<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-10053
ORYX ENERGY COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 23-1743284
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
Number)
13155 NOEL ROAD, DALLAS, TEXAS 75240-5067
(Address of principal executive offices) (Zip code)
(972) 715-4000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
The number of shares of common stock, $1 par value,
outstanding on April 30, 1997 was 105,327,541.
<PAGE>
ORYX ENERGY COMPANY
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Income
for the Three Months Ended March 31, 1997
and 1996 .................................. 3
Condensed Consolidated Balance Sheets at
March 31, 1997 and December 31, 1996 ...... 4
Condensed Consolidated Statements of Cash
Flows for the Three Months Ended March 31,
1997 and 1996 ............................. 5
Notes to Condensed Consolidated Financial
Statements ................................ 6
Report of Independent Accountants ......... 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations ................................ 10
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security
Holders .................................. 13
SIGNATURE .......................................... 16
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
ORYX ENERGY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Three Months
(Millions of Dollars, Except Ended March 31
Per Share Amounts) 1997 1996
(Unaudited)
Revenues
Oil and gas $342 $248
Other (7) (1)
---- ----
335 247
---- ----
Costs and Expenses
Operating costs 69 58
Production taxes 39 26
Exploration costs 14 11
Depreciation, depletion and amortization 79 63
General and administrative expense 15 15
Interest and debt expense 27 29
Interest capitalized (5) (3)
---- ----
238 199
Income Before Provision for Income Taxes 97 48
Provision for Income Taxes (Note 3) 35 17
Remeasurement of Foreign Deferred Tax
(Note 3) (4) (1)
---- ----
Net Income $66 $32
==== ====
Net Income Per Share of Common Stock $.62 $.31
==== ====
Weighted Average Number of Common Shares
Outstanding (in millions) 105.7 104.6
===== =====
(See Accompanying Notes)
<PAGE>
ORYX ENERGY COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31 December 31
(Millions of Dollars) 1997 1996
(Unaudited)
Assets
Current Assets
Cash and cash equivalents $ 11 $ 9
Accounts receivable and other current
assets 181 241
------ ------
Total Current Assets 192 250
Properties, Plants and Equipment (Note 4) 1,665 1,627
Deferred Charges and Other Assets 59 58
------ ------
Total Assets $1,916 $1,935
====== ======
Liabilities and Shareholders' Equity (Deficit)
Current Liabilities
Accounts payable $ 116 $ 130
Accrued liabilities 259 251
Current portion of long-term debt 4 4
------ ------
Total Current Liabilities 379 385
Long-Term Debt 1,108 1,183
Deferred Income Taxes 238 248
Deferred Credits and Other Liabilities 156 156
Shareholders' Equity (Deficit) (Note 5)
Common stock, par value $1 per share 124 124
Additional paid-in capital 1,821 1,821
Accumulated deficit (833) (895)
------ ------
1,112 1,050
Less: Common stock in treasury,
at cost (979) (988)
Loan to ESOP (98) (99)
------ ------
Shareholders' Equity (Deficit) 35 (37)
------ ------
Total Liabilities and Shareholders'
Equity (Deficit) $ 1,916 $1,935
======= ======
The successful efforts method of accounting is followed.
(See Accompanying Notes)
<PAGE>
ORYX ENERGY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months
Ended March 31
(Millions of Dollars) 1997 1996
(Unaudited)
Cash and Cash Equivalents From Operating Activities
Net income $ 66 $ 32
Adjustments to reconcile net income to
net cash flow from operating activities:
Depreciation, depletion and amortization 79 63
Dry hole costs and leasehold impairment 2 3
Gain on sale of assets, net of taxes - (1)
Deferred income taxes 8 15
Remeasurement of foreign deferred tax (4) (1)
Other 4 1
------ ------
155 112
Changes in working capital:
Accounts receivable and
other current assets 61 (5)
Accounts payable and accrued
liabilities (2) 22
------ ------
Net Cash Flow Provided From Operating
Activities 214 129
------ -----
Investing Activities
Capital expenditures (117) (86)
Proceeds from divestments, net of
current taxes - 4
Other (21) (9)
----- -----
Net Cash Flow Used For Investing
Activities (138) (91)
------ ------
Financing Activities
Proceeds from borrowings 15 16
Repayments of long-term debt (90) (64)
ESOP Loan Repayment 1 -
------ ------
Net Cash Flow Used For Financing
Activities (74) (48)
------ ------
Changes In Cash and Cash Equivalents 2 (10)
Cash and Cash Equivalents at Beginning
of Period 9 20
Cash and Cash Equivalents at End ------ ------
of Period $ 11 $ 10
====== ======
(See Accompanying Notes)
<PAGE>
ORYX ENERGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The accompanying condensed consolidated financial statements
and related notes of Oryx Energy Company and its
subsidiaries (hereinafter, unless the context otherwise
requires, being referred to as the Company) are presented in
accordance with the requirements of Form 10-Q and do not
include all disclosures normally required by generally
accepted accounting principles or those normally made in
annual reports on Form 10-K. In management's opinion, all
adjustments necessary for a fair presentation of the results
of operations for the periods shown have been made and are
of a normal recurring nature. The results of operations of
the Company for the three months ended March 31, 1997 are
not necessarily indicative of the results for the full year
1997.
