UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- - --- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
---------------
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 1-10053
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ORYX ENERGY COMPANY
-------------------
(Exact name of registrant as specified in its charter)
DELAWARE 23-1743284
-------- ----------
(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)
(214) 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 shares of common stock, $1 par value,
outstanding on April 30, 1994 was 96,946,069.
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ORYX ENERGY COMPANY
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Income for the
Three Months Ended March 31, 1994 and 1993 3
Condensed Consolidated Balance Sheets at March 31,
1994 and December 31, 1993 4
Condensed Consolidated Statements of Cash Flows for
the Three Months Ended March 31, 1994 and 1993 5
Notes to Condensed Consolidated Financial Statements 6
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 12
SIGNATURE 13
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<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
ORYX ENERGY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Three Months
(Millions of Dollars, Except Ended March 31
Per Share Amounts) --------------------
1994 1993
--------------------
(Unaudited)
Revenues
Oil and gas $ 262 $ 283
Other (2) -
------- -------
260 283
------- ------
Costs and Expenses
Operating costs 91 96
Production taxes 25 29
Exploration costs 26 15
Depreciation, depletion and amortization 110 101
General and administrative expense 22 26
Interest and debt expense 39 40
Interest capitalized (3) (13)
Provision for restructuring (Note 2) 161 -
------- -------
471 294
------- -------
Loss Before Benefit for Income Taxes (211) (11)
Benefit for Income Taxes (Note 3) (71) (2)
Remeasurement of Foreign Deferred Tax (Note 3) - (2)
------- -------
Net Loss (140) (7)
Less Preferred Dividend - 1
------- -------
Net Loss Attributable to Common Stock $ (140) $ (8)
======= =======
Net Loss Per Share of Common Stock $(1.44) $ (.08)
======= =======
Cash Dividends Per Share of Common Stock $ - $ .10
======= =======
Weighted Average Number of Common Shares
Outstanding (in millions) 97.0 97.1
======= =======
(See Accompanying Notes)<PAGE>
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ORYX ENERGY COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31 December 31
(Millions of Dollars) 1994 1993
---------------------------
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 3 $ 10
Accounts and notes receivable and
other current assets 194 195
-------- --------
Total Current Assets 197 205
Properties, Plants and Equipment
(Note 4) 3,195 3,333
Deferred Charges and Other Assets 83 86
-------- --------
Total Assets $ 3,475 $ 3,624
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 109 $ 134
Accrued liabilities 234 162
Current portion of long-term debt 24 28
-------- --------
Total Current Liabilities 367 324
Long-Term Debt 1,772 1,741
Deferred Income Taxes 609 682
Deferred Credits and Other Liabilities 191 201
Shareholders' Equity (Note 5)
Preferred stock, par value $1 per share,
cumulative 7 7
Common stock, par value $1 per share 124 124
Additional paid-in capital 2,204 2,204
Retained earnings (deficit) (296) (155)
-------- --------
2,039 2,180
Less: Common stock in treasury,
at cost (1,401) (1,402)
Loan to ESOP (102) (102)
-------- --------
Shareholders' Equity 536 676
-------- --------
Total Liabilities and Shareholders'
Equity $ 3,475 $ 3,624
======== ========
The successful efforts method of accounting is followed.
