<PAGE> 1
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 SEPTEMBER 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
-----------------
Commission file number 1-9033
-------------------
SUN ENERGY PARTNERS, L.P.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 75-2070723
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
13155 NOEL ROAD, DALLAS, TEXAS 75240-5067
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(972) 715-4000
- -------------------------------------------------------------------------------
(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
--- ---
---------------
The number of depositary units outstanding as of November 3, 1998 was
421,170,459.
<PAGE> 2
SUN ENERGY PARTNERS, L.P.
-------------------------
FORWARD-LOOKING STATEMENTS
In the following report, Sun Energy Partners, L.P. has included certain
statements (other than statements of historical fact) that constitute
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. When used
herein, the words "budget", "budgeted", "anticipate", "expects", "believes",
"seeks", "goals", "intends" or "projects" and similar expressions are intended
to identify forward-looking statements. It is important to note that Sun Energy
Partners, L.P.'s actual results could differ materially from those projected by
such forward-looking statements. Although Sun Energy Partners, L.P. believes the
expectations reflected in such forward-looking statements are reasonable and
such forward-looking statements are based upon the best data available at the
time this report is filed with the Securities and Exchange Commission, no
assurance can be given that such expectations will prove correct. Factors that
could cause Sun Energy Partners, L.P.'s results to differ materially from the
results discussed in such forward-looking statements include, but are not
limited to, the following: production variances from expectations, volatility of
oil and gas prices, the need to develop and replace its reserves, the
substantial capital expenditures required to fund its operations, exploration
uses, environmental risks, uncertainties about estimates of reserves,
competition, government regulation and political actions, and the ability of Sun
Energy Partners, L.P. to implement its business strategy. All such
forward-looking statements in this document are expressly qualified in their
entirety by the cautionary statements in this paragraph.
2
<PAGE> 3
SUN ENERGY PARTNERS, L.P.
-------------------------
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Income
for the Three and Nine Months Ended September
30, 1998 and 1997.......................................................................4
Condensed Consolidated Balance Sheets at
September 30, 1998 and December 31, 1997................................................5
Condensed Consolidated Statements of Cash
Flows for the Nine Months Ended September
30, 1998 and 1997.......................................................................6
Notes to Condensed Consolidated Financial
Statements..............................................................................7
Report of Independent Accountants.......................................................9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations..........................................10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.......................................................15
SIGNATURE .......................................................................................16
</TABLE>
3
<PAGE> 4
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SUN ENERGY PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
(Millions of Dollars, Ended September 30 Ended September 30
Except Per Unit Amounts) ---------------------------- ----------------------------
1998 1997 1998 1997
--------- --------- --------- ---------
(Unaudited)
<S> <C> <C> <C> <C>
REVENUES
Oil and gas $ 115 $ 176 $ 381 $ 548
Other 1 (7) 19 (10)
--------- --------- --------- ---------
116 169 400 538
--------- --------- --------- ---------
COSTS AND EXPENSES
Operating costs 30 34 97 103
Production taxes 6 9 21 29
Exploration costs 10 11 66 37
Depreciation,
depletion and
amortization 53 53 150 155
General and
administrative
expense 10 11 31 32
Interest and debt
expense 6 4 14 11
Interest capitalized (2) (4) (10) (11)
--------- --------- --------- ---------
113 118 369 356
--------- --------- --------- ---------
Net Income $ 3 $ 51 $ 31 $ 182
========= ========= ========= =========
Net Income Per Unit $ .01 $ .12 $ .07 $ .43
========= ========= ========= =========
Cash Distributions Paid
Per Unit $ -- $ .02 $ .02 $ .25
========= ========= ========= =========
Weighted Average Number of Units
Outstanding (in thousands) 421,171 421,171 421,171 421,171
========= ========= ========= =========
</TABLE>
(See Accompanying Notes)
4
<PAGE> 5
SUN ENERGY PARTNERS, L.P.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30 December 31
(Millions of Dollars) 1998 1997
----------- -----------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets
Cash and short-term investments $ 6 $ 2
Accounts receivable and other current
assets 63 124
-------- --------
Total Current Assets 69 126
Properties, Plants and Equipment (Note 2) 1,404 1,254
Investment in Affiliate 83 88
-------- --------
Total Assets $ 1,556 $ 1,468
======== ========
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities
Advances from affiliate $ 164 $ 49
Accounts payable 74 80
Accrued liabilities 69 84
Current portion of long-term debt due
affiliate 14 13
Current portion of long-term debt 1 1
-------- --------
Total Current Liabilities 322 227
Long-Term Debt Due Affiliate 27 38
Deferred Credits and Other Liabilities 31 49
Partners' Capital (Note 3)
Limited partnership interests 361 354
General partnership interests 815 800
-------- --------
Partners' Capital 1,176 1,154
-------- --------
Total Liabilities and Partners' Capital $ 1,556 $ 1,468
======== ========
</TABLE>
- ----------------
The successful efforts method of accounting is followed.
