19
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, 1996
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 April 30, 1996 was 104,604,850.
<PAGE>
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, 1996
and 1995 .................................. 3
Condensed Consolidated Balance Sheets at
March 31, 1996 and December 31, 1995 ...... 4
Condensed Consolidated Statements of Cash
Flows for the Three Months Ended March 31,
1996 and 1995 ............................. 5
Notes to Condensed Consolidated Financial
Statements ................................ 6
Report of Independent Accountants ......... 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations ................................ 11
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security
Holders .................................. 14
SIGNATURE .......................................... 16
<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) 1996 1995
--------------------
(Unaudited)
Revenues
Oil and gas $ 248 $ 299
Other (1) (6)
------- ------
247 293
------- ------
Costs and Expenses
Operating costs 58 91
Production taxes 26 38
Exploration costs 11 13
Depreciation, depletion and amortization 63 74
General and administrative expense 15 18
Interest and debt expense 29 40
Interest capitalized (3) (2)
-------- -------
199 272
-------- -------
Income Before Provision for Income Taxes 48 21
Provision for Income Taxes (Note 3) 17 6
Remeasurement of Foreign Deferred Tax
(Note 3) (1) 2
-------- --------
Net Income $ 32 $ 13
======== ========
Net Income Per Share of Common Stock $ .31 $ .13
======== ========
Weighted Average Number of Common Shares
Outstanding (in millions) 104.6 99.1
======== ========
(See Accompanying Notes)
<PAGE>
ORYX ENERGY COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31 December 31
(Millions of Dollars) 1996 1995
----------------------
(Unaudited)
Assets
Current Assets
Cash and cash equivalents $ 10 $ 20
Accounts receivable and other current
assets 166 161
-------- --------
Total Current Assets 176 181
Properties, Plants and Equipment
(Note 4) 1,444 1,426
Deferred Charges and Other Assets 62 59
-------- --------
Total Assets $ 1,682 $ 1,666
======== ========
Liabilities and Shareholders' Deficit
Current Liabilities
Accounts payable $ 125 $ 106
Accrued liabilities 196 196
Current portion of long-term debt 116 152
-------- --------
Total Current Liabilities 437 454
Long-Term Debt 1,038 1,051
Deferred Income Taxes 220 207
Deferred Credits and Other Liabilities 162 163
Shareholders' Deficit (Note 5)
Common stock, par value $1 per share 124 124
Additional paid-in capital 1,821 1,821
Accumulated deficit (1,021) (1,051)
------- -------
924 894
Less: Common stock in treasury,
at cost (1,000) (1,004)
Loan to ESOP (99) (99)
------- -------
Shareholders' Deficit (175) (209)
------- -------
Total Liabilities and Shareholders'
Deficit $ 1,682 $ 1,666
======== ========
The successful efforts method of accounting is followed.
(See Accompanying Notes)
<PAGE>
ORYX ENERGY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months
Ended March 31
(Millions of Dollars) 1996 1995
--------------------
(Unaudited)
Cash and Cash Equivalents From Operating Activities
Net income $ 32 $ 13
Adjustments to reconcile net income to
net cash flow from operating activities:
Depreciation, depletion and amortization 63 74
Dry hole costs and leasehold impairment 3 4
Loss (gain) on sale of assets, net
of taxes (1) 2
Deferred income taxes 15 11
Remeasurement of foreign deferred tax (1) 2
Other 1 6
------- -------
112 112
Changes in working capital:
Accounts and notes receivable and
other current assets (5) (4)
Accounts payable and accrued
liabilities 22 (39)
------ ------
Net Cash Flow Provided From Operating
Activities 129 69
------ ------
Investing Activities
Capital expenditures (86) (65)
Proceeds from divestments, net of
current taxes 4 36
Other (9) (3)
------ ------
Net Cash Flow Used For Investing
Activities (91) (32)
------ ------
Financing Activities
Proceeds from borrowings 16 29
Repayments of long-term debt (64) (62)
------ ------
Net Cash Flow Used For Financing
Activities (48) (33)
------ ------
Changes In Cash and Cash Equivalents (10) 4
Cash and Cash Equivalents at Beginning
of Period 20 10
------ ------
Cash and Cash Equivalents at End
of Period $ 10 $ 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 three months ended March 31, 1996 are
not necessarily indicative of the results for the full year
1996.