Statements of Cash Flows
Amounts paid for interest and income taxes were as follows:
Three Months Ended March 31
1997 1996
(Millions of Dollars)
Interest paid (net of
capitalized amounts) $ 19 $ 15
Income taxes paid $ 18 $ -
2. Provision for Restructuring
In the fourth quarter of 1995, the Company recognized a net
$25 million ($16 million after-tax) charge for restructuring
comprised of a $4 million adjustment to the 1994
restructuring provision and a $29 million restructuring
provision for a plan to achieve further cost reductions.
An analysis of the 1995 provision for restructuring follows:
1997
Balance First Balance
at Quarter at
12/31/96 Activity 3/31/97
(Millions of Dollars)
Office lease obligation *$ 13 $ (1) $ 12
==== ===== ====
* Represents contractual obligations existing prior to
the commitment date that will continue with no economic
benefit to the Company.
<PAGE>
ORYX ENERGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(continued)
3. Income Taxes
The Company's provisions for income taxes for the three
months ended March 31, 1997 and 1996 reflect provisions of
$35 million and $17 million. Foreign income tax provisions
included within the Company's consolidated provisions are
determined based upon the appropriate foreign statutory
rates which differ from the U.S. statutory rate.
Deferred income taxes are provided to reflect the tax
consequences in future periods of differences between
financial statements and tax basis of assets and liabilities
at period end in accordance with Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes"
(SFAS No. 109). The remeasurement provisions of SFAS No.
109 have affected the reported earnings of the Company.
Earnings have increased $4 million and $1 million for the
three months ended March 31, 1997 and 1996 from such
remeasurement. Management believes that such non-cash
remeasurements distort current period economic results and
should be disregarded in analyzing the Company's current
business. Future economic results may also be distorted
because payment of the deferred tax liability is not
expected to occur in the near-term and it is likely that
exchange rates will fluctuate prior to the eventual
settlement of the liability.
<PAGE>
ORYX ENERGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(continued)
4. Properties, Plants and Equipment
At March 31, 1997 and December 31, 1996, the Company's
properties, plants and equipment; and related accumulated
depreciation, depletion and amortization were as follows:
March 31 December 31
1997 1996
(Millions of Dollars)
Gross investment............ $ 5,430 $ 5,354
Less accumulated
depreciation, depletion
and amortization.......... 3,765 3,727
-------- --------
Net investment.............. $ 1,665 $ 1,627
======== ========
5. Shareholders' Equity (Deficit)
Shares of the Company's preferred and common stocks
authorized, issued, outstanding and in treasury at March 31,
1997 and December 31, 1996 were as follows:
In
Authorized Issued Outstanding Treasury
(Thousands of Shares)
March 31, 1997
Preferred stock 15,000 - - -
Preference stock 7,741 - - -
Common stock 250,000 126,704 105,314 (18,388)
December 31, 1996
Preferred stock 15,000 - - -
Preference stock 7,741 - - -
Common stock 250,000 126,704 104,983 (18,719)
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors, Oryx Energy Company:
We have reviewed the accompanying condensed consolidated balance
sheet of Oryx Energy Company and its Subsidiaries as of March 31,
1997, and the related condensed consolidated statements of income
and cash flows for the three months ended March 31, 1997 and
1996. These financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical review procedures to financial data and
making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the accompanying condensed
consolidated financial statements for them to be in conformity
with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet as of December
31, 1996, and the related consolidated statements of income and
cash flows for the year then ended (not presented herein); and in
our report dated February 19, 1997, we expressed an unqualified
opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of December 31, 1996, is fairly
stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
/s/ Coopers & Lybrand L.L.P.
Dallas, Texas
May 2, 1997
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
FINANCIAL CONDITION
The Company's cash and cash equivalents increased by $2 million
during the three months ended March 31, 1997. The increase was
comprised of $214 million of net cash flow provided from
operating activities, $138 million of net cash flow used for
investing activities and $74 million of net cash flow used for
financing activities. The $214 million in net cash flow provided
from operating activities consisted of $155 million in net cash
flow provided from operating activities before changes in current
assets and liabilities and $59 million provided from changes in
current assets and liabilities. The $155 million in net cash
flow provided from operating activities before changes in current
assets and liabilities was primarily impacted by increased crude
oil and natural gas prices and volumes. The $59 million of net
cash flow provided from changes in current assets and liabilities
consisted of a $61 million decrease in accounts receivable and a
$2 million decrease in accounts payable.
