Mexico prospects, including the continental shelf, subsalt and
flex trend.
RESERVES
As of December 31, 1993, the Partnership's proved reserves were an estimated
257 mmb of liquids and an estimated 1,417 bcf of natural gas which represents an
aggregate of 493 mmeb of reserves. More information on the estimated quantities
of proved oil and gas reserves and information on proved developed oil and gas
reserves, as well as information concerning the standardized measure of
<PAGE>
discounted future net cash flows from estimated production of proved oil and gas
reserves (Standardized Measure), are presented in the "Consolidated Financial
Statements -- Supplementary Financial and Operating Information" included in
Item 8 herein. The Partnership files estimates of oil and gas reserve data with
various governmental regulatory authorities and agencies. The basis of reporting
reserves to these authorities and agencies in some cases may not be comparable.
However, the difference in estimates does not exceed five percent.
The Partnership's production is exclusively in the United States and in
1993, the Partnership produced 54.5 mmeb. The Partnership seeks production
replacement through a balanced approach that combines exploration, development
and acquisition. In 1993, the Partnership replaced 85 percent of its production
at a finding, development and acquisition cost of $4.75 per eb.
OFFSHORE
EXPLORATION
As of December 31, 1993, the Partnership held 384 thousand net undeveloped
acres offshore, as compared to 295 thousand as of December 31, 1992. The
Partnership owns interests in 173 Gulf of Mexico blocks of which 124 are
undeveloped. In 1993, the Partnership spent $6.5 million to acquire interests in
20 blocks.
As of December 31, 1993, the Partnership was in the process of drilling 2
gross and 2 net exploratory wells. The Partnership drilled 4 net exploratory
wells offshore in 1993 and 4 in 1992.
The Partnership's offshore exploration program, concentrated in the Gulf of
Mexico, has three major objectives. The first objective is the gas-prone
prospects in the shallower water depths (less than 600 feet). The second
objective is in the subsalt which covers part of the continental shelf and the
deeper part of the Gulf of Mexico in water depths ranging from 300 to 2,000
feet. The third objective is in the deeper waters of the flex trend area (600 to
2,000 feet). Advanced hydrocarbon indicator and three-dimensional seismic
technologies are being used to explore undeveloped acreage as well as blocks
held by production.
The Partnership owns a 99 percent interest in the four block High Island 384
unit. The High Island 384 unit is composed of blocks 378, 379, 384 and 385 and
is located approximately 112 miles off the Texas coast in water with an average
depth of approximately 360 feet. In 1993, the Partnership announced an oil
discovery in High Island 379. The HI-A-379 #1 discovery well encountered 179
feet of oil pay from three Pleistocene sands between 4,600 and 5,130 feet. In
the early part of 1994, the Partnership announced an oil and gas discovery in
High Island 385. The High Island 385 discovery encountered 80 feet of net pay in
two Basal Nebraskan sands between 14,300 and 14,410 feet. The combined
production from the two discoveries is expected to peak at approximately 20 meb
per day. This new development is expected to begin production in 1995.
PRODUCTION AND DEVELOPMENT
Average daily production of crude oil and condensate offshore was 8.5, 7.1
and 5.3 mb in 1993, 1992 and 1991. Average daily production of natural gas
offshore was 191, 179 and 183 mmcf in 1993, 1992 and 1991. The increase in 1993
natural gas production was due primarily to the Mississippi Canyon unit.
The Partnership began production from its Mississippi Canyon 400 unit in
July 1993. The unit lies in water depths ranging from 600 to 2,100 feet off of
the Louisiana coast. The Partnership used subsea completions to tie three wells
into an existing platform. Production from this unit reached 60 mmcf of gas per
day. The Partnership has a 99 percent working interest in this project.
Delineation of Garden Banks 260 located in the deep flex trend area of the
Gulf of Mexico is continuing. First production is anticipated in 1998 at a gross
rate of about 60,000 eb/d. The Partnership owns a 50 percent interest in a three
block area.
2
<PAGE>
Viosca Knoll 826, lies 80 miles off the Alabama coast in water depths of
1,500 to 2,500 feet. First production is anticipated in 1996 or 1997 with a
gross peak rate of 20,000 to 30,000 eb/d. The Partnership operates the 4 block
Viosca Knoll unit and owns a 50 percent interest.
As of December 31, 1993, the Partnership was in the process of drilling 7
gross and 2 net development wells. The Partnership drilled 8 net development
wells offshore in 1993 and 2 in 1992. Of the 8 net development wells drilled in
1993, 5 were successful.
ONSHORE
The onshore area continues to be the major contributor of production volumes
and cash flow. While the Partnership continues to pursue workovers and
development opportunities to enhance its production and cash flows, ED&A
spending for onshore in total has declined substantially since 1991 as a result
of the redeployment of the Partnership's resources.
EXPLORATION
The decrease of 383 thousand net undeveloped acres from 812 thousand at
December 31, 1992 to 429 thousand at December 31, 1993 is due to the
relinquishment of non-producing properties as part of the Partnership's
strategic plan to reduce onshore exploration.
The Partnership drilled 3 fewer net exploratory wells onshore in 1993 than
1992 and 17 fewer in 1992 than in 1991.
PRODUCTION AND DEVELOPMENT
Average daily production of crude oil and condensate onshore was 46.8, 55.7
and 69.7 mb in 1993, 1992 and 1991. The decrease in 1993 crude oil and
condensate production compared to 1992 and in 1992 compared to 1991 was due
primarily to asset sales and normal declines. Average daily net production of
natural gas onshore was 326, 399 and 461 mmcf in 1993, 1992 and 1991. The
decrease in 1993 natural gas production compared to 1992 and in 1992 compared to
1991 was due primarily to divestments.
As of December 31, 1993, the Partnership was in the process of drilling or
participating in the drilling of 14 gross and 8 net development wells onshore.
Of the 45 net development wells drilled onshore, 44 were successful during 1993.
Net development wells drilled onshore during 1993 decreased by 12 from 57 in
1992 and decreased in 1992 by 42 from 99 in 1991 primarily due to the
de-emphasis of onshore activities.
As part of an asset sale program, the Partnership sold substantially all its
gas processing plant business in 1992. The Partnership's remaining gas plant
business at December 31, 1993 consisted of 11 operated gas processing plants and
interests in 4 others.
3
<PAGE>
TABULAR INFORMATION
The following table sets forth the Partnership's undeveloped and developed
oil and gas acreage (in thousands) held at December 31, 1993 and 1992:
<TABLE>
<CAPTION>
GROSS NET
-------------------- --------------------
1993 1992 1993 1992
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
UNDEVELOPED ACREAGE
Onshore............................................................. 997 1,752 429 812
Offshore............................................................ 674 605 384 295
--------- --------- --- ---------
1,671 2,357 813 1,107
--------- --------- --- ---------
--------- --------- --- ---------
<CAPTION>
GROSS NET
-------------------- --------------------
1993 1992 1993 1992
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
DEVELOPED ACREAGE
Onshore............................................................. 1,599 2,416 861 1,227
Offshore............................................................ 253 268 103 115
--------- --------- --- ---------
1,852 2,684 964 1,342
--------- --------- --- ---------
--------- --------- --- ---------
</TABLE>
The following table sets forth the Partnership's net exploratory and
development oil and gas wells drilled in 1993, 1992 and 1991:
<TABLE>
<CAPTION>
Exploratory Development
Wells Wells
---------------- ----------------
1993 1992 1991 1993 1992 1991
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Oil
Onshore..................................................... - 1 4 29 43 78
Offshore.................................................... 1 1 2 2 - -
---- ---- ---- ---- ---- ----
1 2 6 31 43 78
---- ---- ---- ---- ---- ----
---- ---- ---- ---- ---- ----
Gas
Onshore..................................................... - 1 1 15 11 19
Offshore.................................................... 1 3 1 3 2 7
---- ---- ---- ---- ---- ----
1 4 2 18 13 26
---- ---- ---- ---- ---- ----
---- ---- ---- ---- ---- ----
Dry
Onshore..................................................... 2 3 17 1 3 2
Offshore.................................................... 2 - 2 3 - -
---- ---- ---- ---- ---- ----
4 3 19 4 3 2
---- ---- ---- ---- ---- ----
---- ---- ---- ---- ---- ----
</TABLE>
The following table sets forth the Partnership's gross and net producing oil
and gas wells at December 31, 1993:
<TABLE>
<CAPTION>
Gross* Net
-------------------- --------------------
Oil Gas Oil Gas
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Onshore............................................................... 4,586 988 2,181 571
Offshore.............................................................. 60 159 22 65
--------- --------- --------- ---
4,646 1,147 2,203 636
--------- --------- --------- ---
--------- --------- --------- ---
<FN>
- ------------------------
*Gross producing wells include 180 multiple completion wells (more than one
formation producing into the same well bore).
</TABLE>
4
<PAGE>
The following table sets forth the Partnership's average daily net
production for 1993, 1992 and 1991:
<TABLE>
<CAPTION>
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Crude & Condensate:
(Thousands of barrels daily)
Onshore..................................................................... 46.8 55.7 69.7
Offshore.................................................................... 8.5 7.1 5.3
--- --- ---------
55.3 62.8 75.0
Processed Natural Gas:*
(Thousands of barrels daily).................................................. 7.3 19.5 27.4
--- --- ---------
62.6 82.3 102.4
--- --- ---------
--- --- ---------
Natural Gas:**
(Millions of cubic feet daily)
Onshore..................................................................... 326 399 461
Offshore.................................................................... 191 179 183
--- --- ---------
517 578 644
--- --- ---------
--- --- ---------
<FN>
- ------------------------
*Following the Company's October 1991 announcement of its intention to divest
certain non-strategic assets, the Partnership sold substantially all of its
gas plant business. (See Note 3 to the Consolidated Financial Statements
included in Item 8 herein.)
**Natural gas production includes unprocessed natural gas liquids.
</TABLE>
The following table sets forth the Partnership's average revenues and
production costs per unit of oil and gas production for 1993, 1992 and 1991:
<TABLE>
<CAPTION>
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Revenues:
Crude oil & condensate (per bbl)....................................... $ 15.96 $ 18.51 $ 20.88
Crude oil, condensate & natural gas liquids (per bbl).................. $ 14.08 $ 18.21 $ 20.45
Natural gas (per mcf).................................................. $ 1.96 $ 1.72 $ 1.55
Average production cost per unit of oil and gas production (per eb)*... $ 4.56 $ 4.12 $ 3.85
<FN>
- ------------------------
*Average production cost consists of operating costs and production taxes.
</TABLE>
ASSET DISPOSALS
Assets are managed on a portfolio basis. The Partnership will continue to
buy and sell assets with the intention of upgrading its asset base.
RECOVERY METHODS
During 1993, the Partnership obtained 49, 39, and 12 percent of its crude
production from primary, secondary and tertiary recovery methods. This compares
to 50, 38 and 12 percent of its crude oil production in 1992. At December 31,
1993, the Partnership operated or participated in 18 major tertiary oil recovery
programs that produced approximately 6 thousand net barrels of crude and
condensate daily in 1993.
The terms "secondary recovery" and "tertiary recovery" relate to those
methods used to increase the quantity of crude oil and condensate and natural
gas that can be recovered in excess of the quantity recoverable using the
primary energy found in a reservoir. Secondary recovery methods include pressure
maintenance by waterflooding or natural gas injection. Tertiary recovery methods
5
<PAGE>
include injection of carbon dioxide, nitrogen, chemicals, steam or a combination
of these with natural gas or water. Tertiary and, to a lesser extent, secondary
recovery operations generally have higher operating costs compared to those
incurred in primary production efforts.
MARKETING OF OIL AND GAS
DISTRIBUTION
Crude oil, condensate and natural gas are distributed to end users through
pipelines, barges and/or trucks. In addition to end users, purchasers include
intermediaries such as gatherers, transporters and traders. Sufficient
distribution systems exist and are readily available in the areas of the
Partnership's production to enable the Partnership to effectively market its oil
and gas. In some instances, the Partnership owns an interest in these systems.
