<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 0-17162
---------------
KEY PRODUCTION COMPANY, INC.
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 84-1089744
- ------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
One Norwest Center, 20th Floor
1700 Lincoln Street, Denver, Colorado 80203-4520
- ------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (303) 837-0779
---------------
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 Key Production Company, Inc. common stock, $.25 par
value, outstanding as of September 30, 1996, is 11,640,562.
<PAGE>
PART I - FINANCIAL INFORMATION
------------------------------
ITEM 1 - FINANCIAL STATEMENTS
- -----------------------------
KEY PRODUCTION COMPANY, INC.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
For the Quarter For the Nine Months
Ended September 30, Ended September 30,
-------------------- --------------------
(In thousands, except per share data) 1996 1995 1996 1995
-------- -------- ------- -------
<S> <C> <C> <C> <C>
REVENUES:
Oil and gas production revenues $ 9,584 $ 4,747 $ 25,592 $ 14,168
Other revenues 204 35 286 40
------- -------- -------- --------
9,788 4,782 25,878 14,208
------- -------- ------- --------
OPERATING EXPENSES:
Depreciation, depletion and
amortization 3,047 1,831 9,006 5,393
Operating costs 2,625 1,679 6,842 4,792
Administrative, selling and other 461 338 1,524 1,076
Financing costs:
Interest expense 168 55 494 164
Interest income (14) (4) (38) (10)
------- -------- ------- --------
6,287 3,899 17,828 11,415
------- -------- ------- --------
INCOME BEFORE INCOME TAXES 3,501 883 8,050 2,793
PROVISION FOR INCOME TAXES 1,330 106 3,059 600
------- -------- ------- --------
NET INCOME $ 2,171 $ 777 $ 4,991 $ 2,193
======= ======== ======= ========
NET INCOME PER COMMON AND COMMON
EQUAVALENT SHARE $ .18 $ .08 $ .44 $ .23
======= ======== ======= ========
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 12,353 9,639 11,360 9,623
======= ======= ======= =======
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
-2-
<PAGE>
KEY PRODUCTION COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Nine Months
Ended September 30,
-------------------------
(In thousands) 1996 1995
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 4,991 $ 2,193
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation, depletion and amotization 9,006 5,393
Deferred income taxes 2,738 488
Changes in operating assets and liabilities
net of the effect of businesses acquired:
(Increase) decrease in receivables (1,693) 304
Increase in prepaid expenses and other (180) (252)
Decrease in accounts payable and
accrued expenses (136) (982)
Decrease in long-term property
liabilities and other (139) (21)
--------- -------
Net cash provided by operating
activities 14,587 7,123
--------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Oil and gas exploration and
development expenditures (12,795) (8,005)
Acquisition of oil and gas properties (640) (543)
Cash received in connection with acquisition
net of purchase adjustments 2,879 -
Proceeds from sale of oil and gas
properties 724 351
Other capital expenditures (151) (158)
--------- -------
Net cash used by investing activities (9,983) (8,355)
--------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term borrowings 10,104 1,700
Payments on long-term debt (14,154) (300)
Payments to acquire treasury stock (2) (5)
Proceeds from issuance of common stock 24 -
--------- -------
Net cash provided (used) by financing
activities (4,028) 1,395
--------- -------
NET INCREASE IN CASH AND CASH EQUIVALENTS 576 163
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 591 281
--------- ------
CASH AND CASH EQUIVALENTS AT END OF
PERIOD $ 1,167 $ 444
========= =======
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
-3-
<PAGE>
KEY PRODUCTION COMPANY, INC.
