UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- --- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- --- SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-9033
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SUN ENERGY PARTNERS, L.P.
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(Exact name of registrant as specified in its charter)
DELAWARE 75-2070723
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
13155 NOEL ROAD, DALLAS, TEXAS 75240-5067
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(Address of principal executive offices) (Zip code)
(214) 715-4000
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(Registrant's telephone number, including area code)
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
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The number of depositary units outstanding as of April 30,
1995 was 7,543,100.
<PAGE>
SUN ENERGY PARTNERS, L.P.
INDEX
Page
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Income for the
Three Months Ended March 31, 1995 and 1994 3
Condensed Consolidated Balance Sheets at March 31,
1995 and December 31, 1994 4
Condensed Consolidated Statements of Cash Flows for
the Three Months Ended March 31, 1995 and 1994 5
Notes to Condensed Consolidated Financial Statements 6
Report of Independent Accountants 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURE 12
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
SUN ENERGY PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Three Months
(Millions of Dollars, Except Ended March 31
Per Unit Amounts) 1995 1994
---- ----
(Unaudited)
REVENUES
Oil and gas $ 147 $ 162
Other (3) (1)
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144 161
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COSTS AND EXPENSES
Operating costs 49 48
Production taxes 8 11
Exploration costs 9 14
Depreciation, depletion and
amortization 40 46
General and administrative
expense 14 18
Interest and debt expense 3 3
Interest capitalized (2) -
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121 140
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Income Before Cumulative Effect of
Accounting Change 23 21
Cumulative Effect of Accounting Change (Note 2) - (577)
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Net Income (Loss) $ 23 $ (556)
======= =======
Net Income (Loss) Per Unit:
Before cumulative effect of
accounting change $ .05 $ .05
Cumulative effect of accounting change - (1.37)
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Net income (loss) $ .05 $(1.32)
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Cash Distributions Paid to Unitholders $ 59 $ 34
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Cash Distributions Per Unit $ .14 $ .08
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Weighted Average Number of Units
Outstanding (in thousands) 421,171 421,171
======= ========
(See Accompanying Notes)
<PAGE>
SUN ENERGY PARTNERS, L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31 December 31
(Millions of Dollars) 1995 1994
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(Unaudited)
ASSETS
Current Assets
Cash and short-term investments $ 6 $ 11
Advances to affiliate 12 9
Accounts and notes receivable and
other current assets 114 88
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Total Current Assets 132 108
Properties, Plants and Equipment (Note 3) 939 993
Investment in Affiliate 80 80
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Total Assets $ 1,151 $ 1,181
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LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities
Accounts payable $ 70 $ 62
Accrued liabilities 69 72
Current portion of long-term debt
due affiliate 10 10
Current portion of long-term debt 2 2
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Total Current Liabilities 151 146
Long-Term Debt due Affiliate 70 72
Long-Term Debt 1 2
Deferred Credits and Other Liabilities 31 27
Partners' Capital (Note 4)
Limited partnership interests 276 286
General partnership interests 622 648
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Partners' Capital 898 934
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Total Liabilities and Partners' Capital $ 1,151 $ 1,181
======== ========
The successful efforts method of accounting is followed.