The $138 million in net cash flow used for investing activities
and the $74 million in net cash flow used for financing
activities are primarily due to a cash use of $117 million for
capital expenditures and a cash use of $75 million for net
decreases in debt.
In the fourth quarter of 1995, the Company incurred a net $25
million ($16 million after-tax) provision for restructuring
comprised of a $4 million adjustment to the 1994 restructuring
provision and a $29 million restructuring provision for a plan to
achieve further cost reductions. For an analysis of the
restructuring provision, see Note 2 to the Condensed Consolidated
Financial Statements.
During February 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 128,
"Earning per Share," effective for fiscal years beginning after
December 15, 1997. The impact of this statement, when adopted,
will not be material.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations - continued
RESULTS OF OPERATIONS
The Company's net income for the quarter ended March 31, 1997 was
$66 million, or $.62 per share, as compared to net income of $32
million, or $.31 per share for the quarter ended March 31, 1996.
Revenues for the 1997 first quarter were $335 million versus $247
million for the first quarter of 1996.
Compared to the same quarter last year, worldwide crude oil
prices increased by $2.49 per barrel and U.S. natural gas prices
increased by $.74 per mcf. Crude oil volumes increased by 16
thousand barrels per day, or 16 percent and natural gas volumes
increased 51 million cubic feet per day, or 11 percent.
First quarter unit costs were higher than the same period last
year primarily due to higher operating costs, driven by the
timing of maintenance and workover expenses; increased production
taxes, a direct result of higher commodity prices; and higher
DD&A, a function of production mix.
During the first quarter the Company reported several key
operational milestones. In February, Oryx became operator of the
U.K. Ninian field where it is implementing plans to significantly
reduce costs, extend field life and increase reserves.
Production commenced in March from the Gulf of Mexico Neptune
field, where the Company operates the world's first floating
production spar. Also in March, a decision was made to proceed
with development of the 350-400 million gross barrels of
hydrocarbon liquids at the Bayu-Undan field in Australia.
The 1997 first quarter includes a $4 million benefit for the
remeasurement of foreign deferred taxes. By comparison, the 1996
first quarter included a $1 million net gain from asset sales and
a $1 million benefit for the remeasurement of foreign deferred
taxes.
Average worldwide net production of crude oil and condensate for
the three months ended March 31, 1997 was 118 thousand barrels
daily compared to average net production for the three months
ended March 31, 1996 of 102 thousand barrels daily. Average net
production of crude oil and condensate was 41 thousand barrels
daily in the United States and 77 thousand barrels daily from
foreign locations during the three months ended March 31, 1997,
compared to 45 thousand barrels daily in the United States and 57
thousand barrels daily from foreign locations in the first
quarter of 1996. The average worldwide crude oil and condensate
price in the first quarter of 1997 was $19.86 per barrel compared
to $17.37 per barrel in the first quarter of 1996.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations - continued
RESULTS OF OPERATIONS (continued)
Average worldwide net production of natural gas was 524 million
cubic feet daily for the three months ended March 31, 1997,
compared to 473 million cubic feet in the three months ended
March 31, 1996. Average net production of natural gas was 512
million cubic feet daily in the United States and 12 million
cubic feet daily from the United Kingdom in the first quarter of
1997, compared to 466 million cubic feet daily in the United
States and 7 million cubic feet daily from the United Kingdom in
the first quarter of 1996. The average worldwide price of
natural gas for the first quarter of 1997 was $2.77 per thousand
cubic feet compared to $2.03 per thousand cubic feet in the first
quarter of 1996.
<PAGE>
PART II
OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
On May 1, 1997, 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.
Jerry W. William E. Sylvia A. Edward W.
Box Bradford Earle Moneypenny
Affirmative83,304,670 83,406,070 83,387,537 83,302,993
Negative - - - -
Abstained - - - -
Withheld 601,977 500,577 519,110 603,654
Broker non-votes - - - -
Shares without
executed
proxies
and not
present
for vote 21,406,234 21,406,234 21,406,234 21,406,234
----------- ---------- ---------- ----------
Shares entitled
to vote 105,312,881 105,312,881 105,312,881 105,312,881
=========== =========== =========== ===========
(b) To approve the appointment of Coopers &
Lybrand L.L.P. as independent accountants for the
fiscal year 1997.
Affirmative 83,131,252
Negative 521,611
Abstained 253,784
Withheld -
Broker non-votes -
Shares without executed
proxies and not present
for vote 21,406,234
-----------
Shares entitled to vote 105,312,881
===========
<PAGE>
PART II
OTHER INFORMATION - continued
(c) To approve the 1997 Long-Term Incentive Plan.
