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, 2000
--------------
[ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the Transition Period from .......... to ..........
Commission File Number..........1-12508
-------
MAGNUM HUNTER RESOURCES, INC.
-----------------------------
Exact name of registrant as specified in its charter
Nevada 87-0462881
- --------------- ----------
State or other jurisdiction of IRS employer identification No.
incorporation or organization
600 East Las Colinas Blvd., Suite 1100, Irving, Texas 75039
-----------------------------------------------------------
Address of principal executive offices
(972) 401-0752
-------------------------------------
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
State the number of shares outstanding of each of the issuer's classes of
common equity, as of May 9, 2000: 20,243,601.
<PAGE>
PART I -- FINANCIAL INFORMATION
--------------------------------------
Item 1. Financial Statements
- ------------------------------
The consolidated financial statements of Magnum Hunter Resources, Inc.
("Magnum Hunter"or the "Company") follow "Item 2. Management's Discussion and
Analysis of Financial Condition and Results of Operation".
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation
- --------------------------------------------------------------------------------
The following discussion and analysis should be read in conjunction with
Magnum Hunter's consolidated financial statements and the notes associated with
them contained in its Form 10-K for the year ended December 31, 1999. This
discussion should not be construed to imply that the results discussed herein
will necessarily continue into the future or that any conclusion reached herein
will necessarily be indicative of actual operating results in the future. Such
discussion represents only the best present assessment by management of Magnum
Hunter.
On December 31, 1998, the Company through its 100% owned subsidiary,
Bluebird, acquired from Spirit Energy 76 ("Spirit 76") natural gas reserves and
associated assets in producing fields located in Oklahoma and Texas. The net
purchase price was approximately $25 million after certain purchase price
adjustments, including preferential rights exercised by third parties and other
customary adjustments. As part of the capitalization of Bluebird, the Company
contributed 1,840,271 units of TEL Offshore Trust. Bluebird is an "unrestricted
subsidiary", as defined under certain credit agreements, and is neither a
guarantor of the Company's 10% Senior Notes due 2007 nor can it be included in
determining compliance with certain financial covenants under the Company's
credit agreements. To finance the Spirit 76 acquisition, Bluebird borrowed $26
million under a bridge loan facility with several banks. The bridge loan was
replaced in June 1999 with permanent financing from banks providing for a
revolving credit facility of $75 million with an initial borrowing base of $41.5
million, due June 2002 with interest rates based upon either "LIBOR" or the
"Base Rate" (Prime). The loan is non-recourse to the Company. In addition to
retiring the bridge loan, a portion of the proceeds from the permanent financing
was used to finance the acquisition of properties from Vastar Resources, Inc.
("Vastar") discussed below.
On February 3, 1999, the Company sold $50 million of its Convertible
Preferred Stock in a private placement to a natural gas utility. The Preferred
Stock has a liquidation value of $50 million and is convertible into the
Company's common stock at $5.25 per share. Dividends on the preferred stock are
payable in cash at the rate of 8% per annum and are cumulative. The Company used
the net proceeds from the transaction, approximately $46.3 million, to repay
senior bank indebtedness.
On June 8, 1999, the Company acquired oil and gas reserves and related
assets from Vastar for a total purchase price of $32.5 million after purchase
price adjustments. The effective date of the acquisition was April 1, 1999. The
acquisition included Vastar's interest in 476 wells, a gas processing plant and
two gas gathering systems located in the states of Texas, Oklahoma and Arkansas.
On December 1, 1999, the Company acquired 50% ownership interest in the
Madill Gas Processing Plant and associated gathering system from Dynegy
Midstream Services, L.P., a wholly-owned subsidiary of Dynegy, Inc. This modern
cryogenic plant includes 3,350 horsepower of high-speed compression and has
gas-processing capacity of approximately 18,000 Mcf/d. The facilities are
located in Marshall and Bryan counties, Oklahoma. The effective date of the
acquisition was November 1, 1999.
The Company uses the full cost method of accounting for its investment in
oil and gas properties. Under the full cost method of accounting, all costs of
acquisition, exploration and development of oil and gas reserves are capitalized
into a "full cost pool" as incurred, and properties in the pool are depleted and
charged to operations using the unit-of-production method based on the ratio of
current production to total proved oil and gas reserves. To the extent that such
capitalized costs (net of accumulated depreciation, depletion and amortization)
less deferred taxes exceed the SEC PV-10 of estimated future net cash flow from
Proved Reserves of oil and gas, and the lower of cost or fair value
<PAGE>
of unproved properties after income tax effects, such excess costs are charged
to operations. Once incurred, a write-down of oil and gas properties is not
reversible at a later date even if oil or gas prices increase. The Company's SEC
PV-10 property valuation at March 31, 2000 exceeded the capitalized cost at that
date. Significant downward revisions of quantity estimates or significant
declines in oil and gas prices which are not offset by other factors could
possibly result in write-down for impairment of oil and gas properties in the
future.
Results of Operations for the Three Month Periods Ended March 31, 2000 and 1999
- -------------------------------------------------------------------------------
The results of operations for the three month period ended March 31, 2000,
included three months of operations for the Vastar and Dynegy acquisitions,
while the corresponding period in 1999 did not. Unless otherwise stated, the
increases in the 2000 interim period over the 1999 period were substantially the
result of these acquisitions as well as the Company's successful drilling
activities during the remainder of 1999 and the first quarter of 2000.
