<PAGE> 1
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 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 NO. 1-10053
------------------------------
ORYX ENERGY COMPANY
(Exact name of Registrant as specified in its charter)
<TABLE>
<C> <C>
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)
</TABLE>
Registrant's telephone number, including area code:
(972) 715-4000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
<TABLE>
<CAPTION>
Name of Each Exchange
Title of Each Class on Which Registered
------------------- ---------------------
<C> <C>
COMMON STOCK, $1 PAR VALUE NEW YORK STOCK EXCHANGE
8% NOTES DUE OCTOBER 15, 2003 NEW YORK STOCK EXCHANGE
8 3/8% NOTES DUE JULY 15, 2004 NEW YORK STOCK EXCHANGE
8 1/8% NOTES DUE OCTOBER 15, 2005 NEW YORK STOCK EXCHANGE
7 1/2% CONVERTIBLE SUBORDINATED NEW YORK STOCK EXCHANGE
DEBENTURES DUE MAY 15, 2014
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
MEDIUM TERM NOTES, SERIES A DUE JANUARY 4, 1999 THROUGH FEBRUARY 1, 2002
10% NOTES DUE JUNE 15, 1999
9 1/2% NOTES DUE NOVEMBER 1, 1999
10% NOTES DUE APRIL 1, 2001
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
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 aggregate market value of voting stock held by nonaffiliates of the
Registrant as of March 1, 1997, was approximately $2,106 million.
The number of shares of Common Stock, $1 par value, outstanding as of March
1, 1997, was 105,312,881.
Selected portions of the Oryx Energy Company Annual Report to Shareholders
to the fiscal year ended December 31, 1996 are incorporated by reference in
Parts I, II, and IV of this Form 10-K.
Selected portions of the Oryx Energy Company definitive Proxy Statement,
which will be filed with the Securities and Exchange Commission within 120 days
after December 31, 1996, are incorporated by reference in Part III of this Form
10-K.
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<PAGE> 2
CERTAIN ABBREVIATIONS AND OTHER MATTERS
As used herein and with the Oryx Energy Company Annual Report to
Shareholders for the Fiscal Year Ended December 31, 1996 incorporated by
reference in Parts I, II and IV of this Form 10-K, the following terms have
specific meanings:
<TABLE>
<S> <C>
m thousand bc/d barrels of condensate per day
bbl barrel mm million
mmb million barrels mb thousand barrels
mmcf million cubic feet mcf thousand cubic feet
eb equivalent barrel bcf billion cubic feet
b/d barrels per day meb thousand equivalent barrels
WTI West Texas Intermediate spot price mmeb million equivalent barrels
HH Henry Hub spot price mmcf/d million cubic feet per day
ED&A exploration, development and acquisition* mmcfe/d million cubic feet equivalent per day
FD&A finding, development and acquisition
</TABLE>
- ---------------
* ED&A outlays represent capital expenditures and cash exploration costs,
excluding capitalized interest.
Natural gas equivalents are determined under the relative energy content
method by using the ratio of 6 mcf of natural gas to 1 bbl of crude oil,
condensate or natural gas liquids.
With respect to information on the working interest in wells, drilling
locations and acreage, "net" oil and gas wells, drilling locations and acres are
determined by multiplying the whole numbers by the Company's working interest.
<PAGE> 3
PART I
ITEMS 1. AND 2. BUSINESS AND PROPERTIES
GENERAL
Oryx Energy Company (together with its consolidated subsidiaries, unless
the context otherwise requires, Company) engages in the oil and gas exploration
and production business. The Company has operations in six oil producing
countries around the world: the onshore and offshore U.S., the U.K. North Sea,
Ecuador, Kazakstan, Australia and Algeria. The Company also had producing assets
in Indonesia and Gabon which were sold in 1995. The Company's business in the
United States is conducted through Sun Energy Partners, L.P. (Partnership), of
which the Company is the Managing General Partner and owns a 98 percent
interest.
In 1995, the Company implemented a plan which refocused strategic
direction, significantly reduced debt, restored profitability and is designed to
set the Company on a course for sustained long-term growth in cash flow. The
Company reoriented its strategic direction by changing the nature of its capital
investing program. Investing has been supported by proven technology.
Exploration spending is directed toward areas of proven success. The primary
geographic focus of both exploration and development spending is the Gulf of
Mexico.
For the five years 1992 through 1996, the Company's average production
replacement rate was 101 percent at a cost of $4.86 per eb. In 1996, the Company
replaced 153 percent of its production at $4.50 per eb.
The Company determines its ED&A investing plans primarily based on the cash
flow that it expects to generate. For 1996, the Company invested $500 million
for ED&A programs. The Company plans to invest approximately $520 million for
ED&A in 1997, with the primary emphasis being the Gulf of Mexico. The Company is
basing its 1997 investing plans on oil and gas spot prices averaging $19.75 per
barrel (WTI) and $2.05 per mmbtu (HH). The Company's cash flow available for
investment will continue to be affected by prevailing oil and gas prices, costs
and volumes. In 1996, about 18 percent of the Company's total ED&A investing was
on exploration and about 82 percent on development and acquisitions. About 64
percent of total ED&A outlays were made in the U.S., and this percentage is
planned to increase to 67 percent in 1997.
PROVED RESERVES
As of December 31, 1996, the Company's estimated proved reserves were 395
mmb of liquids and 1,199 bcf of natural gas which represents an aggregate of 595
mmeb of reserves. The Company's liquids reserves were located in the United
States (52 percent), the United Kingdom (31 percent) and other foreign countries
(17 percent). The Company's natural gas reserves were located in the United
States (98 percent) and the United Kingdom (2 percent). More information on the
estimated quantities of proved oil and gas reserves, proved developed reserves,
and the Standardized Measure, are presented in the "Consolidated Financial
Statements -- Supplementary Financial and Operating Information" in the
Company's 1996 Annual Report to Shareholders. The Company files oil and gas
reserve estimates with various governmental regulatory authorities and agencies,
the variability of which does not exceed 5 percent.
ASSET SALES
During 1995, the Company generated $517 million of net proceeds from the
sale of certain assets in order to reduce debt. The U.K. North Sea Alba field
and Block 48/15a interests were sold for $270 million and $120 million
respectively. The Company also sold certain assets in the U.S. for $77 million
and all of its assets in Indonesia and Gabon for $67 million and $2 million
respectively. Asset dispositions, totaling $536 million of gross proceeds,
represented 138 million equivalent barrels of proved reserves and 43 thousand
average equivalent barrels of production per day.
OFFSHORE UNITED STATES
The Company has identified the Gulf of Mexico as the primary focus of its
growth strategy. The Company has a significant presence in the Gulf of Mexico
with an interest in 148 blocks in various stages of
2
<PAGE> 4
exploration, development and production. The Company has an interest in 39
producing platforms, 21 of which it operates. The Company also holds interests
in various offshore pipelines and facilities. In 1996, the Company achieved a 7
percent reduction in its offshore operating cost.
Exploration
As of December 31, 1996, the Company held 328 thousand net undeveloped
acres offshore, as compared to 275 thousand as of December 31, 1995. Of the 148
Gulf of Mexico blocks in which the Company owns an interest, 81 are undeveloped.
In 1996, the Company spent $22 million to acquire interests in 34 blocks.
In early 1996, the Company participated in a discovery well, Garden Banks
(GB) 216 #2, which encountered 214 net feet of pay in three zones. The well is
located approximately three miles to the northeast of the GB 260 development
project. Also in early 1996, the Company drilled a discovery well on the Brazos
A-21 Block which encountered 108 net feet of pay in three zones. The well began
producing at about 18 mmcf/d during the summer. The Company is operator of the
Block with a 51 percent interest.
As of December 31, 1996, 2 exploratory wells were being drilled. The
Company drilled 9 gross (3 net) exploratory wells offshore in 1996 and 6 gross
(3 net) in 1995. Of the wells drilled in 1996, 2 gross (1 net) wells were
successful.
Production and Development
Average daily production of crude oil and condensate offshore was 15, 16
and 10 mbbls in 1996, 1995 and 1994. Average daily production of natural gas
offshore was 189, 180 and 203 mmcf in 1996, 1995 and 1994.
The Company owns a 100 percent interest in the High Island A-576 block. In
1994, the HI A-576 #1 discovery well encountered 168 feet of net pay from the
Lower Pleistocene sands. The well is located 110 miles off the Texas coast in
290 feet of water. This development, which has been named the Sherman Project,
began production in December 1995. In 1996, the HI A-576 #2 well was tested at
24 mmcf and 2,300 barrels of condensate per day.
The Company owns a 100 percent interest in the four-block High Island 384
unit. The High Island 384 unit is located approximately 112 miles off the Texas
coast in water with an average depth of 360 feet. In 1993, the Company announced
an oil discovery in High Island 379 which encountered 179 feet of oil pay. In
the early part of 1994, the Company announced an oil and gas discovery in High
Island 385. The High Island 385 discovery encountered 80 feet of net pay. This
new development, which has been named the Patton Project, began production in
January 1995 and in September 1995 achieved the expected peak production of 20
meb per day.
Late in 1995, the Company confirmed the presence of natural gas reserves in
a previously untested area of the High Island 384 Unit. The High Island 385 #3
well encountered 158 feet of net gas pay. Two subsequent delineation wells found
the same pay interval in nearby fault blocks. In the second phase of Patton, the
Company installed the "D" platform in 360 feet of water and developed the new
gas reservoir. First production occurred in the fourth quarter of 1996 with
gross production of 35 mmcf/d. In addition, two wells were drilled and the "E"
platform installed to develop a previously discovered reservoir on the High
Island 379. These wells came on stream during the fourth quarter of 1996 at 24
mmcfe/d.
In 1995, the Company approved a plan for the development of Viosca Knoll
826 which lies 80 miles off the Alabama coast in water depths of 1,500 to 2,500
feet. This development has been named the Neptune Project. The Company operates
the four-block Viosca Knoll unit and owns a 50 percent interest. The project is
utilizing a new type of floating production facility called a spar. The spar is
a cylindrical-shaped vessel which floats in a vertical position, similar to a
buoy. Production risers have been routed through the cylinder to allow the spar
to float around them. The field will be developed in multiple phases with the
spar being moved from location to location. The spar was installed in the fourth
quarter of 1996. First production occurred in March 1997.
3
<PAGE> 5
In early 1995, the Company confirmed the presence of hydrocarbons in a
previously untested fault block on the GB 260 discovery in the Gulf of Mexico.
The GB 215 #2 well, which drilled a new fault block about two miles north of the
original discovery well on GB 260, encountered approximately 170 feet of net
pay. The GB 259 #2 well was then drilled as a side-track, and encountered over
115 feet of new pay in the same reservoir sands. This development, which has
been named the Baldpate Project, is in federal waters offshore Louisiana in
water depths of approximately 1,700 feet. In 1995, the Company entered into a
plan of development to install a compliant tower platform and processing
facility. The Company expects to begin production in 1998 with gross peak
production of 50-60 meb per day. The Company owns a 50 percent interest in the
four-block area.
As of December 31, 1996, the Company was drilling 3 gross (2 net) offshore
development wells. The Company drilled 30 gross (19 net) development wells
offshore in 1996 and 14 gross (11 net) in 1995. Of the development wells drilled
in 1996, 26 gross (17 net) were successful.
ONSHORE UNITED STATES
The onshore area continues to be a major contributor of production volumes
and cash flow with relatively modest reinvestment needs. This is important for
the funding of the Company's plans in other strategic areas. In 1995, the
Company initiated significant cost-reduction measures at its operated fields. As
a result, the Company achieved an overall 19 percent reduction in onshore U.S.
operating costs in 1996. The Company has interests in 60 major onshore fields in
five states and operates about 75 percent of its production. In addition, the
Company has increased its drilling activity to more rapidly exploit its onshore
asset portfolio.
The Company is applying 3-D technology to create opportunities in new fault
blocks and deeper pool horizons which provide new volumes and reserves. The
Company will continue to exploit its waterflood operations. The U.S. onshore
will be managed for maximum cash flow generation.
Exploration
The Company drilled no exploratory wells onshore in 1996, and at December
31, 1996, none were being drilled.
Production and Development
Average daily production of crude oil and condensate onshore was 28, 30 and
38 mb in 1996, 1995 and 1994. The decrease in 1996 crude oil and condensate
production compared to 1995 and in 1995 compared to 1994 was due primarily to
asset sales and normal declines. Average daily net production of natural gas
onshore was 302, 288 and 335 mmcf in 1996, 1995 and 1994.
Development wells drilled in 1996 and their test results include Seabreeze
#12, 21 mmcf/d and 500 bc/d; Belle Isle 3-10, 15 mmcf/d and 700 bc/d; Belle Isle
11-5, 18 mmcf/d and 600 bc/d; Belle Isle 10-4, 15 mmcf/d and 500 bc/d; Garcia
#20, 9 mmcf/d and 500 bc/d and Alabama Coushatta #7, 9 mmcf/d and 900 bc/d.
As of December 31, 1996, the Company was drilling or participating in the
drilling of 18 gross (12 net) development wells onshore. Of the 148 gross (103
net) development wells drilled onshore during 1996, 134 gross (93 net) were
successful.
UNITED KINGDOM
The U.K. North Sea provides a strong stream of earnings and cash flow with
relatively modest reinvestment needs. This is important for the funding of the
Company's plans in other strategic areas. In 1995, the Company initiated
significant cost-reduction measures at its operated fields. As a result, the
Company achieved an overall 25 percent reduction of U.K. operating costs in
1996.
Drilling activities are concentrated on infield and near-field
opportunities near existing infrastructure. In total, the Company has an
interest in 35 blocks in the North Sea.
4
<PAGE> 6
Exploration
The Company held 132 thousand net undeveloped acres in the North Sea as of
December 31, 1996, compared to 212 thousand net undeveloped acres as of December
31, 1995.
In 1996, the Company entered into an agreement to farm out approximately 50
percent of its U.K. North Sea exploration acreage. Under the terms of the
agreement, the Company will be carried on a $55 million exploration and
appraisal program over the next three to four years. Following any discovery,
the Company would fund its share of development costs.
In 1996, the Company drilled 1 successful exploratory well in the North
Sea, and at December 31, 1996, none were being drilled.
Production and Development
The Company's producing fields, set forth in the table below, are located
in the northern sector of the North Sea.
As of December 31, 1996, the Company was drilling or participating in the
drilling of 2 gross (1 net) development wells in the North Sea. All of the 14
gross (6 net) development wells drilled in the U.K. in 1996 were successful.
The Company's average daily net production of crude oil and condensate in
the United Kingdom was 56, 55 and 54 mb during 1996, 1995 and 1994. The increase
in production in 1996 was due to the acquisition of additional interests in the
Ninian, Hutton, Lyell and Murchison fields and the results of development work
at Hutton and Murchison. Average daily production of natural gas was 9, 50 and
62 mmcf during 1996, 1995 and 1994. The decrease in net daily production of
natural gas in 1996 was due to the sale of the Audrey field in 1995. The
decrease in net daily production of natural gas in 1995 was due to reduced takes
by British Gas plc and asset sales.
The following table sets forth the North Sea producing fields held at
December 31, 1996 and their net daily production:
<TABLE>
<CAPTION>
1996 NET
PERCENT DAILY PRODUCTION
PRODUCING FIELDS OIL/GAS OWNERSHIP (MEB)
---------------- ------- --------- ----------------
<S> <C> <C> <C>
Columba................................. Oil 52.5 2
Dunlin.................................. Oil 14.4 5
Hutton.................................. Oil 58.8 9
Murchison............................... Oil 68.7 12
Ninian.................................. Oil 44.9 18
Lyell................................... Oil/Gas 88.3 7
Strathspey.............................. Oil/Gas 6.5 3
</TABLE>
The Company also receives tariff income on production from several
satellite fields that produce through the Ninian facilities.
Effective July 1, 1996, the Company acquired additional interests in the
Ninian, Hutton, Lyell and Murchison fields as well as Columba and surrounding
acreage for $91 million cash. The Company was operator of the Hutton, Lyell and
Murchison fields and took over as operator of Ninian in February 1997.
In the third quarter of 1996, the Company drilled the Columba B-1 well and
encountered a total of 77 net feet of pay in three zones. Subsurface studies
have indicated two follow-up well locations which the Company expects to drill
in 1997.
Additional development wells drilled in 1996 and their test results include
Dunlin DA-16, 15,700 b/d; Murchison M-38, 13,000 b/d and Hutton H-38, 15,000
b/d.
5
<PAGE> 7
In early 1994, the Company began producing oil from the Alba field. Alba is
located on Block 16/26 in the central sector of the North Sea. The Company owned
a 15.5 percent interest in the field which it sold in 1995.
In the third quarter of 1994, the Company exchanged its interest in the
undeveloped Britannia field for additional interests in the Hutton, Lyell and
Murchison producing fields and $40.4 million in cash. This transaction increased
near-term production volumes and considerably reduced future development capital
expenditures. Effective January 9, 1995, the Company took over operatorship of
the Hutton, Lyell and Murchison fields. In late 1994, the Company completed a
development well for 20,000 gross b/d in a newly discovered extension to the
Hutton field. The well encountered in excess of 150 feet of net pay in the Brent
sandstone.
In the fourth quarter of 1994, the Company began producing gas from the
Galleon field at a net of 19 mmcf per day. Galleon is located in the southern
portion of the North Sea. The Company had a 10 percent interest, subject to
unitization, in the field which it sold in 1995.
In addition, the Company has interests in and receives tariff income from
North Sea transportation systems, terminal storage facilities and certain other
related income producing assets, including the Brent and Ninian Pipeline Systems
and the Sullom Voe Terminal in the Shetland Islands.
OTHER FOREIGN
Exploration
As of December 31, 1996, the Company held 2,704 thousand net undeveloped
acres in other foreign countries, as compared to 2,266 thousand net undeveloped
acres as of December 31, 1995.
In September 1995, the Company farmed-out 50 percent of its exploration
venture in Kazakstan in exchange for a carry on the initial exploration phase.
The Company drilled 1 successful gross exploratory well in 1995 in the Zone
of Cooperation between Australia and Indonesia. The Bayu #1 discovery well was
drilled on ZOCA 91-13 and encountered 570 gross feet of pay (353 net feet) and
flowed at a cumulative rate of 90 mmcf/d of gas and 5250 b/d of condensate from
four zones. Since then, 9 successful appraisal wells have been drilled on ZOCA
91-13 and the adjacent block with results that indicate a consistent gas-water
contact across the field and similar reservoir properties. Preliminary estimates
for recoverable reserves from the field are 3.5-4 trillion cubic feet of natural
gas and 175-200 mmb of hydrocarbon liquids (approximately 750-850 mmeb). The
field is located 185 miles off the northern coast of Australia in 240 feet of
water. The Company owns 25 percent of ZOCA 91-13.
In 1996, the Company obtained an offshore exploration permit over Area
AC95-1 in the Timor Sea region of Australia's Northwest Shelf. The permit, which
covers an area of 1,251 square miles, is located 80 miles west of ZOCA 91-13.
Water depths across the permit range between 262 and 1,640 feet. The Company has
one-third interest in the permit which covers an initial six year term.
At December 31, 1996, the Company was drilling or participating in the
drilling of 1 gross exploratory well.
Production and Development
In Ecuador, production increased in 1996 due to development work on Block 7
which contains the Gacela, Jaguar and Mono fields. The Company is conducting
geophysical work on the Yuralpa prospect in Block 21.
In 1996, production increased in Kazakstan where, during 1994, the Company
signed two oil and gas agreements with the Republic of Kazakstan. The agreements
involve both the development of a known field as well as the rights to explore a
large block in western Kazakstan. A joint venture agreement was signed for
development of the Arman Field which was discovered in the 1980's but had not
been developed. The Company jointly operates the venture and currently holds a
50 percent interest with two Kazakstani partners.
6
<PAGE> 8
The Arman Field is located on the Caspian Sea. In 1995, the first 380 thousand
net barrels of oil were produced and sold from four wells in the Arman Field.
The Company has a production sharing agreement for approximately 3 million acres
located east of the Arman Field.
In 1996, the Company entered into an agreement with Russia, Kazakstan, Oman
and seven other international energy companies to construct a pipeline system
that will run from the Tengiz field area in Kazakstan, around the Caspian Sea
through Russia to the Black Sea. The Company has a 1.75 percent interest and a
3.50 percent cost sharing interest in the pipeline.
The Company's average daily net production of crude oil and condensate from
other foreign areas was 10, 13 and 19 mb in 1996, 1995 and 1994. The average
daily production of crude oil and condensate decreased in 1995 compared to 1994,
due to the sale of Indonesian assets, partially offset by increased production
in Ecuador.
The Company drilled 12 gross (6 net) development wells, all of which were
successful, in 1996. As of December 31, 1996, the Company was in the process of
drilling or participating in the drilling of 1 gross development well.
In 1995, the Company sold all its interests in Indonesia and Gabon.
PRODUCTION
In 1996, the Company's production was concentrated primarily in the United
States and the United Kingdom. In 1996, the Company produced 48 mmeb from its
properties in the United States, 20.5 mmeb from its properties in the United
Kingdom, and 4 mmeb from its other foreign properties.
The following table sets forth the Company's average daily net production
for 1996, 1995 and 1994:
AVERAGE DAILY NET PRODUCTION
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31
------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Crude and Condensate (mb):
United States
Onshore................................................ 28 30 38
Offshore............................................... 15 16 10
--- --- ---
43 46 48
--- --- ---
U.K....................................................... 56 55 54
Other foreign............................................. 10 13 19
--- --- ---
66 68 73
--- --- ---
Processed Natural Gas Liquids (mb):
United States............................................. 7 6 6
--- --- ---
116 120 127
=== === ===
Natural Gas (mmcf):
United States
Onshore................................................ 302 288 335
Offshore............................................... 189 180 203
--- --- ---
491 468 538
U.K....................................................... 9 50 62
--- --- ---
500 518 600
=== === ===
</TABLE>
7
<PAGE> 9
ACREAGE, WELLS AND PER UNIT DATA
The following table sets forth the Company's undeveloped and developed oil
and gas acreage (in thousands) held at December 31, 1996 and 1995:
UNDEVELOPED ACREAGE
<TABLE>
<CAPTION>
GROSS NET
-------------- --------------
1996 1995 1996 1995
----- ----- ----- -----
<S> <C> <C> <C> <C>
United States
Onshore........................................... 916 983 506 533
Offshore.......................................... 472 380 328 275
----- ----- ----- -----
1,388 1,363 834 808
U.K................................................. 446 605 132 212
Other Foreign....................................... 6,253 5,479 2,704 2,266
----- ----- ----- -----
8,087 7,447 3,670 3,286
===== ===== ===== =====
</TABLE>
DEVELOPED ACREAGE
<TABLE>
<CAPTION>
GROSS NET
-------------- --------------
1996 1995 1996 1995
----- ----- ----- -----
<S> <C> <C> <C> <C>
United States
Onshore........................................... 987 982 558 551
Offshore.......................................... 222 231 104 102
----- ----- ----- -----
1,209 1,213 662 653
U.K................................................. 69 72 46 36
Other Foreign....................................... 149 58 75 29
----- ----- ----- -----
1,427 1,343 783 718
===== ===== ===== =====
</TABLE>
8
<PAGE> 10
The following table sets forth the Company's exploratory and development
oil and gas wells drilled during 1996, 1995 and 1994:
EXPLORATORY WELLS DRILLED
<TABLE>
<CAPTION>
GROSS NET
-------------------- --------------------
1996 1995 1994 1996 1995 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Oil
United States
Onshore.............................. - - - - - -
Offshore............................. - 1 - - 1 -
-- -- -- -- -- --
- 1 - - 1 -
U.K..................................... - - - - - -
Other foreign........................... - - 3 - - -
-- -- -- -- -- --
- 1 3 - 1 -
-- -- -- -- -- --
Gas
United States
Onshore.............................. - - 1 - - -
Offshore............................. 2 1 1 1 - 1
-- -- -- -- -- --
2 1 2 1 - 1
U.K..................................... 1 - - - - -
Other Foreign........................... 3 1 1 1 - 1
-- -- -- -- -- --
6 2 3 2 - 2
-- -- -- -- -- --
Dry
United States
Onshore.............................. - - - - - -
Offshore............................. 7 4 3 2 2 2
-- -- -- -- -- --
7 4 3 2 2 2
U.K..................................... - - 1 - - -
Other foreign........................... - - 14 - - 3
-- -- -- -- -- --
7 4 18 2 2 5
-- -- -- -- -- --
Total.............................. 13 7 24 4 3 7
== == == == == ==
</TABLE>
9
<PAGE> 11
DEVELOPMENT WELLS DRILLED
<TABLE>
<CAPTION>
GROSS NET
-------------------- --------------------
1996 1995 1994 1996 1995 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Oil
United States
Onshore.............................. 62 56 27 43 41 11
Offshore............................. 12 7 5 9 7 2
--- --- --- --- --- --
74 63 32 52 48 13
U.K..................................... 14 7 20 6 2 4
Other foreign........................... 12 14 35 6 2 4
--- --- --- --- --- --
100 84 87 64 52 21
--- --- --- --- --- --
Gas
United States
Onshore.............................. 72 65 49 50 39 23
Offshore............................. 14 7 9 8 4 3
--- --- --- --- --- --
86 72 58 58 43 26
U.K..................................... -- 1 2 -- -- --
--- --- --- --- --- --
86 73 60 58 43 26
--- --- --- --- --- --
Dry
United States
Onshore.............................. 14 11 4 10 9 4
Offshore............................. 4 -- 2 2 -- 1
--- --- --- --- --- --
18 11 6 12 9 5
U.K..................................... -- -- -- -- -- --
Other foreign........................... -- -- -- -- -- --
--- --- --- --- --- --
18 11 6 12 9 5
--- --- --- --- --- --
Total.............................. 204 168 153 134 104 52
=== === === === === ==
</TABLE>
The following table sets forth the Company's gross and net producing oil
and gas wells at December 31, 1996:
PRODUCING OIL AND GAS WELLS
<TABLE>
<CAPTION>
GROSS* NET
------------ ------------
OIL GAS OIL GAS
----- --- ----- ---
<S> <C> <C> <C> <C>
United States
Onshore.............................................. 2,855 830 1,587 512
Offshore............................................. 88 165 48 81
----- --- ----- ---
2,943 995 1,635 593
U.K.................................................... 130 4 56 --
Other Foreign.......................................... 55 -- 20 --
----- --- ----- ---
Total............................................. 3,128 999 1,711 593
===== === ===== ===
</TABLE>
- ------------------------------
* Gross producing wells include 132 multiple completion wells (more than one
formation producing into the same well bore).
10
<PAGE> 12
The following table sets forth the Company's average revenues and
production costs per unit of oil and gas production for 1996, 1995 and 1994:
AVERAGE PER UNIT REVENUES AND PRODUCTION COSTS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
--------------------------
1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
Revenues:
Crude and condensate (per bbl)
U.S............................................... $20.43 $16.44 $14.69
U.K............................................... $19.88 $16.73 $15.44
Other foreign..................................... $13.89 $14.51 $14.89
Worldwide......................................... $19.56 $16.35 $15.06
Natural Gas (per mcf)
U.S............................................... $ 2.14 $ 1.73 $ 1.87
U.K............................................... $ 2.05 $ 2.20 $ 2.15
Worldwide......................................... $ 2.14 $ 1.77 $ 1.90
</TABLE>
Average production cost per unit of oil and gas production (per eb):*
<TABLE>
<S> <C> <C> <C>
U.S.
Operating costs................................... $ 3.14 $ 3.64 $ 3.96
Production taxes.................................. .87 .72 .89
------ ------ ------
Total production costs............................ $ 4.01 $ 4.36 $ 4.85
U.K.
Operating costs................................... $ 4.69 $ 6.45 $ 6.13
Production taxes.................................. 5.38 2.12 1.17
------ ------ ------
Total production costs............................ $10.07 $ 8.57 $ 7.30
Other foreign
Operating costs................................... $ 3.08 $ 3.53 $ 4.43
Production taxes.................................. 3.27 4.95 5.71
------ ------ ------
Total production costs............................ $ 6.35 $ 8.48 $10.14
Worldwide
Operating costs................................... $ 3.40 $ 4.52 $ 4.65
Production taxes.................................. 2.29 1.43 1.39
------ ------ ------
Total production costs............................ $ 5.69 $ 5.95 $ 6.04
</TABLE>
- ------------------------------
* Excludes natural gas liquids production.
ACQUISITIONS AND DIVESTMENTS
Assets are managed on a portfolio basis. The Company will continue to buy
and sell assets with the intention of upgrading its asset base.
RECOVERY METHODS
During 1996, the Company obtained 61 and 39 percent of its U.S. crude
production from primary and secondary recovery methods. This compares to 62 and
37 percent, plus 1 percent from tertiary, of its crude oil production in 1995.
At December 31, 1996, the Company was participating in no major tertiary oil
recovery programs.
The terms "secondary recovery" and "tertiary recovery" relate to those
methods used to increase the quantity of crude oil and condensate and natural
gas that can be recovered in excess of the quantity recoverable using the
primary energy found in a reservoir. Secondary recovery methods include pressure
maintenance by waterflooding or natural gas injection.
11
<PAGE> 13
MARKETING OF OIL AND GAS
Distribution
In the U.S., crude oil, condensate and natural gas are distributed through
pipelines and/or trucks to traders, end users, gatherers and transportation
companies and in foreign locations by tankers and/or pipelines to traders and
end users. Worldwide, sufficient distribution systems exist and are readily
available in the areas of the Company's production to enable the Company to
effectively market its oil and gas. In some instances, the Company owns an
interest in these systems.
