FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1996
( )Transition Report Pursuant to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Commission File Number 1-9743
ENRON OIL & GAS COMPANY
(Exact name of registrant as specified in its charter)
Delaware 47-0684736
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1400 Smith Street, P.O. Box 4362
Houston, Texas 77210-4362
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (713)853-6161
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 .
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of April 30, 1996.
Common Stock, $.01 Par Value 159,909,840 shares
Class Number of Shares
<PAGE>
ENRON OIL & GAS COMPANY
TABLE OF CONTENTS
Page
No.
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Statements of Income -
Three Months Ended March 31, 1996 and 1995 3
Consolidated Balance Sheets - March 31, 1996
and December 31, 1995 4
Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1996 and 1995 5
Notes to Consolidated Financial Statements 6
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II. OTHER INFORMATION
ITEM 4. Results of Votes of Security Holders 13
ITEM 6. Exhibits and Reports on Form 8-K 13
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ENRON OIL & GAS COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands Except Per Share Amounts)
(Unaudited)
<TABLE>
Three Months Ended
March 31,
<S> <C> <C>
1996 1995
NET OPERATING REVENUES
Natural Gas
Associated Companies $ 28,132 $69,597
Trade 90,495 46,602
Crude Oil, Condensate and Natural Gas Liquids
Associated Companies 12,626 15,596
Trade 24,224 14,086
Gains on Sales of Reserves and Related Assets 1,860 5,605
Other 1,689 3,876
Total 159,026 155,362
OPERATING EXPENSES
Lease and Well 18,756 16,702
Exploration 11,918 11,277
Dry Hole 2,511 1,769
Impairment of Unproved Oil and Gas Properties 4,863 7,079
Depreciation, Depletion and Amortization 63,321 53,118
General and Administrative 14,189 12,773
Taxes Other Than Income 11,471 9,815
Total 127,029 112,533
OPERATING INCOME 31,997 42,829
OTHER EXPENSE, NET (515) (591)
INCOME BEFORE INTEREST EXPENSE AND INCOME TAXES 31,482 42,238
INTEREST EXPENSE
Incurred
Affiliate 586 389
Other 4,931 4,061
Capitalized (1,373) (1,712)
Net Interest Expense 4,144 2,738
INCOME BEFORE INCOME TAXES 27,338 39,500
INCOME TAX PROVISION 1,415 9,875
NET INCOME $ 25,923 $ 29,625
EARNINGS PER SHARE OF COMMON STOCK $ .16 $ .19
AVERAGE NUMBER OF COMMON SHARES 159,934 159,972
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 1. FINANCIAL STATEMENTS - (Continued)
ENRON OIL & GAS COMPANY
CONSOLIDATED BALANCE SHEETS
(In Thousands)
<TABLE>
March 31, December 31,
1996 1995
(Unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and Cash Equivalents $ 26,525 $ 23,039
Accounts Receivable
Associated Companies 73,068 60,777
Trade 107,704 107,737
Inventories 13,676 11,697
Other 8,667 14,582
Total 229,640 217,832
OIL AND GAS PROPERTIES (Successful Efforts Method) 3,390,791 3,380,924
Less:Accumulated Depreciation, Depletion and Amortization (1,509,230) (1,499,379)
Net Oil and Gas Properties 1,881,561 1,881,545
OTHER ASSETS 44,928 47,881
TOTAL ASSETS $2,156,129 $2,147,258
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES
Accounts Payable
Associated Companies $ 8,640 $ 12,902
Trade 106,881 120,756
Accrued Taxes Payable 13,666 19,595
Dividends Payable 4,739 4,795
Other 8,715 11,249
Total 142,641 169,297
LONG-TERM DEBT
Affiliate 36,017 141,520
Other 282,350 147,559
OTHER LIABILITIES 16,297 11,629
DEFERRED INCOME TAXES 300,671 308,141
DEFERRED REVENUE 202,780 205,453
SHAREHOLDERS' EQUITY
Common Stock, $.01 Par, 160,000,000 Shares Authorized and Issued 201,600 201,600
Additional Paid In Capital 393,883 399,379
Unearned Compensation (7,085) -
Cumulative Foreign Currency Translation Adjustment (10,357) (10,747)
Retained Earnings 597,924 576,740
Common Stock Held in Treasury, 23,160 shares at March 31, 1996
and 150,045 shares at December 31, 1995 (592) (3,313)
Total Shareholders' Equity 1,175,373 1,163,659