Affirmative 71,510,914
Negative 9,081,721
Abstained 1,654,128
Withheld -
Broker non-votes 1,659,884
Shares without executed
proxies and not present
for vote 21,406,234
-----------
Shares entitled to vote 105,312,881
===========
(d) To approve an Amendment to the 1992 Long-Term
Incentive Plan.
Affirmative 77,798,685
Negative 2,802,432
Abstained 1,694,239
Withheld -
Broker non-votes 1,611,291
Shares without executed
proxies and not present
for vote 21,406,234
-----------
Shares entitled to vote 105,312,881
===========
(e) To reapprove the Executive Variable Incentive
Plan.
Affirmative 79,925,110
Negative 2,504,011
Abstained 1,455,398
Withheld -
Broker non-votes 22,128
Shares without executed
proxies and not present
for vote 21,406,234
-----------
Shares entitled to vote 105,312,881
===========
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
12 Computation of Consolidated Ratios
of Earnings to Fixed Charges and Earnings to
Fixed Charges and Preferred Stock Dividend
Requirements.
*15 Accountant's letter regarding
unaudited interim financial information.
27 Financial Data Schedule
28 Awareness letter of Coopers & Lybrand L.L.P.
* Attached as page 18 to this Form 10-Q.
(b) Reports on Form 8-K:
The Company did not file any reports on Form
8-K during the quarter ended March 31, 1997.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
ORYX ENERGY COMPANY
BY /s/ EDWARD W. MONEYPENNY
Edward W. Moneypenny
(Executive Vice President, Finance,
and Chief Financial Officer)
DATE May 5, 1997
<PAGE>
EXHIBIT 12
ORYX ENERGY COMPANY
COMPUTATION OF CONSOLIDATED RATIO OF EARNINGS
TO FIXED CHARGES AND EARNINGS TO FIXED CHARGES AND
PREFERRED STOCK DIVIDEND REQUIREMENTS - UNAUDITED (a)
(Millions of Dollars)
Three Months
Ended March 31
1997
RATIO OF EARNINGS TO FIXED CHARGES:
Fixed Charges:
Consolidated interest cost and debt expense $ 27
Interest allocable to rental expense (b) 1
----
Total $ 28
====
Earnings:
Consolidated income before provision for
income taxes $ 97
Fixed charges 28
Interest capitalized (5)
Amortization of previously capitalized
interest 1
----
Total $121
====
Ratio of Earnings to Fixed Charges 4.32
====
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED
STOCK DIVIDEND REQUIREMENTS:
Fixed Charges:
Consolidated interest cost and debt expense $ 27
Preferred stock dividend requirements -
Interest allocable to rental expense (b) 1
----
Total $ 28
====
Earnings:
Consolidated income before provision for
income taxes $ 97
Fixed charges 28
Interest capitalized (5)
Amortization of previously capitalized interest 1
----
Total $ 121
=====
Ratio of Earnings to Fixed Charges 4.32
=====
(a) The consolidated financial statements of Oryx Energy Company
include the accounts of all subsidiaries (more than 50
percent owned and/or controlled).
(b) Represents one-third of total operating lease rental expense
which is that portion deemed to be interest.
<PAGE>
EXHIBIT 28
Securities and Exchange Commission
450 Fifth Street, Northwest
Washington, D.C. 20549
Attn.: Document Control
Re: Oryx Energy Company Form 10-Q
We are aware that our report dated May 2, 1997 on our review of
the interim condensed consolidated balance sheet of Oryx Energy
Company and its Subsidiaries as of March 31, 1997, and the
related condensed consolidated statements of income and cash
flows for the three months ended March 31, 1997 and 1996,
included in this Form 10-Q, is incorporated by reference in the
following registration statements:
Registration No.
On Form S-3 for:
Oryx Energy Company $500,000,000 Debt
Securities; Preferred Stock; and Common
Stock 33-45611
Oryx Energy Company $600,000,000 Debt
Securities 33-33361
Oryx Energy Company 7,259,394 shares of
Common Stock 33-36799
On Form S-8 for:
Oryx Energy Company 1992 Long-Term Incentive
Plan 33-42695
Oryx Energy Company Long-Term Incentive Plan 33-25032
Oryx Energy Company Capital Accumulation Plan 33-24918
Oryx Energy Company Equity and Deferred
Compensation Plan for Non-Employee Directors 333-03075
Oryx Energy Company Executive Variable
Incentive Plan 333-03089
Pursuant to Rule 436(c) under the Securities Act of 1933, this
report should not be considered a part of the registration
statement prepared or certified by us within the meaning of
Sections 7 and 11 of that Act.
/s/ Coopers & Lybrand L.L.P.
Dallas, Texas
May 2, 1997
<PAGE>
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<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SEC FORM
10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
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