<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
--------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
------ -------
Commission file number 0-22576
COHO ENERGY, INC.
-----------------
(Exact name of registrant as specified in its charter)
Texas 75-2488635
- - ------------------------------- ----------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
14785 Preston Road, Suite 860
Dallas, TX 75240
- - --------------------------------------- ------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 774-8300
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
---- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Common Shares, $.01 par value
- - -------------------------- -----------------------------
Outstanding at May 3, 1996 20,166,562
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
December 31, 1995 and March 31, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Condensed Consolidated Statements of Earnings - three
months ended March 31, 1995 and 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Condensed Consolidated Statements of Cash Flows - three months
ended March 31, 1995 and 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Notes to Condensed Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . 4-5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . 6-9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Item 4. Submission of Matters to a Vote
of Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Index to Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
COHO ENERGY, INC.
and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
<TABLE>
<CAPTION>
December 31 March 31
1995 1996
---- ----
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,430 $ 1,086
Accounts receivable, principally trade 5,049 8,262
Receivable from sale of discontinued operations (note 2) --- 20,700
Inventory at lower of cost of market 72 72
Deferred income taxes 973 811
Other current assets 797 253
Net assets of discontinued operations (note 2) 15,938 ---
--------- ---------
24,259 31,184
PROPERTY AND EQUIPMENT, at cost net of accumulated depletion and
depreciation, based on full cost accounting method, (note 3) 175,899 175,964
OTHER ASSETS 2,401 2,066
--------- ---------
$ 202,559 $ 209,214
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 11,041 $ 12,074
Current portion of long term debt 268 274
--------- ---------
11,309 12,348
LONG TERM DEBT excluding current portion 107,403 109,416
DEFERRED INCOME TAXES 9,526 12,094
--------- ---------
128,238 133,858
--------- ---------
SHAREHOLDERS' EQUITY
Preferred stock, par value $0.01 per share
Authorized 10,000,000 shares, none issued
Common stock, par value $0.01 per share
Authorized 50,000,000 shares
Issued 20,165,263 shares 202 202
Additional paid-in capital 82,278 82,278
Retained earnings (deficit) (8,159) (7,124)
--------- ---------
Total shareholders' equity 74,321 75,356
--------- ---------
COMMITMENTS AND CONTINGENCIES (note 6)
$ 202,559 $ 209,214
========= =========
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1
<PAGE> 4
COHO ENERGY, INC.
and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands, except per share amounts)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31
-------------------------
1995 1996
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(RESTATED)
<S> <C> <C>
OPERATING REVENUES
Net crude oil and natural gas production $ 9,402 $12,367
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OPERATING EXPENSES
Crude oil and natural gas production 2,604 2,830
Taxes on crude oil and natural gas production 418 597
General and administrative 1,344 1,459
Depletion and depreciation 3,462 3,905
------- -------
Total operating expenses 7.828 8,791
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OPERATING INCOME 1,574 3,576
------ -------
OTHER INCOME AND EXPENSES
Interest and other income 37 477
Interest expense (1,837) (2,312)
------- --------
(1,800) (1,835)
------- --------
EARNINGS (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (226) 1,741
INCOME TAXES EXPENSE (BENEFIT) (86) 706
------- -------
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS (140) 1,035
DISCONTINUED OPERATIONS (note 2)
Income (Loss) from discontinued marketing and transportation operations
(less applicable income tax expense of $195) 317 ---
------ -------
NET EARNINGS 177 1,035
DIVIDENDS ON PREFERRED STOCK 338 ---
------ -------
NET EARNINGS (LOSS) APPLICABLE TO COMMON STOCK $ (161) $ 1,035
======== =======
EARNINGS (LOSS) FROM CONTINUING OPERATIONS
PER COMMON SHARE $ (0.02) $ .05
======== =======
EARNINGS (LOSS) PER COMMON SHARE (note 5) $ (0.01) $ .05
======== =======
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2
<PAGE> 5
COHO ENERGY, INC.
and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
Three Months Ended
March 31
--------------------------
1995 1996
-------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 177 $ 1,035
Adjustments to reconcile net earnings
to net cash provided by operating activities:
Depletion and depreciation 3,703 3,905
Deferred income taxes 41 658
Amortization of debt issue costs and other items 105 236
Changes in operating assets and liabilities:
Accounts receivable and other assets 4,409 (2,598)
Accounts payable and accrued liabilities (1,106) 2,348
-------- --------
Net cash provided by operating activities 7,329 5,584
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Property and equipment (4,873) (7,862)
-------- --------
Net cash used in investing activities (4,873) (7,862)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in long term debt 2,000 5,500
Repayment of long term debt (3,648) (3,566)
-------- --------
Net cash provided (used) by financing activities (1,648) 1,934
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 808 (344)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,613 1,430
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,421 $ 1,086
======== ========
CASH PAID (RECEIVED) DURING THE PERIOD FOR:
Interest $ 1,326 $ 2,812
Income taxes $ (714) $ 83
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE> 6
COHO ENERGY, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1996
(TABULAR AMOUNTS ARE IN THOUSANDS OF DOLLARS
EXCEPT WHERE NOTED)
(UNAUDITED)
1. BASIS OF PRESENTATION
GENERAL
The accompanying condensed consolidated financial statements of Coho Energy,
Inc. (the "Company") have been prepared without audit, in accordance with
the rules and regulations of the Securities and Exchange Commission and do
not include all disclosures normally required by generally accepted
accounting principles or those normally made in annual reports on Form 10-K.