Crude and Condensate
During 1996, sales to Morgan Stanley Capital Groups, Inc., J. Aron &
Company and Amoco Production Co. totaled approximately 16, 14 and 12 percent of
the Company's sales of crude oil and condensate. No other customer purchased
more than 10 percent of the Company's sales of crude oil and condensate.
Since most of the Company's crude and condensate is produced in areas where
there are other buyers offering to purchase at market prices, the Company
believes that the loss of any major purchaser would not have a material adverse
effect on the Company's business. In 1996, the ten largest customers, including
Morgan Stanley Capital Groups, Inc., J. Aron & Company and Amoco Production Co.,
accounted for approximately 77 percent of such sales.
Currently, approximately 79 percent of domestic sales are made pursuant to
arrangements that are cancelable upon 30 days' written notice by the Company or
the purchaser, with substantially all of the remainder of the domestic
production being sold pursuant to contracts of varying terms of up to eight
years in length.
The Company markets its foreign crude oil production, which is sold under
short-term contracts, on a cargo/lot basis.
Natural Gas
During the fourth quarter of 1995, the Company, Apache Corporation and
Parker & Parsley Petroleum Company formed Producers Energy Marketing, LLC
(ProEnergy). ProEnergy purchases the majority of its members' U.S. gas
production at index prices. During 1996, sales to ProEnergy totaled
approximately 50 percent of the Company's sales of natural gas. No other
customer purchased more than 10 percent of the Company's sales of natural gas.
Natural gas production which was not dedicated to third party purchasers under
the terms of existing contracts as of the date of the formation of ProEnergy
became dedicated to ProEnergy under the terms of the Member Gas Purchase
Agreement as of April 1, 1996. As of December 31, 1996 approximately 27% of the
Company's natural gas was contracted to various end users of natural gas on a
term basis. The duration of these agreements ranges from three months to five
years.
Hedging
Because of the volatility of oil and gas prices, the Company periodically
enters into crude oil and natural gas hedging activities.
REGULATION
General
The oil and gas industry is subject to regulation by the public policies of
national, state and local governments relating to such matters as the award of
exploration and production interests, the imposition of specific drilling
obligations, environmental protection controls, control over the development and
abandonment of a field (including restrictions on production and abandonment of
production facilities) and, in some cases, possible nationalization,
expropriation, regulatory taking, cancellation or frustration of contract
rights. The industry is also subject to the payment of royalties and taxes,
which tend to be high compared to those levied
12
<PAGE> 14
on other commercial activities. The Company cannot predict the impact of future
regulatory and taxation initiatives.
Natural Gas
The natural gas industry in the United States remains under federal
regulation pursuant to the Natural Gas Act and the Natural Gas Policy Act.
Environmental Matters
The Company is subject to, and makes every effort to comply with, various
environmental quality control regulations of national, state and local
governments. Although environmental requirements can have a substantial impact
upon the energy industry, generally these requirements do not appear to affect
the Company any differently or to any greater or lesser extent than other
exploration and production companies.
The Company has been named as a potentially responsible party (PRP) at four
sites pursuant to the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended. At two of these sites, the Company has been
named as a de minimis party and therefore expects its liability to be small. At
a third site, the Company is reviewing its options and anticipates that it will
participate in steering committee activities with the Environmental Protection
Agency (EPA). At the fourth and largest site, the Operating Industries, Inc.
site in California, the Company has participated in a steering committee
consisting of 139 companies. The steering committee and other PRP's previously
entered into two partial consent decrees with the EPA providing for remedial
actions which have been or are to be completed. The steering committee has
successfully negotiated a third partial consent decree which provides for the
following remedial actions: a clay cover, methane capturing wells and leachate
destruction facilities. The remaining work at the site involves groundwater
evaluation and long-term operation and maintenance.
Based on the facts outlined above and the Company's ongoing analyses of the
actions where it has been identified as a PRP, the Company believes that it has
accrued sufficient reserves to absorb the ultimate costs of such actions and
that such costs will not have a material impact on the Company's liquidity,
capital resources or financial condition. While liability at superfund sites is
typically joint and several, the Company has no reason to believe that defaults
by other PRPs will result in the anticipated liability of the Company being
materially larger than expected.
COMPETITION
The oil and gas industry is highly competitive. Integrated companies,
independent companies and individual producers and operators are active bidders
for desirable oil and gas properties, as well as for the equipment and labor
required to operate and develop such properties. Although several of these
competitors have financial resources substantially greater than those of the
Company, management believes that the Company is in a position to compete
effectively.
The availability of a ready market for the Company's oil and gas production
depends on numerous factors beyond its control, including the level of prices
and consumer demand, the extent of worldwide oil and gas production, the cost
and availability of alternative fuels, the cost and proximity of pipelines and
other transportation facilities, regulation by national and local authorities
and the cost of compliance with applicable environmental regulations.
TECHNOLOGY
The Company's exploration, development and production activities depend
upon the use of applied technology. In support of this, the Company has 24
engineers, geoscientists, technicians and support personnel focusing on the
technology used in the exploration for, and development and production of,
energy resources. The Company's expenditures on technology activities, including
employee-related costs, were $8 million, $8 million and $11 million for the
years 1996, 1995 and 1994, respectively.
13
<PAGE> 15
THE PARTNERSHIP
Since December 1, 1985, the Company has functioned as the managing general
partner for, and has conducted its business operations in the United States
principally through the Partnership, a Delaware limited partnership. As of
December 31, 1996, the Company had a 98 percent interest in the Partnership. The
remaining 2 percent partnership interest is a limited partnership interest and
is held by public unitholders in the form of depositary units. There were
7,543,100 depositary units outstanding at December 31, 1996.
The Partnership operates through Sun Operating Limited Partnership, which
is a Delaware limited partnership, and several other operating partnerships.
Certain conflicts of interest may arise as a result of the relationships
between the Company and the Partnership. The directors and officers of the
Company have fiduciary duties to manage the Company in the best interest of its
stockholders. The Company, as managing general partner of the Partnership, has a
fiduciary duty to manage the Partnership in a manner that is fair to the public
unitholders. The duty of the directors of the Company to its stockholders may
therefore come into conflict with the duties of the Company to the public
unitholders. The Partnership may sell limited partnership units to the Company
for the purpose of funding the Partnership's property acquisition, exploration
and development cash requirements.
The Audit Committee of the Board of Directors of the Company (Audit
Committee), none of whose members is affiliated with the Company except as
Company directors or stockholders or as holders of units, reviews policies and
procedures developed by the Company for dealing with various matters as to which
a conflict of interest may arise. The Audit Committee also monitors the
application of such policies and procedures.
EMPLOYEES
At December 31, 1996, the number of full-time active employees of the
Company was 976.
ITEM 3. LEGAL PROCEEDINGS
The historical method used by the oil industry in the United States to
establish the price at which crude oil is bought and sold is being challenged.
Buyers and sellers have traditionally determined the market price of crude oil
by reference to "posted prices", which are prices published by certain crude oil
buyers such as crude oil refiners and transporters as the price at which they
are willing to buy. A number of suits have been brought alleging that posted
prices have been set consistently below market value, and that, as a result,
royalties have been underpaid.
The Company was named as a defendant in such a case filed in state court in
Starr County, Texas in April, 1995 and a co-defendant in cases filed in state
courts in Lee County, Texas and in Louisiana and in federal court in Alabama.
All of these lawsuits seek certification as class actions on behalf of royalty
owners in specific geographic areas, except the Alabama case, which seeks
certification of a nationwide class of royalty owners. The Alabama case also
alleges that the co-defendants have conspired and acted in concert to establish
the price of crude oil in violation of antitrust statutes. These suits are
similar to those brought in Texas by the Texas General Land Office, and in
Texas, New Mexico, Oklahoma and Florida by private royalty owners against major
crude oil producers. Suits are also being brought by natural gas royalty
interest owners regarding royalty valuation and deductions of post-production
costs from royalty.
In addition to these suits, the Minerals Management Service ("MMS") of the
United States Department of the Interior is challenging the prices on which
royalties were assessed. The MMS has claimed that a number of crude oil
producers including the Company underpaid royalties owed the federal government
on California crude oil production from 1980 to 1988 and has sent Orders to Pay
to a number of producers including the Company. The MMS is also auditing royalty
valuation in other parts of the country. The Department of Justice is
independently investigating whether oil and gas producers have violated the
False Claims Act in connection with royalty payments on production from federal
and Indian lands.
14
<PAGE> 16
While a number of claims and suits against the Company and other crude oil
and natural gas producers have already been brought by a variety of governmental
and private plaintiffs in a number of jurisdictions, the fact that these suits
challenge practices common to the industry suggests that additional lawsuits
against the Company may be filed. The suits filed to date, to include the
actions in which the Company is a party, are in the preliminary stage. The
Company believes it has meritorious defenses and intends to defend these claims
and lawsuits vigorously.
The Company is involved in a number of other legal and administrative
proceedings arising in the ordinary course of its oil and gas business. Although
the ultimate outcome of these proceedings cannot be ascertained at this time, it
is reasonably possible that some of the proceedings could be resolved
unfavorably to the Company. Management of the Company believes that any
liabilities which may arise out of legal claims or proceedings would not be
material in relation to its financial position at December 31, 1996. The Company
intends to maintain liability and other insurance of the type customary in the
oil and gas business with such coverage limits as the Company deems prudent.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
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.
<TABLE>
<CAPTION>
ROBERT L. PAUL R. IAN L.
KEISER SEEGERS WHITE-THOMSON
----------- ----------- -------------
<S> <C> <C> <C>
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
=========== =========== ===========
</TABLE>
(b) To approve the appointment of Coopers & Lybrand L.L.P. as
independent accountants for the fiscal year 1996.
<TABLE>
<S> <C>
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
===========
</TABLE>
15
<PAGE> 17
(c) To approve the Equity and Deferred Compensation Plan for
Non-Employee Directors.
<TABLE>
<S> <C>
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
===========
</TABLE>
(d) To approve the Executive Variable Incentive Plan.
<TABLE>
<S> <C>
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
===========
</TABLE>
EXECUTIVE OFFICERS
The following table sets forth information as to the Company's executive
officers. All officers of the Company hold their offices at the pleasure of the
Board of Directors.
<TABLE>
<CAPTION>
NAME, AGE AND BUSINESS EXPERIENCE
POSITION WITH THE COMPANY DURING PAST FIVE YEARS
------------------------- ----------------------
<S> <C>
Jerry W. Box, 58 Mr. Box has been in this position since December 1995. From
Executive Vice President, December 1994 through November 1995 he served as
Chief Operating Officer and Director Executive Vice President, Exploration and Production.
From January 1992 through November 1994, he served as
Senior Vice President, Exploration and Production of the
Company.
Sherri T. Durst, 47 Ms. Durst has been in this position since December 1993.
General Auditor From February 1990 to December 1993, she served as
Manager, Financial Processes.
Steven J. Flowers, 36 Mr. Flowers assumed this position on November 8, 1996. He
Treasurer joined the Company in August 1995 as Assistant Treasurer.
Prior to joining Oryx, Mr. Flowers held various financial
and planning positions, including Assistant Treasurer at
Maxus Energy Corporation from 1988 to 1995.
Frances G. Heartwell, 50 Ms. Heartwell assumed this position in December 1995. From
Vice President, Human Resources and February 1993 to December 1995, she served the Company as
Administration Director, Human Resources. From December 1991 to February
1993, Ms. Heartwell was Director of Employee and
Community Relations.
Robert L. Keiser, 54 Mr. Keiser assumed this position in December 1994. From
Chairman of the Board, January 1992 through November 1994, he was President and
Chief Executive Officer, and President Chief Operating Officer of the Company.
</TABLE>
16
<PAGE> 18
<TABLE>
<CAPTION>
NAME, AGE AND BUSINESS EXPERIENCE
POSITION WITH THE COMPANY DURING PAST FIVE YEARS
------------------------- ----------------------
<S> <C>
William C. Lemmer, 52 Mr. Lemmer assumed this position in February 1995. From
Vice President, General Counsel and June 1994 until February 1995, he served as Vice
Secretary President and General Counsel to the Company. For the
five previous years, he was Chief Counsel, Corporate of
the Company.
Edward W. Moneypenny, 55 Mr. Moneypenny has been in this position since December
Executive Vice President, Finance, 1994. From January 1992 through November 1994, he was
Chief Financial Officer, and Director Senior Vice President, Finance and Chief Financial
Officer of the Company.
Robert L. Thompson, 50 Mr. Thompson assumed this position in February 1995. From
Comptroller and February 1993 through January 1995, he served the Company
Corporate Planning Director as Director of Business Planning and Acquisitions. From
January 1992 through January 1993, he was Director of
Planning and Analysis.
</TABLE>
PART II
ITEM 5. MARKET FOR ORYX ENERGY COMPANY COMMON STOCK AND
RELATED SECURITY HOLDER MATTERS
Market for Oryx Energy Company Common Stock and Related Security Holder
Matters on page 47 of the Company's 1996 Annual Report to Shareholders is
incorporated herein by reference. The market exchange on which the Company's
stock is traded is listed on the cover page of this Form 10-K Annual Report.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item is incorporated herein by reference
to page 17 of the Company's 1996 Annual Report to Shareholders.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The information required by this item is incorporated herein by reference
to pages 13-16 of the Company's 1996 Annual Report to Shareholders.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following information in the Company's 1996 Annual Report to
Shareholders is incorporated herein by reference: the Consolidated Financial
Statements on pages 18-21; the Notes to Consolidated Financial Statements on
pages 22-40; the Report of Independent Accountants on page 41; and the
Supplementary Financial and Operating Information (Unaudited) on pages 42-46.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
17
<PAGE> 19
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information on directors required by this Item is incorporated herein
by reference to the section entitled "Election of Directors" on pages 3-5 of the
Company's definitive Proxy Statement dated March 26, 1997.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is incorporated herein by reference
to the section entitled "Executive Compensation" on pages 9-17 of the Company's
definitive Proxy Statement dated March 26, 1997.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item is incorporated herein by reference
to the sections entitled "Security Ownership of Certain Beneficial Owners" on
page 2 and "Security Ownership of Management" on page 8 of the Company's
definitive Proxy Statement dated March 26, 1997.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as a part of this report:
1. Consolidated Financial Statements: The information in the Company's
1996 Annual Report to Shareholders as described in Item 8 is incorporated
herein by reference.
Other schedules and separate financial statements of unconsolidated
subsidiaries are omitted because the information is shown elsewhere in this
report, is not required or is not applicable.
2. Exhibits:
<TABLE>
<CAPTION>
<C> <C> <S>
*3.1 -- Restated Certificate of Incorporation of the Registrant,
as currently in effect
**3.2 -- Amended and Restated Bylaws of the Registrant, as
currently in effect
***4.1 -- Form of Common Stock of the Registrant
****4.2 -- Rights Agreement dated as of September 11, 1990, between
the Registrant and Manufacturers Hanover Trust Company
+4.3 -- Indenture dated as of September 11, 1990, between the
Registrant and Manufacturers Hanover Trust Company
++4.4 -- First Supplemental Indenture by and between The Bank of
New York and the Registrant
+++10.1 -- Second Amended and Restated Agreement of Limited
Partnership of Sun Energy Partners, L.P.
+++10.2 -- Agreement of Limited Partnership of Sun Operating Limited
Partnership, as amended
10.3 + -- Registrant's Equity and Deferred Compensation Plan for
Non-Employee Directors
10.4 + -- Registrant's Executive Variable Incentive Plan
</TABLE>
18
<PAGE> 20
<TABLE>
<CAPTION>
<C> <C> <S>
++++10.5 -- Registrant's Pension Restoration Plan
++10.5a -- Amendment to Registrant's Pension Restoration Plan
++++10.6 + -- Registrant's Executive Retirement Plan As Amended and
Restated as of January 1, 1995
++++10.6a + -- Amendment No. One to Registrant's Executive Retirement
Plan As Amended and Restated Effective January 1, 1995
10.6b + -- Amendment No. Two to Registrant's Executive Retirement
Plan As Amended and Restated Effective January 1, 1995
++++++10.7 + -- Registrant's Executive Long-Term Incentive Plan
++++++++10.7a + -- Amendment to Registrant's Executive Long-Term Incentive
Plan, dated February 1, 1989
++++++++10.7b + -- Amendment to Registrant's Executive Long-Term Incentive
Plan, dated February 6, 1989
m10.8 + -- Registrant's 1992 Long-Term Incentive Plan As Amended
Through December 2, 1993 and Restated
10.8a + -- Amendment to Registrant's 1992 Long-Term Incentive Plan
As Amended Through December 2, 1993 and Restated
Effective as of September 4, 1996
++++10.9 + -- Registrant's Savings Restoration Plan As Amended and
Restated as of September 6, 1995
++++10.10 + -- Registrant's Executive Deferred Compensation Plan as
Amended and Restated as of September 6, 1995
++++10.11 + -- Registrant's Deferred Compensation and Benefits Trust
++++10.12 -- Registrant's Special Employee Severance Plan
m10.13 + -- Registrant's Amended and Restated Special Executive
Severance Plan
mmm10.15 -- Oryx Energy Company $500,000,000 Revolving Credit
Agreement Dated as of June 1, 1995
mmm10.16 -- Sale and Purchase Agreement by and between Novus
Petroleum Limited and the Registrant dated February 17,
1995
mmm10.17 -- Sale and Purchase Agreement by and between Union Texas
Petroleum Limited and the Registrant dated May 31, 1995
mmm10.18 -- Sale and Purchase Agreement by and between Powergen North
Sea Limited and the Registrant dated June 14, 1995
12 -- Computation of Consolidated Ratio of Earnings to Fixed
Charges and Earnings to Fixed Charges and Preferred
Stock Dividend Requirements
13 -- Oryx Energy Company 1996 Annual Report to Shareholders
m18 -- Accountant's Preferability Letter
mmmm19 -- Distribution Agreement dated August 28, 1991 relating to
Medium-Term Notes, Series A
++21 -- Subsidiaries
23 -- Consent of Coopers & Lybrand L.L.P.
24 -- Power of Attorney
27 -- Financial Data Schedule
</TABLE>
19
<PAGE> 21
- ------------------------------
<TABLE>
<CAPTION>
<C> <S>
* Incorporated by reference to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1992
(File No. 1-10053) filed with the Commission on May 15,
1992.
** Incorporated by reference to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1990
(File No. 1-10053) filed with the Commission on November 14,
1990.
*** Incorporated by reference to the Registrant's Form 8-K (File
No. 1-10053) filed with the Commission on September 25,
1990.
**** Incorporated by reference to the Registrant's Registration
Statement on Form 8-A (File No. 1-10053) filed with the
Commission on September 19, 1990.
+ Incorporated by reference to the Registrant's Registration
Statement on Form S-1 (File No. 33-24214) filed with the
Commission on September 8, 1988.
++ Incorporated by reference to the Registrant's Amendment No.
2 on Form S-3 (File No. 33-33361) filed with the Commission
on June 29, 1990.
+++ Incorporated by reference to the Form SE of Sun Energy
Partners, L.P. filed with the Commission on March 20, 1986.
+ Management contracts or compensatory plan or arrangement
required to be filed as an exhibit hereto.
++++ Incorporated by reference to the Registrant's Registration
Statement on Form S-1 (File No. 33-27723) filed with the
Commission on March 22, 1989.
++ Incorporated by reference to the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1991
(File No. 1-10053) filed with the Commission on March 19,
1992.
++++ Incorporated by reference to the registrant's Annual report
on Form 10-K for the fiscal year ended December 31, 1995
(File no. 1-10053) filed with the Commission on March 29,
1996.
++++++ Incorporated by reference to the Registrant's Registration
Statement on Form S-1 (File No. 33-24214) filed with the
Commission on September 8, 1988.
++++++++ Incorporated by reference to the Registrant's Registration
Statement on Form S-1 (File No. 33-33361) filed with the
Commission on February 6, 1990.
m Incorporated by reference to the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1994
(File No. 1-10053) filed with the Commission on March 23,
1995.
mm Incorporated by reference to the Registrant's Form 8-K (File
No. 1-10053) filed with the Commission on December 26, 1989.
mmm Incorporated by reference to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1995
(File No. 1-10053) filed with the Commission on August 9,
1995.
mmmm Incorporated by reference to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1991
(File No. 1-10053) filed with the Commission on November 14,
1991.
</TABLE>
(b) Reports on Form 8-K:
The Company did not file any reports on Form 8-K during the year ended
December 31, 1996.
20
<PAGE> 22
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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,
Chief Financial Officer, and
Date: March 21, 1997 Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
ROBERT L. KEISER* Chairman of the Board, President, )
- ----------------------------------------------------- and Chief Executive Officer )
Robert L. Keiser (principal executive officer) )
)
/s/ EDWARD W. MONEYPENNY Executive Vice President, Finance, )
- ----------------------------------------------------- Chief Financial Officer )
Edward W. Moneypenny (principal financial officer), )
and Director )
)
ROBERT L. THOMPSON* Comptroller and Corporate Planning )
- ----------------------------------------------------- Director (principal accounting )
Robert L. Thompson officer) )
)
JERRY W. BOX* Executive Vice President, Chief )
- ----------------------------------------------------- Operating Officer and Director )
Jerry W. Box )
)
WILLIAM E. BRADFORD* Director )
- ----------------------------------------------------- )
William E. Bradford )
)
SYLVIA A. EARLE* Director ) March 21, 1997
- ----------------------------------------------------- )
Sylvia A. Earle )
)
DAVID C. GENEVER-WATLING* Director )
- ----------------------------------------------------- )
David C. Genever-Watling )
)
ROBERT B. GILL * Director )
- ----------------------------------------------------- )
Robert B. Gill )
)
DAVID S. HOLLINGSWORTH* Director )
- ----------------------------------------------------- )
David S. Hollingsworth )
)
CHARLES H. PISTOR, JR.* Director )
- ----------------------------------------------------- )
Charles H. Pistor, Jr. )
)
PAUL R. SEEGERS* Director )
- ----------------------------------------------------- )
Paul R. Seegers )
)
IAN L. WHITE-THOMSON* Director )
- ----------------------------------------------------- )
Ian L. White-Thomson )
)
*By: /s/ EDWARD W. MONEYPENNY )
------------------------------------------------ )
Edward W. Moneypenny )
Attorney-in-Fact )
)
</TABLE>
- ------------------------------
* A Power of Attorney authorizing Robert L. Keiser and Edward W. Moneypenny, and
each of them, to sign this Form 10-K Annual Report on behalf of the directors,
constituting a majority of the Board of Directors, and certain officers of
Oryx Energy Company, is being filed with the Securities and Exchange
Commission.
21
<PAGE> 23
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description
Number
------- -----------
<S> <C>
*3.1 -- Restated Certificate of Incorporation of the Registrant,
as currently in effect
**3.2 -- Amended and Restated Bylaws of the Registrant, as
currently in effect
***4.1 -- Form of Common Stock of the Registrant
****4.2 -- Rights Agreement dated as of September 11, 1990, between
the Registrant and Manufacturers Hanover Trust Company
+4.3 -- Indenture dated as of September 11, 1990, between the
Registrant and Manufacturers Hanover Trust Company
++4.4 -- First Supplemental Indenture by and between The Bank of
New York and the Registrant
+++10.1 -- Second Amended and Restated Agreement of Limited
Partnership of Sun Energy Partners, L.P.
+++10.2 -- Agreement of Limited Partnership of Sun Operating Limited
Partnership, as amended
10.3 + -- Registrant's Equity and Deferred Compensation Plan for
Non-Employee Directors
10.4 + -- Registrant's Executive Variable Incentive Plan
</TABLE>
<PAGE> 24
<TABLE>
<S> <C> <C>
++++10.5 -- Registrant's Pension Restoration Plan
++10.5a -- Amendment to Registrant's Pension Restoration Plan
++++10.6 + -- Registrant's Executive Retirement Plan As Amended and
Restated as of January 1, 1995
++++10.6a + -- Amendment No. One to Registrant's Executive Retirement
Plan As Amended and Restated Effective January 1, 1995
10.6b + -- Amendment No. Two to Registrant's Executive Retirement
Plan As Amended and Restated Effective January 1, 1995
++++++10.7 + -- Registrant's Executive Long-Term Incentive Plan
++++++++10.7a + -- Amendment to Registrant's Executive Long-Term Incentive
Plan, dated February 1, 1989
++++++++10.7b + -- Amendment to Registrant's Executive Long-Term Incentive
Plan, dated February 6, 1989
m10.8 + -- Registrant's 1992 Long-Term Incentive Plan As Amended
Through December 2, 1993 and Restated
10.8a + -- Amendment to Registrant's 1992 Long-Term Incentive Plan
As Amended Through December 2, 1993 and Restated
Effective as of September 4, 1996
++++10.9 + -- Registrant's Savings Restoration Plan As Amended and
Restated as of September 6, 1995
++++10.10 + -- Registrant's Executive Deferred Compensation Plan as
Amended and Restated as of September 6, 1995
++++10.11 + -- Registrant's Deferred Compensation and Benefits Trust
++++10.12 -- Registrant's Special Employee Severance Plan
m10.13 + -- Registrant's Amended and Restated Special Executive
Severance Plan
mmm10.15 -- Oryx Energy Company $500,000,000 Revolving Credit
Agreement Dated as of June 1, 1995
mmm10.16 -- Sale and Purchase Agreement by and between Novus
Petroleum Limited and the Registrant dated February 17,
1995
mmm10.17 -- Sale and Purchase Agreement by and between Union Texas
Petroleum Limited and the Registrant dated May 31, 1995
mmm10.18 -- Sale and Purchase Agreement by and between Powergen North
Sea Limited and the Registrant dated June 14, 1995
12 -- Computation of Consolidated Ratio of Earnings to Fixed
Charges and Earnings to Fixed Charges and Preferred
Stock Dividend Requirements
13 -- Oryx Energy Company 1996 Annual Report to Shareholders
m18 -- Accountant's Preferability Letter
mmmm19 -- Distribution Agreement dated August 28, 1991 relating to
Medium-Term Notes, Series A
++21 -- Subsidiaries
23 -- Consent of Coopers & Lybrand L.L.P.
24 -- Power of Attorney
27 -- Financial Data Schedule
</TABLE>
<PAGE> 25
- ------------------------------
* Incorporated by reference to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1992
(File No. 1-10053) filed with the Commission on May 15,
1992.
** Incorporated by reference to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1990
(File No. 1-10053) filed with the Commission on November 14,
1990.
*** Incorporated by reference to the Registrant's Form 8-K (File
No. 1-10053) filed with the Commission on September 25,
1990.
**** Incorporated by reference to the Registrant's Registration
Statement on Form 8-A (File No. 1-10053) filed with the
Commission on September 19, 1990.
+ Incorporated by reference to the Registrant's Registration
Statement on Form S-1 (File No. 33-24214) filed with the
Commission on September 8, 1988.
++ Incorporated by reference to the Registrant's Amendment No.
2 on Form S-3 (File No. 33-33361) filed with the Commission
on June 29, 1990.
+++ Incorporated by reference to the Form SE of Sun Energy
Partners, L.P. filed with the Commission on March 20, 1986.
+ Management contracts or compensatory plan or arrangement
required to be filed as an exhibit hereto.
++++ Incorporated by reference to the Registrant's Registration
Statement on Form S-1 (File No. 33-27723) filed with the
Commission on March 22, 1989.
++ Incorporated by reference to the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1991
(File No. 1-10053) filed with the Commission on March 19,
1992.
++++ Incorporated by reference to the registrant's Annual report
on Form 10-K for the fiscal year ended December 31, 1995
(File no. 1-10053) filed with the Commission on March 29,
1996.
++++++ Incorporated by reference to the Registrant's Registration
Statement on Form S-1 (File No. 33-24214) filed with the
Commission on September 8, 1988.
++++++++ Incorporated by reference to the Registrant's Registration
Statement on Form S-1 (File No. 33-33361) filed with the
Commission on February 6, 1990.
m Incorporated by reference to the Registrant's Annual Report
on Form 10-K for the fiscal year ended December 31, 1994
(File No. 1-10053) filed with the Commission on March 23,
1995.
mm Incorporated by reference to the Registrant's Form 8-K (File
No. 1-10053) filed with the Commission on December 26, 1989.
mmm Incorporated by reference to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1995
(File No. 1-10053) filed with the Commission on August 9,
1995.
mmmm Incorporated by reference to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1991
(File No. 1-10053) filed with the Commission on November 14,
1991.
<PAGE> 1
EXHIBIT 10.3
ORYX ENERGY COMPANY
EQUITY AND DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
Effective as of May 2, 1996
<PAGE> 2
ORYX ENERGY COMPANY
EQUITY AND DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
SECTION 1. ESTABLISHMENT AND PURPOSE. Oryx Energy Company, a
Delaware corporation (the "Company"), hereby establishes this Oryx Energy
Company Equity and Deferred Compensation Plan for Non-Employee Directors (the
"Plan"). The purposes of the equity compensation features of the Plan are to
encourage non-employee directors of the Company to acquire shares of the
Company's common stock, and thereby to align their interests more closely with
the interests of the other stockholders of the Company, and to encourage the
highest level of director performance by providing the non-employee directors
with a more direct interest in the Company's attainment of its financial goals.
