<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
SECURITIES EXCHANGE ACT OF 1934
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DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JULY 23, 1999 (JULY 16, 1999)
SANTA FE SNYDER CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 1-7667 36-2722169
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
</TABLE>
840 GESSNER
SUITE 1400
HOUSTON, TEXAS 77024
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(713) 507-5000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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<PAGE> 2
ITEM 5. OTHER EVENTS
On July 19, 1999, Santa Fe Snyder Corporation issued press releases
announcing (i) its financial results for the quarter ended June 30, 1999 and
(ii) the execution, on July 16, 1999, of an agreement with Shell Deepwater
Development, Inc. ("SDDI"), a subsidiary of Shell Oil Company, to purchase a
portion of the interests owned by SDDI in the Angus, El Toro and Macaroni
fields and to create an exploration area of mutual interest between the two
companies. These press releases are filed as Exhibits 99.1 and 99.2 to this
Current Report on Form 8-K, and the contents of such Exhibits are incorporated
herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Press Release, dated July 19, 1999.
99.2 Press Release, dated July 19, 1999.
-2-
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SANTA FE SNYDER CORPORATION
By: /s/ Mark A. Older
-------------------------------------
Mark A. Older
Corporate Secretary
Date: July 23, 1999
-5-
<PAGE> 4
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
99.1 Press Release, dated July 19, 1999.
99.2 Press Release, dated July 19, 1999.
<PAGE> 1
EXHIBIT 99.1
Company Press Release
SOURCE: Santa Fe Snyder Corporation
SANTA FE SNYDER CORPORATION REPORTS SECOND-QUARTER GAINS IN PRODUCTION, REVENUES
AND CASH FLOW
HOUSTON, July 19 /PRNewswire/ -- Santa Fe Snyder Corporation (NYSE: SFS - news)
today announced the results of its second quarter ended June 30, 1999, which
includes the first two months of combined operations of Santa Fe Energy
Resources and Snyder Oil Corporation.
Santa Fe Snyder had net earnings of $2.8 million, or $0.02 per share, in the
second quarter before recognition of $150.8 million of nonrecurring charges, net
of tax, related to the May 5, 1999, merger. Including these charges, the Company
reported a net loss of $148.0 million, or $1.02 per common share, compared with
earnings of $0.4 million, or break-even earnings per share, in the second
quarter of 1998. The merger was accounted for as a purchase transaction and
included a pretax property impairment charge of $196.4 million.
Revenues increased to $112.4 million from $77.8 million in the second quarter of
1998, driven by a 10 percent increase in realized commodity prices and a 29
percent increase in production due to the merger. Discretionary cash flow for
the second quarter of 1999 increased to $57.4 million compared with $42.1
million for the second quarter of 1998.
Oil production in the second quarter of 1999 averaged 47,000 barrels per day, up
12 percent from the 41,900 barrels per day produced in the same prior-year
period. Natural gas production increased 53 percent to 281 million cubic feet
(Mmcf) per day during the second quarter of 1999 from 183 Mmcf per day in the
second quarter of last year fueled principally from Snyder Oil's predominate
domestic gas production. Domestic production in the second quarter was 64
percent natural gas and 36 percent oil.
Average crude oil prices realized by Santa Fe Snyder in the second quarter 1999
increased 24 percent to $15.06 per barrel from $12.12 in the prior-year second
quarter. The average price for natural gas dropped to $1.92 per thousand cubic
feet (Mcf) during the quarter, compared with an average $1.99 per Mcf a year
earlier.
Chief Executive Officer James L. Payne commented, "The strength of the merged
Company is clearly reflected in the more than 50 percent increase in second
quarter gas production and the 7 percent reduction in operating costs per barrel
of oil equivalent from the first quarter. With the further cost savings expected
in the second half of the year and the recent improvement in commodity prices,
we have positioned the Company to take advantage of the changes now occurring
within the industry. We exited June producing 48,000 barrels of oil and 320
million cubic feet of gas per day, both above our plan levels."