Oil and natural gas sales were $21,365,000, an 89% increase over 1999 sales
of $11,321,000. The Company sold 370,000 barrels of oil, a 29% increase over
1999 sales of 287,000 barrels of oil, and 4,994,000 Mcf of gas, a 10% increase
over 1999 sales of 4,551,000 Mcf. The price received for oil was $21.73 per
barrel and for natural gas was $2.67 per Mcf in 2000 versus an oil price of
$10.93 per barrel and a gas price of $1.80 per Mcf in 1999, representing a 99%
increase in oil price and a 48% increase in gas price. Oil and natural gas
production lifting costs increased 45% to $4,616,000 in 2000 while production
taxes and other costs increased 94% to $2,840,000 in 2000 compared to 1999. The
gross operating margin from oil and natural gas production was $13,909,000 in
2000, a 109% increase over 1999 operating margin of $6,663,000. On an equivalent
unit basis, the gross margin was $1.93 per Mcfe in 2000 versus $1.06 in 1999, an
82% increase. The sales price increased 64% to $2.96 per Mcfe in 2000 versus
$1.80 per Mcfe while production lifting costs increased 25% to $0.64 per Mcfe in
2000 from $0.51 per Mcfe in 1999. Production taxes and other costs, including
overhead, were $0.39 per Mcfe in 2000 versus $0.23 per Mcfe in 1999, a 70%
increase. Total Mcfe sold increased 15% to 7,216,000 Mcfe in 2000 from 6,272,000
Mcfe in 1999.
Gas gathering, marketing, and processing revenues were $3,830,000 in the
2000 period, a 136% increase from 1999 revenues of $1,626,000, principally as a
result of the Dynegy acquisition and the increase in natural gas and natural gas
liquids prices. Costs from these activities were $2,776,000 in 1999, a 118%
increase from 1998 costs of $1,276,000. Gross operating margin was $1,054,000 in
2000 versus $350,000 in 1999, a 201% increase. Net gathering system throughput
decreased 15% to 16,679 Mcf per day in 2000 compared to 19,639 Mcf per day in
1999 due to the sale of a gathering system in 1999. Net natural gas plant
processing throughput was 18,469 Mcf per day in 2000 versus 15,085 Mcf per day
in 1999, a 22% increase. The increase in net processing plant throughput was a
result of the Dynegy acquisition completed in the fourth quarter of 1999 and was
partially offset by a reduction in net throughput at the Company's McLean Plant
due to a contractual payout. During December 1999 the Company completed
recoupment of its original investment in the McLean Plant and its share of
operating income reverted to 50% from the 100% applicable during the recoupment
period. Gross operating margin from gathering operations was $0.14 per Mcf of
throughput for both three month periods of 2000 and 1999. The gross operating
margin from natural gas processing was $0.48 per Mcf of throughput in 2000
versus $0.06 per Mcf of throughput in 1999 due to more favorable processing
economics as a result of higher natural gas liquids prices in the 2000 period.
Revenues from oil field services and international sales were $198,000 in
2000 versus $158,000 in 1999. Operating costs increased to $115,000 in 2000 from
$71,000 in 1999. The gross operating margin was $83,000 in 2000 versus $87,000
in 1999. Depreciation and depletion expense increased 16% to $5,971,000 in 2000
versus $5,148,000 in 1999. General and administrative expense was $954,000 in
2000, a 39% increase from 1999. Operating profit increased 543% to $8,139,000 in
2000 from $1,266,000 in 1998. Equity in earnings of affiliate, net of income
tax, was a profit of $40,000 in 2000 versus a loss of $31,000 in 1999. Other
income was $76,000 in 2000 versus $163,000 in 1999. Interest expense decreased
nine percent to $5,736,000 in 2000 from $6,317,000 in 1999. The Company provided
for deferred income taxes of $939,000 on income before tax and minority interest
of $2,519,000 in 2000 versus no benefit on a loss of $4,919,000 in 1999. The
Company reported net income applicable to common shares of $362,000, or $0.02
per common share, basic and diluted, in 2000 versus a loss applicable to common
shares of $5,795,000, or $0.29 per common share, basic and diluted, in 1999. The
Company paid $1,218,000 in dividends on its preferred stock in 2000 versus
$833,000 paid or accrued in 1999.
2
<PAGE>
Liquidity and Capital Resources
- -------------------------------
The Company has three principal operating sources of cash: (i) sales of oil
and gas, (ii) revenues from gas gathering, processing, and marketing, and (iii)
revenues from petroleum management and consulting services. The Company's cash
flow is highly dependent upon oil and gas prices. Decreases in the market price
of oil and gas could result in reductions of both cash flow and the borrowing
base under the Company's Credit Facility, which would result in decreased funds
available, including funds for capital expenditures.
At December 31, 1998, the Company had repurchased 625,600 shares for
approximately $1.9 million under the previously announced stock repurchase
program of up to one million shares at a cost not to exceed $4 million. In 1999,
the Company purchased an additional 601,472 shares for approximately $1.7
million. In April 2000, the Company announced a stock repurchase program whereby
the Company or its affiliates are authorized to repurchase up to an additional
five percent (5%) of Magnum Hunter's outstanding common stock.
In December 1998, the Company's 100% owned subsidiary, Bluebird, acquired
for approximately $25 million, certain natural gas reserves and related assets
from Spirit 76. Additionally, the Company capitalized Bluebird with 1,840,271
units of TEL Offshore Trust. To finance the Spirit 76 acquisition, Bluebird
borrowed $26 million under a bridge loan facility with several banks. The bridge
loan was replaced in June 1999 with permanent financing from banks providing for
a revolving credit facility of $75 million with an initial borrowing base of
$41.5 million, due three years from the date of closing with interest rates
based upon either "LIBOR" or the "Base Rate" (Prime). The loan is non-recourse
to the Company. In addition to retiring the bridge loan, a portion of the
proceeds from the permanent financing was used to finance the acquisition of
properties from Vastar discussed below.
In February 1999, the Company formed a strategic alliance with ONEOK
Resources Company, a wholly-owned subsidiary of a natural gas utility, and sold
$50 million of the Company's Convertible Preferred Stock. The Preferred Stock
has a liquidation value of $50 million and is convertible into the Company's
common stock at $5.25 per share. Dividends on the Preferred Stock are payable in
cash at the rate of 8% per annum and are cumulative. The net proceeds of $46.3
million received from the sale of Preferred Stock were used to repay senior bank
indebtedness.