The purpose of the elective deferral features of the Plan is to permit
non-employee directors of the Company to defer to the date of termination of
their service as directors of the Company or other fixed date all or part of
their regular cash compensation.
SECTION 2. CERTAIN DEFINITIONS. For purposes of the Plan, the
following terms shall have the indicated meanings:
(a) "annual retainer" shall have the meaning specified in Section
6(a) hereof.
(b) "Average Share Price" means the average of the Fair Market
Value of the Common Stock on each of the following days within the period for
which Average Share Price is being determined under the Plan: (i) the last
Trading Day of the calendar quarter ending on March 31; (ii) the last Trading
Day of the calendar quarter ending on June 30; (iii) the last Trading Day of
the calendar quarter ending on September 30; and (iv) the last Trading Day of
the calendar quarter ending on December 31 (as appropriately adjusted to take
into account any stock dividend, split, or combination during such period with
respect to the Common Stock).
(c) "Board of Directors" means the Board of Directors of the
Company.
(d) "Cash Compensation" means the cash compensation earned by an
Outside Director for his services as a director of the Company.
(e) "cash retainer" shall have the meaning specified in Section
6(a) hereof.
(f) "Cash Unit" shall have the meaning specified in Section 8(d)
hereof.
(g) "Common Stock" means the Common Stock, par value $1.00 per
share, of the Company, or any stock or other securities of the Company
hereafter issued or issuable in substitution or exchange for the Common Stock.
<PAGE> 3
(h) "Compensation Committee" means the Compensation Committee of
the Board of Directors.
(i) "Deferred Compensation Account" shall have the meaning
specified in Section 8(d) hereof.
(j) "Fair Market Value" of the Common Stock on any Trading Day
shall be the average of the high and low sales prices of the Common Stock for
such day, or if no such sale is made on such day, the average of the closing
bid and asked prices of the Common Stock for such day, in each case as
officially reported on the New York Stock Exchange (or, if the Common Stock is
not then listed or admitted to trading on the New York Stock Exchange, the
principal national stock exchange or stock market on which the Common Stock is
then listed or admitted to trading).
(k) "Initial Restricted Period" shall have the meaning specified
in Section 7(a)(i) hereof.
(l) "Interest Equivalent" shall have the meaning specified in
Section 8(d) hereof.
(m) "Outside Director" means an individual duly elected or chosen
as a director of the Company who is not also an officer or employee of the
Company or its subsidiaries.
(n) "Participant" shall have the meaning specified in Section 8(a)
hereof.
(o) "plan quarter" means each three-month period ending on July
31, October 31, January 31, and April 30 of each Plan Year, except that the
plan quarters for the first Plan Year hereunder shall be the three-month period
ending on September 30, 1996, the three-month period ending on December 31,
1996, and the four-month period ending on April 30, 1997.
(p) "Plan Year" means each 12-month period commencing on May 1 and
ending on and including the next following April 30, except that the first Plan
Year hereunder shall commence on July 1, 1996 and end on and include April 30,
1997.
(q) "Required Share Amount" means an amount of money constituting
50% of an Outside Director's annual retainer earned by such Outside Director
for his services as a director of the Company for a Plan Year, which amount is
payable in shares of Common Stock pursuant to Section 6(c) hereof. The
Required Share Amount is not Cash Compensation for purposes of the Plan.
(r) "Restricted Period" shall have the meaning specified in
Section 7(a)(i) hereof.
(s) "Restricted Shares" means shares of Common Stock issued
pursuant to the Plan that are subject to the restrictions imposed by the
provisions of Section 7 hereof.
-2-
<PAGE> 4
(t) "Share Award" means an award, grant, sale, or other issuance
of Shares, Restricted Shares or Unrestricted Shares to an Outside Director
pursuant to the provisions of the Plan.
(u) "Shares" means shares of Common Stock issued pursuant to the
Plan that are not subject to the restrictions imposed by the provisions of
Section 7 hereof, but are subject to the restrictions on transfer set forth in
Section 10 hereof.
(v) "Term of Office" means the term of office as a director of the
Company for which the Outside Director has been elected pursuant to and in
accordance with the provisions of the certificate of incorporation and bylaws
of the Company.
(w) "Trading Day" means any day on which the stock exchange or
stock market referred to in Section 2(j) hereof is open for trading on a
regular basis.
(x) "Unrestricted Shares" means shares of Common Stock issued
pursuant to the Plan that are not subject to the restrictions imposed by the
provisions of Section 7 or 10 hereof.
(y) "Voluntary Share Amount" means the amount of Cash Compensation
(including the cash retainer) earned by an Outside Director for a Plan Year
which the Outside Director elects to apply to the purchase of shares of Common
Stock pursuant to Section 6(b) hereof.
SECTION 3. PLAN ADMINISTRATION. The Compensation Committee
shall be responsible for the administration of the Plan. However, the
Compensation Committee shall have no authority, discretion, or power to select
the Outside Directors who will receive Share Awards, determine the Share Awards
to be made pursuant to the Plan, the number of Shares, Restricted Shares or
Unrestricted Shares to be issued thereunder, or the time at which Share Awards
are to be made, establish the duration or nature of the restrictions applicable
to Shares or Restricted Shares, or alter any other terms or conditions
specified in the Plan, except in the sense of administering the Plan subject to
the express provisions hereof, including Section 12 hereof. Subject to the
foregoing limitations, the Compensation Committee is authorized to interpret
the Plan, prescribe, amend, and rescind rules and regulations relating to the
Plan, provide for conditions and assurances deemed necessary or advisable to
protect the interests of the Company in connection with the operation of the
Plan, and make all other determinations necessary or advisable for the
administration of the Plan, but only to the extent not contrary to the express
provisions of the Plan. No member of the Board of Directors or the
Compensation Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any agreement entered into pursuant to
the Plan. The determinations, interpretations, and other actions of the Board
of Directors and the Compensation Committee pursuant to the provisions of the
Plan shall be binding and conclusive for all purposes and on all persons.
SECTION 4. STOCK SUBJECT TO THE PLAN.
(a) Number of Shares. Three hundred thousand (300,000) shares of
Common Stock are authorized for issuance under the Plan in accordance with the
provisions of the Plan. Shares of Common Stock that are issued as Shares,
Restricted Shares or Unrestricted Shares shall be
-3-
<PAGE> 5
applied to reduce the maximum number of shares of Common Stock remaining
available for use under the Plan. Any Restricted Shares that are forfeited to
the Company pursuant to the provisions of Section 7(b) hereof shall again be
available for use under the Plan. Any shares of Common Stock issuable to an
Outside Director under the Plan that for any reason are not issued to the
Outside Director shall automatically become available for use under the Plan.
The Company shall at all times during the term of the Plan retain as authorized
and unissued Common Stock at least the number of shares from time to time
required under the provisions of the Plan or otherwise assure itself of its
ability to perform its obligations hereunder. Shares of Common Stock issued
pursuant to the Plan may be shares of original issuance or treasury shares or a
combination of the foregoing, as the Board of Directors, in its discretion,
shall from time to time determine.
(b) Adjustments Upon Changes in Common Stock. In the event the
Company shall effect a split of the Common Stock or a dividend payable in
Common Stock, or in the event the outstanding Common Stock shall be combined
into a smaller number of shares, (i) the maximum number of shares of Common
Stock that may be issued under the Plan shall be increased or decreased
proportionately and (ii) the Board of Directors shall make an appropriate
adjustment in the number of shares of Common Stock then subject to issuance
under Sections 5(b) and 5(c) hereof. In the event of a reclassification of the
Common Stock not covered by the foregoing, or in the event of a liquidation or
reorganization (including a merger, consolidation, or sale of assets) of the
Company, the Board of Directors shall make such adjustments, if any, as it may
deem appropriate in the number and kind of shares that are authorized for
issuance or are issuable pursuant to the Plan.
SECTION 5. INITIAL AND ANNUAL AUTOMATIC GRANTS OF COMMON STOCK.
(a) Initial Grants to Current Directors. Effective as of the next
business day after the 1996 annual meeting of stockholders of the Company, the
Company shall issue 5,500 shares of Common Stock to each person who is an
Outside Director on such date.
(b) Initial Grants to Newly Elected Directors. Commencing after
the date of the 1996 annual meeting of stockholders of the Company, 5,000
shares of Common Stock shall be issued by the Company automatically to each
Outside Director who is newly elected to the Board of Directors after such
date, irrespective of whether such Outside Director is elected by the Board of
Directors or by the stockholders. The effective date of issuance of such
shares shall be the effective date of such Outside Director's election to the
Board of Directors. For purposes of this Section 5(b), the term "newly elected
to the Board of Directors" shall mean that the Outside Director was not serving
as a director of the Company immediately prior to the time of his election in
respect of which such shares are issued.
(c) Annual Grants. Beginning with the year 1997, 500 shares of
Common Stock shall be issued by the Company automatically effective as of the
date of each annual meeting of stockholders of the Company, to each person who
(i) is an Outside Director on the date of and immediately following such annual
meeting and (ii) has served in that capacity for at least six months
immediately preceding the date of such annual meeting.
-4-
<PAGE> 6
(d) Form of Share Awards. Each Share Award granted to an Outside
Director pursuant to this Section 5 shall be made either (i) all in Restricted
Shares or (ii) all in Shares, as shall be designated by the recipient of such
award by notice in writing delivered to the Company (A) prior to March 15, 1996
(in the case of an award under Section 5(a) hereof), (B) prior to the effective
date of issuance of such shares (in the case of an award under Section 5(b)
hereof), or (C) prior to the January 1 immediately preceding the annual meeting
of stockholders in respect of which the award is made (in the case of an award
under Section 5(c) hereof). All such designations shall be on a form
prescribed for this purpose by the Compensation Committee and shall be
irrevocable. If no such designation is made with respect to a Share Award
granted under this Section 5, such award shall be made all in Shares.
(e) Declinations. Any Outside Director may decline to accept any
Share Award granted to him pursuant to this Section 5 by giving written notice
to the Company of his election to decline to accept such award.
SECTION 6. SHARE AWARDS APPLICABLE TO RETAINER AND OTHER CASH
COMPENSATION.
(a) Retainer; Required Share Amount. The amount of the retainer
to be paid to each Outside Director for each Plan Year (the "annual retainer")
shall be determined by the Board of Directors from time to time; 50% of the
annual retainer shall be the cash component of the retainer, payable in cash as
Cash Compensation (the "cash retainer"), and the other 50% of the annual
retainer shall be the equity component of the retainer, payable in shares of
Common Stock as the Required Share Amount. The cash retainer for each Plan
Year shall be payable in installments as of the last day of each plan quarter
of the Plan Year in arrears. An Outside Director must be serving as an Outside
Director on the last day of the plan quarter in order to earn his cash retainer
for such plan quarter; provided, however, that an Outside Director serving in
such capacity on such day who has served in such capacity for less than the
entire plan quarter shall have his cash retainer for such plan quarter
pro-rated based on his number of days of service as an Outside Director during
such plan quarter. An Outside Director must be serving as an Outside Director
on the last day of the Plan Year in order to earn his Required Share Amount for
such year; provided, however, that an Outside Director serving in such capacity
on such day who has served in such capacity for less than the entire Plan Year
shall have his Required Share Amount for such Plan Year pro-rated based on his
number of days of service as an Outside Director during such Plan Year.
(b) Voluntary Share Amount. For any Plan Year, an Outside
Director may elect to have up to 100% of his cash retainer earned for such Plan
Year and any other Cash Compensation earned by him for such Plan Year for his
services as a director of the Company, which amounts have not been deferred by
the Outside Director pursuant to the provisions of Section 8 hereof
(collectively referred to herein as his Voluntary Share Amount), applied to the
purchase of shares of Common Stock pursuant to the provisions of Section 6(c)
hereof. An Outside Director must notify the Company in writing of such
election prior to the first day of the Plan Year for which the election is made
(or prior to such later date as may be approved by the Compensation Committee);
provided, however, that a newly elected Outside Director (within the meaning of
Section 5(b) hereof) may make such an election prior to the commencement of
such Outside Director's initial Term of Office with respect to Cash
Compensation earned by him
-5-
<PAGE> 7
in the balance of the Plan Year of his initial election to the Board of
Directors. Unless otherwise determined by the Compensation Committee, a
separate election must be made for each Plan Year. An election made pursuant
to this Section 6(b) for a Plan Year shall be irrevocable from and after the
first day of such Plan Year; provided, however, that an election made pursuant
to this Section 6(b) during a Plan Year for the remaining portion of such Plan
Year shall be irrevocable from and after the date the election is made. Such
elections shall be on a form prescribed for this purpose by the Compensation
Committee.
(c) Issuance of Shares. Promptly following the end of each Plan
Year, the Company shall, subject to the further provisions of this Section 6,
issue to each Outside Director, effective as of the last day of such Plan Year:
(A) a number of whole shares of Common Stock determined
by dividing (x) the Required Share Amount earned by such Outside
Director for such Plan Year by (y) the Average Share Price of the
Common Stock for such Plan Year or, if such Outside Director did not
serve as an Outside Director during the entire Plan Year, for that
portion of the Plan Year during which he served in that capacity (for
purposes of calculating such Average Share Price, the Outside Director
shall always be deemed to have served in that capacity for at least
the last plan quarter of the Plan Year),
and
(B) a number of whole shares of Common Stock determined
by dividing (x) such Outside Director's Voluntary Share Amount, if
any, for such Plan Year by (y) the Average Share Price of the Common
Stock for such Plan Year or, if such Outside Director did not serve as
an Outside Director during the entire Plan Year, for that portion of
the Plan Year during which he served in that capacity (for purposes of
calculating such Average Share Price, the Outside Director shall
always be deemed to have served in that capacity for at least the last
plan quarter of the Plan Year). The issuance of shares of Common
Stock to the Outside Director pursuant to clause (A) above and the
issuance of shares of Common Stock to the Outside Director pursuant to
clause (B) above shall each be deemed to be a separate Share Award
made to the Outside Director.
No fractional shares of Common Stock shall be issued by the Company pursuant to
this Section 6(c), and no cash payment or other adjustment shall be made in
respect of any such fractional share that would otherwise be issuable.
(d) Eligibility. An Outside Director must be serving as an
Outside Director on the last day of the Plan Year in order to be eligible to
receive shares of Common Stock pursuant to Section 6(c) hereof in respect of
his Required Share Amount and Voluntary Share Amount, if any, for such Plan
Year. Any Outside Director who becomes ineligible to receive shares of Common
Stock in respect of his Voluntary Share Amount for a Plan Year because his
service as an Outside Director terminated prior to the last day of such Plan
Year shall be paid any earned amounts of such Voluntary Share Amount in cash,
without interest, as promptly as practicable following the date of such
termination of service, and the election made by such
-6-
<PAGE> 8
Outside Director with respect to such Voluntary Share Amount pursuant to
Section 6(b) hereof shall be null and void effective as of the date of such
termination of service.
(e) Form of Share Awards. Each Share Award made to an Outside
Director with respect to his Required Share Amount for a Plan Year pursuant to
Section 6(c) hereof shall be made either (i) all in Restricted Shares or (ii)
all in Shares, and each Share Award made to an Outside Director with respect to
his Voluntary Share Amount, if any, for a Plan Year pursuant to Section 6(c)
hereof shall be made either (i) all in Restricted Shares or (ii) all in
Unrestricted Shares, in each case as shall be designated by the Outside
Director by notice in writing delivered to the Company prior to the first day
of such Plan Year; provided, however, that a newly elected Outside Director
(within the meaning of Section 5(b) hereof) may make such designations prior to
the commencement of such Outside Director's initial Term of Office with respect
to his Required Share Amount and Voluntary Share Amount, if any, earned by him
in the balance of the Plan Year of his initial election to the Board of
Directors. Unless otherwise determined by the Compensation Committee, a
separate designation must be made for each Plan Year. A designation made
pursuant to this Section 6(e) for a Plan Year shall be irrevocable from and
after the first day of such Plan Year; provided, however, that a designation
made pursuant to this Section 6(e) during a Plan Year for the remaining portion
of such Plan Year shall be irrevocable from and after the date the designation
is made. Such designations shall be on a form prescribed for this purpose by
the Compensation Committee. If no such designation is made with respect to a
Share Award made under this Section 6, such award shall be made all in Shares
(in the case of an award with respect to a Required Share Amount) or all in
Unrestricted Shares (in the case of an award with respect to a Voluntary Share
Amount).
(f) Effectiveness. The provisions of this Section 6 shall be
effective for Required Share Amounts and Cash Compensation earned by Outside
Directors on and after July 1, 1996.
SECTION 7. RESTRICTIONS ON RESTRICTED SHARES.
(a) Restricted Period. (i) All Restricted Shares issued to an
Outside Director pursuant to the Plan shall be subject to a restricted period,
which shall commence on the effective date of issuance of such Restricted
Shares and end on April 30 of the calendar year in which the Outside Director's
then current Term of Office is scheduled to expire (the "Initial Restricted
Period"). The term "Restricted Period", as hereinafter used, means (A) the
Initial Restricted Period and (B) the Initial Restricted Period as it may be
extended pursuant to the following provisions of this Section 7(a)(i). Each
Outside Director to whom Restricted Shares have been issued shall have the
right to extend the Restricted Period applicable to such Restricted Shares so
that such Restricted Period ends on April 30 of the calendar year in which the
Outside Director's next succeeding Term of Office (assuming for this purpose
that he continues to serve as a director of the Company) would be scheduled to
expire, provided that such Outside Director notifies the Company in writing of
such extension on or prior to April 30 of the calendar year immediately
preceding the calendar year of expiration of the then current Restricted
Period. Subject to the foregoing provisions of this Section 7(a)(i), such
right to extend the Restricted Period may be exercised on any one or more
occasions. An election to extend the Restricted Period shall be irrevocable.
-7-
<PAGE> 9
(ii) Notwithstanding the foregoing provisions of Section 7(a)(i)
hereof:
(A) With respect to (x) Restricted Shares issued pursuant
to Section 5(b) or 6(c) hereof to an Outside Director whose then
current Term of Office is scheduled to expire in the calendar year of
the effective date of issuance of such shares, (y) Restricted Shares
issued pursuant to Section 5(b) hereof on or after November 1 of a
calendar year, but prior to the end of such calendar year, to an
Outside Director whose then current Term of Office is scheduled to
expire in the calendar year next following the calendar year of the
effective date of issuance of such shares and (z) Restricted Shares
issued pursuant to Section 9(b) hereof to an Outside Director whose
then current Term of Office is scheduled to expire in the calendar
year next following the calendar year of the effective date of
issuance of such shares, the Initial Restricted Period of such shares
shall end on April 30 of the calendar year in which the Outside
Director's next succeeding Term of Office (assuming for this purpose
that he continues to serve as a director of the Company) would be
scheduled to expire.
(B) With respect to (x) Restricted Shares issued pursuant
to Section 5(a) or 5(c) hereof to an Outside Director whose then
current Term of Office is scheduled to expire in the calendar year
next following the calendar year of the effective date of issuance of
such shares and (y) Restricted Shares issued pursuant to Section 5(b)
hereof on or after April 30 of a calendar year, but prior to November
1 of such calendar year, to an Outside Director whose then current
Term of Office is scheduled to expire in the calendar year next
following the calendar year of the effective date of issuance of such
shares, the Initial Restricted Period of such shares shall end on
either (1) April 30 of the calendar year in which the Outside
Director's then current Term of Office is scheduled to expire or (2)
April 30 of the calendar year in which the Outside Director's next
succeeding Term of Office (assuming for this purpose that he continues
to serve as a director of the Company) would be scheduled to expire,
as shall be designated by the Outside Director by notice in writing
delivered to the Company on or prior to the effective date of issuance
of such shares. If no such designation is made, the Initial
Restricted Period of such shares shall end on the date specified in
clause (1) of the preceding sentence. All such designations shall be
irrevocable on and after the effective date of issuance of such
shares.
(b) Forfeiture. Restricted Shares issued to an Outside Director
pursuant to the Plan shall be forfeited to the Company at no cost to the
Company if the Outside Director's service as a director of the Company
terminates prior to the expiration or termination of the Restricted Period
applicable to such shares; provided, however, that the Restricted Shares shall
become fully vested and the Restricted Period applicable thereto shall
terminate upon (i) the Outside Director's termination of service as a director
of the Company during the Restricted Period due to death, Disability (as
defined in Section 7(h) hereof), or a Permitted Event (as defined in Section
7(h) hereof) or (ii) the occurrence of a Corporate Change (as defined in
Section 7(h) hereof) during the Restricted Period. Unless and until Restricted
Shares are delivered to the Outside Director upon vesting, the Restricted
Shares shall not be sold, assigned, transferred, discounted, exchanged,
pledged, or otherwise encumbered or disposed of by the Outside Director in any
manner.
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<PAGE> 10
(c) Stock Certificates. The Company shall issue, in the name of
each Outside Director to whom Restricted Shares have become issuable pursuant
to the Plan (or, at the option of the Company, in the name of a nominee of the
Company), stock certificates representing the total number of Restricted Shares
to be issued to the Outside Director, as soon as reasonably practicable after
the effective date of issuance of such shares. The Company or its agent, at
the direction of the Compensation Committee, shall hold such certificates,
together with stock powers and any other instrument of transfer reasonably
requested by the Company duly endorsed in blank, for the Outside Director's
benefit until such time as the Restricted Shares represented by such
certificates are forfeited to the Company or the restrictions thereon
terminate.
(d) Rights as Stockholder. Upon the issuance of a certificate
representing Restricted Shares to or on behalf of an Outside Director, the
Outside Director shall become the owner thereof for all purposes and shall have
all rights as a stockholder, including voting rights and the right to receive
dividends and distributions, with respect to such shares, subject to the
restrictions of the Plan and any restrictions imposed by law. If the Company
shall pay or declare a dividend or make a distribution of any kind, whether due
to a reorganization, recapitalization, or otherwise, with respect to the shares
of Common Stock constituting the Restricted Shares, then the Company shall pay
or make such dividend or other distribution with respect to the Restricted
Shares; provided, however, that the cash, stock or other securities, and other
property constituting such dividend or other distribution shall be held by the
Company subject to the restrictions applicable to the Restricted Shares until
the Restricted Shares with respect to which such dividend or other distribution
was paid or made are either vested or forfeited. If any Restricted Shares with
respect to which such dividend or distribution was paid or made do not vest but
instead are forfeited pursuant to the provisions hereof, then the Outside
Director shall not be entitled to receive such dividend or distribution with
respect to such forfeited shares and such dividend or distribution with respect
to such forfeited shares shall likewise be forfeited and automatically
transferred to and reacquired by the Company. If any Restricted Shares with
respect to which such dividend or distribution was paid or made become vested
pursuant to the provisions hereof, then the Outside Director shall be entitled
to receive such dividend or distribution with respect to such vested shares,
without interest, and such dividend or distribution with respect to such vested
shares shall likewise be delivered to the Outside Director.
(e) Adjustments. If any of the following events shall occur at
any time while Restricted Shares are outstanding and prior to the vesting or
forfeiture thereof, the following adjustments shall be made in the number of
shares of Common Stock then constituting such Restricted Shares, as
appropriate:
(i) If the Company pays a dividend on its outstanding
shares of Common Stock in shares of Common Stock or subdivides its
outstanding shares of Common Stock into a greater number of shares of
Common Stock, the number of shares of Common Stock then constituting
the Restricted Shares shall be proportionately increased. Conversely,
if the outstanding shares of Common Stock are combined into a smaller
number of shares of Common Stock, the number of shares of Common Stock
then constituting the Restricted Shares shall be proportionately
reduced. An adjustment made pursuant to this Section 7(e)(i) shall
become effective as of the record date in the case
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<PAGE> 11
of a dividend and shall become effective immediately after the
effective date in the case of a subdivision or combination.
(ii) In case of any recapitalization or reclassification
of the Common Stock, or any merger or consolidation of the Company
with or into one or more other corporations, or any sale of all or
substantially all the assets of the Company, as a result of which the
holders of Common Stock receive other stock, securities, or property
in lieu of or in addition to, but on account of, their shares of
Common Stock, (A) such other stock, securities, or property allocable
(as provided in clause (B) below) to the shares of Common Stock then
constituting the Restricted Shares shall be paid and delivered with
respect to such Restricted Shares, subject to the same restrictions
applicable to such Restricted Shares, and (B) the Company shall make
or cause to be made lawful and adequate provision whereby, upon the
vesting of the Restricted Shares after the record date for the
determination of the holders of Common Stock entitled to receive such
other stock, securities, or property, the Outside Director shall
receive, in lieu of or in addition to the Restricted Shares that have
vested, as the case may be, the shares of stock, securities, or
property that would have been allocable to such Restricted Shares had
such shares vested immediately prior to such record date. The
subdivision or combination of shares of Common Stock at any time
outstanding into a greater or smaller number of shares of Common Stock
shall not be deemed to be a recapitalization or reclassification of
the Common Stock for the purposes of this Section 7(e)(ii).
(f) Termination of Restrictions. Upon the expiration or
termination of the Restricted Period applicable to Restricted Shares, the
restrictions applicable to the Restricted Shares that have not theretofore been
forfeited shall terminate, and as soon as practicable thereafter, a stock
certificate for the number of Restricted Shares with respect to which the
restrictions have terminated, together with any dividends or other
distributions with respect to such shares then being held by the Company
pursuant to the provisions of this Section 7, shall be delivered, free of all
such restrictions, to the Outside Director or his beneficiary or estate, as the
case may be.
(g) Restricted Share Agreements. Each recipient of a Share Award
relating to Restricted Shares made pursuant to the Plan shall, as a condition
precedent to the issuance of the Restricted Shares to or on behalf of such
person, enter into an agreement with the Company, in such form as the
Compensation Committee shall prescribe and which is consistent with the
provisions of the Plan, setting forth or incorporating the restrictions, terms,
and conditions of the Share Award. In the event of any inconsistency between
the provisions of the Plan and any such agreement, the provisions of the Plan
shall govern.
(h) Certain Definitions. For purposes of this Section 7, the
following terms shall have the indicated meanings:
Disability: The "Disability" of an Outside Director shall be deemed
to have occurred if the Outside Director shall become unable to continue the
proper performance of his duties as a director of the Company on a full-time
basis as a result of his physical or mental incapacity.
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<PAGE> 12
Permitted Event: A "Permitted Event" shall be deemed to have occurred
if: (i) the Outside Director shall have resigned as a director of the Company
because the Outside Director is unable to continue the proper performance of
his duties as a director of the Company as a result of an injury or illness
affecting a member of the Outside Director's immediate family and such
inability is likely to exist for a period of six months or more; (ii) the
Outside Director shall have retired as a director of the Company because he has
reached the mandatory retirement age for directors of the Company as
established by Company policy; (iii) the Outside Director, after being
nominated by the Board of Directors, shall not be re-elected by the
stockholders of the Company in an election of directors; or (iv) the Outside
Director's directorship shall have ceased at the end of his term because such
Outside Director was not nominated for re-election as a director of the Company
in connection with an election of directors.
Corporate Change: A "Corporate Change" shall be deemed to have
occurred upon (i) the dissolution or liquidation of the Company; (ii) a
reorganization, merger, or consolidation of the Company with one or more
corporations (other than a merger or consolidation effecting a reincorporation
of the Company in another state or any other merger or consolidation in which
the shareholders of the surviving corporation and their proportionate interests
therein immediately after the merger or consolidation are substantially
identical to the shareholders of the Company and their proportionate interests
therein immediately prior to the merger or consolidation); (iii) the sale of
all or substantially all of the assets of the Company; or (iv) the occurrence
of a Change in Control. A "Change in Control" shall be deemed to have occurred
for purposes of this definition if (a) individuals who were directors of the
Company immediately prior to a Control Transaction shall cease, within two
years of such Control Transaction, to constitute a majority of the Board of
Directors of the Company (or of the Board of Directors of any successor to the
Company or to a company which has acquired all or substantially all of its
assets) or (b) any entity, person, or Group acquires shares of the Company in a
transaction or series of transactions that result in such entity, person, or
Group directly or indirectly owning beneficially 50% or more of the outstanding
shares of Common Stock of the Company. As used herein, "Control Transaction"
shall be (a) any tender offer for or acquisition of capital stock of the
Company, (b) any merger or consolidation of the Company, (c) any contested
election of directors of the Company, or (d) any combination of the foregoing,
any one of which results in a change in voting power sufficient to elect a
majority of the Board of Directors of the Company. As used herein, "Group"
shall mean persons who act "in concert" as described in Sections 13(d)(3)
and/or 14(d)(2) of the Securities Exchange Act of 1934, as amended.
SECTION 8. DEFERRAL OF CASH COMPENSATION. Outside Directors
shall have the right to defer the receipt of their Cash Compensation in
accordance with the following provisions of this Section 8.
(a) Election to Defer. An Outside Director may elect to defer the
receipt of all or a portion of his Cash Compensation (other than his Voluntary
Share Amount) for a Plan Year in accordance with the provisions of this Section
8 by filing a written election to defer with the Compensation Committee. Such
election shall be made on a form or forms prescribed for this purpose by the
Compensation Committee. Such election must include the following: (i) the
percentage of Cash Compensation to be deferred; (ii) an irrevocable election of
a method of payment as provided in Section 8(e) hereof; and (iii) a designation
of beneficiary as provided
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<PAGE> 13
in Section 8(f) hereof. Except as provided in Section 8(c) hereof, a deferral
election shall apply only to Cash Compensation to be earned in the Plan Year
next following the Plan Year in which the election is made. An election to
defer made under this Section 8 shall be irrevocable. For purposes of the
Plan, the term "Participant" means an Outside Director who has elected to defer
the receipt of his Cash Compensation in accordance with the provisions of this
Section 8.