(See Accompanying Notes)
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<PAGE>
ORYX ENERGY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months
Ended March 31
---------------------
(Millions of Dollars) 1994 1993
---------------------
(Unaudited)
CASH AND CASH EQUIVALENTS FROM OPERATING
ACTIVITIES
Net loss $ (140) $ (7)
Adjustments to reconcile net loss to
net cash flow
from operating activities:
Depreciation, depletion and
amortization 110 101
Dry hole costs and leasehold impairment 14 5
Loss on sale of assets, net of taxes 1 1
Deferred income taxes (15) -
Remeasurement of foreign deferred tax - (2)
Provision for restructuring,
net of taxes 103 -
Proceeds from interest rate hedging
activities - 14
Other - 2
------- -------
73 114
Changes in working capital:
Accounts and notes receivable and
other current assets 3 34
Accounts payable and accrued
liabilities (38) (54)
------- -------
Net Cash Flow Provided From Operating
Activities 38 94
------- -------
Investing Activities
Capital expenditures (69) (78)
Proceeds from divestments, net of
current taxes - 13
Other (3) (3)
------- -------
Net Cash Flow Used For Investing Activities (72) (68)
------- -------
Financing Activities
Proceeds from borrowings 105 37
Repayments of long-term debt (78) (50)
Cash dividends paid on common and
preferred stock - (11)
------- -------
Net Cash Flow Provided From (Used For)
Financing Activities 27 (24)
------- -------
Changes In Cash and Cash Equivalents (7) 2
Cash and Cash Equivalents at Beginning
of Period 10 10
------- -------
Cash and Cash Equivalents at End of Period $ 3 $ 12
======= =======
(See Accompanying Notes)
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ORYX ENERGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying condensed consolidated financial statements
and related notes of Oryx Energy Company and its subsidiaries
(hereinafter, unless the context otherwise requires, being
referred to as the Company) 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 Company for the three months ended March 31,
1994 are not necessarily indicative of the results for the full
year 1994.
Statements of Cash Flows
Amounts paid for interest and income taxes were as follows:
Three Months Ended March 31
1994 1993
---------------------------
(Millions of Dollars)
Interest paid (net of capitalized
amounts) $ 27 $ 17
Income taxes paid $ 1 $ 11
In accordance with Statement of Financial Accounting Standards
No. 95, "Statement of Cash Flows," non-cash transactions are not
reflected within the accompanying Condensed Consolidated
Statements of Cash Flows.
2. Provision for Restructuring
In March 1994, the Company adopted plans designed to achieve
significant future cost reductions (Restructuring). Components
of the Restructuring include asset disposals and staff
reductions. Associated therewith, the Company recognized a $161
million pretax ($103 million after tax) charge in the first
quarter of 1994. Management expects the Restructuring to result
in a minimum of $61 million annual cost reductions in 1995.
During 1993, the properties included in the divestment plan
accounted for less than three percent of the Company's worldwide
oil and gas production and at December 31, 1993, they accounted
for less than four percent of the Company's net investment in
properties, plants and equipment. The Company expects to complete
the asset disposals during 1994. The personnel reductions
affected about 20-percent of the Company's workforce.<PAGE>
<PAGE>
ORYX ENERGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
3. Income Taxes
Foreign income tax provisions included within the Company's
consolidated provisions are determined based upon the appropriate
foreign statutory rates which differ from the U.S. statutory
rate.
The remeasurement provisions of Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" (SFAS No. 109)
require the Company to remeasure its foreign currency denominated
deferred tax liabilities at current exchange rates. The reported
earnings of the Company for the three months ended March 31, 1993
increased $2 million from such remeasurement. Management
believes that such non-cash remeasurement credits and debits
distort current period economic results and should be disregarded
in analyzing the Company's current business. Future economic
results may also be distorted because payment of the deferred
tax liability is not expected to occur in the near-term and it is
likely that exchange rates will fluctuate prior to the eventual
settlement of the liability.
4. Properties, Plants and Equipment
At March 31, 1994 and December 31, 1993, the Company's
properties, plants and equipment; and related accumulated
depreciation, depletion and amortization were as follows:
March 31 December 31
1994 1993
-------- -----------
(Millions of Dollars)
Gross investment ................. $ 6,568 $ 6,523
Less accumulated depreciation,
depletion and amortization ..... 3,373 3,190
------- -------
Net investment ................... $ 3,195 $ 3,333
======= =======
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<PAGE>
ORYX ENERGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
5. Shareholders' Equity
Shares of the Company's preferred and common stocks authorized,
issued, outstanding and in treasury at March 31, 1994 and
December 31, 1993 were as follows:
In
Authorized Issued Outstanding Treasury
(Thousands of Shares)
March 31, 1994
Preferred stock 15,000 - - -
Preference stock 15,000 7,259 7,259 -
Common stock 250,000 126,704 96,946 (26,756)
December 31, 1993
Preferred stock 15,000 - - -
Preference stock 15,000 7,259 7,259 -
Common stock 250,000 126,704 96,932 (26,769)
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<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors, Oryx Energy Company:
We have made a review of the condensed consolidated balance sheet
of Oryx Energy Company and its Subsidiaries as of March 31, 1994,
and the related condensed consolidated statements of income and
cash flows for the three months ended March 31, 1994 and 1993, in
accordance with standards established by the American Institute
of Certified Public Accountants.