All material adjustments, consisting only of normal recurring accruals,
which, in the opinion of management, were necessary for a fair presentation
of the results for the interim periods have been made. The results of
operations for the three month period ended March 31, 1996 are not
necessarily indicative of the results to be expected for the full year. The
condensed consolidated financial statements should be read in conjunction
with the notes to the financial statements, which are included as part of
the Company's annual report on Form 10-K for the year ended December 31,
1995.
SUPPLEMENTAL CASH FLOW INFORMATION
The statements of cash flows reflect the cash effects of the Company's
operations, its investing transactions, and its financing transactions.
Certain noncash transactions related to the sale of the discontinued
operations have been excluded from the statement of cash flows for the three
months ended March 31, 1996.
2. DISCONTINUED OPERATIONS
On March 4, 1996, the Company signed a definitive agreement to sell
effective January 1, 1996, the stock of its three wholly-owned subsidiaries
that comprise its natural gas marketing and transportation segment to an
unrelated third party for cash of $19.5 million, the assumption of net
liabilities of approximately $2.3 million and the payment of taxes to a
maximum of $1.2 million generated as a result of the tax treatment of the
transaction. The sale closed on April 3, 1996. The marketing and
transportation segment is accounted for as discontinued operations, and
accordingly, its operations are segregated in the accompanying statement of
earnings for the three months ended March 31, 1995.
The proceeds from the sale of the discontinued operations of $20.7 million
are recorded as a current receivable and the costs associated with the sale
of $1.4 million are recorded as an accrued liability as of March 31, 1996.
These noncash transactions have been excluded from the statement of cash
flows for the three months ended March 31, 1996.
3. PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
December 31, March 31,
1995 1996
---------- --------
<S> <C> <C>
Crude oil and natural gas leases and rights
including exploration, development and
equipment thereon, at cost $ 278,197 $282,213
Accumulated depletion and depreciation (102,298) (106,249)
--------- --------
$ 175,899 $175,964
========= ========
</TABLE>
Overhead expenditures directly associated with exploration and development
of crude oil and natural gas reserves have been capitalized in accordance
with the accounting policies of the Company. Such charges totalled $490,000
and $583,000 for the three months ended March 31, 1995 and 1996,
respectively.
4
<PAGE> 7
During the three months ended March 31, 1995 and 1996, the Company did not
capitalize any interest or other financing charges on funds borrowed to
finance unproved properties or major development projects.
At December 31, 1995 and March 31, 1996, unproved crude oil and natural gas
properties totalling $6,254,000 were excluded from costs subject to
depletion. These costs are anticipated to be included in costs subject to
depletion during the next three to five years.
4. RESTRUCTURING EXPENSES
During the first quarter of 1996, the Company terminated the last employee
and paid all remaining severance benefits totalling $412,000 associated with
the Company's 1994 restructuring plan.
5. EARNINGS PER SHARE
Earnings per share have been calculated based on the weighted average number
of shares outstanding (including common shares plus, when their effect is
dilutive, common stock equivalents consisting of stock options) for the
three months ended March 31, 1995 and 1996, of 16,782,925 and 20,230,915,
respectively.
6. COMMITMENTS AND CONTINGENCIES
The Company is a defendant in various legal proceedings and claims which
arise in the normal course of business. Based on discussions with legal
counsel, the Company does not believe that the ultimate resolution of such
actions will have a significant effect on the Company's financial position.
Like other crude oil and natural gas producers, the Company's operations are
subject to extensive and rapidly changing federal and state environmental
regulations governing emissions into the atmosphere, waste water discharges,
solid and hazardous waste management activities and site restoration and
abandonment activities. The Company does not believe that any potential
liability, in excess of amounts already provided for, would have a
significant effect on the Company's financial position.
The Company has entered into certain financial arrangements which act as a
hedge against price fluctuations in future crude oil and natural gas
production. Gains and losses on these transactions are recorded in earnings
when the future production sale occurs. The Company has 2,140,000 Mmbtu of
natural gas production hedged over the period from April through October
1996, at an average price of $2.10 per Mmbtu. The Company has also entered
into certain arrangements which fix a minimum WTI price per barrel of $16.00
and a maximum WTI price of $18.20 for 3,000 barrels of oil production per
day through July 31,1996 and a minimum WTI price per barrel of $17.00 and a
maximum WTI price of $18.28 for 3,500 barrels per day of oil production for
the period beginning August 1, 1996 through December 31, 1996.
