SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 11-K
------------------------
ANNUAL REPORT
PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
------------------------
SANTA FE ENERGY RESOURCES SAVINGS INVESTMENT PLAN
------------------------
SANTA FE SNYDER CORPORATION
840 GESSNER, SUITE 1400
HOUSTON, TEXAS 77024
<PAGE>
SANTA FE ENERGY RESOURCES SAVINGS INVESTMENT PLAN
INDEX TO FINANCIAL STATEMENTS AND EXHIBITS
- ------------------------------------------------------------------------------
PAGE
(a) Financial Statements:
Report of Independent Accountants 1
Statement of Net Assets Available for Benefits
at December 31, 1998 2
Statement of Net Assets Available for Benefits
at December 31, 1997 3
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1998 4
Statement of Changes in Net Assets Available for Benefits
or the Year Ended December 31, 1997 5
Notes to Financial Statements 6 - 12
(b) Additional Information*
Schedule 1
Item 27a - Schedule of Assets Held for Investment Purposes
at December 31, 1998 13
Schedule 2
Item 27d - Schedule of Reportable Transactions for the
Year Ended December 31, 1998 14
(c) Exhibits:
No. 23 - Consent of Independent Accountants 15
* All other schedules required by Section 2520.103-10 of the Department of
Labor Rules and Regulations for Reporting and Disclosure under ERISA have
been omitted because they are not applicable or the required information is
shown in the financial statements or the notes thereto.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, persons who
administer the Plan have duly caused this annual report to be signed by the
undersigned thereunto duly authorized.
SANTA FE ENERGY RESOURCES
SAVINGS INVESTMENT PLAN
By:________________________________
Mark A. Older
Member - Employee Benefits
Committee
Date:______________
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Employee Benefits Committee of
Santa Fe Energy Resources Savings Investment Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Santa Fe Energy Resources Savings Investment Plan (the "Plan") at
December 31, 1998 and 1997, and the changes in net assets available for benefits
for the years then ended, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Plan's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Assets Held
for Investment Purposes at December 31, 1998 and of Reportable Transactions for
the year ended December 31, 1998 are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The fund information in the statements of net assets
available for benefits and the statements of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to present
the net assets available for plan benefits and changes in net assets available
for benefits of each fund. These supplemental schedules and fund information are
the responsibility of the Plan's management. The supplemental schedules and fund
information have been subjected to the auditing procedures applied in the audits
of the basic financial statements, and in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/PRICEWATERHOUSECOOPERS LLP/
Houston, Texas
May 28, 1999
<PAGE>
SANTA FE ENERGY RESOURCES SAVINGS INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FUND INFORMATION
-------------------------------------------------------------------
PUTNAM
STABLE GROWTH & TOTAL S&P
VALUE INCOME RETURN INDEX VOYAGER
FUND* FUND* FUND* FUND* FUND*
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Investments, at fair value:
Mutual funds ........... $ 9,567,604 $ 2,764,496 $ 2,933,781 $ 7,233,742 $ 5,104,664
Santa Fe Energy common
stock ................
Loans to participants ..
----------- ----------- ----------- ----------- -----------
Total investments ... 9,567,604 2,764,496 2,933,781 7,233,742 5,104,664
----------- ----------- ----------- ----------- -----------
Receivables:
Employer contributions .
----------- ----------- ----------- ----------- -----------
Total receivables ...
