<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT - FEBRUARY 5, 1998
(DATE OF EARLIEST EVENT REPORTED)
UNITED MERIDIAN CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
COMMISSION FILE NO. 1-12088
DELAWARE 75-2160316
- -------------------------- -------------------
(STATE OF INCORPORATION) (I.R.S. EMPLOYER
IDENTIFICATION NO.)
1201 LOUISIANA, SUITE 1400, HOUSTON, TEXAS 77002-5603
- ------------------------------------------------------------------------------
(ADDRESS OF PRINCIPAL (ZIP CODE)
EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 654-9110
<PAGE> 2
Item 5. Other Events
On February 5, 1998, United Meridian Corporation, a Delaware corporation (the
"Company"), and Ocean Energy, Inc., a Delaware corporation ("OEI"), announced
that the close of business on Friday, February 20, 1998, has been set as the
record date for their respective shareholders to be entitled to vote at the UMC
Special Meeting and the OEI Annual Meeting. The purpose of the UMC Special
Meeting is to consider and vote upon the proposed merger between UMC and OEI.
On February 6, 1998, UMC announced that the government of the Republic of
Angola has awarded it a participation in the deepwater Block 19 concession
group with a 20% interest.
On February 10, 1998, UMC announced that proved energy reserves at year-end
1997 reached a record 162 million barrels of oil equivalent (MMBOE), 36%
greater than the 120 MMBOE reported at year-end 1996.
On February 10, 1998, UMC announced record net income of $19.8 million ($0.56
Basic Earnings per share) for the year ended December 31, 1997.
Registrant is filing as exhibits to this Report press releases announcing the
above-described events. Such exhibits are incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
*99.1 Press Release, dated February 5, 1998
*99.2 Press Release, dated February 6, 1998
*99.3 Press Release, dated February 10, 1998
*99.4 Press Release, dated February 10, 1998
- ----------------
* filed herewith
[The remainder of this page is intentionally left blank.]
2
<PAGE> 3
SIGNATURES
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 hereunto duly authorized.
UNITED MERIDIAN CORPORATION
By: /s/ CHRISTOPHER E. CRAGG
-----------------------------------------
Christopher E. Cragg
Vice President, Controller and
Chief Accounting Officer
Dated: February 10, 1998
3
<PAGE> 4
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
*99.1 Press Release, dated February 5, 1998
*99.2 Press Release, dated February 6, 1998
*99.3 Press Release, dated February 10, 1998
*99.4 Press Release, dated February 10, 1998
</TABLE>
- --------------
* filed herewith
<PAGE> 1
EXHIBIT 99.1
MONDAY, FEBRUARY 2, 1998 CONTACT: JEANNE BUCHANAN
UNITED MERIDIAN CORPORATION
(713) 653-5095
MICHAEL O. ALDRIDGE
OCEAN ENERGY, INC.
(504) 927-1450
UNITED MERIDIAN, OCEAN ENERGY SET RECORD DATE
FOR MEETINGS TO CONSIDER MERGER
Houston, TX and Baton Rouge, LA - United Meridian Corporation (UMC) and Ocean
Energy, Inc. (NYSE: OEI) have set the close of business on Friday, February
20, as the record date for the UMC Special Meeting and the OEI Annual Meeting.
The purpose of the Meetings is to consider and vote upon the proposed merger
between UMC and OEI.
The date of the Meetings remains to be determined pending the timing of
clearance of the joint proxy statement by the Securities and Exchange
Commission.
United Meridian Corporation is a Houston-based independent energy company
engaged in the exploration, exploitation and acquisition of crude oil and
natural gas properties in the United States and Canada. UMC also has
exploration and development activities in West Africa's Cote d'Ivoire and
Equatorial Guinea, and has recently commenced exploration programs in Pakistan
and Bangladesh. The company's stock is traded on the New York Stock Exchange
under the symbol UMC.
Ocean Energy, Inc. is an independent energy company engaged in the exploration,
development, production, and acquisition of crude oil and natural gas.