5
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Company's
Condensed Consolidated Financial Statements and notes thereto included
elsewhere herein.
GENERAL
The Company seeks to acquire controlling interests in underdeveloped oil and
gas properties and attempts to maximize reserves and production from such
properties through relatively low-risk activities such as development
drilling, multiple completions, recompletions, workovers, enhancement of
production facilities and secondary recovery projects. During the three
months ended March 31, 1996, 74% of production revenues were attributable to
the sale of crude oil and the remaining 26% were derived from natural gas.
These percentages are consistent with the quarter ended March 31, 1995.
The Company increased its crude oil production in the first three months of
1996 as a result of ongoing development activities on its existing
properties in Mississippi. Average net daily BOE production was 9,590 BOE
for the three months ended March 31, 1996 as compared to 8,979 BOE for the
same period in 1995.
Oil and gas prices are subject to significant seasonal, political and other
variables which are beyond the Company's control. In an effort to reduce the
effect on the Company of the volatility of the prices received for crude oil
and natural gas, the Company has entered, and expects to continue to enter,
into crude oil and natural gas hedging transactions. The Company's hedging
program is intended to stabilize cash flow and thus allow the Company to
plan its capital expenditure program with greater certainty. Furthermore,
under its revolving credit facility, the Company is required, once per year,
to hedge at least 50% of its daily crude oil and natural gas production for
the then succeeding 12 months. Because all hedging transactions are tied
directly to the Company's crude oil and natural gas production, the Company
does not believe that such transactions are of a speculative nature.
LIQUIDITY AND CAPITAL RESOURCES
Capital Sources. For the three months ended March 31, 1996, cash flow
generated from operating activities was $5.6 million compared with $7.3
million for the same period in 1995. Although cash flow generated from
operating activities before changes in operating assets and liabilities
improved $1.8 million from 1995 to 1996, changes in operating assets and
liabilities provided additional cash flow of $3.3 million in 1995 as
compared to a use of cash flow of $.2 million in 1996. See results of
operations for a discussion of improved operating results.
At March 31, 1996, the Company had working capital of $18.8 million,
primarily due to the inclusion of $20.7 million as a current receivable
relating to the sale of the marketing and pipeline segment which closed on
April 3, 1996. The proceeds from the sale were used to pay down borrowings
under the Company's revolving credit facility in April 1996.
As of March 31, 1996, the amount available to the Company ("Borrowing Base")
under its revolving credit facility is $110 million, with an additional $5
million in "Permitted Overadvances", giving the Company $115 million in
total borrowing capacity for general corporate purposes. The Borrowing Base
was not reduced in April 1996 as a result of the sale of the marketing and
pipeline segment of operations. Outstanding advances under the Restated
Credit Agreement at March 31, 1996 were $105.4 million, all of which is
classified as long term. The Company also had letters of credit aggregating
$4.2 million outstanding under the Restated Credit Agreement as of March 31,
1996, to secure promissory notes issued in August 1995, relating to the
acquisition of the Brookhaven field in Mississippi, leaving $5.4 million
available under the facility at March 31, 1996. On April 3, 1996, the sales
proceeds of $20.7 million from the sale of the marketing and transportation
segment were used to pay down amounts outstanding under the credit facility
thereby increasing the availability under the facility to approximately
$26.1 million. The Restated Credit Agreement permits advances and
repayments under the revolver until January 31, 1998, at which time the loan
converts to a non-revolver term facility that requires quarterly principal
repayments until the loan is fully repaid in 2002.
6
<PAGE> 9
The Restated Credit Agreement contains certain financial and other covenants
including (i) the maintenance of minimum amounts of shareholders' equity,
(ii) maintenance of minimum ratios of cash flow to debt service costs, (iii)
limitations on the Company's and Coho Resources, Inc.'s ability to incur
additional debt (iv) a requirement to periodically hedge a minimum of 50% of
crude oil and natural gas production and (v) restrictions on the payment of
dividends.
On April 3, 1996, the Company's wholly owned subsidiary, Interstate Natural
Gas Company, sold to Republic Gas Partners, L.L.C. ("Republic") all of the
stock of its wholly-owned subsidiaries, Mid Louisiana Gas Company, Mid
Louisiana Marketing Company and Mid Louisiana Gas Transmission Company,
which comprise the Company's Louisiana natural gas marketing and
transportation segment of operations for total consideration of
approximately $23 million. The total consideration is comprised of $19.5
million cash, the assumption of net liabilities of approximately $2.3
million (excluding deferred taxes) and the reimbursement for the payment of
certain taxes to a maximum of $1.2 million, generated as a result of the tax
treatment of the transaction. Republic is an unaffiliated third party. The
proceeds from the sale were used to pay down borrowings under the Company's
revolving credit facility.
