<PAGE> 1
Page 1 of 14
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, 1998
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: 1-10216
CHIEFTAIN INTERNATIONAL, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Alberta, Canada None
- ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1201 Toronto Dominion Tower, Edmonton Centre,
Edmonton, Alberta, Canada T5J 2Z1
- ---------------------------------------------- ----------------------
(Address of principal executive offices) (Zip Code/Postal Code)
Registrant's telephone number, including area code: (403) 425-1950
Not Applicable
---------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report)
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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<S> <C> <C>
Title of each class Date Number Outstanding
- ------------------- ---------------- ------------------
Common shares November 2, 1998 13,385,991
</TABLE>
<PAGE> 2
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CHIEFTAIN INTERNATIONAL, INC.
SEPTEMBER 30, 1998 FORM 10-Q QUARTERLY REPORT
TABLE OF CONTENTS
PART I
<TABLE>
<CAPTION>
Page No.
<S> <C> <C>
Item 1. Financial Statements
Consolidated Condensed Balance Sheet -
September 30, 1998 and December 31, 1997 3
Consolidated Condensed Statement of Income
Nine months ended September 30, 1998 and 1997 and
Three months ended September 30, 1998 and 1997 4
Consolidated Condensed Statement of Changes in Financial Position -
Nine months ended September 30, 1998 and 1997 5
Notes to Consolidated Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
</TABLE>
PART II
<TABLE>
<CAPTION>
<S> <C>
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
</TABLE>
<PAGE> 3
Page 3 of 14
CHIEFTAIN INTERNATIONAL, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED CONDENSED BALANCE SHEET
(Full Cost Method of Accounting)
<TABLE>
<CAPTION>
SEPTEMBER 30, December 31,
1998 1997
- -------------------------------------------------------------------------------
<S> <C> <C>
(U.S. $ in thousands)
(unaudited)
ASSETS
Current assets:
Cash and short-term deposits $ 6,103 $ 26,925
Accounts receivable 9,931 10,862
Other 1,277 606
--------- ---------
17,311 38,393
Capital assets - net 272,905 236,715
Deferred income taxes 2,888 3,442
--------- ---------
$ 293,104 $ 278,550
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued $ 13,279 $ 15,717
Long-term debt 25,000 --
Deferred income taxes 13,927 13,367
Preferred shares of a subsidiary 63,403 63,403
Shareholders' equity:
Common shares 189,534 192,845
Contributed surplus -- 307
Deficit (12,039) (7,089)
--------- ---------
177,495 186,063
--------- ---------
$ 293,104 $ 278,550
========= =========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE> 4
Page 4 of 14
CHIEFTAIN INTERNATIONAL, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED CONDENSED STATEMENT OF INCOME
<TABLE>
<CAPTION>
Nine months Three months
----------------------------------- -----------------------------------
PERIOD ENDED SEPTEMBER 30, 1998 1997 1998 1997
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(U.S. $ in thousands except shares and
per share amounts)
(unaudited)
Production revenue, net of royalties $ 44,852 $ 50,346 $ 13,822 $ 14,304
Interest and other revenue (Note 2) 2,613 1,915 121 587
------------ ------------ ------------ ------------
47,465 52,261 13,943 14,891
------------ ------------ ------------ ------------
Production expenses 12,219 10,185 4,206 3,367
General and administrative expenses 3,668 3,288 917 996
Interest expense 285 -- 260 --
Depletion and amortization 30,096 27,124 9,905 8,579
------------ ------------ ------------ ------------
46,268 40,597 15,288 12,942
------------ ------------ ------------ ------------
Income (loss) before income taxes
and dividends on preferred shares
of a subsidiary 1,197 11,664 (1,345) 1,949
Income taxes (Note 3) 1,141 4,467 (109) 677
------------ ------------ ------------ ------------
Income (loss) before dividends on
preferred shares of a subsidiary 56 7,197 (1,236) 1,272
Dividends on preferred shares of a
subsidiary 3,707 3,707 1,236 1,236
------------ ------------ ------------ ------------
Net income (loss) applicable to
common shares $ (3,651) $ 3,490 $ (2,472) $ 36
============ ============ ============ ============
Net income (loss) per common share
(Note 4) - Basic $ (0.27) $ 0.26 $ (0.18) $ 0.01
============ ============ ============ ============
- Fully diluted $ (0.27) $ 0.26 $ (0.18) $ 0.01
============ ============ ============ ============
Weighted average number of common
shares outstanding:
- Basic 13,520,786 13,611,995 13,438,005 13,626,973
============ ============ ============ ============
- Fully diluted 13,520,786 13,611,995 13,438,005 13,626,973
