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, 1995
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
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 OCTOBER 20, 1995 WAS 104,429,662. <PAGE>
ORYX ENERGY COMPANY
________________________________
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Income
for the Three and Nine Months Ended
September 30, 1995 and 1994................. 3
Condensed Consolidated Balance Sheets at
September 30, 1995 and December 31, 1994 ... 4
Condensed Consolidated Statements of Cash
Flows for the Nine Months Ended
September 30, 1995 and 1994................ 5
Notes to Condensed Consolidated Financial
Statements.................................. 6
Report of Independent Accountants .......... 11
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations.................................. 12
PART II. OTHER INFORMATION
Item 3. Legal Proceedings .......................... 16
Item 6. Exhibits and Reports on Form 8-K ........... 16
SIGNATURE ................................................. 17
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
ORYX ENERGY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
________________________________________________________________
For the Three For the Nine
(Millions of Dollars, Months Ended Months Ended
Except Per Share Amounts) September 30 September 30
1995 1994 1995 1994
(Unaudited)
REVENUES
Oil and gas $ 217 $ 274 $ 788 $ 795
Other (Note 6) 128 (1) 135 (7)
------- ------ ----- ------
345 273 923 788
------- ------ ------ ------
COSTS AND EXPENSES
Operating costs 74 94 256 279
Production taxes 17 37 85 82
Exploration costs 14 33 40 90
Depreciation, depletion
and amortization 66 66 212 202
General and administrative
expense 15 15 49 52
Interest and debt expense 33 41 112 121
Interest capitalized (3) (2) (7) (9)
Provision for restructuring
(Note 2) - - - 76
---- ---- ----- -----
216 284 747 893
----- ----- ----- -----
Income (Loss) Before
Extraordinary
Item, Cumulative Effect of
Accounting Change and
Provision (Benefit) for
Income Taxes 129 (11) 176 (105)
Provision (Benefit) for
Income Taxes (Note 3) 21 1 29 (28)
Provision for Remeasurement
of Foreign Deferred Tax
(Note 3) - - 1 2
---- ---- ------ -----
Income (Loss) Before
Extraordinary Item
and Cumulative Effect of
Accounting Change 108 (12) 146 (79)
Extraordinary Item
(Note 4) (1) (12) (15) (12)
<PAGE>
Cumulative Effect of Accounting
Change (Note 5) - - - (948)
---- ----- ----- -----
NET INCOME (LOSS) 107 (24) 131 (1,039)
Less Preferred Dividend - - - 1
---- ---- ----- -----
Net Income (Loss) Attributable
to Common Stock $ 107 $(24) $131 $(1,040)
====== ===== ===== ========
Net Income (Loss) Per Share of Common Stock:
Before extraordinary item
and cumulative
effect of accounting
change $ 1.04 $(.13) $1.44 $ (.82)
Extraordinary item (.01) (.12) (.15) (.12)
Cumulative effect of
accounting change - - - (9.77)
------ ----- ----- -----
Net income (loss) $ 1.03 $ (.25) $1.29 $(10.71)
===== ====== ===== =======
Weighted Average Number of Common
Shares Outstanding
(millions of shares) 103.6 97.0 101.7 97.0
====== ====== ====== ======
(See Accompanying Notes)<PAGE>
ORYX ENERGY COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
_________________________________________________________________
September 30 December 31
(Millions of Dollars) 1995 1994
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 12 $ 10
Accounts and notes receivable
and other current assets 158 185
Net assets held for sale (Note 6) 128 -
-------- --------
Total Current Assets 298 195
Properties, Plants and
Equipment (Note 7) 1,423 1,840
Deferred Charges and
Other Assets 51 72
-------- --------
Total Assets $ 1,772 $ 2,107
======== ========
LIABILITIES AND
SHAREHOLDERS' DEFICIT
Current Liabilities
Accounts payable $ 93 $ 105
Accrued liabilities 190 262
Current portion of
long-term debt 224 165
Obligations to be repaid
from divestment
proceeds (Note 6) 120 -
-------- --------
Total Current Liabilities 627 532
Long-Term Debt (Note 4) 978 1,546
Deferred Income Taxes 223 221
Deferred Credits and Other
Liabilities 157 155
Shareholders' Equity
(Deficit) (Note 8)
Preferred stock, $1 par value;
30,000,000 shares
authorized;
5,259,394 shares of Series
B Junior Cumulative Convertible
Preference Stock issued
and outstanding in 1994. - 5
Common stock, $1 par value;
250,000,000 shares authorized;
126,703,553 shares issued in
1995 and 1994, 104,421,176
and 98,946,066 shares
outstanding in 1995 and 1994. 124 124<PAGE>
Additional paid-in capital 1,821 2,098
Accumulated deficit (1,054) (1,181)
-------- --------
891 1,046
Less common stock in treasury,
at cost; 19,280,498 and
24,755,608 shares in 1995
and 1994 (1,005) (1,294)
Less loan to ESOP (99) (99)
-------- --------
Shareholders' Deficit (213) (347)
-------- --------
Total Liabilities and
Shareholders' Deficit $ 1,772 $ 2,107
======== ========
The successful efforts method of accounting is followed.