Capital Expenditures. During the first three months of 1996, the Company
incurred capital expenditures of $7.9 million compared with $4.9 million for
the first three months of 1995. The capital expenditures incurred during
the first three months of 1996, were largely in connection with the
continuing development efforts on existing wells in the Company's Laurel,
Martinville, Soso and Summerland fields. In addition at March 31, 1996, the
Company is in various stages in the process of drilling four wells, two in
the Laurel field, one in the Martinville field and one in the Summerland
field. General and administrative costs directly associated with the
Company's exploration and development activities were $583,000 for the first
three months of 1996 compared with $490,000 for the first three months of
1995, and are included in total capital expenditures.
The Company has no material capital commitments and is consequently able to
adjust the level of its expenditures as circumstances warrant.
7
<PAGE> 10
RESULTS OF OPERATIONS
Selected Operating Data
<TABLE>
<CAPTION>
Three Months Ended March 31
------------------------------
1995 1996
------------- -------------
(in thousands, except per day,
<S> <C> <C>
Production
Crude Oil (Bbl/day) 5,616 6,609
Natural Gas (Mcf/day) 20,179 17,884
BOE (Bbl/day) 8,979 9,590
Average Sales Prices
Crude Oil $ 13.46 $ 15.16
Natural Gas $ 1.43 $ 1.99
Other
Production costs per BOE (1) $ 3.74 $ 3.93
Depletion per BOE $ 4.28 $ 4.47
Revenues
Production revenues
Crude Oil $ 6,804 $ 9,121
Natural Gas 2,598 3,246
--------- -------
$ 9,402 $12,367
========= =======
</TABLE>
Operating Revenues. During the first three months of 1996, production
revenues increased 32% to $12.4 million as compared to $9.4 million for the
same period in 1995. This increase was principally due to an 18% increase
in crude oil production, a 13% increase in crude oil prices received and a
39% increase in natural gas prices received.
The 18% increase in crude oil production is primarily a result of the
continued positive response from the Company's development efforts on
existing wells, particularly in the Laurel, Soso and Summerland fields. In
addition, for the three months ended March 31, 1996, production includes oil
from the Company's Brookhaven field, which was acquired in August 1995. Gas
production during the first quarter of 1996 was 11% lower than the
comparable 1995 period, primarily due to operational problems as a result of
colder than normal weather.
Crude oil prices increased during the first quarter of 1996 compared to the
same period in 1995 and are continuing to remain strong into the second
quarter of 1996. The posted price for the Company's crude oil averaged
$18.04 for the three months ended March 31, 1996, a 6% increase over the
average posted price of $16.98 experienced in the first quarter of 1995.
The price per barrel received by the Company is adjusted for the quality of
the crude oil and is generally lower than the posted price. The crude oil
prices received by the Company during 1996 increased more significantly than
the average posted price because the Company amended its marketing
arrangements for the sale of
8
<PAGE> 11
substantially all of its crude oil during 1995 and again in March 1996, to
improve the price it receives for its crude oil resulting in a net increase
in revenues to the Company. These price improvements were partially offset
by increased crude oil hedging losses during 1996 discussed below.
The price for the Company's natural gas, including hedging gains and losses,
increased 39% during the first three months of 1996 from $1.43 in 1995 to
$1.99 in 1996, due to the colder winter season across the United States in
1996 and increased heating needs.
Production revenues for the three months ended March 31, 1996 included crude
oil hedging losses of $380,000 ($0.63 per Bbl) compared to hedging losses of
$53,000 ($0.10 per Bbl) for the same period in 1995. Production revenues
for the 1996 period also included hedging losses on natural gas of $708,000
($0.44 per Mcf) compared with natural gas gains of $31,000 ($0.02 per Mcf)
during the same period in 1995. Additionally, the Company has entered into
certain arrangements which fix a minimum WTI price per barrel of $16.00 and
a maximum WTI price of $18.20 for 3,000 barrels of production per day
through July 31, 1996, and a minimum WTI price of $17.00 and a maximum WTI
price of $18.28 per barrel on 3,500 barrels per day of production beginning
August 1, 1996 and ending December 31, 1996. The Company also has 2,140,000
Mmbtu of natural gas production hedged over the April through October 1996
period at an average price of $2.10 per Mmbtu. Any gain or loss on the
Company's crude oil hedging transactions is determined as the difference
between the contract price and the average closing price for WTI on the
NYMEX for the contract period. Any gain or loss on the Company's natural
gas hedging transactions is generally determined as the difference between
the contract price and the average settlement price for the last three days
during the month in which the hedge is in place. Consequently, hedging
activities do not affect the actual sales price received for the Company's
crude oil and natural gas.
Interest and other income increased to $477,000 in 1996 from $37,000 in 1995
primarily due to $457,000 of interest earned during the first quarter of
1996 on the receivable from the sale of the marketing and pipeline segment
of operations.