A review of interim financial information consists principally of
obtaining an understanding of the system for the preparation of
interim financial information, 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 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 condensed consolidated
financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet as of December
31, 1993, and the related consolidated statements of income and
cash flows for the year then ended (not presented herein); and in
our report dated February 19, 1994, we expressed an unqualified
opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of December 31, 1993 is fairly
stated in all material respects in relation to the consolidated
balance sheet from which it has been derived.
COOPERS & LYBRAND
Dallas, Texas
May 9, 1994
<PAGE>
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Company's cash and cash equivalents decreased by $7 million
over the three months ended March 31, 1994. The decrease was
comprised of $38 million of net cash flow provided from operating
activities, $72 million of net cash flow used for investing
activities and $27 million of net cash flow provided from
financing activities. The $38 million in net cash flow provided
from operating activities consisted of $73 million in net cash
flow provided from operating activities before changes in current
assets and liabilities and $35 million used for changes in
current assets and liabilities. The $73 million in net cash flow
provided from operating activities before changes in current
assets and liabilities was primarily impacted by lower crude oil
prices, lower natural gas volumes and reduced proceeds from
interest rate hedging activities offset partially by an increase
in crude oil volumes and natural gas prices. The $35 million of
net cash flow used for changes in current assets and liabilities
consisted of a $38 million decrease in accounts payable and
accrued liabilities offset by a $3 million decrease in accounts
receivable.
The $72 million in net cash flow used for investing activities
and the $27 million in net cash flow provided from financing
activities are primarily due to a cash use of $69 million for
capital expenditures and a cash source of $27 million from net
increases in debt.
In March 1994, the Company announced a major cost reduction
program. The program involves consolidation of the Company's
U.S. onshore position from approximately 300 fields in 19 states
to approximately 150 fields in 6 states. The Company will also
outsource certain non-critical technical functions and reduce
administrative functions accordingly. The net result of these
actions will be a loss of approximately 300 jobs. The Company
expects to achieve a minimum $61 million cost reduction for
the full year of 1995 as a result of these actions. Some expense
reductions will occur in 1994, although the specific amount and
timing are difficult to predict.
The Company recorded a net charge of $103 million for estimated
losses on the sale of assets ($71 million), employee terminations
and associated costs ($17 million) and postretirement benefit
adjustments ($15 million). During 1995, estimated production
will be reduced by approximately five thousand equivalent barrels
per day, representing only about two percent of first quarter
1994 worldwide production.
The Company paid a cash dividend of $.10 per share on its common
stock in the first quarter of 1993. In 1994, the Board of
Directors suspended the payment of dividends on common stock.
<PAGE>
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - continued
RESULTS OF OPERATIONS
The Company's net loss for the quarter ended March 31, 1994 was
$140 million, or $1.44 per share, as compared to a net loss of $7
million, or $.08 per share for the quarter ended March 31, 1993.
Revenues for the 1994 first quarter were $260 million verses $283
million for the first quarter of 1993.
The first quarter of 1994 includes a special $103 million
after-tax charge for costs associated with the Company's recently
announced restructuring and $1 million of net losses related to
asset sales. By comparison, the 1993 first quarter includes $2
million of benefit relating to Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" (SFAS No. 109),
and $1 million of net losses related to asset sales.