CRUDE OIL AND CONDENSATE
During 1993, sales to Phibro Energy Company and Meridian Oil Trading totaled
approximately 21 and 16 percent of the Partnership's sales of crude oil and
condensate. No other customer purchased more than 8 percent of the Partnership's
sales of crude oil and condensate.
Since most of the Partnership's crude oil and condensate is produced in
areas where there are other buyers offering to purchase at market prices, the
Partnership believes that the loss of any major purchaser would not have a
material adverse effect on the Partnership's business. In 1993, the ten largest
customers, including Phibro and Meridian Oil Trading, accounted for
approximately 68 percent of such sales.
Currently, approximately 55 percent of sales are made pursuant to
arrangements that are cancelable upon 30 days' written notice by the Partnership
or the purchaser, with substantially all of the remainder of the production
being sold pursuant to contracts of varying terms of up to one year in length.
NATURAL GAS
The Partnership's natural gas marketing strategies are designed to be
effective in the current competitive environment. Sales of natural gas into
short-term markets averaged 57 percent of total sales. However, by year-end
nearly 50 percent of total sales were contracted to end-users of natural gas on
a long-term basis. The Partnership's strategy is to sell to end-users that
possess firm transportation rights from the producing basin to the city gate on
major interstate pipelines. Contract length of these term sales ranges from one
to ten years.
During 1993, no individual customer accounted for more than five percent of
the Partnership's natural gas sales. The ten largest customers accounted for
approximately 30 percent of total gas sales during 1993.
HEDGING
Because of the volatility of oil and gas prices, the Partnership
periodically enters into crude oil and natural gas hedging activities (See Note
1 to the Consolidated Financial Statements included in Item 8 herein).
REGULATION
GENERAL
The oil and gas industry is subject to regulation by the public policies of
national, state and local governments relating to such matters as the award of
exploration and production interests, the imposition of specific drilling
obligations, environmental protection controls, control over the development and
abandonment of a field (including restrictions on production and abandonment of
production facilities). The industry is also subject to the payment of royalties
and taxes, which tend to be high compared to those levied on other commercial
activities. The Partnership cannot predict the impact of future regulatory and
taxation initiatives.
6
<PAGE>
NATURAL GAS
The domestic gas industry remains under federal regulation pursuant to the
Natural Gas Act and the Natural Gas Policy Act. However, as a result of the
Natural Gas Decontrol Act, wellhead regulation of gas prices ended January 1,
1993.
ENVIRONMENTAL MATTERS
The Partnership is subject to, and makes every effort to comply with,
various environmental quality control regulations of national and local
governments. Although environmental requirements can have a substantial impact
upon the energy industry, generally these requirements do not appear to affect
the Partnership any differently or to any greater or lesser extent than other
exploration and production companies.
The Partnership has been named as a potentially responsible party (PRP) at
four sites pursuant to the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended. At two of these sites, the Partnership
has been named as a de minimis party and therefore expects its liability to be
small. At a third site, the Partnership is reviewing its options and anticipates
that it will participate in steering committee activities with the Environmental
Protection Agency (EPA). At the fourth and largest site, the Operating
Industries, Inc. site in California, the Partnership has participated in a
steering committee consisting of 139 companies. The steering committee and other
PRP's previously entered into two partial consent decrees with the EPA providing
for remedial actions which have been or are to be completed. The steering
committee has recently successfully negotiated a third partial consent decree
which provides for the following remedial actions: a clay cover, methane
capturing wells, and leachate destruction facilities. The remaining work at the
site involves groundwater evaluation and long-term operation and maintenance.
Based on the facts outlined above and the Partnership's ongoing analyses of
the actions where it has been identified as a PRP, the Partnership believes that
it has accrued sufficient reserves to absorb the ultimate cost of such actions
and that such costs will not have a material impact on the Partnership's
financial condition or results of operations. While liability at superfund sites
is typically joint and several, the Partnership has no reason to believe that
defaults by other PRP's will result in liability of the Partnership materially
larger than expected.
COMPETITION
The oil and gas industry is highly competitive. Integrated companies,
independent companies and individual producers and operators are active bidders
for desirable oil and gas properties, as well as for the equipment and labor
required to operate and develop such properties. Although several of these
competitors have financial resources substantially greater than those of the
Partnership, management believes that the Partnership is in a position to
compete effectively.
The availability of a ready market for the Partnership's oil and gas
production depends on numerous factors beyond its control, including the level
of prices and consumer demand, the extent of worldwide oil and gas production,
the cost and availability of alternative fuels, the cost and proximity of
pipelines and other transportation facilities, regulation by national and local
authorities and the cost of compliance with applicable environmental
regulations.
TECHNOLOGY
The Partnership's exploration, development and production activities depend
upon the use of applied technology. In support of this, the Partnership, through
the Company, has 67 engineers, geoscientists, technicians and support personnel
applying the technology used in the exploration for, and development and
production of, energy resources. The Partnership's expenditures on technology
activities, including its share of the Company's employee-related costs, were
$15 million, $15 million and $13 million for the years 1993, 1992 and 1991,
respectively.
7
<PAGE>
CONFLICTS OF INTEREST
Certain conflicts of interest may arise as a result of the relationships
between the Company and the Partnership. The directors and officers of the
Company have fiduciary duties to manage the Company in the best interest of its
stockholders. The Company, as managing general partner of the Partnership, has a
fiduciary duty to manage the Partnership in a manner that is fair to the public
unitholders. The duty of the directors of the Company to its stockholders may
therefore come into conflict with the duties of the Company to the public
unitholders.
The Audit Committee of the Board of Directors of the Company (Audit
Committee), none of whose members is affiliated with the Company except as
company directors or stockholders or as holders of units, reviews policies and
procedures developed by the Company for dealing with various matters as to which
a conflict of interest may arise. The Audit Committee also monitors the
application of such policies and procedures.
OTHER
The Partnership's financial condition and business operations are affected
from time to time by political developments and laws and regulations which
relate to such matters as production, taxes, property, imports, pricing and
environmental controls. The Company makes no representations as to future events
and developments which could affect the Partnership's operations and financial
condition. Oil and gas prices are subject to international supply and demand.
Political developments (especially in the Middle East) and the decisions of OPEC
can particularly affect world oil supply and oil prices. Furthermore, the
Partnership's business and financial condition could be affected by, among other
things, competition, future price changes or controls, material and labor costs,
legislation, transportation regulations, tariffs, embargoes and armed conflicts.
ITEM 3. LEGAL PROCEEDINGS
The Partnership is involved in a number of legal and administrative
proceedings arising in the ordinary course of its oil and gas business. Although
the ultimate outcome of these proceedings cannot be ascertained at this time, it
is reasonably possible that some of the proceedings could be resolved
unfavorably to the Partnership. Management of the Company believes that any
liabilities which may arise would not be material in relation to the financial
position of the Partnership at December 31, 1993. The Company intends to
maintain liability and other insurance for the Partnership of the type customary
in the oil and gas business with such coverage limits as the Company deems
prudent.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF UNITHOLDERS
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S LIMITED PARTNERSHIP
UNITS AND RELATED SECURITY HOLDER MATTERS
The depositary units of Sun Energy Partners, L.P. are traded on the New York
Stock Exchange, Inc. The following table sets forth the high and low sales
prices per unit, as reported on the New York Stock Exchange Composite
Transactions quotations, for the periods indicated:
<TABLE>
<CAPTION>
1993 1992
------------------ ------------------
High Low High Low
------- ------- ------- -------
<S> <C> <C> <C> <C>
First Quarter........................................................... $ 8 7/8 $ 7 5/8 $ 9 1/8 $ 7 1/4
Second Quarter.......................................................... $ 8 3/4 $ 6 7/8 $ 9 $ 7 5/8
Third Quarter........................................................... $ 8 1/4 $ 7 1/8 $ 9 3/8 $ 8 1/4
Fourth Quarter.......................................................... $ 9 1/8 $ 6 $ 9 1/4 $ 7 1/2
</TABLE>
The Partnership had approximately 3,074 holders of record of depositary
units as of February 28, 1994.
8
<PAGE>
During 1993 and 1992, the quarterly cash distributions per unit paid to
unitholders were as follows:
<TABLE>
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
First Quarter.......................................................................... $ .25 $ .28
Second Quarter......................................................................... $ .16 $ .19
Third Quarter.......................................................................... $ .23 $ .18
Fourth Quarter......................................................................... $ .18 $ .22
</TABLE>
The first quarterly cash distribution for 1994 in the amount of $.08 per
unit was paid in March 1994. Future quarterly cash distributions to unitholders
are expected to be paid on or about the 10th day of March, June, September and
December in each year. (See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Cash Distribution Policy.")
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Year Ended December 31
-----------------------------------------------------
1993 1992 1991 1990 1989
--------- --------- --------- --------- ---------
(Millions of Dollars, Except Per Unit Amounts)
<S> <C> <C> <C> <C> <C>
For the Period
Revenues.................................................... $ 676 $ 937 $ 1,079 $ 1,455 $ 1,192
Income before cumulative effect of accounting change (1).... $ 44 $ 120 $ 114 $ 300 $ 84
Net income (loss) (1)....................................... $ 44 $ 120 $ 114 $ 300 $ (115)
Net income (loss) per unit (1).............................. $ .11 $ .29 $ .28 $ .77 $ (.31)
Cash distributions paid to unitholders (2).................. $ 340 $ 360 $ 535 $ 531 $ 426
Cash distributions per unit (2)............................. $ .82 $ .87 $ 1.33 $ 1.36 $ 1.16
Weighted average units outstanding (in millions)............ 414.7 412.5 404.4 390.8 367.0
Capital expenditures (3).................................... $ 199 $ 100 $ 306 $ 358 $ 424
At End of Period
Total assets................................................ $ 1,822 $ 2,038 $ 2,592 $ 3,636 $ 3,693
Long-term debt (4).......................................... $ 86 $ 100 $ 319 $ 887 $ 984
Partners' capital........................................... $ 1,525 $ 1,751 $ 1,991 $ 2,311 $ 2,278
<FN>
- ------------------------
(1) The net income for 1993 includes a $7 million loss from the sale of
assets. The net incomes for 1992, 1991 and 1990 include gains from sales
of assets of $115 million, $75 million and $92 million. The net loss for
1989 includes a $9 million loss from the sale of assets and a $199 million
($.55 per unit) cumulative charge from the change in accounting for
capitalized interest.
(2) In the fourth quarter of 1993, the Company announced that it would no
longer purchase newly issued partnership units to fund the Partnership's
capital outlays. The Partnership will fund its capital outlays from
internally generated funds and make distributions to partners from the
cash flow remaining after such outlays (see Note 11 to the Consolidated
Financial Statements).
(3) Includes capitalized interest of $13 million in 1989.
(4) Includes $82 million, $91 million, $312 million, $932 million and $981
million of long-term debt due to the Company. The Partnership prepaid $213
million and $575 million of such debt in 1992 and 1991.
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Management's discussion and analysis of the Partnership's financial position
and results of operations follows. This discussion should be read in conjunction
with the Consolidated Financial Statements and Selected Financial Data included
in this report.
9
<PAGE>
BUSINESS CLIMATE
The Partnership's production is approximately 60 percent gas and 40 percent
oil on an equivalent basis. The fundamentals in the U.S. gas market are better
today than they have been since the mid 1980's. Excess deliverability is no
longer a problem due to solid growth in demand and reduced supply, although oil
prices have constrained the upward movement of gas prices. The Partnership's
realized gas price in 1993 was $1.96 per mcf or 14 percent higher than the $1.72
per mcf realized in 1992.
The fundamentals in worldwide oil markets continue to reflect an excess of
supply over demand. OPEC members have not restrained their production in a weak
global economy and prices have fallen to five-year lows. The Partnership's
realized oil price in 1993 fell by $2.55 per barrel to $15.96 per barrel, or 14
percent less than the 1992 price. The crude price in the fourth quarter of 1993
was $5.59 per barrel lower than the fourth quarter of 1992. Prices in early 1994
have not shown any significant improvement from levels realized in late 1993.