Expenses. Production expenses were $3.4 million for the first three months
of 1996 compared to $3.0 million for the first three months of 1995. This
increase reflects additional production volumes. On a BOE basis, production
costs increased to $3.93 per Bbl in 1996 compared to $3.74 per Bbl in 1995,
primarily due to an increase of $.17 per BOE in production taxes as a result
of higher oil and gas prices.
General and administrative costs increased to $1.5 million in 1996 from $1.3
million in 1995. This increase is primarily due to increased personnel
costs due to staff additions in the Dallas office made late in the first
quarter and during the second quarter of 1995 to handle the ING acquisition
as well as staff additions made throughout 1995 and early 1996 to handle the
increased capital spending activities in Mississippi.
Interest expense increased 28% to $2.3 million in 1996 from $1.8 million in
1995. This increase is due to higher borrowing levels as a result of the
Company's ongoing capital expenditure program.
Depletion and depreciation increased 13% to $3.9 million, for the three
months ended March 31, 1996 from $3.5 million in 1995. This increase
primarily is a result of increased production volumes. The rate per BOE
increased slightly to $4.47 versus $4.28 for the comparable period in 1995.
The Company's net earnings for the first three months of 1996 were
$1,035,000 as compared to $177,000 for the same period in 1995 for the
reasons discussed above.
9
<PAGE> 12
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
10.1 Fourth Amendment to the Second Amended and Restated Credit
Agreement dated March 29, 1996 by and among Coho Resources,
Inc., Coho Energy, Inc., and Banque Paribas, Houston Agency.
10.2 Gas Purchase Contract dated January 1, 1996, by and between
Mid Louisiana Production Company and Mid Louisiana Marketing
Company (incorporated by reference to Exhibit 99.1 to the
Company's current report on Form 8-K dated April 3, 1996).
10.3 Gas Transportation Agreement dated January 1, 1996, by and
between Mid Louisiana Gathering Company and Mid Louisiana
Marketing Company (incorporated by reference to Exhibit 99.2
to the Company's current report on Form 8-K dated April 3,
1996).
10.4 Gas Transportation Agreement dated January 1, 1996, by and
between Fairbanks Gathering Company and Mid Louisiana
Marketing Company (incorporated by reference to Exhibit 99.3
to the Company's current report on Form 8-K dated April 3,
1996).
11 Statement re computation of per share earnings
27 Financial Data Schedule
(B) REPORTS ON FORM 8-K
None
10
<PAGE> 13
COHO ENERGY, INC.
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 thereunto duly authorized.
<TABLE>
<S> <C>
COHO ENERGY, INC.
(Registrant)
Date: May 9, 1996
By /s/ Jeffrey Clarke
---------------------------------------------------------
Jeffrey Clarke
(Chairman, President, and Chief Executive Officer)
By /s/ Eddie M. LeBlanc, III
------------------------------------------------------
Eddie M. LeBlanc, III
(Sr. Vice President and Chief Financial Officer)
</TABLE>
11
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE NO.
- - ------- ----------- --------
<S> <C> <C>
10.1 Fourth Amendment to the Second Amended and Restated Credit
Agreement dated March 29, 1996 by and among Coho Resources,
Inc., Coho Energy, Inc., and Banque Paribas, Houston Agency.
10.2 Gas Purchase Contract dated January 1, 1996, by and between
Mid Louisiana Production Company and Mid Louisiana Marketing
Company (incorporated by reference to Exhibit 99.1 to the
Company's current report on Form 8-K dated April 3, 1996).
10.3 Gas Transportation Agreement dated January 1, 1996, by and
between Mid Louisiana Gathering Company and Mid Louisiana
Marketing Company (incorporated by reference to Exhibit 99.2
to the Company's current report on Form 8-K dated April 3,
1996).
10.4 Gas Transportation Agreement dated January 1, 1996, by and
between Fairbanks Gathering Company and Mid Louisiana
Marketing Company (incorporated by reference to Exhibit 99.3
to the Company's current report on Form 8-K dated April 3,
1996).
11 Statement re computation of per share earnings
27 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 10.1
FOURTH AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (the
"Amendment"), dated as of March 29, 1996, is by and among COHO RESOURCES, INC.,
a Nevada corporation ("Borrower"), COHO ENERGY, INC., a Texas corporation
("Guarantor") (Borrower and Guarantor are sometimes referred to herein
individually as "Company" and together as "Companies"), each of the banks or
other lending institutions which is a signatory hereto or any successor or
assignee thereof (collectively, the "Lenders") and BANQUE PARIBAS, a bank
organized under the laws of the Republic of France, acting through its Houston
agency, as agent for itself as a Lender and the other Lenders (in such
capacity, together with its successors in such capacity, "Agent").