----------- ----------- ----------- ----------- -----------
Net assets available for
plan benefits ........... $ 9,567,604 $ 2,764,496 $ 2,933,781 $ 7,233,742 $ 5,104,664
----------- ----------- ----------- ----------- -----------
<CAPTION>
FUND INFORMATION
-------------------------------------------------------
OVERSEAS NEW COMPANY
GROWTH OPPORTUNITIES STOCK LOAN
FUND FUND* FUND* FUND TOTAL
----------- ----------- ------------- ----------- -----------
Investments, at fair value:
Mutual funds ........... $ 1,633,576 $ 4,441,486 $33,679,349
Santa Fe Energy common
stock ................ $ 8,162,376 8,162,376
Loans to participants .. $ 1,296,679 1,296,679
----------- ----------- ------------- ----------- -----------
Total investments ... 1,633,576 4,441,486 8,162,376 1,296,679 43,138,404
----------- ----------- ------------- ----------- -----------
Receivables:
Employer contributions . 218,873 218,873
----------- ----------- ------------- ----------- -----------
Total receivables ... 218,873 218,873
----------- ----------- ------------- ----------- -----------
Net assets available for
plan benefits ........... $ 1,633,576 $ 4,441,486 $ 8,381,249 $ 1,296,679 $43,357,277
----------- ----------- ------------- ----------- -----------
</TABLE>
* These funds represent more than 5% of net assets available for benefits.
The accompanying notes are an integral part of these financial statements.
- 2 -
<PAGE>
SANTA FE ENERGY RESOURCES SAVINGS INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FUND INFORMATION
-------------------------------------------------------------------
PUTNAM
STABLE GROWTH & TOTAL S&P
VALUE INCOME RETURN INDEX VOYAGER
FUND* FUND* FUND* FUND* FUND*
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Investments, at fair value:
Mutual funds ........... $ 9,282,904 $ 2,474,759 $ 2,632,035 $ 5,620,618 $ 3,476,234
Santa Fe Energy common
stock
Loans to participants ..
----------- ----------- ----------- ----------- -----------
Total investments ... 9,282,904 2,474,759 2,632,035 5,620,618 3,476,234
----------- ----------- ----------- ----------- -----------
Receivables:
Employer contributions .
----------- ----------- ----------- ----------- -----------
Total receivables ...
----------- ----------- ----------- ----------- -----------
Net assets available for
plan benefits ........... $ 9,282,904 $ 2,474,759 $ 2,632,035 $ 5,620,618 $ 3,476,234
=========== =========== =========== =========== ===========
<CAPTION>
FUND INFORMATION
-----------------------------------------------------
OVERSEAS NEW COMPANY
GROWTH OPPORTUNITIES STOCK LOAN
FUND FUND* FUND* FUND TOTAL
----------- ----------- ----------- ----------- -----------
Investments, at fair value:
Mutual funds ........... $ 1,158,800 $ 3,061,832 $27,707,182
Santa Fe Energy common $ 9,864,876 9,864,876
stock
Loans to participants .. $ 1,241,372 1,241,372
----------- ----------- ----------- ----------- -----------
Total investments ... 1,158,800 3,061,832 9,864,876 1,241,372 38,813,430
----------- ----------- ----------- ----------- -----------
Receivables:
Employer contributions . 338,322 338,322
----------- ----------- ----------- ----------- -----------
Total receivables ... 338,322 338,322
----------- ----------- ----------- ----------- -----------
Net assets available for
plan benefits ........... $ 1,158,800 $ 3,061,832 $10,203,198 $ 1,241,372 $39,151,752
=========== =========== =========== =========== ===========
</TABLE>
* These funds represent more than 5% of net assets available for benefits.
The accompanying notes are an integral part of these financial statements.
- 3 -
<PAGE>
SANTA FE ENERGY RESOURCES SAVINGS INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FUND INFORMATION
----------------------------------------------------------------------------
PUTNAM
STABLE GROWTH & TOTAL S&P
VALUE INCOME RETURN INDEX VOYAGER
FUND FUND FUND FUND FUND
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:-
Investment income:
Interest and dividends ................... $ 568,533 $ 245,577 $ 106,165 $ 305,723
Net unrealized appreciation (deprecia-
tion) in value of investments .......... 87,173 178,300 $ 1,461,854 290,589
Net realized gain (loss) on sale of assets 18,005 34,909 146,232 313,983
Contributions:
Employer .................................