RESULTS OF OPERATIONS
The Partnership's net income in 1993 was $44 million, or $.11 per unit, as
compared to net income of $120 million, or $.29 per unit, in 1992 and net income
of $114 million, or $.28 per unit in 1991.
Lower net income in 1993 as compared to 1992 was caused by lower production
volumes and a lower average oil price partially offset by a higher average price
for gas and lower costs and expenses. Additionally, results for 1992 include
$115 million in gains from the sale of assets while results for 1993 include $7
million in losses from asset disposals. Oil volumes were 13 percent lower and
gas volumes were 11 percent lower in 1993 resulting from divestments of
producing properties in 1992. The Partnership's hedging activities decreased the
overall price it received by $.09 per mcf of gas in 1993 and by $.06 per barrel
of oil and $.02 per mcf in 1992. Total costs and expenses decreased $185 million
or 23 percent to $632 million in 1993 from $817 million in 1992. The Partnership
is continuing to review its cost structure in an effort to further reduce costs
at all levels.
The improvement in net income for 1992 as compared to 1991 is reflective of
a $148 million decrease in costs and expenses, substantially offset by a $142
million decrease in total revenues. The decrease in costs and expenses was
driven by the cost cutting provisions of the restructuring which began in 1991,
but were partially offset by a $62 million provision recognized in 1992 for the
early relinquishment of non-producing properties. The decrease in total revenues
was comprised of a $146 million, or 16 percent, decrease in oil and gas
revenues, partially offset by a $4 million increase in other revenues. The
decrease in oil and gas revenues is reflective of a 13 percent decline in
volumes, due to asset sales and normal declines, and continued price volatility.
The increase in other revenues is essentially comprised of a $40 million
increase in gains on sales of assets, partially offset by a $27 million decrease
in gas plant margins caused by the sale of substantially all of the
Partnership's gas processing plants.
Average net production of oil in 1993 was 55 thousand barrels daily, or 13
percent lower than the average net production in 1992 of 63 thousand barrels
daily. The average price received for the Partnership's oil production in 1993
was $15.96 per barrel, representing a 14 percent decrease from the 1992 average
price of $18.51.
Average net production of oil in 1992 was 63 thousand barrels daily, or 16
percent lower than average net production in 1991 of 75 thousand barrels daily.
The average price received for the Partnership's oil production in 1992 was
$18.51 per barrel, representing a 11 percent decrease from the 1991 average
price of $20.88.
Average net production of gas in 1993 was 517 million cubic feet daily, or
11 percent lower than average net production for 1992 of 578 million cubic feet
daily. The Partnership received an average price of $1.96 per thousand cubic
feet for its gas production in 1993 compared to an average price of $1.72 per
thousand cubic feet in 1992, representing a 14 percent increase.
10
<PAGE>
Average net production of gas in 1992 was 578 million cubic feet daily, or
10 percent lower than average net production of 644 for 1991. The average price
received for the Partnership's gas production in 1992 was $1.72 per thousand
cubic feet compared to $1.55 per thousand cubic feet in 1991, representing an 11
percent increase.
LIQUIDITY AND CAPITAL RESOURCES
In 1991, cash flow from operating activities decreased $102 million compared
to 1990 primarily due to lower oil prices offset by favorable increases in
working capital components. Investing activities provided $371 million more cash
and cash equivalents in 1991 largely due to a $325 million increase in
divestment proceeds and a $52 million reduction in capital expenditures. In
1991, financing activities used $725 million more cash and cash equivalents due
to an increase in debt repayments of $547 million and a reduction in the sale of
limited partnership units of $163 million.
In 1992, cash flow from operating activities decreased $208 million compared
to 1991 primarily due to lower sales volumes and oil prices, and reductions in
current liabilities, offset in part by an increase in gas prices and reductions
in costs and expenses. Cash flow provided from investing activities declined by
$28 million, reflecting a $258 million decrease in proceeds from divestments,
partially offset by a $206 million decrease in capital expenditures. Cash flow
used for financing activities decreased by $445 million in 1992, principally
reflective of declines of $361 million and $175 million in cash used for
repayments of long-term debt and cash distributions paid to unitholders, offset
in part by a $101 million decrease in cash flow provided from the sale of
limited partnership units.
In 1993, cash flow from operating activities increased $68 million from 1992
primarily due to favorable increases in cash from working capital components, a
higher average price for gas and lower costs and expenses partially offset by
lower production volumes and a lower average price for oil. Cash flow from
investing activities used $148 million in 1993 compared to providing $252
million in 1992. Proceeds from divestments were $298 million lower in 1993 while
capital expenditures increased by $99 million. Cash flow used for financing
activities decreased by $305 million in 1993 primarily because of the repayment
of $239 million in long-term debt in 1992 compared to repayment of $19 million
in 1993.
In the fourth quarter of 1993, the Company's Board of Directors elected to
change its investment policy concerning ownership of the Partnership. Effective
in 1994, the policy of distributing all cash to unitholders and then selling
newly issued Partnership units to the Company to fund capital outlays was
changed. The Partnership now funds its capital outlays from internally generated
funds and makes distributions of only that cash remaining after such outlays.
The Partnership's spending levels will be governed by its cash flow from
operating activities which will continue to be affected by prevailing oil and
gas prices, cost levels and production volumes. A shortfall in expected cash
flow from operating activities may require adjustment of the business plans.
Options include deferral of discretionary capital expenditures and the sale of
Partnership units. The Partnership's long-term cash generation capability is
ultimately tied to the value of its proved reserve base.
RESERVE REPLACEMENT
The ability to sustain cash flow is dependent, among other things, on the
level of the Partnership's oil and gas reserves, oil and gas prices and cost
containment. Replacement of proved reserves through extensions and discoveries,
improved recovery, purchases and revisions to prior reserve estimates in 1993
was 74 percent of liquids production and 93 percent of gas production. Reserve
replacement rates of liquids and gas were 17 and 68 percent in 1992 and 79 and
81 percent in 1991.
ENVIRONMENTAL
The Partnership's oil and gas operations are subject to stringent
environmental regulations. The Company is dedicated to the preservation of the
environment and has committed significant resources
11
<PAGE>
to comply with such regulations. Although the Partnership has been named as a
potentially responsible party at sites related to past operations, the Company
believes the Partnership is in general compliance with applicable governmental
regulations and that the potential costs to it, in the aggregate, are not
material to its financial condition. However, risks of substantial costs and
liabilities are inherent in the oil and gas business. Should other developments
occur, such as increasingly strict environmental laws, regulations and
enforcement policies or claims for damages resulting from the Partnership's
operations, they could result in additional costs and liabilities in the future.
See Note 12 to the Consolidated Financial Statements.
CASH DISTRIBUTION POLICY
In the fourth quarter of 1993, the Company's Board of Directors elected to
change the Company's investment policy concerning purchase of additional
Partnership units. Effective in 1994, the Company will no longer routinely
purchase newly issued Partnership units to fund capital outlays. As a result,
the Partnership now funds its capital outlays from internally generated funds
and make distributions of only that cash remaining after such outlays. The newly
adopted policy will reduce the cash paid to unitholders, but will also end the
ownership dilution caused by the issuance of additional units.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO FINANCIAL STATEMENTS, SUPPLEMENTARY FINANCIAL AND OPERATING
INFORMATION AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Report of Independent Accountants.......................................................................... 13
Financial Statements:
Consolidated Statements of Income for the Years Ended
December 31, 1993, 1992 and 1991........................................................................ 14
Consolidated Balance Sheets at December 31, 1993 and 1992................................................ 15
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1993, 1992 and 1991........................................................................ 16
Notes to Consolidated Financial Statements............................................................... 17
Supplementary Financial and Operating Information -- (Unaudited):
Oil and Gas Data......................................................................................... 24
Quarterly Financial Information.......................................................................... 27
Quarterly Operating Information.......................................................................... 27
Financial Statement Schedules:
Report of Independent Accountants........................................................................ 28
Schedule II -- Amounts Receivable from Related Parties and Underwriters, Promoters
and Employees Other Than Related Parties.......................... 29
Schedule V -- Properties, Plants and Equipment................................... 30
Schedule VI -- Accumulated Depreciation, Depletion and Amortization of Properties,
Plants and Equipment.............................................. 31
Schedule X -- Supplementary Income Statement Information......................... 32
</TABLE>
12
<PAGE>
SUN ENERGY PARTNERS, L.P.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of Sun Energy Partners, L.P. and the Board of Directors of Oryx
Energy Company:
We have audited the consolidated balance sheets of Sun Energy Partners, L.P.
and its Subsidiaries as of December 31, 1993 and 1992, and the related
consolidated statements of income and cash flows for each of the three years in
the period ended December 31, 1993. These financial statements are the
responsibility of Oryx Energy Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Sun Energy
Partners, L.P. and its Subsidiaries as of December 31, 1993 and 1992, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1993 in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND
Dallas, Texas
February 19, 1994
13
<PAGE>
SUN ENERGY PARTNERS, L.P
CONSOLIDATED STATEMENTS OF INCOME
(MILLIONS OF DOLLARS, EXCEPT PER UNIT AMOUNTS)
<TABLE>
<CAPTION>
Year Ended December 31
-------------------------------
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Revenues
Oil and gas...................................................................... $ 693 $ 791 $ 937
Other (Notes 2, 3 and 4)......................................................... (17) 146 142
--------- --------- ---------
676 937 1,079
--------- --------- ---------
Costs and Expenses
Operating costs.................................................................. 187 213 234
Production taxes (Note 5)........................................................ 48 56 62
Exploration costs................................................................ 48 64 159
Depreciation, depletion and amortization......................................... 256 271 306
General and administrative expense (Note 2)...................................... 80 107 147
Interest and debt expense (Note 2)............................................... 13 44 57
Provision for relinquishment of non-producing properties (Note 3)................ -- 62 --
--------- --------- ---------
632 817 965
--------- --------- ---------
Net Income......................................................................... $ 44 $ 120 $ 114
--------- --------- ---------
--------- --------- ---------
Net Income Per Unit................................................................ $ .11 $ .29 $ .28
--------- --------- ---------
--------- --------- ---------
Cash Distributions Paid to Unitholders............................................. $ 340 $ 360 $ 535
--------- --------- ---------
--------- --------- ---------
Cash Distributions Per Unit........................................................ $ .82 $ .87 $ 1.33
--------- --------- ---------
--------- --------- ---------
Weighted Average Units Outstanding (In Millions)................................... 414.7 412.5 404.4
--------- --------- ---------
--------- --------- ---------
</TABLE>
(See Accompanying Notes)
14
<PAGE>
SUN ENERGY PARTNERS, L.P.
CONSOLIDATED BALANCE SHEETS
(MILLIONS OF DOLLARS)
ASSETS
<TABLE>
<CAPTION>
December 31
--------------------
1993 1992
--------- ---------
<S> <C> <C>
Current Assets
Cash and short-term investments......................................................... $ 4 $ 7
Advances to affiliate (Note 2).......................................................... -- 20
Accounts and notes receivable and other current assets.................................. 113 172
--------- ---------
Total Current Assets...................................................................... 117 199
Properties, Plants and Equipment (Note 6)................................................. 1,625 1,758
Deferred Charges and Other Assets......................................................... 80 81
--------- ---------
Total Assets.............................................................................. $ 1,822 $ 2,038
--------- ---------
--------- ---------
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities
Accounts payable........................................................................ $ 92 $ 101
Accrued liabilities (Note 7)............................................................ 58 47
Advances from affiliate (Note 2)........................................................ 22 --
Current portion of long-term debt due affiliate (Note 8)................................ 9 8
Current portion of long-term debt (Note 8).............................................. 5 6
--------- ---------
Total Current Liabilities................................................................. 186 162
Long-term debt due affiliate (Note 8)..................................................... 82 91
Long-Term Debt (Note 8)................................................................... 4 9
Deferred Credits and Other Liabilities (Note 12).......................................... 25 25
Commitments and Contingent Liabilities (Note 9)
Partners' Capital (Notes 10 and 11)
Limited partnership interests........................................................... 468 510
General partnership interests........................................................... 1,057 1,241
--------- ---------
Partners' Capital......................................................................... 1,525 1,751
--------- ---------
Total Liabilities and Partners' Capital................................................... $ 1,822 $ 2,038
--------- ---------
--------- ---------
<FN>
- ------------------------
The successful efforts method of accounting is followed.