RECITALS:
A. Borrower, Guarantor, Agent and the Lenders entered into that certain
Second Amended and Restated Credit Agreement dated as of December 2, 1994 (as
amended by that certain First Amendment to Second Amended and Restated Credit
Agreement dated as of June 30, 1995, that certain Second Amendment to Second
Amended and Restated Credit Agreement dated as of August 4, 1995, and that
certain Third Amendment to Second Amended and Restated Credit Agreement dated
as of November 1, 1995, herein the "Agreement").
B. Borrower, Guarantor, Agent and the Lenders now desire to amend the
Agreement further as herein set forth.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.01. Definitions. Capitalized terms used in this Amendment, to
the extent not otherwise defined herein, shall have the same meanings as in the
Agreement as amended hereby.
FOURTH AMENDMENT TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT - Page 1
<PAGE> 2
ARTICLE II
Amendments
Section 2.01. Deletion of Definitions. Effective as of the date
hereof, the definitions of "Louisiana Pipeline Mortgage," "Marketing Company,"
"Mississippi Pipeline Deed of Trust," "Stored Gas Advances," "Stored Gas
Commitment," and "Stored Gas Valuation Report" are hereby deleted from Section
1.01 of the Agreement in their entirety.
Section 2.02. Amendment to Definition of Applicable Rate. Effective
as of the date hereof, the definition of "Applicable Rate" contained in Section
1.01 of the Agreement is hereby amended and restated to read in its entirety as
follows:
"Applicable Rate" means: (a) during the period that an
Advance is a Prime Rate Advance, the Prime Rate plus the
Applicable Margin, (b) during the period that an Advance (other than
a Permitted Overadvance) is a Eurodollar Advance, the Adjusted
Eurodollar Rate plus the Applicable Margin, and (c) during the period
that an Advance is a Permitted Overadvance, the Applicable Rate for
the portion of such Advance that is a Permitted Overadvance shall be
equal to (i) the Prime Rate plus two and one-quarter percent (2.25%)
if such Advance is a Prime Rate Advance, and (ii) the Adjusted
Eurodollar Rate plus three percent (3%) if such Advance is a
Eurodollar Advance.
Section 2.03. Amendment to Definition of Applicable Margin.
Effective as of the date hereof, the last sentence of the definition of
"Applicable Margin" contained in Section 1.01 of the Agreement is hereby
amended and restated to read in its entirety as follows:
The term "Borrowing Base Utilization" means, for any day, a
percentage calculated by (a) dividing (i) the Outstanding Credit on
such day by (ii) the Borrowing Base on such day and (b) multiplying
the resulting quotient by 100.
Section 2.04. Amendment to Definition of Availability. Effective as of the date
hereof, the definition of "Availability" contained in Section 1.01. of the
Agreement is hereby amended and restated to read in its entirety as follows:
"Availability" means, at the date of determination,
the difference between (a) the sum of the Borrowing Base as of such
date, plus, from November 1, 1995, to but excluding the Permitted
Overadvance Termination Date, $5,000,000 and (b) the Outstanding
Credit as of such date, plus, from November 1, 1995, to but excluding
the Permitted Overadvance Termination Date, outstanding Permitted
Overadvances as of such date.
Section 2.05. Amendment to Definition of ING Subsidiaries. Effective
as of the date hereof, the definition of "ING Subsidiaries" contained in
Section 1.01 of the Agreement is hereby amended and restated to read in its
entirety as follows:
FOURTH AMENDMENT TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT - Page 2
<PAGE> 3
"ING Subsidiaries" means the Production Company, Fairbanks
Gathering Company, Mid Louisiana Gathering Company and ING-La.
Section 2.06. Amendment to Definition of Outstanding Credit.
Effective as of the date hereof, the definition of "Outstanding Credit"
contained in Section 1.01 of the Agreement is hereby amended and restated to
read in its entirety as follows:
"Outstanding Credit" means, at the date of determination, the
sum of the following: (a) the sum of the aggregate outstanding amount
of Advances as of such date, plus (b) the outstanding Letter of
Credit Liabilities as of such date, plus (c) all fixed and contingent
liabilities outstanding as of such date in respect of the
letters of credit issued pursuant to the provisions set forth in
subsection 7.02(b)(xi) and, prior to the Renewal Date,
pursuant to the provisions set forth in subsection 7.02(b)(xi) of the
First Amended Credit Agreement, and prior to February 8, 1994,
pursuant to the provisions of subsection 7.02(b)(ix) of the Original
Credit Agreement.