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $2,156,129 $2,147,258
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 1. FINANCIAL STATEMENTS - (Continued)
ENRON OIL & GAS COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
<TABLE>
Three Months Ended
March 31,
<S> <C> <C>
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES
Reconciliation of Net Income to Net Operating Cash Inflows:
Net Income $ 25,923 $ 29,625
Items Not Requiring (Providing) Cash
Depreciation, Depletion and Amortization 63,321 53,118
Impairment of Unproved Oil and Gas Properties 4,863 7,079
Deferred Income Taxes (6,516) 4,801
Other, Net (600) 322
Exploration Expenses 11,918 11,277
Dry Hole Expenses 2,511 1,769
Gains on Sales of Reserves and Related Assets (1,860) (5,605)
Other, Net (2,763) (364)
Changes in Components of Working Capital and Other Liabilities
Accounts Receivable 4,742 15,975
Inventories (1,979) (323)
Accounts Payable (18,137) (20,706)
Accrued Taxes Payable (5,929) (557)
Other Liabilities 5,104 5,108
Other, Net 1,649 (1,982)
Amortization of Deferred Revenue (10,807) (10,687)
Changes in Components of Working Capital Associated
with Investing and Financing Activities 15,833 (2,973)
NET OPERATING CASH INFLOWS 87,273 85,877
INVESTING CASH FLOWS
Additions to Oil and Gas Properties (70,261) (93,912)
Exploration Expenses (11,918) (11,277)
Dry Hole Expenses (2,511) (1,769)
Proceeds from Sales of Reserves and Related Assets (Note 5) 4,868 26,504
Changes in Components of Working Capital Associated
with Investing Activities (15,595) 7,197
Other, Net (3,240) (502)
NET INVESTING CASH OUTFLOWS (98,657) (73,759)
FINANCING CASH FLOWS
Long-Term Debt
Affiliate (105,503) -
Other 135,266 8,300
Dividends Paid (4,795) (4,800)
Common Stock Repurchases (17,044) (3,726)
Proceeds from Sales of Treasury Stock 7,184 1,827
Changes in Components of Working Capital Associated
with Financing Activities (238) (4,224)
NET FINANCING CASH INFLOWS (OUTFLOWS) 14,870 (2,623)
INCREASE IN CASH AND CASH EQUIVALENTS 3,486 9,495
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 23,039 5,810
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 26,525 $ 15,305
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 1. FINANCIAL STATEMENTS - (Continued)
ENRON OIL & GAS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated financial statements of Enron Oil & Gas
Company and subsidiaries (the "Company") included herein have
been prepared by management without audit pursuant to the rules
and regulations of the Securities and Exchange Commission.
Accordingly, they reflect all adjustments which are, in the
opinion of management, necessary for a fair presentation of the
financial results for the interim periods. Certain information
and notes normally included in financial statements prepared in
accordance with generally accepted accounting principles have
been condensed or omitted pursuant to such rules and regulations.
However, management believes that the disclosures are adequate to
make the information presented not misleading. These
consolidated financial statements should be read in conjunction
with the consolidated financial statements and the notes thereto
included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1995.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Certain reclassifications have been made to prior period
financial statements to conform with the current presentation.
2. Cash and Cash Equivalents at March 31, 1996 includes $13.9
million of funds deposited with an Enron Corp. affiliated company
under a revolving credit agreement.
3. Income tax provision for the three-month periods ended March
31, 1996 and 1995 includes tax benefits of $1.3 million and $5.1
million, respectively, related to tight gas sand federal income
tax credit utilization. Income tax provision for the three-month
period ended March 31, 1996 also includes an $8.5 million tax
benefit primarily associated with a reassessment of deferred tax
requirements and the successful resolution on audit of Canadian
income taxes for certain prior years.