(b) Amount of Deferral. The amount of Cash Compensation to be
deferred in any Plan Year shall be designated by the Outside Director as a
percentage of his Cash Compensation in integral multiples of 5%, but shall not
be less than 10%.
(c) Time of Election. Except as otherwise determined by the
Compensation Committee, an election to defer Cash Compensation hereunder must
be received by the Compensation Committee prior to the commencement of the Plan
Year in which the Cash Compensation is earned; provided, however, that a newly
elected Outside Director (within the meaning of Section 5(b) hereof) may make a
deferral election prior to the commencement of such Outside Director's initial
Term of Office with respect to Cash Compensation earned by him in the balance
of the Plan Year of his initial election to the Board of Directors. Unless
otherwise determined by the Compensation Committee, a separate deferral
election must be made for each Plan Year. A deferral election by an Outside
Director with respect to Cash Compensation in a given year will not preclude a
different action by the Outside Director with respect to Cash Compensation in
subsequent years.
(d) Deferred Compensation Accounts. Cash Compensation deferred by
a Participant pursuant to this Section 8 shall be credited to an account
("Deferred Compensation Account") established by the Company for such
Participant. Cash Units (as defined below) in an amount equal to the deferred
Cash Compensation shall be credited to the Participant's Deferred Compensation
Account at the time the deferred Cash Compensation would otherwise have been
paid had no election to defer been made. As additional deferred compensation
for Participants with Cash Units credited to their Deferred Compensation
Accounts, the Company shall credit a Participant's Deferred Compensation
Account on a quarterly basis with an Interest Equivalent (as defined below).
The amounts credited to a Participant's Deferred Compensation Account in
accordance with this Section 8(d) shall represent the total amount of the
Company's liability to the Participant for the payment of deferred compensation
under this Section 8. For purposes of this Section 8, (i) a "Cash Unit" means
the entry in a Deferred Compensation Account of a credit equal to One Dollar
and (ii) an "Interest Equivalent" means the entry in a Deferred Compensation
Account of an interest credit with respect to a Cash Unit, the interest factor
being equal to the quarterly rate of return generated under the Stable Value
Fund of the Company's Capital Accumulation Plan (or such successor or other
fund within the Capital Accumulation Plan as the Compensation Committee may
approve).
(e) Payment of Deferred Compensation. All payments of a
Participant's Deferred Compensation Account shall be made at, or shall commence
on, the first day of the calendar year selected by the Participant in
accordance with the provisions of Section 8(a) hereof and this Section 8(e).
The date on which payment will commence must be designated by the Outside
Director. The Outside Director may elect to defer the receipt of his Cash
Compensation to: (a) the first day of any calendar year that is at least one
year after the calendar year in which
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<PAGE> 14
the Cash Compensation is earned; or (b) the first day of the calendar year
following (i) the calendar year he retires as a director of the Company; (ii)
the calendar year his membership on the Board of Directors terminates; or (iii)
the calendar year of his death. The benefit commencement date may not be later
than the third calendar year following the attainment of mandatory retirement
age for directors of the Company. Upon the death of a Participant prior to the
final payment of all amounts credited to his Deferred Compensation Account, the
balance of the Deferred Compensation Account shall be paid in accordance with
the provisions of Section 8(f) hereof commencing on the first day of the
calendar year following the year of death. A Participant shall have the option
of selecting either a single payment schedule or a series of annual
installments (not exceeding ten), provided such election is irrevocable and
made at the date of deferral. A Participant shall receive in cash all deferred
compensation credited to his Deferred Compensation Account.
(f) Designation of Beneficiary. Each Participant shall name a
beneficiary to receive any payments due him at the time of his death, with the
right to change such beneficiary at any time. In case of a failure to
designate a beneficiary or the death of the designated beneficiary without a
designated successor, such payments shall be made to the person or persons
designated as beneficiary in the designation most recently filed by the
Participant under the Directors Group Life Insurance Plan of the Company, or if
no such designation has been made or the Participant is not participating in
such plan, then to the surviving spouse of a deceased Participant, or, if there
is no surviving spouse, the children of the Participant in equal shares (the
share of any child who predeceases the Participant to go in equal shares to the
issue of such deceased child), or if there is no surviving spouse, children, or
issue of such children, the estate of the Participant. No designation of
beneficiary shall be valid unless in writing signed by the Participant, dated
and filed with the Compensation Committee. Upon the Participant's death, any
balance in his Deferred Compensation Account shall be payable under the method
and form elected by the Participant or in such other manner as the Compensation
Committee may determine in its sole discretion.
(g) Source of Payments. All payments of deferred compensation
under this Section 8 shall be made in cash from the general funds of the
Company, and the Company shall be under no obligation to segregate any assets
in connection with the maintenance of a Deferred Compensation Account. Nothing
contained in the Plan and no action taken pursuant to the Plan shall create or
be construed to create a trust of any kind in favor of a Participant or any
other person or a fiduciary relationship between the Company and a Participant.
Title to the beneficial ownership of any assets, whether cash or investments,
that the Company may designate to pay the amounts credited to Deferred
Compensation Accounts shall at all times remain in the Company, and
Participants shall have no property interest whatsoever in any specific assets
of the Company. A Participant's interest in his Deferred Compensation Account
shall be limited to the right to receive payments pursuant to the terms of the
Plan, and such right shall be no greater than the right of any other unsecured
general creditor of the Company.
(h) Effectiveness. Except as otherwise provided in Section 9
hereof, the provisions of this Section 8 shall be effective for Cash
Compensation earned by Outside Directors on and after July 1, 1996.
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<PAGE> 15
SECTION 9. TERMINATION OF DIRECTORS' DEFERRED COMPENSATION PLAN.
(a) Termination; Transfer of Units. Effective as of July 1, 1996,
the Oryx Energy Company Directors' Deferred Compensation Plan, as amended and
restated effective September 7, 1995 (the "Deferred Compensation Plan"), shall
terminate, and all cash units and share units credited as of such date to an
Outside Director's deferred compensation account thereunder shall automatically
be transferred and credited to a Deferred Compensation Account established for
such Outside Director under Section 8 hereof. Thereafter, except as provided
in Section 9(b) hereof, such cash units shall be governed by the provisions of
Section 8 hereof to the same extent as if they had originally been credited as
Cash Units under the Plan. Such cash units are herein referred to as "Subject
Cash Units".
(b) Conversion of Subject Cash Units. Each Outside Director with
Subject Cash Units credited to his Deferred Compensation Account under the Plan
may elect to have up to 100% of the Subject Cash Units credited to his account
as of July 1, 1996 applied to the purchase of Restricted Shares in accordance
with the provisions of this Section 9(b) effective as of July 1, 1996; provided
that the Outside Director must notify the Company in writing of such election
on or prior to July 1, 1996, which election will be irrevocable on and after
such date. Such election shall be on a form prescribed for this purpose by the
Compensation Committee. Promptly following, and effective as of, July 1, 1996,
the Company shall, subject to the further provisions of this Section 9(b),
issue to each Outside Director who has made an election to purchase Restricted
Shares pursuant to this Section 9(b) a number of whole Restricted Shares
determined by dividing (x) the amount of the Subject Cash Units that the
Outside Director elected to have applied to the purchase of Restricted Shares
by (y) the Fair Market Value of the Common Stock on July 1, 1996. No
fractional shares of Common Stock shall be issued by the Company pursuant to
this Section 9(b), and no cash payment or other adjustment shall be made in
respect of any such fractional share that would otherwise be issuable. An
Outside Director must be serving as an Outside Director on July 1, 1996 in
order to be eligible to receive Restricted Shares pursuant to this Section
9(b). An election made pursuant to this Section 9(b) by an Outside Director
who becomes ineligible to receive Restricted Shares pursuant to this Section
9(b) because his service as an Outside Director terminated prior to July 1,
1996 shall be null and void effective as of the date of such termination of
service. Any Subject Cash Units (or portion thereof) not converted into
Restricted Shares pursuant to this Section 9(b) shall remain subject to the
provisions of Section 8 hereof.
(c) Share Units. An Outside Director with share units credited to
his Deferred Compensation Account under the Plan shall continue to hold such
units subject to the terms and conditions that were in effect with respect
thereto under the Deferred Compensation Plan immediately prior to its
termination. The Board of Directors may, in its discretion, grant to such
Outside Director the right to convert such share units into shares of Common
Stock under the Plan on such terms and conditions as the Board of Directors may
prescribe.
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<PAGE> 16
SECTION 10. RESTRICTIONS ON TRANSFER OF SHARES. No Shares issued
to an Outside Director pursuant to the Plan shall be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of by the Outside
Director, other than by will or pursuant to the laws of descent and
distribution, until six months have elapsed from the effective date of issuance
of such Shares. The Company shall hold the certificates representing such
Shares for the Outside Director's benefit until such time as the restrictions
on transfer of such Shares set forth in the preceding sentence have lapsed.
All securities received by an Outside Director on account of his Shares as a
result of an event described in Section 7(e)(i) or (ii) hereof shall be deemed
to be Shares for purposes of this Section 10 and shall be restricted as to
transfer pursuant to the provisions of this Section 10 to the same extent and
for the same period as if such securities were the original Shares with respect
to which they were issued. Subject to the restrictions of this Section 10, an
Outside Director shall have all rights as a stockholder, including voting
rights and the right to receive dividends and distributions, with respect to
his Shares.
SECTION 11. FREEZE OF NON-EMPLOYEE DIRECTORS RETIREMENT PLAN.
Effective as of July 1, 1996, the Non-Employee Directors Retirement Plan of
the Company (the "Retirement Plan") shall be "frozen" such that (i) no
directors of the Company newly elected to the Board of Directors after such
date shall be entitled to participate therein, (ii) the retirement benefit
under the Retirement Plan for all Outside Directors serving on the Board of
Directors as of such date shall be fixed from and after such date as that
amount which the Outside Director would have been entitled to receive under the
Retirement Plan had he retired as a director of the Company effective as of
such date (disregarding for this purpose the Retirement Plan's years of service
eligibility requirement), and (iii) no future benefits under the Retirement
Plan shall accrue from and after July 1, 1996. The Board of Directors may, in
its discretion, provide for the discharge of the Company's obligations with
respect to such frozen retirement benefits on such terms and conditions as the
Board of Directors may prescribe, which may include the grant to Outside
Directors of the right to exchange such frozen retirement benefits for shares
of Common Stock under the Plan (which may be Shares, Restricted Shares or
Unrestricted Shares) or other securities or cash, or a combination thereof.
SECTION 12. PLAN AMENDMENT, MODIFICATION, AND TERMINATION. The
Board of Directors may at any time suspend, terminate, amend, or modify the
Plan; provided, however, that no amendment or modification of the Plan shall
become effective without the approval of such amendment or modification by the
stockholders of the Company if the Company, on the advice of counsel,
determines that stockholder approval is necessary or desirable; and provided
further that the provisions of the Plan governing (a) the Share Awards to be
made pursuant to Section 5 hereof and the Share Awards to be made pursuant to
Section 6(c) hereof in respect of Required Share Amounts, (b) the number of
shares of Common Stock to be issued under such awards, (c) the time at which
such awards are to be made, and (d) the duration and nature of the restrictions
applicable to such awards, shall not be amended more than once every six
months, other than to comport with changes in the Internal Revenue Code of
1986, the Employee Retirement Income Security Act of 1974, or the rules
promulgated thereunder. No suspension, termination, amendment, or modification
of the Plan shall in any manner adversely affect any Share Award theretofore
made under the Plan or the rights of a Participant with respect to amounts
theretofore credited to his Deferred Compensation Account under the Plan,
without the consent of the recipient of such award or such Participant. All
Restricted Shares issued prior to any termination of the Plan that have not
theretofore vested or been forfeited shall continue to be subject to the terms
of the Plan.
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<PAGE> 17
SECTION 13. PLAN EFFECTIVENESS. The Plan shall be submitted for
approval by the stockholders of the Company at the 1996 annual meeting of
stockholders. The Plan shall become effective on the date of its approval by
the holders of a majority of the shares of Common Stock present, or
represented, and entitled to vote at such annual meeting. If the Plan is not
so approved, the Plan shall terminate and all actions hereunder shall be null
and void.
SECTION 14. GENERAL PROVISIONS.
(a) No Continuing Right as Director. Neither the adoption or
operation of the Plan, nor the Plan itself or any document describing or
relating to the Plan, or any part hereof, shall confer upon any Outside
Director any right to continue as a director of the Company or any subsidiary
of the Company.
(b) Nonalienation of Benefits. No Outside Director or Participant
shall have the right to sell, assign, transfer, or otherwise convey or encumber
in whole or in part the right to receive any award or payment under the Plan,
except in accordance with the express provisions hereof.
(c) Binding Effect. The obligations of the Company under the Plan
shall be binding upon any successor corporation or organization resulting from
the merger, consolidation, or other reorganization of the Company, or upon any
successor corporation or organization succeeding to all or substantially all of
the assets and business of the Company. The terms and conditions of the Plan
shall be binding upon each Outside Director and any other recipient of
Restricted Shares hereunder and each such person's heirs, legatees,
distributees, and legal representatives.
(d) Severability. If any provision of the Plan or any agreement
hereunder is held to be illegal or invalid for any reason, the illegality or
invalidity shall not affect the remaining provisions of the Plan or such
agreement, as the case may be, but such provision shall be fully severable and
the Plan or such agreement, as the case may be, shall be construed and enforced
as if the illegal or invalid provision had never been included herein or
therein.
(e) Expenses. All expenses incident to the administration,
protection, or termination of the Plan, including, but not limited to, legal
and accounting fees, shall be paid by the Company.
(f) Notices. Whenever any notice is required or permitted under
the Plan or any agreement hereunder, such notice must be in writing and
personally delivered or sent by mail. Any notice required or permitted to be
delivered hereunder or under an agreement shall be deemed to be delivered on
the date on which it is personally delivered, or on the third business day
after it is deposited in the United States mail, certified or registered,
postage prepaid, addressed to the person who is to receive it at the address
that such person has theretofore specified by written notice delivered in
accordance herewith. The Company or an Outside Director may change, at any
time and from time to time, by written notice to the other, the
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<PAGE> 18
address that it or he had theretofore specified for receiving notices. Until
such address is changed in accordance herewith, notices hereunder or under an
agreement shall be delivered or sent (i) to the Outside Director at his address
as set forth in the records of the Company or (ii) to the Company or the
Compensation Committee at the principal executive offices of the Company
clearly marked "Attention: President".
(g) No Restriction of Corporate Action. Nothing contained in the
Plan shall be construed to prevent the Company or any subsidiary thereof from
taking any corporate action that is deemed by the Company or such subsidiary to
be appropriate or in its best interest, whether or not such action would have
an adverse effect on the Plan or any Share Award made or to be made under the
Plan. No Outside Director or other person shall have any claim against the
Company or any subsidiary thereof as a result of such action.
(h) Governing Law. The provisions of the Plan, and all agreements
hereunder, shall be governed by and construed in accordance with the laws of
the State of Texas.
(i) Miscellaneous. Headings are given to the sections and
subsections of the Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to the
construction of the Plan or any provisions hereof. The use of the masculine
gender shall also include within its meaning the feminine. Wherever the
context of the Plan dictates, the use of the singular shall also include within
its meaning the plural, and vice versa.
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<PAGE> 1
EXHIBIT 10.4
ORYX ENERGY COMPANY
EXECUTIVE VARIABLE INCENTIVE PLAN ("EXECUTIVE VIP")
Effective as of January 1, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE DESCRIPTION PAGE
- ------- ----------- ----
<S> <C> <C>
Article I Purpose of the Plan . . . . . . . . . . . . . . . . . . 1
Article II Definitions . . . . . . . . . . . . . . . . . . . . . . 1
Article III Eligibility . . . . . . . . . . . . . . . . . . . . . . 4
Article IV Administration of the Plan . . . . . . . . . . . . . . . 5
Article V Target Award Levels . . . . . . . . . . . . . . . . . . 6
Article VI Determination of Performance Goals
and Amount of Awards . . . . . . . . . . . . . . . . . . 6
Article VII Form and Timing of Awards . . . . . . . . . . . . . . . 8
Article VIII Voluntary Election to Defer . . . . . . . . . . . . . . 8
Article IX Voluntary Election to Receive Restricted Stock . . . . . 9
Article X No Right of Employment . . . . . . . . . . . . . . . . . 13
Article XI Miscellaneous . . . . . . . . . . . . . . . . . . . . . 14
</TABLE>
<PAGE> 3
Article I
Purpose of the Plan
The purpose of this Executive Variable Incentive Plan (hereinafter referred to
as the "Plan") for Oryx Energy Company is to provide incentive compensation
opportunities for certain executive employees of the Company and to provide
certain participants the option of taking all or a portion of their annual
incentive compensation awards in restricted common stock of the Company. The
Plan seeks to reinforce three significant Company values: teamwork, sharing
success, and the rewarding of individual performance. It is also designed to
assist in the attraction, motivation, and retention of superior employees and
to link employees to the Company's strategic objectives and the interests of
stockholders. Each year, Participants in the Plan will have the opportunity to
earn incentive compensation awards based upon the attainment of specific
Performance Goals established at the beginning of each Plan Year by the
Compensation Committee of the Board of Directors.
Article II
Definitions
When used in the Plan, the following terms shall have the following meanings:
2.1 Base Salary means the annualized weekly base salary in effect as of
the last pay period ending during the Plan Year as reflected in the
personnel records of the Company.
2.2 Board of Directors means the Board of Directors of the Company.
2.3 Common Stock means the common stock, par value $1.00 per share, of the
Company or any stock or other securities of the Company hereafter
issued or issuable in substitution or exchange for the Common Stock.
2.4 Company means Oryx Energy Company.
2.5 Compensation Committee means the Compensation Committee of the Board
of Directors, which will have the overall responsibility for
administering the Plan.
1
<PAGE> 4
2.6 Corporate Change: A "Corporate Change" shall be deemed to have
occurred for the purposes of Article IX hereof upon (i) the
dissolution or liquidation of the Company; (ii) a reorganization,
merger, or consolidation of the Company with one or more corporations
(other than a merger or consolidation effecting a reincorporation of
the Company in another state or any other merger or consolidation in
which the shareholders of the surviving corporation and their
proportionate interests therein immediately after the merger or
consolidation are substantially identical to the shareholders of the
Company and their proportionate interests therein immediately prior to
the merger or consolidation); (iii) the sale of all or substantially
all of the assets of the Company; or (iv) the occurrence of a Change
in Control. A "Change in Control" shall be deemed to have occurred
for purposes of Article IX hereof if (a) individuals who were
directors of the Company immediately prior to a Control Transaction
shall cease, within two years of such Control Transaction, to
constitute a majority of the Board of Directors of the Company (or of
the Board of Directors of any successor to the Company or to a company
which has acquired all or substantially all of its assets) or (b) any
entity, person, or Group acquires shares of the Company in a
transaction or series of transactions that result in such entity,
person, or Group directly or indirectly owning beneficially 50% or
more of the outstanding shares of Common Stock of the Company. As
used herein, "Control Transaction" shall be (a) any tender offer for
or acquisition of capital stock of the Company, (b) any merger or
consolidation of the Company, (c) any contested election of directors
of the Company, or (d) any combination of the foregoing, any one of
which results in a change in voting power sufficient to elect a
majority of the Board of Directors of the Company. As used herein,
"Group" shall mean persons who act "in concert" as described in
Sections 13(d)(3) and/or 14(d)(2) of the Securities Exchange Act of
1934, as amended.
2.7 Disability: For purposes of Articles III and IX hereof, the
"Disability" of a Participant shall be deemed to have occurred if, in
the good faith judgment of the Compensation Committee, the Participant
shall become unable to continue the proper performance of his or her
duties as an employee of the Company or a subsidiary thereof on a
full-time basis as a result of his or her physical or mental
incapacity.
2.8 Executive Deferred Compensation Plan means the nonqualified deferred
compensation plan of the Company in which certain executive employees
of the Company may voluntarily elect to participate by deferring their
cash awards earned pursuant to the Plan as set forth in Article VIII
hereof.
2.9 Fair Market Value means the average of the reported high and low sales
prices of the Common Stock (rounded up to the nearest one-eighth of a
dollar) on the date Fair Market Value is to be determined (or if there
was no reported sale on such date, the next preceding date on which
any reported sale occurred) on the New York Stock Exchange (or, if the
Common Stock is not then listed or admitted to trading on such
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<PAGE> 5
exchange, on the principal exchange or in such other principal market
on which the Common Stock is then listed or admitted to trading).
2.10 Just Cause means willful misconduct or dishonesty by the Participant,
conviction of the Participant for a felony or failure by the
Participant to contest prosecution for a felony, or excessive
absenteeism on the part of the Participant not related to illness.
2.11 Participant means any employee of the Company or any subsidiary
thereof who is described as eligible to participate in the Plan as set
forth in Article III hereof.
2.12 Performance Goals mean the performance goals established each year
pursuant to the Plan upon which performance will be measured.
2.13 Plan means the Executive Variable Incentive Plan of Oryx Energy
Company, effective as of January 1, 1996, as described herein.
2.14 Plan Year means the performance period of the Plan, commencing on
January 1 and ending December 31 each year, commensurate with the
Company's fiscal year.
2.15 Restricted Stock means Common Stock issued pursuant to, and with such
restrictions as are imposed by, Article IX hereof.
2.16 Retirement: For purposes of Articles III and IX hereof, the term
"Retirement" shall mean a termination of employment with the Company
or a subsidiary thereof by reason of retirement either (i) on a
voluntary basis by a Participant who is at least 60 years of age or
(ii) with the written consent of the Compensation Committee in its
sole discretion (in the case of the retirement of the Chief Executive
Officer of the Company) or with the written consent of the Chief
Executive Officer of the Company in his sole discretion (in the case
of the retirement of any other Participant). The preceding provisions
of this Section to the contrary notwithstanding, at any time prior to
one year preceding the date on which a Participant attains age 60, a
Participant may make a written irrevocable election to defer his or
her voluntary retirement age set forth in clause (i) to age 61 or such
later age the Participant may designate in such election. In
addition, any Participant who makes such an election may make a
subsequent written irrevocable election to further defer his or her
voluntary retirement age to any age at least one year older than the
age previously designated provided that such election must be made at
least one year prior to the attainment of the previously elected
voluntary retirement age.
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2.17 Target means the level of performance that is judged to be acceptable
or standard for which 100% of the award will be paid for attainment of
that performance objective.
2.18 Target Award Level means the percentage of Base Salary that may be
earned by each Participant based upon the attainment of the Target
(100%) level of performance.
2.19 Threshold means the level of performance that is judged to be the
minimum acceptable for which some percentage, less than 100%, of the
award will be paid for attainment of that performance objective.
Article III
Eligibility
3.1 Subject to the provisions of this Article III, only those employees of
the Company or a subsidiary thereof who are "officers" of the Company
as defined in Rule 16a-1(f) promulgated by the Securities and Exchange
Commission under Section 16 of the Securities Exchange Act of 1934, as
amended, are eligible to participate in this Plan and only those so
eligible who are designated by the Compensation Committee as
"Participants" in the Plan for any Plan Year will participate in the
Plan for such Plan Year.
3.2 An employee must be on the regular payroll (including approved annual
vacation leave) as of December 31 of the Plan Year and have at least
26 completed weeks of active service during the Plan Year in order to
be eligible to receive an award pursuant to the Plan for such Plan
Year. Any employee who satisfies the criteria for receiving an award
pursuant to the Plan for a Plan Year but who had fewer than 52
completed weeks of active service during the Plan Year shall have his
or her award pro-rated based on his or her number of completed weeks
of active service during the Plan Year. An employee whose employment
terminates during the Plan Year for any reason other than those
reasons set forth in Section 3.4 hereof is not eligible to receive an
award pursuant to the Plan for such Plan Year.
3.3 Any provision of the Plan to the contrary notwithstanding: (i) for
purposes of determining an employee's completed weeks of active
service during a Plan Year under this Article III, any period of
approved annual vacation leave, and any period of a leave of absence
(whether paid or unpaid) to which the employee is entitled pursuant to
the Family and Medical Leave Act, shall be included as active service
for such Plan Year; (ii) for purposes of determining whether an
employee is on the regular payroll as of December 31 of a Plan Year
under this Article III, an employee
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<PAGE> 7
on a leave of absence as of December 31 of a Plan Year (whether paid
or unpaid) to which the employee is entitled pursuant to the Family
and Medical Leave Act shall be deemed to be on the regular payroll as
of such date; and (iii) for purposes of determining whether an
employee is on the regular payroll as of December 31 of a Plan Year
under this Article III, an employee receiving benefits pursuant to the
Company's Short-Term Disability Program or Long-Term Disability Plan
shall be deemed to be on the regular payroll as of such date if such
employee had at least 26 completed weeks of active service during the
Plan Year.
3.4 Any Participant whose employment terminates during a Plan Year (but
prior to December 31 of such Plan Year) due to Disability, Retirement
or death shall be eligible for a pro rata award for the Plan Year
based on the number of his or her completed weeks of active service
during the Plan Year, provided such Participant has accumulated at
least 26 completed weeks of active service in the Plan Year. In the
event of an employee's death, the designated beneficiary of the
employee under the Plan shall be the same as his or her designated
beneficiary under the Company's Death Benefit Plan.
Article IV
Administration of the Plan
4.1 The Plan shall be administered by the Compensation Committee. Subject
to the express provisions of the Plan, the Compensation Committee
shall have the right and authority, in its sole and absolute
discretion, (a) to adopt, amend, or rescind administrative and
interpretive rules and regulations relating to the Plan; (b) to
construe the Plan; (c) to make all other determinations necessary or
advisable for administering the Plan; (d) to determine the terms and
provisions of the respective agreements (which need not be identical)
relating to the award of shares of Restricted Stock pursuant to
Article IX hereof; (e) to construe such agreements; and (f) to
exercise the powers conferred on the Compensation Committee under the
Plan. The Compensation Committee may correct any defect or supply any
omission or reconcile any inconsistency in the Plan in the manner and
to the extent it shall deem expedient to carry it into effect, and it
shall be the sole and final judge of such expediency. The
determinations of the Compensation Committee on the matters referred
to in this Section 4.1 shall be final and conclusive.
4.2 Subject to the express provisions of the Plan, the Compensation
Committee shall have the exclusive authority to amend, modify,
suspend, or terminate the Plan at any time; provided, however, that no
amendment, modification, suspension or termination of the Plan shall
in any manner adversely affect the right of any Participant to receive
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<PAGE> 8
any amount to which such Participant has become entitled prior to such
amendment, modification, suspension or termination.
4.3 At the beginning of the Plan Year, the Chief Executive Officer of the
Company shall make recommendations to the Compensation Committee
regarding Performance Goals and the respective Threshold and Target
levels of performance associated with each. Within the first 90 days
of the Plan Year the Compensation Committee will review the
recommendations of the Chief Executive Officer and approve or modify
the recommendations as presented. In addition, as provided in more
detail in Articles V and VI hereof, at the completion of the Plan
Year, the Compensation Committee shall review and certify the Plan
award levels based upon actual performance during the Plan Year, and
may exercise discretion in approving the award for any Participant
such that the Compensation Committee may reduce (but may not increase)
any or all of a Participant's award otherwise determined in accordance
with the formula set forth in this Plan and the performance results
for such Plan Year. The Compensation Committee may, in its
discretion, design the award levels and performance goals for any Plan
Year for any individual or group of individuals in a manner which will
except any compensation paid to any such individual or group from the
deduction limitations of Section 162(m) of the Internal Revenue Code
of 1986, but the Compensation Committee is not obligated to do so.
Article V
Target Award Levels
5.1 Participants in the Plan shall have Target Award Levels expressed as a
percentage, not to exceed 100%, of their respective Base Salaries
during the Plan Year. The Target Award Levels for a Plan Year will be
established for each Participant by the Compensation Committee within
the first 90 days of the Plan Year.
Article VI
Determination of Performance Goals and Amount of Awards
6.1 Within the first 90 days of each Plan Year, the Compensation Committee
shall establish the Performance Goals which shall provide the basis
for calculating the annual incentive compensation award for
Participants for such Plan Year. The Performance Goals established by
the Compensation Committee for a Plan Year may be based on stock
price, cash flows, net income, operating income, expense levels, debt
balance, debt ratings, total shareholder return, return on investment,
return on equity, economic value added, production volumes, reserve
additions, profit or cost
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<PAGE> 9
per equivalent barrel, earnings per share, net asset value per share,
or such other goals as the Compensation Committee may determine
appropriate for a Plan Year. The Performance Goals may be based on
the performance of the Company generally, in the absolute or in
relation to its peers, or the performance of a particular employee,
division, department, branch, subsidiary or other unit to which a
particular employee is assigned. In establishing the Performance
Goals for the applicable Plan Year, the Compensation Committee may
establish different Performance Goals for individual Participants or
groups of Participants. Each Performance Goal will be weighted to
reflect its relative performance to the Company's strategic business
plans for the Plan Year. The sum of the weightings of the Performance
Goals at the Target level for particular Participants or groups of
Participants will equal 100% for the Plan Year. Each Performance Goal
will have stated Threshold and Target levels of performance which will
provide a range of award possibilities.