Section 2.07. Amendment to Definition of Permitted Intercompany
Advance. Effective as of the date hereof, the definition of "Permitted
Intercompany Advance" contained in Section 1.01 of the Agreement is hereby
amended and restated to read in its entirety as follows:
"Permitted Intercompany Advance" means an advance made by
Borrower to an Intercompany Borrower if (A) no Potential Default or
Event of Default exists or would result therefrom, (B) the amount of
such advance does not exceed the Availability existing immediately
prior to the time such advance is made, (C) such advance is used by
the applicable Intercompany Borrower to acquire Petroleum and Natural
Gas Rights, or, in the case of advances to Guarantor, such advances
are used to pay cash dividends on the Preferred Stock or to retire,
redeem, or otherwise repurchase the Preferred Stock to the extent
such dividends, retirements, redemptions or other repurchases are
otherwise permitted by this Agreement, (D) such advance is otherwise
made on terms and conditions and is evidenced and governed by loan
and security documents which are reasonably acceptable to the Agent
and Lenders, (E) such advance, along with the collateral securing the
repayment thereof and all documentation executed in connection
therewith, is pledged to the Agent for the benefit of the Lenders to
secure repayment of the Obligations pursuant to the terms of the
Additional Security Agreement, and (F) Borrower shall have provided
evidence to Agent and the Lenders, in form and substance reasonably
acceptable to the Agent and the Lenders, that after giving effect to
such advance (1) the present fair saleable value of Borrower's assets
is in excess of the total amount of the Borrowees liabilities,
contingent or otherwise, (2) Borrower is paying its debts as they
become due, (3) Borrower does not believe that it will incur debts or
liabilities beyond its ability to pay such debts and liabilities as
they mature, and (4) Borrower has sufficient capital to carry on its
business as it has been operated and as it is intended to be
operated.
FOURTH AMENDMENT TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT - Page 3
<PAGE> 4
Section 2.08. Amendment to Definition of Security Documents.
Effective as of the date hereof, the definition of "Security Documents"
contained in Section 1.01 of the Agreement is hereby amended and restated to
read in its entirety as follows:
"Securities Documents" means the Mortgage, the Deed of Trust,
the Original Security Agreement, the Additional Security Agreement,
the Guaranty, the Guarantor Pledge Agreement, the Borrower Pledge
Agreement, the ING Pledge Agreement, the Mid Louisiana Pledge
Agreement, the Louisiana Oil and Gas Mortgage, the Mississippi Oil
and Gas Deed of Trust, the Negative Pledge Agreement dated February
8, 1994, executed by Coho Canada for the benefit of the Agent and the
Lenders, Uniform Commercial Code Financing Statements and such other
mortgages, deeds of trust, security agreements, financing statement
and other documentation executed and delivered by any Credit Party or
any other Person for the benefit of the Agent and the Lenders that
grant or perfect Liens on property to secure the Obligations or any
part thereof, as any of the same may be amended or otherwise modified
from time to time.
Section 2.09. Amendment to Section 2.01(a) of the Agreement.
Effective as of the date hereof, the first sentence of Section 2.01(a) of the
Agreement is hereby amended and restated to read in its entirety as follows:
Subject to the terms and conditions of this Agreement, each
Lender severally agrees to make one or more Advances to Borrower from
time to time from the Renewal Date to and including the Revolving
Termination Date in an aggregate principal amount at any time
outstanding up to but not exceeding the amount of such Lender's
Commitment as then in effect; provided, however, that the
Outstanding Credit shall not at any time exceed the Borrowing Base
plus, from November 1, 1995, to but excluding the Permitted
Overadvance Termination Date, up to $5,000,000 in Permitted
Overadvances.
Section 2.10. Amendment to Section 2.04(i) of the Agreement.
Effective as of the date hereof, Section 2.04(i) of the Agreement is hereby
amended and restated to read in its entirety as follows:
"(i) in the case of Prime Rate Advances (including Permitted
Overadvances), on each Monthly Payment Date and on the Maturity Date;"
Section 2.11. Amendment to Section 2.05(a) of the Agreement.
Effective as of the date hereof, Section 2.05(a) of the Agreement is hereby
amended and restated to read in its entirety as follows:
(a) Borrowing Procedure. Borrower shall give the Agent
notice by means of an Advance Request Form of each requested Advance
(other than an Advance pursuant to subsection 2.01(b)(ii)), at least
two (2) Business Days before the requested date of each Prime Rate
Advance and at least three (3) Business Days before the requested
date of each Eurodollar Advance, specifying: (i) the requested date
of such Advance (which shall be a
FOURTH AMENDMENT TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT - Page 4
<PAGE> 5
Business Day), (ii) the amount of such Advance, (iii) the Type of the
Advance, and (iv) in the case of a Eurodollar Advance, the duration
of the Interest Period for such Advance. The Agent at its option may
accept telephonic requests for Advances, provided that such
acceptance shall not constitute a waiver of the Agent's right to
delivery of an Advance Request Form in connection with subsequent
Advances. Any telephonic request for an Advance by Borrower
shall be promptly confirmed by submission of a properly completed
Advance Request Form to the Agent. Each Advance (other than an
Advance pursuant to subsection 2.01(b)(ii) shall be in a minimum
principal amount of One Million Dollars ($1,000,000.00). The
aggregate principal amount of Eurodollar Advances having the same
Interest Period shall be at least equal to One Million Dollars
($1,000,000.00). The Agent shall promptly notify each Lender of each
such notice of borrowing. Not later than 11:00 A.M. Houston, Texas
time on the date specified for each Advance hereunder, each Lender
will make available to the Agent at the Principal Office in
immediately available funds, for the account of Borrower, its Pro
Rata share (determined based on the Commitments) of each Advance.