Employees ................................ 284,769 225,772 203,197 556,589 492,830
------------ ------------ ------------ ------------ ------------
Total additions ........................ 853,302 576,527 522,571 2,164,675 1,403,125
------------ ------------ ------------ ------------ ------------
Deductions to net assets attributed to:
Trustee fees .............................. 252 96 52 112 159
Net distributions to participants ......... 389,700 69,054 25,998 120,930 82,334
------------ ------------ ------------ ------------ ------------
Total deductions ....................... 389,952 69,150 26,050 121,042 82,493
------------ ------------ ------------ ------------ ------------
Net increase (decrease) prior to
interfund transfers ........................ 463,350 507,377 496,521 2,043,633 1,320,632
Interfund transfers .......................... (178,650) (217,640) (194,775) (430,509) 307,798
Net assets available for plan benefits:
Beginning of period ....................... 9,282,904 2,474,759 2,632,035 5,620,618 3,476,234
------------ ------------ ------------ ------------ ------------
End of period ............................. $ 9,567,604 $ 2,764,496 $ 2,933,781 $ 7,233,742 $ 5,104,664
============ ============ ============ ============ ============
<CAPTION>
FUND INFORMATION
----------------------------------------------------------
OVERSEAS NEW COMPANY
GROWTH OPPORTUNITIES STOCK LOAN
FUND FUND FUND FUND TOTAL
------------ ------------ ------------ ------------ ------------
Additions to net assets
attributed to:-
Investment income:
Interest and dividends ................... $ 43,963 $ 143,603 $ 111,154 $ 1,524,718
Net unrealized appreciation (deprecia-
tion) in value of investments .......... 157,808 362,594 $ (3,320,710) (782,392)
Net realized gain (loss) on sale of assets 24,460 272,757 (239,506) 570,840
Contributions:
Employer ................................. 1,199,979 1,199,979
Employees ................................ 187,791 604,728 288,530 2,844,206
------------ ------------ ------------ ------------ ------------
Total additions ........................ 414,022 1,383,682 (2,071,707) 111,154 5,357,351
------------ ------------ ------------ ------------ ------------
Deductions to net assets attributed to:
Trustee fees .............................. 77 185 425 1,358
Net distributions to participants ......... 23,732 140,835 187,582 110,303 1,150,468
------------ ------------ ------------ ------------ ------------
Total deductions ....................... 23,809 141,020 188,007 110,303 1,151,826
------------ ------------ ------------ ------------ ------------
Net increase (decrease) prior to
interfund transfers ........................ 390,213 1,242,662 (2,259,714) 851 4,205,525
Interfund transfers .......................... 84,563 136,992 437,765 54,456 --
Net assets available for plan benefits:
Beginning of period ....................... 1,158,800 3,061,832 10,203,198 1,241,372 39,151,752
------------ ------------ ------------ ------------ ------------
End of period ............................. $ 1,633,576 $ 4,441,486 $ 8,381,249 $ 1,296,679 $ 43,357,277
============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 4 -
<PAGE>
SANTA FE ENERGY RESOURCES SAVINGS INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FUND INFORMATION
---------------------------------------------------------------------------
PUTNAM
STABLE GROWTH & TOTAL S&P
VALUE INCOME RETURN INDEX VOYAGER
FUND FUND FUND FUND FUND
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:-
Investment income:
Interest and dividends ................... $ 602,904 $ 315,343 $ 113,982 $ 207,222
Net unrealized appreciation (deprecia-
tion) in value of investments .......... 1,822 259,817 $ 1,044,577 469,612
Net realized gain (loss) on sale of assets 52,430 61,624 158,420 60,310
Contributions:
Employer .................................
Employees ................................ 292,574 288,934 162,111 362,820 436,534
------------ ------------ ------------ ------------ ------------
Total additions ........................ 895,478 658,529 597,534 1,565,817 1,173,678
------------ ------------ ------------ ------------ ------------
Deductions to net assets attributed to:
Trustee fees .............................. 88 36 52 58 81
Loan defaults .............................