4. Natural Gas and Crude Oil, Condensate and Natural Gas Liquids
Net Operating Revenues
Natural Gas Net Operating Revenues are comprised of the
following (in millions):
Three Months Ended
March 31,
1996 1995
Wellhead Natural Gas Revenues
Associated Companies (1)(2) $ 56.8 $ 44.6
Trade 68.6 35.1
Total $125.4 $ 79.7
Other Natural Gas Marketing Activities
Gross Revenues from:
Associated Companies $ 18.9 $ 27.3
Trade (3) 39.5 27.6
Total 58.4 54.9
Associated Cost from:
Associated Companies (1)(5) 33.0 27.9(4)
Trade 17.6 16.4
Total 50.6 44.3
Net 7.8 10.6
Commodity Price Swap Gain(Loss)
Trading (6) (1.2) 11.3
Non-Trading (7) (13.4) 14.6
Total (14.6) 25.9
Total $ (6.8) $ 36.5
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 1. FINANCIAL STATEMENTS - (Continued)
ENRON OIL & GAS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Crude Oil, Condensate and Natural Gas Liquids, Net Operating
Revenues are comprised of the following (in millions):
Three Months Ended
March 31,
1996 1995
Wellhead Crude Oil, Condensate and
Natural Gas Liquid Revenues
Associated Companies $ 13.6 $ 15.2
Trade 24.2 14.1
Total $ 37.8 $ 29.3
Other Crude Oil and Condensate Marketing
Activities
Commodity Price Hedging Gain(Loss) (7) $ (1.0) $ 0.4
(1) Wellhead Natural Gas Revenues include $32.8 million and
$18.9 million for the three-month periods ended March 31, 1996
and 1995, respectively, associated with deliveries by Enron Oil &
Gas Company to Enron Oil & Gas Marketing, Inc., a wholly-owned
subsidiary, reflected as a cost in Other Natural Gas Marketing
Activities - Associated Costs.
(2) Includes $4.0 million and $3.8 million for the three-month
periods ended March 31, 1996 and 1995, respectively, associated
with the equivalent wellhead value of volumes delivered under the
terms of a volumetric production payment agreement effective
October 1, 1992, as amended, net of transportation.
(3) Includes $10.8 million and $10.7 million for the three-month
periods ended March 31, 1996 and 1995 associated with the
amortization of deferred revenues under the terms of volumetric
production payment and exchange agreements effective October 1,
1992, as amended.
(4) Includes the effect of a price swap agreement with a third
party which in effect fixed the price of certain purchases
through February 1995.
(5) Includes $8.2 million and $6.7 million for the three-month
periods ended March 31, 1996 and 1995, respectively, for volumes
delivered under the terms of volumetric production payment and
exchange agreements effective October 1, 1992, as amended,
including equivalent wellhead value, any applicable
transportation costs and location differentials.
(6) The three-month period ended March 31, 1996 includes a $1.2
million loss associated with certain call option transactions.
The comparable period in 1995 includes an $11.3 million gain
associated with certain NYMEX-related commodity market
transactions designated for trading purposes. Subsequent to
March 31, 1996, the Company restructured an option covering
notional volumes of 73 trillion British thermal units ("Tbtu")
for each of the years 1997 and 1998 into four options each
exercisable, in total, at one time by the counterparty on or
before December 3117, 1996, 1997, 1998 and 1999, respectively,
to purchase natural gas at an average fixed price of $1.98,
$1.98, $1.93 and $1.93 per million British thermal unit for
the years 1997, 1998, 1999 and 2000, respectively. The options
each cover notional volumes of 37 Tbtu for each of the years.
(7) Represents gain or loss associated with commodity price swap
transactions primarily with Enron Corp. affiliated companies
based on NYMEX-related commodity prices in effect on dates of
execution, less customary transaction fees. These transactions
were originally entered into as price hedges for a portion of
wellhead sales.
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 1. FINANCIAL STATEMENTS - (Concluded)
ENRON OIL & GAS COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. Gains on sales of certain oil and gas reserves and related
assets in the amount of $1.9 million and $5.6 million for the
three-month periods ended March 31, 1996 and 1995, respectively,
are required by current accounting guidelines to be removed from
net income in connection with determining net operating cash
inflows while the related proceeds are classified as investing
cash flows. The Company believes the proceeds from the sales of
reserves and related assets should be considered in analyzing the
elements of operating cash flows. The current federal income tax
impact of these sales transactions was calculated by the Company
to be $0.6 million and $6.0 million for the three-month periods
ended March 31, 1996 and 1995, respectively, which entered into
the overall calculation of current federal income tax. The
Company believes that this current federal income tax impact
should also be considered in analyzing the elements of the cash
flow statement.