Statements of Cash Flows
Amounts paid for interest and income taxes were as follows:
Three Months Ended March 31
1996 1995
---------------------------
(Millions of Dollars)
Interest paid (net of
capitalized amounts) $ 15 $ 46
Income taxes paid $ - $ 3
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 the fourth quarter of 1995, the Company recognized a net
$25 million ($16 million after-tax) charge for restructuring
comprised of a $4 million adjustment to the 1994
restructuring provision and a $29 million restructuring
provision for a plan to achieve further cost reductions.
<PAGE>
ORYX ENERGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
2. Provision for Restructuring (continued)
An analysis of the 1995 provision for restructuring follows:
1996
Activity Balance Activity Balance
Initial through at through at
Provision 12/31/95 12/31/95 3/31/96 3/31/96
--------- -------- -------- ------- -------
(Millions of Dollars)
Termination and
associated costs* $ 10 $ 1 $ 9 $ 1 $ 8
SFAS No. 88 and
SFAS No. 106
(retirement and
postretirement
costs)** 5 5 - - -
Office lease
obligation*** 14 - 14 1 13
----- ----- ---- ---- ----
Total $ 29 $ 6 $ 23 $ 2 $ 21
===== ===== ==== ==== ====
* Termination and associated cash costs are
primarily comprised of severance pay and associated
employee benefit costs for 250 operational and
administrative employees. Management expects to
complete such payments by the end of 1997.
** 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.
*** Represents contractual obligations existing
prior to the commitment date that will continue with
no economic benefit to the Company.
The costs of the 1994 restructuring were substantially
complete at 12/31/95. As a result of $1 million of
termination payments made during the first quarter of 1996,
costs of the 1994 restructuring have been completed.
<PAGE>
ORYX ENERGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
3. Income Taxes
The Company's provisions for income taxes for the three
months ended March 31, 1996 and 1995 reflect provisions of
$17 million and $6 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 months ended March 31, 1996 and 1995 increased $1
million and decreased $2 million from such remeasurement.
Management believes that such non-cash remeasurements
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, 1996 and December 31, 1995, the Company's
properties, plants and equipment; and related accumulated
depreciation, depletion and amortization were as follows:
March 31 December 31
1996 1995
----------------------
(Millions of Dollars)
Gross investment............ $ 5,193 $ 5,133
Less accumulated
depreciation, depletion
and amortization.......... 3,749 3,707
-------- --------
Net investment.............. $ 1,444 $ 1,426
======== ========
<PAGE>
ORYX ENERGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(continued)
5. Shareholders' Deficit
Shares of the Company's preferred and common stocks
authorized, issued, outstanding and in treasury at March 31,
1996 and December 31, 1995 were as follows:
In
Authorized Issued Outstanding Treasury
---------- ------ ----------- --------
(Thousands of Shares)
March 31, 1996
Preferred stock 15,000 - - -
Preference stock 7,741 - - -
Common stock 250,000 126,704 104,590 (19,112)
December 31, 1995
Preferred stock 15,000 - - -
Preference stock 7,741 - - -
Common stock 250,000 126,704 104,455 (19,247)
<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 March 31,
1996, and the related condensed consolidated statements of income
and cash flows for the three months ended March 31, 1996 and
1995. 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, 1995, 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, 1996, 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, 1995, is fairly
stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
/s/ COOPERS & LYBRAND L.L.P.
