<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): DECEMBER 1, 1997
AMENDMENT NO. 1
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 7. FINANCIAL STATEMENTS AND EXHIBITS. PAGE
----
(a) Financial statements of businesses acquired.
Amoco Acquisition:
Report of Independent Public Accountants.................. 3
Statements of Revenues and Direct Operating Expenses
for the Year Ended December 31, 1996 and the Nine
Months Ended September 30, 1996 and 1997................. 4
Notes to Statements of Revenues and Direct Operating
Expenses................................................. 5-6
(b) Pro forma financial information.
Cross Timbers Oil Company:
Pro Forma Consolidated Financial Statements (Unaudited)... 7
Pro Forma Consolidated Balance Sheet at September 30, 1997 8
Pro Forma Consolidated Statement of Operations For the
Year Ended December 31, 1996............................. 9
Pro Forma Consolidated Statement of Operations For the
Nine Months Ended September 30, 1997..................... 10
Notes to Pro Forma Consolidated Financial Statements...... 11-13
(c) Exhibits.
Exhibit Number
and Description
---------------
(2) Plan of acquisition, reorganization, arrangement, liquidation or
succession
2.1 Purchase and Sale Agreement by and between Amoco Production
Company and the Company, dated September 29, 1997 *
(99) Additional Exhibits
99.1 Revolving Credit Agreement, dated November 21, 1997, among the
Company and certain commercial banks named therein *
- -------------------
* Previously filed
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<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
Cross Timbers Oil Company:
We have audited the accompanying statement of revenues and direct operating
expenses of the Amoco Acquisition (see Note 1) for the year ended December 31,
1996. This financial statement is the responsibility of the management of Cross
Timbers Oil Company. Our responsibility is to express an opinion on this
financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statements. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, such statement presents fairly, in all material respects, the
revenues and direct operating expenses of the Amoco Acquisition described in
Note 1 for the year ended December 31, 1996 in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Fort Worth, Texas
February 11, 1998
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<PAGE>
AMOCO ACQUISITION
STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1996 AND
THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997
(in thousands)
Year Nine Months Ended
Ended September 30,
December 31, ----------------------
1996 1996 1997
------------ ---------- ----------
(Unaudited)
REVENUES
Oil............................... $ 2,039 $ 1,524 $ 1,292
Gas............................... 35,186 22,210 26,709
------- ------- -------
Total........................... 37,225 23,734 28,001
------- ------- -------
DIRECT OPERATING EXPENSES
Production........................ 6,656 5,170 4,091
Taxes on production and property.. 3,561 2,256 2,779
------- ------- -------
Total........................... 10,217 7,426 6,870
------- ------- -------
EXCESS OF REVENUES OVER
DIRECT OPERATING EXPENSES......... $27,008 $16,308 $21,131
======= ======= =======
See Accompanying Notes to Statements of Revenues and Direct Operating Expenses.
-4-
<PAGE>
AMOCO ACQUISITION
NOTES TO STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES
1. BASIS OF PRESENTATION
Amoco Acquisition
On December 1, 1997, the Company acquired interests in certain producing
oil and gas properties in the San Juan Basin of New Mexico from a subsidiary of
Amoco Corporation ("Amoco Acquisition"). The purchase was made pursuant to a
Purchase and Sale Agreement dated September 29, 1997, with a stated purchase
price of $252 million and warrants to purchase 625,000 shares of the Company's
common stock at a price of $22.97 per share for a period of five years. The
Company paid a deposit of $25.2 million toward the purchase price on September
29, 1997. After adjustments for other acquisition costs, estimated cash flows
through date of closing and preferential purchase rights exercised by third
parties, the properties were purchased for approximately $195 million, including
approximately $5.7 million value for the warrants. Amoco elected to accept
certain producing properties owned by the Company valued at $15.7 million in
lieu of cash, reducing cash consideration to $173.6 million, which was funded
through borrowings under the Company's Revolving Credit Agreement with
commercial banks dated November 21, 1997. Additional purchase price revisions
may result from customary post-closing adjustments.
The accompanying statements of revenues and direct operating expenses do
not include general and administrative expense, interest income or expense, a
provision for depreciation, depletion and amortization or any provision for
income taxes because the property interests acquired represent only a portion of
a business and the costs incurred by Amoco Corporation are not necessarily
indicative of the costs to be incurred by the Company.
Historical financial information reflecting financial position, results of
operations and cash flows of the Amoco Acquisition is not presented because the
entire acquisition cost was assigned to the oil and gas property interests.