(See Accompanying Notes)
<PAGE>
ORYX ENERGY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
_________________________________________________________________
For the Nine Months
Ended September 30
(Millions of Dollars) 1995 1994
(Unaudited)
CASH AND CASH EQUIVALENTS
FROM OPERATING ACTIVITIES
Net income (loss) $ 131 $(1,039)
Adjustments to reconcile net income
(loss) to net cash
from operating activities:
Depreciation, depletion and
amortization 212 202
Dry hole costs and leasehold
impairment 15 53
Gain on sale of assets, net of
taxes (149) -
Deferred income taxes 48 -
Cumulative effect of
accounting change - 948
Provision for restructuring,
net of taxes - 49
Extraordinary item 15 12
Other 7 1
------- -------
279 226
Changes in working capital:
Accounts and notes receivable
and other current assets 6 (8)
Accounts payable and accrued
liabilities (77) (28)
------- --------
Net Cash Flow Provided From
Operating Activities 208 190
------- --------
INVESTING ACTIVITIES
Capital expenditures (192) (201)
Proceeds from divestments, net of
current taxes 384 3
Other (9) (36)
------- --------
Net Cash Flow Provided From(Used For)
Investing Activities 183 (234)
------- --------
FINANCING ACTIVITIES
Proceeds from borrowings 30 143
Repayments of long-term debt (419) (94)
Cash dividends paid on
preference stock - (1)
------- --------
<PAGE>
Net Cash Flow Provided From (Used For)
Financing Activities (389) 48
------- ---------
CHANGES IN CASH AND CASH EQUIVALENTS 2 4
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 10 10
------- --------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 12 $ 14
======= ========
(See Accompanying Notes)
<PAGE>
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 nine months ended September 30, 1995 are
not necessarily indicative of the results for the full year
1995.
As further discussed in Note 5, the Company changed its
accounting policy for calculating the oil and gas asset
ceiling test during the fourth quarter of 1994, but
effective as of January 1, 1994. As a result thereof, the
Company's results of operations and corresponding per share
amounts as well as certain items in the Condensed
Consolidated Statement of Cash Flows for the nine months
ended September 30, 1994 have been restated to reflect this
change in accounting policy.
Statements of Cash Flows
Amounts paid for interest and income taxes were as follows:
Nine Months Ended September 30
1995 1994
(Millions of Dollars)
Interest paid (net of
capitalized amounts) $ 116 $ 95
Income taxes paid $ 4 $ 4
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.
<PAGE>
ORYX ENERGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
2. Restructuring Liability
In 1994, the Company adopted plans to achieve further cost
reductions and, associated therewith, recognized a $92
million ($59 million after-tax) provision for restructuring.
The 1994 provision consisted of a charge of $161 million
provided in the first quarter, revised to $76 million
because of the accounting change (Note 5), and $16 million
provided in the fourth quarter.