============ ============ ============ ============
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE> 5
Page 5 of 14
CHIEFTAIN INTERNATIONAL, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN FINANCIAL POSITION
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30 1998 1997
- --------------------------------------------------------------------------------------
<S> <C> <C>
(U.S. $ in thousands)
(unaudited)
Operating activities:
Net income (loss) applicable to common shares $ (3,651) $ 3,490
Items not requiring a current cash outlay 31,210 31,579
-------- --------
27,559 35,069
Net change in non-cash operating working capital (713) 5,713
-------- --------
26,846 40,782
Financing activities:
Issue of common shares 437 923
Purchase of common shares for cancellation (5,355) --
Increase in long-term debt 25,000 --
-------- --------
20,082 923
Investing activities:
Lease acquisition, exploration and drilling costs (55,847) (46,387)
Pipelines and production equipment acquired (10,351) (6,026)
-------- --------
(66,198) (52,413)
Purchase of other capital assets (87) (271)
Change in investing accounts payable and accrued (1,465) 1,888
-------- --------
(67,750) (50,796)
-------- --------
Change in cash and short term deposits (20,822) (9,091)
Beginning cash and short-term deposits 26,925 42,449
-------- --------
Ending cash and short-term deposits $ 6,103 $ 33,358
======== ========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<PAGE> 6
Page 6 of 14
CHIEFTAIN INTERNATIONAL, INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. Basis of Presentation:
In the opinion of Chieftain International, Inc. (the "Company" and
together with its subsidiaries "Chieftain"), the accompanying unaudited
consolidated condensed financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to present
fairly the financial position as at September 30, 1998 and December 31,
1997 and the results of operations and changes in financial position for
the nine months ended September 30, 1998 and 1997. Certain information
and notes normally included in Chieftain's financial statements prepared
in conformity with Canadian generally accepted accounting principles have
been condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission. These consolidated condensed
financial statements should be read in conjunction with the consolidated
financial statements and the notes thereto included in Chieftain's Annual
Report on Form 10-K for the year ended December 31, 1997.
Preparation of financial statements in conformity with generally accepted
accounting principles requires management to make informed judgements and
estimates. Actual results may differ from those estimates.
The results of operations and changes in financial position for the nine
months ended September 30, 1998 are not necessarily indicative of the
results to be expected for the full year.
Material differences between Canadian and U.S. accounting principles that
affect Chieftain are referred to in Note 5, which provides the condensed
effects of the differences on earnings and balance sheet accounts.
2. Interest and Other Revenue:
Interest and other revenue for the first quarter of 1998 includes $1.6
million awarded by the courts pursuant to a successful claim for recovery
of excess transportation charges incurred from 1990 through 1997. The
award comprises transportation charges, legal fees and judgement interest
in the amounts of $1,129,000, $282,000 and $189,000, respectively.
<PAGE> 7
Page 7 of 14
3. Income Taxes:
The provision for income taxes differs from the amount of income tax
determined by applying the Canadian statutory rate to pre-tax income
(loss) before dividends paid on preferred shares of a subsidiary as a
result of the following:
<TABLE>
<CAPTION>
NINE MONTHS Three months
-------------------------- --------------------------
Period ended September 30, 1998 1997 1998 1997
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(U.S. $ in thousands) (unaudited)
Tax at statutory Canadian rate 44.62% $ 534 $ 5,204 $ (603) $ 869
Lower income tax rate on earnings of U.S.
subsidiaries (144) (893) 95 (177)
Canadian income tax on exchange loss (gain)
which is eliminated upon consolidation 220 (1) 47 (97)
Prior years' tax reassessments 208 -- 208 --
Exchange revaluation of Canadian
deferred tax assets 222 -- 105 --
Other 101 157 39 82
------- ------- ------- -------
Tax at effective rate $ 1,141 $ 4,467 $ (109) $ 677
======= ======= ======= =======
Effective tax rate 95.3% 38.3% 8.1% 34.7%
======= ======= ======= =======
</TABLE>
4. Per Share Amounts:
Net income per common share is computed by dividing net income applicable
to common shares by the weighted average number of common shares
outstanding during the period.