</TABLE>
(See Accompanying Notes)
15
<PAGE>
SUN ENERGY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
Year Ended December 31
-------------------------------
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Cash and Cash Equivalents From Operating Activities
Net Income.......................................................................... $ 44 $ 120 $ 114
Adjustments to reconcile net income to net cash from operating activities:
Depreciation, depletion and amortization........................................ 256 271 306
Dry hole costs and leasehold impairment......................................... 24 37 95
(Gain) loss on sale of assets................................................... 7 (115) (75)
Provision for relinquishment of non-producing properties........................ -- 62 --
Other........................................................................... 10 7 5
--------- --------- ---------
341 382 445
Changes in working capital:
Accounts and notes receivable and other current assets.......................... 46 28 174
Accounts payable, accrued liabilities and advances from affiliates.............. 22 (69) (70)
--------- --------- ---------
Net Cash Flow Provided From Operating Activities.................................... 409 341 549
--------- --------- ---------
Cash and Cash Equivalents From Investing Activities
Capital expenditures (includes capitalized interest).............................. (199) (100) (306)
Proceeds from divestments......................................................... 59 357 615
Other............................................................................. (8) (5) (29)
--------- --------- ---------
Net Cash Flow Provided From (Used For) Investing Activities......................... (148) 252 280
--------- --------- ---------
Cash and Cash Equivalents From Financing Activities
Proceeds from borrowings.......................................................... 5 10 --
Repayments of long-term debt...................................................... (19) (239) (600)
Cash distributions paid to unitholders............................................ (340) (360) (535)
Sale of limited partnership units................................................. 70 -- 101
--------- --------- ---------
Net Cash Flow Used For Financing Activities......................................... (284) (589) (1,034)
--------- --------- ---------
Changes in Cash and Cash Equivalents................................................ (23) 4 (205)
Cash and Cash Equivalents at Beginning of Year...................................... 27 23 228
--------- --------- ---------
Cash and Cash Equivalents at End of Year............................................ $ 4 $ 27 $ 23
--------- --------- ---------
--------- --------- ---------
</TABLE>
(See Accompanying Notes)
16
<PAGE>
SUN ENERGY PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND CONTROL
Sun Energy Partners, L.P. (Sun Energy Partners), a Delaware limited
partnership, was formed on October 1, 1985 and prior to December 1, 1985 had no
operations and nominal assets and equity. Effective as of December 1, 1985, Sun
Energy Partners succeeded to all the domestic oil and gas operations of Oryx
Energy Company and certain of its affiliates (collectively, the Company). These
operations consist of the exploration and development of oil and natural gas
reserves in the United States.
Sun Energy Partners is controlled by the Company, which is the managing
general partner. As of December 31, 1993, the Company had a partnership interest
of 98 percent in Sun Energy Partners. The remaining two percent limited
partnership interest is held by public unitholders in the form of depositary
units. Eighty-five percent of the Company's Board of Directors must approve any
additional issuance, sale or transfer of units which would reduce the Company's
holdings in Sun Energy Partners below eighty-five percent.
Sun Energy Partners operates through Sun Operating Limited Partnership, a
Delaware limited partnership, and several other operating partnerships
(collectively, the Operating Partnerships). In all of the partnerships which
comprise the Operating Partnerships, Sun Energy Partners holds a 99 percent
interest as the sole limited partner, while the Company holds a one percent
interest as the managing general partner.
Sun Energy Partners and the Operating Partnerships (collectively, the
Partnership) have no officers or employees. The officers and employees of the
Company perform all management functions.
BASIS OF PRESENTATION
The Partnership's consolidated financial statements have been prepared using
the proportionate method of consolidation for Sun Energy Partners and its 99
percent interest in the Operating Partnerships. Such financial statements are
prepared in accordance with generally accepted accounting principles which is
different from the basis used for reporting taxable income or loss to
unitholders.
CASH AND SHORT-TERM INVESTMENTS
The Partnership considers highly liquid investments with original maturities
of less than three months to be cash equivalents. Cash equivalents are stated at
cost which approximates market value.
PROPERTIES, PLANTS AND EQUIPMENT
The successful efforts method of accounting is followed for costs incurred
in oil and gas operations.
CAPITALIZATION POLICY. Acquisition costs are capitalized when incurred.
Costs of unproved properties are transferred to proved properties when proved
reserves are added. Exploration costs, including geological and geophysical
costs and costs of carrying unproved properties, are charged against income as
incurred. Exploratory drilling costs are capitalized initially; however, if it
is determined that an exploratory well did not find proved reserves, such
capitalized costs are charged to expense, as dry hole costs, at that time.
Development costs are capitalized. Costs incurred to operate and maintain wells
and equipment are expensed.
LEASEHOLD IMPAIRMENT AND DEPRECIATION, DEPLETION AND AMORTIZATION. Periodic
valuation provisions for impairment of capitalized costs of unproved properties
are expensed.
17
<PAGE>
SUN ENERGY PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The acquisition costs of proved properties are depleted by the
unit-of-production method based on proved reserves by field. Capitalized
exploratory drilling costs which result in the addition of proved reserves and
development costs are amortized by the unit-of-production method based on proved
developed reserves by field.
DISMANTLEMENT, RESTORATION AND ABANDONMENT COSTS. Estimated costs of future
dismantlement, restoration and abandonment are accrued as a component of
depreciation, depletion and amortization expense; actual costs are charged to
the accrual.
RETIREMENTS. Gains and losses on the disposals of fixed assets are
generally reflected in income. For certain property groups, the cost less
salvage value of property sold or abandoned is charged to accumulated
depreciation, depletion and amortization except that gains and losses for these
groups are taken into income for unusual retirements or retirements involving an
entire property group.
CAPITALIZED INTEREST
The Partnership capitalizes interest costs incurred as a result of the
acquisition and installation of significant assets.
INCOME TAXES
The Operating Partnerships and Sun Energy Partners are treated as
partnerships for income tax purposes and, as a result, income or loss of the
Partnership is includable in the tax returns of the individual unitholders.
Accordingly, no recognition has been given to income taxes in the financial
statements.
At December 31, 1993, 1992 and 1991, the Partnership's financial reporting
bases of assets and liabilities exceeded the tax bases of its assets and
liabilities (net temporary differences) by $1,049 million, $1,077 million and
$1,121 million.
CASH FLOWS
For purposes of reporting cash flows, cash and cash equivalents includes
cash, highly liquid investments with remaining maturities of less than three
months (see "Cash and Short-Term Investments", above) and advances to/from
affiliate.
Associated with the sale of the Midway-Sunset Field and related facilities
in 1991, the purchaser assumed $53 million of Partnership debt. In accordance
with Statement of Financial Accounting Standards No. 95, "Statement of Cash
Flows," non-cash transactions are not reflected within the accompanying
Consolidated Statements of Cash Flows (see Note 3 to the Consolidated Financial
Statements). Interest paid totaled $13 million, $45 million and $57 million in
1993, 1992 and 1991.
SALES OF OIL AND GAS
Sales of oil and gas are recorded on the entitlement method. Differences
between actual production and entitlements result in amounts due when
underproduction occurs and amounts owed when overproduction occurs.
During 1993, sales of oil to the Partnership's top two purchasers totaled
approximately 21 and 16 percent of oil revenue. During 1992, sales of oil to the
Partnership's top purchasers totaled approximately 13, 11 and 10 percent. During
1993 and 1992, no individual customer accounted for more than 5 percent of the
Partnership's gas sales. The Partnership believes that the loss of any major
purchaser would not have a material adverse effect on its business.
18
<PAGE>
SUN ENERGY PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FINANCIAL INSTRUMENTS
The difference between the values calculated as prescribed by Statement of
Financial Accounting Standards (SFAS) No. 107, "Disclosures about Fair Value of
Financial Instruments," of the Partnership's financial instruments and their
carrying value is not material.
FUTURES TRADING ACTIVITY
The Partnership, from time to time, enters into futures contracts to hedge
the impact of price fluctuations on crude and natural gas production. Futures
trading activity decreased oil and gas revenue by $17 million in 1993 and $7
million in 1992. At December 31, 1993, the Partnership had hedged about 30
percent of its gas production at an average floor of $2.04 per mmbtu and an
average ceiling of $2.28 per mmbtu.
ENVIRONMENTAL COSTS
The Partnership establishes reserves for environmental liabilities as such
liabilities are incurred (Note 12).
CEILING TESTS
For ceiling test purposes, the Partnership compares its undiscounted
standardized measure of future net cash flows from estimated production of
proved oil and gas reserves to its net properties, plants and equipment related
to oil and gas operations.
STATEMENT PRESENTATION
Certain items in years prior to 1993 have been reclassified to conform to
the 1993 presentation.
2) RELATED PARTY TRANSACTIONS
ADVANCES TO/FROM AFFILIATE
The Company has served as the Partnership's lender and borrower of funds and
a clearing-house for the settlement of intercompany receivables and payables.
Deposits earn interest at a rate equal to the rate paid by a major money market
fund. Demand loans bear interest at a rate based on the prime rate.
LONG-TERM DEBT DUE AFFILIATE
The Partnership is indebted to the Company under a 9.75% note due 1994-2001.
In 1992 and 1991 the Partnership prepaid $213 million and $575 million of such
debt from proceeds of asset sales (see Note 8 to the Consolidated Financial
Statements).
DIRECT AND INDIRECT COSTS
The Company is reimbursed by the Partnership for all direct costs incurred
in performing management functions and indirect costs (including payroll and
payroll related costs and the cost of postemployment benefits and management
incentive plans) allocable to the Partnership. The full cost of direct and
indirect costs incurred on behalf of the Partnership by the Company is allocated
to the Partnership based on services rendered and extent of use. Such costs,
which are charged principally to production cost, exploration cost and general
and administrative expense, totaled $104 million, $127 million and $176 million
for the years 1993, 1992 and 1991. The Company does not receive any carried
interests, promotions, back-ins or other similar compensation as the general
partner of the Partnership.
INTEREST INCOME
Interest income received from the Company, which is reflected in other
income in the consolidated statements of income, was earned on advances to the
Company and totaled $5 million, $9 million and $11 million during the years
1993, 1992 and 1991.
19
<PAGE>
SUN ENERGY PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2) RELATED PARTY TRANSACTIONS (CONTINUED)
INTEREST COST
Interest cost paid to the Company, which is included in interest and debt
expense in the consolidated statements of income, was primarily incurred on
long-term debt due the Company and totaled $12 million, $43 million and $55
million during the years 1993, 1992 and 1991 (see Note 8 to the Consolidated
Financial Statements).
3) CHANGES IN BUSINESS
Effective January 31, 1991, the Partnership sold its interest in the
Midway-Sunset Field producing oil and gas assets and a steam cogeneration
facility. Net proceeds of $529 million from the sale, including $53 million of
debt assumed by the purchaser, were used to fund capital expenditures and prepay
$575 million of debt.
In 1991, the Company commenced a major restructuring program (Restructuring)
to reduce the Company's and Partnership's cost structures. The program outlined
a plan to sell substantially all of the Partnership's gas plant business (Note
4) and certain onshore producing oil and gas properties.
Associated with the Restructuring, the Partnership recognized a $62 million
provision for the early relinquishment of certain non-producing properties in
1992. At December 31, 1992, the asset disposal program was substantially
complete although from time to time the Partnership will have divestments. In
1993, the Partnership completed asset disposals that generated $59 million in
proceeds and generated a loss of $7 million.