(See Accompanying Notes)
5
<PAGE> 6
SUN ENERGY PARTNERS, L.P.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Nine Months
Ended September 30
----------------------
(Millions of Dollars) 1998 1997
------ ------
(Unaudited)
<S> <C> <C>
CASH FROM OPERATING ACTIVITIES
Net income $ 31 $ 182
Adjustments to reconcile net income
to net cash provided from operating activities:
Depreciation, depletion and amortization 150 155
Dry hole costs and leasehold impairment 29 13
(Gain) Loss on sale of assets (19) 5
Other (2) 5
------ ------
189 360
Changes in working capital:
Advances from affiliates 114 29
Accounts receivable and other current assets 61 13
Accounts payable and accrued liabilities (19) 46
------ ------
Net Cash Flow Provided From Operating Activities 345 448
------ ------
INVESTING ACTIVITIES
Capital expenditures (325) (330)
Proceeds from divestments 21 1
Other (19) (3)
------ ------
Net Cash Flow Used For Investing Activities (323) (332)
------ ------
FINANCING ACTIVITIES
Repayments of long-term debt (10) (6)
Cash distributions paid to unitholders (8) (105)
------ ------
Net Cash Flow Used For Financing Activities (18) (111)
------ ------
CHANGES IN CASH AND CASH EQUIVALENTS 4 5
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 2 2
------ ------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6 $ 7
====== ======
</TABLE>
(See Accompanying Notes)
6
<PAGE> 7
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 nine months ended
September 30, 1998 are not necessarily indicative of the results for
the full year 1998.
In December 1997, the Partnership adopted Statement of Financial
Accounting Standards (SFAS) No. 128, "Earnings per Share," effective
January 1, 1997 resulting in no material impact. In addition, the
Partnership adopted SFAS No. 130, "Reporting Comprehensive Income,"
effective January 1, 1998. Total comprehensive income and net income
are identical for the three and nine months ended September 30, 1998.
In June 1998, the Financial Accounting Standards Board (FASB) issued
SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," effective for fiscal years beginning after June 15, 1999.
SFAS 133 requires that all derivative instruments be recorded on the
balance sheet at their fair value and net gains and losses on
derivative instruments be recognized initially in comprehensive income.
The Partnership has not yet determined the impact that the adoption of
SFAS 133 will have on its earnings or statement of financial position.
2. Properties, Plants and Equipment
<TABLE>
<CAPTION>
September 30 December 31
1998 1997
-------- --------
(Millions of Dollars)
<S> <C> <C>
Gross investment................. $ 4,196 $ 3,923
Less accumulated depreciation,
depletion and amortization..... 2,792 2,669
-------- --------
Net investment $ 1,404 $ 1,254
======== ========
</TABLE>
7
<PAGE> 8
SUN ENERGY PARTNERS, L.P.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
3. Partners' Capital
At September 30, 1998, the ownership of the Partnership was comprised
of a 69 percent general partnership interest and a 31 percent limited
partnership interest. Oryx Energy Company (Oryx) 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 September
30, 1998, there were a total of 421.2 million units outstanding.
4. Subsequent Events
On October 14, 1998, Oryx Energy Company, the general partner of the
Partnership, announced a merger with Kerr-McGee Corporation, with
Kerr-McGee to be the surviving corporation. The board of each company
has unanimously approved the transaction and recommends the merger.