<PAGE> 2
Payne added, "We have successfully integrated our assets and personnel and
executed a smooth transition into the combined Company. With the lead-time we
had for the merger, we were able to integrate our operating groups so that we
were fully functional immediately after the merger. This preparation served us
well during our first quarter of combined operations and has allowed the Company
to respond quickly to opportunities."
Year-to-Date
For the six months ended June 30, 1999, the Company reported a net loss of
$160.1 million or $1.29 cents per share, compared with net income of $0.1
million or break-even earnings per share for the comparable period of 1998,
primarily due to the impairment charge and the historically low commodity prices
realized during the first quarter of 1999. Total revenues for the six-month
period were $180.6 million versus $146.6 million for the first half of 1998 due
to higher second-quarter oil and gas production from the merger. Discretionary
cash flow for the 1999 period increased to $82.5 million from $79.0 million
during the first six months of 1998 as low commodity prices in the first quarter
of 1999 neutralized the production increases in the second quarter of 1999.
During the first half of 1999, increased oil production from Indonesia and Gabon
and domestic additions primarily from the merger drove a 20 percent increase in
overall production to 46,100 barrels per day compared with 38,400 barrels per
day in the first six months of 1998. The merger with Snyder in the second
quarter of 1999 pushed overall gas production for the first half of 1999 up 28
percent to 231 Mmcf per day compared with 180 Mmcf per day in the first half of
1998.
For the first six months of 1999, realized oil prices averaged $13.01 per
barrel, up slightly from the $12.48 per barrel realized in the same period of
1998. Natural gas prices declined 9 percent to $1.79 per Mcf in the first half
of 1999 from an average $1.96 per Mcf in the 1998 period.
Total costs and expenses increased to $391.8 million during the first six months
of 1999, compared with $151.1 million for the same period last year primarily
because of merger costs.
Santa Fe Snyder Corporation is a large, independent oil and gas exploration and
production Company with operations in the United States, Southeast Asia, South
America and West Africa. Its common stock trades on the New York Stock Exchange
under the symbol SFS.
This news release may contain "forward-looking statements" within the meaning of
the Securities Litigation Reform Act. These projections and statements reflect
the Company's current views with respect to future events and financial
performance. Actual results could differ materially from those projected as a
result of certain factors. A discussion of these factors is included in the
Company's periodic reports filed with the Securities and Exchange Commission,
including its Annual Report on Form 10-K/A.
<PAGE> 3
SANTA FE SNYDER CORPORATION
SECOND QUARTER 1999 RESULTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------- -------------------------
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
CRUDE OIL AND LIQUIDS
Sales Volumes (MBbls/day)
Domestic 23.8 21.5 22.7 21.5
Argentina 5.0 5.5 5.0 5.5
Indonesia 15.5 13.0 15.7 10.0
Gabon 2.7 1.9 2.7 1.4
--------- --------- --------- ---------
47.0 41.9 46.1 38.4
========= ========= ========= =========
Sales Prices ($/Bbl)
Unhedged
Domestic $ 14.73 $ 11.70 $ 12.59 $ 12.46
Argentina 14.90 11.03 12.52 11.74
Indonesia 15.87 12.56 13.71 12.33
Gabon 14.41 12.12 13.78 12.42
Total 15.11 11.90 13.03 12.32
Hedged 15.06 12.12 13.01 12.48
Revenues ($/millions)
Sales