4) OTHER REVENUES
The components of other revenues were as follows:
<TABLE>
<CAPTION>
1993 1992 1991
--------- --------- ---------
(MILLIONS OF DOLLARS)
<S> <C> <C> <C>
Interest income............................................................ $ 5 $ 10 $ 12
Gas plant margins*......................................................... 4 29 56
Gain (loss) on sale of assets.............................................. (7) 115 75
Miscellaneous.............................................................. (19) (8) (1)
--- --------- ---------
$ (17) $ 146 $ 142
--- --------- ---------
--- --------- ---------
<FN>
- ------------------------
*Associated with the Restructuring announced in 1991, the Company sold
substantially all of the Partnership's gas plant business.
</TABLE>
5) PRODUCTION TAXES
Production taxes consisted of the following:
<TABLE>
<CAPTION>
1993 1992 1991
--------- --------- ---------
(MILLIONS OF DOLLARS)
<S> <C> <C> <C>
Severance...................................................................... $ 31 $ 37 $ 44
Property taxes................................................................. 17 19 18
--- --- ---
$ 48 $ 56 $ 62
--- --- ---
--- --- ---
</TABLE>
20
<PAGE>
SUN ENERGY PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
6) PROPERTIES, PLANTS AND EQUIPMENT
At December 31, the Partnership's properties, plants and equipment and
accumulated depreciation, depletion and amortization were as follows:
<TABLE>
<CAPTION>
1993 1992
---------- ----------
(MILLIONS OF DOLLARS)
<S> <C> <C>
Gross Investment
Proved oil and gas properties.............................................. $ 4,130 $ 4,114
Unproved oil and gas properties............................................ 59 67
Other...................................................................... 58 59
---------- ----------
4,247 4,240
---------- ----------
Less Accumulated Depreciation, Depletion and Amortization
Proved oil and gas properties.............................................. 2,571 2,432
Unproved oil and gas properties............................................ -- 2
Other...................................................................... 51 48
---------- ----------
2,622 2,482
---------- ----------
Net Investment............................................................... $ 1,625 $ 1,758
---------- ----------
---------- ----------
</TABLE>
7) ACCRUED LIABILITIES
At December 31, the Partnership's accrued liabilities were comprised of the
following:
<TABLE>
<CAPTION>
1993 1992
----- -----
(MILLIONS OF DOLLARS)
<S> <C> <C>
Drilling and operating costs.................................................... $ 35 $ 29
Taxes payable................................................................... 8 9
Other........................................................................... 15 9
--- ---
$ 58 $ 47
--- ---
--- ---
</TABLE>
8) LONG-TERM DEBT
At December 31, the Partnership's long-term debt consisted of the following:
<TABLE>
<CAPTION>
1993 1992
---------- ----------
(MILLIONS OF DOLLARS)
<S> <C> <C>
9.75% note payable to affiliate, due 1994-2001, payable in quarterly
installments................................................................... $ 91 $ 99
Capitalized lease obligation due 1996........................................... 6 8
Capitalized lease obligation and other long-term debt due 1994.................. 3 7
----- -----
100 114
Less: Current portion of note payable to affiliate.............................. 9 8
Current portion of capitalized lease obligations and other long-term
debt....................................................................... 5 6
----- -----
$ 86 $ 100
----- -----
----- -----
</TABLE>
Under the Partnership's existing capitalized lease and other long-term debt
obligations, the Partnership is obligated to make annual payments of $5 million,
$2 million and $2 million in 1994, 1995 and 1996.
Repayment obligations under the Partnership's long-term debt due affiliate
are $9 million, $10 million, $11 million, $12 million and $13 million in 1994,
1995, 1996, 1997 and 1998.
21
<PAGE>
SUN ENERGY PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
9) COMMITMENTS AND CONTINGENT LIABILITIES
The Partnership has operating leases for property and equipment. Total
rental expense for such leases for the years 1993, 1992 and 1991 was $28
million, $28 million and $38 million. Under contracts existing as of December
31, 1993, future minimum annual rentals applicable to noncancellable operating
leases that have initial or remaining lease terms in excess of one year were as
follows (in millions of dollars):
<TABLE>
<S> <C>
Year Ending December 31:
1994.......................................................... $ 16
1995.......................................................... 8
1996.......................................................... 3
1997.......................................................... 3
1998.......................................................... 3
Later years................................................... 4
---
Total minimum payments required............................... $ 37
---
---
</TABLE>
Several legal and administrative proceedings are pending against the
Partnership. Although the ultimate outcome of these proceedings cannot be
ascertained at this time, and it is reasonably possible that some of them could
be resolved unfavorably to the Partnership, management believes that any
liabilities which may arise would not be material in relation to the financial
position of the Partnership at December 31, 1993.
10) PARTNERS' CAPITAL
<TABLE>
<CAPTION>
GENERAL PARTNER
LIMITED PARTNERS ----------------
--------------------------------------------------
ORYX ENERGY ORYX ENERGY
PUBLIC COMPANY TOTAL COMPANY TOTAL
-------------- ---------------- ---------------- ---------------- ----------------
UNITS DOLLARS UNITS DOLLARS UNITS DOLLARS UNITS DOLLARS UNITS DOLLARS
----- ------- ------- ------- ------- ------- ------- ------- ------- -------
(DOLLARS IN MILLIONS, UNITS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
December 31, 1990.............. 7,543 $ 45 101,412 $ 583 108,955 $ 628 292,000 $1,683 400,955 $2,311
Sale of limited partnership
units....................... -- 1 11,500 69 11,500 70 -- 31 11,500 101
Cash distributions........... -- (10 ) -- (138 ) -- (148 ) -- (387 ) -- (535 )
Net income................... -- 2 -- 29 -- 31 -- 83 -- 114
----- ------- ------- ------- ------- ------- ------- ------- ------- -------
December 31, 1991.............. 7,543 38 112,912 543 120,455 581 292,000 1,410 412,455 1,991
Cash distributions........... -- (7 ) -- (99 ) -- (106 ) -- (254 ) -- (360 )
Net income................... -- 2 -- 33 -- 35 -- 85 -- 120
----- ------- ------- ------- ------- ------- ------- ------- ------- -------
December 31, 1992.............. 7,543 33 112,912 477 120,455 510 292,000 1,241 412,455 1,751
Sale of limited partnership
units....................... -- 1 8,716 48 8,716 49 -- 21 8,716 70
Cash distributions........... -- (7 ) -- (94 ) -- (101 ) -- (239 ) -- (340 )
Net income................... -- -- -- 10 -- 10 -- 34 -- 44
----- ------- ------- ------- ------- ------- ------- ------- ------- -------
December 31, 1993.............. 7,543 $ 27 121,628 $ 441 129,171 $ 468 292,000 $1,057 421,171 $1,525
----- ------- ------- ------- ------- ------- ------- ------- ------- -------
----- ------- ------- ------- ------- ------- ------- ------- ------- -------
</TABLE>
11) CASH DISTRIBUTIONS
Beginning with the fourth quarter 1993, Distributable Cash will be reduced
by the cash needed for capital outlays. This policy change will reduce the cash
paid to unitholders but will eliminate the ongoing ownership dilution faced by
unitholders due to Oryx Energy's purchase of newly issued partnership units to
fund Sun Energy's capital outlays. Distributable Cash is defined as revenues
(including interest income) less production cost; seismic, geological and
geophysical costs (including related costs); payments of principal and interest
on debt; general and administrative expenses including reimbursements of the
Company as managing general partner; adjustments for capital
22
<PAGE>
SUN ENERGY PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11) CASH DISTRIBUTIONS (CONTINUED)
expenditures (net of proceeds from divestments); and cash exploration costs. No
deduction will be made for depreciation, depletion and amortization, for
property acquisition and development expenditures.
Sun Energy Partners' quarterly cash distributions per unit for the years
1993, 1992 and 1991 were as follows:
<TABLE>
<CAPTION>
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
First Quarter.................................................................... $ .25 $ .28 $ .60
Second Quarter................................................................... .16 .19 .28
Third Quarter.................................................................... .23 .18 .25
Fourth Quarter................................................................... .18 .22 .20
</TABLE>
12) DEFERRED CREDITS AND OTHER LIABILITIES
At December 31, the Partnership's deferred credits and other liabilities
were comprised of the following:
<TABLE>
<CAPTION>
1993 1992
----- -----
(MILLIONS OF DOLLARS)
<S> <C> <C>
Accrued environmental cleanup costs............................................ $ 20 $ 20
Other.......................................................................... 5 5
--- ---
$ 25 $ 25
--- ---
--- ---
</TABLE>
Environmental cleanup costs have been accrued in response to the
identification of several sites that require cleanup based on environmental
pollution, some of which have been designated as superfund sites by the
Environmental Protection Agency (EPA). The Partnership has been designated as a
Potentially Responsible Party (PRP) at a site in southern California where the
EPA is requiring the PRP's to undertake remediation of the site in several
phases. The Partnership is a member of the group that is responsible for
carrying out the first phase of the work, which is expected to take 5 to 8
years. Completion of all phases is estimated to take up to 30 years. The maximum
liability of the group, which is joint and several for each member of the group,
is expected to range from approximately $450 million to $600 million, of which
the Partnership's share is expected to be approximately $10 million (net of $3
million in recoveries from third parties). Cleanup costs are payable over the
period that the work is completed.
23
<PAGE>
SUPPLEMENTARY FINANCIAL AND
OPERATING INFORMATION (UNAUDITED)
OIL AND GAS DATA
CAPITALIZED COSTS
<TABLE>
<CAPTION>
DECEMBER 31
--------------------------
1993 1992
---------- ----------
(MILLIONS OF DOLLARS)
<S> <C> <C>
Proved properties............................................................. $ 4,130 $ 4,114
Unproved properties........................................................... 59 67
---------- ----------
Total capitalized costs....................................................... 4,189 4,181
Less accumulated depreciation, depletion and amortization..................... 2,571 2,434
---------- ----------
Net capitalized costs......................................................... $ 1,618 $ 1,747
---------- ----------
---------- ----------
</TABLE>
COSTS INCURRED IN OIL AND GAS PRODUCING ACTIVITIES
<TABLE>
<CAPTION>
1993 1992 1991
--------- --------- ---------
(MILLIONS OF DOLLARS)
<S> <C> <C> <C>
Property acquisition costs:
Proved....................................................................... $ 9 $ -- $ 27
Unproved..................................................................... 8 -- 8
Exploration costs.............................................................. 58 48 127
Development costs.............................................................. 145 84 195
--------- --------- ---------
$ 220 $ 132 $ 357
--------- --------- ---------
--------- --------- ---------
</TABLE>
EXPLORATION COSTS
<TABLE>
<CAPTION>
1993 1992 1991
--------- --------- ---------
(MILLIONS OF DOLLARS)
<S> <C> <C> <C>
Dry hole costs................................................................. $ 21 $ 11 $ 40
Leasehold impairment........................................................... 3 26 55
Geological and geophysical..................................................... 22 25 50
Other.......................................................................... 2 2 14
--------- --------- ---------
$ 48 $ 64 $ 159
--------- --------- ---------
--------- --------- ---------
</TABLE>
ESTIMATED NET QUANTITIES OF PROVED OIL AND GAS RESERVES
Proved reserves are the estimated quantities which geological and
engineering data demonstrate with reasonable certainty to be recoverable in
future years from reservoirs under existing economic and operating conditions.
Proved developed reserves are the quantities expected to be recovered through
existing wells with existing equipment and operating methods. These reserve
estimates were principally prepared by Company engineers and are based on
current technology and economic conditions. The Partnership considers such
estimates to be reasonable; however, due to inherent uncertainties and the
limited nature of reservoir data, estimates of underground reserves are
imprecise and subject to change over time as additional information becomes
available.
24
<PAGE>
There has been no major discovery or other favorable or adverse event that
has caused a significant change in estimated proved reserves since December 31,
1993. The Partnership has no long-term supply agreements or contracts with
governments or authorities in which it acts as producer nor does it have any
interest in oil and gas operations accounted for by the equity method. All
reserves are located onshore and offshore within the United States.