Prior to the merger, each share of Oryx common stock will be converted
into .369 shares of Oryx common stock in a reverse stock split. If
approved by shareholders of both companies, at the effective time of
the merger, each Oryx shareholder will receive one newly issued share
of Kerr-McGee common stock for each Oryx common share, resulting in an
equity split of Kerr-McGee of approximately 55% Kerr-McGee and 45%
Oryx. The transaction is intended to be accounted for as a pooling of
interests, to be tax-free to Oryx's shareholders and to be completed in
the first quarter of 1999.
8
<PAGE> 9
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 September 30, 1998, and the
related condensed consolidated statements of income for the three and nine
months ended September 30, 1998 and 1997, and the related condensed consolidated
statements of cash flows for the nine months ended September 30, 1998 and 1997.
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 of Sun Energy Partners, L.P. and its
Subsidiaries as of December 31, 1997, and the related consolidated statements of
income and cash flows for the year then ended (not presented herein); and in our
report dated February 17, 1998, 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, 1997,
is fairly stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
/s/PricewaterhouseCoopers LLP
Dallas, Texas
November 5, 1998
9
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
At September 30, 1998, cash and cash equivalents were $6 million compared to $2
million at December 31, 1997. The $4 million increase in cash and cash
equivalents was comprised of $345 million provided from operating activities,
$323 million used for investing activities and $18 million used for financing
activities. The $345 million net cash flow provided from operating activities
was comprised of $189 million net cash flow provided from operating activities
before changes in current assets and liabilities and $156 million net cash flow
provided from changes in current assets and liabilities. The $189 million net
cash flow provided from operating activities before changes in current assets
and liabilities was primarily impacted by decreased crude oil and natural gas
prices and production. The $156 million net cash flow provided from changes in
current assets and liabilities consisted of a $114 million increase in advances
from affiliates, a $61 million decrease in accounts receivable and other current
assets, and a $19 million decrease in accounts payable and accrued liabilities.
The $323 million net cash flow used for investing activities consisted primarily
of $325 million used for capital expenditures. The $18 million net cash flow
used for financing activities resulted from the scheduled payment of $10 million
of long-term debt and $8 million of cash distributions paid to unitholders.
As a result of a combination of operating cash flow and capital expenditures, no
cash distribution will be paid for the 1998 third quarter. Distributions will
fluctuate due to oil and gas prices, production volumes, operating costs and the
amount of capital expenditures and divestment proceeds.
As of October 26 1998, the Partnership has entered into collar agreements to
hedge approximately 31 percent of its remaining projected 1998 crude production
at an average floor price of $17.71 West Texas Intermediate (WTI) per barrel and
an average ceiling price of $18.77 WTI per barrel. Approximately 51 percent of
its remaining estimated 1998 gas production is hedged using collars at an
average floor price of $2.37 Henry Hub (HH) per mmbtu and an average ceiling
price of $2.54 HH per mmbtu. The Partnership has also entered into collar
arrangements to hedge approximately 7 percent of its projected 1999 crude
production at an average floor price of $15.85 WTI per barrel and an average
ceiling price of $17.35 WTI per barrel. Approximately 31 percent of its
estimated 1999 gas production is hedged using collars at an average floor price
of $2.29 HH per mmbtu and an average ceiling price of $2.47 HH per mmbtu.
10
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - CONTINUED
FINANCIAL CONDITION (CONTINUED)
In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities," effective
for fiscal years beginning after June 15, 1999. SFAS 133 requires that all
derivative instruments be recorded on the balance sheet at their fair value and
net gains and losses on derivative instruments be recognized initially in
comprehensive income. The Partnership has not yet determined the impact that the
adoption of SFAS 133 will have on its earnings or statement of financial
position.
On October 14, 1998, Oryx Energy Company, the general partner of the
Partnership, announced a merger with Kerr-McGee Corporation, with Kerr-McGee to
be the surviving corporation. The board of each company has unanimously approved
the transaction and recommends the merger. Prior to the merger, each share of
Oryx common stock will be converted into .369 shares of Oryx common stock in a
reverse stock split. If approved by shareholders of both companies, at the
effective time of the merger, each Oryx shareholder will receive one newly
issued share of Kerr-McGee common stock for each Oryx common share, resulting in
an equity split of Kerr-McGee of approximately 55% Kerr-McGee and 45% Oryx. The
transaction is intended to be accounted for as a pooling of interests, to be
tax-free to Oryx's shareholders and to be completed in the first quarter of
1999.