Excluding the items above, operations resulted in a net loss of
$36 million for the 1994 first quarter versus a net loss of $8
million for the 1993 first quarter. In the quarter-to-quarter
comparison, crude oil volumes increased 7 thousand barrels per
day, as a result of strong U.K. production. Natural gas volumes
in the U.S. increased 39 mmcf per day while worldwide gas volumes
declined 19 mmcf per day because of lower U.K. production.
Worldwide crude oil prices fell $4.18 per barrel while natural
gas prices rose $.25 per mcf. Total costs and expenses increased
as a result of higher non-cash charges and lower capitalized
interest, partially offset by lower production costs and general
and administrative expenses.
Comparing the 1994 first quarter with the previous quarter, the
net loss from operating activities improved $6 million. Daily
oil and gas volumes increased by 6 percent and 7 percent
respectively, while oil and gas prices rose by 3 percent and 2
percent respectively. Total costs and expenses increased because
of higher production costs (including production taxes), higher
depreciation, depletion and amortization and lower capitalized
interest while exploration expense fell as a result of reduced
dry hole costs.
Average worldwide net production of crude oil and condensate for
the three months ended March 31, 1994 was 116 thousand barrels
daily compared to average net production for the three months
ended March 31, 1993 of 109 thousand barrels daily. Average net
production of crude oil and condensate was 51 thousand barrels
daily in the United States and 65 thousand barrels daily from
foreign locations during the three months ended March 31, 1994,
compared to 56 thousand barrels daily in the United States and
53 thousand barrels daily from foreign locations in the first
quarter of 1993. The average worldwide crude oil and condensate
price in the first quarter of 1994 was $13.44 per barrel compared
to $17.62 per barrel in the first quarter of 1993.
Average worldwide net production of natural gas was 645 million
cubic feet daily for the three months ended March 31, 1994,
compared to 664 million cubic feet in the three months ended
March 31, 1993. Average net production of natural gas was 553
million cubic feet daily in the United States and 92 million
cubic feet daily from the United Kingdom in the first quarter of
1994, compared to 514 million cubic feet daily in the United
States and 150 million cubic feet daily from the United Kingdom
in the first quarter of 1993. The average worldwide price of
natural gas for the first quarter of 1994 was $2.10 per thousand
cubic feet compared to $1.85 per thousand cubic feet in the first
quarter of 1993.
<PAGE>
<PAGE>
PART II
OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
On May 5, 1994, the Annual Meeting of Shareholders of Oryx
Energy Company was held to vote on proposals as follows:
(a) To elect three directors to Class III of the Company's
Board of Directors.
William E. Bradford Carol E. Dinkins Robert P. Hauptfuhrer
------------------------------------------------------------
Affirmative 71,427,263 71,325,759 68,203,684
Negative - - -
Abstained - - -
Withheld 3,885,449 3,986,953 7,109,028
Broker
non-votes - - -
Shares without
executed proxies
and not present
for vote 21,633,357 21,633,357 21,633,357
----------- ---------- ----------
Shares entitled
to vote 96,946,069 96,946,069 96,946,069
=========== ========== ==========
(b) To approve the appointment of Coopers & Lybrand as
independent accountants for the fiscal year 1994.
Affirmative 72,790,550
Negative 1,845,258
Abstained 676,904
Withheld -
Broker non-votes -
Shares without
executed proxies
and not present
for vote 21,633,357
-----------
Shares entitled
to vote 96,946,069
===========
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
12 Computation of Consolidated Ratios of Earnings to
Fixed Charges and Earnings to Fixed Charges and
Preferred Stock Dividend Requirements.
*15 Accountant's letter regarding unaudited interim
financial information.
28 Awareness letter of Coopers & Lybrand.
* Attached as page 9 to this Form 10-Q.
b) Reports on Form 8-K:
On March 17, 1994, the Company filed a Form 8-K to
report a restructuring plan which includes asset disposals and
staff reductions. See Note 2 to the Condensed Consolidated
Financial Statements and Management's Discussion and Analysis of
Financial Condition and Results of Operations - Financial
Condition.
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<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.
