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
July 11, 1996
(Date of earliest event reported)
BURLINGTON RESOURCES INC.
(Exact name of registrant as specified in its charter)
Delaware 1-9971 91-1413284
(State or other (Commission (IRS Employer
Jurisdiction of File Number) Identification
Incorporation) Number)
5051 Westheimer, Suite 1400, Houston, Texas 77056
(Address of principal executive offices, zip code)
Registrant's telephone number including area code:
(713) 624-9500
<PAGE>
Item 5. OTHER EVENTS
On July 11, 1996 Burlington Resources Inc. ("BR") announced it will
accelerate its on-going divestiture program. Since 1994, BR has sold over 9,000
wells. Over the next twelve months, BR plans to sell its interest in
approximately 20,000 wells thus reducing its pre-1994 well count over 50
percent. The proved reserves associated with this prospective divestiture
approximate 800 BCFE while the related production represents about 10 percent of
BR's currently produced volumes.
This accelerated divestiture program will allow BR to reorganize and
reduce the number of its operating areas from five to three. The accelerated
divestiture program and reorganization will result in more than a 20 percent
reduction in the company's 1995 level of production expenses and employee count
and over a 10 percent reduction in corporate administrative expenses. The
company plans to substantially complete the reorganization prior to the end of
the third quarter.
BR's Board of Directors authorized the repurchase of an additional 10
million shares of common stock from time to time depending on market conditions.
A copy of the Press Release is attached as an Exhibit to this report.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits Description
99.1 Press Release dated July 11, 1996
FORWARD-LOOKING STATEMENTS
This report (including the attached exhibit) contains projections and
other forward looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934. These projections and statements reflect BR's
current views with respect to future events and financial performance. No
assurances can be given, however, that these events will occur or that these
projections will be achieved and actual results could differ materially from
those projected as a result of certain factors. A discussion of these factors is
included in periodic reports previously filed with the Securities and Exchange
Commission.
-2-
<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.
BURLINGTON RESOURCES INC.
By /s/ Hays R. Warden
-------------------------------------
Hays R. Warden
Senior Vice President and Controller,
and Chief Accounting Officer
Date: July 25, 1996
-3-
<PAGE>
EXHIBIT INDEX
Sequentially
Exhibit Numbered
Number Exhibit Page
99.1 Press release dated July 11, 1996 5
-4-
BURLINGTON RESOURCES News Release
P.O. Box 4239
Houston, TX 77056-2124
(713) 624-9364
Contact: James Leahy
BURLINGTON RESOURCES REPORTS STRONG
SECOND QUARTER EARNINGS
A MAJOR DIVESTITURE PROGRAM FOR
NON-STRATEGIC PROPERTIES
A CORPORATE REORGANIZATION AND AUTHORIZATION TO
REPURCHASE AN ADDITIONAL 10 MILLION SHARES OF COMMON STOCK
Second Quarter Earnings
Houston, Texas, July 11, 1996 - Burlington Resources (BR) reported second
quarter 1996 operating income of $96 million and net income of $48 million or
$.38 per share. For the same period last year, the company reported operating
income of $125,000 and net income of $2 million or $.02 per share. Operating
cash flow for the first half increased 35% to $272 million as compared to $201
million for the first half of 1995. Bobby Shackouls, President and CEO, stated
that "this period's operating income is the highest of any quarter since the
spin-off of El Paso Natural Gas Company in 1992. The fundamentals underpinning
natural gas prices continue to be strong and we are optimistic about our
future prospects."
Natural gas sales volumes averaged 1,193 million cubic feet per day
(mmcf/d) during the second quarter compared to 1,149 mmcf/d in the second
quarter of 1995. Second quarter oil sales volumes increased to 50,400 barrels
per day from 48,000 barrels per day a year ago. Realized natural gas prices in
the second quarter increased from $1.22 per thousand cubic feet (mcf) in 1995,
to $1.75 per mcf in 1996. Second quarter realized oil prices moved up from
$17.07 per barrel in 1995 to $20.29 per barrel in 1996.
Gas production increased from first quarter levels in spite of the volume
reductions experienced in the San Juan Basin for routine annual maintenance.
Gas volumes achieved a record level of approximately 1,250 mmcf/d at the end
of the quarter as San Juan production returned to normal volumes and large
production increases were realized from the High Island A-371 platform in the
Gulf of Mexico. Second quarter oil volumes increased over first quarter
primarily as a result of drilling success in the company's River Run project
in the Williston Basin.