<TABLE>
<CAPTION>
RECOVERABLE
CRUDE OIL AND NATURAL GAS
CONDENSATE LIQUIDS NATURAL GAS
(MILLIONS OF (MILLIONS OF (BILLIONS OF
BARRELS) BARRELS) CUBIC FEET)*
----------------- --------------- -------------
<S> <C> <C> <C>
PROVED RESERVES
BALANCE AT DECEMBER 31, 1990...................................... 452** 65 1,866
Revisions of previous estimates................................... (11) 6 13
Improved recovery................................................. 2 -- 5
Purchases of minerals in place.................................... 1 1 9
Sales of minerals in place........................................ (153) -- (65)
Extensions and discoveries........................................ 28 3 164
Production........................................................ (28) (10) (235)
--
----- ------
BALANCE AT DECEMBER 31, 1991...................................... 291 65 1,757
Revisions of previous estimates................................... (14) -- (31)
Improved recovery................................................. 4 -- 1
Purchases of minerals in place.................................... -- -- --
Sales of minerals in place........................................ (21) (33) (195)
Extensions and discoveries........................................ 15 -- 175
Production........................................................ (23) (7) (212)
--
----- ------
BALANCE AT DECEMBER 31, 1992...................................... 252 25 1,495
Revision of previous estimates.................................... (4) (1) 5
Improved recovery................................................. 1 -- 1
Purchases of minerals in place.................................... -- -- 4
Sales of minerals in place........................................ (12) (2) (65)
Extensions and discoveries........................................ 19 2 166
Production........................................................ (20) (3) (189)
--
----- ------
BALANCE AT DECEMBER 31, 1993...................................... 236 21 1,417
--
--
----- ------
----- ------
Proved Developed Reserves At:
December 31, 1990............................................... 337** 59 1,417
December 31, 1991............................................... 210 56 1,337
December 31, 1992............................................... 173 20 1,058
December 31, 1993............................................... 154 16 1,000
<FN>
- ------------------------
*Natural gas volumes include liquefiable hydrocarbons approximating 5 percent
of total gas reserves which are recoverable at natural gas processing plants
downstream from the lease or field separation facilities. Such recoverable
liquids also have been included in natural gas liquids reserve volumes.
**Includes approximately 140 million barrels of proved and 100 million barrels
of proved developed reserves of crude oil attributable to the Midway-Sunset
Field which was sold January 31, 1991 (see Note 3 to the Consolidated
Financial Statements).
</TABLE>
STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS
FROM ESTIMATED PRODUCTION OF PROVED OIL AND GAS RESERVES
The standardized measure of discounted future net cash flows from estimated
production of proved oil and gas reserves is presented in accordance with the
provisions of Statement of Financial Accounting Standards No. 69, "Disclosures
about Oil and Gas Producing Activities" (SFAS No. 69). In
25
<PAGE>
computing this data, assumptions other than those mandated by SFAS No. 69 could
produce substantially different results. The Partnership cautions against
viewing this information as a forecast of future economic conditions or
revenues.
The standardized measure has been prepared assuming year-end selling prices
adjusted for future fixed and determinable contractual price changes, year-end
development, production and direct general and administrative costs and a ten
percent annual discount rate. No future income tax expense has been provided for
the Partnership since it incurs no income tax liability. (See Summary of
Significant Accounting Policies -- Income Taxes in the Notes to Consolidated
Financial Statements.)
<TABLE>
<CAPTION>
1993 1992
---------- ----------
(MILLIONS OF DOLLARS)
<S> <C> <C>
Future cash inflows............................................................... $ 5,744 $ 7,566
Future production and development costs........................................... (3,316) (3,682)
Other related future costs........................................................ (300) (323)
---------- ----------
Future net cash flows............................................................. 2,128 3,561
Discount at 10 percent............................................................ (992) (1,569)
---------- ----------
Standardized measure of discounted future net cash flows from estimated production
of proved oil and gas reserves................................................... $ 1,136 $ 1,992
---------- ----------
---------- ----------
</TABLE>
SUMMARY OF CHANGES IN THE STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH
FLOWS FROM ESTIMATED PRODUCTION OF PROVED OIL AND GAS RESERVES
<TABLE>
<CAPTION>
1993 1992 1991
--------- --------- ---------
(MILLIONS OF DOLLARS)
<S> <C> <C> <C>
Balance, beginning of year.............................................. $ 1,992 $ 2,737 $ 5,761
Increase (decrease) in discounted future net cash flows:
Sales of oil and gas production net of related costs.................. (440) (522) (683)
Revisions to estimates of proved reserves:
Prices.............................................................. (767) 1 (2,200)
Development costs................................................... (30) (288) 64
Production costs.................................................... (10) 202 (194)
Quantities.......................................................... (9) (70) (11)
Other............................................................... (11) (282) (532)
Extensions, discoveries and improved recovery, less related costs..... 96 230 245
Development costs incurred during the period.......................... 168 97 223
Purchases of reserves in place........................................ 6 -- 10
Sales of reserves in place............................................ (58) (387) (522)
Accretion of discount................................................. 199 274 576
--------- --------- ---------
Balance, end of year.................................................... $ 1,136 $ 1,992 $ 2,737
--------- --------- ---------
--------- --------- ---------
</TABLE>
26
<PAGE>
QUARTERLY FINANCIAL INFORMATION
<TABLE>
<CAPTION>
QUARTER ENDED
-----------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
-------- ------- ------------ -----------
(MILLIONS OF DOLLARS, EXCEPT PER UNIT AMOUNTS)
<S> <C> <C> <C> <C>
Revenue:
1993........................ $ 168 $ 186 $ 165 $ 157
1992........................ $ 214 $ 255 $ 284 $ 184
Gross profit:*
1993........................ $ 35 $ 57 $ 40 $ 26
1992........................ $ 37 $ 41 $ 66 $ 72
Net income (loss):
1993........................ $ 6 $ 33 $ 14 $ (9 )
1992........................ $ 1 $ 59 $ 48 $ 12
Net income (loss) per unit:
1993........................ $ .01 $ .08 $ .03 $ (.02 )
1992........................ $ -- $ .14 $ .12 $ .03
<FN>
- ------------------------
*Gross profit equals oil and gas revenues plus gas plant margins less production
cost, exploration cost and depreciation, depletion and amortization.
</TABLE>
QUARTERLY OPERATING INFORMATION
<TABLE>
<CAPTION>
QUARTER ENDED
---------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31 YEAR
----------- --------- ------------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Crude oil and condensate:
Net production (thousand barrels daily):
1993............................................. 56 55 55 56 55
1992............................................. 72 63 59 58 63
Average price (per barrel):
1993............................................. $ 17.31 $ 17.44 $ 15.33 $ 13.81 $ 15.96
1992............................................. $ 16.94 $ 18.00 $ 20.05 $ 19.40 $ 18.51
Natural gas:
Net production (million cubic feet daily):
1993............................................. 509 528 516 516 517
1992............................................. 582 593 583 556 578
Average price (per thousand cubic feet):
1993............................................. $ 1.78 $ 2.06 $ 1.90 $ 2.09 $ 1.96
1992............................................. $ 1.51 $ 1.51 $ 1.76 $ 2.15 $ 1.72
</TABLE>
27
<PAGE>
SUN ENERGY PARTNERS, L.P.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of Sun Energy Partners, L.P.
and the Board of Directors of Oryx Energy Company:
Our report on the consolidated financial statements of Sun Energy Partners,
L.P. and its Subsidiaries is included on page 13 of this Form 10-K Annual
Report. In connection with our audits of such financial statements, we have also
audited the related financial statement schedules listed in the index on page 12
of this Form 10-K.
In our opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information required to be
included therein.
COOPERS & LYBRAND
Dallas, Texas
February 19, 1994
28
<PAGE>
SUN ENERGY PARTNERS, L.P.
SCHEDULE II -- AMOUNTS RECEIVABLE FROM RELATED PARTIES AND
UNDERWRITERS, PROMOTERS, AND EMPLOYEES OTHER THAN RELATED PARTIES
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
BALANCE AT
BEGINNING OF AMOUNTS AMOUNTS
DEBTOR PERIOD ADDITIONS COLLECTED WRITTEN OFF CURRENT NOT CURRENT
- ----------------------------------------------- ------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Oryx Energy Company (A):
For the year ended December 31, 1993......... $ 20 $ 1 $ 21 $ -- $ -- $ --
----- ----- ----- --- --- ---
----- ----- ----- --- --- ---
For the year ended December 31, 1992......... $ 20 $ 213 $ 213 $ -- $ 20 $ --
----- ----- ----- --- --- ---
----- ----- ----- --- --- ---
For the year ended December 31, 1991......... $ 217 $ 644 $ 841 $ -- $ 20 $ --
----- ----- ----- --- --- ---
----- ----- ----- --- --- ---
<FN>
- ------------------------
(A) Advances to Oryx Energy Company, of which Sun Energy Partners, L.P. is a
majority owned subsidiary, earn interest equal to the rate paid by a major
money market fund (see Notes 1 and 2 to the Consolidated Financial
Statements).
</TABLE>
29
<PAGE>
SUN ENERGY PARTNERS, L.P.
SCHEDULE V -- PROPERTIES, PLANTS AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
BALANCE AT OTHER BALANCE AT
BEGINNING ADDITIONS RETIREMENTS CHARGES END OF
CLASSIFICATION OF PERIOD AT COST OR SALES(A) ADD (DEDUCT) PERIOD
- ------------------------------------------------ ------------ ----------- ------------- --------------- -----------
<S> <C> <C> <C> <C> <C>
For the year ended December 31, 1993............ $ 4,240 $ 199 $ 186 $ (6) $ 4,247
------------ ----- ----- --- -----------
------------ ----- ----- --- -----------
For the year ended December 31, 1992............ $ 5,000 $ 100 $ 860 $ -- $ 4,240
------------ ----- ----- --- -----------
------------ ----- ----- --- -----------
For the year ended December 31, 1991............ $ 5,088 $ 306 $ 394 $ -- $ 5,000
------------ ----- ----- --- -----------
------------ ----- ----- --- -----------
<FN>
- ------------------------
(A) Includes dry hole costs.
</TABLE>
30
<PAGE>
SUN ENERGY PARTNERS, L.P.
SCHEDULE VI -- ACCUMULATED DEPRECIATION, DEPLETION
AND AMORTIZATION OF PROPERTIES, PLANTS AND EQUIPMENT
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
Additions
Balance at Charged Other Balance at
Beginning to Cost and Retirements Charges End of
Classification of Period Expenses (A)(B) or Sales Add (Deduct) Period
- -------------------------------------------------- ----------- ----------------- ------------- --------------- -----------
<S> <C> <C> <C> <C> <C>
For the year ended December 31, 1993.............. $ 2,482 $ 259 $ 114 $ (5) $ 2,622
----------- ----- ----- --- -----------
----------- ----- ----- --- -----------
For the year ended December 31, 1992.............. $ 2,730 $ 359 $ 607 $ -- $ 2,482
----------- ----- ----- --- -----------
----------- ----- ----- --- -----------
For the year ended December 31, 1991.............. $ 2,654 $ 361 $ 267 $ (18) $ 2,730
----------- ----- ----- --- -----------
----------- ----- ----- --- -----------
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31
-------------------------------
1993 1992 1991
--------- --------- ---------
<C> <S> <C> <C> <C>
(A) Depreciation, depletion and amortization....................................... $ 256 $ 271 $ 306
Leasehold impairment........................................................... 3 26 55
Provision for relinquishment of non-producing properties....................... -- 62 --
--------- --------- ---------
Total additions................................................................ 259 359 361
Dry hole costs................................................................. 21 11 40
--------- --------- ---------
Amounts shown in the Consolidated Statements of Cash Flows as depreciation,
depletion and amortization, provision for relinquishment of non-producing
properties, leasehold impairment and dry hole costs........................... $ 280 $ 370 $ 401
--------- --------- ---------
--------- --------- ---------
(B) Depreciation, depletion and amortization is calculated primarily using the
unit-of-production method. (See Note 1 to the Consolidated Financial
Statements.)
</TABLE>
31
<PAGE>
SUN ENERGY PARTNERS, L.P.