On June 8, 1999, the Company acquired oil and gas reserves and related
assets from Vastar for a total purchase price of $32.5 million after purchase
price adjustments. The effective date of the acquisition was April 1, 1999. The
acquisition included Vastar's interest in 476 wells, a gas processing plant and
two gas gathering systems located in the states of Texas, Oklahoma and Arkansas.
On December 1, 1999, the Company, through its wholly-owned subsidiary
Bluebird, acquired a 50% ownership interest in the Madill Gas Processing Plant
and associated gathering system from Dynegy Midstream Services, L.P., a
wholly-owned subsidiary of Dynegy, Inc. This modern cryogenic plant includes
3,350 horsepower of high-speed compression and has gas-processing capacity of
approximately 18,000 Mcf/d. The facilities are located in Marshall and Bryan
counties, Oklahoma. The effective date of the acquisition was November 1, 1999.
In connection with the Madill Gas Plant acquisition, Bluebird's banks
increased the borrowing base under the credit agreement to $45.0 million
effective November 30, 1999, subject to a provision to automatically reduce the
borrowing base to $41.5 million on March 31, 2000, with further reductions to
the borrowing base of $2.0 million to occur on June 30, 2000 and each subsequent
quarter-end. Effective March 27, 2000, the banks suspended the various
requirements of the November 30, 1999 adjustment to the borrowing base and
established a current borrowing base for Bluebird of $43.5 million. The banks
agreed to redetermine the borrowing base and the need to reimplement the other
requirements of the November 30, 1999 adjustment upon the earlier of May 15,
2000, or the consummation or termination of a proposed sale of oil and gas
properties owned partially by Bluebird. The Company believes that this
agreement, along with cash flow from operations, provides Bluebird with
sufficient liquidity to meet interest payments as well as to carry out its
capital spending plans in 2000.
3
<PAGE>
The Company's borrowing base under its revolving credit line with banks was
$60,000,000 at March 31, 2000, providing $5,000,000 of additional borrowing
capacity at that date. The Company believes that this availability, along with
cash flow from operations, is sufficient to meet interest and dividend
requirements in 2000 as well as to carry out its capital spending budget plans.
For the three months ended March 31, 2000, the Company had a net increase
in cash of $3.1 million. The Company's operating activities provided net cash of
$6.5 million, principally from operating income before depreciation and
depletion. The Company used $5.5 million in investing activities, principally
for additions to property and equipment. Financing activities provided $2.1
million of cash, principally from the aggregate proceeds from net borrowings
under the Company's and Bluebird's credit lines with banks. The Company also
paid $1,218,000 in cash dividends on preferred stock.
Capital Requirements
- --------------------
For fiscal 2000, the Company has budgeted approximately $25 million for
exploration and development activities, including approximately $15 million for
participation in exploration projects in the shallow water area of the Gulf of
Mexico. The Company is typically not contractually obligated to proceed with any
of its budgeted capital expenditures until it has executed an Authority For
Expenditure ("AFE"). The amount and allocation of future capital expenditures
will depend on a number of factors that are not entirely within the Company's
control or ability to forecast, including drilling results and changes in oil
and gas prices. As a result, actual capital expenditures may vary significantly
from current expectations.
Based upon the Company's anticipated level of operations, the Company
believes that cash flow from operations together with the availability under the
Credit Facility (approximately $5.0 million available as of March 31, 2000) will
be adequate to meet its anticipated requirements for working capital, capital
expenditures and scheduled interest and dividend payments for the foreseeable
future.
In addition, the Company's wholly-owned subsidiary, Bluebird, has
availability under its own credit facility (non-recourse to the Company)
approximately $1.2 million as of March 31, 2000 on a borrowing base of $43.5
million. Bluebird's banks had previously increased it's borrowing base to $45.0
million on November 30, 1999. However, this increase was subject to a provision
to automatically reduce the borrowing base to $41.5 million on March 31, 2000,
with further reductions to the borrowing base of $2.0 million to occur on June
30, 2000 and each subsequent quarter-end. Effective March 27, 2000, the banks
suspended the various requirements of the November 30, 1999 adjustment to the
borrowing base and established a current borrowing base for Bluebird of $43.5
million. The banks agreed to redetermine the borrowing base and the need to
reimplement the other requirements of the November 30, 1999 adjustment upon the
earlier of May 15, 2000 or the consummation or termination of a proposed sale of
oil and gas properties partially owned by Bluebird. The Company believes that
this agreement, along with cash flow from operations, provides Bluebird with
sufficient liquidity to meet interest payments as well as to carry out its
capital spending plans in 2000.
In the normal course of business, the Company reviews opportunities for the
possible acquisition of additional oil and gas reserves and activities related
thereto. When potential acquisition opportunities are deemed consistent with the
Company's growth strategy, bids or offers in amounts and with terms acceptable
to the Company may be submitted. It is uncertain whether any such bids or offers
which may be submitted by the Company from time to time will be acceptable to
the sellers. In the event of a future significant acquisition, the Company may
require additional financing or equity capital in connection therewith.
Inflation and Changes in Prices
- -------------------------------
During 1999, the Company experienced an increase in prices for crude oil of
18% and for natural gas of 7% compared to the previous year. During the first
quarter of 2000, the price increase realized for crude oil was 99% and for
natural gas was 48% compared to the first quarter of 1999. The results of
operations and cash flow of the Company have been, and will continue to be,
affected by the volatility in oil and gas prices. Should the Company experience
a significant
4
<PAGE>
increase in oil and gas prices that is sustained over a prolonged period, it
would expect that there would also be a corresponding increase in oil and gas
finding costs, lease acquisition costs, and operating expenses.
Periodically, the Company enters into futures, options, and swap contracts to
reduce the effects of fluctuations in crude oil and gas prices. It is the policy
of the Company not to enter into any such arrangements which exceed 75% of the
Company's anticipated oil and gas production during the next 12 months.