ORYX ENERGY COMPANY
BY /s/ E. W. Moneypenny
---------------------
E. W. Moneypenny
(Senior Vice President, Finance, and Chief Financial
Officer)
DATE May 12, 1994
EXHIBIT 12
ORYX ENERGY COMPANY
COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS
TO FIXED CHARGES AND EARNINGS TO FIXED CHARGES AND
PREFERRED STOCK DIVIDEND REQUIREMENTS - UNAUDITED (a)
(Millions of Dollars)
Three Months
Ended March 31
1994
--------------
RATIO OF EARNINGS TO FIXED CHARGES:
Fixed Charges:
Consolidated interest cost and debt expense . . . . .$ 39
Interest allocable to rental expense (b) . . . . . . . 3
------
Total . . . . . . . . . . . . . . . . . . . . . . .$ 42
======
Earnings:
Consolidated loss before benefit for income taxes . .$(211)
Fixed charges. . . . . . . . . . . . . . . . . . . . . 42
Interest capitalized . . . . . . . . . . . . . . . . . (3)
Amortization of previously capitalized interest . . . 3
------
Total . . . . . . . . . . . . . . . . . . . . . . .$(169)
======
Ratio of Earnings to Fixed Charges (c) . . . . . . . . .
======
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK
DIVIDEND REQUIREMENTS:
Fixed Charges:
Consolidated interest cost and debt expense . . . . .$ 39
Preferred stock dividend requirements. . . . . . . . . -
Interest allocable to rental expense (b) . . . . . . . 3
------
Total . . . . . . . . . . . . . . . . . . . . . . .$ 42
======
Earnings:
Consolidated loss before benefit for income taxes . .$(211)
Fixed charges. . . . . . . . . . . . . . . . . . . . . 42
Interest capitalized . . . . . . . . . . . . . . . . . (3)
Amortization of previously capitalized interest . . . 3
------
Total . . . . . . . . . . . . . . . . . . . . . . .$(169)
======
Ratio of Earnings to Fixed Charges (c) . . . . . . . . .
======<PAGE>
<PAGE>
(a) The consolidated financial statements of Oryx Energy Company
include the accounts of all subsidiaries (more than 50 percent
owned and/or controlled).
(b) Represents one-third of total operating lease rental expense
which is that portion deemed to be interest.
(c) Since earnings for the three months ended March 31 were less
than zero, the ratios of earnings to fixed charges and earnings to
fixed charges and preferred stock dividend requirements are not
meaningful and accordingly, have not been presented. Earnings for
the three months ended March 31 were inadequate to cover fixed
charges or fixed charges and preferred stock dividend requirements
by $211 million.
EXHIBIT 28
Securities and Exchange Commission
450 Fifth Street, Northwest
Washington, D.C. 20549
Attn: Document Control
Re: Oryx Energy Company Form 10-Q
We are aware that our report dated May 9, 1994 on our review of
the interim condensed consolidated balance sheet of Oryx Energy
Company and its Subsidiaries as of March 31, 1994, and the
related condensed consolidated statements of income and cash
flows for the three months ended March 31, 1994 and 1993,
included in this Form 10-Q, is incorporated by reference in the
following registration statements:
Registration No.
----------------
On Form S-3 for:
Oryx Energy Company $500,000,000 Debt
Securities; Preferred Stock; and Common Stock 33-45611
Oryx Energy Company $600,000,000 Debt Securities 33-33361
Oryx Energy Company 7,259,394 shares of
Common Stock 33-36799
On Form S-8 for:
Oryx Energy Company 1992 Long-Term Incentive Plan 33-42695
Oryx Energy Company Long-Term Incentive Plan 33-25032
Oryx Energy Company Capital Accumulation Plan 33-24918
Pursuant to Rule 436(c) under the Securities Act of 1933, this
report should not be considered a part of the registration
statement prepared or certified by us within the meaning of
Sections 7 and 11 of that Act.
COOPERS & LYBRAND
Dallas, Texas
May 12, 1994