An analysis of the restructuring liability follows:
1995
Balance First
1994 1994 at Quarter
Provision Activity 12/31/94 Activity
(Millions of Dollars)
Termination and
Associated Costs* $ 33 $ 21 $ 12 $ 5
FAS 88 and FAS
106 (Retirement and
Postretirement Costs)** 33 21 12 -
Book Value of
Assets to be
Divested and
Lease Obligations*** 26 4 22 -
---- ---- ---- ----
Total Liability $ 92 $ 46 $ 46 $ 5
==== ==== ==== ====
<PAGE>
ORYX ENERGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
2. Restructuring Liability (continued)
1995 1995
Second Third Balance
Quarter Quarter at
Activity Activity 9/30/95
(Millions of Dollars)
Termination and
Associated Costs* $ 5 $ 1 $ 1
FAS 88 and FAS
106 (Retirement and
Postretirement Costs)** 5 - 7
Book Value of
Assets to be
Divested and
Lease Obligations*** (7) 28 1
----- ----- -----
Total Liability $ 3 $ 29 $ 9
==== ==== =====
* Termination and associated cash costs are primarily
comprised of severance pay, associated employee benefit
costs and moving costs for 345 employees. Management
expects to complete such payments by the end of 1996.
** Costs primarily represent non-cash adjustments due to
special termination benefits and the acceleration of a
portion of the transition obligation as a result of a
reduction in the remaining expected future years of
service of active employees.
*** Book value of assets to be divested are a result of the
Company's program to consolidate its U.S. onshore
position into 6 primary states. Under the terms of an
operating lease which expired in September 1995, the
Company was obligated to pay the lessor the amount by
which the fair market value of the asset was less than
$37 million, not to exceed $31 million. The Company
accrued an additional $7 million in the second quarter
of 1995 and paid the obligation in full in the third
quarter of 1995.
<PAGE>
ORYX ENERGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
3. Income Taxes
The Company's provisions for income taxes for the three and
nine months ended September 30, 1995 reflect provisions of
$21 million and $29 million. The Company's provisions for
income taxes for the three and nine months ended September
30, 1994 reflect a provision of $1 million and a benefit of
$28 million. 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 and nine months ended September 30, 1995 were
unaffected and decreased $1 million while reported earnings
for the three and nine months ended September 30, 1994 were
unaffected and decreased $2 million from such
remeasurements. 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. Long-Term Debt
Effective June 1, 1995, the Company replaced its $620
million revolving credit facility with a $500 million
revolving credit facility which matures on June 30, 1998.
The terms of the $500 million revolving credit facility
incorporate restrictive covenants, including limitations on
total debt, minimum cash flow interest coverage and certain
dividend limitations. Additionally, variable rate bank debt
originally maturing $89 million in 1996 and $88 million in
1997, is scheduled to mature June 30, 1998. Effective
August 10, 1995, as a result of the sale of the Company's
interest in the U.K. Alba field, the Company was required by
the holder to repay the 8.5% $100 million note.
<PAGE>
ORYX ENERGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
4. Long-Term Debt (continued)
In connection with the aforementioned, the Company has
recognized non-cash extraordinary losses of $15 million (net
of $8 million of income tax) from the write off of debt
issuance costs deferred under the $620 million revolving
credit facility of $14 million and a prepayment penalty of
$1 million on the 8.5% $100 million note.
On August 15, 1995, a swap option, in the notional amount of
$250 million sold by the Company in 1993 for $14 million,
was exercised by the counterparties, thereby obligating the
Company, commencing September 15, 1995 and continuing
through September 15, 1998, to pay an annual rate of 9.75
percent while receiving LIBOR (5.875 percent at September
15, 1995, to be reset at six-month intervals). The $14
million of proceeds previously received will be amortized
and netted against the interest expense associated with the
exercise of the swap option.
The Company has called for redemption on October 30, 1995
its $138 million 10 3/8% Debentures at 106.471 percent of
par plus accrued interest, which is expected to result in a
$6 million extraordinary loss (net of $3 million of income
tax) in the fourth quarter. The redemption will be funded
with proceeds from divestments.