6. In the first quarter of 1996, the Company adopted Statement
of Financial Accounting Standards No. 121 - "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of" which resulted in a non-cash impairment charge which
was immaterial to and is included in depreciation, depletion and
amortization.
7. In January 1996, 301,500 shares of common stock of the
Company were granted to certain officers and key employees of the
Company under the Enron Oil & Gas Company 1992 Stock Plan, as
amended, and the Amended and Restated Enron Oil & Gas Company
1994 Stock Plan. Such shares are restricted and vest, subject to
continued employment and certain net income performance goals, on
the anniversary date of grant which could begin as early as 1998,
but in any event no later than January 2003. The fair value of
the shares at date of grant has been recorded in shareholders'
equity as unearned compensation.
8. As reported in the Company's Annual Form 10-K for the year
ended December 31, 1995, the Company has been named as a
potentially responsible party in certain Comprehensive
Environmental Response Compensation and Liability Act
proceedings. However, management does not believe that any
potential assessments resulting from such proceedings will
individually or in the aggregate have a materially adverse effect
on the financial condition or results of operations of the
Company.
9. In April 1996, the Company sold certain oil and gas reserves
and related assets for approximately $51 million with a resulting
pretax gain of approximately $13 million.
10. On May 7, 1996, the shareholders of the Company approved a
resolution submitted by the Board of Directors to amend the
Restated Certificate of Incorporation of the Company to increase
the total number of authorized shares of the common stock of the
Company from 160 million to 320 million shares.
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ENRON OIL & GAS COMPANY
The following review of operations for the three-month periods
ended March 31, 1996 and 1995 should be read in conjunction with
the consolidated financial statements of the Company and Notes
thereto.
Results of Operations
Three Months Ended March 31, 1996
vs. Three Months Ended March 31, 1995
In the first quarter of 1996, Enron Oil & Gas Company (the
"Company") realized net income of $25.9 million compared to net
income of $29.6 million for the first quarter of 1995. Net
operating revenues for the first quarter of 1996 were $159.0
million as compared to $155.4 million for the first quarter of
1995.
Wellhead volume and price statistics are as follows:
1996 1995
Natural Gas Volumes (MMcf/d)(1)
North America (2) 715 621
Trinidad 133 95
Total 848 716
Average Natural Gas Prices ($/Mcf)(3)
North America (4) $1.74 $ 1.28
Trinidad 1.00 0.96
Composite 1.62 1.24
Crude Oil/Condensate Volumes (MBbl/d)(1)
North America 11.3 11.7
Trinidad 7.1 3.6
India 3.0 2.8
Total 21.4 18.1
Average Crude Oil/Condensate Prices ($/Bbl)(3)
North America $18.41 $16.62
Trinidad 17.96 15.48
India 17.36 16.65
Composite 18.11 16.40
(1) Million cubic feet per day or thousand barrels per
day, as applicable.
(2) Includes 48 MMcf per day for the three-month periods
ended March 31, 1996 and 1995 delivered under the
terms of volumetric production payment and exchange
agreements effective October 1, 1992, as amended.
(3) Dollars per thousand cubic feet or per barrel, as
applicable.
(4) Includes an average equivalent wellhead value of
$.91/Mcf and $.87/Mcf for the three-month periods
ended March 31, 1996 and 1995, respectively, for the
volumes described in note (2), net of transportation
costs.
First quarter 1996 average wellhead natural gas prices were
up approximately 31% from the comparable period in 1995
increasing net operating revenues by approximately $30 million.
An increase of 18% in wellhead natural gas volumes from the first
quarter of 1995 increased net operating revenues by approximately
$16 million. The first quarter 1996 North America increase in
wellhead natural gas volumes was primarily the result of
acquisitions net of dispositions made during 1995 and eliminating
voluntary curtailments in the first quarter of 1996 due to the
significant increases realized in average wellhead natural gas
prices over the prices realized during the comparable period in
1995. Offshore Trinidad natural gas volumes were 40% higher
primarily as a result of increased daily takes under the existing
contract. First quarter 1996 wellhead crude oil and condensate
average prices were up 10% increasing net operating revenues
approximately $3 million from the first quarter of 1995.
Wellhead crude oil and condensate volumes increased 18% adding
approximately $5 million to net operating revenues compared to
the first quarter of 1995. This increase reflects the impact on
condensate volumes of the higher natural gas takes in Trinidad
noted above and successful well completions in the latter half of
1995.