Net distributions to participants ......... 900,639 32,179 102,323 118,359 84,232
Distributions to the Monterey Resources
Savings Investment Plan ................. 2,495,757 831,029 745,681 1,364,633 1,432,170
------------ ------------ ------------ ------------ ------------
Total deductions ....................... 3,396,484 863,244 848,056 1,483,050 1,516,483
------------ ------------ ------------ ------------ ------------
Net increase (decrease) prior to
interfund transfers ........................ (2,501,006) (204,715) (250,522) 82,767 (342,805)
Interfund transfers .......................... 1,175,354 810,291 113,617 426,500 (174,181)
Net assets available for plan benefits:
Beginning of period ....................... 10,608,556 1,869,183 2,768,940 5,111,351 3,993,220
------------ ------------ ------------ ------------ ------------
End of period ............................. $ 9,282,904 $ 2,474,759 $ 2,632,035 $ 5,620,618 $ 3,476,234
============ ============ ============ ============ ============
<CAPTION>
FUND INFORMATION
------------------------------------------------------------
OVERSEAS NEW COMPANY
GROWTH OPPORTUNITIES STOCK LOAN
FUND FUND FUND FUND TOTAL
------------ ------------ ------------ ------------ ------------
Additions to net assets
attributed to:-
Investment income:
Interest and dividends ................... $ 67,662 $ 65,480 $ 133,662 $ 1,506,255
Net unrealized appreciation (deprecia-
tion) in value of investments .......... 129,335 840,207 $ 2,183,828 4,929,198
Net realized gain (loss) on sale of assets (70,386) (284,683) 1,400,647 1,378,362
Contributions:
Employer ................................. 1,431,867 1,431,867
Employees ................................ 203,106 610,097 490,496 2,846,672
------------ ------------ ------------ ------------ ------------
Total additions ........................ 329,717 1,231,101 5,506,838 133,662 12,092,354
------------ ------------ ------------ ------------ ------------
Deductions to net assets attributed to:
Trustee fees .............................. 46 100 190 651
Loan defaults ............................. 58,792 58,792
Net distributions to participants ......... 16,041 65,283 303,454 33,696 1,656,206
Distributions to the Monterey Resources
Savings Investment Plan ................. 673,334 1,831,155 1,657,366 660,429 11,691,554
------------ ------------ ------------ ------------ ------------
Total deductions ....................... 689,421 1,896,538 1,961,010 752,917 13,407,203
------------ ------------ ------------ ------------ ------------
Net increase (decrease) prior to
interfund transfers ........................ (359,704) (665,437) 3,545,828 (619,255) (1,314,849)
Interfund transfers .......................... 151,823 (230,205) (2,365,989) 92,790
Net assets available for plan benefits:
Beginning of period ....................... 1,366,681 3,957,474 9,023,359 1,767,837 40,466,601
------------ ------------ ------------ ------------ ------------
End of period ............................. $ 1,158,800 $ 3,061,832 $ 10,203,198 $ 1,241,372 $ 39,151,752
============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 5 -
<PAGE>
SANTA FE ENERGY RESOURCES SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE PLAN
The following description of the Santa Fe Energy Resources Savings
Investment Plan (the Plan) is provided for general information purposes
only. Participants should refer to the Plan document for a more complete
description of the Plan's provisions, as the Plan document is controlling
at all times.
GENERAL
The Plan is a defined contribution plan for employees of Santa Fe Energy
Resources, Inc. (SFER or the Company) and is subject to the provisions of
the Employee Retirement Security Act of 1974 (ERISA).
ADMINISTRATION OF THE PLAN
The Plan is administered by the Employee Benefits Committee appointed by
the Board of Directors of the Company. Effective April 1, 1996, Putnam
Fiduciary Trust Company was appointed trustee and recordkeeper of the
Plan, and all Plan assets were transferred to the new trustee's custody.
ELIGIBILITY
Substantially all salaried, full-time employees of the Company are
eligible to participate in the Plan on the first day of the month
following their date of hire. Eligible employees may become participants
in the Plan by authorizing regular payroll deductions and designating
investment allocations for such deductions. At December 31, 1998, there
were 371 participants in the Plan.