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
September 30, December 31,
(In thousands) 1996 1995
-------------- -------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,167 $ 591
Receivables 6,143 3,346
Prepaid expenses and other 940 481
-------- --------
8,250 4,418
-------- --------
OIL AND GAS PROPERTIES, ON THE BASIS OF
FULL COST ACCOUNTING:
Proved properties 92,423 61,470
Unproved properties and properties 12,158 9,104
under development, not being amortized 104,581 70,574
Less - accumulated depreciation,
depletion and amortization (25,302) (16,420)
-------- --------
79,279 54,154
-------- --------
OTHER ASSETS,NET 654 627
-------- --------
$ 88,183 $ 59,199
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 3,083 $ -
Accounts payable 3,051 2,948
Accrued exploration and development 1,108 370
Accrued lease operating expense and
other 1,331 531
-------- --------
8,573 3,849
-------- --------
15,417 14,600
-------- --------
LONG-TERM DEBT
DEFERRED CREDITS AND OTHER NONCURRENT
LIABILITIES
Income taxes 7,555 3,199
Long-term property liabilities and
other 2,004 1,852
-------- --------
9,559 5,051
-------- --------
STOCKHOLDERS' EQUITY:
Common stock, $.25 par value, 50,000,000
shares authorized, 11,677,061 and
11,656,350 shares issued, respectively 2,919 2,914
Paid-in capital 37,380 34,401
Retained earnings 14,480 9,489
Treasury stock at cost, 36,499 and
2,806,882 shares, respectively (145) (11,105)
-------- --------
54,634 35,699
-------- --------
$ 88,183 $ 59,199
======== ========
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
-4-
<PAGE>
KEY PRODUCTION COMPANY, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Total
Stock-
Common Paid-in Retained Treasury holders'
Stock Capital Earnings Stock Equity
----------- ------- -------- ----- ------
<S> <C> <C> <C> <C> <C>
(In thousands, except per share data)
BALANCE, DECEMBER 31, 1995 $2,914 $34,401 $ 9,489 $(11,105) $35,699
Net income - - 4,991 - 4,991
Common stock issued 5 20 - - 25
Treasury stock issued - 2,959 - 10,962 13,921
Treasury stock purchased - - - (2) (2)
------ ------- ------- -------- -------
BALANCE, SEPTEMBER 30, 1996 $2,919 $37,380 $14,480 $ (145) $54,634
====== ======= ======= ======== =======
</TABLE>
The accompanying notes to financial statements are an integral part of this
statement.
-5-
<PAGE>
KEY PRODUCTION COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
The financial statements included herein have been prepared by Key
Production Company, Inc. ("Key" or the "Company"), without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission, and reflect
all adjustments which are, in the opinion of management, necessary to a fair
statement of the results for the interim periods, on a basis consistent with the
annual audited statements. All such adjustments are of a normal, recurring
nature except as disclosed herein. Certain information, accounting policies, and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted
pursuant to such rules and regulations, although the Company believes that the
disclosures are adequate to make the information presented not misleading. These
financial statements should be read in conjunction with the financial statements
and summary of significant accounting policies and notes thereto included in the
Company's latest annual report on Form 10-K.
BASIS OF PRESENTATION
Key consummated the acquisition of Brock Exploration Corporation ("Brock")
on March 28, 1996 in a tax-free reorganization pursuant to which Brock became a
wholly-owned subsidiary of Key. To effect the transaction, each Brock
shareholder received one share of Key common stock for each 1.45 Brock shares
held. The accompanying financial statements include the accounts of Key for 1996
and 1995 and the accounts of Brock for periods subsequent to the acquisition.
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.
INCOME TAXES
Income tax expense consisted of the following:
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1996 1995
--------- ---------
<S> <C> <C>
Current Taxes:
Federal $ - $ -
State 321 112
Deferred Taxes: 2,738 488
--------- ---------
$ 3,059 $ 600
========= =========
</TABLE>
-6-
<PAGE>
STATEMENT OF CASH FLOWS
The Company considers all highly liquid debt instruments purchased with an
original maturity of three months or less to be cash equivalents. These
investments earned 5.1 percent and 5.3 percent rates of interest at September
30, 1996 and December 31, 1995, respectively, with cost approximating market.
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
For the Nine Months
Ended September 30,
-------------------
1996 1995
-------- --------
(In thousands)
Cash paid during the period for:
Interest (net of amounts capitalized) $ 394 $ 114
Income taxes $ 188 $ 361
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
In connection with the Brock acquisition, the Company received cash and cash
equivalents totaling $2,433,000. In addition to the cash impact, the acquisition
had the following noncash impact on the Company's September 30, 1996 balance
sheet:
<TABLE>
<CAPTION>
Amount
------
(in thousands)
<S> <C>
Current assets $ 1,383
Oil and gas properties 21,011
-------
$22,394
=======
Current liabilities $ 1,099
Long-term debt 7,950
Non-current liabilities 1,909
Stockholders' equity 13,869
-------
$24,827
=======
</TABLE>
PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma information was prepared as if the Brock
acquisition occurred on January 1, 1995. The pro forma data presented is based
on numerous assumptions and is not necessarily indicative of future results of
operations.
<TABLE>
<CAPTION>
Nine Months Ended Nine Months Ended
September 30, 1996 September 30, 1995
-------------------- ---------------------
(In thousands, except per share data)
<S> <C> <C>
Revenues $28,383 $21,522
Net income $ 5,532 $ 3,249
Net income per share $ .46 $ .26
</TABLE>
-7-
<PAGE>
SUBSEQUENT EVENT
On October 10, 1996, the Company purchased 224,022 shares of Key common
stock from Lawrence Brock for $10.00 per share. Mr. Brock was the Chairman and
Chief Executive Officer of Brock at the time Brock was acquired by the Company.
The purchase was funded using the Company's existing credit facility.
Prospectively, the resulting reduction in the number of shares outstanding will
proportionately increase the per share amounts Key reports.
-8-
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FINANCIAL RESULTS
Key is reporting net income of $.18 per share, or $2,171,000 for the third
quarter of 1996. This represents an increase of 125 percent over the $.08 per
share, or $777,000 reported for the same period of 1995. These results are
based on revenues of $9.8 million and $4.8 million, respectively.
On a year-to-date basis, earnings rose 91 percent or $.21 per share to $.44
per share in 1996. Net income climbed 128 percent to reach $4,991,000 for the
first nine months of 1996. Revenues for the first nine months of 1996 and 1995
were $25.9 million and $14.2 million, respectively.
Key's strong results for the third quarter and first nine months are
directly related to improved oil and gas prices and significant production
increases from new drilling and the acquisition of Brock Exploration Corporation
("Brock") at the end of March 1996.
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Quarter For the Nine Months
Ended September 30, Ended September 30,
-------------------- -------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Selected Oil and Gas
Operating Statistics
- --------------------
Gas Volume - Mcf per day 26,758 14,073 24,658 14,236
Gas Price - Per Mcf $ 1.96 $ 1.65 $ 1.97 $ 1.67
Oil Volume - Barrels per day 2,466 1,823 2,251 1,750
Oil Price - Per barrel $ 20.51 $ 15.05 $ 19.46 $ 15.66
Full Cost Amortization Rate 31.4% 38.7% 34.7% 37.4%
</TABLE>
Oil and gas revenues doubled between the third quarters of 1996 and 1995 as
a result of increases in production and oil and gas prices. Year-to-date
revenues for 1996 increased by 81 percent over 1995 results for the same period.
Both the quarter and nine month results for 1996 reflect the impact of the Brock
acquisition and the Company's successful drilling program.
Oil sales for the current quarter of $4.7 million are 84 percent, or $2.1
million, above the same quarter a year ago. The Company's average oil price
surged from $15.05 in 1995 to $20.51 in 1996, elevating oil sales by $1.2
million. Oil production climbed 35 percent to 2,466 barrels per day in 1996 and
added an extra $.9 million.
Oil sales for the first nine months of 1996 increased 61 percent, or $4.5
million, over 1995 sales for the same period. Higher production and favorable
prices contributed almost equally to the variance. Average daily production
advanced from 1,750 barrels per day in 1995 to 2,251 barrels per day in 1996.
Oil prices changed from $15.66 per barrel in 1995 to $19.46 per barrel in 1996.
Gas sales for the quarter showed even greater gains than the Company's oil
sales. Key is reporting third quarter gas sales of $4.8 million in 1996,
compared to $2.1 million in 1995. Daily production increased 90 percent to reach
26,758 Mcf per day in 1996. Production growth boosted gas sales for the quarter
by $1.9 million. A $.31 per Mcf increase to the average price contributed
another $.8 million to gas sales for the quarter.
-9-
<PAGE>
For the nine month periods, gas sales increased by 105 percent to $13.3
million. Daily production increased from 14,236 Mcf per day to 24,658 Mcf per
day and added approximately $4.8 million to gas sales. Key's average gas price
increased by $.30 Mcf to reach $1.97 per Mcf and equated to another $2 million
in gas sales.
Product sales from gas processing plants for the third quarter and first
nine months increased 22 percent and 41 percent, respectively, but did not
contribute a significant amount to oil and gas revenues. Key's third quarter oil
and gas revenues are derived from the following product mix: 49 percent oil, 50
percent gas and 1 percent plant products. This compares to the following
components for the third quarter of 1995: 53 percent oil, 45 percent gas and 2
percent plant products.
Other revenue for the nine months of 1996 and 1995 is $286,000 and $40,000,
respectively. Key acquired a pipeline in the first quarter of 1996 as part of
the Brock acquisition. The majority of other revenue for 1996 is derived from
this pipeline ($132,000) and a contract settlement ($123,000). Other revenue for
1995 includes two small contract settlements.
Depreciation, depletion and amortization (DD&A) expense for the third
quarter and first nine months of 1996 increased 66 percent and 67 percent,
respectively, from the comparable periods of 1995. The DD&A increase was a
direct result of Key's increased oil and gas sales. However, due to a decline in
the 1996 DD&A rate, the increase was not as pronounced as the sales increase.
Key's third quarter amortization rate as a percentage of revenue decreased from
38.7 percent to 31.4 percent in 1996. For the nine months, the amortization rate
decreased from 37.4 percent to 34.7 percent. Improved product prices,
particularly for oil, through the first nine months of 1996 were the catalyst
for improved DD&A rates.
Operating expenses increased 56 percent between the third quarters of 1996
and 1995, and increased 43 percent between the first nine months of 1996 and
1995. Expense increases are a result of the Brock acquisition in 1996 and the
resulting larger property base. In contrast, expenses compared on a unit of
production basis decreased between 1996 and 1995 for the quarter and first nine
months. Third quarter unit of production operating expenses dropped from $.73
per EMcf in 1995 to $.69 per EMcf in 1996. For the nine months, expenses went
from $.71 per EMcf to $.65 per EMcf in 1996. (Oil is compared to natural gas in
terms of equivalent thousand cubic feet, "EMcf." One barrel of oil is the energy
equivalent of six Mcf of natural gas.)
Administrative, selling and other costs declined on a units of production
basis from $.15 per EMcf in the third quarter of 1995 to $.12 per EMcf in 1996.
Interest cost for the first nine months increased from $586,000 in 1995 to
$990,000 in 1996. Key assumed an additional $7.9 million of bank debt in
connection with the Brock acquisition. The long-term debt balance at September
30, 1996 was $18.5 million, compared to $11.4 million at September 30, 1995.
Interest of $496,000 was capitalized in the first nine months of 1996 for
borrowings associated with the undeveloped leasehold acquired in the second
quarter of 1994. Capitalized interest of $422,000 was recorded for the same
period of 1995.
-10-
<PAGE>
CASH FLOW AND LIQUIDITY
Liquidity refers to the ability of an enterprise to generate adequate
amounts of cash to satisfy its financial commitments. Key's primary needs for
cash are for payment of existing financing obligations and trade commitments
related to oil and gas operations. The Company's primary sources of liquidity
are cash flows from operating activities and debt financing. Management believes
that the overall sources of funds available to Key, including cash on hand, will
continue to be more than sufficient to satisfy the Company's financial
obligations.
Cash from operating activities increased 105 percent to $14.6 million
between the first nine months of 1996 and 1995.
Year-to-date expenditures of $12.8 million for exploration and development
are up 60 percent from the $8 million spent in 1995. In the first nine months of
1996, exploration and development expenditures amounted to 88 percent of cash
from operating activities. For the same period of 1995, 112 percent of cash from
operating activities was expended for exploration and development.
On March 28, 1996, Key consummated a merger with Brock Exploration
Corporation. In this non-cash transaction, Brock became a wholly-owned
subsidiary of Key. Key's consolidated balance sheet includes the assets and
liabilities as well as the adjustments required to record the acquisition under
purchase accounting rules.
Since year-end 1995, long-term debt increased from $14.6 million to $18.5
million. Subsequent to the acquisition of Brock, Key drew on its own credit
facility to retire the Brock debt and obtain more favorable financing terms. The
Company's bank financing is a $50 million credit facility with NationsBank of
Texas, N.A. In March of 1996, the Company elected to increase the borrowing base
from $22 million to $36 million to retire the Brock debt and fund any future
acquisition and drilling opportunities. The current borrowing base is still
significantly less than the total borrowing base that could have been requested
under the terms of the agreement.
The Company's ratio of current assets to current liabilities was 1 to 1 at
September 30, 1996, a decrease from the 1.1 to 1 ratio calculated at December
31, 1995.
FUTURE TRENDS
Exploration activity continues at a pace ahead of last year. The Company
expended $5 million for exploration and development during the third quarter,
bringing the total to $12.8 million for the first nine months of 1996, well
ahead of the $8 million invested at this point last year. A comparable level of
expenditures is expected to continue through yearend.
Drilling results will continue to have a positive effect on oil and gas
production levels. This, combined with the effect of the Brock acquisition,
will result in significantly higher production for 1996 relative to 1995. Year-
to-date oil and gas prices are appreciably higher compared to the first nine
months of 1995 and, based on current information, this should continue through
the remainder of the year. There is, however, no assurance of the future
direction of either oil or gas prices.
-11-
<PAGE>
The Company continues to review a wide variety of acquisition and merger
opportunities. As in the past, potential acquisitions or mergers with the
economic and strategic attributes necessary to facilitate the profitable growth
of the Company will be actively pursued.
The Company expects that cash on hand, net cash generated by operating
activities and amounts available under the credit facility will be adequate to
meet future liquidity needs under current corporate policies. Management
believes that the overall sources of funds available to Key will continue to be
sufficient to provide resources to the meet Company's exploration, development,
operating and acquisition objectives.
CAUTIONARY STATEMENT PURSUANT TO SAFE HARBOR PROVISION OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
This report contains "forward-looking statements" within the meaning of the
federal securities laws. These forward-looking statements include, among others,
statements concerning the Company's outlook for the remainder of 1996 with
regard to production levels, price realizations, expenditures for exploration
and development, plans for funding operations and capital expenditures, and
other statements of expectations, beliefs, future plans and strategies,
anticipated events or trends and similar expressions concerning matters that are
not historical facts. The forward-looking statements in this report are subject
to risks and uncertainties that could cause actual results to differ materially
from those expressed in or implied by the statements.
These risks and uncertainties include, but are not limited to, fluctuations
in the price the Company receives for its oil and gas production, reductions in
the quantity of oil and gas sold due to decreased industry-wide demand and/or
curtailments in production from specific properties due to mechanical, marketing
or other problems, operating and capital expenditures that are either
significantly higher or lower than anticipated because the actual cost of
identified projects varied from original estimates and/or from the number of
exploration and development opportunities being greater or fewer than currently
anticipated and increased financing costs due to a significant increase in
interest rates. These and other risks and uncertainties affecting the Company
are discussed in greater detail in this report and in other filings by the
Company with the Securities and Exchange Commission.
-12-
<PAGE>
PART II. - OTHER INFORMATION
----------------------------
ITEM 1. LEGAL PROCEEDINGS
- --------------------------
None.
ITEM 2. CHANGES IN SECURITIES
- ------------------------------
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
- ----------------------------------------
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF THE SECURITY HOLDERS
- ----------------------------------------------------------------
None.
ITEM 5. OTHER INFORMATION
- --------------------------
On August 20, 1996, L. Paul Teague was appointed to the Company's board of
directors. Mr. Teague will serve the remaining term of Timothy J. Moylan
who passed away on August 1, 1996.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
(a) Exhibits filed herewith:
27.1 Financial Data Schedule for Commercial and Industrial
Companies per Article 5 of Regulation S-X for the quarter ended
September 30, 1996.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the three months ended
September 30, 1996.
-13-
<PAGE>
SIGNATURES
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.
Dated: November 12, 1996
KEY PRODUCTION COMPANY, INC.
/s/ MONROE W. ROBERTSON
______________________________
Monroe W. Robertson
Senior Vice President and Secretary
(Principal Financial Officer)
/s/ CATHY L. ANDERSON
______________________________
Cathy L. Anderson
Controller
(Principal Accounting Officer)
-14-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,167
<SECURITIES> 0
<RECEIVABLES> 6,143
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8,250
<PP&E> 104,581
<DEPRECIATION> 25,302
<TOTAL-ASSETS> 88,183
<CURRENT-LIABILITIES> 8,573
<BONDS> 15,417
0
0
<COMMON> 2,919
<OTHER-SE> 51,715
<TOTAL-LIABILITY-AND-EQUITY> 88,183
<SALES> 9,584
<TOTAL-REVENUES> 9,788
<CGS> 5,630
<TOTAL-COSTS> 5,630
<OTHER-EXPENSES> 503
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 344
<INCOME-PRETAX> 3,501
<INCOME-TAX> 1,330
<INCOME-CONTINUING> 2,171
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,171
<EPS-PRIMARY> .18
<EPS-DILUTED> .18
</TABLE>