The Company markets oil and gas for its own account, which exposes the
Company to the attendant commodities risk. A substantial portion of the
Company's gas production is currently sold to NGTS, LLC, a 30% owned affiliate,
or end-users either on the spot market on a month-to-month basis, at either
prevailing spot market prices, or under long-term contracts based on current
spot market prices. The Company normally sells its crude oil under
month-to-month contracts to a variety of different purchasers.
Hedging Activity
- ----------------
Crude Oil and Natural Gas Hedges
Periodically, the Company enters into futures, options, and swap contracts
to mitigate the effects of significant fluctuations in crude oil and gas prices.
At March 31, 2000, the Company had the following open contracts:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Type Volume/Month Duration Avg. Price
Oil
Swap 30,000 Bbl Apr 00 - Dec 00 $17.60
Collar 30,000 Bbl Apr 00 - Jun 00 Floor - $18.00
Cap - $24.50
Collar 30,000 Bbl Apr 00 - Jun 00 Floor - $18.00
Cap - $26.00
Collar 30,000 Bbl Jul 00 - Sep 00 Floor - $18.00
Cap - $24.00
Collar 30,000 Bbl Jul 00 - Sep 00 Floor - $18.00
Cap - $24.65
Collar 10,000 Bbl Oct 00 - Dec 00 Floor - $19.00
Cap - $26.21
Gas
Collar 300,000 MMBtu Apr 00 - Oct 00 Floor - $ 1.80
Cap - $ 2.25
</TABLE>
Net gains and (losses) related to derivative transactions for the periods
ended March 31, 2000 and March 31, 1999 were ($1,913,000) and $1,444,000,
respectively. At March 31, 2000, the unrealized loss from derivative
transactions was $5,844,000. Based upon daily crude oil (including natural gas
liquids) and natural gas production at March 31, 2000, approximately 59% and
30%, respectively, of the Company's total daily production was subject to some
form of hedging activity.
5
<PAGE>
Interest Rate Swaps
On June 30, 1999, the Company entered into two interest rate swaps in order
to shift a portion of the fixed rate bond debt to floating rate debt, to
capitalize on what was perceived as a market overreaction to pending interest
rate increases by the Federal Reserve and to effectively lower interest rate
expense over the following twelve months.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Type Notional Amount Termination Date Pay Rate Receive Rate
- -------------------------- --------------- ---------------- ----------------- ----------------
Pay Variable/Receive Fixed $50,000,000 06/01/02 LIBOR + 3.34% 10% fixed
through 05/31/00
LIBOR + 3.69%
from 06/01/00 to
06/01/02
Pay Fixed/Receive Variable $50,000,000 06/01/00 9.16% fixed LIBOR + 3.34%
</TABLE>
The pay variable/receive fixed swap has an early termination provision
granting the counterparty the right to terminate the swap on June 1, 2000, in
exchange for a fee payment to the Company of $125,000. As a result of these two
swaps, the Company saved approximately $105,000 in interest expense during the
three month period ended March 31, 2000. At March 31, 2000, the unrealized loss
from interest rate derivative transactions was $753,000.
Year 2000 Compliance
- --------------------
Beginning in 1998, the Company was involved in a program to be "Year 2000"
ready. The program involved reviews of major business, financial and other
information systems, including equipment with embedded microprocessors,
development of specific plans for modification or replacement of date-sensitive
software or microprocessors, execution of such plans and the testing of such
systems to ensure their "Year 2000" readiness. Included within the scope of the
program were contacts with key suppliers and customers to determine their "Year
2000" readiness in order to ensure a steady flow of goods and services to the
Company and continuity with respect to customer service. As a result of this
program, there were no significant occurrences of Year 2000-related failures.
Additionally, the Company does not anticipate that any significant subsequent
events will occur.
Recently Issued Accounting Pronouncements
- -----------------------------------------
In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities, which established a new model for accounting
for derivatives and hedging activities. SFAS No. 133, which will be effective
for the Company's fiscal year 2001, requires that all derivatives be recognized
in the balance sheet as either assets or liabilities and measured at fair value.
The Statement also requires that changes in fair value be reported in earnings
unless specific hedge accounting criteria are met. The Company is currently
evaluating the effect of the adoption of the Statement on its consolidated
financial position and results of operations.