6.2 As of the end of each Plan Year, a performance score will be
determined by the Compensation Committee for each Performance Goal
wherein achievement will be based upon actual performance compared to
the Threshold and Target levels of performance. The Compensation
Committee shall certify the degree of achievement of each Performance
Goal based upon the actual performance results for the Plan Year. The
results of the Performance Goals will be summed to determine the basis
for the annual incentive compensation award for the Participant or
group of Participants to which they apply, which sum may exceed 100%.
6.3 As of the end of the Plan Year, a Participant's incentive compensation
award based upon attainment of Performance Goals for the Plan Year
shall be calculated by multiplying such Participant's Base Salary by
the Participant's Target Award Level for such Plan Year. The result
shall then be multiplied by the performance score applicable to such
Participant as determined by the Compensation Committee for such Plan
Year in accordance with Section 6.2 hereof. After such amount is
determined, the Compensation Committee may, in its sole discretion,
reduce or eliminate (but may not increase) the amount of the award for
a particular Participant based upon such factors as the Compensation
Committee may determine to be relevant, including but not limited to
such Participant's individual performance, but also shall take into
consideration reliance placed on the Plan by the Participant in
rendering performance during the Plan Year. Any provision of this
Plan to the contrary notwithstanding, the maximum incentive
compensation award based upon attainment of Performance Goals that may
be payable to any Participant for a Plan Year calculated as described
above shall be 200% of his or her annualized weekly base salary in
effect as of the first pay period ending during the Plan Year to which
the award relates.
6.4 In addition to the incentive compensation awards based upon attainment
of Performance Goals as set forth above, the Compensation Committee
may, in its sole discretion, grant ad hoc incentive compensation
awards to any Participant or group of Participants in such amount or
amounts as it shall determine to be appropriate based
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<PAGE> 10
upon such factors as it shall deem to be relevant. Any such ad hoc
incentive compensation awards shall be determined and granted by the
Compensation Committee after the Plan Year to which the award relates
but prior to April 30 following the end of such Plan Year.
Article VII
Form and Timing of Awards
7.1 Incentive compensation awards under the Plan may be paid in cash or
shares of Common Stock, or in any combination thereof, at the
discretion of the Compensation Committee. Awards so paid in Common
Stock shall be valued based on the Fair Market Value of the Common
Stock as of the first business day following the completion of the
Plan Year. The manner of payment will be at the discretion of the
Compensation Committee. Awards shall be paid by April 30 following
the completion of the Plan Year. Awards shall be subject to the
normal rules and regulations regarding the withholding for taxes and
other deductions, if any, as may be in effect from time to time.
7.2 Certain Participants may elect to have their cash incentive
compensation awards earned under the Plan (a) deferred in accordance
with the provisions of Article VIII hereof or (b) paid to them in
shares of Restricted Stock in accordance with the provisions of
Article IX hereof.
Article VIII
Voluntary Election to Defer
8.1 Participants eligible to participate in the Executive Deferred
Compensation Plan may elect to defer their cash incentive compensation
awards pursuant to the Plan by their voluntary election to participate
in the Executive Deferred Compensation Plan. Based upon the terms and
provisions of the Executive Deferred Compensation Plan, certain
Participants may irrevocably elect to defer the receipt of all or a
portion of their earned cash incentive compensation awards to a
specified future date such as retirement. The election to participate
in the Executive Deferred Compensation Plan must be made in writing
and submitted to the Company's Human Resources Department before the
commencement of the Plan Year.
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Article IX
Voluntary Election to Receive Restricted Stock
9.1 Subject to the provisions of this Article IX, eligible Participants
may elect to have their cash incentive compensation awards earned
under the Plan for any Plan Year paid to them in shares of Restricted
Stock. An election made by an eligible Participant pursuant to this
Article IX (a) may be made only as to increments of 25%, 50%, 75%, or
100% of the Participant's cash incentive compensation award, (b) must
be made in writing on a form approved for this purpose by the
Compensation Committee and submitted to the Company's Human Resources
Department on or before March 1 of the Plan Year in respect of which
the award is earned (or on or before such later date as the
Compensation Committee may approve), and (c) shall be irrevocable.
The elections provided for under this Article IX are hereinafter
referred to as "Restricted Stock Elections". The payment of shares of
Restricted Stock pursuant to this Article IX shall be subject to the
approval of the Compensation Committee, which shall have the
discretion to cause the Company to settle all or any part of the
Company's payment obligation under a Restricted Stock Election by the
payment to the Participant of his or her cash incentive compensation
award in lieu of the shares of Restricted Stock the Company would
otherwise be obligated to deliver.
9.2 Prior to February 15 of each Plan Year, the Compensation Committee
shall designate the Participants or class or classes of Participants
(if any) who shall be eligible to make Restricted Stock Elections with
respect to awards earned under the Plan for such Plan Year. Such
determinations shall be in the sole discretion of the Compensation
Committee. A Participant who has made a Restricted Stock Election
shall be eligible to receive shares of Restricted Stock pursuant
thereto only if such Participant is an employee of the Company or a
subsidiary thereof on the date that such shares are issued. If the
Participant is not so employed, then the Participant's prior election
to receive shares of Restricted Stock in lieu of all or part of his or
her cash incentive compensation award for such Plan Year shall be
void.
9.3 The total number of shares of Restricted Stock to be paid to a
Participant who has made a Restricted Stock Election shall be
determined by dividing
(x) the product obtained (the "Subject Amount") by
multiplying (i) the amount of the Participant's cash
incentive compensation award earned under the Plan
for the Plan Year times (ii) the percentage of such
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<PAGE> 12
amount that the Participant elected to have paid in
shares of Restricted Stock pursuant to his or her
Restricted Stock Election,
by
(y) the Fair Market Value of the Common Stock as of the
first business day following the completion of the
Plan Year.
In determining the number of shares of Restricted Stock to be paid to
a Participant, the Compensation Committee may, in its discretion,
increase the value of such Participant's Subject Amount by multiplying
it by a factor, which shall not be greater than 150%, as determined by
the Compensation Committee. The factor shall be established by the
Compensation Committee prior to February 15 of the Plan Year and shall
be that rate which the Compensation Committee, in its sole discretion,
determines to be appropriate for such Plan Year to reflect the
Participant's election to forego cash compensation in exchange for
shares of Restricted Stock. No fractional shares of Common Stock
shall be issued pursuant to this Section 9.3; instead, the Company
shall pay to the Participant the amount of his or her cash incentive
compensation award not converted into whole shares of Restricted Stock
pursuant to this Section 9.3.
9.4 All shares of Restricted Stock issued to Participants pursuant to this
Article IX with respect to a Plan Year shall be subject to a
restricted period (the "Restricted Period"), the duration of which
shall be determined by the Compensation Committee in its sole
discretion prior to February 15 of such Plan Year. The Restricted
Period for shares of Restricted Stock issued to a Participant shall
commence on the first business day following completion of the Plan
Year. Shares of Restricted Stock issued to a Participant pursuant to
this Article IX shall be forfeited to the Company at no cost to the
Company if the Participant's employment with the Company or a
subsidiary of the Company terminates prior to the expiration or
termination of the Restricted Period applicable to such shares;
provided, however, that the shares of Restricted Stock shall become
fully vested and the Restricted Period shall terminate upon (a) the
Participant's termination of employment during the Restricted Period
due to death, Disability, or Retirement, (b) the involuntary
termination of the Participant's employment with the Company and its
subsidiaries by action of the Company (or its subsidiary, with respect
to a Participant employed by a subsidiary of the Company) during the
Restricted Period for reasons other than Just Cause, or (c) the
occurrence of a Corporate Change during the Restricted Period. Unless
and until shares of Restricted Stock are delivered to the Participant
upon vesting, the shares of Restricted Stock shall not be sold,
assigned, transferred, discounted, exchanged, pledged, or otherwise
encumbered or disposed of by the Participant in any manner. The
Compensation Committee may from time to time, in its discretion, and
subject to such terms and conditions as the Compensation Committee may
prescribe, grant to Participants to whom shares of Restricted Stock
have been issued pursuant to this
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Article IX the right to extend the Restricted Period applicable to
such shares for an additional period of time or until the occurrence
of a specified event or events, in which case such shares shall remain
subject to the restrictions of this Article IX for the period of such
extension.
9.5 The Company shall issue, in the name of each Participant to whom
shares of Restricted Stock have become payable pursuant to this
Article IX (or, at the option of the Company, in the name of a nominee
of the Company), stock certificates representing the total number of
shares of Restricted Stock to be paid to the Participant with respect
to a Plan Year, as soon as reasonably practicable after the date on
which the Compensation Committee approves, certifies and announces the
awards for such Plan Year. The Company or its agent, at the direction
of the Compensation Committee, shall hold such certificates, together
with stock powers and any other instrument of transfer reasonably
requested by the Company duly endorsed in blank, for the Participant's
benefit until such time as the shares of Restricted Stock represented
by such certificates are forfeited to the Company or the restrictions
thereon terminate.
9.6 Upon the issuance of a certificate representing shares of Restricted
Stock to a Participant, the Participant shall become the owner thereof
for all purposes and shall have all rights as a stockholder, including
voting rights and the right to receive dividends and distributions,
with respect to such shares, subject to the provisions of this Article
IX. If the Company shall pay or declare a dividend or make a
distribution of any kind, whether due to a reorganization,
recapitalization, or otherwise, with respect to the shares of Common
Stock constituting the shares of Restricted Stock, then the Company
shall pay or make such dividend or other distribution with respect to
the shares of Restricted Stock; provided, however, that the cash,
stock or other securities and other property constituting such
dividend or other distribution shall be held by the Company subject to
the restrictions applicable to the shares of Restricted Stock until
the shares with respect to which such dividend or other distribution
was paid or made are either vested or forfeited. If any shares of
Restricted Stock with respect to which such dividend or distribution
was paid or made do not vest but instead are forfeited pursuant to the
provisions hereof, then the Participant shall not be entitled to
receive such dividend or distribution with respect to such forfeited
shares and such dividend or distribution with respect to such
forfeited shares shall likewise be forfeited and automatically
transferred to and reacquired by the Company. If any shares of
Restricted Stock with respect to which such dividend or distribution
was paid or made become vested pursuant to the provisions hereof, then
the Participant shall be entitled to receive such dividend or
distribution with respect to such vested shares, without interest, and
such dividend or distribution with respect to such vested shares shall
likewise be delivered to the Participant.
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9.7 If any of the following events shall occur at any time while shares of
Restricted Stock are outstanding and prior to the vesting or
forfeiture thereof, the following adjustments shall be made in the
number of shares of Common Stock then constituting such shares of
Restricted Stock, as appropriate:
(a) If the Company pays a dividend on its outstanding
shares of Common Stock in shares of Common Stock or
subdivides its outstanding shares of Common Stock
into a greater number of shares of Common Stock, the
number of shares of Common Stock then constituting
the shares of Restricted Stock shall be
proportionately increased. Conversely, if the
outstanding shares of Common Stock are combined into
a smaller number of shares of Common Stock, the
number of shares of Common Stock then constituting
the shares of Restricted Stock shall be
proportionately reduced. An adjustment made pursuant
to this Section 9.7(a) shall become effective as of
the record date in the case of a dividend and shall
become effective immediately after the effective date
in the case of a subdivision or combination.
(b) In case of any recapitalization or reclassification
of the Common Stock, or any merger or consolidation
of the Company with or into one or more other
corporations, or any sale of all or substantially all
the assets of the Company, as a result of which the
holders of Common Stock receive other stock,
securities, or property in lieu of or in addition to,
but on account of, their shares of Common Stock, (A)
such other stock, securities, or property allocable
(as provided in clause (B) below) to the shares of
Common Stock then constituting the shares of
Restricted Stock shall be paid and delivered with
respect to such shares of Restricted Stock, subject
to the same restrictions applicable to such
Restricted Stock, and (B) the Company shall make or
cause to be made lawful and adequate provision
whereby, upon the vesting of the shares of Restricted
Stock after the record date for the determination of
the holders of Common Stock entitled to receive such
other stock, securities, or property, the Participant
shall receive, in lieu of or in addition to the
shares of Restricted Stock that have vested, as the
case may be, the shares of stock, securities, or
property that would have been allocable to such
shares of Restricted Stock had such shares vested
immediately prior to such record date. The
subdivision or combination of shares of Common Stock
at any time outstanding into a greater or smaller
number of shares of Common Stock shall not be deemed
to be a recapitalization or reclassification of the
Common Stock for the purposes of this Section 9.7(b).
9.8 Upon the expiration or termination of the Restricted Period applicable
to shares of Restricted Stock, the restrictions applicable to the
shares of Restricted Stock that have
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not theretofore been forfeited shall terminate, and as soon as
practicable thereafter a stock certificate for the number of shares of
Restricted Stock with respect to which the restrictions have
terminated, together with any dividends or other distributions with
respect to such shares then being held by the Company pursuant to the
provisions of this Article IX, shall be delivered, free of all such
restrictions, to the Participant or the Participant's beneficiary or
estate, as the case may be.
9.9 Each recipient of shares of Restricted Stock pursuant to this Article
IX shall, as a condition precedent to the issuance of such shares to
or on behalf of such person, enter into an agreement with the Company,
in such form as the Compensation Committee shall prescribe and which
is consistent with the provisions of the Plan, setting forth or
incorporating the restrictions, terms, and conditions of the award of
Restricted Stock. An agreement may contain such provisions as the
Compensation Committee deems appropriate to enable the Company or its
appropriate affiliate to satisfy its federal and any applicable state
and local tax withholding obligations, including provisions permitting
the Company, upon the vesting of shares of Restricted Stock, to
withhold delivery of shares of Restricted Stock or accept delivery of
other shares of Common Stock owned by the Participant to satisfy such
tax withholding obligations. In the event of any inconsistency
between the provisions of the Plan and any such agreement, the
provisions of the Plan shall govern.
9.10 Notwithstanding anything contained in the Plan to the contrary, the
Compensation Committee shall have the right to cancel all or any
portion of any outstanding restrictions prior to the expiration or
termination of such restrictions with respect to any or all shares of
Restricted Stock on such terms and conditions as the Compensation
Committee may, in writing, deem appropriate.
Article X
No Right of Employment
10.1 Nothing in the Plan, including the employee's eligibility for
participation in the Plan, will infer any right of employment by the
Company or any subsidiary thereof to such employee.
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Article XI
Miscellaneous
11.1 The total number of shares of Common Stock that may be issued,
transferred, or awarded pursuant to Section 7.1 or Article IX of the
Plan shall not exceed a maximum of 300,000 in the aggregate. In the
event the Company shall effect a split of the Common Stock or a
dividend payable in Common Stock, or in the event the outstanding
Common Stock shall be combined into a smaller number of shares, the
maximum number of shares that may be issued or awarded under the Plan
shall be increased or decreased proportionately. Shares that have
been previously delivered to a Participant as Restricted Stock that
have since been forfeited shall be available for further issuance or
award under the Plan. Shares of Common Stock issued pursuant to the
Plan may be shares of original issuance or treasury shares or a
combination of the foregoing, as the Compensation Committee, in its
discretion, shall from time to time determine.
11.2 Subject to the provisions of Article IX hereof, a Participant shall
not have the right to anticipate, alienate, sell, transfer, assign,
pledge, or encumber his or her right to receive any award made under
the Plan.
11.3 No Participant shall have any lien on any assets of the Company or any
subsidiary thereof by reason of any rights to any award made under the
Plan.
11.4 No member of the Compensation Committee shall be liable for any act,
omission, or determination taken or made in good faith with respect to
the Plan or any awards made hereunder; and the members of the
Compensation Committee shall be entitled to indemnification and
reimbursement by the Company in respect of any claim, loss, damage, or
expenses (including counsel fees) arising therefrom to the full extent
permitted by law and under any directors' and officers' liability or
similar insurance coverage that may be in effect from time to time.
11.5 The adoption of the Plan or any modification or amendment hereof does
not imply any commitment to continue or adopt the same plan, or any
modification hereof, or any other plan for incentive compensation for
any succeeding year, provided that no termination, modification or
amendment of the Plan shall adversely affect the right of any
Participant to receive any amount to which such Participant has become
entitled prior to such termination, modification, or amendment.
11.6 The laws of the State of Texas shall govern the Plan.
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11.7 The Plan shall be binding on the successors of the Company.
11.8 The Plan shall be deemed adopted by the Board of Directors as of
January 1, 1996. The Plan shall be deemed effective as of the date of
its adoption by the Board of Directors, provided it is duly approved
by the holders of a majority of the shares of Common Stock present, or
represented, and entitled to vote at the 1996 annual meeting of
stockholders of the Company. If the Plan is not approved by the
stockholders, the Plan shall terminate and all actions taken hereunder
shall be null and void.
IN WITNESS WHEREOF, Oryx Energy Company has caused this Plan to be executed by
its duly authorized representative this _____ day of ______________, 1996.
ORYX ENERGY COMPANY
By:
-----------------------------
ATTEST:
By:
---------------------------
Title:
------------------------
15
<PAGE> 1
EXHIBIT 10.6b
Amendment No. Two to the
Oryx Energy Company
Executive Retirement Plan
As Amended And Restated
Effective January 1, 1995
WHEREAS, Oryx Energy Company (the "Company") last amended and restated the
Executive Retirement Plan (the "Plan") effective January 1, 1995 and last
amended the Plan effective January 1, 1996; and
WHEREAS, the Company desires further to amend the Plan;
NOW, THEREFORE, pursuant to the powers reserved in Article IX of the Plan, the
Plan is hereby amended as follows:
I.
Effective January 1, 1997, the first sentence of the first paragraph in
Section 3.08(b) is amended to include the year 1997, by the revision of
the phrase "under an outplacement program during 1995 or 1996" to read
"under an outplacement program during 1995, 1996, or 1997".
II.
Except for the amendments reflected in this instrument, the Plan shall
remain in full force and effect.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed this
5th day of September, 1996.
ORYX ENERGY COMPANY
By: /s/ FRANCES G. HEARTWELL
------------------------------------
Name: Frances G. Heartwell
----------------------------------
Title: Vice President, Human Resources
---------------------------------
and Administration
ATTEST:
By: /s/ WILLIAM C. LEMMER
------------------------------------
Title: Vice President, General Counsel
---------------------------------
and Secretary
<PAGE> 1
EXHIBIT 10.8a
AMENDMENT
TO
ORYX ENERGY COMPANY
1992 LONG-TERM INCENTIVE PLAN
Pursuant to the provisions of Section 15.1 of the Oryx Energy Company 1992
Long-Term Incentive Plan, as amended through December 2, 1993 and restated (the
"Plan"), the Plan is hereby amended, effective as of September 4, 1996, as
follows:
1. Restate the first sentence of Section 4.1 of the Plan in its entirety to
read as follows:
This Plan shall be administered by the Committee, which shall consist of
three or more directors of the Company, all of whom are "Non-Employee
Directors," as such term is defined under the rules and regulations
adopted, from time to time, by the Securities and Exchange Commission
pursuant to Section 16(b) of the Exchange Act, including specifically
but without limitation, Rule 16b-3 or any successor rule thereto.
ORYX ENERGY COMPANY
By: /s/ FRANCES G. HEARTWELL
------------------------------------
Name: Frances G. Heartwell
----------------------------------
Title: Vice President, Human Resources
----------------------------------
and Administration
Dated as of September 4, 1996.
<PAGE> 1
EXHIBIT 12
ORYX ENERGY COMPANY
COMPUTATIONS OF CONSOLIDATED RATIOS OF EARNINGS
TO FIXED CHARGES AND EARNINGS TO FIXED CHARGES AND
PREFERRED STOCK DIVIDEND REQUIREMENTS - UNAUDITED (A)
(MILLIONS OF DOLLARS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------------------
1996 1995 1994 1993 1992
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
RATIO OF EARNINGS TO FIXED CHARGES:
Fixed Charges:
Consolidated interest cost and debt expense $ 110 $ 144 $ 162 $ 163 $ 187
Interest allocable to rental expense (b) 6 14 13 11 11
----- ----- ----- ----- -----
Total $ 116 $ 158 $ 175 $ 174 $ 198
===== ===== ===== ===== =====
Earnings:
Consolidated income (loss) before provision (benefit) for income taxes $ 265 $ 136 $(100) $(108) $ (4)
Fixed charges 116 158 175 174 198
Interest capitalized (17) (10) (11) (46) (43)
Amortization of previously capitalized interest 4 5 14 7 3
----- ----- ----- ----- -----
Total $ 368 $ 289 $ 78 $ 27 $ 154
===== ===== ===== ===== =====
Ratio of Earnings to Fixed Charges (c) 3.17 1.83 .45 .16 .78
===== ===== ===== ===== =====
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED
STOCK DIVIDEND REQUIREMENTS:
Fixed Charges:
Consolidated interest cost and debt expense $ 110 $ 144 $ 162 $ 163 $ 187
Preferred stock dividend requirements -- -- 2 8 14
Interest allocable to rental expense (b) 6 14 13 11 11
----- ----- ----- ----- -----
Total $ 116 $ 158 $ 177 $ 182 $ 212
===== ===== ===== ===== =====
Earnings:
Consolidated income (loss) before provision (benefit) for income taxes $ 265 $ 136 $(100) $(108) $ (4)
Fixed charges 116 158 177 182 212
Interest capitalized (17) (10) (11) (46) (43)
Amortization of previously capitalized interest 4 5 14 7 3
----- ----- ----- ----- -----
Total $ 368 $ 289 $ 80 $ 35 $ 168
===== ===== ===== ===== =====
Ratio of Earnings to Fixed Charges (c) 3.17 1.83 .45 .19 .79
===== ===== ===== ===== =====
</TABLE>
- -----------
(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) Earnings for 1994 were inadequate to cover fixed charges, or fixed
charges and preferred stock dividend requirements by $97 million.
Earnings for 1993 were inadequate to cover fixed charges, or fixed
charges and preferred stock dividend requirements by $147 million.
Earnings for 1992 were inadequate to cover fixed changes, or fixed
charges and preferred stock dividend requirements, by $44 million.
<PAGE> 1
EXHIBIT 13
AS WE CONTINUE TO FOCUS
ON THE KEY FACTORS THAT HAVE DRIVEN OUR
TURNAROUND, WE BELIEVE THAT THE FUTURE
WILL BE EVEN MORE SUCCESSFUL.
[PHOTO]
<TABLE>
<CAPTION>
NET EXPLORATORY WELLS DRILLED
<S> <C>
92 13
93 10
94 7
95 3
96 4
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS Management's discussion and analysis of the Company's
financial position and results of operations which follows should be read in
conjunction with the Consolidated Financial Statements and Selected Financial
Data included in this report.
LIQUIDITY AND CAPITAL RESOURCES ED&A outlays were $500 million in 1996, $300
million in 1995 and $314 million in 1994. In 1996, 18 percent of the Company's
total ED&A investment was on exploration and 82 percent on development and
acquisition. In 1997, total ED&A outlays are expected to be $520 million of
which about 72 percent is targeted for development and 28 percent for
exploration, primarily in the U.S. FD&A costs per eb were $4.50 in 1996. The
average FD&A cost for the five years 1992 through 1996 was $4.86 per eb and the
average production replacement rate was 101 percent. In 1996, the Company
replaced 153 percent of its production.
The Company's cash flow available for investment will continue to be
affected by prevailing oil and gas prices, costs and volumes. Volatility in oil
and gas prices experienced over the past several years is expected to continue.
The Company is basing its 1997 investment plans on oil and gas spot prices
averaging $19.75 per barrel WTI and $2.05 per mmbtu HH. These assumptions are
subject to change, along with the associated investment levels.
On October 29, 1996, the Company completed the acquisition of additional
interests in the Ninian, Hutton, Lyell and Murchison fields as well as the
Columba field and surrounding
13
<PAGE> 2
<TABLE>
<CAPTION>
RESERVES ADDED/DISCOVERY NUMBER OF EMPLOYEES PRODUCTION PER EMPLOYEE
(mmeb/well) (hundreds) (meb/employee)
<S> <C> <C> <C> <C> <C>
92 12.8 92 16 92 53
93 19.7 93 15 93 51
94 30.2 94 12 94 67
95 35.8 95 12 95 61
96 32.6 96 10 96 70
</TABLE>
acreage in the U.K. North Sea for $91 million cash. Oryx was operator of three
of the fields and became operator of Ninian in February 1997.
During 1995, the Company generated $517 million of net proceeds from the
sale of certain assets in order to reduce debt. The U.K. North Sea Alba Field
and Block 48/15a interests were sold for $270 million and $120 million
respectively. The Company also sold certain assets in the U.S. for $77 million
and all of its assets in Indonesia and Gabon for $67 million and $2 million
respectively.
In 1994, the Company exchanged its interest in the undeveloped U.K.
Britannia field for a doubling of its interests in the U.K. Hutton, Lyell and
Murchison producing fields and $40.4 million in cash. This transaction
increased near-term production volumes and considerably reduced future
development expenditures. Effective January 9, 1995, the Company took over
operatorship of the Hutton, Lyell and Murchison fields.
Effective June 1, 1995, the Company replaced its $620 million revolving
credit facility with a $500 million revolving credit facility (Revolver) which
matures on June 30, 1998. The terms of the $500 million Revolver incorporate
restrictive covenants, including limitations on total debt, minimum cash flow
interest coverage and certain dividend limitations. In August 1995, as a result
of the sale of the Company's interest in the Alba field, the Company was
required by the holder to repay the 7.2% $100 million note.
In connection with the aforementioned, the Company recognized a non-cash
extraordinary loss of $15 million (net of $8 million of income tax). The $15
million extraordinary loss is comprised of $14 million from the write-off of
debt issuance costs deferred under the $620 million revolving credit facility
and a prepayment penalty of $1 million on the 7.2% $100 million note.
In August 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, 1996, to be reset at six-month
intervals). The $14 million of proceeds previously received is being amortized
and netted against the interest expense associated with the exercise of the
swap option.
The Company called for redemption on October 30, 1995 its $138 million 10
3/8% Debentures at 106.471 percent of par plus accrued interest, which resulted
in an $8 million extraordinary loss (net of $3 million of income tax) in the
fourth quarter. The redemption was funded with proceeds from divestments.
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 were 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. The Company's total debt was $1,187 million, $1,203 million and
$1,711 million at December 31, 1996, 1995 and 1994.
On July 11, 1996, the Company issued $150 million 8 3/8% Notes Due July
15, 2004. The net proceeds of $149 million were used to refinance debt
outstanding under the Company's Revolver, uncommitted lines of credit and
commercial paper. These vehicles had been utilized to refinance $100 million of
the Company's 9.30% Notes that matured in May 1996 and $35 million of the
Company's 6.05% Medium Term Notes that matured in February 1996.
14
<PAGE> 3
<TABLE>
<CAPTION>
CRUDE & CONDENSATE PRICE CRUDE & CONDENSATE PRODUCTION NATURAL GAS PRICE
<S> <C> <C> <C> <C> <C>
92 18.77 92 119 92 1.83
93 16.08 93 110 93 1.98
94 15.06 94 121 94 1.90
95 16.53 95 114 95 1.77
96 19.56 96 109 96 2.14
</TABLE>
Cash was $9 million at the end of 1996 and $20 million at the end of 1995.
The Company's current borrowing capacity is more than adequate to meet its
needs under existing economic conditions. Moreover, the Revolver is available
to support the outstanding commercial paper program, potential refinancing
needs and general liquidity.
During 1996, Moody's Investors Service upgraded the Company's senior
unsecured debentures to Ba2 from Ba3 and the convertible subordinated debenture
to B1 from B2.
During 1995, 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.
Following a reduction of the amount of the quarterly dividend on common
stock in 1992, from $.30 per share to $.10 per share, in 1994, the Board of
Directors suspended the dividend.
Any shortfall in expected cash flow from operating activities may require
adjustment of business plans. Among its options, the Company can defer
discretionary ED&A outlays, draw against the unused portion of the Revolver,
seek additional bank borrowings or seek access to capital markets. The Company
is in compliance with all the covenants in its Revolver and expects to remain
in compliance under existing conditions. The ability to incur additional
indebtedness as well as the long-term cash generation capability is ultimately
tied to the value of the Company's proved reserve base.
FINANCIAL PERFORMANCE Net income in 1996 was $163 million. The realized oil
price in 1996 increased 20 percent to $19.56 per barrel. The increase in 1996
followed a 9 percent increase in 1995 compared to 1994. The Company's realized
U.S. gas price in 1996 increased 24 percent to $2.14 per mcf. In 1996,
production volumes decreased 4 percent as a direct result of 1995 asset sales.
Total costs and expenses decreased 9 percent to $882 million in 1996 from $968
million in 1995, excluding the 1995 restructuring provision. Operating costs
decreased 28 percent in 1996 due to divestments and cost efficiency measures.
Interest and debt expense decreased 24 percent in 1996 due to lower debt.
Production taxes increased 52 percent in 1996 primarily due to higher prices.
Net income in 1995 was $135 million which included net gains of $137
million from the sale of assets, a $23 million extraordinary item related to
early extinguishment of debt (see Note 12 to the Consolidated Financial
Statements) and a $16 million net restructuring charge. Production volumes
decreased 10 percent as a direct result of the sale of producing assets. Total
costs and expenses decreased 10 percent to $968 million in 1995 from $1,080 in
1994, excluding the restructuring provision.