Accordingly, the historical statements of revenues and direct operating expenses
have been presented in lieu of the financial statements required under Rule 3-05
of Securities and Exchange Commission Regulation S-X.
2. SUPPLEMENTAL OIL AND GAS RESERVE INFORMATION (UNAUDITED)
Estimated Quantities of Proved Oil and Gas Reserves
Reserve information presented below has been estimated by the Company's
internal engineers using December 31, 1996 prices and costs. Proved reserves are
estimated quantities of crude oil and natural gas which, based on geologic and
engineering data, are estimated to be reasonably recoverable in future years
from known reservoirs under existing economic and operating conditions. Proved
developed reserves are those which are expected to be recovered through existing
wells with existing equipment and operating methods. Because of inherent
uncertainties and the limited nature of reservoir data, such estimates are
subject to change as additional information becomes available.
Proved Oil and Gas Reserves at
December 31, 1996 Natural Gas
Oil (Bbls) Gas (Mcf) Liquids (Bbls)
------------ ------------ --------------
(in thousands)
Proved reserves............ 1,356 226,946 14,423
===== ======= ======
Proved developed reserves.. 1,147 195,243 12,409
===== ======= ======
-5-
<PAGE>
Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil
and Gas Reserves
The standardized measure of discounted future net cash flows ("Standardized
Measure") is prepared using assumptions required by the Financial Accounting
Standards Board. Such assumptions include the use of year-end prices for oil
and gas and year-end costs for estimated future development and production
expenditures to produce year-end estimated proved reserves. Discounted future
net cash flows are calculated using a 10% rate.
The Standardized Measure does not represent the Company's estimate of
future net cash flows or the value of proved oil and gas reserves. Probable and
possible reserves, which may become proved in the future, are excluded from the
calculations. Furthermore, year-end prices, used to determine the standardized
measure of discounted cash flows, are influenced by seasonal demand and other
factors and may not be the most representative in estimating future revenues or
reserve data.
Standardized Measure of Discounted Future Net Cash Flows at December 31,1996
(in thousands)
Future cash inflows........................ $ 901,823
Future costs:
Production............................... (310,767)
Development.............................. (13,111)
---------
Future net cash inflows.................... 577,945
10% annual discount........................ (296,502)
---------
Standardized measure of discounted future
net cash flows before income taxes $ 281,443
=========
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<PAGE>
CROSS TIMBERS OIL COMPANY
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The accompanying Pro Forma Consolidated Financial Statements have been
prepared by recording pro forma adjustments to the historical consolidated
financial statements of Cross Timbers Oil Company ("the Company"). The Pro
Forma Consolidated Balance Sheet as of September 30, 1997 has been prepared as
if the Amoco Acquisition (as described in Note 2) was consummated on September
30, 1997. The Pro Forma Consolidated Statements of Operations for the year
ended December 31, 1996 and for the nine months ended September 30, 1997 have
been prepared as if the Amoco Acquisition and Other Acquisitions (as described
in Note 2) were consummated on January 1, 1996 and January 1, 1997,
respectively.
The Pro Forma Consolidated Financial Statements are not necessarily
indicative of the financial position or results of operations that would have
occurred had the transactions been effected on the assumed dates. Additionally,
future results may vary significantly from the results reflected in the Pro
Forma Consolidated Statements of Operations due to normal production declines,
changes in prices, future transactions and other factors. These statements
should be read in conjunction with the Company's audited consolidated financial
statements and the related notes for the year ended December 31, 1996 included
in the Company's 1996 Form 10-K, the Company's consolidated financial statements
and the related notes for the nine months ended September 30, 1997 included in
the Company's Form 10-Q for the quarter ended September 30, 1997 and the
statements of revenues and direct operating expenses of the Amoco Acquisition
for the year ended December 31, 1996 and the nine months ended September 30,
1997.