6
<PAGE>
MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
<TABLE>
<CAPTION>
<S> <C> <C>
March 31, December 31,
2000 1999
--------------------------------------
ASSETS (unaudited)
Current Assets
Cash and cash equivalents $ 4,616 $ 1,565
Restricted cash 1,310 2,145
Accounts receivable
Trade, net of allowance of $166 for 2000 and 1999 12,768 10,203
Due from affiliates 82 48
Notes receivable from affiliate 673 902
Current portion of long-term notes receivable, net of allowance of $790
for 2000 and 1999 57 57
Prepaid and other 1,297 1,296
--------------------------------------
Total Current Assets 20,803 16,216
--------------------------------------
Property, Plant, and Equipment
Oil and gas properties, full cost method
Unproved 3,899 3,567
Proved 354,686 349,510
Pipelines 12,475 12,462
Other property 2,040 1,964
--------------------------------------
Total Property, Plant and Equipment 373,100 367,503
Accumulated depreciation, depletion, amortization and impairment (108,280) (102,308)
--------------------------------------
Net Property, Plant and Equipment 264,820 265,195
--------------------------------------
Other Assets
Deposits and other assets 5,748 5,698
Investment in unconsolidated affiliate 4,195 4,163
Deferred tax asset 12,280 13,351
Long-term notes receivable, net of imputed interest 1,514 1,487
---------------------------------------
Total Assets $ 309,360 $ 306,110
=======================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Trade payables and accrued liabilities $ 15,528 $ 15,111
Dividends payable 552 552
Suspended revenue payable 1,098 1,357
Current maturities of long-term debt, with recourse 20 6
----------------------------------------
Total Current Liabilities 17,198 17,026
----------------------------------------
Long-Term Liabilities
Long-term debt, with recourse, less current maturities 195,034 193,000
Long-term debt, non-recourse, less current maturities 42,300 41,800
Production payment liability 436 460
Minority interest 184 184
Stockholders' Equity
Preferred stock - $.001 par value; 10,000,000 shares authorized,
216,000 designated as Series A; 80,000 issued and outstanding,
liquidation amount $0 - -
1,000,000 designated as 1996 Series A Convertible; 1,000,000
issued and outstanding, liquidation amount $10,000,000 1 1
50,000 designated as 1999 Series A 8% Convertible; 50,000 issued
and outstanding, liquidation amount $50,000,000 - -
Common Stock - $.002 par value; 100,000,000 shares authorized,
21,738,320 shares issued 43 43
Additional paid-in capital 121,844 121,815
Accumulated other comprehensive income (1,869) (2,046)
Accumulated deficit (62,180) (62,542)
----------------------------------------
57,839 57,271
Treasury stock, at cost (1,494,719 and 1,512,719 shares of common stock, (3,631) (3,631)
respectively) -----------------------------------------
Total Stockholders' Equity 54,208 53,640
-----------------------------------------
Total Liabilities and Stockholders' Equity $ 309,360 $ 306,110
=========================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-1
<PAGE>
Magnum Hunter Resources, Inc. and Subsidiaries
Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
(in thousands, except for per share amounts)
<TABLE>
<CAPTION>
<S> <C> <C>
Three Months Ended
March 31,
--------------------------------------
2000 1999
--------------------------------------
Operating Revenues:
Oil and gas sales $ 21,365 $ 11,321
Gas gathering, marketing and processing 3,830 1,626
Oil field services and international sales 198 158
--------------------------------------
Total Operating Revenues 25,393 13,105
--------------------------------------
Operating Costs and Expenses:
Oil and gas production lifting costs 4,616 3,193
Production taxes and other costs 2,840 1,465
Gas gathering, marketing and processing 2,776 1,276
Oil field services and international sales 115 71
Depreciation, depletion and amortization 5,971 5,148
(Gain) loss on sale of assets (18) -
General and administrative 954 686
--------------------------------------
Total Operating Costs and Expenses 17,254 11,839
--------------------------------------
Operating Profit 8,139 1,266
Equity in earnings (loss) of affiliate, net of income tax 40 (31)
Other income 76 163
Interest expense (5,736) (6,317)
--------------------------------------
Net Income (Loss) before income tax and minority interest 2,519 (4,919)
Provision for deferred income tax (939) -
--------------------------------------
Net Income (Loss) before minority interest 1,580 (4,919)
Minority interest in subsidiary earnings - (43)
--------------------------------------
Net Income (Loss) 1,580 (4,962)
Dividends Applicable to Preferred Stock (1,218) (833)
--------------------------------------
Income (Loss) Applicable to Common Shares $ 362 $ (5,795)
======================================
Net Income (Loss) $ 1,580 $ (4,962)
Other Comprehensive Income (Loss), net of tax
Unrealized Gain (Loss) on Investments 177 (128)
--------------------------------------
Comprehensive Income (Loss) $ 1,757 $ (5,090)
======================================
Income (Loss) per Common Share - Basic $ .02 $ (0.29)
======================================
Income (Loss) per Common Share - Diluted $ .02 $ (0.29)
======================================
Common Shares Used in Per Share Calculation
Basic 20,242,612 20,282,674
======================================
Diluted 20,548,639 20,282,674
======================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-2
<PAGE>
Magnum Hunter Resources, Inc. and Subsidiaries
Consolidated Statements of Stockholders' Equity
For the Three Months Ended March 31, 2000
(Unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Preferred Stock Common Stock Treasury Stock
Shares Amount Shares Amount Shares Amount
--------------------------------------------------------------------------------
Balance at December 31, 1999 1,130,000 $ 1 21,738,320 $ 43 (1,512,719) $ (3,631)
Exercise of employees' common stock options 18,000 -
Dividends declared or accrued on
preferred stock
Net income (loss)
Unrealized (loss) on investment
--------------------------------------------------------------------------------
Balance at March 31, 2000 1,130,000 $ 1 21,738,320 $ 43 (1,494,719) $ (3,631)
================================================================================
</TABLE>
<TABLE>
<S> <C> <C> <C>
Additional Accumulated Other
Paid-In Comprehensive Accumulated
Capital Income (Loss) Deficit
-----------------------------------------------------------------
Balance at December 31, 1999 $ 121,815 $ (2,046) $ (62,542)
=================================================================
Exercise of employees' common stock options 29
Dividends declared or accrued on preferred stock (1,218)
Net income (loss) 1,580
Unrealized (loss) on investment 177
-----------------------------------------------------------------
Balance at March 31, 2000 $ 121,844 $ (1,869) $ (62,180)
=================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
F-3
<PAGE>
Magnum Hunter Resources, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
<S> <C> <C>
For the Three Months Ended
March 31,
---------------------------------------
2000 1999
---------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income (loss) $ 1,580 $ (4,962)
Adjustments to reconcile net income (loss) to cash provided by
(used for) operating activities:
Depreciation and depletion 5,971 5,148
Amortization of financing fees 240 1,414
Deferred income taxes 939 -
Equity in (earnings)loss of affiliate (40) 31
Minority interest - 43
Other (18) -
Changes in certain assets and liabilities
Accounts and notes receivable (2,370) (462)
Other current assets (1) 390
Accounts payable and accrued liabilities 158 (554)
---------------------------------------
Net Cash Provided By Operating Activities 6,459 1,048
---------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of assets 408 -
Additions to property and equipment (5,930) (1,834)
Loan made for long-term note receivable (27) (473)
Payments received on long-term note receivable - 66
---------------------------------------
Net Cash Used In Investing Activities (5,549) (2,241)
---------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of long-term debt and production payment 10,555 4,000
Fees paid related to financing activities (29) (931)
Payments of principal on long-term debt and production payment (8,031) (48,087)
Payment of short-term notes payable - (2,000)
Proceeds from issuance of preferred and common stock, net of offering 29 46,342
costs
Purchase of treasury stock - (1,722)
(Increase) Decrease in segregated funds for payment of notes payable 835 (565)
Cash dividends paid (1,218) (219)
---------------------------------------
Net Cash Provided By (Used In) Financing Activities 2,141 (3,182)
---------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,051 (4,375)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,565 4,853
---------------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,616 $ 478
=======================================
The accompanying notes are an integral part of these consolidated financial
statements.