<PAGE> 1
EXHIBIT 99.2
FRIDAY, FEBRUARY 6, 1998 CONTACT: JEANNE BUCHANAN
(713) 653-5095
UNITED MERIDIAN AWARDED DEEPWATER BLOCK
IN ANGOLA
Houston, TX - United Meridian Corporation (UMC) today announced that the
government of the Republic of Angola has awarded it a participation in the
deepwater Block 19 concession group with a 20% interest.
The 1.2 million-acre block, located squarely in the exploration fairway
offshore Angola, is approximately 30 miles south of Block 17 where major oil
companies have recently reported oil discoveries believed to contain
recoverable oil reserves in excess of three billion barrels.
"With the award of Block 19, UMC holds interests in approximately 3.5 million
acres, the equivalent of 700 blocks in the Gulf of Mexico, throughout the
high-potential, West African deepwater turbidite deposition oil play," said
John B. Brock, UMC chairman and chief executive officer. "Our net position in
Block 19 alone is about the equivalent of 48 Gulf OCS blocks.
"Because of our reputation as a proven international oil finder and our access
to attractive opportunities worldwide, we continually are able to add
aggressively sought-after concessions such as Block 19 to our international
exploration portfolio," Brock continued. "Existing seismic data strongly
suggest that Block 19 is geologically on trend with recent, large discoveries
on Blocks 14 and 17, all of which are located within the Congo Basin. We look
forward to this initial venture with Sonangol and the government of Angola and
to exploring the potential of this Block with their distinctive work force and
experience," Brock concluded.
UMC's partners in the Block include Sonangol, the national oil company of
Angola (20%), Ranger Oil (25%), the operator Petrofina (30%), and an Israeli
company (5%).
United Meridian Corporation is a Houston-based independent energy company
engaged in the exploration, exploitation and acquisition of crude oil and
natural gas properties in the United States and Canada. UMC also has
exploration and development activities in West Africa's Cote d'Ivoire and
Equatorial Guinea, and has recently commenced exploration programs in Pakistan
and Bangladesh. The company's stock is traded on the New York Stock Exchange
under the symbol UMC.
<PAGE> 1
EXHIBIT 99.3
TUESDAY, FEBRUARY 10, 1998 CONTACT: JEANNE BUCHANAN
(713) 653-5095
UMC INCREASES RESERVES 36 PERCENT,
REPLACES 366 PERCENT OF PRODUCTION
Houston, TX -- United Meridian Corporation today announced that proved energy
reserves at year-end 1997 reached a record 162 million barrels of oil
equivalent (MMBOE), 36% greater than the 120 MMBOE reported at year-end 1996.
After record production volumes of 55 billion cubic feet (BCF) of gas and 8
million barrels of oil, gas reserves totaled 560 BCF and crude oil reserves
totaled 69 million barrels compared to year-end 1996 totals of 451 BCF and 45
million barrels. Proved oil reserves accounted for 42 percent of UMC's total
proved reserves compared to 37 percent at year-end 1996, a significant step
toward achieving the company's goal of more balanced production and reserves.
During 1997, the company replaced 366 percent of total production with
additions to proved reserves, marking the eighth straight year the company has
more than replaced its oil and gas production. UMC achieved this at an
all-sources finding cost of $5.47 per barrel of oil equivalent (including
additions, revisions of prior reserve estimates, and acquisitions).
UMC's North American activities accounted for 58 percent of the company's total
reserves and West Africa contributed the balance. On the continued success of
the company's drilling program on Block B in Equatorial Guinea, UMC doubled
proved oil reserves in the country, booking 40 million barrels (net).
"Proved reserves are at the highest level in the company's history, driven by
our most active annual drilling program to date," said chairman and chief
executive officer John B. Brock. "We drilled 337 wells in 1997 and had an 84%
success rate compared to 169 wells drilled in 1996 and a success rate of 80%.
We expect 1998 to be another record-breaking year as we complete the merger
with Ocean Energy and drill many of the high-impact prospects in our respective
exploration inventories."