FINANCIAL CONDITION - YEAR 2000 PROJECT
GENERAL
The Project addresses the ability of computer programs and embedded computer
chips to distinguish between the year 1900 and the year 2000. An enterprise-wide
program was launched in 1996 to take steps to mitigate this problem. The
Partnership additionally chose to replace its financial applications systems
with systems that were already Year 2000 compliant. Implementation of these
systems is on schedule and expected to be completed by January 31, 1999.
Remaining business software programs are expected to be made Year 2000 compliant
through the Year 2000 Project. None of the Partnership's other information
technology projects have been delayed due to the implementation of the Year 2000
Project.
PROJECT
The Year 2000 Project is divided into three major sections - Information
Technology (IT Systems), Asset Integrity and Commercial Integrity. The general
phases common to all sections are: (1) inventorying Year 2000 items; (2)
assigning priorities to those items; (3) assessing the Year 2000 compliance of
items determined to be material to the Company; (4) repairing or replacing
material items that are determined not to be Year 2000 compliant; (5) testing
material items and (6) designing and implementing contingency and business
continuation plans.
11
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - CONTINUED
FINANCIAL CONDITION - YEAR 2000 PROJECT (CONTINUED)
PROJECT (CONTINUED)
At September 30, 1998, the inventory and priority assessment phases of the
Information Technology and the Asset Integrity sections of the Project had been
completed. The remediation phase of the Project is currently being performed by
the Partnership. The testing phase is ongoing as hardware or system software is
remediated, upgraded or replaced.
The Information Technology section includes software applications,
telecommunications, networks and other hardware. The Partnership estimates that
all repair or replacement will be completed by the second quarter of 1999. The
testing phase is conducted as the software is replaced and is also scheduled to
be completed by mid-1999.
The Asset Integrity area covers process control, automation and instrumentation
systems which can include date-sensitive hardware or software, and associated
embedded computer chips that are used in the operation of the assets and
facilities of the Partnership. Testing and remediation is currently being
conducted on all critical systems and will continue through the third quarter of
1999.
The Commercial Integrity area addresses the external parties who are involved in
the Partnership's business chains and processes. These include suppliers,
customers, joint venture partners, transporters, regulatory and government
agencies, financial institutions and third party service providers. The
Partnership is currently in the process of identifying those parties who may
have a material adverse effect on the Partnership' business performance. We plan
to communicate with them about their plans and progress in addressing the Year
2000 problem commencing in late 1998 with expected completion in mid-1999.
COSTS
The total cost associated with required modifications to become Year 2000
compliant is not expected to be material to the Partnership's financial
position. The estimated total cost of the Year 2000 Project is approximately $4
million. This estimate does not include the Partnership's potential share of
Year 2000 costs that may be incurred by partnerships or joint ventures in which
the Partnership participates but is not the operator. The total amount expended
on the Project through September 30, 1998 was $1 million, all of which related
to the repair, replacement or upgrade of software and hardware and the cost of
testing and replacing non-compliant process control and instrumentation systems.
The estimated future cost of completing the Year 2000 Project is estimated to be
approximately $3 million; $3 million to repair or replace software and related
hardware and immaterial amounts to repair or replace process control and
instrumentation systems and to identify and communicate with external parties.
Funds for the Project are provided from operating cash
12
<PAGE> 13
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - CONTINUED
FINANCIAL CONDITION - YEAR 2000 PROJECT (CONTINUED)
COSTS (CONTINUED)
flows and are included in existing operating budgets. The costs of implementing
the financial applications systems are not included in these cost estimates.
CONTINGENCY PLANS
The Partnership has begun, but not yet completed, a comprehensive analysis of
the operational problems and costs (including loss of revenues) that would be
reasonably likely to result from the failure by the Partnership and certain
third parties to complete efforts necessary to achieve Year 2000 compliance
timely. A contingency plan has not been developed for dealing with the most
reasonably likely worst case scenario, and such scenario has not yet been
clearly identified. The Partnership currently plans to complete such analysis
and contingency planning by the latter part of 1999.