CONTRIBUTIONS
Participants may elect to contribute from 1% to 12% of their annual base
pay. Tax deferred contributions to the Plan by individual employees were
limited to $10,000 in 1998 and 1997. This limitation is periodically
adjusted to reflect cost-of-living adjustments. Further, the Internal
Revenue Code (the Code) limits the total amount of contributions and
forfeitures to the Plan (and all other defined contribution plans of the
Company) to the lesser of 25% of total annual compensation or $30,000 per
participant. The Plan is also subject to the "top-heavy" rules and
regulations promulgated under the Code. These rules generally provide that
for any Plan year in which the Plan is "top-heavy," certain additional
restrictions apply to contributions made on behalf of key employees. There
were no such restrictions on the Plan due to "top-heavy" provisions during
1998 or 1997.
The Company matches employee contributions for an amount up to 4% of each
participant's base salary (the Regular Matching Contribution). In
addition, if at the end of each fiscal year the Company's financial
performance for such year has met or exceeded certain predetermined
criteria, each participant will
- 6 -
<PAGE>
SANTA FE ENERGY RESOURCES SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
receive an additional matching contribution (the Performance Matching
Contribution) of up to 50% of the Regular Matching Contribution. For the
years ended December 31, 1998 and 1997, the Company made Performance
Matching Contributions of $218,873 and $338,322, respectively. The
Performance Matching Contribution amounts for 1998 and 1997 are accrued as
a receivable from employer in the statement of net assets available for
plan benefits at December 31, 1998 and 1997. Both the Regular and
Performance Matching Contributions are entirely in the form of Company
stock and are held in the Company Stock Fund.
A participant who receives a qualifying distribution from a former
employer's retirement or savings plan may contribute the distribution to
the Plan provided that such contribution qualifies as a "rollover"
contribution in accordance with Section 402 of the Code, or is made by a
direct trust-to-trust transfer.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contribution
and an allocation of (a) the Company's contribution, (b) earnings from
Plan funds in which the participant has invested and (c) forfeitures of
the unvested portion of terminated participants' accounts (which reduce
the Company's contribution). Allocations are based on participant earnings
or account balances, as defined.
VESTING
Participants are 100% vested at all times with respect to their
contributions and rollover accounts. Participants' employer contributions
vest at a rate of 20% per year for each full year of service and become
100% vested after five full years of service, or in the case of death,
total disability, attainment of normal retirement age or in certain other
circumstances.
INVESTMENTS
Participants can direct all contributions made on their behalf into one or
all of the Plan's investment funds. Contribution rates may be changed at
any time.
Effective April 1, 1996 and continuing through December 31, 1998, the
eight investment funds of the Plan were as follows:
o FUND 1 - the "Stable Value Fund" invests primarily in a collective
investment trust consisting of high-quality annuity investment
contracts issued by insurance companies or banks to preserve capital
and maintain a consistent yield of current income. The fund also
maintains investments in two previously negotiated guaranteed
investment contracts issued by an insurance company that were
transferred to the fund from the Plan's previous trustee. For
liquidity
- 7 -
<PAGE>
SANTA FE ENERGY RESOURCES SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
purposes, a portion of the fund's assets are invested in high-quality
money market instruments. The fund is managed by Putnam Investments,
Inc.
o FUND 2 - the "Growth and Income Fund" invests primarily in the stock
of large, well-established corporations in a variety of industries with
an above-average history of dividend payments. The Fund's goal is to
obtain long-term capital appreciation while also providing current
income. The fund is managed by Putnam Investments, Inc.
o FUND 3 - the "Total Return Fund" invests in a combination of (a)
large corporation stocks that are historically strong performers and
(b) high-quality fixed-income securities. The objective of the Fund
is to achieve a high total return, long-term capital appreciation
and current income. The fund is managed by Invesco Funds Group, Inc.
o FUND 4 - the "Putnam S&P Index Fund" invests in the common stock of
the 500 industrial, utility, financial and transportation companies
that comprise Standard & Poor's 500 Stock Composite Index. The Fund
attempts to mirror the performance of such index. The fund is
managed by Putnam Investments, Inc.