United Meridian Corporation is a Houston-based independent energy company
engaged in the exploration, exploitation and acquisition of natural gas and
crude oil properties in the United States and Canada. Internationally, the
company has exploration and development activities in West Africa's Cote
d'Ivoire and Equatorial Guinea, and was recently awarded a block offshore
Angola. UMC also has exploration programs underway in Pakistan and Bangladesh.
The company's common stock is traded on the New York Stock Exchange under the
symbol UMC.
<PAGE> 2
UNITED MERIDIAN CORPORATION
DECEMBER 31, 1997
PROVED RESERVE RECONCILIATION
<TABLE>
<CAPTION>
UNITED IVORY EQUATORIAL
STATES CANADA COAST GUINEA TOTAL
---------- ---------- ---------- ---------- ----------
NATURAL GAS (MMCF)
- ------------------------------------
<S> <C> <C> <C> <C> <C>
December 31, 1996 297,532 62,781 90,410 0 450,723
Revisions of Previous Estimates 5,716 533 14,174 0 20,423
Additions 35,687 17,775 3,370 0 56,832
Improved Recoveries 0 3,327 0 0 3,327
Production (42,238) (7,630) (4,939) 0 (54,807)
Purchases of Reserves In-Place 41,876 21,377 33,275 0 96,528
Sales of Reserves In-Place (12,474) (301) 0 0 (12,775)
---------- ---------- ---------- ---------- ----------
December 31, 1997 326,099 97,862 136,290 0 560,251
========== ========== ========== ========== ==========
CRUDE OIL (MBBLS)
- ------------------------------------
December 31, 1996 16,941 3,499 4,150 19,940 44,530
Revisions of Previous Estimates (780) 192 854 441 707
Additions 2,950 156 218 24,086 27,410
Improved Recoveries 0 25 0 0 25
Production (2,214) (439) (1,027) (4,453) (8,133)
Purchases of Reserves In-Place 4,436 45 1,062 0 5,543
Sales of Reserves In-Place (1,167) (95) 0 0 (1,262)
---------- ---------- ---------- ---------- ----------
December 31, 1997 20,166 3,383 5,257 40,014 68,820
========== ========== ========== ========== ==========
</TABLE>
<PAGE> 3
UNITED MERIDIAN CORPORATION
DECEMBER 31, 1997
PROVED RESERVE RECONCILIATION
<TABLE>
<CAPTION>
UNITED IVORY EQUATORIAL
STATES CANADA COAST GUINEA TOTAL
---------- ---------- ---------- ---------- ----------
TOTAL MBOE
- ------------------------------------
<S> <C> <C> <C> <C> <C>
December 31, 1996 66,530 13,963 19,218 19,940 119,651
Revisions of Previous Estimates 173 281 3,216 441 4,111
Additions 8,898 3,119 780 24,086 36,883
Improved Recoveries 0 580 0 0 580
Production (9,254) (1,711) (1,850) (4,453) (17,268)
Purchases of Reserves In-Place 11,415 3,608 6,608 0 21,631
Sales of Reserves In-Place (3,246) (145) 0 0 (3,391)
---------- ---------- ---------- ---------- ----------
December 31, 1997 74,516 19,695 27,972 40,014 162,197
========== ========== ========== ========== ==========
1997 Capital Expenditures $ 154,165 $ 27,832 $ 56,931 $ 127,074 $370,096 (1)
Less:
LPG Plant -- -- (17,229) -- (17,229)
Corporate Items (6,816) (284) -- -- (7,100)
---------- ---------- ---------- ---------- ----------
1997 Drill Bit & Acq Capital 147,349 27,548 39,702 127,074 345,767 (1)
1997 Drill Bit Capital 94,287 17,994 39,702 127,074 283,151 (1)
1997 Acquisition Costs 53,062 9,554 -- -- 62,616
All Sources Finding Costs ($/BOE) $ 7.19 $ 3.63 $ 3.74 $ 5.18 $ 5.47
Finding Costs with Drill Bit ($/BOE) $ 10.39 $ 4.52 $ 9.94 $ 5.18 $ 6.81
Acquisition Costs ($/BOE) $ 4.65 $ 2.65 -- -- $ 2.89
</TABLE>
(1) Total Company includes $4,094 of Other International Capital Expenditures.