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
ENRON OIL & GAS COMPANY
Other marketing activities associated with sales and
purchases of natural gas, NYMEX-related natural gas and crude oil
price swap transactions and margins related to the volumetric
production payment reduced net operating revenue by $8 million
during the first quarter of 1996, a decrease of approximately $45
million from the comparable period in 1995. During December 1995
and the first quarter of 1996, the Company closed all 1996
natural gas price swap transactions originally entered into as
hedges to facilitate participation in anticipated wellhead
natural gas price upside. Included in the first quarter of 1996
is a $21 million reduction related to the closing of first
quarter 1996 natural gas price swap transactions. This reduction
is partially offset by the recognition of an $8 million gain in
the first quarter of 1996 related to natural gas price swap
agreements with an Enron Corp. affiliated company received in
1995 in exchange for certain fuel supply and purchase contracts
and related price swap agreements associated with a cogeneration
facility in 1995. This $13 million net loss compares to a $15
million gain on similar transactions in the first quarter of
1995. In the first quarter of 1996, the Company also incurred a
$1 million loss related to call option transactions compared to
an $11 million gain in the first quarter of 1995 related to
certain natural gas price swap transactions with an Enron Corp.
affiliated company designated for trading purposes and with an
Enron Corp. affiliated company. Deferred gains of approximately
$17 million related to the closing of the remainder of the 1996
NYMEX-related natural gas price swap transactions will be
recognized during the remainder of the year partially offsetting
the $21 million reduction in the first quarter noted above.
Gains on sales of oil and gas reserves and related assets
during the first quarter of 1996 decreased approximately $4
million when compared to the corresponding period in 1995.
In April 1996, the Company sold certain reserves and related
assets for approximately $51 million with a resulting pretax gain
of approximately $13 million.
During the first quarter of 1996, operating expenses were
approximately $14 million higher than in the first quarter of
1995. Lease and well expenses increased approximately $2 million
primarily due to continually expanding operations. Depreciation,
depletion and amortization ("DD&A") expense increased
approximately $10 million to $63 million primarily reflecting an
increase in production volumes. The average DD&A rate in both
the first quarter of both 1996 and 1995 was $.70 per thousand
cubic feet equivalent ("Mcfe").
The per unit operating costs of the Company for lease and
well, DD&A, general and administrative and interest expense, and
taxes other than income averaged $1.24 per Mcfe during the first
quarter of 1996 compared to $1.26 per Mcfe during the first
quarter of 1995. The reduction primarily reflects a decrease in
per unit lease and well expense.
<PAGE>
PART I. FINANCIAL INFORMATION - (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Continued)
ENRON OIL & GAS COMPANY
Income tax provision decreased approximately $8 million for
the first quarter of 1996 as compared to the same period in 1995
primarily resulting from tax benefits associated with a
reassessment of deferred tax requirements and the successful
resolution on audit of Canadian income taxes for certain prior
years.
Federal income taxes accrued in interim periods are
calculated using the estimated annual effective income tax rate
method.
Capital Resources and Liquidity
The Company's primary sources of cash during the first three
months ended March 31, 1996 included funds generated from
operations and the issuance of new debt. Primary cash outflows
included funds used in operations, exploration and development
expenditures, repayment of debt, common stock repurchases, and
dividends paid to the Company shareholders.
Discretionary cash flow, a frequently used measure of
performance for exploration and production companies, is derived
by adjusting net income to eliminate the effects of depreciation,
depletion and amortization, impairment of unproved oil and gas
properties, deferred income taxes, gains on sales of reserves and
related assets, certain other miscellaneous non-cash amounts,
except for amortization of deferred revenue, and exploration and
dry hole expenses and to include proceeds from sales of reserves
and related assets. The Company generated discretionary cash
flow of $102 million during the first quarter of 1996, a 21%
decrease from the $129 million generated for the comparable
period in 1995, primarily reflecting lower proceeds from the
sales of selected reserves and related assets during the first
quarter of 1996. As noted earlier, in April 1996 the Company
closed the sale of certain reserves and related assets generating
proceeds of approximately $51 million. (See "Results of
Operations").
Based upon existing economic and market conditions,
management believes net operating cash flow and available
financing alternatives in 1996 will be sufficient to fund net
investing and other cash requirements of the Company for the
remainder of the year.