o FUND 5 - the "Voyager Fund" invests primarily in the common stock of
smaller, growth-oriented companies and larger, well-established
corporations that the fund manager believes offer above-average growth
potential. The fund's investment objective is rapid capital
appreciation. The fund is managed by Putnam Investments, Inc.
o FUND 6 - the "Overseas Growth Fund" invests in the common stock of
companies located outside of North America, that offer above-average
growth potential. The Fund's overall objective is long-term capital
appreciation. The fund is managed by Putnam Investments, Inc.
o FUND 7 - the "New Opportunities Fund" invests primarily in the
common stock of companies within certain emerging industry groups
which have been identified by the fund manager as having
above-average potential for growth. The Fund's overall objective is
long-term capital appreciation. The fund is managed by Putnam
Investments, Inc.
o FUND 8 - the "Company Stock Fund" invests in the common stock of the
Company. Dividends and other distributions, or amounts received in
respect of Company stock, are reinvested in additional shares, and each
participant's account is credited with a proportionate number of the
incremental shares.
- 8 -
<PAGE>
SANTA FE ENERGY RESOURCES SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
LOANS
Loans may be made pursuant to the Plan. With respect to Plan loans, the
provisions of the Plan (1) allow for the securing of loans by, among other
things, the value of the participants' vested account balance, (2)
establish a reasonable rate of interest, (3) set forth maximum loan terms,
(4) establish any minimum and maximum loan amounts and (5) establish a
fixed repayment schedule. Two loans per employee may be outstanding at one
time; a third loan will not be permitted until one of the prior loans has
been paid in full.
During 1998, $677,883 of new loans were issued to participants, and
$623,427 of principal payments were received from participants. At
December 31, 1998, the interest rate charged on loans from the Plan ranged
from 6.50% to 12.0%, depending upon the length and terms of the loan.
WITHDRAWALS, TRANSFERS AND FORFEITURES
In the event of a participant's death, 100% of the participant's account
balance is paid to designated beneficiaries. In the event of termination
of employment, participants receive a distribution equal to the vested
value of their account as of the valuation date on or following their
termination of employment or normal retirement date. As allowed by the
Code, the Plan also provides for hardship withdrawals under certain
circumstances. Distributions may be made in a lump-sum payment or through
monthly instalments for a specified period, or in the case of accounts
invested in the Company Stock Fund, may be paid all in stock or part in
stock and part in cash.
Forfeitures of unvested employer contributions are applied against future
employer contributions. Such forfeitures were $70,363 and $31,129 for the
years ended December 31, 1998 and 1997, respectively.
AMENDMENT AND TERMINATION
The Board of Directors of the Company may, at any time, amend, discontinue
contributions or terminate the Plan subject to the provisions of ERISA. In
the event of Plan termination, participants become fully vested in their
accounts.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
METHOD OF ACCOUNTING
Financial statements of the Plan are prepared on the accrual basis of
accounting and include all adjustments necessary to present fairly the
financial statements of the Plan in accordance with generally accepted
accounting principles.
VALUATION OF INVESTMENTS
Investments in the Stable Value Fund are valued at contract or fair market
value. Valuations of investments in common stock and
- 9 -
<PAGE>
SANTA FE ENERGY RESOURCES SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
shares in registered investment company funds are based upon published
quotations for the last business day of the Plan year. The valuation of
the Putnam S&P Index Fund is based upon its closing sales price
reported for the last business day of the year. Loans are valued at cost
which approximates fair market value.
CONTRIBUTIONS
Employee contributions are recorded in the periods in which the Company
makes payroll deductions from the Plan participants' earnings. Matching
Company contributions are recorded in the comparable period.
INCOME RECOGNITION
Investment income from dividends and interest is recorded on the accrual
basis, with dividends accrued on the ex-dividend date.