<PAGE> 1
EXHIBIT 99.4
TUESDAY, FEBRUARY 10, 1998 CONTACT: JEANNE BUCHANAN
(713) 653-5095
UNITED MERIDIAN POSTS RECORD NET INCOME, CASH FLOW ON INCREASED PRODUCTION
VOLUME IN FOURTH QUARTER AND FULL-YEAR 1997
Houston, TX - For the sixth consecutive year, United Meridian Corporation (UMC)
achieved record production volumes, pushing 1997 financial results to all-time
highs.
FULL-YEAR 1997 RESULTS
On a greater number of shares outstanding, net income in 1997 rose 14% to a
record $19.8 million, or $.56 per share, on total revenues of $264.9 million.
An 85% increase in oil production, sharp declines in operating costs on a
barrel equivalent basis, and good control of other cash costs drove
discretionary cash flow up 37% to an all-time high $165.2 million, or $4.64 per
share.
By comparison, full-year 1996 net income totaled $17.4 million, or $.53 per
share, on total revenues of $236.4 million, which included a $29 million
pre-tax gain on the sale of properties. Discretionary cash flow for 1996 was
$121 million, or $4.02 per share.
"UMC chalked up another year of record financial and operating results,
including net income and cash flow," said John B. Brock, UMC chairman and chief
executive officer. "Our production growth has now averaged 30% over the past
five years. And we exited the year producing 19% more than we averaged during
1997. By continuing to invest in high-impact drilling projects, we expect
similar production growth in 1998 and beyond,
<PAGE> 2
providing a substantial foundation for increased profitability, cash flow and
shareholder value following our planned merger with Ocean Energy in March.
"We ended 1997 with the highest level of reserves in company history. Total
proved reserves increased 36% and we replaced 366% of our production at low
finding costs," Brock continued. "Looking at 1998, our aggressive drilling
program is designed to continue capturing the upside potential of our
exploration inventory, with particular emphasis in the Gulf of Mexico and
offshore West Africa. At the same time, we will continue to add high-impact
properties to our core areas, illustrated by our newly awarded block in Angola
located in the heart of the West Africa deepwater play."
UMC increased 1997 production volumes to 17.3 million barrels of oil equivalent
(MMBOE), 27% higher than the 13.6 MMBOE produced a year ago. Reflecting a full
year of production from Equatorial Guinea's Block B, crude oil volumes averaged
22,300 barrels a day compared to 12,000 barrels averaged in 1996. Increased
production helped to offset the effect of lower oil prices during the year,
particularly in the fourth quarter. UMC oil sales averaged $17.87 per barrel,
down $3.07 a barrel from 1996 price realizations.
Daily gas production averaged 150 million cubic feet (MMCF) in 1997 versus 152
MMCF averaged in 1996. Improved volume in the fourth quarter helped to offset
the loss of gas production associated with properties sold earlier in the year.
The company received $2.04 per thousand cubic feet (MCF) of gas in 1997 versus
$2.07 per MCF in 1996.
Accompanying the record production in 1997 was a 12% decline in operating costs
(production, general and administrative, and depreciation, depletion and
amortization) on a unit-of-production basis. Year-over-year, production costs
(including ad valorem taxes) fell from $3.76 per barrel of oil equivalent (BOE)
to $3.27 per BOE. UMC reduced general and administrative expense by 15% to
$.79 per BOE. Depreciation, depletion and amortization expense was $5.58 per
BOE compared to $6.23 per BOE in 1996.
<PAGE> 3
UMC's capital expenditures during 1997 totaled $370 million compared to $190
million in 1996. Of this amount, $103 million and $180 million were allocated
to exploration and development activities, respectively. The company spent $63
million to acquire interests in producing properties. International spending
totaled $188 million, or 51% of total capital expenditures.