</TABLE>
F-4
<PAGE>
MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2000
(Unaudited)
NOTE 1 - MANAGEMENT'S REPRESENTATION
The consolidated balance sheet as of March 31, 2000, the consolidated
statements of operations and comprehensive income for the three months ended
March 31, 2000 and 1999, the consolidated statement of stockholders' equity for
the period ended March 31, 2000 and the consolidated statements of cash flows
for the three months ended March 31, 2000 and 1999 are unaudited. In the opinion
of management, all necessary adjustments (which include only normal recurring
adjustments) have been made to present fairly the financial position at March
31, 2000, results of operations, changes in stockholders' equity and cash flows
for the three month periods.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles general accepted in
the United States of America have been condensed or omitted. It is suggested
that these condensed financial statements be read in conjunction with the
financial statements and notes thereto included in the December 31, 1999 annual
report on Form 10-K for the Company. The results of operations for the three
month period ended March 31, 2000, are not necessarily indicative of the
operating results for the full year.
The accompanying consolidated financial statements include the accounts of
the Company and its subsidiaries. All significant intercompany transactions and
balances have been eliminated in consolidation. Certain items have been
reclassified to conform with the current presentation.
The Company is a holding company with no significant assets or operations
other than its investments in its subsidiaries. The wholly-owned subsidiaries of
the Company, except for Bluebird, are direct Guarantors of the Company's 10%
Senior Notes and have fully and unconditionally guaranteed the Notes on a joint
and several basis. The Guarantors comprise all of the direct and indirect
subsidiaries of the Company (other than Bluebird and inconsequential
subsidiaries), and the Company has presented separate condensed consolidating
financial statements and other disclosures concerning each Guarantor and
Bluebird (See Note 4). Except for Bluebird, there is no restriction on the
ability of consolidated or unconsolidated subsidiaries to transfer funds to the
Company in the form of cash dividends, loans, or advances.
NOTE 2 - RECENT EVENTS
On April 17, 2000, the Company announced a stock repurchase program whereby
the Company or its affiliates are authorized to repurchase up to five percent
(5%) of Magnum Hunter's outstanding common stock.
NOTE 3 - SEGMENT DATA
The Company has three reportable segments. The Exploration and Production
segment is engaged in exploratory drilling and acquisition, production, and sale
of crude oil, condensate, and natural gas. The Gas Gathering, Marketing and
Processing segment is engaged in the gathering and compression of natural gas
from the wellhead, the purchase and resale of natural gas which it gathers, and
the processing of natural gas liquids. The Oil Field Services segment is engaged
in the managing and operation of producing oil and gas properties for interest
owners.
The Company's reportable segments are strategic business units that offer
different products and services. They are managed separately because each
business requires different technology and marketing strategies. The Exploration
and Production segment has six geographic areas that are aggregated. The Gas
Gathering, Marketing and Processing segment includes the activities of the two
gathering systems and one natural gas liquids processing plant in two geographic
areas that are aggregated. The Oil Field Services segment has six geographic
areas that are aggregated. The reason for aggregating the segments, in each
case, is due to the similarity in nature of the products, the production
processes, the type of customers, the method of distribution, and the regulatory
environments.
F-5
<PAGE>
MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
March 31, 2000
(Unaudited)
The accounting policies of the segments are the same as those for the
Company as a whole. The Company evaluates performance based on profit or loss
from operations before income taxes. The accounting for intersegment sales and
transfers is done as if the sales or transfers were to third parties, that is,
at current market prices.
Segment data for the periods ended March 31, 2000 and 1999 follows (in
thousands):
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Gas Gathering,
Exploration & Marketing & Oil Field
Three Months Ended March 31, 2000: Production Processing Services All Other Elimination Consolidated
- ------------------------------------------------------------------------------------------------------------------------------------
Revenue from external customers $ 21,365 $ 3,830 $ 198 $ - $ $ 25,393
Intersegment revenues 3,373 1,669 - (5,042) -
Depreciation, depletion and 5,680 218 68 5 5,971
amortization
Segment profit (loss) 8,255 861 (117) (860) 8,139
Equity earnings (losses) of affiliates 40 40
Interest expense (5,736) (5,736)
Other income 76 76
-------------
Loss before income taxes $ 2,519
Provision for deferred income tax (939) (939)
benefit
Minority interest -
-------------
Net income $ 1,580
=============
Segment assets (as of March 31, 2000) $ 274,031 $ 17,186 $ 4,502 $13,641 $ 309,360
Equity subsidiary investments
(as of March 31, 2000) 4,195 4,195
Capital expenditures (net of asset
sales) 5,508 13 20 56 5,597
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Gas Gathering,
Exploration & Marketing & Oil Field
Three Months Ended March 31, 1999: Production Processing Services All Other Elimination Consolidated
- ------------------------------------------------------------------------------------------------------------------------------------
Revenue from external customers $ 11,321 $ 1,626 $ 158 $ - $ - $ 13,105
Intersegment revenues - 2,803 1,332 - (4,135) -
Depreciation, depletion and 4,934 163 47 4 5,148
amortization
Segment profit (loss) 1,029 150 671 (584) 1,266
Equity earnings (losses) of affiliates (31) (31)
Interest expense (6,317) (6,317)
Other income 163 163
----------------
Loss before income taxes $ (4,919)
Provision for deferred income tax - -
benefit
Minority interest (43) (43)
----------------
Net loss $ (4,962)
================
Segment assets (as of March 31, 2000) $ 232,146 $ 13,360 $ 4,327 $10,022 $259,855
Equity subsidiary investments
(as of March 31, 2000) 4,235 4,235
Capital expenditures (net of asset
sales) 1,811 16 29 - 1,856
</TABLE>
F-6
<PAGE>
MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
March 31, 2000
(Unaudited)
NOTE 4 -- CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
The Company and its wholly owned subsidiaries, except Bluebird, are direct
Guarantors of the Company's 10% Senior Notes and have fully and unconditionally
guaranteed the Notes on a joint and several basis. Bluebird was formed in
December 1998 and first reported results of operations in fiscal 1999. In
addition to not being a guarantor of the Company's 10% Senior Notes, it cannot
be included in determining compliance with certain financial covenants under the
Company's credit agreements. Condensed consolidating financial information for
Magnum Hunter Resources, Inc. and subsidiaries as of March 31, 2000 and December
31, 1999, and for the three months ended March 31, 2000 and 1999, was as
follows:
Magnum Hunter Resources, Inc. and Subsidiaries
Condensed Consolidating Balance Sheets
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
March 31, 2000
- ------------------------------------------------------------------------------------------------------------------------------------
Magnum Hunter Bluebird Magnum Hunter
Resources, Inc. Energy, Inc. Resources, Inc.