In the calculation of fully diluted earnings per share, shares
outstanding are adjusted for share options and shares issuable on
conversion of preferred shares. Earnings are adjusted by the amount of
imputed interest on share option proceeds and preferred share dividends.
5. United States Accounting Principles:
U.S. full cost accounting rules differ materially from the Canadian full
cost accounting guidelines followed by Chieftain. The U.S. rules require
an impairment test to be conducted quarterly whereas the Canadian
guidelines require this test only at year-end. In determining the
limitation on carrying values, U.S. rules require the discounting of
future net revenues at 10% and Canadian guidelines require the use of
undiscounted future net revenues and the deduction of estimated future
administrative costs. The quarterly test required by U.S. accounting
rules, using June 30 U.S. gas and oil prices of $2.09 per mcf and $12.40
per barrel to determine future net revenues, would have resulted in a
write-down of U.S. property carrying costs of $16.1 million, after
providing for tax recoveries of $8.6 million.
<PAGE> 8
Page 8 of 14
The effect on the Consolidated Condensed Balance Sheet of the differences
between Canadian and U.S. accounting principles is as follows:
<TABLE>
<CAPTION>
AS AT SEPTEMBER 30, 1998 December 31, 1997
--------------------------------------------------------------------------------------------------------
(U.S.$ in thousands)
Under U.S. Under U.S.
As Accounting As Accounting
reported Principles reported Principles
-------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Net capital assets $ 272,905 $ 232,769 $ 236,715 $ 218,673
Deferred tax - asset $ 2,888 $ 4,243 $ 3,442 $ 5,537
Deferred tax - liability $ 13,927 $ 1,108 $ 13,367 $ 8,737
Deficit $ (12,039) $ (38,001) $ (7,089) $ (18,406)
</TABLE>
The effect on consolidated earnings of these differences is summarized as
follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30 1998 1997
--------------------------------------------------------------------------------------------------------
<S> <C> <C>
(U.S.$ in thousands except shares and per share amounts)
Net income (loss) applicable to common shares as
reported $ (3,651) $ 3,490
Additional depletion (24,725) --
------------ ------------
(28,376) 3,490
Add reduction in depletion expense 2,631 2,283
Less (increase) decrease in deferred tax provision 7,449 (849)
------------ ------------
Net income (loss) applicable to common shares
under U.S. accounting principles $ (18,296) $ 4,924
============ ============
Net income (loss) per common share under U.S.
accounting principles:
- Basic $ (1.35) $ 0.36
============ ============
- Fully diluted $ (1.35) $ 0.35
============ ============
Fully diluted number of common shares outstanding 13,520,786 14,002,071
============ ============
</TABLE>
<PAGE> 9
Page 9 of 14
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30 1998 1997
------------------------------------------------------------------------------------------------------
<S> <C> <C>
(U.S.$ in thousands except shares and per share amounts)
Net income (loss) applicable to common shares
as reported $ (2,472) $ 36
Add reduction in depletion expense 1,212 589
Less (increase) decrease in deferred tax provision (708) (222)
------------ ------------
Net income(loss) applicable to common shares under
U.S. accounting principles $ (1,968) $ 403
============ ============
Net income (loss) per common share under U.S.
accounting principles:
- Basic $ (0.15) $ 0.03
============ ============
- Fully diluted $ (0.15) $ 0.03
============ ============
Fully diluted number of common shares outstanding 13,438,005 14,017,049
============ ============
</TABLE>
The Company applies the intrinsic value method prescribed by APB Opinion
25 and related interpretations in accounting for share option
transactions. Accordingly, no compensation cost is recognized in the
accounts. U.S. accounting principles require disclosure of the impact on
earnings and earnings per share of the value of options granted after
1994, calculated in accordance with FAS 123. Such impact, for the nine
months ended September 30, 1998 would amount to a net of tax charge to
income of $1,270,000 (1997 - $927,000) and for the three months ended
September 30 such impact would amount to a net of tax charge to income of
$397,000 (1997 - $414,000). Under U.S. accounting principles after
reflecting this charge, for the nine months ended September 30, pro forma
net income (loss) applicable to common shares would be $(19,566,000)
(1997 - $3,997,000); net income (loss) per common share under U.S.
accounting principles would be $(1.45)(1997 - $0.29); and pro forma fully
diluted earnings (loss) per common share would be $(1.45) (1997 - $0.29).