Domestic $ 31.9 $ 22.9 $ 51.5 $ 48.4
Argentina 6.8 5.5 11.4 11.8
Indonesia 22.3 14.8 39.1 22.2
Gabon 3.5 2.1 6.6 3.2
--------- --------- --------- ---------
64.5 45.3 108.6 85.6
Hedging (.2) .9 (.2) 1.1
Net Profits Payments (.9) (.5) (1.9) (1.2)
--------- --------- --------- ---------
$ 63.4 $ 45.7 $ 106.5 $ 85.5
========= ========= ========= =========
NATURAL GAS
Sales Volumes (MMcf/day)
Domestic 255.1 156.8 205.3 154.1
Argentina 25.7 26.0 25.8 25.7
Indonesia .2 .4 .2 .3
--------- --------- --------- ---------
281.0 183.2 231.3 180.1
========= ========= ========= =========
Sales Prices ($/Mcf)
Unhedged
Domestic $ 2.03 $ 2.10 $ 1.89 $ 2.07
Argentina 1.27 1.34 1.24 1.29
Indonesia .97 1.04 .97 1.03
Total 1.96 1.99 1.82 1.96
Hedged 1.92 1.99 1.79 1.96
Revenues ($/millions)
Sales
Domestic $ 47.1 $ 29.9 $ 70.2 $ 57.7
Argentina 3.0 3.2 5.8 6.0
Indonesia -- -- -- --
--------- --------- --------- ---------
50.1 33.1 76.0 63.7
Hedging (1.1) -- (1.1) --
Net Profits Payments (.5) (1.2) (1.6) (3.0)
--------- --------- --------- ---------
$ 48.5 $ 31.9 $ 73.3 $ 60.7
========= ========= ========= =========
</TABLE>
<PAGE> 4
SANTA FE SNYDER CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(In millions of dollars, except as noted)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- -----------------------
1999 1998 1999 1998
------- ------- ------- -------
<S> <C> <C> <C> <C>
REVENUES
Sales of crude oil and liquids $ 63.4 $ 45.7 $ 106.5 $ 85.5
Sales of natural gas 48.5 31.9 73.3 60.7
Other .5 .2 .8 .4
------- ------- ------- -------
TOTAL REVENUES 112.4 77.8 180.6 146.6
------- ------- ------- -------
COSTS AND EXPENSES
Production and operating 30.9 26.2 59.2 51.5
Exploration, including dry hole costs 9.4 7.3 20.6 19.5
Depletion, depreciation and amortization 44.1 33.4 76.0 61.5
Impairment of oil and gas properties 196.4 -- 196.4 --
General and administrative 7.6 4.6 13.0 9.0
Taxes other than income 6.1 4.3 9.6 8.4
Merger related costs 16.8 -- 16.8 --
Loss (gain) on disposition of assets .1 1.2 .2 1.2
------- ------- ------- -------
TOTAL COSTS AND EXPENSES 311.4 77.0 391.8 151.1
------- ------- ------- -------
INCOME (LOSS) FROM OPERATIONS (199.0) .8 (211.2) (4.5)
Interest income .3 1.0 .7 3.2
Interest expense (10.7) (5.3) (17.5) (9.1)
Interest capitalized 1.3 1.9 2.6 3.6
Other income (expense) (.1) (.1) (.1) (.1)
------- ------- ------- -------
INCOME (LOSS) BEFORE INCOME TAXES
AND EXTRAORDINARY ITEM (208.2) (1.7) (225.5) (6.9)
Income tax (expense) benefit
Current .6 2.8 (.1) 5.4
Deferred 63.8 (.7) 69.7 1.6
------- ------- ------- -------
NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEM (143.8) .4 (155.9) .1
Extraordinary item - debt extinguishment (4.2) -- (4.2) --
------- ------- ------- -------
NET INCOME (LOSS) $(148.0) $ .4 $(160.1) $ .1
======= ======= ======= =======
NET INCOME (LOSS) PER COMMON SHARE,
BASIC AND DILUTED (IN DOLLARS)
Net Income (Loss) Before Extraordinary Item $ (.99) $ -- $ (1.26) $ --
Extraordinary item - Debt Extinguishment (.03) -- (.03) --
------- ------- ------- -------
Net Income (Loss) per Share $ (1.02) $ -- $ (1.29) $ --
======= ======= ======= =======
Average Shares Outstanding (in millions)
Basic 145.3 102.9 123.9 102.8
======= ======= ======= =======
</TABLE>
<PAGE> 5
SANTA FE SNYDER CORPORATION
CONSOLIDATED CASH FLOWS (Unaudited)
(In millions of dollars, except as noted)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- ----------------------
1999 1998 1999 1998
------- ------- ------- -------
<S> <C> <C> <C> <C>
Earnings (Loss) to Common Shares $(148.0) $ .4 $(160.1) $ .1
Add Back Non Cash Items:
Depletion, Depreciation and Amortization 44.1 33.4 76.0 61.5
Impairment of Oil and Gas Properties 196.4 -- 196.4 --