BENEFITS
Benefit claims are accrued when they have been processed and approved for
payment by the Plan. Claims processed and approved, but unpaid as of the
Plan's fiscal year end, are not shown as liabilities on the statement of
net assets available for plan benefits but are reflected as liabilities on
the Plan's Form 5500.
EXPENSES
Plan administrative expenses are borne by the Company, except for loan
origination and maintenance fees related to Plan loans which are paid by
the participants.
USE OF ESTIMATES
The preparation of the Plan's financial statements in conformity with
generally accepted accounting principles requires management to make
certain estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and
liabilities and the periods in which certain items of revenue and expense
are included. Actual results may differ from such estimates.
3. TAX STATUS OF THE PLAN
The Internal Revenue Service issued a favorable letter of determination
with respect to the tax status of the Plan dated November 19, 1997. Since
the Plan was not amended during 1998, management believes an updated
determination letter is not required as the Plan's design and operations
are in compliance with the applicable requirements of the Internal Revenue
Code (Code). Therefore, the related trust is exempt from federal income
tax under Code Section 501(a).
4. NET REALIZED GAIN (LOSS) ON INVESTMENTS
- 10 -
<PAGE>
SANTA FE ENERGY RESOURCES SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
The net realized gain (loss) on the Plan's fund investments represents
sales of fund shares, or SFER common stock, the proceeds of which have
been distributed to participants or transferred to other funds. In
accordance with ERISA guidelines, realized gains (losses) are calculated
as sales proceeds less current value at the beginning of the year or
acquisition cost if acquired during the year. Under certain circumstances,
the cost basis of the common stock for tax purposes may differ from the
cost basis for financial reporting purposes.
Net realized gains (losses) for the year ended December 31, 1998 were as
follows:
ERISA
ERISA REALIZED
PROCEEDS COST GAIN (LOSS)
----------- ----------- -------------
Growth & Income Fund .............. $ 805,611 $ 787,606 $ 18,005
Total Return Fund ................. 579,125 544,216 34,909
Putnam S&P Index Fund ............. 1,177,500 1,031,268 146,232
Voyager Fund ...................... 2,787,264 2,473,281 313,983
Overseas Growth Fund .............. 258,540 234,080 24,460
New Opportunities Fund ............ 4,180,422 3,907,665 272,757
Company Stock Fund ................ 1,697,890 1,937,396 (239,506)
----------- ----------- -------------
$11,486,352 $10,915,512 $ 570,840
=========== =========== =============
Net realized gains (losses) for the year ended December 31, 1997 were as
follows:
ERISA
ERISA REALIZED
PROCEEDS COST GAIN (LOSS)
----------- ----------- -------------
Growth & Income Fund .............. $ 484,988 $ 432,558 $ 52,430
Total Return Fund ................. 525,851 464,227 61,624
Putnam S&P Index Fund ............. 948,128 789,708 158,420
Voyager Fund ...................... 814,395 754,085 60,310
Overseas Growth Fund .............. 259,266 329,652 (70,386)
New Opportunities Fund ............ 1,189,086 1,473,769 (284,683)
Company Stock Fund ................ 7,483,241 6,082,594 1,400,647
----------- ----------- -------------
$11,704,955 $10,326,593 $ 1,378,362
=========== =========== =============
- 11 -
<PAGE>
SANTA FE ENERGY RESOURCES SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
5. MONTEREY RESOURCES, INC. COMMON STOCK DISTRIBUTION
On July 25, 1997, the Company distributed pro rata to its common
shareholders all of the common stock it owned in Monterey Resources,
Inc. (Monterey) at a rate of .44 common shares of Monterey for each common
share of Santa Fe.
Effective October 31, 1997, all Monterey shares were automatically sold by
the Trustee and reinvested in the Putnam Stable Value Fund, unless
otherwise directed by the participant.
In conjunction with the Company's spin-off of Monterey, qualifying
distributions to Monterey employees totaling $11,691,554 were made by a
trust-to-trust transfer to the Monterey Resources Savings Investment Plan.
6. PLAN AMENDMENTS
There were no amendments to the Plan during 1998.