The net loss for 1994 was $1,025 million, which included a $948 million
cumulative effect of an accounting change (see Note 8 to the Consolidated
Financial Statements), a $12 million extraordinary item related to early
retirement of debt (see Note 12 to the Consolidated Financial Statements) and a
$59 million restructuring charge (net of $33 million of income tax). Production
volumes increased 5 percent primarily from the U.K. North Sea. Depreciation,
depletion and amortization expense declined 31 percent because of the
accounting change which decreased the Company's producing property balance
$1,355 million. (See Note 8 to the Consolidated Financial Statements.) General
and administrative expense decreased 20 percent primarily because of fewer
employees and capitalized interest decreased 76 percent because of the
completion of certain development projects. Total costs and expenses decreased
7 percent to $1,080 million in 1994 excluding the restructuring provision.
15
<PAGE> 4
<TABLE>
<CAPTION>
NATURAL GAS PRODUCTION TOTAL DEBT LEVELS
(mmcf/d) ($ billion)
<S> <C> <C> <C>
92 679 92 1.71
93 603 93 1.77
94 600 94 1.71
95 518 95 1.20
96 500 96 1.19
</TABLE>
RESTRUCTURING CHARGES The Company incurred provisions for restructuring of $25
million in 1995 and $92 million in 1994. The 1994 provision consisted of a
charge of $161 million provided in the first quarter, revised to $76 million
because of the accounting change, and $16 million provided in the fourth
quarter. The restructuring program involves some consolidation of the Company's
business. The net result of these actions was a reduction of approximately 600
positions which, along with other actions taken, led to cost reductions for
1996. For analysis of the restructuring provisions, see Note 6 to the
Consolidated Financial Statements.
HEDGING ARRANGEMENTS The Company, from time to time, enters into hedging
arrangements for foreign currencies, interest rates and oil and gas prices. The
Company has entered into contracts to hedge approximately 33 percent of its
1997 crude oil production. Collar agreements were employed to hedge
approximately 12 percent of production at an average floor price of $19.90 WTI
per barrel and an average ceiling price of $22.49 WTI per barrel, put contracts
comprise 11 percent of production at an average floor price of $19.65 WTI per
barrel and swap agreements hedge 2 percent of production at an average price of
$19.25 WTI per barrel. In addition, the Company has sold forward Brent crude at
$19.23 per barrel which is approximately 8 percent of its estimated 1997 crude
oil production. Approximately 35 percent of its estimated 1997 U.S. gas
production is under hedging agreements at an average price of $2.08 HHper mmbtu
comprised of 18 percent hedged using collars at an average floor price of $2.13
HH per mmbtu and an average ceiling price of $2.51 HH per mmbtu, 14 percent
hedged via put contracts at an average floor price of $2.02 HH per mmbtu, and 3
percent utilizing swap agreements at an average price of $2.06 HH per mmbtu.
(See Note 2 to the Consolidated Financial Statements.)
MARKETING During the fourth quarter of 1995, the Company, Apache Corporation
and Parker & Parsley Petroleum Company formed Producers Energy Marketing, LLC
(ProEnergy). ProEnergy purchases substantially all of its members' U.S. gas
production at index prices.
INCOME TAXES Oryx Energy adopted SFAS No. 109, "Accounting for Income Taxes,"
effective January 1, 1992. The effect for remeasurement of foreign deferred tax
was a charge of $2 million in 1994, no effect in 1995 and a charge of $6
million in 1996. As a result of applying the provisions of SFAS No. 109, a
non-cash charge or credit is included in business results based on the change
in foreign exchange rates and the corresponding impact on the net deferred tax
liability. The Company believes these items tend to distort current period
business results and should be disregarded in analyzing its current business.
ENVIRONMENTAL The Company's oil and gas operations are subject to stringent
environmental regulations. The Company is dedicated to the preservation of the
environment and has committed significant resources to comply with such
regulations. Although it has been named as a potentially responsible party at
sites related to past operations, the Company believes it is in general
compliance with applicable governmental regulations and that the potential
costs to it, in the aggregate, are not material to its financial condition.
However, risks of substantial costs and liabilities are inherent to the oil and
gas business. Should other developments occur, such as increasingly strict
environmental laws, regulations and enforcement policies or claims for damages
resulting from the Company's operations, they could result in additional costs
and liabilities in the future. (See Note 19 to the Consolidated Financial
Statements.)
16
<PAGE> 5
SELECTED FINANCIAL DATA
Oryx Energy Company
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
(Millions of Dollars, Except
Per Share Amounts) 1996 1995 1994 1993 1992
- ---------------------------------------------------------------------------------------------------------
FOR THE PERIOD
<S> <C> <C> <C> <C> <C>
Revenues $ 1,147 $ 1,129 $ 1,072 $ 1,054 $ 1,392
Income (loss) before extraordinary
item and cumulative effect
of accounting change (1) $ 163 $ 158 $ (65) $ (93) $ 73
Net income (loss) (1) $ 163 $ 135 $(1,025) $ (100) $ 14
Income (loss) per share of common
stock before extraordinary item
and cumulative effect
of accounting change (1) $ 1.55 $ 1.54 $ (.68) $ (1.01) $ .74
Net income (loss) per share
of common stock (1) $ 1.55 $ 1.32 $(10.53) $ (1.08) $ .06
Cash dividends per share
of common stock (2) $ -- $ -- $ -- $ .40 $ .80
Cash dividends per share
of preferred stock (3) $ -- $ .05 $ .175 $ .725 $ 1.25
ED&A outlays (4) $ 500 $ 300 $ 314 $ 451 $ 390
AT END OF PERIOD
Total assets (1) $ 1,935 $ 1,666 $ 2,118 $ 3,624 $ 3,738
Long-term debt $ 1,183 $ 1,051 $ 1,546 $ 1,741 $ 1,489
Shareholders' equity (deficit)(5) $ (37) $ (209) $ (347) $ 676 $ 817
</TABLE>
(1) Net income for 1996 includes a $6 million charge for remeasurement of
foreign deferred taxes and a $1 million after-tax loss on asset disposals.
Net income for 1995 includes $137 million of after-tax gains on asset
disposals, a $16 million after-tax charge for costs associated with the
Company's restructuring and a $23 million extraordinary loss net of taxes
from debt costs. (See Notes 6 and 12 to the Consolidated Financial
Statements.) Effective January 1, 1994, the Company adopted a new policy
for determining the ceiling test for its oil and gas properties. A
one-time non-cash charge of $948 million after-tax for the cumulative
effect of the change was recognized in the earnings for 1994 (see Note 8
to the Consolidated Financial Statements). Additionally, net loss for 1994
includes a $59 million after-tax charge for costs associated with the
Company's restructuring program, a $12 million extraordinary loss net of
taxes from debt costs and a $2 million charge for the remeasurement of
foreign deferred taxes (see Notes 6 and 12 to the Consolidated Financial
Statements). Net loss for 1993 includes $5 million of after-tax losses on
asset disposals, a $7 million extraordinary loss net of taxes from the
repurchase of indebtedness and a $5 million benefit for remeasurement of
foreign deferred taxes (see Note 12 to the Consolidated Financial
Statements). Net income for 1992 includes $19 million of after-tax gains
on asset disposals, a $9 million after-tax charge for costs associated
with the Company's restructuring program and a $59 million benefit for
remeasurement of foreign deferred taxes.
(2) In June 1992, the Company announced the reduction of the quarterly cash
dividend on its $1.00 par value common stock (Common Stock) from $.30 to
$.10 per share. In January 1994, the Company announced the suspension of
its quarterly cash dividend of $.10 per share.
(3) On September 11, 1990, the Company issued 7,259,394 shares of Series B
Junior Cumulative Convertible Preference Stock (Series B Preference
Stock). In November 1994, 2 million shares of Series B Preference Stock
were converted into Common Stock. During 1995, the remaining 5,259,394
shares of Series B Preference Stock were converted into Common Stock.
(4) Exploration, development and acquisition outlays (ED&A outlays) exclude
capitalized interest of $17 million, $10 million, $11 million, $46 million
and $43 million for 1996, 1995, 1994, 1993 and 1992.
(5) Shareholders' equity (deficit) at December 31, 1996, 1995 and 1994
includes the $948 million charge for the cumulative effect of the change
in the Company's policy for determining the ceiling test for its oil and
gas properties (see Note 8 to the Consolidated Financial Statements).
Shareholders' equity (deficit) at December 31, 1996, 1995, 1994, 1993 and
1992 includes the effects of the sale of 17,250,000 shares of Common Stock
in August 1992.
17
<PAGE> 6
CONSOLIDATED STATEMENTS OF INCOME
Oryx Energy Company
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
(Millions of Dollars, Except Per Share Amounts) 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------
REVENUES
<S> <C> <C> <C>
Oil and gas (Note 3) $ 1,168 $ 1,014 $ 1,082
Other-net (Note 4) (21) 115 (10)
------- ------- -------
1,147 1,129 1,072
------- ------- -------
COSTS AND EXPENSES
Operating costs 239 330 374
Production taxes (Note 5) 160 105 112
Exploration costs 56 59 104
Depreciation, depletion and amortization 276 276 271
General and administrative expense 58 64 68
Interest and debt expense 110 144 162
Interest capitalized (17) (10) (11)
Provision for restructuring (Note 6) -- 25 92
------- ------- -------
882 993 1,172
------- ------- -------
Income (loss) before extraordinary item, cumulative effect of
accounting change and provision (benefit) for income taxes 265 136 (100)
Provision (benefit) for income taxes (Note 7) 96 (22) (37)
Remeasurement of foreign deferred tax (Notes 1 and 7) 6 -- 2
------- ------- -------
Income (loss) before extraordinary item and cumulative effect
of accounting change 163 158 (65)
Extraordinary item (Note 12) -- (23) (12)
Cumulative effect of accounting change (Note 8) -- -- (948)
------- ------- -------
NET INCOME (LOSS) 163 135 (1,025)
Less preferred stock dividends -- -- 1
------- ------- -------
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK $ 163 $ 135 $(1,026)
======= ======= =======
NET INCOME (LOSS) PER SHARE OF COMMON STOCK (Note 9):
Before extraordinary item and cumulative effect of accounting change $ 1.55 $ 1.54 $ (.68)
Extraordinary item -- (.22) (.12)
Cumulative effect of accounting change -- -- (9.73)
------- ------- -------
Net income (loss) $ 1.55 $ 1.32 $(10.53)
======= ======= =======
Weighted average number of common and common
equivalent shares outstanding (millions of shares) 105.0 102.4 97.4
======= ======= =======
</TABLE>
(See Accompanying Notes)
18
<PAGE> 7
CONSOLIDATED BALANCE SHEETS
Oryx Energy Company
<TABLE>
<CAPTION>
DECEMBER 31 (Millions of Dollars) 1996 1995
- ----------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 9 $ 20
Accounts receivable and other current assets 241 161
------- -------
Total Current Assets 250 181
Properties, Plants and Equipment (Note 10) 1,627 1,426
Deferred Charges and Other Assets 58 59
------- -------
Total Assets $ 1,935 $ 1,666
======= =======
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities
Accounts payable $ 130 $ 106
Accrued liabilities (Note 11) 251 196
Current portion of long-term debt (Note 12) 4 152
------- -------
Total Current Liabilities 385 454
Long-Term Debt (Note 12) 1,183 1,051
Deferred Income Taxes (Note 7) 248 207
Deferred Credits and Other Liabilities (Note 19) 156 163
Commitments and Contingent Liabilities (Note 13)
Shareholders' Deficit (Note 14)
Preferred stock, $1 par value; 22,740,606 shares
authorized; none issued or outstanding -- --
Common stock, $1 par value; 250,000,000 shares
authorized; 126,703,550 shares issued in
1996 and 1995, 104,982,628 and 104,454,562
shares outstanding in 1996 and 1995 124 124
Additional paid-in capital 1,821 1,821
Accumulated deficit (895) (1,051)
------- -------
1,050 894
Less common stock in treasury, at cost; 18,719,046
and 19,247,112 shares in 1996 and 1995 (988) (1,004)
Less loan to ESOP (99) (99)
------- -------
Shareholders' Deficit (37) (209)
------- -------
Total Liabilities and Shareholders' Deficit $ 1,935 $ 1,666
======= =======
</TABLE>
The successful efforts method of accounting is followed. (See Accompanying
Notes)
19
<PAGE> 8
CONSOLIDATED STATEMENTS OF CASH FLOWS
Oryx Energy Company
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 (Millions of Dollars) 1996 1995 1994
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH AND CASH EQUIVALENTS FROM OPERATING ACTIVITIES
Net Income (Loss) $ 163 $ 135 $(1,025)
Adjustments to reconcile net income (loss) to net
cash from operating activities:
Depreciation, depletion and amortization 276 276 271
Dry hole costs and leasehold impairment 20 21 57
Deferred income taxes 66 33 10
(Gain) loss on sale of assets, net of taxes 1 (137) --
Provision for restructuring, net of taxes -- 16 59
Extraordinary item -- 23 12
Cumulative effect of accounting change -- -- 948
Other 14 10 5
------- ------- -------
540 377 337
Changes in working capital:
Accounts receivable and other current assets (81) 9 14
Accounts payable 24 -- (14)
Accrued liabilities 52 (61) (41)
------- ------- -------
NET CASH FLOW PROVIDED FROM OPERATING ACTIVITIES 535 325 296
------- ------- -------
CASH AND CASH EQUIVALENTS FROM INVESTING ACTIVITIES
Capital expenditures (484) (273) (281)
Proceeds from divestments, net of current taxes 7 517 78
Other (51) (25) (30)
------- ------- -------
NET CASH FLOW PROVIDED FROM (USED FOR) INVESTING ACTIVITIES (528) 219 (233)
------- ------- -------
CASH AND CASH EQUIVALENTS FROM FINANCING ACTIVITIES
Proceeds from borrowings 221 259 123
Repayments of long-term debt (239) (793) (185)
Cash dividends paid on preferred stock -- -- (1)
------- ------- -------
NET CASH FLOW USED FOR FINANCING ACTIVITIES (18) (534) (63)
------- ------- -------
CHANGES IN CASH AND CASH EQUIVALENTS (11) 10 --
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 20 10 10
------- ------- -------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 9 $ 20 $ 10
======= ======= =======
</TABLE>
(See Accompanying Notes)
20
<PAGE> 9
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT
Oryx Energy Company
<TABLE>
<CAPTION>
COMMON STOCK PREFERRED STOCK COMMON STOCK
------------------- ------------------ ADDITIONAL HELD IN TREASURY LOAN
NUMBER PAR NUMBER PAR PAID-IN ACCUMULATED ---------------- TO
OF SHARES VALUE OF SHARES VALUE CAPITAL DEFICIT SHARES COST ESOP
- ------------------------------------------------------------------------------------------------------------------------------------
(Millions of Dollars, Thousands of Shares)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
At December 31, 1993 123,702 $ 124 7,259 $ 7 $ 2,204 $ (155) (26,769) $ (1,402) $ (102)
Net loss (1,025)
Issuance from treasury (1) 13 1
Preferred stock conversion (2,000) (2) (105) 2,000 107
Cash dividends declared:
Preferred - $.175 per share (1)
Repayment of loan to ESOP 3
------- -------- ----- -------- -------- -------- ------- -------- --------
At December 31, 1994 123,702 124 5,259 5 2,098 (1,181) (24,756) (1,294) (99)
Net income 135
Issuance from treasury (5) 250 7
Preferred stock conversion (5,259) (5) (277) 5,259 283
Cash dividends declared:
Preferred - $.05 per share --
------- -------- ----- -------- -------- -------- ------- -------- --------
At December 31, 1995 123,702 124 -- -- 1,821 (1,051) (19,247) (1,004) (99)
Net income 163
Issuance from treasury (7) 528 16
------- -------- ----- -------- -------- -------- ------- -------- --------
At December 31, 1996 123,702 $ 124 -- $ -- $ 1,821 $ (895) (18,719) $ (988) $ (99)
======= ======== ===== ======== ======== ======== ======= ======== ========
</TABLE>
(See Accompanying Notes)
21
<PAGE> 10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Oryx Energy Company
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION
Oryx Energy Company together with its consolidated subsidiaries (the Company)
was incorporated in Delaware in 1971 and became a publicly traded company on
November 1, 1988. The Company's business operations consist of the exploration
for and development and production of oil and natural gas reserves. Since
December 1, 1985, the Company has functioned as the managing general partner
for and has conducted its United States operations through Sun Energy Partners,
L.P. The majority of the Company's operations located outside of the United
States were acquired effective January 1, 1990 and are identified herein by the
separate geographic areas of the United Kingdom and Other Foreign.
The consolidated financial statements contain the accounts of the Company
after elimination of intercompany balances and transactions. The Company's
interests in Sun Energy Partners, L.P. and its related operating partnerships
(Partnership) are fully consolidated.
CASH AND CASH EQUIVALENTS
The Company considers highly liquid investments with original maturities of less
than three months to be cash equivalents. Cash equivalents are stated at cost
which approximates market value.
PROPERTIES, PLANTS AND EQUIPMENT
The successful efforts method of accounting is followed for costs incurred in
oil and gas operations.
CAPITALIZATION POLICY Acquisition costs are capitalized when incurred. Costs of
unproved properties are transferred to proved properties when proved reserves
are added. Exploration costs,including geological and geophysical costs and
costs of carrying unproved properties, are charged against income as incurred.
Exploratory drilling costs are capitalized initially; however, if it is
determined that an exploratory well did not find proved reserves, such
capitalized costs are charged to expense, as dry hole costs, at that time.
Development costs are capitalized. Costs incurred to operate and maintain wells
and equipment are expensed.
LEASEHOLD IMPAIRMENT AND DEPRECIATION, DEPLETION AND AMORTIZATION Periodic
valuation provisions for impairment of capitalized costs of unproved properties
are expensed. The acquisition costs of proved properties are depleted by the
unit-of-production method based on proved reserves by field. Capitalized
exploratory drilling costs which result in the addition of proved reserves and
development costs are amortized by the unit-of-production method based on
proved developed reserves by field.
CEILING TEST The Company performs its ceiling test comparisons on an individual
field basis. In December 1995, the Company adopted the provisions of Statement
of Financial Accounting Standards (SFAS) No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
Under SFAS No. 121, whenever events or changes in circumstances indicate that
the carrying amount of a long-lived asset may not be recoverable, the Company
reviews for impairment by comparing estimated future cash flows expected to
result from the use of an asset and its eventual disposition to the carrying
amount of the asset (Note 8). If impairment is indicated, the asset is written
down to its fair value based upon its expected future discounted cash flows.
DISMANTLEMENT, RESTORATION AND ABANDONMENT COSTS Estimated costs of future
dismantlement, restoration and abandonment are accrued as a component of
depreciation, depletion and amortization expense; actual costs are charged to
the accrual.
RETIREMENTS Gains and losses on the disposals of fixed assets are generally
reflected in income. For certain property groups, the cost less salvage value
of property sold or abandoned is charged to accumulated depreciation, depletion
and amortization except that gains and losses for these groups are taken into
income for unusual retirements or retirements involving an entire property
group.
CAPITALIZED INTEREST
The Company capitalizes interest costs incurred as a result of the acquisition
and installation of significant assets.
22
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Oryx Energy Company
INCOME TAXES
Deferred income taxes are provided to reflect the tax consequences in future
years of differences between financial statements and tax basis of assets and
liabilities at year end in accordance with SFAS No. 109, "Accounting for Income
Taxes." The remeasurement provisions of SFAS No. 109 have affected the reported
earnings of the Company for 1996 and 1994. Earnings for 1996 and 1994 were
decreased by $6 million and $2 million from remeasuring the Company's foreign
deferred tax liabilities. 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.
PENSION AND OTHER POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS
The Company has established noncontributory defined benefit plans and defined
contribution plans to provide retirement benefits for most of its employees.
Pension benefits are charged against earnings over the periods in which they
are earned by the employees (Note 15).
In addition to providing pension benefits, the Company provides certain
health care and life insurance benefits for retired employees and certain
insurance and other postemployment benefits for individuals whose employment is
terminated by the Company prior to their normal retirement. Substantially all
of the Company's employees may become eligible for postretirement benefits if
they reach normal retirement age while working for the Company. The Company
recognizes the costs of postretirement benefits other than pensions and
postemployment benefits on an accrual basis.
SALES OF OIL AND GAS
Sales of oil and gas are recorded on the entitlement method. Differences
between actual production and entitlements result in amounts due when
underproduction occurs and amounts owed when overproduction occurs.
FOREIGN CURRENCY TRANSLATION
The U.S. dollar is the functional currency for the Company's consolidated
foreign operations. For those operations, all transaction gains or losses from
currency fluctuations are included in income currently.
FOREIGN EXCHANGE HEDGING CONTRACTS
The Company, from time to time, enters into foreign currency hedging
arrangements to hedge the impact of changes in exchange rates on its
receivables and payables denominated in British pounds. Gains and losses
realized from such arrangements offset transaction gains and losses which are
included in the measurement of the related foreign currency transactions (Note
2).
INTEREST RATE HEDGING AGREEMENTS
The Company, from time to time, enters into interest rate hedging agreements to
alter the floating rate portion of its underlying debt portfolio. Advance
proceeds received under such agreements are included in deferred credits and
other liabilities and are amortized as offsets to interest and debt expense
over the relevant periods. The differentials paid or received during the terms
of such agreements are accrued as interest rates change and are recorded as
adjustments to interest and debt expense (Note 2).
OIL AND GAS PRICE HEDGING ACTIVITY
The Company, from time to time, enters into arrangements to hedge the impact of
price fluctuations on anticipated crude oil and natural gas sales. Advance
payments under such contracts are deferred and charged to oil and gas revenue
during the anticipated sales periods. The differentials paid or received during
the terms of such agreements are accrued as oil and gas prices change and are
charged or credited to oil and gas sales (Note 2).
ENVIRONMENTAL COSTS
The Company establishes reserves for environmental liabilities as such
liabilities are incurred (Note 19).
23
<PAGE> 11
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Oryx Energy Company
STATEMENT PRESENTATION
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Certain items in years prior to 1996 have been reclassified to conform to
the 1996 presentation.
2. FINANCIAL INSTRUMENTS
DERIVATIVES
As discussed in Note 1, the Company enters into hedging arrangements for
foreign exchange, interest rates and crude oil and natural gas prices with
major financial institutions. The Company does not enter into derivative
transactions for trading purposes.
The Company is active in the foreign exchange market to hedge its economic
exposures to the British pound. In addition, the Company has minor exposures to
other currencies in countries in which it does business. At December 31, 1996
and 1995, the Company had forward and option contracts outstanding with various
expiration dates to purchase 13 million and 52 million net British pounds at
various prices. At December 31, 1996 and 1995, the fair values of the Company's
outstanding foreign exchange contracts, based on quoted market prices, were
nil, which approximated their associated carrying values. For the year ended
December 31, 1996, the Company did not recognize a net transaction gain or loss
but did recognize a net transaction loss of $1 million for the year ended
December 31, 1995.
The Company also participates in various interest rate hedging
arrangements to manage the floating rate portion of its debt. At December 31,
1996 and 1995, the Company was a party to interest rate hedging agreements
having notional amounts of $600 million, of which $350 million represented
interest rate caps (Caps) with maturities in 1997 and 1998. The remaining $250
million represented interest rate swaps (Swaps) expiring in 1998 that had been
under option at December 31, 1994 and were subsequently exercised on August 15,
1995. The terms of the Caps expose the Company to interest rate risk when LIBOR
(5.6875 percent at December 31, 1996) exceeds 5 percent per year. Under the
terms of the Caps, the Company received advance proceeds of $19 million from
the counterparties and must pay the excess by which LIBOR exceeds 5 percent on
the notional amounts. Under the terms of the Swaps, the Company received
advance proceeds of $14 million from the counterparties and must pay an annual
rate of 9.75 percent while receiving LIBOR (5.875 percent at September 15,
1996, to be reset at six-month intervals). The terms of the Swaps decrease the
exposure of the Company to increases in LIBOR. At December 31, 1996 and 1995,
the aggregate carrying values of the gains deferred from the Company's interest
rate futures agreements were $15 million and $25 million, and their estimated
fair market values, based on market quotes, were $23 million and $37 million.
At December 31, 1996, the Company was a party to crude oil hedging
contracts to hedge about 22 percent of its estimated 1997 crude oil production
at an average price of $20.30 WTI per barrel. Approximately 31 percent of its
estimated 1997 U.S. natural gas production was hedged at $2.24 HH per mmbtu. At
December 31, 1995, the Company was a party to crude oil and natural gas hedging
contracts to hedge about 8 percent of its estimated 1996 crude oil production
at $18.34 WTI per barrel and approximately 40 percent of its 1996 U.S. natural
gas production at $1.81 HH per mmbtu. These arrangements serve to reduce the
volatility associated with prices of crude oil and natural gas. The aggregate
carrying values of these assets at December 31, 1996 and 1995 were $10 million
and $5 million and the aggregate fair values, subject to daily fluctuation,
based on quotes from brokers, were approximately $(3) million and $(21)
million.
All of the above mentioned derivative contracts expose the Company to
credit risks. The Company has established controls to manage this risk and
closely monitors the creditworthiness of its counterparties, which are major
institutions. The Company believes that losses from nonperformance are unlikely
to occur.
OTHER FINANCIAL INSTRUMENTS
At December 31, 1996 and 1995, the carrying values of the Company's long-term
debt, including amounts due within one year, were $1,187 million and $1,203
million (Note 12). At December 31, 1996 and 1995, the aggregate fair values of
the Company's long-term debt were approximately $1,220 million and $1,233
million, estimated primarily based on quoted market prices for the same or
similar issues or on the current rates offered to the Company for debt of the
same remaining maturities.
24
<PAGE> 12
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Oryx Energy Company
3. RELATED PARTY TRANSACTIONS
During the fourth quarter of 1995, the Company, Apache Corporation and Parker &
Parsley Petroleum Company formed Producers Energy Marketing, LLC (ProEnergy) to
jointly market natural gas. As of December 31, 1996, the Company had an
ownership interest of 46 percent in ProEnergy; however, ownership varies based
on the Company's share of natural gas throughput for the preceding quarter. The
Company accounts for its investment in ProEnergy using the equity method and,
as of December 31, 1996, had recorded an investment in ProEnergy of $5 million.
The Company sells the majority of its domestic natural gas production to
ProEnergy at index prices. Full operations commenced in April of 1996 and
natural gas sales to ProEnergy totaled $195 million for the nine months ended
December 31, 1996. At December 31, 1996, the Company had an outstanding
receivable balance of $48 million from ProEnergy.
4. OTHER REVENUES-NET
The components of other revenues were as follows:
<TABLE>
<CAPTION>
(Millions of Dollars) 1996 1995 1994
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest income $ 2 $ 8 $ 2
Gain (loss) on sale of assets (2) 124* --
Miscellaneous (21) (17) (12)
--------- -------- ---------
$ (21) $ 115 $ (10)
========= ======== =========
</TABLE>
* Gains generated in 1995 substantially from the sale of the Company's interest
in the following properties. During 1995, the Company generated $517 million
of net proceeds from the sale of certain assets in order to reduce debt. The
U.K. North Sea Alba Field and Block 48/15a interests were sold for $270
million and $120 million respectively. The Company also sold certain assets in
the U.S. for $77 million and all of its assets in Indonesia and Gabon for $67
million and $2 million respectively. Asset dispositions, totaling $536 million
of gross proceeds, represented 138 million equivalent barrels of proved
reserves and 43 thousand average equivalent barrels of production per day.
5. PRODUCTION TAXES
Production taxes consisted of the following:
<TABLE>
<CAPTION>
(Millions of Dollars) 1996 1995 1994
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
International royalties $ 37 $ 46 $ 54
U.S. severance taxes 31 22 28
U.S. property taxes 9 11 15
U.K. petroleum revenue taxes 83 26 15
--------- -------- ---------
$ 160 $ 105 $ 112
========= ======== =========
</TABLE>
25
<PAGE> 13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Oryx Energy Company
6. CHANGES IN BUSINESS
In the fourth quarter of 1995, the Company recognized a net $25 million ($16
million after-tax) charge for restructuring. The charge is comprised of a $4
million adjustment to the 1994 restructuring provision (see below) and a $29
million restructuring provision for a plan to achieve further cost reductions.
An analysis of the 1995 provision for restructuring follows:
<TABLE>
<CAPTION>
ACTIVITY BALANCE ACTIVITY BALANCE
INITIAL THROUGH AT THROUGH AT
(Millions of Dollars) PROVISION 12/31/95 12/31/95 12/31/96 12/31/96
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Termination and associated costs * $ 10 $ (1) $ 9 $ (9) $ --
SFAS No. 88 and SFAS No. 106
(retirement and postretirement
costs) ** 5 (5) -- -- --
Office lease obligation *** 14 -- 14 (1) 13
--------- --------- -------- --------- --------
Total $ 29 $ (6) $ 23 $ (10) $ 13
========= ========= ======== ========= ========
</TABLE>
* Termination and associated cash costs are primarily comprised of severance
pay and associated employee benefit costs for 250 operational and
administrative employees.
** 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 obligation existing prior to the commitment date
that will continue with no economic benefit to the Company.
The expenditures for the 1994 restructuring were substantially complete at
December 31, 1995. As a result of $1 million of termination payments made
during the first quarter of 1996, expenditures for the 1994 restructuring were
completed.
7. INCOME TAXES
Income (loss) before extraordinary item, cumulative effect of accounting change
and provision (benefit) for income taxes consisted of the following:
<TABLE>
<CAPTION>
(Millions of Dollars) 1996 1995 1994
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Before interest expense
United States income (loss) $ 220 $ 48 $ (2)
Foreign income 138 222 53
Interest expense (93) (134) (151)
-------- ------- --------
$ 265 $ 136 $ (100)
======== ======= ========
</TABLE>
The provision (benefit) for income taxes for each of the years 1996, 1995
and 1994 is applicable to continuing operations.