Deferred Income Taxes (66.1) .7 (72.0) (1.6)
Other (.5) 1.0 .7 1.9
Add Back Income Statement Items Deemed Discretionary:
Exploratory Dry Hole Costs .8 3.6 6.3 7.2
Exploration Expenses, other than dry holes 8.6 3.7 14.3 12.3
Merger Related Costs 16.8 -- 16.8 --
Extraordinary Item - Debt Extinguishment Costs 6.5 -- 6.5 --
Interest Capitalized (1.3) (1.9) (2.6) (3.6)
Net Loss (Gain) on Disposition of Assets .1 1.2 .2 1.2
------- ------- ------- -------
DISCRETIONARY CASH FLOW $ 57.4 $ 42.1 $ 82.5 $ 79.0
Discretionary Cash Disbursements and Receipts:
Changes in Operating Assets and Liabilities (31.3) 8.3 (21.6) (7.2)
Capital Expenditures (excluding capitalized interest) (65.9) (57.5) (126.3) (114.5)
Exploration Expenses, other than dry holes (8.6) (3.7) (14.3) (12.3)
Acquisition of Producing Properties (1.4) (88.2) (1.9) (100.0)
Proceeds from Property Sales .3 .3 .4 1.8
------- ------- ------- -------
NET CASH FLOW BEFORE FINANCING ACTIVITIES (49.5) (98.7) (81.2) (153.2)
Net Change in Long-Term Lines of Credit 36.2 108.8 67.5 165.9
Issuance of Senior Notes 123.4 -- 123.4 --
Retirement of 11% Subordinated Debentures (100.0) -- (100.0) --
Treasury Stock Reissued .4 1.1 .4 1.5
Treasury Stock Purchased (.3) (1.1) (.5) (6.0)
------- ------- ------- -------
INCREASE (DECREASE) IN CASH 10.2 10.1 9.6 8.2
======= ======= ======= =======
Cash at End of Period $ 21.7 $ 13.8 $ 21.7 $ 13.8
======= ======= ======= =======
- ------------------------------------------------------------------------------------------------------------------------------
DISCRETIONARY CASH FLOW PER SHARE (IN DOLLARS) $ .40 $ .41 $ .67 $ .77
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 6
SANTA FE SNYDER CORPORATION
CONSOLIDATED BALANCE SHEETS
(In millions of dollars, except as noted)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
-------- -----------
(unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 21.7 $ 12.1
Other Current Assets 123.3 103.9
-------- --------
Total Current Assets 145.0 116.0
Investments 29.2 --
Property and Equipment, net 1,321.2 718.3
Other Assets 22.7 24.7
-------- --------
TOTAL ASSETS $1,518.1 $ 859.0
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 105.8 $ 123.3
Other Current Liabilities 49.4 15.9
-------- --------
Total Current Liabilities 155.2 139.2
-------- --------
Long-Term Debt 640.9 330.6
-------- --------
Other Long-Term Obligations 48.1 40.8
-------- --------
Deferred Income Taxes 75.9 --
-------- --------
Shareholders' Equity
Common stock 1.7 1.0
Paid-in capital 1,139.6 728.2
Accumulated deficit (532.9) (372.5)
Other (10.4) (8.3)
-------- --------
Total Shareholders' Equity 598.0 348.4
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,518.1 $ 859.0
======== ========
CAPITALIZATION
Long-Term Debt 51.7% 48.7%
Shareholders' Equity 48.3% 51.3%
-------- --------
100.0% 100.0%
======== ========
</TABLE>
<PAGE> 1
EXHIBIT 99.2
Company Press Release
SOURCE: Santa Fe Snyder Corporation
SANTA FE SNYDER ANNOUNCES $210 MILLION ACQUISITION OF DEEPWATER GULF OF MEXICO
OIL AND GAS INTERESTS FROM SHELL
Santa Fe Snyder's First Major Transaction Since Merger Will Significantly
Enhance Production and Long-Term Development Potential in the Gulf of Mexico
HOUSTON, July 19 /PRNewswire/ -- Santa Fe Snyder Corporation (NYSE: SFS - news)
today announced it has signed definitive agreements to acquire working interests
in four Shell Deepwater Development, Inc. Gulf of Mexico discoveries, as well as
unexplored acreage on some adjacent blocks in a $210 million transaction. Santa
Fe Snyder estimates that the acquisition would add production of 11,500 Barrels
of oil equivalent per day next year.