<PAGE>
During the quarter, BR acquired 912,500 shares of its common stock to
bring total 1996 purchases to 1,374,900 shares. Since it began acquiring stock
in 1988, the company has purchased approximately 28,692,000 shares or 19% of
its original common stock capitalization. Yesterday, the company's Board of
Directors authorized management to repurchase an additional 10 million shares
of common stock from time to time depending on market conditions.
Divestiture Program
BR said it will accelerate its divestiture program which has improved
operating efficiency and financial performance through the sale of
non-strategic properties. Since 1994, BR has sold over 9,000 wells. Over the
next twelve months, BR plans to sell its interest in approximately 20,000
wells thus reducing its pre-1994 well count by over 50%. The proved reserves
associated with this prospective divestiture approximate 800 BCFE while the
related production represents about 10% of BR's currently produced volumes.
Shackouls stated: "This program is designed to eliminate non-strategic
properties, allowing the company to improve its operating focus on those
assets that have important upside potential. Essentially, this strategy is a
redeployment of assets into higher return projects. It is driven by the
company's desire to increase its efficiency and exposure to meaningful volume
growth. The divestiture program comes at a time in our industry when the
market for producing properties is excellent with acquisition capital readily
available."
Reorganization
This accelerated divestiture program will allow BR to reorganize and
reduce the number of its operating areas from five to three. The accelerated
divestiture program and reorganization will result in more than a 20%
reduction in the company's 1995 level of production expenses and employee
count and over a 10% reduction in corporate administrative expenses. The
company plans to substantially complete the reorganization prior to the end of
the third quarter.
The company will continue to manage its San Juan Basin operations out of
its office located in Farmington, New Mexico. BR's Denver regional office will
be closed and all of the company's remaining activities in the Rocky Mountain,
Permian Basin and Mid-Continent areas will be managed by BR's existing office
located in Midland, Texas. The two regional offices located in Houston which
currently oversee the company's onshore Gulf Coast and offshore Gulf of Mexico
operations will be merged to form a single Gulf Coast Division. Going forward
the company intends to conduct operations utilizing the Burlington Resources
name rather than that of Meridian Oil.
<PAGE>
Sale Proceeds
Proceeds from the divestiture program will be used to fund the company's
expanded exploration program and continued share repurchases. Shackouls
commented: "This asset rationalization program will position BR to continue as
a premier low cost producer of oil and gas, focused on increased
profitability, with substantial financial resources to invest in high quality
exploration opportunities and in our common stock."
Financial statement is attached.
FORWARD-LOOKING STATEMENTS
This press release contains projections and other forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934. These
projections and statements reflect the Company's current views with respect to
future events and financial performance. No assurances can be given, however,
that these events will occur or that these projections will be achieved and
actual results could differ materially from those projected as a result of
certain factors. A discussion of these factors is included in the Company's
periodic reports filed with the Securities and Exchange Commission.
<PAGE>
DIVESTITURE PROGRAM
PACKAGE RESERVES
(BCFE)
Black Warrior Basin 90 - 130
Texas Gulf Coast 150 - 200
Rocky Mountain 50 - 80
Permian Basin 150 - 180
San Juan Basin 270 - 300
<PAGE>
BURLINGTON RESOURCES INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
SECOND QUARTER SIX MONTHS
-------------------- -------------------
1996 1995 1996 1995
---- ---- ---- ----
(Dollars in Millions, Except per Share Amounts)
<S> <C> <C> <C> <C>
Revenues ................................................. $ 295 $ 211 $ 551 $ 426
Costs and Expenses ....................................... 199 211 392 424
--- --- --- ---
Operating Income ......................................... 96 - 159 2
Interest Expense ......................................... 28 28 57 54
Other Income (Expense) - Net ............................. 1 (1) 2 (1)
-- -- -- --
Income (Loss) Before Income Taxes ........................ 69 (29) 104 (53)
Income Tax Expense (Benefit) ............................. 21 (31) 18 (50)
Net Income (Loss) ........................................ $ 48 $ 2 $ 86 $ (3)
===== ===== ===== =====
Earnings (Loss) per Common Share ......................... $ .38 $ .02 $ .68 $(.02)
===== ===== ===== =====
Average Common Shares .................................... 126 127 127 127
=== === === ===
</TABLE>
This financial statement should be read in conjunction with the
attached press release.