-7-
<PAGE>
CROSS TIMBERS OIL COMPANY
PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED)
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
Pro Forma
Adjustments
(Note 3)
--------------
Amoco
Historical Acquisition(a) Pro Forma
---------- -------------- -----------
ASSETS (in thousands)
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents................................ $ 3,537 $ - $ 3,537
Accounts receivable, net................................. 38,055 - 38,055
Other current assets..................................... 5,769 - 5,769
--------- ----------- ---------
Total Current Assets.................................... 47,361 - 47,361
--------- ----------- ---------
Property and Equipment, at cost........................... 776,504 154,081 930,585
Accumulated depreciation, depletion and amortization..... (230,103) - (230,103)
--------- ----------- ---------
Net Property and Equipment.............................. 546,401 154,081 700,482
--------- ----------- ---------
Investment in Equity Securities, at market value.......... 3,488 - 3,488
--------- ----------- ---------
Other Assets.............................................. 6,862 - 6,862
--------- ----------- ---------
TOTAL ASSETS.............................................. $ 604,112 $ 154,081 $ 758,193
========= =========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued liabilities................. $ 47,766 $ - $ 47,766
Accrued stock incentive compensation..................... 492 - 492
--------- ----------- ---------
Total Current Liabilities............................... 48,258 - 48,258
--------- ----------- ---------
Long-term Debt............................................ 374,000 148,356 522,356
--------- ----------- ---------
Deferred Income Tax....................................... 17,362 - 17,362
--------- ----------- ---------
Other Long-term Liabilities............................... 3,086 - 3,086
--------- ----------- ---------
Stockholders' Equity:
Series A Convertible preferred stock ($.01 par value,
1,138,729 shares issued)............................... 28,468 - 28,468
Common stock ($.01 par value, 30,807,345 shares issued).. 308 - 308
Additional paid-in capital............................... 203,670 5,725 209,395
Treasury stock (4,414,044 shares)........................ (72,843) - (72,843)
Unrealized gain on investment in equity securities....... 84 - 84
Retained earnings........................................ 1,719 - 1,719
--------- ----------- ---------
Total Stockholders' Equity.............................. 161,406 5,725 167,131
--------- ----------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY..................................... $ 604,112 $ 154,081 $ 758,193
========= =========== =========
</TABLE>
See Accompanying Notes to Pro Forma Consolidated Financial Statements.
-8-
<PAGE>
CROSS TIMBERS OIL COMPANY
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
Pro Forma Adjustments (Note 3)
--------------------------------------
Amoco Other
Acquisition Acquisitions
Historical (b) (c) Other Pro Forma
---------- ----------- ---------- ---------- -----------
REVENUES (in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Oil............................... $ 75,013 $ 2,039 $ 1,526 $ - $ 78,578
Gas............................... 73,402 35,186 16,773 - 125,361
Gas gathering, processing
and marketing................. 12,032 - - - 12,032
Other............................. 944 - - - 944
-------- -------- -------- ---------- ---------
Total Revenues................. 161,391 37,225 18,299 - 216,915
-------- -------- -------- ---------- ---------
EXPENSES
Production........................ 39,365 6,656 2,724 3,954 (e) 52,699
Taxes on production and property.. 11,944 3,561 1,867 - 17,372
Depreciation, depletion
and amortization.............. 37,858 - - 21,081 (d) 58,939
General and administrative........ 16,420 - - (2,173)(e) 14,247
Gas gathering and processing...... 6,905 - - - 6,905
Interest, net..................... 17,072 - - 19,061 (g) 36,133
Trust development costs........... 854 - - - 854
-------- -------- -------- ---------- ---------
Total Expenses................. 130,418 10,217 4,591 41,923 187,149
-------- -------- -------- ---------- ---------
INCOME BEFORE INCOME TAX........... 30,973 27,008 13,708 (41,923) 29,766
Income Tax......................... 10,669 9,183 4,661 (14,254)(h) 10,259
-------- -------- -------- ---------- ---------
NET INCOME......................... 20,304 17,825 9,047 (27,669) 19,507
Preferred Stock Dividends.......... 514 - - - 514
-------- -------- -------- ---------- ---------
EARNINGS AVAILABLE TO
COMMON STOCK...................... $ 19,790 $ 17,825 $ 9,047 $ (27,669) $ 18,993
======== ======== ======== ========== =========
EARNINGS PER COMMON SHARE.......... $ 0.74 $ 0.71
======== =========
Weighted Average
Common Shares Outstanding......... 26,609 26,609
======== =========
</TABLE>
See Accompanying Notes to Pro Forma Consolidated Financial Statements.