5. Accounting Change
Effective January 1, 1994, the Company changed its
accounting policy for calculating the oil and gas asset
ceiling test from a total company basis to an individual
field basis. As a result of this change, the Company
recognized a one time non-cash cumulative charge to earnings
of $948 million ($1,355 million pre-tax) to first quarter
1994 earnings. Consequently, earnings have been restated
for the three and nine months ended September 30, 1994, as
follows:
<PAGE>
ORYX ENERGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
5. Accounting Change (continued)
For the Three For the Nine
Months Ended Months Ended
September 30, 1994 September 30, 1994
As Reported:
Net loss $ (56) $ (237)
Net loss per share $ (.57) $ (2.45)
As Restated:
Net loss $ (24) $ (1,039)
Net loss per share $ (.25) $ (10.71)
6. Asset Sales
On July 18, 1995, the Company completed the sale, effective
July 1, 1995, of all of its assets in the Alba field in the
U.K. North Sea for cash consideration of $270 million. The
sale of the Company's assets in the Alba field is part of a
series of related asset dispositions which the Company has
entered into in 1995 for the purpose of using the associated
net proceeds to reduce outstanding indebtedness. In
addition to the sale of the Alba field assets, the Company
has completed sales of certain U.S. oil and gas producing
assets and all of its assets in Indonesia and Gabon. The
sale of the U.S. assets occurred throughout the six month
period which ended on June 30, 1995 and generated cash
proceeds of $77 million; the sale of the Indonesian assets
occurred on May 18, 1995, effective January 1, 1995, for
cash proceeds of $67 million; and the sale of the Gabonese
assets occurred effective January 1, 1995 for cash proceeds
of $2 million. On June 14, 1995, the Company signed an
agreement to sell its interests in Block 48/15a in the U.K.
North Sea for $120 million. Assets being sold include the
Company's 33.7 percent interest in the Audrey field; its
estimated 10 percent interest in the Galleon field; and its
undetermined interest in the Ensign discovery. Management
believes that it is probable that closing will occur in the
fourth quarter, therefore, the net asset value of $128
million is shown as net assets held for sale and the net
proceeds of $120 million are shown as obligations to be
repaid from divestment proceeds in the Condensed
Consolidated Balance Sheets. This series of asset
dispositions, totalling $536 million, represents 133 million<PAGE>
ORYX ENERGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
6. Asset Sales (continued)
equivalent barrels of proved reserves and 43 thousand
average equivalent barrels of production per day.
7. Properties, Plants and Equipment
At September 30, 1995 and December 31, 1994, the Company's
properties, plants and equipment; and related accumulated
depreciation, depletion and amortization were as follows:
September 30, December 31,
1995 1994
(Millions of Dollars)
Gross investment . .. . .. . . $ 4,891 $ 6,320
Less accumulated depreciation,
depletion and amortization. 3,340 4,480
------ ------
Net investment.. . .. . .. . . $ 1,551 $ 1,840
====== ======
Reflected as:
Net assets held for sale.. . . $ 128 -
Properties, Plants and
Equipment . .. . .. . .. . . $ 1,423 $ 1,840
8. Shareholders' Deficit
Shares of the Company's preferred and common stocks
authorized, issued, outstanding and in treasury at September
30, 1995 and December 31, 1994 were as follows:
Authorized Issued
(Thousands of Shares)
September 30, 1995
Preferred stock 15,000 -
Preference stock 15,000 -
Common stock 250,000 126,704
December 31, 1994
Preferred stock 15,000 -
Preference stock 15,000 5,259
Common stock 250,000 126,704
<PAGE>
ORYX ENERGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
8. Shareholders' Deficit (continued)
Outstanding In Treasury
(Thousands of Shares)
September 30, 1995
Preferred stock - -
Preference stock - -
Common stock 104,421 (19,280)
December 31, 1994
Preferred stock - -
Preference stock 5,259 -
Common stock 98,946 (24,756)
9. Subsequent Events
On October 20, 1995, the Company issued $100 million 8%
Notes Due October 15, 2003 and $150 million 8.125% Notes Due
October 15, 2005. The net proceeds of $245 million will be
applied to the redemption of the Company's $250 million
9.75% Notes Due September 15, 1998 on November 30, 1995 at
par plus accrued interest.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors, Oryx Energy Company:
We have reviewed the accompanying condensed consolidated balance
sheet of Oryx Energy Company and its Subsidiaries as of September
30, 1995, the related condensed consolidated statements of income
for the three and nine months ended September 30, 1995 and 1994,
and the related condensed consolidated statements of cash flows
for the nine months ended September 30, 1995 and 1994. These
financial statements are the responsibility of the 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 as of December
31, 1994, 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, 1995, which included an explanatory
paragraph describing the change in accounting for calculating the
oil and gas asset ceiling test in 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, 1994 is
fairly stated, in all material respects, in relation to the
consolidated balance sheet from which it has been derived.