SCHEDULE X -- SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
(MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Maintenance and Repairs................................................................ $ 45 $ 54 $ 79
--- --- ---
--- --- ---
</TABLE>
32
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership has no employees. The Company, as the managing general
partner of the Partnership, has the responsibility for the Partnership's conduct
of operations. Set forth below is information concerning the ten current
directors of the Company and the 11 current executive officers of the Company.
All executive officers of the Company are elected annually by the Board of
Directors of the Company. The directors are divided into three classes with
approximately one-third of the directors constituting the Board being elected
each year to serve a three-year term. Class I directors (whose term expires in
1995) are Mr. Gill, Mr. Hollingsworth and Mr. Pistor. Class II directors (whose
term expires in 1996) are Mr. Keiser, Mr. Seegers and Mr. White-Thomson. Class
III directors (whose term expires in 1994) are Mr. Bradford, Ms. Dinkins, Dr.
Grayson and Mr. Hauptfuhrer. Dr. Grayson will retire from the Board at the
expiration of his term.
<TABLE>
<CAPTION>
NAME, AGE AND BUSINESS EXPERIENCE DURING
POSITION WITH ORYX ENERGY CO. PAST FIVE YEARS
- ----------------------------------------------------- -----------------------------------------------------------
<S> <C>
Jerry W. Box, 55 .................................... Mr. Box has been in this position since January 1992. From
Senior Vice President, Exploration and 1987 to 1991, he was Vice President, Exploration.
Production
William E. Bradford, 59 ............................. Mr. Bradford has been President, Chief Operating Officer
Director and a director of Dresser Industries, Inc. since March
1992. He was President and Chief Executive Officer of
Dresser-Rand Company from February 1988 to March 1992.
From March 1982 to March 1992 he was Senior Vice President
of Operations of Dresser Industries, Inc. Mr. Bradford is
a director of Diamond Shamrock, Inc.
David F. Chavenson, 41 .............................. Mr. Chavenson assumed this position on October 1, 1993. For
Treasurer the five years previous thereto, he was Assistant
Treasurer and Manager, Corporate Finance and Credit of
Oryx Energy Company.
Carol E. Dinkins, 48 ................................ Ms. Dinkins has been a partner with the Houston law firm of
Director Vinson & Elkins L.L.P., in charge of its environmental
legal practice, and member of the Firm's Management
Committee. Prior to rejoining the firm in 1985, Ms.
Dinkins was Deputy Attorney General of the United States,
the second ranking official in the Department of Justice.
She is a member of the House of Delegates and serves on
the Council of the Natural Resources, Energy &
Environmental Law Section of the American Bar Association.
Ms. Dinkins is a member of the Board of the Energy and
Environmental Study Institute, a Trustee and member of the
Executive Committee of the Nature Conservancy of Texas and
a frequent lecturer on environmental law.
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE AND BUSINESS EXPERIENCE DURING
POSITION WITH ORYX ENERGY CO. PAST FIVE YEARS
- ----------------------------------------------------- -----------------------------------------------------------
<S> <C>
Sherri T. Durst, 44 ................................. Ms. Durst assumed this position on December 2, 1993. From
General Auditor February 1990 to December 1993, she served as Manager,
Financial Processes for Oryx Energy Company. For the six
years previous thereto, she held the position of Financial
Systems Project Manager.
Robert B. Gill, 62 .................................. Mr. Gill served as Vice Chairman of the Board of J. C.
Director Penney Company, Inc. from 1982 and Chief Operating Officer
of J. C. Penney Stores and Catalog from March 1, 1990
until his retirement on July 1, 1992. Prior to his
retirement, he was a director of the National Junior
Achievement, Chairman of the Board of Trustees of the
National 4-H Council and a member of the board of
directors of the U.S. Chamber of Commerce. He currently is
a trustee of Pace University.
C. Jackson Grayson, Jr., 70 ......................... Dr. Grayson has been Chairman of the American Productivity
Director and Quality Center since 1976. He served as a director of
Sun Company, Inc. from 1974 to 1988. He currently is a
director of Browning-Ferris Industries, First City
Bancorporation of Texas, Inc., Harris Corporation, Whitman
Corporation, and Infomart.
Robert P. Hauptfuhrer, 62 ........................... Mr. Hauptfuhrer assumed this position on July 21, 1988,
Chairman of the Board, and Chief having been President and Chief Operating Officer of Sun
Executive Officer Company, Inc. from 1987 to 1988, and was a director of
that company during the same period. Previously, he was
President of the Company and Group Vice President of Sun
Company, Inc. Mr. Hauptfuhrer is also a director of Quaker
Chemical Corporation and Chairman of the Natural Gas
Supply Association. He is a member of the board of
trustees of Princeton University. Mr. Hauptfuhrer is a
member of the Conference Board and the Dallas Symphony
Association Board of Governors.
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE AND BUSINESS EXPERIENCE DURING
POSITION WITH ORYX ENERGY CO. PAST FIVE YEARS
- ----------------------------------------------------- -----------------------------------------------------------
<S> <C>
David S. Hollingsworth, 65 .......................... Mr. Hollingsworth served as Chairman of the Board and Chief
Director Executive Officer of Hercules Incorporated from 1987 until
his retirement on December 31, 1990. From 1986 to 1987, he
was Vice Chairman of the same company. Previously, he was
Vice President with various responsibilities, including
corporate planning and marketing. Mr. Hollingsworth is a
member of the board of directors of the Delaware Trust
Company. Prior to his retirement, Mr. Hollingsworth was a
member of the board of directors of the U.S. Chamber of
Commerce. He was also a member of the board and the
executive committee of both the Chemical Manufacturers
Association and the Medical Center of Delaware and a
member of the Delaware Business Roundtable.
Robert L. Keiser, 51 ................................ Mr. Keiser has been in this position since January 1, 1992.
President, Chief Operating Officer and He was President and Chief Executive Officer of Oryx U.K.
Director Energy Company from January 1, 1990 through December 1991.
He was also Vice President, International Exploration and
Production for the Company from January 1990 until August
1990 and from April 1991 through December 1991. From July
1988 to November 1988, he was a director of the Company.
From July 1987 to December 1989, he was Vice President,
Planning and Development of the Company. From 1986 to
1987, he was Operations Manager, International Exploration
and Production of the Company.
Thomas W. Lynch, 64 ................................. Mr. Lynch has been a Vice President for the past five
Vice President and General Counsel years. He has been General Counsel since November 1, 1988
and, previous thereto, he was Chief Counsel of Oryx Energy
Company.
Edward W. Moneypenny, 52 ............................ Mr. Moneypenny has been in this position since January
Senior Vice President, Finance, and Chief 1992. From 1983 to 1991, he was Vice President, Finance
Financial Officer and Chief Financial Officer of Oryx Energy Company. From
1983 to 1988, he was also Treasurer of Oryx Energy
Company.
</TABLE>
35
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE AND BUSINESS EXPERIENCE DURING
POSITION WITH ORYX ENERGY CO. PAST FIVE YEARS
- ----------------------------------------------------- -----------------------------------------------------------
<S> <C>
Charles H. Pistor, Jr., 63 .......................... Mr. Pistor has been the Vice Chair of Southern Methodist
Director University since October 1991. He served as Chairman of
the Board and Chief Executive Officer of NorthPark
National Bank from 1988 to 1990. He retired as Vice
Chairman of First RepublicBank Corporation, and Chairman
and Chief Executive Officer of First RepublicBank Dallas,
N.A. in April 1988. Before that time, he was Chairman of
the Board and Chief Executive Officer of RepublicBank
Dallas, N.A. Mr. Pistor is a past-president of the
American Bankers Association. Mr. Pistor also serves as a
director of AMR Corporation, American Brands, Inc. and
Centex Corporation. He is a trustee of Southern Methodist
University.
Paul R. Seegers, 64 ................................. Mr. Seegers is President of Seegers Enterprises. He was
Director Chairman of the Board of Centex Corporation from July 1988
until his retirement in July 1991. From July 1985 to July
1988, he was also its Chief Executive Officer and, from
July 1978 to July 1985, he was Vice Chairman and Co-Chief
Executive Officer. He is a member of the board of
directors of Centex Corporation and is Chairman of its
Executive Committee. Mr. Seegers is Chairman of the Board
of Methodist Hospitals of Dallas, a trustee of
Southwestern Medical Foundation and a member of the
Advisory Council of Heidelberger Zement of Heidelberg,
Germany.
William P. Stokes, Jr., 52 .......................... Mr. Stokes assumed this position on January 10, 1993. From
Vice President, Corporate Development and January 1990 to January 1993, he served Oryx Energy
Human Relations Company as Vice President, Planning and Development. For
the five years previous thereto, Mr. Stokes held the
position of Manager Western Production Region of Oryx
Energy Company.
Barry L. Strong, 49 ................................. Mr. Strong has been in this position for the past five
Comptroller years.
Frank B. Sweeney, 55 ................................ Mr. Sweeney assumed this position on July 31, 1988. For the
Corporate Secretary four years previous thereto, he served Oryx Energy Company
as Chief Counsel and, at various times, he served as
Assistant Secretary for Oryx Energy Company and its
subsidiaries.
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE AND BUSINESS EXPERIENCE DURING
POSITION WITH ORYX ENERGY CO. PAST FIVE YEARS
- ----------------------------------------------------- -----------------------------------------------------------
<S> <C>
Ian L. White-Thomson, 57 ............................ Mr. White-Thomson has been President and Chief Executive
Director Officer of U.S. Borax Inc. since 1988. Prior to that time
he was Vice President, Marketing and then Executive Vice
President of the same company. Mr. White-Thomson has been
a director of U.S. Borax Inc. since 1973. In 1985-86 he
was Group Executive of Pennsylvania Glass Sand Corporation
and Ottawa Silica Company, newly acquired subsidiaries of
U.S. Borax Inc., and organized their combination as U.S.
Silica, of which company he was Group Executive in 1987.
Mr. White-Thomson has been a director of the American
Mining Congress since 1989 and he has previously served as
a director and held several positions, including Chairman,
of the Chemical Industry Council of California. He is a
director of KCET Community Television of Southern
California. He was born and educated in England and became
a U.S. citizen in 1982.
William F. Whitsitt, 49 ............................. Mr. Whitsitt assumed this position on January 10, 1993.
Vice President, Marketing and Public From November 1988 to January 1993, he served Oryx Energy
Affairs Company as Vice President, Government Relations. From 1981
to 1988, he served as Director, Legislative Affairs for
Sun Company, Inc.
</TABLE>
ITEM 11. EXECUTIVE COMPENSATION
The directors, officers, and employees of the Company (the managing general
partner) receive no direct compensation from the Partnership for their services
to the Partnership. Such persons receive compensation from the Company, a
substantial portion of which is generally reimbursed to the Company by the
Partnership as costs allocable to it. (See Note 2 to the Consolidated Financial
Statements.)
The Partnership reimburses the Company for all direct costs and indirect
costs associated with the Partnership's activities. For the year 1993, the
Company received $104 million as reimbursement of costs allocable to the
Partnership. Such amounts included salaries of employees and allocations of
certain executive and administrative expenses. The aggregate amount reimbursed
by the Partnership to the Company for salaries paid to the Chief Executive
Officer of the Company and the four most highly compensated executive officers
of the Company other than the Chief Executive Officer was approximately
$1,310,000 for 1993. (See Note 2 to the Consolidated Financial Statements.)
37
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides certain information regarding beneficial
ownership of the limited partnership units of Sun Energy Partners, L.P. as of
December 31, 1993:
UNITS OF SUN ENERGY PARTNERS, L.P.
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
BENEFICIAL OWNER UNITS CLASS
- -------------------------------------------------------------------------------- ----------- ----------
<S> <C> <C>
Oryx Energy Company
13155 Noel Road
Dallas, TX 75240-5067.......................................................... 413,627,359 98.2 *
All Directors and Executive Officers of Managing General Partner (Oryx Energy
Company) as a Group (19)**..................................................... 1,300
<FN>
- ------------------------
*Assumes that Oryx Energy Company's 292,000,000 general partnership units are
converted into limited partnership units of Sun Energy Partners, L.P.