To help fund its aggressive capital program, UMC used cash on hand at the
beginning of the year and drew on its bank revolver, increasing total long-term
debt from $157 million in 1996 to $283 million at the end of 1997, including
$150 million in subordinated debt. UMC did increase the capacity of its
revolver to $300 million during the fourth quarter, leaving approximately $170
million of unused capacity at year end. Total debt represents 38% of UMC's
total book capitalization.
FOURTH QUARTER 1997 RESULTS
On the strength of robust oil and gas production, UMC recorded respective 51%
and 27% improvements in net income and discretionary cash flow during fourth
quarter 1997, both record quarterly results. On a greater number of shares
outstanding, net income totaled $8.5 million, or $.24 per share, compared to
$5.6 million, or $.17 per share, in the prior-year period. Discretionary cash
flow of $50.7 million compared to $40 million a year ago.
Helping to mitigate the impact of falling oil prices, daily oil production
during the quarter climbed 67% to average 27,700 barrels compared to 16,600
barrels in fourth quarter 1996. UMC received an average $17.31 a barrel, off
$5.55 a barrel from year-ago realizations.
For the fourth quarter, daily gas production increased 18% from an average 143
MMCF to 169 MMCF, reflecting the results of the successful development drilling
program and
<PAGE> 4
the acquisition of partnership and other interests in the third quarter. The
company realized $2.27 per MCF versus $2.29 per MCF in fourth quarter 1996.
United Meridian Corporation is a Houston-based independent energy company
engaged in the exploration, exploitation and acquisition of crude oil and
natural gas properties in the United States and Canada. UMC has exploration
and development activities in West Africa's Cote d'Ivoire and Equatorial
Guinea, and was recently awarded a block offshore Angola. UMC also has
exploration programs underway in Pakistan and Bangladesh. The company's common
stock is traded on the New York Stock Exchange under the symbol UMC.
Financials follow.
<PAGE> 5
CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
For the three months For the twelve months
ended December 31, ended December 31,
------------------------- ------------------------
1997 1996 1997 1996
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Gas sales.......................................................... $ 35,156 $ 30,125 $ 111,663 $ 114,498
Oil sales ......................................................... 44,161 35,001 145,351 92,031
Gain on sale of assets ............................................ 1,954 3,624 4,851 29,021
Other ............................................................. 674 95 3,000 854
---------- --------- --------- ---------
81,945 68,845 264,865 236,404
---------- --------- --------- ---------
Costs and expenses:
Production costs .................................................. 17,258 16,079 56,492 51,298
General and administrative ........................................ 4,851 3,168 13,580 12,727
Exploration, including dry holes and impairments .................. 8,300 17,509 38,845 40,325
Depreciation, depletion and amortization .......................... 28,523 22,086 96,418 84,979
---------- --------- --------- ---------
58,932 58,842 205,335 189,329
---------- --------- --------- ---------
Income from operations ............................................... 23,013 10,003 59,530 47,075
Other expenses and deductions:
Interest and debt expense ......................................... (6,680) (5,991) (21,749) (22,811)
Other ............................................................. 359 (798) 1,681 (844)
---------- --------- --------- ---------
Income before income taxes ........................................... 16,692 3,214 39,462 23,420
Income tax benefit (provision):
Current ........................................................... (1,265) (115) (6,220) (785)
Deferred .......................................................... (6,962) 2,516 (13,455) (5,231)
---------- --------- --------- ---------
Net income............................................................ $ 8,465 $ 5,615 $ 19,787 $ 17,404
========== ========= ========= =========
Basic EPS............................................................. $ 0.24 $ 0.17 $ 0.56 $ 0.53
========== ========= ========= =========
Weighted average number of common shares
outstanding ................................................... 35,784 33,515 35,590 30,120
========== ========= ========= =========
Diluted EPS........................................................... $ 0.23 $ 0.16 $ 0.54 $ 0.51