Dallas, Texas
May 15, 1996
<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 $10 million
over the three months ended March 31, 1996. The decrease was
comprised of $129 million of net cash flow provided from
operating activities, $91 million of net cash flow used for
investing activities and $48 million of net cash flow used for
financing activities. The $129 million in net cash flow provided
from operating activities consisted of $112 million in net cash
flow provided from operating activities before changes in current
assets and liabilities and $17 million provided from changes in
current assets and liabilities. The $112 million in net cash
flow provided from operating activities before changes in current
assets and liabilities was primarily impacted by increased crude
oil and natural gas prices, lower debt levels and reduced
operating costs. The $17 million of net cash flow provided from
changes in current assets and liabilities consisted of a $22
million increase in accounts payable and accrued liabilities and
a $5 million increase in accounts receivable.
The $91 million in net cash flow used for investing activities
and the $48 million in net cash flow used for financing
activities are primarily due to a cash use of $86 million for
capital expenditures and a cash use of $48 million for net
decreases in debt.
In the fourth quarter of 1995, the Company incurred a net $25
million ($16 million after-tax) provision for restructuring
comprised of a $4 million adjustment to the 1994 restructuring
provision and a $29 million restructuring provision for a plan to
achieve further cost reductions. For an analysis of the
restructuring provision, see Note 2 to the Condensed Consolidated
Financial Statements.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations - continued
RESULTS OF OPERATIONS
The Company's net income for the quarter ended March 31, 1996 was
$32 million, or $.31 per share, as compared to net income of $13
million, or $.13 per share for the quarter ended March 31, 1995.
Revenues for the 1996 first quarter were $247 million versus $293
million for the first quarter of 1995.
Compared to the same quarter last year, worldwide crude oil
prices increased by $.91 per barrel and U.S. natural gas prices
increased by $.34 per mcf. Daily production rates for the
quarter decreased by 24 percent as a direct result of asset
sales. Cost reductions outpaced the decline in production, with
total costs and expenses lower by $73 million, or 27 percent
below the first quarter of 1995. A $60 million reduction in cash
costs accounted for most of the improvement, representing a 31
percent decrease from levels a year ago. The combination of an
improved asset portfolio, lower debt levels and reduced operating
costs generated unit cost reductions in both total costs and cash
expenses. Total costs and expenses per equivalent barrel were
$12.09 in the first quarter, a reduction of $.63 from a year ago,
while cash costs per equivalent barrel declined by $.90 to $8.28.
For the second quarter, the Company anticipates both a higher
level of exploration activity and a step-up in workover expense.
The 1996 first quarter includes a $1 million net gain from asset
sales and a $1 million benefit for the remeasurement of foreign
deferred taxes. By comparison, the 1995 first quarter included a
$2 million charge for the remeasurement of foreign deferred
taxes.
Average worldwide net production of crude oil and condensate for
the three months ended March 31, 1996 was 102 thousand barrels
daily compared to average net production for the three months
ended March 31, 1995 of 137 thousand barrels daily. Average net
production of crude oil and condensate was 45 thousand barrels
daily in the United States and 57 thousand barrels daily from
foreign locations during the three months ended March 31, 1996,
compared to 49 thousand barrels daily in the United States and 88
thousand barrels daily from foreign locations in the first
quarter of 1995. The average worldwide crude oil and condensate
price in the first quarter of 1996 was $17.37 per barrel compared
to $16.46 per barrel in the first quarter of 1995.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations - continued
RESULTS OF OPERATIONS (continued)
Average worldwide net production of natural gas was 473 million
cubic feet daily for the three months ended March 31, 1996,
compared to 603 million cubic feet in the three months ended
March 31, 1995. Average net production of natural gas was 466
million cubic feet daily in the United States and 7 million cubic
feet daily from the United Kingdom in the first quarter of 1996,
compared to 504 million cubic feet daily in the United States and
99 million cubic feet daily from the United Kingdom in the first
quarter of 1995. The average worldwide price of natural gas for
the first quarter of 1996 was $2.03 per thousand cubic feet
compared to $1.77 per thousand cubic feet in the first quarter of
1995.