26
<PAGE> 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Oryx Energy Company
The components of the provision (benefit) for income taxes on income
(loss) before extraordinary item and accounting change were as follows:
<TABLE>
<CAPTION>
(Millions of Dollars) 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Federal
Current tax provision (benefit) $ 15 $ (18) $ (14)
Deferred tax provision (benefit) 44 (9) (16)
State tax provision (benefit) 2 1 (6)
Foreign
Current tax provision 17 3 9
Deferred tax provision (benefit) 18 1 (10)
--------- -------- ---------
$ 96 $ (22) $ (37)
========= ======== =========
</TABLE>
Deferred taxes are provided for the impact of differences between the tax
basis of assets and liabilities and their reported amounts. Significant
components of the Company's deferred income tax assets and liabilities at
December 31, 1996 and 1995 were as follows:
<TABLE>
<CAPTION>
(Millions of Dollars) 1996 1995
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Deferred Tax Assets
AMT credit carryforward $ 54 $ 64
Dismantlement, restoration and abandonment 41 38
Loss on controlled foreign corporations 11 12
Geological and geophysical expenditures 15 11
Contingency accruals 20 17
Employee benefit accruals 29 38
Foreign tax credit 9 9
Other 3 --
------- --------
182 189
------- --------
Deferred Tax Liabilities
Items associated with capitalized costs and write-offs 405 352
Miscellaneous accrued liabilities 25 44
------- --------
430 396
------- --------
Net Deferred Tax Liability $ 248 $ 207
======= ========
</TABLE>
No valuation allowance was provided at December 31, 1996 or 1995 as the
Company anticipates the results of operations in future years are more likely
than not to generate taxable income sufficient to allow utilization of the
existing deferred tax assets.
27
<PAGE> 15
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Oryx Energy Company
Following is the reconciliation of the tax provision (benefit) calculated
at the U.S. statutory tax rate to the Company's actual tax provision (benefit)
on income (loss) before extraordinary item and accounting change:
<TABLE>
<CAPTION>
(Millions of Dollars) 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. statutory rate calculation $ 93 $ 48 $ (35)
Increase (reduction) in taxes resulting from:
Benefit of additional tax basis on assets sold -- (58) --
Other 3 (12) (2)
--------- -------- ---------
Provision (benefit) for income taxes before remeasurement
of foreign deferred tax 96 (22) (37)
Remeasurement of foreign deferred tax
as required by SFAS No. 109 6 -- 2
--------- -------- ---------
Provision (benefit) for income taxes $ 102 $ (22) $ (35)
========= ======== =========
</TABLE>
8. ACCOUNTING CHANGE
In December 1995, the Company adopted SFAS No. 121, which had no material
impact for the years ended December 31, 1996 and 1995.
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. The Company believes the field basis is preferable
because it is the way the Company manages its business. The basis underlying
the calculation of the cumulative effect of this change is a comparison of the
undiscounted pre-tax cash flows of each field's then existing proved reserves
to its net book value at each quarter-end during the life of the asset. This
subjects the ceiling test valuation to the lowest quarter-end price experienced
over the asset's life. Prior to this change, the Company compared its worldwide
undiscounted standardized measure of future net cash flows from estimated
production of proved oil and gas reserves before income taxes to its net proved
property, plant and equipment. As a result of this change, the Company
recognized a non-cash cumulative effect charge of $948 million ($1,355 million
pre-tax) to 1994 results. Excluding the cumulative charge, the Company's net
loss for 1994 was $77 million ($.68 per share before extraordinary item and
$.80 per share after extraordinary item).
9. INCOME PER SHARE
The 5,259,394 shares of Series B Preference Stock in 1994 were common stock
equivalents. During 1995, all of these shares were converted to Common Stock
and issued from treasury on a share-for-share basis. Conversion of the Series B
Preference Stock in 1994 would have been anti-dilutive to the Company's loss
per share. The Company has reserved 5,111,438 shares of Common Stock for
issuance to the owners of its 7 1/2% Convertible Subordinated Debentures Due
2014 (Debentures). The Debentures are convertible into the Company's Common
Stock at any time prior to maturity at $39.125 per share of Common Stock. The
Debentures are not common stock equivalents. If conversion of the Debentures
were assumed to have occurred, the result would have been anti-dilutive to
1996, 1995 and 1994 income (loss) per share.
28
<PAGE> 16
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Oryx Energy Company
10. PROPERTIES, PLANTS AND EQUIPMENT
At December 31, the Company's properties, plants and equipment and accumulated
depreciation, depletion and amortization were as follows:
<TABLE>
<CAPTION>
(Millions of Dollars) 1996 1995
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Gross investment
Proved properties $ 5,167 $ 4,945
Unproved properties 147 126
Other 40 62
-------- ---------
5,354 5,133
-------- ---------
Less accumulated depreciation, depletion and amortization
Proved properties* 3,699 3,650
Other 28 57
-------- ---------
3,727 3,707
-------- ---------
Net investment $ 1,627 $ 1,426
======== =========
</TABLE>
* Includes $123 million and $116 million for dismantlement, restoration and
abandonment at December 31, 1996 and 1995.
11. ACCRUED LIABILITIES
At December 31, the Company's accrued liabilities were comprised of the
following:
<TABLE>
<CAPTION>
(Millions of Dollars) 1996 1995
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Drilling and operating costs $ 90 $ 78
Restructuring reserve (Note 6) 13 24
Interest payable 25 25
Employee related costs and benefits 31 33
Royalties payable 24 10
Taxes payable 39 1
Other 29 25
-------- ---------
$ 251 $ 196
======== =========
</TABLE>
29
<PAGE> 17
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Oryx Energy Company
12. LONG-TERM DEBT
At December 31, long-term debt consisted of the following:
<TABLE>
<CAPTION>
(Millions of Dollars) 1996 1995
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
8.375% Notes Due 2004 $ 150 $ --
8% Notes Due 2003 100 100
8.125% Notes Due 2005 150 150
10% Notes due 1999 and 2001 payable $100 in 1999 and $150 in 2001 250 250
7.50% Convertible Subordinated Debentures payable $10 annually
1999 - 2013 and $50 in 2014 200 200
Medium Term Notes, variable and fixed interest rates ranging from 8.65%
to 9.50% at December 31, 1996 due during 1999 - 2002 28 75
9.30% Notes due 1996 -- 100
9.50% Notes Due 1999 100 100
Commercial Paper, variable interest rate ranging from 6.10% to 6.25%
at December 31, 1996* 70 50
Variable interest rate (ranging from 6.06% to 6.68% at December 31, 1996)
revolving credit facility (Revolver) 65 132
Capitalized lease obligations and other long-term debt due 1997 - 2002 74 46
-------- ---------
1,187 1,203
Less current portion 4 152
-------- ---------
$ 1,183 $ 1,051
======== =========
</TABLE>
* Commercial paper matures from 29 - 49 days. Such debt is classified as
long-term due to management's intention to continue to use it as a
financing vehicle and the availability of credit under the Company's
Revolver.
Long-term debt maturities are $4 million, $4 million, $228 million, $13
million and $163 million for each of the years 1997 through 2001. The maturing
amount for 1998 excludes $191 million under the Revolver which management
intends to replace no later than June 30, 1998.
During the third quarter of 1996, the Company issued $150 million 8.375
percent notes due July 15, 2004. The net proceeds of $149 million were used to
refinance debt outstanding under the Company's Revolver, uncommitted line of
credit and commercial paper.
During 1996, Moody's Investors Service upgraded the Company's senior
unsecured debentures to Ba2 from Ba3 and the convertible subordinated
debentures to B1 from B2.
During the fourth quarter of 1995, the Company repurchased its 10.375
percent debentures at a total cost of $149 million resulting in an after-tax
extraordinary loss of $8 million.
In the third quarter of 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 7.2 percent $100 million note, resulting in an after-tax
extraordinary loss of $1 million.
In the second quarter of 1995, the Company replaced its $620 million
revolving credit facility with a $500 million Revolver which is scheduled to
mature on June 30, 1998, resulting in an after-tax extraordinary loss of $14
million.
The Company pays a fee ranging from .375 percent to .5 percent of the
unused portion of its $500 million Revolver. At year end 1996, the Company had
the capacity to borrow $330 million under such facility; however, the amount
can change daily. The commitments are subject to withdrawal if there were to be
an event of default.
The Company's long-term debt contains restrictive covenants, including a
limitation on total indebtedness; restriction on the payment of common stock
dividends and minimum cash flow interest coverage. At December 31, 1996, the
Company was in compliance with all of its debt covenants.
During 1994, Standard & Poor's downgraded the Company's senior unsecured
debt from BBB- to BB, subordinated debt from BB+ to B+ and commercial paper to
B from A-3. Subsequently, the holders of the Company's senior ESOP notes
(approxi-
30
<PAGE> 18
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Oryx Energy Company
mately $100 million principal amount outstanding) exercised their right to
require the Company to repay the notes in full at par plus a makewhole premium
tied to prevailing rates of interest on U.S. Treasury obligations. As a result
of the downgrade, the Company recognized a $12 million (net of $5 million of
tax) extraordinary loss associated with the notes which were paid in full
subsequent to year-end 1994.
During 1994, the Company repurchased $33 million
of its 10.375 percent debentures at a total cost of $33 million.
13. COMMITMENTS AND CONTINGENT LIABILITIES
The Company has operating leases for office space and other property and
equipment. Total rental expense for such leases for the years 1996, 1995 and
1994 was $20 million, $41 million and $37 million. Under contracts existing as
of December 31, 1996, future minimum annual rental payments applicable to
non-cancelable operating leases that have initial or remaining lease terms in
excess of one year, less minimum rentals to be received under non-cancelable
subleases, were as follows (in millions of dollars):
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31:
- ----------------------------------------------------------------------------------------------------------
<C> <C>
1997 $ 11
1998 9
1999 8
2000 6
2001 8
Later years 54
---------
Total minimum payments required $ 96
=========
</TABLE>
Minimum rentals to be received under non-cancelable subleases are $4
million, $5 million, $5 million, $5 million and $4 million for the years 1997
through 2001 and none for later years.
Several legal and administrative proceedings are pending against the
Company. Although the ultimate outcome of these proceedings cannot be
ascertained at this time, and it is reasonably possible that some of them could
be resolved unfavorably to the Company, management believes that any
liabilities which may arise would not be material.
14. SHAREHOLDERS' DEFICIT
Effective in October 1988, 3,001,876 shares of Common Stock of the Company were
issued to an operating partnership of the Partnership in exchange for certain
assets, which shares have been deducted from the number of shares shown in the
Consolidated Balance Sheets as outstanding. Such shares are not entitled to be
voted at the annual meeting of shareholders. All other shares of Common Stock
are entitled to one vote per share.
On August 1, 1989, the Company privately placed $110 million of notes
(ESOP Notes) pursuant to the provisions of the Oryx Energy Company Capital
Accumulation Plan (CAP). The Company loaned the proceeds to the CAP which used
the funds to purchase Common Stock of the Company. Prior to 1995 and resuming
in 1997, the CAP made scheduled loan payments using Company contributions to
the CAP. In 1995 and 1996, repayments were deferred pending a ruling requested
from the Internal Revenue Service.
The Company has 272,740,606 authorized shares of stock, consisting of (i)
250,000,000 shares of Common Stock having a par value of $1.00 per share, (ii)
7,740,606 shares of Cumulative Preference Stock (Preference Stock) having a par
value of $1.00 and a liquidation preference of $.001 per share, and (iii)
15,000,000 shares of Preferred Stock (Preferred Stock) having a par value of
$1.00 per share. As of December 31, 1996, there were 104,982,628 shares of
Common Stock outstanding. There are two series of Preference Stock designated,
of which there were no shares of Series B Preference Stock outstanding and
120,000 shares of Series A Preference Stock designated and reserved for
issuance upon exercise of the Stock Purchase Rights, of which none were
outstanding. The Preferred Stock was authorized by vote of the shareholders on
May 5, 1992 and there are currently no shares of Preferred Stock designated or
outstanding. In addition, on December 31, 1996 the Company had reserved for
issuance 5,111,438 shares of Common Stock on conversion of the outstanding 7
1/2% Convertible Debentures and 2,695,584 shares of Common Stock upon the
exercise of outstanding management options.
31
<PAGE> 19
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Oryx Energy Company
COMMON STOCK
Each share of Common Stock entitles its record owner to one vote on all matters
submitted to the stockholders for action. The stockholders are not entitled to
cumulative voting rights in the election of directors. Subject to the rights of
holders of any class of Preference Stock or Preferred Stock, the holders of
Common Stock are entitled to share ratably in dividends in such amount as may
be declared by the Company's Board of Directors (Board) from time to time out
of funds legally available therefor. The payment of dividends on the Common
Stock is restricted under the Revolver and is prohibited in the event of a
default.
PREFERENCE STOCK
The Board is authorized by the Certificate to issue Preference Stock in one or
more series and to fix for each such series such qualifications, privileges,
limitations, options, conversion rights and other special rights as are stated
and adopted by the Board and as are permitted by the Certificate and the
Delaware General Corporation Law, including the designation and number of
shares issuable, the dividend rate, voting rights, conversion rights,
redemption and sinking fund provisions and liquidation values of each such
series.
Holders of Preference Stock are entitled to receive, when and as declared
by the Board out of assets legally available for that purpose, annual
cumulative dividends payable in quarterly installments. Unless full cumulative
dividends on the Preference Stock have been paid, no dividend may be declared
or paid on, or other distributions made upon, Preferred Stock or Common Stock,
nor may any Preferred Stock or Common Stock be redeemed or purchased by the
Company. Subject to certain conditions, the Company may redeem all or any part
of the Preference Stock then outstanding.
During 1995, the holders of Series B Preference Stock converted the
remaining shares of Series B Preference Stock into Common Stock on a
share-for-share basis.
PREFERRED STOCK
The Board is authorized by the Certificate to issue Preferred Stock in one or
more series and to fix for each such series such qualifications, privileges,
limitations, options, conversion rights and other special rights as are stated
and adopted by the Board and as are permitted by the Certificate and the
Delaware General Corporation Law, including the designation and number of
shares issuable, the dividend rate, voting rights, conversion rights,
redemption and sinking fund provisions and liquidation values of each such
series.
Subject to the rights of holders of any class of Preference Stock, if any,
the holders of Preferred Stock are entitled to receive dividends, when and as
declared by the Board out of funds legally available for that purpose. As to
dividends and rights upon liquidation, dissolution or winding up, the Preferred
Stock will rank junior and subordinate to any series of Preference Stock and
prior to the Common Stock.
RIGHTS
On September 11, 1990, the Board declared a dividend distribution of one Stock
Purchase Right (Rights) on each outstanding share of Common Stock, payable
September 28, 1990, to holders of record of the Common Stock on that date. The
Rights are also issuable upon the issuance of additional shares of Common Stock
prior to the time the Rights are redeemed or expire. Initially, the Rights are
represented by the certificates for the Common Stock and trade only with the
Common Stock. The Rights expire September 11, 2000 unless earlier redeemed by
the Company.
32
<PAGE> 20
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Oryx Energy Company
15. EMPLOYEE AND RETIREE BENEFIT PLANS
DEFINED BENEFIT PENSION PLANS
The Company has noncontributory defined benefit plans which provide retirement
benefits for most of its employees. Plan benefits are generally based on years
of service, age at retirement and the employee's compensation. It is the
Company's policy to fund defined benefit pension contributions, at a minimum,
in accordance with the requirements of the Internal Revenue Code.
The cost of the Company's primary defined benefit pension plans consisted
of the following:
<TABLE>
<CAPTION>
(Millions of Dollars) 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost (cost of benefits earned during the year) $ 5 $ 6 $ 5
Interest cost on projected benefit obligation 35 36 36
Actual return on plan assets (53) (85) 4
Net amortization and deferral* 11 47 (47)
--------- -------- ---------
Net periodic pension cost (benefit)** $ (2) $ 4 $ (2)
========= ======== =========
</TABLE>
* Estimated returns on assets are used in determining net periodic pension
cost. Differences between estimated and actual returns are included in net
amortization and deferral.
** Does not include $1 million curtailment loss in 1995 and 1994 and $2
million, $4 million and $13 million cost of special termination benefits
due to the reduction in workforce in 1996, 1995 and 1994.
The following table sets forth the funded status and amounts recognized in
the Company's Consolidated Balance Sheets at December 31:
<TABLE>
<CAPTION>
1996 1995
----------------------------- -----------------------------
PLANS IN PLANS IN
PLANS IN WHICH PLANS IN WHICH
WHICH ASSETS ACCUMULATED WHICH ASSETS ACCUMULATED
EXCEED BENEFITS EXCEED BENEFITS
ACCUMULATED EXCEED ACCUMULATED EXCEED
(Millions of Dollars) BENEFITS ASSETS BENEFITS ASSETS
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Actuarial present value of benefit obligation:
Vested $ (381) $ (83) $ (406) $ (86)
Nonvested (11) -- (13) --
--------- -------- --------- --------
Accumulated benefit obligation (392) (83) (419) (86)
Effect of projected future salary increases (24) (3) (23) (3)
--------- -------- --------- --------
Projected benefit obligation (416) (86) (442) (89)
Less plan assets at fair value* 457 -- 443 --
--------- -------- --------- --------
Projected benefit obligation less than (in excess of)
plan assets 41 (86) 1 (89)
Unrecognized net transition obligation (asset) (20) 9 (26) 12
Unrecognized prior service cost (benefit) 3 (1) 2 (2)
Unrecognized net loss 16 26 50 30
Additional minimum liability -- (31) -- (37)
--------- -------- --------- --------
Accrued pension asset (liability)** $ 40 $ (83) $ 27 $ (86)
========= ======== ========= ========
</TABLE>
* Plan assets consist principally of commingled trust funds, marketable
equity securities, corporate and government debt securities and real
estate. At December 31, 1996 and 1995, less than 1 percent of plan assets
was invested in Common Stock of the Company.
** Accrued pension liability is included in "Accrued Liabilities" and
"Deferred Credits and Other Liabilities" in the Consolidated Balance
Sheets.
33
<PAGE> 21
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Oryx Energy Company
As of December 31, 1996 and 1995, the projected benefit obligations were
determined using weighted average assumed discount rates of 7.3 and 6.75
percent and a rate of compensation increase of 4 percent. The weighted average
expected long-term rate of return on plan assets was 9.5 percent in 1996 and
1995. All of these rates are subject to change in the future as economic
conditions change.
DEFINED CONTRIBUTION PENSION PLANS
Defined contribution plans, which are designed to provide retirement benefits,
are available to substantially all employees. Contributions, which are
principally based on employees' compensation, are expensed as incurred.
At December 31, 1996, the principal defined contribution plan is CAP,
which is a combined stock bonus and leveraged ESOP available to substantially
all U.S. employees. The first 5 percent of employee contributions are matched
by the Company at 110 percent up to the first $50,000 of employee base salary
and at 100 percent thereafter. In 1994, the Company's contributions to CAP were
used to repay the debt issued to fund the purchase of Common Stock held by the
leveraged ESOP. In 1995 and 1996, stock allocations to employees from the
leveraged ESOP were suspended pending a ruling requested from the IRS;
therefore, there was no debt service in the form of Company matching
contributions made to the ESOP. Instead, Company matching contributions were
made using Treasury Stock. Benefit expense recognized for defined contribution
plans amounted to $3 million, $3 million and $11 million for 1996, 1995 and
1994.
Additional information with respect to the leveraged ESOP portion of CAP
is as follows:
<TABLE>
<CAPTION>
(Millions of Dollars) 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest cost on ESOP debt $ -- $ -- $ 8
Company cash contributions to the ESOP $ -- $ -- $ 13
</TABLE>
HEALTH CARE AND LIFE INSURANCE BENEFITS
The Company sponsors unfunded defined benefit health care and life insurance
benefit plans to substantially all employees and retirees. Benefits under the
health care plan are provided on a self-insured basis or through Health
Maintenance Organizations. The health care plan provides comprehensive major
medical coverage which integrates with Medicare and contains provisions for
cost sharing with participants through contributions, coinsurance, deductibles
and caps on employer costs. Benefits under the life insurance plan are provided
through an insurance contract. The life insurance plan contains provisions for
retiree cost sharing through contributions and provides benefits based on
preretirement compensation with a scheduled reduction in benefits commencing at
age 66 and termination of all benefits at age 70 for substantially all
participants.
The cost of health care and life insurance benefit plans was $14 million,
$15 million and $19 million, of which $10 million, $11 million and $14 million
was for retirees in 1996, 1995 and 1994. The Company uses the accrual
accounting method in computing postretirement health care and life insurance
benefit plan expense in accordance with SFAS No. 106.
The cost, net of retiree contributions, of the postretirement health care
and life insurance benefit plans calculated in accordance with the provisions
of SFAS No. 106 is as follows:
<TABLE>
<CAPTION>
(Millions of Dollars) 1996 1995 1994
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost (cost of benefits earned during the year) $ 1 $ 1 $ 1
Interest cost on the accumulated postretirement benefit obligation 6 7 8
Amortization of transition obligation 3 3 4
Net amortization of other components -- -- 1
--------- -------- ---------
Net periodic postretirement benefit cost * $ 10 $ 11 $ 14
========= ======== =========
</TABLE>
* Does not include $10 million and $13 million curtailment loss due to the
reduction in workforce in 1995 and 1994.
34
<PAGE> 22
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Oryx Energy Company
The following table sets forth the funded status and amounts reported in
the Company's Consolidated Balance Sheets at December 31:
<TABLE>
<CAPTION>
(Millions of Dollars) 1996 1995
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees $ (67) $ (87)
Active employees eligible to retire (3) (3)
Active employees not yet eligible to retire (6) (9)
-------- ---------
Total accumulated postretirement benefit obligation (76) (99)
Less plan assets at fair value -- --
-------- ---------
Accumulated obligation in excess of plan assets (76) (99)
Unrecognized net loss (gain) (2) 9
Unrecognized prior service benefit -- --
Unrecognized transition obligation 35 51
-------- ---------
Accrued postretirement benefit liability* $ (43) $ (39)
======== =========
</TABLE>
* Accrued postretirement benefit liability is included in "Accrued
Liabilities" and "Deferred Credits and Other Liabilities" in the
Consolidated Balance Sheets.
The assumed health care cost trend rate used to measure the expected cost
of benefits covered by the plan is approximately 6 percent. Health care cost
trend rates for future years are assumed to gradually trend downward over a
five year period to meet and thereafter parallel the projected rate of general
inflation of 4.5 percent. A 1-percent increase in the assumed health care cost
trend rates for future years would result in no significant increase in annual
cost but an increase of $5 million in the accumulated postretirement benefit
obligation for the Company's health care plan.
The weighted average assumed discount rates used to measure the
accumulated postretirement benefit obligation are 7.75 and 7 percent in 1996
and 1995. For the life insurance plan, an assumed rate of increase of
compensation of 4 percent was used to measure the accumulated postretirement
benefit obligation.
16. MANAGEMENT INCENTIVE PLANS
The principal management incentive plans are the 1992 Long-Term Incentive Plan
(1992 LTIP), the Long-Term Incentive Plan (LTIP) and the Executive Long-Term
Incentive Plan (ELTIP). The ELTIP provides that no awards may be granted after
November 1, 1988 and was replaced by the LTIP which provides that no awards may
be granted after December 31, 1991. All previous awards granted under both the
ELTIP and LTIP remain in effect in accordance with their terms. As of December
31, 1995, there were no outstanding awards granted under the ELTIP. The 1992
LTIP replaced the LTIP and became effective January 1, 1992. A maximum of
3,000,000 shares of Common Stock were authorized for issuance under the 1992
LTIP.
Under the provisions of these plans, stock options, stock appreciation
rights and limited rights were granted in various tandem combinations so that
the exercise of any one of them will reduce, on a one-for-one basis, the tandem
options or rights. In addition, certain stock options were granted which become
exercisable (subject to the option vesting schedule) only upon the cancellation
of the related performance shares for non-attainment of performance targets.
The Company grants certain executives and other key employees stock option
awards which vest at a rate of 25% per year over four years. Effective with
1996 grants, accelerated vesting is contingent on the Company's stock price
performance over a specified period of time. The exercise price of each option,
which has a 10-year life, is equal to the market price on the date of grant.
35
<PAGE> 23
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Oryx Energy Company
The following table summarizes information with respect to Common Stock
options awarded under the 1992 LTIP, the LTIP and the ELTIP:
<TABLE>
<CAPTION>
1996 1995 1994
----------------------------------- --------------------------------- -------------------------
WEIGHTED WEIGHTED
SHARES AVERAGE SHARES AVERAGE SHARES
UNDER OPTION PRICE EXERCISE UNDER OPTION PRICE EXERCISE UNDER OPTION PRICE
OPTION PER SHARE PRICE OPTION PER SHARE PRICE OPTION PER SHARE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Outstanding, January 1 2,722,374 $11.81-$44.13 $22.88 2,456,103 $17.44-$44.13 $25.14 1,914,832 $19.63-$44.13
Granted 444,150 $13.50 $13.50 407,350 $11.81 $11.81 643,900 $17.44
Exercised (207,524) $11.81-$19.63 $15.49 -- -- -- -- --
Canceled (263,416) $11.81-$44.13 $28.39 (141,079) $11.81-$44.13 $30.24 (102,629) $17.44-$44.13
--------- --------- ---------
Outstanding, December 31 2,695,584 $11.81-$44.13 $21.37 2,722,374 $11.81-$44.13 $22.88 2,456,103 $17.44-$44.13
========= ========= =========
Exercisable, December 31 1,982,386 $11.81-$44.13 $23.88 1,713,446 $11.81-$44.13 $26.64 1,278,033 $17.44-$44.13
========= ========= =========
Available for grant, December 31* 674,720 978,663 1,262,086
========= ========= =========
Weighted average fair value of
options granted during the
year ** $ 7.17 $ 6.93
========= =========
</TABLE>
* Shares available for grant does not include 300,000 shares available for
issue under the provisions of the Executive Variable Incentive Plan
approved by stockholders May 2, 1996.
** The fair value of each option grant is estimated using the Black-Scholes
option-pricing model with the following assumption for 1996 and 1995,
respectively: risk-free interest rates of 6.0 and 7.9 percent; volatility
of 30.7 and 36.7 percent; no dividend yield; and expected life of 9 and 8
years.
The Company applies APB Opinion 25, "Accounting for Stock Issued to
Employees" and related Interpretations in accounting for its plans.
Accordingly, no compensation cost has been recognized for its stock option
plans. Had compensation cost for the Company's plans been determined based on
the fair value at the grant dates for awards under the plans consistent with
the method of SFAS No. 123, "Accounting for Stock-Based Compensation," the
Company's net income and earnings per share would have been reduced to the pro
forma amounts indicated below:
<TABLE>
<CAPTION>
1996 1995
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net income As Reported $ 163 $ 135
Pro Forma $ 161 $ 134
Earnings per share As Reported $1.55 $1.32
Pro Forma $1.54 $1.31
</TABLE>
The following table summarizes information about stock options outstanding at
December 31, 1996:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
- ------------------------------------------------------------------- -----------------------------
WEIGHTED
AVERAGE WEIGHTED WEIGHTED
REMAINING AVERAGE AVERAGE
RANGE OF NUMBER CONTRACTED EXERCISE NUMBER EXERCISE
EXERCISE PRICES OUTSTANDING LIFE PRICE EXERCISABLE PRICES
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$11.81 - $ 19.63 1,672,096 7.5 $15.89 958,898 $17.01
$24.16 - $ 26.00 679,168 3.2 $25.79 679,168 $25.79
$36.00 - $ 44.13 344,320 3.7 $39.24 344,320 $39.24
--------- ---------
2,695,584 6.0 $21.37 1,982,386 $23.88
========= =========
</TABLE>
36
<PAGE> 24
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Oryx Energy Company
17. GEOGRAPHIC SEGMENT INFORMATION
Sales of oil to the Company's top purchaser in 1996, 1995 and 1994 totaled
approximately 16, 15 and 18 percent of oil revenue. Sales of gas to the
Company's top purchaser in 1996 totaled approximately 50 percent of gas revenue
and for 1995 and 1994 totaled approximately 12 percent of gas revenue. The
Company believes that the loss of any major purchaser would not have a material
adverse effect on the Company's business.
Financial information by segment for the years ended December 31, 1996,
1995 and 1994 are summarized as follows:
<TABLE>
<CAPTION>
UNITED UNITED OTHER
(Millions of Dollars) STATES KINGDOM FOREIGN TOTAL
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DECEMBER 31, 1996
Revenues
Oil and gas $ 707 $ 411 $ 50 $ 1,168
Gain (loss) on sale of assets (2) -- -- (2)
Other (21) 1 1 (19)
------- ------- ------- -------
Total Revenues 684 412 51 1,147
------- ------- ------- -------
Operating Expenses
Operating costs 144 84 11 239
Production taxes 40 108 12 160
Exploration costs 45 4 7 56
Depr., depl. and amort. 181 85 10 276
Miscellaneous -- 1 1 2
------- ------- ------- -------
Total Operating Expenses 410 282 41 733
------- ------- ------- -------
Operating Profit* $ 274 $ 130 $ 10 414
======= ======= =======
General and administrative expense (58)
Interest, net (91)
Provision for income taxes (96)
Remeasurement of foreign deferred tax (6)
-------
Net Income $ 163
=======
Capital Expenditures $ 318** $ 143 $ 23 $ 484
======= ======= ======= =======
Identifiable Assets $ 1,479 $ 428 $ 28 $ 1,935
======= ======= ======= =======
</TABLE>
* Provision for income taxes on 1996 operating profits, calculated at
statutory rates, are $99 million, $43 million and $3 million for the
United States, United Kingdom and Other Foreign.