After the Agent's receipt of such funds and subject to the other
terms and conditions of this Agreement, the Agent will make such
Advances available to Borrower by depositing the same, in immediately
available funds, in an account of Borrower designated by Borrower.
All notices under this subsection (a) given by the Borrower shall be
irrevocable and shall be given not later than 10:00 A.M. Houston,
Texas, time on the day which is not less than the number of Business
Days specified above for such notice.
Section 2.12. Amendment to Section 2.06 of the Agreement. Effective
as of the date hereof, Section 2.06 of the Agreement is hereby amended and
restated to read in its entirety as follows:
SECTION 2.06. Use of Proceeds. Upon the effectiveness of this
Agreement, the principal amount then outstanding under the First
Amended Credit Agreement is and shall be deemed to be an "Advance"
outstanding hereunder, each Lender to have its Pro Rata share
thereof (based on the Commitments) and such Advance to be of the
Type or Types selected by Borrower pursuant to the First Amended
Credit Agreement. The proceeds of all other Advances shall be used
by Borrower (i) to finance the acquisition of Petroleum and
Gas Rights, (ii) for the exploration for, drilling and
development of Petroleum and Natural Gas Rights, (iii) to make
Permitted Coho Shell Advances and Permitted Intercompany Advances,
(iv) to finance the ING Acquisition, including associated
transaction costs, and (v) for other general corporate purposes.
Section 2.13. Amendment to Section 3.02 of the Agreement. Effective
as of the date hereof, Section 3.02 of the Agreement is hereby amended and
restated to read in its entirety as follows:
SECTION 3.02. Repayments and Prepayment.
(a) Optional Repayments and Prepayments. Borrower may, upon
at least two (2) Business Days prior notice to the Agent in the case
of Prime Rate Advances and at least three (3) Business Days prior
notice to the Agent in the case of Eurodollar Advances, repay or
prepay the Notes in whole at any time or from time to time in part
without premium or
FOURTH AMENDMENT TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT - Page 5
<PAGE> 6
penalty but with accrued and unpaid interest to the date of repayment
or prepayment on the amount so repaid or prepaid; provided that (i)
Eurodollar Advances may be repaid or prepaid only on the last day of
the Interest Period for such Advances, unless the Borrower shall pay
to the Agent for the account of the applicable Lenders any amounts
owed pursuant to Section 4.05 and (ii) each partial repayment or
prepayment shall be in the principal amount of One Million Dollars
($1,000,000.00) or an integral multiple thereof. The principal amount
of any prepayments made under this subsection 3.02(a) after the
Revolving Termination Date shall be applied to the principal
installments owing under Section 2.03 as follows:
(A) fifty percent (50%) of the amount of the prepayment shall be
applied to the principal installments owing under Section
2.03 in the inverse order of maturity; and
(B) fifty percent (50%) of the amount of the prepayment shall be
applied to the next succeeding principal installments owing
under Section 2.03 in the order of maturity.
(b) Mandatory Prepayments. If the Outstanding Credit at
any time ever exceeds the Borrowing Base plus, from November 1, 1995,
to but excluding the Permitted Overadvance Termination Date, up to
$5,000,000 in Permitted Overadvances, the Borrower shall make a
prepayment in an amount equal to the amount by which the sum of the
outstanding Advances and the outstanding Letter of Credit
Liabilities exceeds the Borrowing Base plus, from November 1, 1995,
to but excluding the Permitted Overadvance Termination Date, up to
$5,000,000 in Permitted Overadvances, if any (with accrued and unpaid
interest to the date of prepayment on the amount so prepaid and any
amounts due under Section 4.05), within sixty (60) days after the
Borrower shall have been given notice from the Agent that such sum
exceeds the Borrowing Base. Any prepayments under this Section
3.02(b) shall be distributed to the Lenders pursuant to Section 3.03
until or unless all amounts under the applicable Notes have been
paid, then such repayments shall be held by the Agent as additional
collateral pursuant to such documentation and agreements as Agent may
require to secure the Obligations with respect to the applicable
Letter of Credit Liabilities outstanding, if any. The principal
amount of any mandatory prepayments made under this subsection
3.02(b) and any prepayments made in accordance with subsection
7.02(d)(iii) after the Revolving Termination Date shall be applied to
all the principal installments owing under Section 2.03, each such
installment to be reduced by an amount equal to the quotient obtained
by dividing the amount of the prepayment by the number of unpaid
installments owing under the terms of Section 2.03.
Section 2.14. Amendment to Section 5.02(d) of the Agreement.
Effective as of the date hereof, