<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended March 31, 1995 or
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Act of 1934 for the
Transition Period from __________ to ___________
COMMISSION FILE NO. 1-10762
________________________________________
BENTON OIL AND GAS COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 77-0196707
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
1145 EUGENIA PLACE, SUITE 200
CARPINTERIA, CALIFORNIA 93013
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (805) 566-5600
___________________________________________
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 _____
___________________________________________
At May 11, 1995, 25,011,386 shares of the
Registrant's Common Stock were outstanding.
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2
BENTON OIL AND GAS COMPANY AND SUBSIDIARIES
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Page
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PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets at March 31, 1995
(Unaudited) and December 31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Operations for the Three
Months Ended March 31, 1995 and 1994 (Unaudited) . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows for the Three
Months Ended March 31, 1995 and 1994 (Unaudited) . . . . . . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . 7
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
PART II. OTHER INFORMATION
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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3
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
BENTON OIL AND GAS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
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<CAPTION>
March 31, December 31,
1995 1994
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(unaudited)
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ASSETS
- ------
CURRENT ASSETS:
Cash and cash equivalents $ 21,208,775 $ 14,192,568
Restricted cash (Note 3) 19,550,000 19,550,000
Accounts receivable:
Accrued oil and gas revenue 11,633,485 9,357,782
Joint interest and other (Note 1) 2,188,769 3,880,808
Property held for sale 14,887,700
Prepaid expenses and other 1,140,632 563,839
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TOTAL CURRENT ASSETS 55,721,661 62,432,697
OTHER ASSETS 1,431,512 2,550,607
PROPERTY AND EQUIPMENT (Notes 1, 3, 6 and 7):
Oil and gas properties (full cost method - costs of
$13,518,734 and $16,695,284 excluded from
amortization in 1995 and 1994, respectively) 130,797,283 116,209,554
Furniture and fixtures 1,746,600 1,439,484
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132,543,883 117,649,038
Accumulated depletion and depreciation (23,171,849) (20,071,223)
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109,372,034 97,577,815
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$ 166,525,207 $ 162,561,119
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LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Accounts payable:
Revenue distribution $ 658,823 $ 594,782
Trade and other 11,429,594 11,426,105
Accrued interest payable, payroll and related taxes 808,100 1,199,096
Income taxes payable 788,068
Short term borrowings (Note 3) 23,561,868 21,035,401
Current portion of long term debt (Note 2) 4,996,053 6,392,114
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TOTAL CURRENT LIABILITIES 42,242,506 40,647,498
LONG TERM DEBT (Note 2) 31,187,571 31,911,164
MINORITY INTEREST (Note 7) 2,606,335 1,743,660
COMMITMENTS AND CONTINGENCIES (Notes 4 and 6)
STOCKHOLDERS' EQUITY (Notes 2 and 7):
Preferred stock, par value $0.01 a share;
authorized 5,000,000 shares; outstanding, none
Common stock, par value $0.01 a share;
authorized 40,000,000 shares; issued and
outstanding 24,931,862 and 24,899,848 at
March 31, 1995 and December 31, 1994, respectively 249,319 248,998
Additional paid-in capital 93,109,684 92,921,115
Accumulated deficit (2,870,208) (4,911,316)
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TOTAL STOCKHOLDERS' EQUITY 90,488,795 88,258,797
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$ 166,525,207 $ 162,561,119
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<FN>
See notes to consolidated financial statements.
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4
BENTON OIL AND GAS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
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THREE MONTHS ENDED MARCH 31,
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1995 1994
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REVENUES
Oil and gas sales $12,080,479 $ 3,498,661
Gain (loss) on exchange rates 131,717 (69,533)
Investment earnings 424,234 252,545
Partnership reimbursements and other 24,736 500
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12,661,166 3,682,173
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EXPENSES
Lease operating costs and production taxes 2,246,002 1,766,022
Depletion, depreciation and amortization 3,145,067 1,172,744
General and administrative 1,668,772 1,142,042
Interest 1,618,126 680,737
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8,677,967 4,761,545
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INCOME (LOSS) BEFORE INCOME TAXES
AND MINORITY INTEREST 3,983,199 (1,079,372)
INCOME TAX EXPENSE 1,079,416
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INCOME (LOSS) BEFORE MINORITY INTEREST 2,903,783 (1,079,372)
MINORITY INTEREST (Note 7) 862,675 62,754
----------- -----------
NET INCOME (LOSS) $ 2,041,108 $(1,142,126)
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NET INCOME (LOSS) PER COMMON SHARE $ 0.08 $ (0.05)
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<FN>
See notes to consolidated financial statements.
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BENTON OIL AND GAS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(unaudited)
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THREE MONTHS ENDED MARCH 31,
------------------------------------
1995 1994
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 2,041,108 $(1,142,126)
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Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depletion, depreciation and amortization 3,145,067 1,172,744
Net earnings from limited partnerships (3,511) (15,937)
Amortization of financing costs 28,578 28,578
Loss on disposition of assets 10,632
Minority interest in undistributed earnings of subsidiary 862,675
Increase in accounts receivable (583,664) (2,446,075)
Increase in prepaid expense and other (576,793) (216,402)
Increase(decrease) in accounts payable 67,530 (393,200)
Increase (decrease) in accrued interest payable, payroll and related taxes (390,996) 819,996
Increase in income taxes payable 788,068
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TOTAL ADJUSTMENTS 3,347,586 (1,050,296)
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NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 5,388,694 (2,192,422)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and equipment 14,713,894 126,397
Additions of property and equipment (11,130,286) (8,231,603)
Increase in restricted cash (21,000,000)
Distributions from limited partnerships 746
Payment for purchase of Benton-Vinccler interest, net of cash acquired (2,501,973)
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NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 3,583,608 (31,606,433)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options and warrants 188,890
Proceeds from commercial paper and other short term borrowings 22,054,000
Proceeds from issuance of notes payable 2,040,000
Payments on commercial paper, other short term borrowings
and notes payable (4,025,520) (14,824,690)
Increase in other assets (159,465) (41,530)
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NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (1,956,095) 7,187,780
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NET INCREASE (DECREASE) IN CASH 7,016,207 (26,611,075)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 14,192,568 36,308,118
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 21,208,775 $ 9,697,043
============= ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest expense $ 1,832,229 $ 115,066
============= ===========
Cash paid during the period for income taxes $ 176,825 $ 50,016
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6
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
During the three months ended March 31, 1995, the Company financed the purchase
of oil and gas equipment in the amount of $2,337,860 and leased office
equipment in the amount of $54,473.
During the three months ended March 31, 1994, the Company converted $143,658 of
accounts payable into a note payable.
On March 4, 1994, the Company acquired capital stock from Vinccler representing
an additional 30% ownership interest in Benton-Vinccler for $3 million in cash,
$10 million in non-interest bearing notes payable (with a present value of $9.2
million assuming a 10% interest rate) and 200,000 shares of the Company's
common stock. The excess of the purchase price over the net book value of
assets acquired was $13,880,100, which was allocated to oil and gas properties.
See notes to consolidated financial statements.
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7
BENTON OIL AND GAS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
THREE MONTHS ENDED MARCH 31, 1995 (UNAUDITED)
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Benton Oil and Gas Company (the "Company") engages in the exploration,
development, and management of oil and gas properties in Venezuela, the United
States and Russia.
The Company and its subsidiary, Benton Oil and Gas Company of Louisiana,
formerly Energy Partners, participate as the managing general partner of three
oil and gas limited partnerships formed during 1989 through 1991. Under the
provisions of the limited partnership agreements, the Company receives
compensation as stipulated therein, and functions as an agent for the
partnerships to arrange for the management, drilling, and operation of
properties, and assumes customary contingent liabilities for partnership
obligations.
The consolidated financial statements include the accounts of the Company and
its subsidiaries. The Company's investments in limited partnerships and the
Russia joint venture ("GEOILBENT") are proportionately consolidated based on
the Company's ownership interest. All material intercompany profits,
transactions and balances have been eliminated.
INTERIM REPORTING
In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial position as of
March 31, 1995, and the results of operations for the three month periods ended
March 31, 1995 and 1994. The unaudited financial statements are presented in
accordance with the requirements of Form 10-Q and do not include all
disclosures normally required by generally accepted accounting principles.
References should be made to the Company's consolidated financial statements
and notes thereto included in the Company's annual report on Form 10-K for the
year ended December 31, 1994 for additional disclosures, including a summary of
the Company's accounting policies.
The results of operations for the three month period ended March 31, 1995 are
not necessarily indicative of the results to be expected for the full year.
EARNINGS (LOSS) PER SHARE
Primary earnings (loss) per common share are computed by dividing net income
(loss) by the weighted average number of common and common equivalent shares
outstanding. Common equivalent shares are shares which may be issuable upon
exercise of outstanding stock options and warrants; however, they are not
included in the computation for the three months ended March 31, 1994 since
their effect would be to reduce the loss per share. Total weighted average
common and common equivalent shares outstanding during the three months ended
March 31, 1995 and 1994 were 26,037,055 and 24,736,848 respectively.
Fully diluted earnings per common share are not presented since the conversion
of the Company's 8% Convertible Subordinated Notes and 8% Convertible
Subordinated Debentures would have either an insignificant or antidilutive
effect.
PROPERTY AND EQUIPMENT
The Company follows the full cost method of accounting for oil and gas
properties. Accordingly, all costs associated with the acquisition,
exploration, and development of oil and gas reserves are capitalized as
incurred, including exploration overhead of $526,161 and $371,530 for the three
months ended March 31, 1995 and 1994, respectively. Only overhead which is
directly identified with acquisition, exploration or development activities is
capitalized. All costs related to production, general corporate overhead or
similar activities are expensed as incurred. The costs of oil and gas
properties are accumulated in cost centers on a country by country basis,
subject to a cost center
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8
ceiling (as defined by the Securities and Exchange Commission).
All capitalized costs of oil and gas properties, excluding unevaluated property
acquisition and exploration costs and including the estimated future costs to
develop proved reserves, are depleted over the estimated useful lives of the
properties by application of the unit-of-production method using only proved
oil and gas reserves. Excluded costs attributable to the Venezuela, United
States and Russia cost centers at March 31, 1995 were $6,559,112, $4,530,804
and $2,428,818, respectively. Excluded costs attributable to the Venezuela,
United States and Russia cost centers at December 31, 1994 were $6,743,012,
$7,523,454 and $2,428,818, respectively. Depletion expense attributable to the
Venezuela cost center for the three months ended March 31, 1995 and 1994 was
$2,109,428 and $549,518 ($1.99 and $1.79 per equivalent barrel), respectively.
Depletion expense attributable to the United States cost center for the three
months ended March 31, 1995 and 1994 was $628,270 and $485,064 ($6.97 and $6.49
per equivalent barrel), respectively. Depletion expense attributable to the
Russia cost center for the three months ended March 31, 1995 and 1994 were
$328,136 and $84,324 ($2.76 and $3.13 per equivalent barrel respectively).
Depreciation of furniture and fixtures is computed using the straight-line
method, with depreciation rates based upon the estimated useful life applied to
the cost of each class of property. Depreciation expense was $57,477 and
$43,888 for the three months ended March 31, 1995 and 1994, respectively.
RECLASSIFICATIONS
Certain items in 1994 have been reclassified to conform to the 1995 financial
statement presentation.
NOTE 2 - LONG TERM DEBT
Long term debt consists of the following:
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<CAPTION>
MARCH 31, 1995 DECEMBER 31, 1994
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Senior unsecured notes with interest at 13% due on
September 30, 2002. Interest payments are due on
March 31 and September 30. Principal
payments of $3 million are due on each
September 30 beginning in 1998. $15,000,000 $15,000,000
Revolving secured credit facility. Interest
payments due quarterly beginning
March 31, 1995. Principal payments due
quarterly beginning March 31, 1997. 5,000,000 5,000,000
Convertible subordinated debentures with
interest at 8% due on May 1, 2002. Interest
payments are due on May 1 and November 1. 6,428,000 6,428,000
Convertible subordinated notes with interest
at 8% due on October 1, 2001. Interest payments are
due on April 1 and October 1. 4,662,000 4,662,000
Non-interest bearing promissory notes
payable with a face value of $3 million
discounted using a 10% interest rate.
The notes are due in various installments
through January 1996. See Note 7. 2,854,962 5,747,878
Bank financing with interest at LIBOR plus
7.5% due on January 16, 1996.
Secured by certain GEOILBENT oil export proceeds.
Principal and interest payments due monthly in
varying installments. 2,040,000 1,292,000
Other--various equipment purchases and
leases with principal and interest
payments due monthly from $180 to $3,916.
Interest rates vary from 10.0% to 16.91%.
Notes and leases mature from August 1995 to
February 1998. 198,662 173,400
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36,183,624 38,303,278
Less current portion 4,996,053 6,392,114
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$31,187,571 $31,911,164
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NOTE 3 - SHORT TERM BORROWINGS
In February 1994, Benton-Vinccler borrowed $15 million from Morgan Guaranty
Trust Company of New York ("Morgan Guaranty"). Benton-Vinccler subsequently
borrowed from the same bank an additional $7 million for working capital
requirements. The credit facility is collateralized in full by time deposits
from the Company, bears interest at LIBOR plus 3/4%, and is renewed on a
monthly basis. The loan arrangement contains no restrictive covenants and no
financial ratio covenants. Benton-Vinccler made a payment of $2.75 million in
September 1994, leaving a balance of $19.25 million. The Company is presently
pursuing several options for long term financing for Benton-Vinccler.
During the fourth quarter of 1994 and the first quarter of 1995,
Benton-Vinccler acquired approximately $4.1 million of drilling and production
equipment from trading companies and suppliers under terms which include
repayment within a 12-month period in monthly and quarterly installments at
interest rates from 6.7% to 10%. The outstanding balances at March 31, 1995
and December 31, 1994 related to these transactions, were approximately $3.0
and $1.5 million, respectively.
In June 1994, GEOILBENT entered into a production payment advance agreement
with NAFTA Moscow, the export agency which markets GEOILBENT's oil production
to purchasers in Europe. The payment advance of $2.5 million against future
oil shipments, which bore an effective discount rate of 12% was repaid through
withholdings from oil sales on a monthly basis through December 1994. During
the quarter ended March 31, 1995, GEOILBENT received $3.0 million in production
payment advances pursuant to a similar agreement with NAFTA Moscow containing
similar terms. At March 31, 1995, the Company's share of the unpaid advances
was approximately $1.0 million.
NOTE 4 - COMMITMENTS AND CONTINGENCIES
The state leases relating to the West Cote Blanche Bay Field, the portion of
the Belle Isle Field owned by Texaco and the Rabbit Island Field, were the
subject of litigation between Texaco and the State of Louisiana. The Company's
interests in the Fields, which include substantially all of the Company's
domestic reserves, were originally owned by Texaco under certain leases granted
by the State. Although the Company was not a party to this litigation, its
interests in the Fields were subject to the litigation. In February 1994, the
State and Texaco entered into a Global Settlement Agreement to settle all
disputes related to this litigation. As a result of this agreement, Texaco has
committed to certain acreage development and drilling obligations which may
affect the Company and certain of its Louisiana properties. The Company
believes that the settlement should have no effect on its proved reserves and
should have no material adverse effect on the Company.
In the normal course of its business, the Company may periodically become
subject to actions threatened or brought by its investors or partners in
connection with the operation or development of its properties or the sale of
securities. Prior to 1992, the Company was engaged in the formation and
operation of oil and gas limited partnership interests. In 1992, the Company
ceased raising funds through such sales. In connection with its continuing
role as managing general partner of certain limited partnerships, the Company
may become subject to actions brought by limited partners of these
partnerships. Certain of such limited partners have brought an action against
the Company in connection with the Company's operation of the limited
partnerships as managing general partner. The plaintiffs seek actual and
punitive damages for alleged actions and omissions by the Company in operating
the partnerships and alleged misrepresentations made by the Company in selling
the limited partnership interests. The Company is also a defendant in an
action brought by investors in a series of unaffiliated limited partnerships to
which the Company provided all or a substantial portion of the drilling
prospects and drilled and operated a number of wells for the partnerships. The
plaintiffs allege that the Company aided the general partner in
misrepresentations, fraud and breaches of fiduciary duties, and seek an
unspecified amount of compensatory and punitive damages. The Company intends to
vigorously defend these actions and does not believe the claims raised are
meritorious. However, new developments could alter this conclusion at any
time. The Company will be forced to expend time and financial resources to
defend or resolve all such matters. The Company is also subject to ordinary
litigation that is incidental to its business. None of the above matters are
expected to have a material adverse effect on the Company.
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NOTE 5 - TAXES ON INCOME
As of December 31, 1994, the Company had, for federal income tax purposes,
operating loss carryforwards of approximately $32.4 million, expiring in the
years 2003 through 2009. If the carryforwards are ultimately realized,
approximately $3.0 million will be credited to additional paid-in capital for
tax benefits associated with deductions for income tax purposes related to
stock options. The Company has available approximately $12.4 million and
approximately $1.5 million of net operating loss carryforwards for state and
foreign income tax purposes, respectively.
NOTE 6 - RUSSIA JOINT VENTURE
In December 1991, a joint venture agreement forming GEOILBENT, Limited, between
the Company and two Russian partners, Purneftegasgeologia and Purneftegas, was
approved by the appropriate regulatory bodies in Russia. GEOILBENT's charter
is to explore, develop, produce and market oil, condensate and natural gas from
the North Gubkinskoye field in the West Siberia region of Russia, approximately
two thousand miles northeast of Moscow. At the time of GEOILBENT's formation,
the field, which covers an area approximately 15 miles long and 4 miles wide,
had been delineated with over 60 wells, had been production tested and had
logged numerous oil and gas sands, but had never been commercially produced.
The joint venture agreement calls for the Company to have a 34% working
interest and the two Russian partners each to have a 33% working interest in
the joint venture. Production commenced during the third quarter of 1993.
The Company is obligated under the terms of the GEOILBENT charter agreement
with its partners to make contributions of approximately $25.8 million by
December 31, 1995. At March 31, 1995, the Company's contributions totaled
approximately $20.1 million. During the first part of 1994, a combination of
volatile crude oil prices and a relatively high export tariff, among other
factors, constrained the pace of development of the field by GEOILBENT. In
September 1994, GEOILBENT received a recommendation from the Inter-departmental
Commission of the Ministry of Fuel and Energy for a waiver for one-year from
the export tariff. Such waiver was received in March 1995, effective
retroactively to January 1, 1995. GEOILBENT expects to apply for renewal of
the waiver for 1996 and 1997. However, the Russian regulatory environment
continues to be volatile and the Company is unable to predict the availability
of the waiver during the remainder of 1995 or for the future.
NOTE 7 - VENEZUELA JOINT VENTURE
On July 31, 1992, the Company and its partner, Venezolana de Inversiones y
Construcciones Clerico, C.A. ("Vinccler"), signed an operating service
agreement to reactivate and further develop three Venezuelan oil fields with
Lagoven, S.A., an affiliate of the national oil company, Petroleos de
Venezuela, S.A. The operating service agreement covers the Uracoa, Bombal and
Tucupita fields that comprise the South Monagas unit. Under the terms of the
operating service agreement, Benton-Vinccler, a corporation owned 80% by the
Company and 20% by Vinccler, is a contractor for Lagoven and is responsible for
overall operations of the South Monagas unit, including all necessary
investments to reactivate and develop the fields comprising the unit.
Benton-Vinccler receives an operating fee in U.S. dollars deposited into a U.S.
commercial bank account for each barrel of crude oil produced (subject to
periodic adjustments to reflect changes in a special energy index of the U.S.
Consumer Price Index) and is reimbursed according to a prescribed formula in
U.S. dollars for its capital costs, provided that such operating fee and cost
recovery fee cannot exceed the maximum dollar amount per barrel set forth in
the agreement (which amount is periodically adjusted to reflect changes in the
average of certain world crude oil prices). The Venezuelan government
maintains full ownership of all hydrocarbons in the fields.
Pursuant to the original joint venture agreement, the Company and Vinccler each
owned a 50% interest in a joint venture which operated the South Monagas unit.
Effective January 1, 1994, the operating service agreement and the joint
venture assets and liabilities were transferred to Benton-Vinccler, a
corporation in which the Company and Vinccler each owned 50% of the capital
stock. On March 4, 1994, the Company acquired capital stock from Vinccler
representing an additional 30% ownership interest in Benton-Vinccler for $3
million in cash, $10 million in non-interest bearing notes payable (with a
present value of $9.2 million assuming a 10% interest rate) payable in various
installments over 24 months and 200,000 shares of the Company's common stock.
The excess of the purchase price over the book value of the 30% interest was
allocated to oil and gas properties.
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11
Prior to the acquisition of the additional 30% interest in Benton-Vinccler, the
Company's interest in the Venezuelan joint venture was proportionately
consolidated based on its ownership interest. Effective with the acquisition
of the additional 30% interest in Benton-Vinccler, the Company has included
Benton-Vinccler in its consolidated financial statements, with the 20% owned by
Vinccler reflected as a minority interest.
<PAGE> 12
12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
VENEZUELA
In July 1992, the Company and Vinccler, a Venezuelan construction and
engineering company, entered into an operating service agreement to reactivate
and further develop three Venezuelan oil fields with Lagoven, an affiliate of
PDVSA. Under the agreement, Benton-Vinccler, a corporation owned 80% by the
Company and 20% by Vinccler, receives an operating fee paid in U.S. dollars
(currently deposited directly into a U.S. bank account each quarter) for each
Bbl of crude oil produced (subject to periodic adjustments to reflect changes
in the special energy index of the U.S. Consumer Price Index) and will be
reimbursed in U.S. dollars for its capital expenditures, provided that such
operating fee and capital recovery fee cannot exceed the maximum fee amount per
Bbl set forth in the agreement (which amount will be periodically adjusted to
reflect changes in the average of certain world crude oil prices).
Accordingly, the per Bbl revenues and expenses are not comparable to the
domestic and Russian operating data and financial results.
UNITED STATES
Substantially all of the Company's domestic activity is focused in the Gulf
Coast region of Louisiana. The Company has acquired and earned significant
interests in Gulf Coast fields operated by Texaco and Oryx by incurring capital
expenditures to purchase working interests, acquire and process 3-D seismic
data, drill development wells and recomplete existing wells in the West Cote
Blanche Bay Field, and to complete 3-D seismic surveys and certain development
activities in order to earn the right to drill future wells as a working
interest partner in the Rabbit Island and Belle Isle Fields.
In 1993 the Company entered into an agreement with Tenneco whereby Tenneco
purchased a 50% interest in the Company's operations in the Rabbit Island and
Belle Isle Fields in Louisiana and was given the right to participate as a 50%
partner in all of the Company's future activities in the Gulf Coast for the
next five years, excluding the West Cote Blanche Bay Field. The Company
believes that its relationship with Tenneco will provide it with the ability to
accelerate the development of such fields, as well as provide an alternative
outlet to market its Gulf Coast natural gas production. In November 1994, the
Company sold to Tenneco a 10.8% working interest (24.9% of the Company's 43.3%
working interest) in the West Cote Blanche Bay Field for approximately $5.8
million and future consideration of up to $3.7 million. In March 1995, as part
of an effort to focus on deeper gas and oil zones at West Cote Blanche Bay, the
Company, its affiliates and Tenneco sold their working interest in certain
depths (above approximately 10,575 feet) to WRT Energy Corporation for an
aggregate purchase price of $20 million. Of the aggregate purchase price, the
Company received approximately $14.7 million.
RUSSIA
The Company is a partner in GEOILBENT, a Russian-American joint venture which
develops, produces and markets oil from the North Gubkinskoye Field in the West
Siberia region of Russia. GEOILBENT's production from the field is exported
and sold for currency freely convertible into U.S. dollars. In the event of
any distribution by GEOILBENT, the Company has the right to receive such
distribution in the form of freely convertible currency (provided that under
certain circumstances distributions may be made in the form of export quality
Urals grade crude). The Company will not receive distributions from GEOILBENT
until it has fulfilled its financial contribution requirements under the terms
of the GEOILBENT joint venture and charter fund agreements. As of March 1995,
the Company has contributed approximately $20.1 million of a total of $25.8
million it is required to contribute by the end of 1995 pursuant to the
GEOILBENT agreements. The Company expects that after it has satisfied such
contribution commitments, it will not receive any significant distributions
from GEOILBENT for several years because substantially all of the money
received by GEOILBENT from the North Gubkinskoye Field will be reinvested to
fund future development activities. The joint venture agreement grants the
Company a 34% interest and each of the two Russian partners a 33% interest in
GEOILBENT. The Company's investment in GEOILBENT is proportionately
consolidated based on the Company's ownership interest.
<PAGE> 13
13
GROWTH IN INTERNATIONAL ACTIVITIES
The Company's costs of operations in Venezuela and Russia in 1993 and 1994
included certain fixed or minimum office, administrative, legal and personnel
related costs and certain start up costs, including short term facility
rentals, organizational costs, contract services and consultants, etc. The
operating and overhead costs are expected to grow over time as operations
increase, but in the aggregate to become less significant on a unit of
production basis. The start up costs are expected to decrease over time both
in the aggregate and on a per unit basis. In Venezuela, for the year ended
December 31, 1993, the operating costs and general and administrative expenses
were $7.26 and $2.25 per Bbl, respectively. However, for the year ended
December 31, 1994 the operating costs and general and administrative expenses
decreased to $1.51 and $0.66 per Bbl, respectively. For the period ended
March 31, 1995, operating costs and general and administrative expenses further
decreased to $1.22 and $0.47 per Bbl, respectively. In Russia, for the year
ended December 31, 1993, the operating costs and general and administrative
expenses were $16.22 and $12.96 per Bbl, respectively, decreasing to $9.63 and
$1.58 per Bbl, respectively for the year ended December 31, 1994. For the
period ended March 31, 1995, operating costs and general and administrative
expenses further decreased to $1.88 and $1.01 per Bbl, respectively. The
Company's Venezuelan operations grew considerably during 1994 and are expected
to grow for some time thereafter, and its operating costs and general and
administrative expenses are expected to increase in magnitude but to remain
relatively low or decrease on a per unit basis. The Company's Russian
operations grew less significantly during 1994. Consequently, the operating
costs and general and administrative costs grew less rapidly than those in
Venezuela; however, the per unit costs are expected to decrease over time.
Also, capital expenditures through 1993 in both Venezuela ($8 million) and
Russia ($17 million) focused more on start-up infrastructure items such as
roads, pipelines, and facilities rather than drilling. Since the beginning of
1994, a higher proportion of capital expenditures has been and will continue to
be spent on drilling and production activities, particularly in Venezuela.
Future infrastructure costs will be related to enhancing production rather than
start-up operations.
OTHER
The Company follows the full-cost method of accounting for its investments in
oil and gas properties. The Company capitalizes all acquisition, exploration,
and development costs incurred. The Company accounts for its oil and gas
properties using cost centers on a country by country basis. Proceeds from
sales of oil and gas properties are credited to the full-cost pools.
Capitalized costs of oil and gas properties are amortized within the cost
centers on an overall unit-of-production method using proved oil and gas
reserves as determined by independent petroleum engineers. Costs amortized
include all capitalized costs (less accumulated amortization), the estimated
future expenditures (based on current costs) to be incurred in developing
proved reserves, and estimated dismantlement, restoration and abandonment
costs. See Note 1 of Notes to Consolidated Financial Statements.
The following discussion of the Company's results of operations for the three
months ended March 31, 1995 and 1994 and financial condition as of March 31,
1995 and December 31, 1994 should be read in conjunction with the Company's
Consolidated Financial Statements and related notes thereto included in PART I,
Item 1, "FINANCIAL STATEMENTS."
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1995 AND 1994
The Company had revenues of $12,661,166 for the three months ended March 31,
1995. Expenses incurred during the period consisted of lease operating costs
and production taxes of $2,246,002, depletion, depreciation and amortization
expense of $3,145,067, general and administrative expense of $1,668,772,
interest expense of $1,618,126, income tax expense of $1,079,416 and minority
interest of $862,675. The net income for the period was $2,041,108 or $0.08
per share.
By comparison, the Company had revenues of $3,682,173 for the three months
ended March 31, 1994. Expenses incurred during the period consisted of lease
operating costs and production taxes of $1,766,022, depletion, depreciation and
amortization expense of $1,172,744, general and administrative expense of
$1,142,042 interest expense of $680,737, and a minority interest of $62,754.
The net loss for the period was $1,142,126 or $0.05 per share.
<PAGE> 14
14
Revenues increased $8,978,993, or 244%, during the three months ended March 31,
1995 compared to the corresponding period of 1994 primarily due to increased
oil sales in Venezuela and Russia. Sales quantities for the three months ended
March 31, 1995, from Venezuela and Russia were 1,062,093 Bbl and 118,864 Bbl,
respectively compared to 307,675 Bbl and 26,925 Bbl, respectively for the
corresponding period of the preceding year. Prices for crude oil averaged
$9.02 (pursuant to terms of an operating service agreement) and $13.12 from
Venezuela and Russia, respectively, for the period ended March 31, 1995
compared to $7.08 from Venezuela and $11.04 from Russia, respectively, for the
corresponding period of the preceding year. Domestic sales quantities for the
three months ended March 31, 1995 were 32,317 Bbl of crude oil and condensate
and 346,548 Mcf of natural gas compared to 61,818 Bbl of crude oil and
condensate and 77,843 Mcf of natural gas for the three months ended March 31,
1994. Domestic prices for crude oil and natural gas averaged $17.10 per Bbl
and $1.62 per Mcf during the three months ended March 31, 1995 compared to
$13.71 per Bbl and $2.25 per Mcf during the corresponding period of 1994.
Additionally, during the three months ended March 31, 1995, the Company
recorded a loss of $173,250 related to its commodity hedge agreement with
Morgan Guaranty.
Lease operating costs and production taxes increased $479,980, or 27%, during
the three months ended March 31, 1995 compared to the corresponding period in
1994 primarily due to the growth of the Company's Venezuelan and Russian
operations. Depletion, depreciation and amortization increased $1,972,323, or
168%, during the three months ended March 31, 1995 compared to the
corresponding period in 1994 primarily due to increased oil production in
Venezuela and in Russia. Depletion expense per barrel of oil equivalent
produced from Venezuela, United States and Russia during the three months ended
March 31, 1995 was $1.99, $6.97 and $2.76, respectively, compared to $1.79,
$6.49 and $3.13 in Venezuela, United States and Russia, respectively, during
the corresponding period of the preceding year. The increase in general and
administrative expense of $526,730, or 46%, during the three months ended March
31, 1995 compared to the corresponding period in 1994 was primarily due to the
Company's increased corporate activity associated with the growth of the
Company's business. Interest expense increased $937,389, or 138%, during the
three months ended March 31, 1995 compared to the corresponding period in 1994
primarily due to increased borrowing to fund operations in Venezuela and
Russia. Income tax expense in Venezuela was $1,079,416 for the period ended
March 31, 1995.
CAPITAL RESOURCES AND LIQUIDITY
The oil and gas industry is a highly capital intensive business. The Company
requires capital principally to fund the following costs: (i) drilling and
completion costs of wells and the cost of production and transportation
facilities; (ii) capital expenditures under certain agreements for geological,
geophysical and seismic costs; (iii) purchase of leases and other interests in
oil and gas producing properties; and (iv) general and administrative expenses.
The amount of available capital will affect the scope of the Company's
operations and the rate of its growth.
The net funds raised and/or used in each of the operating, investing and
financing activities for the three months ended March 31, 1995 and 1994 are
summarized in the following table and discussed in further detail below.
<TABLE>
<CAPTION>
Three Months Ended March 31,
------------------------------------------
1995 1994
----------- -------------
<S> <C> <C>
Net cash provided by (used in) operating activities $5,388,694 $ (2,192,422)
Net cash provided by (used in) investing activities 3,583,608 (31,606,433)
Net cash provided by (used in) financing activities (1,956,095) 7,187,780
----------- -------------
Net increase (decrease) in cash $7,016,207 $(26,611,075)
========== ============
</TABLE>
The Company has issued senior unsecured notes in the principal amount of $15
million. The senior unsecured notes, which mature in September 2002, bear
interest at 13% per annum, with annual principal payments of $3 million due on
September 30 of each year beginning on September 30, 1998. The Company's
secured credit facility provides for borrowings up to $15 million, with the
initial available principal limited to $10 million. Borrowings under the
secured credit facility, which expires in December 1999, bear interest, at the
Company's option, at either a floating rate (higher of prime rate plus 3% or
the Federal Funds Rate plus 5%) or a fixed rate (rate of interest at which
deposits of dollars are available to lender in the interbank eurocurrency
market plus 4.5%). At March 31, 1995, $5 million was outstanding under the
credit facility agreement, with no available borrowing capacity.
<PAGE> 15
15
Both the senior unsecured notes and the secured credit facility provide for
limitations on liens, dividends, capital expenditures, sales of assets and
mergers, and each contain financial covenants including a minimum ratio of
current assets to current liabilities (not less than 1.1 to 1.0). The secured
credit facility also includes a maximum ratio of certain liabilities to net
worth (cannot exceed .60 to 1.0) or domestic oil and gas reserves (cannot
exceed 1.0 to 1.0) covenant and the senior unsecured notes include a minimum
ratio of current assets to current liabilities (not less than 1.1 to 1.0) and a
maximum ratio of funded liabilities to net worth (cannot exceed .60 to 1.0) and
a minimum ratio of funded liabilities to U.S. oil and gas reserves (cannot
exceed 1.0 to 1.0). At March 31, 1995, the Company was in compliance with all
such covenants.
FOR THE THREE MONTHS ENDED MARCH 31, 1995
During the three months ended March 31, 1995, the Company had capital
expenditures of $13.5 million, of which $10.1 million related to the
development of the South Monagas Unit in Venezuela, $2.0 million related to the
development of the North Gubkinskoye Field in Russia and $1.4 million was
attributable to the United States and other projects.
During the three months ended March 31, 1995, the Company derived proceeds of
approximately $14.7 million from the sale of certain property interests in the
West Cote Blanche Bay Field, $2.0 million from additional borrowings in Russia
and $0.2 million from the exercise of stock options and warrants.
The Company has borrowed $5 million under a $15 million revolving credit
facility secured in part by mortgages on the Company's U.S. properties and in
part by a guarantee by a financial institution. As a result of the sale of
certain property interests in the West Cote Blanche Bay Field in March 1995,
the Company does not expect to borrow further against this facility until it
increases the security value of its remaining U.S. properties or increases the
guarantee from the financial institution.
The Company is currently in discussions with several financial institutions in
Venezuela and the United States to refinance a portion or all of
Benton-Vinccler's existing indebtedness and to provide further financing for a
portion of Benton-Vinccler's capital requirements. Such financing may have no
or limited recourse to the Company, in which case restricted cash securing
Benton-Vinccler's existing indebtedness in amounts equal to any such refinanced
amounts would become unrestricted. There is no assurance that such financing
will become available on terms acceptable to Benton-Vinccler or that such
financing will result in the reclassification of any of the Company's
restricted cash.
FOR THE THREE MONTHS ENDED MARCH 31, 1994
During the three months ended March 31, 1994, the Company had capital
expenditures of $8.2 million, of which $4.7 million related to the development
of the South Monagas Unit in Venezuela, $1.7 million related to the development
of the North Gubkinskoye Field in Russia and $1.8 million was attributable to
the United States and other projects. In addition, the Company acquired
capital stock from Vinccler representing an additional 30% ownership interest
in Benton-Vinccler for $3 million cash, $10 million in non-interest bearing
notes payable (with a present value of $9.2 million assuming a 10% interest
rate) and 200,000 shares of the Company's common stock.
During the first three months of 1994, the Company derived net proceeds of
approximately $22.1 million from short term borrowings used to fund operations
in Venezuela and repay $15 million of commercial paper.
VENEZUELAN OPERATIONS
In February 1994, the Company and Benton-Vinccler entered into a loan
arrangement with Morgan Guaranty. Borrowings under this loan arrangement are
secured by cash collateral in the form of a time deposit from the Company. The
loan arrangement contains no restrictive covenants and no financial ratio
requirements. The principal amount of such loan outstanding at March 31, 1995
was $19.3 million.
<PAGE> 16
16
In March 1994, the Company acquired capital stock from Vinccler representing an
additional 30% ownership interest in Benton-Vinccler and thus increased its
ownership from 50% to 80%. The purchase price was $3.0 million in cash, the
issuance of non-interest bearing promissory notes with a face value of $10.0
million (present value of $9.2 million) payable in various installments through
January 1996 and the issuance of 200,000 shares of the Company's Common Stock.
At March 31, 1995, the principal amount of the notes outstanding was
approximately $2.9 million. In addition, the Company has agreed to arrange for
all of Benton-Vinccler's future financing and to provide any further collateral
or guarantees, if required for such financing.
During the fourth quarter of 1994 and the first quarter of 1995,
Benton-Vinccler acquired approximately $4.1 million of drilling and production
equipment from trading companies and suppliers under terms which include 12
month financing. The Company expects that other such trade financing may be
available to Benton-Vinccler, particularly if political risk insurance is made
available from OPIC (the Overseas Private Investment Corporation, an agency of
the U.S. government).
The Company has budgeted approximately $40-50 million for capital expenditures
in Venezuela during 1995. The Company is presently pursuing several options
for long-term financing for Benton-Vinccler. There can be no assurance that
such financing will be available on terms acceptable to Benton-Vinccler. To
the extent such permanent financing cannot be secured, Benton-Vinccler will
fund its operations from its working capital and cash flow from operations,
which may result in reduced capital expenditures.
In June 1994, the Venezuelan government, amid economic uncertainties and bank
crises, implemented certain exchange and price controls. Currently, exchange
and price controls remain in place, with no indication of when or how much such
controls will be lifted or relaxed. To date, neither the current economic
uncertainties nor the exchange and price controls have had an adverse effect on
the Company's operations in Venezuela, although the controls have limited the
potential sources of credit financing for Benton-Vinccler's growth. The
Company reflects an account receivable in the amount of $9.4 million on its
consolidated balance sheet, representing the operating service fee for the
quarter ended March 31, 1995 owed by Lagoven to Benton-Vinccler. The Company
continues to evaluate the economic and political environment in Venezuela to
assess the potential effect on the Company and its Venezuelan operations.
RUSSIAN OPERATIONS
Under the terms of GEOILBENT's joint venture agreement, the Company has
committed to make cumulative equity contributions totaling approximately $25.8
million by December 31, 1995. As of March 31, 1995, the Company's contribution
since inception totalled approximately $20.1 million. The Company expects to
contribute a total of $6-7 million to GEOILBENT during 1995. The Company
continues to retain Morgan Guaranty as a financial advisor to develop
appropriate financial plans and to determine potential funding sources for the
venture.
In June 1994, GEOILBENT entered into a production payment advance agreement
with NAFTA Moscow, the export agency which markets GEOILBENT's oil production
to purchasers in Europe. The payment advance of $2.5 million against future
oil shipments, which bore an effective discount rate of 12% was repaid through
withholdings from oil sales on a monthly basis through December 1994. During
the quarter ended March 31, 1995, GEOILBENT received $3.0 million in production
payment advances pursuant to a similar agreement with NAFTA Moscow containing
similar terms. At March 31, 1995, the Company's share of the unpaid advances
was approximately $1.0 million.
In August 1994, GEOILBENT entered into an agreement with International Moscow
Bank for a $4 million loan with the following terms: 14 monthly payments,
interest at LIBOR plus 7.5%, with interest only payments for the first four
months and monthly principal and interest payments thereafter. In connection
with this agreement, the Company provided to International Moscow Bank a
guarantee of payment under which the Company has agreed to pay such loan in
full if GEOILBENT fails to make the scheduled payments. In March 1995,
GEOILBENT's credit facility with International Moscow Bank was expanded to $6
million, with interest only payments for 3 months and monthly principal and
interest payments thereafter. The Company has similarly guaranteed this
indebtedness, through which the Company intends to fulfill substantially all of
its remaining charter fund contribution requirements. At March 31, 1995, the
Company's share of the outstanding balance was $2.0 million.
ANTICIPATED CAPITAL REQUIREMENTS
The Company anticipates funding its total 1995 capital expenditures, which it
expects to be approximately $50-60
<PAGE> 17
17
million, from cash flow from operations, sales of property interests, project
and trade financing sources or the issuance of debt or equity securities. In
March 1995, the Company received approximately $15 million from the sale of
property interests which will be used to fund certain portions of the Company's
1995 drilling and development activities and for working capital purposes.
There can be no assurance that financing for the remaining portion of the
Company's capital expenditure plan will become available under terms and
conditions acceptable to the Company, which may result in reduced capital
expenditures in any or all three of the Company's principal areas of
operations.
EFFECTS OF INFLATION, CHANGING PRICES AND FOREIGN EXCHANGE RATES
The Company's results of operations and cash flow are affected by changing oil
and gas prices. If the price of oil and gas increases, there could be a
corresponding increase in the cost to the Company for drilling and related
services, as well as an increase in revenues. Continued fluctuating oil and
gas prices may affect the Company's total planned development activities and
capital expenditure program.
Within the United States, inflation has had a minimal effect on the Company.
The Company's foreign operations may be adversely affected by inflation in
Russia and Venezuela, but the Company cannot predict the extent of such effect.
With respect to Benton-Vinccler and GEOILBENT, substantially all of the sources
of funds, including the Company's contributions and the proceeds from oil sales
and credit financings, are denominated in U.S. dollars, which may help to limit
the impact of inflation in those countries.
Effective May 1, 1994, the Company entered into a commodity hedge agreement
with Morgan Guaranty designed to reduce a portion of the Company's risk from
oil price movements. Pursuant to the hedge agreement, with respect to the
period from May 1, 1994 through the end of 1996, the Company will receive from
Morgan Guaranty $16.82 per Bbl and the Company will pay to Morgan Guaranty the
average price per Bbl of West Texas Intermediate Light Sweet Crude Oil ("WTI")
(determined in the manner set forth in the hedge agreement). Such payments
will be made with respect to production of 1,250 Bbl of oil per day for 1995
and 1,500 Bbl of oil per day for 1996. During the quarter ended March 31,
1995, the average price per Bbl of WTI was $18.36 and the Company's net
exposure for the quarter was $173,250. Total exposure for the year ended
December 31, 1994 under the hedge agreement was $328,868. The Company's oil
production is not materially affected by seasonality. The returns under the
hedge agreement are affected by world-wide crude oil prices, which are subject
to wide fluctuation in response to a variety of factors that are beyond the
control of the Company.
To the extent practicable, while oil sales and financings have been in U.S.
dollars, local transactions in Russia and Venezuela are conducted in local
currency. Benton-Vinccler and GEOILBENT pay their employees and purchase
certain equipment and services in local currency. This allows both
Benton-Vinccler and GEOILBENT to maximize benefits when possible from the
current favorable exchange rates. Payments to Benton-Vinccler under the
Operating Service Agreement and payments to GEOILBENT for delivery and sale of
oil are made in U.S. dollars or currency that is freely exchangeable for U.S.
dollars. There are no restrictions in either Venezuela or Russia that affect
the conversion of U.S. dollars into local currency. However, during 1994,
Venezuela implemented exchange controls which significantly limit the ability
to convert local currency into U.S. dollars. Because payments to
Benton-Vinccler are made in U.S. dollars into its United States bank accounts,
and Benton-Vinccler is not subject to regulations requiring the conversion or
repatriation of those dollars back into the country, the exchange controls have
not had a material adverse effect on Benton-Vinccler or the Company.
During the quarter ended March 31, 1995, GEOILBENT had substantial net monetary
liabilities denominated in Russian rubles. As a result of the decline in the
value of the ruble during this period, the Company realized net foreign
exchange gains of $131,717. The Company cannot predict the extent of future
gains or losses, but attempts to minimize its exposure to losses.
<PAGE> 18
18
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 SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
11.1 Computation of per share earnings
(b) Reports on Form 8-K
None.
<PAGE> 19
19
SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
BENTON OIL AND GAS COMPANY
Dated: May 12, 1995 By: /S/A. E. Benton
----------------------------
A. E. Benton,
President
Dated: May 12, 1995 By: /S/David H. Pratt
-----------------------------
David H. Pratt,
Vice President of Finance,
Chief Financial Officer
<PAGE> 1
20
EXHIBIT 11.1
BENTON OIL AND GAS COMPANY AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
----------------------------------------
<TABLE>
<CAPTION>
Three Months Ended March 31,
------------------------------
1995 1994
---------- ----------
<S> <C> <C>
PRIMARY EARNINGS PER SHARE
--------------------------
Net income (loss) attributable to common stock $ 2,041,108 $(1,142,126)
=========== ============
Weighted average number of common shares outstanding 24,914,617 24,736,848
=========== ===========
Primary earnings (loss) per share $ 0.08 $ (0.05)
=========== ===========
ADDITIONAL PRIMARY COMPUTATION (a)
------------------------------
Net income (loss) attributable to common stock $2,041,108 $(1,142,126)
========== ============
Shares:
Weighted average number of common shares outstanding 24,914,617 24,736,848
Add shares assuming exercise of options reduced by the number
of shares which could have been purchased with the
proceeds from exercise of such options 1,122,438 -
----------- -----------
Primary weighted average number of common shares outstanding
as adjusted 26,037,055 24,736,848
=========== ===========
Primary earnings (loss) per share (b) $ 0.08 $ (0.05)
=========== ===========
ASSUMING FULL DILUTION
----------------------
Net income (loss) attributable to common stock $2,041,108 $(1,142,126)
========== ===========
Shares:
Weighted average number of common shares outstanding 24,914,617 24,736,848
Add shares assuming exercise of options reduced by the number
of shares which could have been purchased with the
proceeds from exercise of such options 1,440,878 -
----------- -----------
Weighted average number of common shares outstanding as
adjusted 26,355,495 24,736,848
=========== ===========
Earnings (loss) per common share assuming full dilution (b) $ 0.08 $ (0.05)
=========== ===========
ADDITIONAL FULLY DILUTED COMPUTATION
------------------------------------
Additional adjustment to net income (loss) as adjusted per fully
diluted computation above:
Net income (loss) attributable to common stock $2,041,108 $(1,142,126)
Add after tax interest expense attributable to convertible notes 93,240 93,240
Add after tax interest expense attributable to convertible
debentures 128,560 128,560
---------- -----------
Net income (loss) as adjusted $2,262,908 $ (920,326)
========== ============
Additional adjustment to weighted average number of shares
outstanding:
Weighted average number of common shares outstanding 24,914,617 24,736,848
Add shares assuming conversion of convertible debentures 650,237 650,237
Add shares assuming conversion of convertible notes 397,477 397,477
Add shares assuming exercise of options reduced by the number
of shares which could have been purchased with the
proceeds from exercise of such options 1,440,878 -
----------- -----------
Weighted average number of common shares outstanding as
adjusted 27,403,209 25,784,562
=========== ===========
Earnings (loss) per common share assuming full dilution (c) $ 0.08 $ (0.04)
========== ===========
<FN>
(a) These figures agree with the related amounts in the statements of operations.
(b) This calculation is submitted in accordance with Regulations S-K Item 601(b)(11).
(c) This calculation is submitted in accordance with Regulation S-K Item 601 (b)(11) although it is contrary to paragraph 40 of
APB Opinion No. 15 because it produces an anti-dilutive result.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
FOR THE PERIOD ENDED MARCH 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 21,208,775
<SECURITIES> 0
<RECEIVABLES> 13,822,254
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 55,721,661
<PP&E> 132,543,883
<DEPRECIATION> 23,171,849
<TOTAL-ASSETS> 166,525,207
<CURRENT-LIABILITIES> 42,242,506
<BONDS> 31,187,571
<COMMON> 249,319
0
0
<OTHER-SE> 90,239,476
<TOTAL-LIABILITY-AND-EQUITY> 166,525,207
<SALES> 12,080,479
<TOTAL-REVENUES> 12,661,166
<CGS> 5,391,069
<TOTAL-COSTS> 7,059,841
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,618,126
<INCOME-PRETAX> 3,983,199
<INCOME-TAX> 1,079,416
<INCOME-CONTINUING> 2,041,108
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,041,108
<EPS-PRIMARY> .08
<EPS-DILUTED> 0
</TABLE>