Amounts in Thousands And Guarantor Subs (Non Guarantor) Eliminations Consolidated
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Current assets $ 16,541 $ 4,262 $ - $ 20,803
Property and equipment
(using full cost accounting) 210,860 53,960 - 264,820
Investment in subsidiaries
(equity method) 14,833 - (14,833) -
Other assets (934)
24,211 460 23,737
------------------------------------------------------------------------------------
Total assets $ 266,445 $ 58,682 $ (15,767) $ 309,360
====================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 16,583 $ 615 $ - $ 17,198
Long-term liabilities 195,654 43,234 (934) 237,954
Shareholders' equity 54,208 14,833 (14,833) 54,208
------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 266,445 $ 58,682 $ (15,767) $ 309,360
====================================================================================
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
December 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
Magnum Hunter Bluebird Magnum Hunter
Resources, Inc. Energy, Inc. Resources, Inc.
Amounts in Thousands And Guarantor Subs (Non Guarantor) Eliminations Consolidated
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Current assets $ 15,076 $ 3,741 $ (2,601) $ 16,216
Property and equipment
(using full cost accounting) 211,159 54,036 265,195
Investment in subsidiaries
(equity method) 13,302 - (13,302) -
Other assets
24,189 510 24,699
------------------------------------------------------------------------------------
Total assets $ 263,726 $ 58,287 $ (15,903) $ 306,110
====================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 16,442 $ 3,185 $ (2,601) $ 17,026
Long-term liabilities 193,644 41,800 235,444
Shareholders' equity 53,640 13,302 (13,302) 53,640
------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 263,726 $ 58,287 $ (15,903) $ 306,110
====================================================================================
</TABLE>
F-7
<PAGE>
MAGNUM HUNTER RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
March 31, 2000
(Unaudited)
Magnum Hunter Resources, Inc. and Subsidiaries
Condensed Consolidating Statement of Operations
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
March 31, 2000
- ------------------------------------------------------------------------------------------------------------------------------------
Magnum Hunter Bluebird Magnum Hunter
Resources, Inc. Energy, Inc. Resources, Inc.
Amounts in Thousands And Guarantor Subs (Non Guarantor) Eliminations Consolidated
- ------------------------------------------------------------------------------------------------------------------------------------
Revenues $ 17,333 $ 8,158 $ (98) $ 25,393
Expenses 17,279 5,693 (98) 22,874
--------------------------------------------------------------------------------------------
Income before 54 2,465 - 2,519
Equity in net earnings of subsidiary 1,531 - (1,531) -
--------------------------------------------------------------------------------------------
Income before income taxes 1,585 2,465 (1,531) 2,519
Income tax provision (5) (934) - (939)
--------------------------------------------------------------------------------------------
Net income $ 1,580 $ 1,531 $(1,531) $ 1,580
============================================================================================
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
March 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
Magnum Hunter Bluebird Magnum Hunter
Resources, Inc. Energy, Inc. Resources, Inc.