(See Accompanying Notes)
<PAGE>
SUN ENERGY PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months
Ended March 31
(Millions of Dollars) 1995 1994
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(Unaudited)
CASH AND CASH EQUIVALENTS FROM
OPERATING ACTIVITIES
Net income (loss) $ 23 $(556)
Adjustments to reconcile net income
(loss) to net cash from operating
activities:
Depreciation, depletion and
amortization 40 46
Dry hole costs and leasehold impairment 3 8
Loss on divestments 1 -
Cumulative effect of accounting change - 577
Other 4 (1)
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71 74
Changes in working capital:
Accounts and notes receivable and
other current assets (12) 7
Accounts payable, accrued liabilities
and advances from affiliates 5 -
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Net Cash Flow Provided From Operating
Activities 64 81
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CASH AND CASH EQUIVALENTS FROM
INVESTING ACTIVITIES
Capital expenditures (44) (39)
Proceeds from divestments 41 -
Other (1) (4)
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Net Cash Flow Used For Investing
Activities (4) (43)
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CASH AND CASH EQUIVALENTS FROM
FINANCING ACTIVITIES
Repayments of long-term debt (3) (4)
Cash distributions paid to unitholders (59) (34)
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Net Cash Flow Used For Financing
Activities (62) (38)
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Changes In Cash and Cash Equivalents (2) -
Cash and Cash Equivalents at Beginning
of Period 20 4
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Cash and Cash Equivalents at End
of Period $ 18 $ 4
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(See Accompanying Notes)
<PAGE>
SUN ENERGY PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying condensed consolidated financial statements
and related notes of Sun Energy Partners, L.P. and its
subsidiaries (hereinafter, unless the context otherwise requires,
being referred to as the Partnership) are presented in accordance
with the requirements of Form 10-Q and do not include all
disclosures normally required by generally accepted accounting
principles or those normally made in annual reports on Form 10-K.
In management's opinion, all adjustments necessary for a fair
presentation of the results of operations for the periods shown
have been made and are of a normal recurring nature. The results
of operations of the Partnership for the three months ended March
31, 1995 are not necessarily indicative of the results for the
full year 1995.
Statements of Cash Flows
Amounts paid for interest were as follows:
Three Months Ended March 31
1995 1994
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(Millions of Dollars)
Interest paid (net of capitalized
amounts) $ - $ 2
In accordance with Statement of Financial Accounting
Standards No. 95, "Statement of Cash Flows," non-cash
transactions are not reflected within the accompanying Condensed
Consolidated Statements of Cash Flows.
2. Accounting Change
Effective January 1, 1994, the Partnership changed its
accounting policy for calculating the oil and gas asset ceiling
test from a total Partnership basis to an individual field basis.
As a result of this change, the Partnership recognized a one time
non-cash cumulative effect charge to 1994 earnings of $577
million. Consequently, earnings have been restated for the first
quarter of 1994, as follows:
As Reported As Restated
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(Millions of Dollars, Except Per Unit Amounts)
Net loss $ (82) $ (556)
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Net loss per unit $ (.19) $(1.32)
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<PAGE>
SUN ENERGY PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (cont.)
3. Properties, Plants and Equipment
March 31 December 31
1995 1994
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(Millions of Dollars)
Gross investment ............... $3,733 $4,015
Less accumulated depreciation,
depletion and amortization ... 2,794 3,022
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Net investment $ 939 $ 993
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4. Partners' Capital
At March 31, 1995, the ownership of the Partnership was
comprised of a 69 percent general partnership interest and a 31
percent limited partnership interest. Oryx Energy Company holds
a 98 percent interest in the Partnership. A two percent limited
partnership interest in the form of depositary units is held by
the public. As of March 31, 1995, there was a total of 421.2
million units outstanding.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of Sun Energy Partners, L.P. and
the Board of Directors of Oryx Energy Company:
We have reviewed the accompanying condensed consolidated balance
sheet of Sun Energy Partners, L.P. and its Subsidiaries as of
March 31, 1995, and the related condensed consolidated statements
of income and cash flows for the three months ended March 31,
1995 and 1994. These financial statements are the responsibility
of Oryx Energy Company's management.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical review procedures to financial data and
making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the accompanying condensed
consolidated financial statements for them to be in conformity
with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet as of December
31, 1994, and the related consolidated statements of income and
cash flows for the year then ended (not presented herein); and in
our report dated February 19, 1995, which included an explanatory
paragraph describing the change in accounting for calculating the
oil and gas asset ceiling test in 1994, we expressed an
unqualified opinion on those consolidated financial statements.
In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 1994, is
fairly stated, in all material respects, in relation to the
consolidated balance sheet from which it has been derived.
COOPERS & LYBRAND L.L.P.