COOPERS & LYBRAND L.L.P.
Dallas, Texas
October 24, 1995
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Company's cash and cash equivalents increased by $2 million
over the nine months ended September 30, 1995. The increase was
comprised of $208 million of net cash flow provided from
operating activities, $183 million of net cash flow provided from
investing activities and $389 million of net cash flow used for
financing activities. The $208 million in net cash flow provided
from operating activities consisted of $279 million in net cash
flow provided from operating activities before changes in current
assets and liabilities and $71 million used for changes in
current assets and liabilities. The $279 million in net cash
flow provided from operating activities before changes in current
assets and liabilities was primarily impacted by increased crude
oil prices, offset partially by lower production volumes and
decreased natural gas prices. The $71 million of net cash flow
used for changes in current assets and liabilities consisted of a
$6 million decrease in accounts and notes receivable and other
current assets and a $77 million decrease in accounts payable and
accrued liabilities.
The $183 million in net cash flow provided from investing
activities and the $389 million in net cash flow used for
financing activities are primarily due to cash uses of $192
million for capital expenditures and $389 million from net
decreases in debt offset in part by a cash source of $384 million
from proceeds from divestments, net of current taxes.
The Company incurred a provision for restructuring in 1994
consisting of an initial charge of $161 million in the first
quarter, revised to $76 million because of the accounting change,
and $16 million provided in the fourth quarter. The
restructuring program should lead to a $70 million cost reduction
for 1995. For analyses of the restructuring provision, see Note
2 to the Condensed Consolidated Financial Statements.
During March 1995, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed of", effective for fiscal years
beginning after December 15, 1995. When adopted, the impact of
this statement is expected to be immaterial.
During 1995, the holders of the Company's Series B Junior
Cumulative Convertible Preference Stock (Series B Preference)
converted the remaining shares of Series B Preference into common
stock on a share for share basis.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - (CONTINUED)
FINANCIAL CONDITION (continued)
On July 18, 1995, the Company completed the sale, effective July
1, 1995, of all of its assets in the Alba field in the U.K. North
Sea for cash consideration of $270 million. The sale of the
Company's assets in the Alba field is part of a series of related
asset dispositions which the Company has entered into in 1995 for
the purpose of using the associated net proceeds to reduce
outstanding indebtedness. In addition to the sale of the Alba
field assets, the Company has completed sales of certain U.S. oil
and gas producing assets and all of its assets in Indonesia and
Gabon. The sale of U.S. assets occurred throughout the six month
period which ended on June 30, 1995 and generated cash proceeds
of $77 million; the sale of the Indonesia assets occurred on May
18, 1995, effective January 1, 1995, for cash proceeds of $67
million; and the sale of the Gabonese assets occurred effective
January 1, 1995 for cash proceeds of $2 million.
On June 14, 1995, the Company signed an agreement to sell its
interests in Block 48/15a in the U.K. North Sea for $120 million.
Assets being sold include the Company's 33.7 percent interest in
the Audrey field; its estimated 10 percent interest in the
Galleon field; and its undetermined interest in the Ensign
discovery. Management believes that it is probable that closing
will occur early in the fourth quarter. This series of asset
dispositions, totalling $536 million, represents 133 million
equivalent barrels of proved reserves and 43 thousand average
equivalent barrels of production per day.
As a result of the Company's debt reduction program, total
indebtedness decreased from $1,711 million at December 31, 1994
to $1,322 million at September 30, 1995. In addition, cash
proceeds of $120 million expected from the sale of Block 48/15a
in the U.K. North Sea in the fourth quarter of 1995 will be used
for debt reduction.
The sale of the Company's interest in the U.K. Alba field caused
the holder of the Company's 8.5% $100 million note to require the
Company to repay the note in the third quarter of 1995. In
addition, the holder of a $21 million debt agreement, although
entitled to require the Company to repay the debt in full, has
elected to extend the due date to November 17, 1995.