For the three months ended September 30, pro forma net income (loss)
applicable to common shares under U.S. accounting principles would be
$(2,365,000) (1997 - $(11,000)); pro forma net income (loss) per common
share would be $(0.18) (1997 - $(0.01)); and pro forma fully diluted
earnings (loss) per common share would be $(0.18) (1997 - $(0.01)). These
effects are not necessarily indicative of those to be expected in future
periods.
<PAGE> 10
Page 10 of 14
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
To be read in conjunction with the accompanying consolidated
condensed financial statements.
RESULTS OF OPERATIONS
Nine months ended September 30, 1998 and 1997
The 11% decrease in production revenue in the first nine months of 1998 resulted
from an 11% decrease in average price received for natural gas to $2.02 per mcf,
a 36% decrease in average oil price received to $12.39 per barrel, a 1% increase
in natural gas production to 21.4 bcf and a 35% increase in oil production
volume to 912,000 barrels, all as compared to the corresponding 1997 period.
<TABLE>
<CAPTION>
Nine months
ended 1998 1997
September 30,
- ---------------------------------------------------------------------------------------------------------------
Natural Gas Oil and NGLs Natural Gas Oil and NGLs
(mmcfd) (bd) (mmcfd) (bd)
Gulf of North Gulf of North
Mexico Sea Total Total Mexico Sea Total Total
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gross production 70.7 7.8 78.5 3,341 67.9 9.5 77.4 2,478
Royalties 14.5 -- 14.5 440 13.6 -- 13.6 356
Net production 56.2 7.8 64.0 2,901 54.3 9.5 63.8 2,122
Average price $ 2.09 $ 1.34 $ 2.02 $12.39 $ 2.38 $ 1.50 $ 2.27 $19.28
</TABLE>
<TABLE>
<CAPTION>
Three months
ended 1998 1997
September 30,
- ---------------------------------------------------------------------------------------------------------------
Natural Gas Oil and NGLs Natural Gas Oil and NGLs
(mmcfd) (bd) (mmcfd) (bd)
Gulf of North Gulf of North
Mexico Sea Total Total Mexico Sea Total Total
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gross production 72.2 1.8 74.0 3,261 67.9 2.1 70.0 2,460
Royalties 14.8 -- 14.8 438 14.0 -- 14.0 350
Net production 57.4 1.8 59.2 2,823 53.9 2.1 56.0 2,110
Average price $ 1.97 $ 1.19 $ 1.96 $11.86 $ 2.13 $ 0.90 $ 2.09 $17.92
</TABLE>
U.S. gas prices received during the third quarter were lower relative to the
same period last year. The warm winter experienced in eastern and central parts
of the continent, the primary markets for Chieftain's gas, contributed to a 20%
increase in AGA reported storage levels at the end of the heating season from a
year earlier. The resulting soft demand for injection gas combined with reduced
cooling demand from the lack of extreme temperatures during the summer of 1998
contributed to the 8% decline in the third quarter U.S. gas price received by
Chieftain. Oil prices for the third quarter, which were comparable to those of
the second quarter, continue to be negatively affected by continuing economic
adversity and uncertainty in some parts of the world. A decision of the
Organization of Petroleum Exporting Countries to reduce production quotas has
yet to achieve its stated pricing objective.
<PAGE> 11
Page 11 of 14
Production expenses for the first nine months of 1998 increased 20% from the
1997 period, primarily reflecting a succession of weather induced evacuations of
manned facilities in the Gulf of Mexico, the commencement of production at East
Cameron 349 and significant pipeline repair costs in the South Pass area. On a
gas equivalent basis, production expenses increased 12% to $0.45/mcfe.
Approximately one-third of the 12% increase can be attributed to reduced
production volumes due to major weather related interruptions. Chieftain's
production facilities incurred no significant weather related damage. Higher
lifting costs are associated with oil production which comprised 21% of
Chieftain's gas equivalent production during the first nine months of 1998, up
from 16% in the comparable 1997 period. General and administrative expenses for
the first nine months of 1998 increased 12% from the 1997 period, primarily
reflecting increased performance based compensation payments made during the
first quarter. On a gas equivalent basis, general and administrative expenses
increased 4% to $0.14/mcfe compared to the corresponding 1997 period. Depletion
and amortization expense increased 11%, the result of a 7% increase in units of
production and a 4% increase in the average depletion rate to $1.12 per gas
equivalent unit.
CAPITAL RESOURCES AND LIQUIDITY
The following table summarizes cash provided from (used in) operating, financing
and investing activities for each of the periods shown:
<TABLE>
<CAPTION>
Nine months ended September 30, 1998 1997
- ------------------------------------------------------------------------------------
<S> <C> <C>
Cash provided from (used in):
Operating activities $ 26,846 $ 40,782
Financing activities 20,082 923
Investing activities (67,750) (50,796)
---------- -----------
Decrease in cash $ (20,822) $ (9,091)
========== ===========
</TABLE>
Cash generated from operating activities decreased 34% primarily as a result of
lower operating revenue.
Financing activities in 1998 provided $20.1 million of cash, the net result of:
the exercise of employee stock options for $0.4 million; the drawdown of $25
million of Chieftain's revolving credit facility and the purchase, for $5.3
million, of 264,600 common shares for cancellation. Through September 30, 1998,
300,900 common shares had been purchased and cancelled pursuant to the Company's
normal course issuer bid, announced in October, 1997 and amended August 12,
1998, for up to 1,200,000 common shares. Financing activities in the comparable
period in 1997 provided $0.9 million of cash, the result of the exercise of
employee stock options.
Cash used in investing activities increased 33% to $67.8 million, compared to
the 1997 period. During the 1998 period, Chieftain participated in 43 wells of
which 3 were drilling at quarter end. During the comparable 1997 period,
Chieftain participated in 50 wells of which 4 were drilling at quarter end. All
of the 1998 and 1997 wells were in the U.S. Chieftain plans to drill up to 3
exploratory and 1 development wells in the Gulf of Mexico during the remainder
of 1998. The high levels of industry activity in 1997, which carried through to
the first quarter of 1998, particularly in the Gulf of Mexico, have not been
sustained. Some companies, particularly those with substantial oil production
are experiencing capital constraints, and some are reducing activity levels
and/or are selling properties. Oil comprises 21% of Chieftain's total gas
equivalent production, minimizing the effect of weak oil prices on its cash
flow.
September 30, 1998 cash of $6.1 million was down $27.3 million from the
comparable 1997 amount. $25,000,000 of Chieftain's $100,000,000 revolving credit
facility was utilized at September 30, 1998.
<PAGE> 12
Page 12 of 14
OUTLOOK
While natural gas and oil prices in the first nine months indicate the
probability of lower average prices for 1998 than for 1997, higher volumes are
expected to result in improved cash flow from operations for the balance of
1998.
Capital expenditures for 1998 are budgeted at $95 million, of which $68 million
was spent in the first nine months. Capital expenditures are expected to be
funded by cash flow from operations, working capital and the revolving credit
facility. Capital expenditures can be varied significantly with respect to
timing and priority dependent upon exploration success, availability of
equipment and services and current opportunities.
YEAR 2000 DISCLOSURE
The Company has completed the assessment of its internal Year 2000 issues, has
made changes and employed testing procedure as deemed necessary and is confident
that no issues remain which could have a material effect on its financial
condition or results of operations.
The Company's assessment of the readiness of third parties is in process and is
expected to be complete by the end of the 1999 second quarter.
Costs incurred to date and expected to be incurred in the future are not
material to the Company.
The Company has interests in a substantial number of offshore oil and gas
production facilities which are operated by others and is required to rely on
assessments by such third parties as to Year 2000 compliance of such facilities.
Production volumes are transported through pipelines and processed through
facilities which are also operated by third parties. There is extensive use of
computers to control and operate such pipelines and facilities in the oil and
gas industry and it is reasonably likely that one or more of such facilities
will experience a computer related event which could result in shut down of
production, transportation or processing facilities for such period until
alternative controls can be effected. The Company cannot reasonably quantify the
estimated lost revenue, if any, which would result in the event of such an
interruption.