Under terms of the agreement, Santa Fe Snyder will acquire portions of Shell's
working interests in the Macaroni Field located in the Auger Basin in Garden
Banks and the Angus Complex located near the Bullwinkle, Troika and Brutus
fields in Green Canyon. Shell will retain a majority working interest and
continue as operator.
Both the Macaroni and Angus areas are currently in development, and production
is expected to begin from both later in 1999. Santa Fe Snyder's working
interests will range from 15 percent to 49 percent. Closing is expected to occur
by early August, with the Angus Field acquisition subject to the waiver of a
third-party preferential right to purchase.
"This transaction offers substantial upside exploration and continuing
development potential in the Gulf of Mexico and will make a significant
contribution to our production, reserves, cash flow and earnings per share,"
said Santa Fe Snyder Chief Executive Officer James L. Payne. "In addition to the
future development upside, the area of mutual interest with Shell will give us
the opportunity to explore the sub-basins surrounding the fields."
<PAGE> 2
Santa Fe Snyder estimates a production and reserve mix of 78 percent oil and 22
percent natural gas for the acquired properties. The fields are in water depths
of 1,400 to 3,700 feet. Production from the fields in 2000 is expected to be
9,000 barrels of oil per day and 14.5 million cubic feet of gas per day to Santa
Fe Snyder's interest. The reported transaction value includes Santa Fe Snyder's
share of the cost to bring the fields on production in 1999.
"This is the first major acquisition by the new Santa Fe Snyder since our merger
was approved by shareholders just two months ago, and I think it clearly
demonstrates the synergies of that combination," said Chairman John C. Snyder.
"This transaction adds to the momentum of our growing Gulf of Mexico operations
and underscores our ongoing commitment to transforming Santa Fe Snyder into a
leading competitor in the industry."
The Company expects to finance the transaction with a combination of equity and
a forward sale of crude oil production. Goldman, Sachs & Co. and Credit Suisse
First Boston Corporation will manage the equity offering. The equity may only be
offered by means of a prospectus, copies of which may be obtained from the
underwriting group.
Santa Fe Snyder Corporation is a large independent oil and gas exploration and
production company with operations in the United States, Southeast Asia, South
America and West Africa. Its common stock trades on the New York Stock Exchange
under the symbol SFS.
This news release contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act. Any references to estimated
exploration and development success, earnings, cash flow, production, reserves,
or capitalization reflect the Company's current views and actual results could
differ materially from those projected as a result of certain factors. A
discussion of these factors is included in the Company's periodic reports filed
with the Securities and Exchange Commission including its Annual Report on Form
10-K/A.
A registration statement relating to the equity securities described above has
been filed with the Securities and Exchange Commission but has not yet become
effective. These securities may not be sold nor may offers to buy be accepted
prior to the time the registration statement becomes effective. This news
release shall not constitute an offer to sell nor a solicitation to buy nor
shall there be any sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any state.