Additionally, the Company has called for redemption on October
30, 1995 its $138 million 10.375 percent Debentures at 106.471
percent of par plus accrued interest which is expected to result
in a $6 million extraordinary loss (net of $3 million of income
tax) in the fourth quarter. The redemption will be funded with
proceeds from divestments.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - CONTINUED
FINANCIAL CONDITION (continued)
On August 15, 1995, a swap option, in the notional amount of $250
million, sold by the Company in 1993 for $14 million, was
exercised by the counterparties, thereby obligating the Company,
commencing September 15, 1995 and continuing through September
15, 1998, to pay an annual rate of 9.75 percent while receiving
LIBOR (5.875 percent at September 15, 1995, to be reset at six-
month intervals). The $14 million of proceeds previously
received will be amortized and netted against the interest
expense associated with the exercise of the swap option.
On October 20, 1995, the Company issued $100 million 8% Notes Due
October 15, 2003 and $150 million 8.125% Notes Due October 15,
2005. The net proceeds, estimated to aggregate approximately
$245 million after offering expenses, will be applied to the
redemption of the Company's $250 million 9.75% Notes Due
September 15, 1998 on November 30, 1995 at par plus accrued
interest.
RESULTS OF OPERATIONS - NINE MONTHS
The Company's net income for the nine months ended September 30,
1995 was $131 million, or $1.29 per share, as compared to a net
loss before the cumulative effect of an accounting change, of $91
million, or $.94 per share for the first nine months of 1994.
Revenues for the nine months were $923 million in 1995 versus
$788 million in 1994. Year-to-date results for 1995 include a
$120 million net gain on the sale of assets, a $15 million
extraordinary net charge for debt issue costs and a $1 million
charge for remeasurement of foreign deferred taxes. By
comparison, results for the nine months ended September 30, 1994,
restated for a change in accounting principle but excluding the
cumulative effect, include a $49 million net restructuring
charge, a $12 million extraordinary charge associated with the
ESOP notes and a $3 million tax-related charge.
Average worldwide net production of crude oil and condensate for
the nine months ended September 30, 1995 was 119 thousand barrels
daily compared to average net production for the nine months
ended September 30, 1994 of 118 thousand barrels daily. Average
net production of crude oil and condensate was 47 thousand
barrels daily in the United States and 72 thousand barrels daily
from foreign locations during the nine months ended September 30,
1995, compared to 49 thousand barrels daily in the United States
and 69 thousand barrels daily from foreign locations during the
nine months ended September 30, 1994. The worldwide crude oil <PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - CONTINUED
RESULTS OF OPERATIONS - NINE MONTHS (continued)
and condensate price for the first nine months of 1995 was $16.48
per barrel compared to $14.84 per barrel for the first nine
months of 1994.
Average worldwide net production of natural gas was 537 million
cubic feet daily for the nine months ended September 30, 1995,
compared to 597 million cubic feet in the nine months ended
September 30, 1994. Average net production of natural gas was
477 million cubic feet daily in the United States and 60 million
cubic feet daily from the United Kingdom in the first nine months
of 1995, compared to 538 million cubic feet daily in the United
States and 59 million cubic feet daily in the United Kingdom in
the first nine months of 1994. The worldwide price of natural
gas for the first nine months of 1995 and 1994 was $1.73 and
$1.94 per thousand cubic feet.
RESULTS OF OPERATIONS - THREE MONTHS
The Company's net income for the quarter ended September 30, 1995
was $107 million, or $1.03 per share, as compared to a net loss
of $24 million, or $.25 per share for the same quarter last year,
which was restated for a change in accounting principle.
Revenues for the 1995 third quarter were $345 million versus $273
million for the third quarter of 1994.
The third quarter of 1995 includes a $106 million net gain on
sale of assets and a $1 million extraordinary net charge
associated with early extinguishment of debt. By comparison, the
1994 third quarter, restated for a change in accounting
principle, includes a $12 million extraordinary charge associated
with the ESOP notes and a $1 million tax-related charge.
Compared to the same quarter last year, crude oil volumes
decreased by 22 thousand barrels per day and natural gas volumes
decreased 126 million cubic feet per day primarily due to the
sale of producing assets. Worldwide crude oil prices were
approximately the same as the prior year while natural gas prices
decreased by 6 percent or $.11 per mcf. Reduced revenues were,
however, more than offset by lower costs and expenses.
Average worldwide net production of crude oil and condensate for
the three months ended September 30, 1995 was 101 thousand
barrels daily compared to average net production for the three
months ended September 30, 1994 of 123 thousand barrels daily.