-9-
<PAGE>
CROSS TIMBERS OIL COMPANY
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
Pro Forma Adjustments (Note 3)
--------------------------------------
Amoco Other
Acquisition Acquisitions
Historical (b) (c) Other Pro Forma
---------- ----------- ---------- ---------- -----------
REVENUES (in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Oil............................... $ 56,470 $ 1,292 $ 145 $ - $ 57,907
Gas............................... 74,714 26,709 1,793 - 103,216
Gas gathering, processing
and marketing................. 7,558 - - - 7,558
Other............................. 4,807 - - - 4,807
-------- ------- -------- ---------- --------
Total Revenues................. 143,549 28,001 1,938 - 173,488
-------- ------- -------- ---------- --------
EXPENSES
Production........................ 31,960 4,091 52 2,391 (f) 38,494
Exploration....................... 1,122 - - - 1,122
Taxes on production and property.. 11,576 2,779 139 - 14,494
Depreciation, depletion
and amortization.............. 34,529 - - 11,737 (d) 46,266
General and administrative........ 10,457 - - (1,534)(f) 8,923
Gas gathering and processing...... 6,325 - - - 6,325
Interest expense, net............. 18,681 - - 9,992 (g) 28,673
Trust development costs........... 566 - - - 566
-------- ------- -------- ---------- --------
Total Expenses................. 115,216 6,870 191 22,586 144,863
-------- ------- -------- ---------- --------
INCOME BEFORE INCOME TAX........... 28,333 21,131 1,747 (22,586) 28,625
Income Tax......................... 9,835 7,185 594 (7,679) (h) 9,935
-------- ------- -------- ---------- --------
NET INCOME......................... 18,498 13,946 1,153 (14,907) 18,690
Preferred Stock Dividends.......... 1,334 - - - 1,334
-------- ------- -------- ---------- --------
EARNINGS AVAILABLE TO
COMMON STOCK...................... $ 17,164 $13,946 $ 1,153 $ (14,907) 17,356
======== ======= ======== ========== ========
EARNINGS PER COMMON SHARE.......... $ 0.65 0.65
======== ========
Weighted Average
Common Shares Outstanding......... 26,548 26,548
======== ========
</TABLE>
See Accompanying Notes to Pro Forma Consolidated Financial Statements.
-10-
<PAGE>
CROSS TIMBERS OIL COMPANY
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying Pro Forma Consolidated Balance Sheet at September 30, 1997
and the Pro Forma Consolidated Statements of Operations for the year ended
December 31, 1996 and the nine months ended September 30, 1997 have been
prepared assuming that Cross Timbers Oil Company ("the Company") consummated
immediately prior to each of the periods presented, the Amoco Acquisition and
Other Acquisitions (see Note 2). The Pro Forma Consolidated Statements of
Operations are not necessarily indicative of the results of operations had the
above described transactions occurred on the assumed dates.
2. ACQUISITIONS
Amoco Acquisition
On December 1, 1997, the Company acquired interests in certain producing
oil and gas properties in the San Juan Basin of New Mexico from a subsidiary of
Amoco Corporation ("Amoco Acquisition"). The purchase was made pursuant to a
Purchase and Sale Agreement dated September 29, 1997, with a stated purchase
price of $252 million and warrants to purchase 625,000 shares of the Company's
common stock at price of $22.97 per share for a period of five years. The
Company paid a deposit of $25.2 million toward the purchase price on September
29, 1997. After adjustments for other acquisition costs, estimated cash flows
through date of closing and preferential purchase rights exercised by third
parties, the properties were purchased for approximately $195 million, including
approximately $5.7 million value for the warrants. Amoco elected to accept
certain producing properties owned by the Company valued at $15.7 million in
lieu of cash, reducing cash consideration to $173.6 million, which was funded
through borrowings under the Company's Revolving Credit Agreement with
commercial banks dated November 21, 1997. Additional purchase price revisions
may result from customary post-closing adjustments.
Other Acquisitions
The acquisitions described in the following four paragraphs are
collectively referred to as the "Other Acquisitions."
From July 1996 through May 1997, the Company purchased 1,326,300 units of
beneficial interest, or 22% of the outstanding units of beneficial interest in
the Cross Timbers Royalty Trust at a cost of $18.2 million, funded primarily
with bank debt.
On July 19, 1996, the Company acquired primarily gas-producing properties
in the Green River Basin of southwestern Wyoming from Enserch Exploration for an
adjusted purchase price of $39.4 million. The properties primarily consist of
operated interests in the Fontenelle, Nitchie Gulch and Pine Canyon fields. On
November 21, 1996, the Company acquired additional interests in the Fontenelle
Unit, the most significant property included in this acquisition, for an
adjusted purchase price of $12.5 million. These acquisitions were funded by bank
debt and cash flow from operations.
On December 2, 1996, the Company acquired primarily gas-producing
properties in the Northern Val Verde area of the Permian Basin of West Texas.
The properties are primarily operated interests in the Henderson, Ozona and
Davidson Ranch fields. The adjusted purchase price of $28.1 million was funded
by bank debt and cash flow from operations.
-11-
<PAGE>
On May 14, 1997, the Company acquired primarily gas-producing properties
and undeveloped acreage in Oklahoma, Kansas and Texas for an estimated adjusted
purchase price of $39 million from a subsidiary of Burlington Resources Inc.