7. SUBSEQUENT EVENT
Effective May 5, 1999, the Company merged with Snyder Oil Corporation and
adopted the name Santa Fe Snyder Corporation. In conjunction with the
merger, the Board of Directors approved a merger between the Plan and the
Snyder Oil Corporation Profit Sharing and Savings Plan. The Board of
Directors also approved the immediate vesting of Plan benefits for all
persons employed on the merger date.
- 12 -
<PAGE>
ADDITIONAL INFORMATION
<PAGE>
SCHEDULE 1
SANTA FE ENERGY RESOURCES SAVINGS INVESTMENT PLAN
LINE 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(A) (C) (E)
PARTY-IN- (B) DESCRIPTION NUMBER (D) CURRENT
INTEREST ISSUER OF INVESTMENT OF SHARES COST VALUE
<S> <C> <C> <C> <C> <C>
* Putnam Investments, Inc. Company Stock Fund 1,106,762 $ 8,490,867 $ 8,162,376
Invesco Funds Group, Inc. Total Return Fund 93,551 2,355,829 2,933,781
* Putnam Investments, Inc. Growth & Income Fund 134,919 2,628,091 2,764,496
* Putnam Investments, Inc. Voyager Fund 232,877 4,296,484 5,104,664
* Putnam Investments, Inc. Stable Value Fund 9,567,604 9,562,269 9,567,604
* Putnam Investments, Inc. New Opportunities Fund 76,013 3,556,290 4,441,486
* Putnam Investments, Inc. Overseas Growth Fund 84,949 1,373,415 1,633,576
* Putnam Investments, Inc. S&P Index Fund 250,042 4,309,817 7,233,742
Participant loans Range of maturities -
March 31, 1998 - February 25, 2013 1,296,679 1,296,679
--------------- ---------------
$37,869,741 $43,138,404
=============== ===============
</TABLE>
- 13 -
* Invested with a party-in-interest to the Plan as defined by ERISA.
<PAGE>
SANTA FE ENERGY RESOURCES SAVINGS INVESTMENT PLAN SCHEDULE 2
LINE 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(C) (D)
PURCHASE SELLING
PRICE PRICE (H)
(CURRENT (CURRENT CURRENT (I)
(A) (B) NUMBER OF VALUE AT VALUE AT VALUE ON NET
----------------- TRANSACTION TRANSACTION (G) TRANSACTION REALIZED
PURCHASES SALES DATE) DATE) COST DATE GAIN (LOSS)
<S> <C> <C> <C> <C> <C> <C> <C>
Putnam Invest- SFER Company Stock Fund 176 $ 1,697,890 $1,403,577 $ 294,313
ments, Inc. 146 $ 3,555,608 $3,555,608
Putnam Invest- Voyager Fund 119 2,787,265 2,685,156 102,109
ments, Inc. 102 3,811,123 3,811,123
Putnam Invest- Stable Value Fund 170 9,424,157 9,419,805 4,352
ments, Inc. 187 9,707,874 9,707,874
Putnam Invest- New Opportunities Fund 118 4,180,422 4,171,957 8,465
ments, Inc. 116 4,924,725 4,924,725
Putnam Invest- S&P 500 Index Fund 77 1,177,500 787,555 389,945
ments, Inc. 103 1,182,538 1,182,538
Invesco Funds Total Return Fund 61 579,125 499,978 79,147
Group Inc. 87 667,574 667,574
</TABLE>
Columns (e) and (f) have been omitted because they are not applicable.
-14-
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 33-37175, 33-44541, 33-44542, 33-58613, 33-59253,
33-59255, 333-07949, 333-34135, 333-34161, 333-34165, 333-47847 and 333-63711)
of Santa Fe Energy Resources, Inc. and on Form S-8 (No. 333-71595) of Santa Fe
Snyder Corporation of our report dated May 28, 1999 appearing on page 1 of this
Form 11-K.
/PRICEWATERHOUSECOOPERS LLP/
Houston, Texas
June 29, 1999
-15-