INFORMATION REGARDING FORWARD LOOKING FINANCIAL STATEMENTS
This Form 10-Q report contains forward-looking statements that are subject to
risk factors associated with the oil and gas business. Chieftain believes that
the expectations reflected in these statements are reasonable, but may be
affected by a variety of factors including, but not limited to: price
fluctuations, currency fluctuations, drilling and production results,
imprecision of reserve estimates, loss of market, industry competition,
environmental risks, political risks and capital restrictions.
<PAGE> 13
Page 13 of 14
PART II
Item 1. Legal Proceedings
Chieftain is not party to, and none of its properties is the subject of,
any material legal proceedings.
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
Chieftain has declared and paid all cumulative dividends.
Item 4. Submission of Matters to a Vote of Security Holders
No matters have been submitted to a vote of the security holders of the
Company during the third quarter of 1998.
Item 5. Other Information
None
Item 6. Exhibits and Reports of Form 8-K
None
<PAGE> 14
Page 14 of 14
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.
Chieftain International, Inc.
(Registrant)
/s/ E. L. Hahn
- --------------------------------------------
E. L. Hahn
Senior Vice President, Finance and Treasurer
(Chief Financial Officer)
Dated: November 2, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
SEPTEMBER 30, 1998 BALANCE SHEET AND THE STATEMENT OF INCOME FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 1998 INCLUDED IN THE COMPANY'S SEPTEMBER 30,
1998 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 6,103
<SECURITIES> 0
<RECEIVABLES> 9,931
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 17,311
<PP&E> 528,140<F1>
<DEPRECIATION> 255,235
<TOTAL-ASSETS> 293,104<F2>
<CURRENT-LIABILITIES> 13,279
<BONDS> 25,000<F3>
0
0
<COMMON> 189,534
<OTHER-SE> 51,364<F4>
<TOTAL-LIABILITY-AND-EQUITY> 293,104<F5>
<SALES> 44,852
<TOTAL-REVENUES> 47,465<F6>
<CGS> 0
<TOTAL-COSTS> 45,983<F7>
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 285
<INCOME-PRETAX> 1,197
<INCOME-TAX> 1,141
<INCOME-CONTINUING> 56
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 56
<EPS-PRIMARY> (0.27)
<EPS-DILUTED> (0.27)
<FN>
<F1>THE COMPANY ACCOUNTS FOR GAS AND OIL PROPERTIES IN ACCORDANCE WITH CANADIAN
GUIDELINES ON FULL COST ACCOUNTING.
<F2>DEFERRED INCOME TAXES OF $2,888 HAVE BEEN INCLUDED IN TOTAL ASSETS.
<F3>UNSECURED REVOLVING CREDIT FACILITY WITH A SYNDICATE OF BANKS, IN THE AMOUNT
OF U.S. $100 MILLION, FULLY REVOLVING FOR 364 DAY PERIODS WITH EXTENSIONS AT THE
OPTION OF THE LENDERS UPON NOTICE FROM THE COMPANY. IF NOT EXTENDED, THE
FACILITY CONVERTS TO TERM LOANS REPAYABLE OVER A PERIOD NOT EXCEEDING FOUR
YEARS. ADVANCES UNDER THE FACILITY BEAR INTEREST AT CANADIAN PRIME OR U.S. BASE
RATE, OR AT BANKER'S ACCEPTANCE RATES OR LIBOR PLUS APPLICABLE MARGINS.
<F4>PREFERRED SHARES OF A SUBSIDIARY OF $63,403, AND RETAINED EARNINGS (DEFICIT)
OF $(12,039), HAVE BEEN COMBINED IN CALCULATING OTHER STOCKHOLDERS' EQUITY.
<F5>DEFERRED INCOME TAXES OF $13,927 HAVE BEEN INCLUDED IN TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY.
<F6>INCLUDES A SUCCESSFUL $1,600 CLAIM FOR RECOVERY OF PAST YEARS' EXCESS
TRANSPORTATION CHARGES.
<F7>PRODUCTION EXPENSES OF $12,219, GENERAL AND ADMINISTRATIVE EXPENSES OF
$3,668 AND DEPLETION AND AMORTIZATION OF $30,096, HAVE BEEN COMBINED IN
CALCULATING TOTAL COSTS.
</FN>
</TABLE>