Exploration and development expenditures for the first
quarter of 1996 and 1995 are as follows (in millions):
1996 1995
North America $ 71 $ 95
Outside North America
Trinidad - 22
India 9 5
Other 5 4
Total $ 85 $ 126
Exploration and development expenditures for the first
quarter of 1996 were lower than expenditures in the first quarter
of 1995 primarily due to a large developmental drilling program
in Trinidad completed in 1995 and a $19 million acquisition in
North America in 1995 with no significant acquisitions completed
in 1996.
<PAGE>
PART I. FINANCIAL INFORMATION - (Concluded)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (Concluded)
ENRON OIL & GAS COMPANY
The level of exploration and development expenditures will
vary in future periods depending on energy market conditions and
other related economic factors. The Company has significant
flexibility with respect to financing alternatives and the
ability to adjust its exploration and development expenditure
budget as circumstances warrant. There are no material
continuing commitments associated with expenditure plans.
Information Regarding Forward Looking Statements
This Quarterly Report on Form 10-Q includes 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. Although the Company believes that its expectations are
based on reasonable assumptions, it can give no assurance that
such assumptions will materialize. Important factors that could
cause actual results to differ materially from those in the
forward looking statements herein include, but are not limited
to, the extent of the Company's success in acquiring oil and gas
properties and in discovering, developing and producing reserves,
the timing and extent of changes in commodity prices for natural
gas, crude oil and condensate and natural gas liquids, political
developments affecting areas where operations of the Company
exist and conditions in the capital markets and equity markets
during the periods covered by the forward looking statements.
<PAGE>
PART II. OTHER INFORMATION
ENRON OIL & GAS COMPANY
ITEM 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of ShareholdersStockholders of Enron Oil
& Gas Company was held on May 7, 1996, in Houston, Texas, for the
purpose of electing a board of directors, approving the
appointment of auditors, and voting on the proposal described
below. Proxies for the meeting were solicited pursuant to
Section 14(a) of the Securities Exchange Act of 1934 and there
was no solicitation in opposition to management's solicitations.
(a) Each of the directors nominated by the Board and listed
in the proxy statement was elected with the votes as follows:
Shares Shares
Nominee For Withheld
Fred C. Ackman 147,321,430 292,137
Forrest E. Hoglund 146,808,043 805,524
Richard D. Kinder 146,799,142 814,425
Kenneth L. Lay 146,798,781 814,786
Edward Randall, III 147,321,230 292,337
(b) The appointment of Arthur Andersen LLP, independent
public accountants, as auditors for the year ending December 31,
1996 was approved by the following vote: 147,552,484 shares for;
36,541 shares against; and 24,542 shares abstaining.
(c) An amendment of the Restated Certificate of
Incorporation of the Company to increase the total number of
authorized shares of common stock of the Company from 160 million
to 320 million shares was approved by the following vote:
144,228,317 shares for; 2,903,502 shares against; and 481,748
shares abstaining.
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K - There were no reports on Form 8-K
filed for the quarterly period ended March 31, 1996.
<PAGE>
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 thereunto duly authorized.
ENRON OIL & GAS COMPANY
(Registrant)
Date: May 10, 1996 By /S/ W. C. WILSON
W. C.Wilson
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date: May 10, 1996 By /S/ BEN B. BOYD
Ben B. Boyd
Vice President and Controller
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 26,525
<SECURITIES> 0
<RECEIVABLES> 180,772
<ALLOWANCES> 0
<INVENTORY> 13,676
<CURRENT-ASSETS> 229,640
<PP&E> 3,390,791
<DEPRECIATION> (1,509,230)
<TOTAL-ASSETS> 2,156,129
<CURRENT-LIABILITIES> 142,641
<BONDS> 0
201,600
0
<COMMON> 0
<OTHER-SE> 973,773
<TOTAL-LIABILITY-AND-EQUITY> 2,156,129
<SALES> 155,477
<TOTAL-REVENUES> 159,026
<CGS> 0
<TOTAL-COSTS> 127,029
<OTHER-EXPENSES> 515
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,144
<INCOME-PRETAX> 27,338
<INCOME-TAX> 1,415
<INCOME-CONTINUING> 25,923
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,923
<EPS-PRIMARY> .16
<EPS-DILUTED> .00
</TABLE>
