<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): FEBRUARY 18, 1998
CROSS TIMBERS OIL COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 1-10662 75-2347769
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
810 HOUSTON STREET, SUITE 2000, FORT WORTH, TEXAS 76102
(Address of principal executive offices) (Zip Code)
(817) 870-2800
(Registrant's telephone number, including area code)
<PAGE>
ITEM 5. OTHER EVENTS.
On February 18, 1998, Cross Timbers Oil Company issued news release
number 98-04 (Exhibit 99.1) announcing earnings for the quarter and year ended
December 31, 1997.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
Exhibit Number
and Description Page
--------------- ----
99.1 Cross Timbers Oil Company News Release
Number 98-04 dated February 18, 1998.
-2-
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CROSS TIMBERS OIL COMPANY
Date: February 23, 1998 By: LOUIS G. BALDWIN
-------------------------------------
Louis G. Baldwin
Senior Vice President and
Chief Financial Officer
-3-
<PAGE>
EXHIBIT 99.1
[CROSS TIMBERS OIL COMPANY NEWS RELEASE LETTERHEAD]
FOR IMMEDIATE RELEASE
NUMBER: 98-04
CROSS TIMBERS OIL ANNOUNCES RECORD RESULTS FOR 1997;
RECORD FOURTH QUARTER PRODUCTION
FORT WORTH, TX (FEBRUARY 18, 1998) -- Cross Timbers Oil Company (NYSE-XTO)
today reported record results for 1997. Earnings available to common stock
totaled $23.9 million or 90 cents per share, compared with earnings of $19.8
million or 74 cents per share for 1996.
Cash flow from operations, before changes in working capital, was $90
million or $3.39 per share, a 32% increase from operating cash flow of $68.3
million or $2.57 per share for 1996. Daily oil and gas production for the year
averaged 10,905 barrels and 135,855 thousand cubic feet (Mcf), up 14% and 33%,
respectively, from 1996 levels.
Fourth quarter production reached record daily averages of 11,378 barrels
and 150,907 Mcf, up 18% and 31%, respectively, from fourth quarter 1996 levels.
Fourth quarter gas prices increased to $2.49 per Mcf compared with $2.39 per Mcf
in the fourth quarter of 1996, while oil prices declined from an average of
$23.51 per barrel in 1996 to $17.92 in 1997.
Fourth quarter earnings were $6.7 million or 26 cents per share, compared
with $8.7 million or 35 cents per share for the prior year quarter. Excluding
$1.7 million in non-cash stock incentive compensation expense, earnings for
fourth quarter 1997 were $7.8 million or 30 cents per share. Cash flow from
operations for the quarter was $26.4 million or $1.00 per share, compared with
$26.1 million or $1.05 per share for the 1996 quarter.
Record production levels are the result of the Company's 1996 and 1997
acquisitions and development programs. During 1997, the Company purchased more
than $250 million in oil and gas properties, most of which was related to Cross
Timbers' December purchase of San Juan Basin
(more)
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PAGE 2
CROSS TIMBERS OIL - 1997 AND FOURTH QUARTER EARNINGS
producing properties. In addition, Cross Timbers drilled a total of 169 wells
and performed 100 workover and recompletion activities this past year.
"We are delighted with our 1997 results, which continues our string of
record earnings, cash flow and production growth," said Bob R. Simpson, Chairman
and Chief Executive Officer. "This consistency in increasing production and cash
flow is a direct result of our ongoing growth strategy.
"We plan to continue to exploit our extensive portfolio of exploration and
development projects, but will balance these opportunities against the economics
of key acquisitions in order to maximize rates of return and replace our
drilling inventory. We also plan to meet our debt target of $2.40 per barrel of
oil equivalent through a combination of reserve growth and debt reduction
through selected asset sales. If substantial strategic acquisition opportunities
arise before the end of 1999, we will consider an equity offering at that time,
depending on prevailing market conditions," Simpson added.
Cross Timbers Oil Company is engaged in the acquisition, exploitation and
development of quality, long-lived producing oil and gas properties. The
Company, whose predecessors were established in 1986, completed its initial
public offering in May 1993. Its properties are concentrated in Texas, Oklahoma,
Kansas, New Mexico and Wyoming.
