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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
JANUARY 26, 1999
ORYX ENERGY COMPANY
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation or organization)
1-10053
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(Commission File Number)
23-1743284
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(IRS Employer Identification Number)
13155 NOEL ROAD, DALLAS, TEXAS 75240-5067
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(Address of principal executive offices, including zip code)
(972) 715-4000
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(Registrant's telephone number, including area code)
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Item 5. Other Events
As a result of a fourth quarter 1998 impairment test related to the application
of Statement of Financial Accounting Standards No. 121, the Company reported an
after-tax non-cash write-down of assets of $49 million. The Company deemed that
certain of its oil and gas fields located in the United States, primarily
offshore, were impaired because the assets were no longer expected to recover
their net book value through future cash flows. The lower estimated cash flows
result primarily from continued weakness in oil and gas prices. In addition,
minor downward reserve revisions were deemed necessary for certain oil and gas
fields. The prices used in performing the impairment analysis of future cash
flows are the Company's investment guideline prices, developed internally giving
consideration to currently available price forecasts for 1999 of $13.00 to
$17.50 per barrel and $1.80 to $2.40 per MMBtu as published by various energy
industry consultants and investment banks. The Company used crude oil prices of
$14.50 per barrel in 1999 escalating to $18.50 per barrel in 2001 and increased
by $ .50 per barrel annually thereafter and natural gas prices of $2.10 per
MMBtu in 1999 escalating to $2.20 per MMBtu in 2000 and increased by $ .05 per
MMBtu annually thereafter. A discount rate of 10% based on the Company's
approximate weighted-average cost of capital was used. The Company used proven
reserves and probable reserves when justified by actual drilling results and
planned additional drilling. The impairment loss will be included in
Depreciation, depletion and amortization in the Statement of Income. The
impairment represents about 4% of the Company's oil and gas assets.
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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
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Edward W. Moneypenny
Executive Vice President, Finance,
Chief Financial Officer and Director
Date: January 25, 1999
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