RISKS
The failure to correct a material Year 2000 problem could result in an
interruption in, or failure of, certain normal business activities or
operations. Such failures could materially and adversely affect the
Partnership's results of operations, liquidity and financial condition. Due to
the general uncertainty inherent in the Year 2000 problem resulting in part from
the uncertainty of the Year 2000 readiness of third-party suppliers and
customers, the Partnership is unable to determine at this time whether the
consequences of Year 2000 failures will have a material impact on the
Partnership's results of operations, liquidity or financial condition. The Year
2000 Project is expected to significantly reduce the Partnership's level of
uncertainty about the Year 2000 problem. The Partnership believes that, with the
implementation of new business systems and completion of the Project as
scheduled, the possibility of interruptions to normal operations should be
significantly reduced.
RESULTS OF OPERATIONS - NINE MONTHS
Net income for the first nine months of 1998 was $31 million, or $.07 per unit,
compared to net income of $182 million, or $.43 per unit, in the first nine
months of 1997. Revenues for the nine months were $400 million in 1998 versus
$538 million in 1997.
Average net production of crude oil and condensate was 44 thousand barrels daily
during the first nine months of 1998 compared to average net production of 45
thousand barrels daily for the first nine months of 1997. The crude oil and
condensate price in the first nine months of 1998 decreased to $13.92 per
barrel, as compared to $18.95 per barrel in the same period last year.
13
<PAGE> 14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS - CONTINUED
RESULTS OF OPERATIONS - NINE MONTHS (CONTINUED)
Average net production of natural gas for the first nine months of 1998 was 375
million cubic feet daily compared to average net production of 492 million cubic
feet daily for the same period in 1997. The reduction in gas production resulted
primarily from field declines, lower than expected drilling results and
weather-related interruptions in the Gulf of Mexico. The natural gas price for
the first nine months of 1998 was $2.09 per thousand cubic feet, as compared to
$2.35 per thousand cubic feet in the same period last year.
RESULTS OF OPERATIONS - THREE MONTHS
The Partnership reported net income of $3 million, or $.01 per unit, for the
quarter ended September 30, 1998, compared to net income of $51 million, or $.12
per unit, for the same quarter last year. Revenues for the 1998 third quarter
were $116 million versus $169 million for the third quarter of 1997.
Average net production of crude oil and condensate for the third quarter of 1998
was 41 thousand barrels daily compared to average net production for the third
quarter of 1997 of 49 thousand barrels daily. The average crude oil and
condensate price in the third quarter of 1998 decreased to $13.12 per barrel, as
compared to $17.81 per barrel in the same period in 1997.
Average net production of natural gas for the third quarter of 1998 was 366
million cubic feet daily compared to average net production of 470 million cubic
feet daily for the third quarter of 1997. The reduction in gas production
resulted primarily from field declines, lower than expected drilling results and
weather-related interruptions in the Gulf of Mexico. The average natural gas
price in the third quarter of 1998 was $2.00 per thousand cubic feet, as
compared to $2.22 per thousand cubic feet in the same period in 1997.
14
<PAGE> 15
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:
The Partnership did not file any reports on Form 8-K during
the quarter ended September 30, 1998.
******************
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
15
<PAGE> 16
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/ E. W. Moneypenny
---------------------------------
E. W. Moneypenny
(Executive Vice President,
Finance, and Chief Financial Officer)
DATE: November 5, 1998
16
<PAGE> 17
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<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>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 6
<SECURITIES> 0
<RECEIVABLES> 46
<ALLOWANCES> 0
<INVENTORY> 1
<CURRENT-ASSETS> 69
<PP&E> 4,196
<DEPRECIATION> (2,792)
<TOTAL-ASSETS> 1,556
<CURRENT-LIABILITIES> 322
<BONDS> 27
0
0
<COMMON> 0
<OTHER-SE> 1,176
<TOTAL-LIABILITY-AND-EQUITY> 1,556
<SALES> 381
<TOTAL-REVENUES> 400
<CGS> 268
<TOTAL-COSTS> 268
<OTHER-EXPENSES> 97
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4
<INCOME-PRETAX> 31
<INCOME-TAX> 0
<INCOME-CONTINUING> 31
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 31
<EPS-PRIMARY> .07<F1>
<EPS-DILUTED> .07
<FN>
<F1>(EPS-PRIMARY) DENOTES BASIC EPS.
</FN>
</TABLE>