("Burlington Resources Acquisition"). The properties are primarily operated
interests. Approximately 30% of the purchase price is attributable to 124
square miles (79,500 net acres) of undeveloped acreage primarily located in
Texas County, Oklahoma. The Company funded the acquisition with bank debt and
cash flow from operations.
3. PRO FORMA ADJUSTMENTS
The following are pro forma adjustments necessary to adjust the
Consolidated Balance Sheet and Statements of Operations.
(a) To record the Amoco Acquisition, net of the $25.2 million deposit
paid in September 1997 (see Note 2).
(b) To record revenue and direct operating expenses of the Amoco
Acquisition, based on the statements of revenue and direct operating
expenses for the year ended December 31, 1996 and for the nine
months ended September 30, 1997.
(c) To record revenue and direct operating expenses of the Other
Acquisitions.
(d) To record estimated depreciation and depletion expense attributable
to the Amoco Acquisition and Other Acquisitions using the unit-of-
production method applied to the net cost of the properties
acquired.
(e) To record the estimated increase in general and administrative
expense ($2,661,000) and an allocation from general and
administrative expense to production expense ($4,834,000, less
billing to joint owners of $880,000) attributable to the Amoco
Acquisition and Other Acquisitions for the year ended December 31,
1996.
(f) To record estimated increase in general and administrative expense
($1,241,000) and an allocation from general and administrative
expense to production expense ($2,775,000, less billing to joint
owners of $384,000) attributable to the Amoco Acquisition and Other
Acquisitions for the nine months ended September 30, 1997.
(g) To record interest expense attributable to the increase in long-term
debt to finance the purchase of the Amoco Acquisition and Other
Acquisitions. Interest expense is based upon the weighted average
interest rate incurred by the Company under its revolving credit
facilities, assuming the entire cost of the acquisition was funded
with bank borrowings at January 1, 1996.
(h) To record federal income tax at a corporate statutory rate of 34%
related to net pro forma adjustments.
-12-
<PAGE>
4. PRO FORMA SUPPLEMENTAL OIL AND GAS RESERVE INFORMATION
Estimated Quantities of Pro Forma Proved Oil and Gas Reserves
Pro forma reserve estimates at December 31, 1996 are based on reports
prepared by independent petroleum engineers for proved reserves of the Company
and reports prepared by the Company's internal engineers for proved reserves of
the Amoco Acquisition and Burlington Resources Acquisition.
Proved reserves are estimated quantities of crude oil and natural gas
which, based on geologic and engineering data, are estimated to be reasonably
recoverable in future years from known reservoirs under existing economic and
operating conditions. Proved developed reserves are those which are expected to
be recovered through existing wells with existing equipment and operating
methods. Because of inherent uncertainties and the limited nature of reservoir
data, such estimates are subject to change as additional information becomes
available.
Pro Forma Proved Oil and Gas Reserves at December 31, 1996
Natural Gas
Oil (Bbls) Gas (Mcf) Liquids (Bbls)
---------- --------- --------------
(in thousands)
Proved reserves....... 43,970 806,743 14,423
====== ======= ======
Proved developed
reserves............. 33,173 685,983 12,409
====== ======= ======
Standardized Measure of Discounted Future Net Cash Flows Relating to Pro Forma
Proved Oil and Gas Reserves
The standardized measure of discounted future net cash flows ("Standardized
Measure") is prepared using assumptions required by the Financial Accounting
Standards Board. Such assumptions include the use of year-end prices for oil
and gas and year-end costs for estimated future development and production
expenditures to produce year-end estimated proved reserves. Discounted future
net cash flows are calculated using a 10% rate.
The Standardized Measure does not represent the Company's estimate of
future net cash flows or the value of proved oil and gas reserves. Probable and
possible reserves, which may become proved in the future, are excluded from the
calculations. Furthermore, year-end prices, used to determine the standardized
measure of discounted cash flows, are influenced by seasonal demand and other
factors and may not be the most representative in estimating future revenues or
reserve data.
Pro Forma Standardized Measure of Discounted Future Net Cash Flows at
December 31, 1996
(in thousands)
Future cash inflows........................... $ 3,669,700
Future costs:
Production.................................. (1,153,461)
Development................................. (96,567)
-----------
Future net cash inflows before income tax..... 2,419,672
Future income tax............................. (607,275)
-----------
Future net cash flows......................... 1,812,397
10% annual discount........................... (849,011)
-----------
Standardized measure of discounted future net
cash flows................................... $ 963,386
===========
-13-
<PAGE>
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 16, 1998 By: LOUIS G. BALDWIN
------------------------------
Louis G. Baldwin
Senior Vice President and
Chief Financial Officer
-14-