<PAGE>
PART II
OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
On May 2, 1996, the Annual Meeting of Shareholders of Oryx
Energy Company was held to vote on proposals as follows:
(a) To elect three directors to Class II of the
Company's Board of Directors.
Robert L. Paul R. Ian L.
Keiser Seegers White-Thomson
---------- ---------- -------------
Affirmative 79,941,770 79,941,727 79,949,037
Negative - - -
Abstained - - -
Withheld 3,174,241 3,174,284 3,166,974
Broker non-votes - - -
Shares without
executed
proxies
and not
present
for vote 21,450,693 21,450,693 21,450,693
----------- ----------- -----------
Shares entitled
to vote 104,566,704 104,566,704 104,566,704
=========== =========== ===========
(b) To approve the appointment of Coopers &
Lybrand L.L.P. as independent accountants for the
fiscal year 1995.
Affirmative 82,056,185
Negative 734,889
Abstained 324,419
Withheld -
Broker non-votes 518
Shares without executed
proxies and not present
for vote 21,450,693
-----------
Shares entitled to vote 104,566,704
===========
<PAGE>
PART II
OTHER INFORMATION - continued
(c) To approve the Equity and Deferred
Compensation Plan for Non-Employee Directors.
Affirmative 77,181,847
Negative 5,212,172
Abstained 479,074
Withheld -
Broker non-votes 242,918
Shares without executed
proxies and not present
for vote 21,450,693
-----------
Shares entitled to vote 104,566,704
===========
(d) To approve the Executive Variable Incentive Plan.
Affirmative 77,296,672
Negative 5,212,523
Abstained 605,998
Withheld -
Broker non-votes 818
Shares without executed
proxies and not present
for vote 21,450,693
Shares entitled to vote 104,566,704
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.
27 Financial Data Schedule
28 Awareness letter of Coopers & Lybrand L.L.P.
* Attached as page 18 to this Form 10-Q.
(b) Reports on Form 8-K:
The Company did not file any reports on Form
8-K during the quarter ended March 31, 1996.
<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/ EDWARD W. MONEYPENNY
------------------------
Edward W. Moneypenny
(Executive Vice President, Finance,
and Chief Financial Officer)
DATE: May 15, 1996
<PAGE>
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
1996
--------------
RATIO OF EARNINGS TO FIXED CHARGES:
Fixed Charges:
Consolidated interest cost and debt expense $ 29
Interest allocable to rental expense (b) 3
------
Total $ 32
======
Earnings:
Consolidated income before provision for
income taxes $ 48
Fixed charges 32
Interest capitalized (3)
Amortization of previously capitalized
interest 1
------
Total $ 78
======
Ratio of Earnings to Fixed Charges 2.44
======
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED
STOCK DIVIDEND REQUIREMENTS:
Fixed Charges:
Consolidated interest cost and debt expense $ 29
Preferred stock dividend requirements -
Interest allocable to rental expense (b) 3
------
Total $ 32
======
Earnings:
Consolidated income before provision for
income taxes $ 48
Fixed charges 32
Interest capitalized (3)
Amortization of previously capitalized interest 1
------
Total $ 78
======
Ratio of Earnings to Fixed Charges 2.44
======
(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 May 15, 1996 on our review of
the interim condensed consolidated balance sheet of Oryx Energy
Company and its Subsidiaries as of March 31, 1996, and the
related condensed consolidated statements of income and cash
flows for the three months ended March 31, 1996 and 1995,
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
Oryx Energy Company Equity and Deferred
Compensation Plan for Non-Employee Directors 333-03075
Oryx Energy Company Executive Variable
Incentive Plan 333-03089
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.
/s/ Coopers & Lybrand L.L.P.
Dallas, Texas
May 15, 1996
<PAGE>
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