** Includes capitalized interest of $17 million.
37
<PAGE> 25
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Oryx Energy Company
<TABLE>
<CAPTION>
UNITED UNITED OTHER
(Millions of Dollars) STATES KINGDOM FOREIGN TOTAL
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DECEMBER 31, 1995
Revenues
Oil and gas $ 571 $ 377 $ 66 $ 1,014
Gain (loss) on sale of assets (15) 122 17 124
Other (15) 5 1 (9)
------- ------- ------- -------
Total Revenues 541 504 84 1,129
------- ------- ------- -------
Operating Expenses
Operating costs 164 150 16 330
Production taxes 33 49 23 105
Exploration costs 44 8 7 59
Depr., depl. and amort. 166 96 14 276
Miscellaneous 1 5 2 8
------- ------- ------- -------
Total Operating Expenses 408 308 62 778
------- ------- ------- -------
Operating Profit* $ 133 $ 196 $ 22 351
======= ======= =======
General and administrative expense (64)
Interest, net (126)
Provision for restructuring (25)
Benefit for income taxes 22
Extraordinary item (23)
-------
Net Income $ 135
=======
Capital Expenditures $ 208** $ 37 $ 28 $ 273
======= ======= ======= =======
Identifiable Assets $ 1,221 $ 410 $ 35 $ 1,666
======= ======= ======= =======
</TABLE>
* Provision for income taxes on 1995 operating profits, calculated at
statutory rates, are $48 million, $65 million and $12 million for the
United States, United Kingdom and Other Foreign.
** Includes capitalized interest of $10 million.
38
<PAGE> 26
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Oryx Energy Company
<TABLE>
<CAPTION>
UNITED UNITED OTHER
(Millions of Dollars) STATES KINGDOM FOREIGN TOTAL
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DECEMBER 31, 1994
Revenues
Oil and gas $ 624 $ 355 $ 103 $ 1,082
Other (10) -- -- (10)
------- ------- ------- -------
Total Revenues 614 355 103 1,072
------- ------- ------- -------
Operating Expenses
Operating costs 197 146 31 374
Production taxes 44 28 40 112
Exploration costs 54 12 38 104
Depr., depl. and amort. 167 86 18 271
Miscellaneous -- 1 -- 1
------- ------- ------- -------
Total Operating Expenses 462 273 127 862
------- ------- ------- -------
Operating Profit (Loss)* $ 152 $ 82 $ (24) 210
======= ======= =======
General and administrative expense (68)
Interest, net (150)
Provision for restructuring (92)
Benefit for income taxes 37
Remeasurement of foreign deferred tax (2)
Extraordinary item (12)
Cumulative effect of accounting change (948)
-------
Net Loss $(1,025)
=======
Capital Expenditures $ 168** $ 65***$ 48 $ 281
======= ====== ======= =======
Identifiable Assets $ 1,508 $ 470 $ 140 $ 2,118
======= ======= ======= =======
</TABLE>
* Provision (benefit) for income taxes on 1994 operating profits, calculated
at statutory rates, are $55 million, $27 million and $(3) million for the
United States, United Kingdom and Other Foreign.
** Includes capitalized interest of $5 million.
*** Includes capitalized interest of $6 million.
18. STATEMENT OF CASH FLOWS
Amounts paid for interest and income taxes were as follows:
<TABLE>
<CAPTION>
(Millions of Dollars) 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest paid (net of capitalized interest) $ 95 $ 144 $ 128
Income taxes paid (refunded) $ 41 $ (15) $ (11)
</TABLE>
39
<PAGE> 27
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Oryx Energy Company
During 1996, the Company recognized deferred tax liabilities of $11
million associated with the acquisition of additional interests in the U.K.
North Sea. During 1994, the Company exchanged its interests in the undeveloped
Britannia field and certain other undeveloped domestic properties for interests
in the developed Hutton, Lyell and Murchison fields and certain undeveloped
interests. This transaction was accounted for by the Company as a non-cash
property exchange, except for $40 million of associated divestment proceeds
received by the Company. In accordance with SFAS No. 95, "Statement of Cash
Flows," non-cash transactions are not reflected within the accompanying
Consolidated Statements of Cash Flows.
19. DEFERRED CREDITS AND OTHER LIABILITIES
At December 31, the Company's deferred credits and other liabilities were
comprised of the following:
<TABLE>
<CAPTION>
(Millions of Dollars) 1996 1995
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Employee benefit obligations $ 81 $ 92
Deferred gains on interest rate hedges 15 25
Minority interest in consolidated subsidiaries 18 14
Accrued environmental cleanup costs 20 20
Other 22 12
-------- ---------
$ 156 $ 163
======== =========
</TABLE>
Environmental cleanup costs have been accrued in response to the
identification of several sites that require cleanup based on environmental
pollution, some of which have been designated as superfund sites by the
Environmental Protection Agency (EPA). The Company has been named as a
potentially responsible party (PRP) at four sites pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended. At
two of these sites, the Company has been named as a de minimis party and
therefore expects its liability to be small. At a third site, the Company is
reviewing its options and anticipates that it will participate in steering
committee activities with the EPA. At the fourth and largest site, the
Operating Industries, Inc. site in California, the Company has participated in
a steering committee consisting of 139 companies. The steering committee and
other PRPs previously entered into two partial consent decrees with the EPA
providing for remedial actions which have been or are to be completed. The
steering committee has successfully negotiated a third partial consent decree
which provides for the following remedial actions: a clay cover, methane
capturing wells, and leachate destruction facilities. The remaining work at the
site involves groundwater evaluation and long-term operation and maintenance.
The Company is a member of the group that is responsible for carrying out the
first phase of the work, which is expected to take 5 to 8 years. Completion of
all phases is estimated to take up to 30 years. The maximum liability of the
group, which is joint and several for each member of the group, is expected to
range from approximately $450 million to $600 million, of which the Company's
share is expected to be approximately $13 million. Cleanup costs are payable
over the period that the work is completed.
Based on the facts outlined above and the Company's ongoing analyses of
the actions where it has been identified as a PRP, the Company believes that it
has accrued sufficient reserves to absorb the ultimate cost of such actions and
that such costs therefore will not have a material impact on the Company's
liquidity, capital resources or financial condition. While liability at
superfund sites is typically joint and several, the Company has no reason to
believe that defaults by other PRPs will result in liability of the Company
materially larger than expected.
In October 1996, Statement of Position (SOP) 96-1, "Environmental
Remediation Liabilities," was issued. It requires companies to recognize the
costs of environmental remediation on an accrual basis. The Company currently
recognizes the costs required by the SOP; therefore, adoption in 1997 will have
no material impact.
40
<PAGE> 28
REPORT OF INDEPENDENT ACCOUNTANTS
Oryx Energy Company
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS, ORYX ENERGY COMPANY:
We have audited the accompanying consolidated balance sheets of Oryx
Energy Company and its Subsidiaries as of December 31, 1996 and 1995 and the
related consolidated statements of income, cash flows and changes in
shareholders' deficit for each of the three years in the period ended December
31, 1996. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Oryx Energy
Company and its Subsidiaries as of December 31, 1996 and 1995 and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1996 in conformity with generally
accepted accounting principles.
As discussed in Notes 1 and 8 to the consolidated financial statements,
the Company changed its accounting policy for calculating the oil and gas asset
ceiling test in 1994.
/s/ COOPERS & LYBRAND L.L.P.
Dallas, Texas
February 19, 1997
41
<PAGE> 29
SUPPLEMENTARY FINANCIAL AND OPERATING INFORMATION (UNAUDITED)
Oryx Energy Company
<TABLE>
<CAPTION>
OIL AND GAS DATA
CAPITALIZED COSTS
UNITED UNITED OTHER
(Millions of Dollars) STATES KINGDOM FOREIGN TOTAL
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DECEMBER 31, 1996
Proved properties $ 3,721 $ 1,334 $ 112 $ 5,167
Unproved properties 59 87 1 147
--------- --------- -------- ---------
Total capitalized costs 3,780 1,421 113 5,314
Less accum. depr., depl. and amort. 2,699 962 38 3,699
--------- --------- -------- ---------
Net capitalized costs $ 1,081 $ 459 $ 75 $ 1,615
========= ========= ======== =========
DECEMBER 31, 1995
Proved properties $ 3,671 $ 1,184 $ 90 $ 4,945
Unproved properties 38 84 4 126
--------- --------- -------- ---------
Total capitalized costs 3,709 1,268 94 5,071
Less accum. depr., depl. and amort. 2,743 877 30 3,650
--------- --------- -------- ---------
Net capitalized costs $ 966 $ 391 $ 64 $ 1,421
========= ========= ======== =========
COSTS INCURRED IN OIL AND GAS PRODUCING ACTIVITIES
UNITED UNITED OTHER
(Millions of Dollars) STATES KINGDOM FOREIGN TOTAL
- ----------------------------------------------------------------------------------------------------------
1996
Property acquisition costs:
Proved $ 6 $ 94 $ -- $ 100
Unproved 24 -- -- 24
Exploration costs 47 5 14 66
Development costs 244* 51 15 310
--------- --------- -------- ---------
Total $ 321 $ 150 $ 29 $ 500
========= ========= ======== =========
1995
Property acquisition costs:
Proved $ 6 $ -- $ -- $ 6
Unproved 6 -- -- 6
Exploration costs 41 8 10 59
Development costs 167* 37 25 229
--------- --------- -------- ---------
Total $ 220 $ 45 $ 35 $ 300
========= ========= ======== =========
1994
Property acquisition costs:
Unproved $ 4 $ -- $ -- $ 4
Exploration costs 41 11 39 91
Development costs 144* 56** 19 219
--------- --------- -------- ---------
Total $ 189 $ 67 $ 58 $ 314
========= ========= ======== =========
</TABLE>
* Excludes capitalized interest of $17 million, $10 million and $5 million
for 1996, 1995 and 1994.
** Excludes capitalized interest of $6 million for 1994.
42
<PAGE> 30
SUPPLEMENTARY FINANCIAL AND OPERATING INFORMATION (UNAUDITED)
Oryx Energy Company
<TABLE>
<CAPTION>
EXPLORATION COSTS
UNITED UNITED OTHER
(Millions of Dollars) STATES KINGDOM FOREIGN TOTAL
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1996
Dry hole costs $ 18 $ -- $ -- $ 18
Leasehold impairment 2 -- -- 2
Geological and geophysical 23 4 7 34
Other 2 -- -- 2
--------- --------- -------- ---------
$ 45 $ 4 $ 7 $ 56
========= ========= ======== =========
1995
Dry hole costs $ 12 $ -- $ -- $ 12
Leasehold impairment 9 -- -- 9
Geological and geophysical 22 8 6 36
Other 1 -- 1 2
--------- --------- -------- ---------
$ 44 $ 8 $ 7 $ 59
========= ========= ======== =========
1994
Dry hole costs $ 10 $ 4 $ 25 $ 39
Leasehold impairment 18 -- -- 18
Geological and geophysical 25 7 13 45
Other 1 1 -- 2
--------- --------- -------- ---------
$ 54 $ 12 $ 38 $ 104
========= ========= ======== =========
</TABLE>
ESTIMATED NET QUANTITIES OF PROVED OIL AND GAS RESERVES
Proved reserve quantities were based on estimates prepared by Company engineers
in accordance with guidelines established by the Securities and Exchange
Commission and were reviewed by Gaffney, Cline & Associates, Inc., independent
petroleum engineers. The Company considers such estimates to be reasonable;
however, due to inherent uncertainties and the limited nature of reservoir
data, estimates of underground reserves are imprecise and subject to change
over time as additional information becomes available.
There has been no major discovery or other favorable or adverse event that
has caused a significant change in estimated proved reserves since December 31,
1996. The Company has no long-term supply agreements or contracts with
governments or authorities in which it acts as producer nor does it have any
interest in oil and gas operations accounted for by the equity method.
43
<PAGE> 31
SUPPLEMENTARY FINANCIAL AND OPERATING INFORMATION (UNAUDITED)
Oryx Energy Company
<TABLE>
<CAPTION>
PROVED RESERVES
NATURAL
CRUDE OIL AND CONDENSATE GAS LIQUIDS NATURAL GAS
--------------------------------- ----------------------- ------------------------
(Millions of Barrels) (Millions of Barrels) (Billions of Cubic Feet)
OTHER OTHER
U.S. U.K. FOREIGN TOTAL U.S. FOREIGN TOTAL U.S.* U.K. TOTAL
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1993 238 188 61 487 21 -- 21 1,431 450 1,881
Revisions of previous estimates (2) 1 (1) (2) 3 -- 3 23 4 27
Improved recovery -- -- -- -- -- -- -- -- -- --
Purchases of minerals in place -- 24 ** -- 24 -- -- -- 2 4 ** 6
Sales of minerals in place (22) (19) -- (41) -- -- -- (115) (248) (363)
Extensions and discoveries 6 -- 23 29 -- -- -- 188 -- 188
Production (17) (20) (7) (44) (3) -- (3) (196) (23) (219)
--- --- -- --- -- -- -- ---- ---- -----
BALANCE AT DECEMBER 31, 1994 203 174 76 453 21 -- 21 1,333 187 1,520
Revisions of previous estimates (6) 1 (1) (6) 3 -- 3 62 5 67
Improved recovery 5 -- -- 5 -- -- -- 1 -- 1
Purchases of minerals in place 1 -- -- 1 -- -- -- 4 -- 4
Sales of minerals in place (10) (54) (36) (100) (4) -- (4) (56) (149) (205)
Extensions and discoveries 12 -- 3 15 -- -- -- 125 -- 125
Production (17) (20) (5) (42) (2) -- (2) (171) (18) (189)
--- --- -- --- -- -- -- ---- ---- -----
BALANCE AT DECEMBER 31, 1995 188 101 37 326 18 -- 18 1,298 25 1,323
Revisions of previous estimates 9 5 (1) 13 2 -- 2 (22) -- (22)
Improved recovery 1 -- -- 1 -- -- -- -- -- --
Purchases of minerals in place 3 29 -- 32 -- -- -- 8 2 10
Sales of minerals in place (3) -- -- (3) -- -- -- (32) -- (32)
Extensions and discoveries 5 7 24 36 2 10 12 102 1 103
Production (16) (20) (4) (40) (2) -- (2) (180) (3) (183)
--- --- -- --- -- -- -- ---- ---- -----
BALANCE AT DECEMBER 31, 1996 187 122 56 365 20 10 30 1,174 25 1,199
=== === == === == == == ===== ==== =====
PROVED DEVELOPED RESERVES
AT DECEMBER 31
1993 156 85 31 272 16 -- 16 1,010 95 1,105
1994 130 112 31 273 16 -- 16 907 143 1,050
1995 116 80 13 209 13 -- 13 881 15 896
1996 118 96 19 233 14 -- 14 816 21 837
</TABLE>
* Natural gas reserve volumes include liquefiable hydrocarbons approximating
5 percent of total gas reserves which are recoverable downstream. Such
recoverable liquids also have been included in natural gas liquids reserve
volumes.
** Represents reserves received in the asset exchange. These amounts have
been excluded in calculating FD&A and reserve replacement (see Note 18).
44
<PAGE> 32
SUPPLEMENTARY FINANCIAL AND OPERATING INFORMATION (UNAUDITED)
Oryx Energy Company
STANDARDIZED MEASURE
The standardized measure of discounted future net cash flows from estimated
production of proved oil and gas reserves after income taxes is presented in
accordance with the provisions of SFAS No. 69, "Disclosures about Oil and Gas
Producing Activities." In computing this data, assumptions other than those
mandated by SFAS No. 69 could produce substantially different results. The
Company cautions against viewing this information as a forecast of future
economic conditions or revenues.
The standardized measure has been prepared assuming year-end selling
prices adjusted for future fixed and determinable contractual price changes,
year-end development and production costs, year-end statutory tax rates
adjusted for future tax rates already legislated and a 10 percent annual
discount rate. The year-end realized prices were $23.18, $17.95 and $15.31 per
barrel of oil and $4.05, $2.27 and $1.82 per mcf of gas for 1996, 1995 and
1994.
<TABLE>
<CAPTION>
UNITED UNITED OTHER
(Millions of Dollars) STATES KINGDOM FOREIGN TOTAL
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1996
Future cash inflows $ 9,480 $ 3,223 $ 1,351 $ 14,054
Future production and development costs (2,623) (2,247) (694) (5,564)
Future income tax expenses (2,326) (275) (237) (2,838)
--------- --------- -------- ----------
Future net cash flows 4,531 701 420 5,652
Discount at 10 percent (1,739) (152) (270) (2,161)
--------- --------- -------- ----------
Standardized measure $ 2,792 $ 549 $ 150 $ 3,491
========= ========= ======== ==========
1995
Future cash inflows $ 6,558 $ 2,237 $ 548 $ 9,343
Future production and development costs (2,618) (1,661) (353) (4,632)
Future income tax expenses (1,289) (129) (47) (1,465)
--------- --------- -------- ----------
Future net cash flows 2,651 447 148 3,246
Discount at 10 percent (1,060) (61) (68) (1,189)
--------- --------- -------- ----------
Standardized measure $ 1,591 $ 386 $ 80 $ 2,057
========= ========= ======== ==========
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF CHANGES IN THE STANDARDIZED MEASURE
(Millions of Dollars) 1996 1995 1994
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance, beginning of year $ 2,057 $ 2,030 $ 1,428
Increase (decrease) in discounted future net cash flows:
Sales of oil and gas production, net of related costs (769) (579) (596)
Revisions to estimates of proved reserves:
Prices net of production taxes 1,834 588 973
Development costs (64) 20 390
Production costs 125 150 (798)
Quantities 91 71 14
Other (232) (140) 292
Extensions, discoveries and improved recovery,
less related costs 504 345 233
Development costs incurred during the period 310 229 219
Purchases of reserves in place 208 12 89
Sales of reserves in place (9) (536) (83)
Accretion of discount 283 219 177
Income taxes (847) (352) (308)
---------- ------- ---------
Balance, end of year $ 3,491 $ 2,057 $ 2,030
========== ======= =========
</TABLE>
45
<PAGE> 33
SUPPLEMENTARY FINANCIAL AND OPERATING INFORMATION (UNAUDITED)
Oryx Energy Company
QUARTERLY FINANCIAL INFORMATION
<TABLE>
<CAPTION>
QUARTER ENDED
-----------------------------------------------------
(Millions of Dollars, Except Per Share
Amounts) MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31 TOTAL
- ---------------------------------------------------------------------------------------------- --------
<S> <C> <C> <C> <C> <C> <C>
Revenue:
1996 $247 $253 $ 289 $358 $1,147
==== ==== ===== ==== ======
1995 $293 $285 $ 345 $206 $1,129
==== ==== ===== ==== ======
Gross profit:*
1996 $ 91 $ 83 $ 108 $157 $ 439
==== ==== ===== ==== ======
1995 $ 84 $ 68 $ 45 $ 50 $ 247
==== ==== ===== ==== ======
Net income (loss):
1996 $ 32 $ 28 $ 40 $ 63 $ 163
==== ==== ===== ==== ======
1995
Before extraordinary item $ 13 $ 25 $ 108 $ 12 $ 158
Extraordinary item -- (14) (1) (8) (23)
---- ---- ----- ---- ------
$ 13 $ 11 $ 107 $ 4 $ 135
==== ==== ===== ==== ======
Net income (loss) per share of common stock:
1996 $.31 $.27 $ .38 $.60 $ 1.55
==== ==== ===== ==== ======
1995
Before extraordinary item $.13 $.25 $1.04 $.12 $ 1.54
Extraordinary item -- (.14) (.01) (.08) (.22)
---- ---- ----- ---- ------
$.13 $.11 $1.03 $.04 $ 1.32
==== ==== ===== ==== ======
</TABLE>
* Gross profit equals oil and gas revenues plus gas plant margins less
production cost, exploration cost and depreciation, depletion and
amortization.
46
<PAGE> 34
OF INTEREST TO SHAREHOLDERS
Oryx Energy Company
<TABLE>
<S> <C> <C>
PRINCIPAL OFFICE TRANSFER AGENT AND REGISTRAR ANNUAL MEETING
13155 Noel Road Chase Mellon Shareholder Services, LLC Thursday, May 1, 1997
Dallas, Texas 75240 Shareholder Relations Department 9:00 a.m.
P.O. Box 3068 Cityplace Conference Center
New York, N.Y. 10116-3068 2711 North Haskell
1-800-648-8393 Dallas, Texas 75204
</TABLE>
For further information about the meeting, please contact the Company's
Secretary at our principal office.
PUBLICATIONS AVAILABLE TO SHAREHOLDERS
We will be pleased to furnish the following reports to shareholders who write
to Shareholder Relations at our principal office, or call 1-800-846-ORYX:
Quarterly Report - a review of new developments and quarterly financial
and operating results, published for quarters ending in March, June and
September
Form 10-K - Annual Report for 1996 filed with the SEC (excluding exhibits)
Exhibits are available upon request at a reasonable charge.
ORYX ENERGY HOMEPAGE
Oryx annual reports, quarterly reports and news releases can be viewed on the
Internet: http://www.oryx.com
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
The Company's notice of annual meeting, proxy statement and proxy card are
mailed about one month before the annual meeting.
MARKET FOR ORYX ENERGY COMMON STOCK AND RELATED SECURITY MATTERS
The Common Stock, $1 par value, of the Company trades on the New York Stock
Exchange under the symbol "ORX." The following table sets forth the high and
low sales prices, as reported on the New York Stock Exchange Composite
Transactions quotations. No dividends were paid for the periods indicated:
<TABLE>
<CAPTION>
HIGH LOW
- --------------------------------------------------------------------------------------------
<S> <C> <C>
1996
First quarter $14 3/4 $12 3/8
Second quarter $17 3/8 $14
Third quarter $18 1/4 $14 1/8
Fourth quarter $25 3/4 $17 1/2
1995
First quarter $13 1/4 $ 9 7/8
Second quarter $14 3/4 $12
Third quarter $14 3/4 $12 5/8
Fourth quarter $14 $10 3/4
</TABLE>
The Company had 28,943 holders of record of Common Stock as of February 28,
1997.
47
<PAGE> 35
Oryx Energy Company
DIRECTORS OF ORYX ENERGY COMPANY
JERRY W. BOX
Executive Vice President and Chief Operating Officer
WILLIAM E. BRADFORD
Dresser Industries, Inc.
Chairman and Chief Executive Officer
SYLVIA A. EARLE
Deep Ocean Exploration and Research, Inc.
President
DAVID C. GENEVER-WATLING
General Electric Industrial and Power Systems Business
Retired President and Chief Executive Officer
ROBERT B. GILL
J.C. Penney Company, Inc.
Retired Vice Chairman of the Board
DAVID S. HOLLINGSWORTH
Hercules Incorporated
Retired Chairman of the Board and Chief Executive Officer
ROBERT L. KEISER
Chairman of the Board, Chief Executive Officer, and President
EDWARD W. MONEYPENNY
Executive Vice President, Finance, and Chief Financial Officer
CHARLES H. PISTOR, JR.
Southern Methodist University
Retired Vice Chair
PAUL R. SEEGERS
Seegers Enterprises
President
Centex Corporation
Retired Chairman of the Board and Chief Executive Officer
IAN L. WHITE-THOMSON
U.S. Borax Inc.
President and Chief Executive Officer
COMMITTEES OF THE BOARD
AUDIT COMMITTEE
Paul R. Seegers, Chairman
William E. Bradford
Sylvia A. Earle
Robert B. Gill
Ian L. White-Thomson
BOARD POLICY AND NOMINATING COMMITTEE
Charles H. Pistor, Jr., Chairman
William E. Bradford
Sylvia A. Earle
David S. Hollingsworth
Paul R. Seegers
COMPENSATION COMMITTEE
David S. Hollingsworth, Chairman
David C. Genever-Watling
Robert B. Gill
Charles H. Pistor, Jr.
Ian L. White-Thomson
EXECUTIVE COMMITTEE
Robert L. Keiser, Chairman
Jerry W. Box
William E. Bradford
Edward W. Moneypenny
Charles H. Pistor, Jr.
MLP COMMITTEE
Jerry W. Box
Robert L. Keiser
Edward W. Moneypenny
PRINCIPAL OFFICERS OF ORYX ENERGY COMPANY
JERRY W. BOX
Executive Vice President and Chief Operating Officer
SHERRI T. DURST
General Auditor
STEVEN J. FLOWERS
Treasurer
FRANCES G. HEARTWELL
Vice President, Human Resources and Administration
ROBERT L. KEISER
Chairman of the Board, Chief Executive Officer, and President
WILLIAM C. LEMMER
Vice President, General Counsel and Secretary
EDWARD W. MONEYPENNY
Executive Vice President, Finance, and Chief Financial Officer
ROBERT L. THOMPSON
Comptroller and Corporate Planning Director
48
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Form S-8 registration
statements of the Oryx Energy Company Long-Term Incentive Plan (File No.
33-25032), the Oryx Energy Company Capital Accumulation Plan (File No.
33-24918), the Oryx Energy Company 1992 Long-Term Incentive Plan (File No.
33-42695), the Oryx Energy Company Equity and Deferred Compensation Plan for
Non-Employee Directors (File No. 333-03075), the Oryx Energy Company Executive
Variable Incentive Plan (File No. 333-03089) and the Form S-3 registration
statements of Oryx Energy Company (File No.'s 33-33361, 33-36799 and 33-45611),
of our report dated February 19, 1997, on our audit of the consolidated
financial statements of Oryx Energy Company and its Subsidiaries as of December
31, 1996 and 1995 and for each of the three years in the period ended December
31, 1996, which report is incorporated by reference in this Form 10-K from page
41 of the Oryx Energy Company 1996 Annual Report to Shareholders.
/s/ COOPERS & LYBRAND L.L.P.
Dallas, Texas
March 20, 1997
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert L. Keiser and Edward W. Moneypenny, and
each of them (with full power to each of them to act alone), his true and lawful
attorney-in-fact and his agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities to sign the Annual Report of ORYX ENERGY COMPANY for the fiscal year
ended December 31, 1996 on Form 10-K pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 and any or all amendments to the Annual Report
and to file the same, with all exhibits thereto and other documents in
connection therewith with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their substitutes, may lawfully
do or cause to be done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ ROBERT L. KEISER Chairman of the Board, Chief March 6, 1997
- ----------------------------------------------------- Executive Officer, President,
(Robert L. Keiser) and Director (principal
executive officer)
/s/ JERRY W. BOX Executive Vice President, Chief March 6, 1997
- ----------------------------------------------------- Operating Officer, and Director
(Jerry W. Box)
/s/ EDWARD W. MONEYPENNY Executive Vice President, Finance, March 6, 1997
- ----------------------------------------------------- Chief Financial Officer, and
(Edward W. Moneypenny) Director (principal financial
officer)
/s/ ROBERT L. THOMPSON Comptroller and Corporate Planning March 6, 1997
- ----------------------------------------------------- Director (principal accounting
(Robert L. Thompson) officer)
/s/ WILLIAM E. BRADFORD Director March 6, 1997
- -----------------------------------------------------
(William E. Bradford)
/s/ SYLVIA A. EARLE Director March 6, 1997
- -----------------------------------------------------
(Sylvia A. Earle)
/s/ DAVID C. GENEVER-WATLING Director March 6, 1997
- -----------------------------------------------------
(David C. Genever-Watling)
/s/ ROBERT B. GILL Director March 6, 1997
- -----------------------------------------------------
(Robert B. Gill)
/s/ DAVID S. HOLLINGSWORTH Director March 6, 1997
- -----------------------------------------------------
(David S. Hollingsworth)
/s/ CHARLES H. PISTOR, JR. Director March 6, 1997
- -----------------------------------------------------
(Charles H. Pistor, Jr.)
/s/ PAUL R. SEEGERS Director March 6, 1997
- -----------------------------------------------------
(Paul R. Seegers)
/s/ IAN L. WHITE-THOMSON Director March 6, 1997
- -----------------------------------------------------
(Ian L. White-Thomson)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains Summary Financial information extracted from the
Consolidated Financial Statements included in the 1996 Oryx Energy Company
Annual Report and is qualified in its entirety by reference to such Financial
Statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 9
<SECURITIES> 0
<RECEIVABLES> 232
<ALLOWANCES> 0
<INVENTORY> 3
<CURRENT-ASSETS> 250
<PP&E> 5,354
<DEPRECIATION> 3,727
<TOTAL-ASSETS> 1,935
<CURRENT-LIABILITIES> 385
<BONDS> 1,183
0
0
<COMMON> 124
<OTHER-SE> (161)
<TOTAL-LIABILITY-AND-EQUITY> 1,935
<SALES> 1,168
<TOTAL-REVENUES> 1,147
<CGS> 675
<TOTAL-COSTS> 675
<OTHER-EXPENSES> 114
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 93
<INCOME-PRETAX> 265
<INCOME-TAX> 102
<INCOME-CONTINUING> 163
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 163
<EPS-PRIMARY> 1.55
<EPS-DILUTED> 1.55
</TABLE>