Dallas, Texas
May 11, 1995
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
FINANCIAL CONDITION
The Partnership's cash and cash equivalents decreased by $2
million over the three months ended March 31, 1995. Cash flows
for the first quarter of 1995 included $64 million provided from
operating activities, $4 million used for investing activities
and $62 million used for financing activities. The $64 million
net cash flow provided from operating activities was comprised of
$71 million net cash flow provided from operating activities
before changes in current assets and liabilities and $7 million
of net cash flow used for changes in current assets and
liabilities. The $71 million net cash flow provided from
operating activities before changes in current assets and
liabilities was favorably impacted by increased crude oil volumes
and prices partially offset by a decrease in natural gas volumes
and prices. The $7 million net cash flow used for changes in
current assets and liabilities consisted of a $12 million
increase in accounts and notes receivable and other current
assets and a $5 million increase in accounts payable, accrued
liabilities and advances from affiliates.
The $4 million net cash flow used for investing activities
primarily consisted of $44 million used for capital expenditures
offset in part by $41 million of proceeds from divestments. The
$62 million net cash flow used for financing activities resulted
from the scheduled payment of $3 million of long-term debt and
$59 million of cash distributions paid to unitholders.
During March 1995, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of", effective for fiscal years
beginning after December 15, 1995. When adopted, the impact of
this statement is expected to be immaterial.
A first quarter cash distribution in the amount of $.14 per unit
was paid in 1995. A second quarter cash distribution of $.14 per
unit has been declared by Oryx Energy Company's Board of
Directors and will be paid on June 9, 1995 to unitholders of
record on May 19, 1995. The cash distribution includes $.10 per
unit from divestment proceeds.
<PAGE>
RESULTS OF OPERATIONS
Net income for the first quarter of 1995 was $23 million, or $.05
per unit, compared to net income before the cumulative effect of
an accounting change of $21 million, or $.05 per unit, in the
first quarter of 1994. Revenues for the 1995 first quarter were
$144 million versus $161 million for the first quarter of 1994.
In comparing the first quarter of 1995 to the first quarter of
1994, crude oil production was about the same while natural gas
production decreased 44 million cubic feet per day because of
asset sales and normal declines. Total costs and expenses
decreased $19 million, or 14 percent, as a result of reductions
in almost all categories.
Average net production of crude oil and condensate was 49
thousand barrels daily during the first quarter of 1995 compared
to an average net production of 50 thousand barrels daily for the
first quarter of 1994. The average crude oil and condensate
price in the first quarter of 1995 increased to $16.26 per
barrel, as compared to $12.72 per barrel in the same period last
year.
Average net production of natural gas for the first quarter of
1995 was 504 million cubic feet daily or eight percent lower than
average net production of 548 million cubic feet daily for the
same period in 1994. The average natural gas price for the first
quarter of 1995 was $1.69 per thousand cubic feet, as compared to
$2.12 per thousand cubic feet in the same period last year.
<PAGE>
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
27 Financial Data Schedule
(b) Reports on Form 8-K:
On February 6, 1995, the Partnership filed a Form 8-K
to report the adoption of a new accounting policy for determining
the ceiling test for its oil and gas properties. See Note 2 to
the Condensed Consolidated Financial Statements and Management's
Discussion and Analysis of Financial Condition and Results of
Operations - Financial Condition.
******************
We are pleased to furnish this report to unitholders who
request it by writing to:
Sun Energy Partners, L.P. Unitholder Relations
c/o Oryx Energy Company
Managing General Partner
P.O. Box 60
Dallas, Texas 75221-0060
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
SUN ENERGY PARTNERS, L.P.
BY ORYX ENERGY COMPANY
(Managing General Partner)
BY /s/ Robert L. Thompson
------------------------
Robert L. Thompson
(Comptroller and Corporate Planning Director)
DATE: May 11, 1995
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<LEGEND>
This schedule contains summary financial information extracted from SEC
Form 10-Q and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1000000
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<PERIOD-END> MAR-31-1995
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