Amounts in Thousands And Guarantor Subs (Non Guarantor) Eliminations Consolidated
- ------------------------------------------------------------------------------------------------------------------------------------
Revenues $ 11,256 $ 1,928 $ (79) $ 13,105
Expenses 14,828 3,318 (79) 18,067
--------------------------------------------------------------------------------------------
Loss before (3,572) (1,390) - (4,962)
Equity in net loss of subsidiary (1,390) - 1,390 -
--------------------------------------------------------------------------------------------
Loss before income taxes (4,962) (1,390) 1,390 (4,692)
Income tax provision - - - -
--------------------------------------------------------------------------------------------
Net loss $ (4,962) $ (1,390) $ 1,390 $ (4,962)
============================================================================================
</TABLE>
F-8
<PAGE>
PART II -- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Number Description of Exhibit
- ------ -----------------------
3.1 & 4.1 Articles of Incorporation (Incorporated by reference to
Registration Statement on Form S-18, File No. 33-30298-D)
3.2 & 4.2 Articles of Amendment to Articles of Incorporation (Incorporated
by reference to Form 10-K for the year ended December 31, 1990)
3.3 & 4.3 Articles of Amendment to Articles of Incorporation (Incorporated
by reference to Registration Statement on Form SB-2,
File No. 33-66190)
3.4 & 4.4 Articles of Amendment to Articles of Incorporation (Incorporated
by reference to Registration Statement on Form S-3,
File No. 333-30453)
3.5 & 4.5 By-Laws, as Amended (Incorporated by reference to
Registration Statement on Form SB-2, File No. 33-66190) 3.6 &
4.6 Certificate of Designation of 1996 Series A Preferred Stock
(Incorporated by reference to Form 8-K dated December 26, 1996,
filed January 3, 1997)
3.7 & 4.7 Amendment to Certificate of Designations for 1996 Series A
Convertible Preferred Stock (Incorporated by reference to
Registration Statement on Form S-3, File No. 333-30453)
3.8 & 4.8 Certificate of Designation for 1999 Series A 8% Convertible
Preferred Stock (Incorporated by reference to Form 8-K,
dated February 3, 1999, filed February 11, 1999)
4.9 Indenture dated May 29, 1997 between Magnum Hunter Resources,
the subsidiary guarantors named therein and First Union National
Bank of North Carolina, as Trustee (Incorporated by reference to
Registration Statement on Form S-4, File No. 333-2290)
4.10 Supplemental Indenture dated January 27, 1999 between Magnum
Hunter Resources, the subsidiary guarantors named therein and
First Union National Bank of North Carolina, as Trustee
(Incorporated by reference to Form 10-K for the fiscal year-end
December 31, 1998 filed April 14, 1999)
4.11 Form of 10% Senior Note due 2007 (Incorporated by reference to
Registration Statement on Form S-4, File No. 333-2290)
10.1 Amended and Restated Credit Agreement, dated April 30, 1997,
between Magnum Hunter Resources, Inc. and Bankers Trust
Company, et al. (Incorporated by reference to Registration
Statement on Form S-4, File No. 333-2290)
10.2 First Amendment to Amended and Restated Credit Agreement, dated
April 30, 1997, between Magnum Hunter Resources, Inc. and
Bankers Trust Company, et al. (Incorporated by reference to
Registration Statement on Form S-4, File No. 333-2290)
10.3 Second Amendment to Amended and Restated Credit Agreement, dated
April 30, 1997, between Magnum Hunter Resources,Inc. and Bankers
Trust Company, et al (Incorporated by reference to Form 10-K
for the fiscal year-end December 31, 1998 filed April 14, 1999)
10.4 Third Amendment to Amended and Restated Credit Agreement, dated
April 30, 1997, between Magnum Hunter Resources, Inc.
and Bankers Trust Company, et al (Incorporated by reference to
Form 10-K for the fiscal year-end December 31, 1998
filed April 14, 1999)
10.5 Employment Agreement for Gary C. Evans (Incorporated by
reference to Form 10-K for the fiscal year-end December 31,
1999 filed March 30, 2000)
10.6 Employment Agreement for Matthew C. Lutz (Incorporated by
reference to Form 10-K for the fiscal year-end
December 31, 1999 filed March 30, 2000)
10.7 Employment Agreement for Richard R. Frazier (Incorporated by
reference to Form 10-K for the fiscal year-end December 31, 1999
filed March 30, 2000)
10.8 Stock Purchase Agreement among Magnum Hunter Resources, Inc. and
Trust Company of the West and TCW Asset Management Company, in
the capacities described herein, TCW Debt and Royalty Fund IVB
and TCW Debt and Royalty Fund IVC, dated as of December 6, 1996
(Incorporated by reference to Form 8-K dated December 26, 1996,
filed January 3, 1997)
7
<PAGE>
10.9 Purchase and Sale Agreement, dated February 27, 1997 among
Burlington Resources Oil and Gas Company, Glacier Park
Company and Magnum Hunter Production, Inc. (Incorporated by
reference to Form 8-K, dated April 30, 1997, filed May 12, 1997)
10.10 Purchase and Sale Agreement between Magnum Hunter Resources,
Inc. , NGTS, et al., dated December 17, 1997 (Incorporated by
reference to Form 8-K, dated December 17, 1997, filed
December 29, 1997)
10.11 Purchase and Sale Agreement dated November 25, 1998 between
Magnum Hunter Production, Inc. and Unocal Oil Company of
California (Incorporated by reference to Form 10-K for the
fiscal year-end December 31, 1998 filed April 14, 1999)
10.12 Stock Purchase Agreement dated February 3, 1999 between ONEOK
Resources Company and Magnum Hunter Resources, Inc.
(Incorporated by reference to Form 8-K, dated February 3, 1999,
filed February 11, 1999)
27* Financial Data Schedule
* Filed herewith.
(B) Form 8-K's - None
8
<PAGE>
SIGNATURE
In accordance with the requirements of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
MAGNUM HUNTER RESOURCES, INC.
By /s/ Gary C. Evans May 9, 2000
-----------------------------------------------------
Gary C. Evans
President and Chief Executive Officer
By /s/ Chris Tong May 9, 2000
-----------------------------------------------------
Sr. Vice President and
Chief Financial Officer
By /s/ David S. Krueger May 9, 2000
---------------------------------------------------
David S. Krueger
Vice President and
Chief Accounting Officer
By /s/ Morgan F. Johnston May 9, 2000
--------------------------------------------------
Morgan F. Johnston
Vice President, General Counsel and
Secretary
9
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-Mos
<FISCAL-YEAR-END> Dec-31-2000
<PERIOD-START> Jan-01-2000
<PERIOD-END> Mar-31-2000
<CASH> 5,926
<SECURITIES> 0
<RECEIVABLES> 13,016
<ALLOWANCES> (166)
<INVENTORY> 0
<CURRENT-ASSETS> 20,803
<PP&E> 373,100
<DEPRECIATION> (108,280)
<TOTAL-ASSETS> 309,360
<CURRENT-LIABILITIES> 17,198
<BONDS> 237,770
0
1
<COMMON> 0
<OTHER-SE> 54,207
<TOTAL-LIABILITY-AND-EQUITY> 309,360
<SALES> 25,195
<TOTAL-REVENUES> 25,393
<CGS> 10,232
<TOTAL-COSTS> 17,254
<OTHER-EXPENSES> (116)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,736
<INCOME-PRETAX> 2,519
<INCOME-TAX> 939
<INCOME-CONTINUING> 1,580
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,580
<EPS-BASIC> 0.02
<EPS-DILUTED> 0.02
</TABLE>