CONTACT: LOUIS G. BALDWIN
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
CROSS TIMBERS OIL COMPANY
817/870-2800
(table follows)
<PAGE>
<TABLE>
<CAPTION>
CROSS TIMBERS OIL COMPANY
(in thousands, except production, per THREE MONTHS ENDED YEAR ENDED
share and per unit data) DECEMBER 31, DECEMBER 31,
------------------------ ------------------------
1997 1996 1997 1996
-------- -------- -------- --------
(Unaudited)
CONSOLIDATED STATEMENTS OF OPERATIONS
- -----------------------------------------
<S> <C> <C> <C> <C>
REVENUES
Oil..................................... $ 18,753 $ 20,791 $ 75,223 $ 75,013
Gas and natural gas liquids............. 35,390 25,279 110,104 73,402
Gas gathering, processing and marketing. 2,293 3,381 9,851 12,032
Other................................... 687 (77) 5,494 (A) 944
-------- -------- -------- --------
Total Revenues........................ 57,123 49,374 200,672 161,391
-------- -------- -------- --------
EXPENSES
Production.............................. 11,620 10,207 43,580 39,365
Exploration............................. 966 (B) - 2,088 (B) -
Taxes on production and property........ 4,829 3,465 16,405 11,944
Depreciation, depletion and amortization 13,192 10,269 47,721 37,858
General and administrative.............. 5,361 (C) 4,253 (D) 15,818 (C) 16,420 (D)
Gas gathering and processing............ 2,192 2,160 8,517 6,905
Interest................................ 7,996 5,006 26,677 17,072
Trust development costs................. 99 136 665 854
-------- -------- -------- --------
Total Expenses........................ 46,255 35,496 161,471 130,418
-------- -------- -------- --------
INCOME BEFORE INCOME TAX................. 10,868 13,878 39,201 30,973
-------- -------- -------- --------
INCOME TAX
Current................................. 19 371 124 456
Deferred................................ 3,663 4,401 13,393 10,213
-------- -------- -------- --------
Total Income Tax...................... 3,682 4,772 13,517 10,669
-------- -------- -------- --------
NET INCOME............................... 7,186 9,106 25,684 20,304
Preferred stock dividends............... 445 441 1,779 514
-------- -------- -------- --------
EARNINGS AVAILABLE TO COMMON STOCK....... $ 6,741 $ 8,665 $ 23,905 $ 19,790
======== ======== ======== ========
EARNINGS PER COMMON SHARE
Basic................................... $ 0.26 $ 0.35 $ 0.90 $ 0.74
======== ======== ======== ========
Diluted................................. $ 0.25 $ 0.32 $ 0.89 $ 0.72
======== ======== ======== ========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING............................. 26,419 24,976 26,515 26,609
======== ======== ======== ========
CONSOLIDATED STATEMENT OF CASH FLOWS DATA
- -----------------------------------------
Cash Flow from Operations, before
changes in working capital............. $ 26,432 $ 26,135 $ 89,979 $ 68,263
======== ======== ======== ========
AVERAGE DAILY PRODUCTION
- -----------------------------------------
OIL (Bbls).............................. 11,378 9,611 10,905 9,584
GAS (Mcf)............................... 150,907 114,769 135,855 101,845
NATURAL GAS LIQUIDS (Bbls) (E).......... 875 - 220 -
AVERAGE SALES PRICES
- -----------------------------------------
OIL (per Bbl)........................... $ 17.92 $ 23.51 $ 18.90 $ 21.38
GAS (per Mcf)........................... $ 2.49 $ 2.39 $ 2.20 $ 1.97
NATURAL GAS LIQUIDS (per Bbl) (E)....... $ 9.66 - $ 9.66 -
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET DATA DECEMBER 31, 1997 December 31, 1996
- ----------------------------------------- ------------------------ ------------------------
<S> <C> <C>
Total Assets............................ $788,455 $523,070
======== ========
Long-term Debt.......................... $539,000 $314,757
======== ========
Total Stockholders' Equity.............. $170,243 $142,668
======== ========
</TABLE>
(footnotes follow)
<PAGE>
- ----------------------------------------
(A) Includes gain on sale of producing properties and facilities and equity
securities of $4.2 million, and lawsuit settlement proceeds of $1.3
million.
(B) Primarily includes geological and geophysical costs related to the 1997
exploration program.
(C) Includes non-cash stock incentive compensation of $1.7 million in the
three-month 1997 period and stock incentive compensation of $3.7 million
(cash payments of $0.3 million) for the year ended December 31, 1997.
(D) Includes non-cash stock incentive compensation of $1.9 million in the
three-month 1996 period and stock incentive compensation of $6.3 million
(cash payments of $7.1 million) for the year ended December 31, 1996.
(E) Natural gas liquids production is attributable to San Juan Basin producing
properties acquired on December 1, 1997.
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