**As of December 31, 1993, the directors and executive officers of Oryx Energy
Company, as a group, beneficially owned less that one percent of the
outstanding shares of Oryx Energy Company.
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In its capacity as managing general partner of the Partnership, the Company
controls the Partnership and its operations, and has served as a lender and
borrower of funds for the Partnership. Following is a table which summarizes
lending activities between the Partnership and the Company during the year ended
December 31, 1993:
<TABLE>
<CAPTION>
BALANCE DUE BALANCE DUE
TO (FROM) TO (FROM)
PARTNERSHIP PARTNERSHIP
DECEMBER 31, 1992 RECEIPTS PAYMENTS DECEMBER 31, 1993
------------------- ------------- ------------- -------------------
<S> <C> <C> <C> <C>
(MILLIONS OF DOLLARS)
Variable Rate Advances to (from) Oryx Energy
Company........................................... $ 20 $ 1 $ (43) $ (22)
--- --- --- ---
--- --- --- ---
9.75% Note Payable to Oryx Energy Company.......... $ (99) $ - $ 8 $ (91)
--- --- --- ---
--- --- --- ---
</TABLE>
During 1993, the largest balance owed to the Partnership by the Company for
variable rate advances was $20 million; the largest balance owed to the Company
by the Partnership for variable rate advances was $69 million. The largest
balance owed to the Company by the Partnership during 1992 under the 9.75% Note
Payable was $99 million. Certain information required by this section is
included in Notes to the Consolidated Financial Statements. See Notes 1, 2 and 8
and Schedules II, included elsewhere in this Form 10-K.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following Documents are filed as a part of this report:
1. Financial Statements:
See Index to Financial Statements, Supplementary Financial and Operating
Information and Financial Statement Schedules on page 12.
38
<PAGE>
2. Financial Statement Schedules:
See Index to Financial Statements, Supplementary Financial and Operating
Information and Financial Statement Schedules on page 12. Other schedules are
omitted because the information is shown elsewhere in this report, is not
required or is not applicable.
3. Exhibits:
<TABLE>
<S> <C>
3(a) --Second Amended and Restated Agreement of Limited Partnership of Sun Energy
Partners, L.P., dated December 10, 1985 (incorporated by reference to Exhibit 3(a)
of the Form SE filed March 20, 1986).
3(b) --Certificate of Limited Partnership of Sun Energy Partners, L.P., dated October 1,
1985 (incorporated by reference to Exhibit 3(b) of the Partnership's Form 10-K for
the one month ended December 31, 1985).
4(a) --Deposit Agreement, made as of December 3, 1985 among Sun Energy Partners, L.P.,
Manufacturers Hanover Trust Company, Sun Company, Inc., Oryx Energy Company and
All Limited Partners in Sun Energy Partners, L.P. (incorporated by reference to
Exhibit 4(a) of the Form SE filed March 20, 1986).
4(b) --Instruments defining the rights of security holders, including indentures: The
Partnership will provide copies of the instruments relating to long-term debt to
the SEC upon request.
22 --Affiliated Operating Partnerships/Subsidiary Corporations of Sun Energy Partners,
L.P. (incorporated by reference to Exhibit 22 of the Form SE filed March 18,
1988).
25(a) --Power of Attorney executed by certain officers and directors of Oryx Energy
Company, managing general partner of Sun Energy Partners, L.P.
25(b) --Certified copy of the resolution authorizing certain officers to sign on behalf of
Oryx Energy Company, managing general partner of Sun Energy Partners, L.P.
28(a) --Agreement of Limited Partnership of Sun Operating Limited Partnership dated
November 18, 1985, as amended (incorporated by reference to Exhibit 28(a) of the
Form SE filed March 20, 1986).
28(b) --Certificate of Limited Partnership of Sun Operating Limited Partnership dated
November 19, 1985 (incorporated by reference to Exhibit 28(b) of the Partnership's
Form 10-K for the one month ended December 31, 1985).
</TABLE>
(b) Reports on Form 8-K:
The Partnership did not file any reports on Form 8-K during the quarter
ended December 31, 1993.
39
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
SUN ENERGY PARTNERS, L.P.
By: ORYX ENERGY COMPANY
(MANAGING GENERAL PARTNER)
*By: _____/s/_EDWARD W. MONEYPENNY____
Edward W. Moneypenny
SENIOR VICE PRESIDENT, FINANCE,
AND CHIEF FINANCIAL OFFICER
Date March 14, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by or on behalf of the following persons on behalf
of the Registrant and in the capacities with Oryx Energy Company, Managing
General Partner, and on the date indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------------------ ------------------------------------- ------------------
<S> <C> <C>
WILLIAM E. BRADFORD**
William E. Bradford Director
CAROL E. DINKINS**
Carol E. Dinkins Director
ROBERT B. GILL**
Robert B. Gill Director
C. JACKSON GRAYSON, JR**
C. Jackson Grayson, Jr. Director
Chairman of the Board, and Chief
ROBERT P. HAUPTFUHRER** Executive Officer (Principal March 14, 1994
Robert P. Hauptfuhrer Executive Officer)
DAVID S. HOLLINGSWORTH**
David S. Hollingsworth Director
ROBERT L. KEISER** President, Chief Operating Officer
Robert L. Keiser and Director
CHARLES H. PISTOR, JR**
Charles H. Pistor, Jr. Director
PAUL R. SEEGERS**
Paul R. Seegers Director
IAN L. WHITE-THOMSON**
Ian L. White-Thomson Director
**By: /s/EDWARD W. MONEYPENNY
Edward W. Moneypenny
ATTORNEY-IN-FACT
<FN>
- ------------------------
*Attorney-in-Fact pursuant to Resolution of the Board of Directors of the
Managing General Partner which is being filed as an Exhibit to this Form 10-K.
**A Power of Attorney authorizing Robert P. Hauptfuhrer and Edward W.
Moneypenny, and each of them, to sign this Form 10-K Annual Report on behalf
of Sun Energy Partners, L.P. is being filed as an Exhibit to this Form 10-K.
</TABLE>
40
<PAGE>
PRINCIPAL OFFICERS AND DIRECTORS OF
ORYX ENERGY COMPANY
MANAGING GENERAL PARTNER
Jerry W. Box
Senior Vice President, Exploration and Production
William E. Bradford
Director
David F. Chavenson
Treasurer
Carol E. Dinkins
Director
Sherri T. Durst
General Auditor
Robert B. Gill
Director
C. Jackson Grayson, Jr.
Director
Robert P. Hauptfuhrer
Chairman of the Board and Chief Executive Officer
David S. Hollingsworth
Director
Robert L. Keiser
President, Chief Operating Officer and Director
Thomas W. Lynch
Vice President and General Counsel
Edward W. Moneypenny
Senior Vice President, Finance, and Chief Financial Officer
Charles H. Pistor, Jr.
Director
Paul R. Seegers
Director
William P. Stokes, Jr.
Vice President, Corporate Development and Human Relations
Barry L. Strong
Comptroller
Frank B. Sweeney
Corporate Secretary
Ian L. White-Thomson
Director
William F. Whitsitt
Vice President, Marketing and Public Affairs
EXECUTIVE OFFICES
13155 Noel Road
Dallas, TX 75240-5067
Telephone (214) 715-4000
DEPOSITORY UNITS
The depositary units are traded on the New York Stock Exchange, Inc. under the
symbol SLP.
MARKET PRICE RANGES:
<TABLE>
<CAPTION>
1993 1992
------------------ ------------------
HIGH LOW HIGH LOW
------- ------- ------- -------
<S> <C> <C> <C> <C>
1st Quarter............................. $ 8 7/8 $ 7 5/8 $ 9 1/8 $ 7 1/4
2nd Quarter............................. $ 8 3/4 $ 6 7/8 $ 9 $ 7 5/8
3rd Quarter............................. $ 8 1/4 $ 7 1/8 $ 9 3/8 $ 8 1/4
4th Quarter............................. $ 9 1/8 $ 6 $ 9 1/4 $ 7 1/2
</TABLE>
CASH DISTRIBUTIONS PAID PER UNIT:
<TABLE>
<CAPTION>
1993 1992
--- ---
<S> <C> <C>
1st Quarter............................. $.25 $.28
2nd Quarter............................. $.16 $.19
3rd Quarter............................. $.23 $.18
4th Quarter............................. $.18 $.22
</TABLE>
TRANSFER AGENT, DEPOSITARY AND REGISTRAR
Chemical Bank
Shareholder Relations Department
P.O. Box 24935
New York, NY 10249
1-800-648-8393
FOR UNITHOLDER ASSISTANCE, PLEASE CONTACT:
Unitholder Relations
Sun Energy Partners, L.P.
c/o Oryx Energy Company
Managing General Partner
P.O. Box 2880
Dallas, TX 75221-2880
1-800-846-ORYX
<PAGE>
Exhibit 25(a)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert P. Hauptfuhrer and Edward W. Moneypenny,
and each of them (with full power to each of them to act alone), his or her
true and lawful attorney-in-fact and agent, with full power of substitution
and resubstitution, for him or her and in his or her name, place and stead, in
any and all capacities with Oryx Energy Company, in its capacity as managing
general partner of Sun Energy Partners, L.P., to sign the Annual Report of Sun
Energy Partners, L.P. for the fiscal year ended December 31, 1993 on Form 10-K
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 and any
or all amendments to the Annual Report and to file the same, with all exhibits
thereto and other documents in connection therewith with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully
to all intents and purposes as he or she might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their substitutes, may lawfully do or cause to be done by virtue
hereof.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Robert P. Hauptfuhrer Chairman of the Board, March 3, 1994
- -------------------------- Chief Executive Officer
(Robert P. Hauptfuhrer) and Director (principal
executive officer)
/s/ Robert L. Keiser President, Chief Operating March 3, 1994
- -------------------------- Officer and Director
(Robert L. Keiser)
/s/ Edward W. Moneypenney Senior Vice President, Finance, March 3, 1994
- -------------------------- and Chief Financial Officer
(Edward W. Moneypenney) (principal financial officer)
/s/ Barry L. Strong Comptroller (principal March 3, 1994
- -------------------------- accounting officer)
(Barry L. Strong)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ William E. Bradford Director March 3, 1994
- --------------------------
(William E. Bradford)
/s/ Carol E. Dinkins Director March 3, 1994
- --------------------------
(Carol E. Dinkins)
/s/ Robert B. Gill Director March 3, 1994
- ---------------------------
Robert B. Gill
/s/ C. Jackson Grayson, Jr. Director March 3, 1994
- ---------------------------
(C. Jackson Grayson, Jr.)
/s/ David S. Hollingsworth Director March 3, 1994
- ---------------------------
(David S. Hollingsworth)
/s/ Charles H. Pistor, Jr. Director March 3, 1994
- ---------------------------
(Charles H. Pistor, Jr.)
/s/ Paul R. Seegers Director March 3, 1994
- ---------------------------
(Paul R. Seegers)
/s/ Ian L. White-Thomson Director March 3, 1994
- ----------------------------
(Ian L. White-Thomson)
</TABLE>
<PAGE>
Exhibit 25(b)
CERTIFICATE
I, Frank B. Sweeney, hereby certify that I am Corporate Secretary of Oryx
Energy Company, a Delaware corporation, and that the following is a true and
correct copy of resolution adopted by the Board of Directors of Oryx Energy
Company on the 3rd day of March, 1994:
RESOLVED that the Annual Report of Sun Energy Partners, L.P. ("MLP")
to the Securities and Exchange Commission on Form 10-K for the year
ended December 31, 1993, prepared and to be filed by the Company as
managing general partner of the MLP, is hereby approved in the form
presented to this meeting as Exhibit D, subject to such revisions or
amendments as may be approved by the Senior Vice President, Finance,
and Chief Financial Officer or the Comptroller to assure compliance
with applicable laws and regulations, and that said officers or either
of them is hereby authorized to sign the Form 10-K on behalf of the
Company.
I further certify that this resolution has not been revoked or amended,
and is now in full force and effect.
Executed this 3rd day of March, 1994.
/s/ Frank B. Sweeney
--------------------
FRANK B. SWEENEY