========== ========= ========= =========
Weighted average number of common shares
outstanding, including common share equivalents ................ 36,943 35,335 36,662 31,428
========== ========= ========= =========
Cash flows from operations before
changes in working capital ........................................ $ 50,712 $ 40,011 $ 165,230 $ 121,045
========== ========= ========= =========
</TABLE>
<PAGE> 6
OTHER OPERATING DATA
<TABLE>
<CAPTION>
For the three months For the twelve months
ended December 31, ended December 31,
------------------------- -------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Production:
Oil (Mbbls)
U.S ............................................. 641 451 2,214 2,022
Canada .......................................... 117 109 439 511
Cote d'Ivoire ................................... 209 233 1,027 894
Equatorial Guinea ............................... 1,583 738 4,453 967
---------- ---------- ---------- ----------
Total ........................................ 2,550 1,531 8,133 4,394
Natural Gas (MMcf)
U.S ............................................. 11,967 11,177 42,238 47,719
Canada .......................................... 2,220 1,427 7,630 5,339
Cote d'Ivoire ................................... 1,327 573 4,939 2,387
---------- ---------- ---------- ----------
Total ........................................ 15,514 13,177 54,807 55,445
Average Daily Production:
Oil (Mbbls)
U.S ............................................. 6.9 4.9 6.1 5.5
Canada .......................................... 1.3 1.2 1.2 1.4
Cote d'Ivoire ................................... 2.3 2.5 2.8 2.5
Equatorial Guinea ............................... 17.2 8.0 12.2 2.6
---------- ---------- ---------- ----------
Total ........................................ 27.7 16.6 22.3 12.0
Natural gas (MMcf)
U.S ............................................. 130.1 121.5 115.7 130.4
Canada .......................................... 24.1 15.5 20.9 14.6
Cote d'Ivoire ................................... 14.4 6.2 13.6 6.5
---------- ---------- ---------- ----------
Total ........................................ 168.6 143.2 150.2 151.5
Average Sales Prices:
Oil ($ per barrel)
U.S ............................................. $ 17.39 $ 23.62 $ 17.96 $ 20.91
Canada .......................................... $ 17.44 $ 22.40 $ 17.97 $ 19.43
Cote d'Ivoire ................................... $ 17.56 $ 23.83 $ 18.35 $ 20.56
Equatorial Guinea ............................... $ 17.24 $ 22.15 $ 17.71 $ 22.17
Total ........................................ $ 17.31 $ 22.86 $ 17.87 $ 20.94
Natural gas ($ per Mcf)
U.S ............................................. $ 2.46 $ 2.38 $ 2.18 $ 2.15
Canada .......................................... $ 1.44 $ 1.72 $ 1.40 $ 1.44
Cote d'Ivoire ................................... $ 1.86 $ 1.95 $ 1.81 $ 1.80
Total ........................................ $ 2.27 $ 2.29 $ 2.04 $ 2.07
</TABLE>
<PAGE> 7
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except percentages)
<TABLE>
<CAPTION>
December 31, December 31,
1997 1996
-------- --------
<S> <C> <C>
Cash and cash equivalents .............................................................. $ 11,689 $ 54,942
Other current assets ................................................................... 96,475 101,219
Property and equipment
net of accumulated depreciation, depletion and
amortization ........................................................................ 740,972 524,189
Other assets ........................................................................... 35,889 37,943
-------- --------
Total assets ........................................................................... $885,025 $718,293
======== ========
Current liabilities .................................................................... $106,712 $ 98,392
Long-term debt ......................................................................... 282,646 156,832
Other liabilities ...................................................................... 36,268 30,833
Equity ................................................................................. 459,399 432,236
-------- --------
Total liabilities and equity ........................................................... $885,025 $718,293
======== ========
===================================================================================================================
Ratio of total debt to total book capitalization ....................................... 38% 27%
======== ========
Total debt ............................................................................. $283,557 $157,731
======== ========
</TABLE>