Average net production of crude oil and condensate was 44
thousand barrels daily in the United States and 57 thousand<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - CONTINUED
RESULTS OF OPERATIONS - THREE MONTHS (continued)
barrels daily from foreign locations during the three months
ended September 30, 1995, compared to 48 thousand barrels daily
in the United States and 75 thousand barrels daily from foreign
locations in the third quarter of 1994. The worldwide crude oil
and condensate price in the third quarter of 1995 was $15.93 per
barrel compared to $15.91 per barrel in the third quarter of
1994.
Average worldwide net production of natural gas was 457 million
cubic feet daily for the three months ended September 30, 1995,
compared to 583 million cubic feet daily in the three months
ended September 30, 1994. Average net production of natural gas
was 444 million cubic feet daily in the United States and 13
million cubic feet daily from the United Kingdom in the third
quarter of 1995, compared to 542 million cubic feet daily in the
United States and 41 million cubic feet daily from the United
Kingdom in the third quarter of 1994. The worldwide price of
natural gas for the third quarter of 1995 was $1.63 per thousand
cubic feet compared to $1.74 per thousand cubic feet in the third
quarter of 1994.
<PAGE>
PART II
OTHER INFORMATION
Item 3. Legal Proceedings
Three federal securities actions, subsequently
consolidated into a single action, brought against the
Company and certain of its senior officers in 1992,
alleging the Company made false and misleading
statements about its financial prospects has been
dismissed by the U.S. District Court for the Northern
District of Texas.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
12 Computation of Consolidated Ratio of Earnings
to Fixed Charges.
*15 Accountant's letter regarding unaudited
interim financial information.
27 Financial Data Schedule
28 Awareness letter of Coopers & Lybrand L.L.P.
* Attached as page 19 to this Form 10-Q.
(b) Reports on Form 8-K:
On August 2 and October 17, 1995, the Company
filed Forms 8-K to report a series of related
asset dispositions which the Company has entered
into in 1995. See Note 6 to the Condensed
Consolidated Financial Statements and Management's
Discussion and Analysis of Financial Condition and
Results of Operations - Financial Condition.
<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
(Executive Vice President, Finance and
Chief Financial Officer)
DATE: October 25, 1995
<PAGE>
EXHIBIT 12
ORYX ENERGY COMPANY
COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS
TO FIXED CHARGES - UNAUDITED (a)
(Millions of Dollars)
Three Months Nine Months
Ended September 30 Ended September 30
1995 1995
RATIO OF EARNINGS TO
FIXED CHARGES:
Fixed Charges:
Consolidated interest
cost and debt expense $ 33 $ 112
Interest allocable to
rental expense (b) 4 11
------ ------
Total $ 37 $ 123
====== ======
Earnings:
Consolidated loss
before provision for
income taxes $ 129 $ 176
Fixed charges 37 123
Interest capitalized (3) (7)
Amortization of
previously capitalized
interest 2 4
------- ------
Total $ 165 $ 296
======= ======
Ratio of Earnings to
Fixed Charges 4.46 2.41
======= ======
RATIO OF EARNINGS TO
FIXED CHARGES AND PREFERRED
STOCK DIVIDEND REQUIREMENTS:
Fixed Charges:
Consolidated interest
cost and debt expense $ 33 $ 112
Preferred stock dividend
requirements - -
Interest allocable to
rental expense (b) 4 11
------- ------
Total $ 37 $ 123
======= ======
<PAGE>
Earnings:
Consolidated loss
before provision for
income taxes $ 129 $ 176
Fixed charges 37 123
Interest capitalized (3) (7)
Amortization of previously
capitalized interest 2 4
------- ------
Total $ 165 $ 296
======= ======
Ratio of Earnings to
Fixed Charges 4.46 2.41
======= ======
(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.
<PAGE>
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 October 24, 1995 on our review
of the interim condensed consolidated balance sheet of Oryx
Energy Company and its Subsidiaries as of September 30, 1995, the
related condensed consolidated statements of income for the three
and nine months ended September 30, 1995 and 1994, and the
related condensed consolidated statements of cash flows for the
nine months ended September 30, 1995 and 1994, 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 L.L.P.
Dallas, Texas
October 25, 1995
<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.
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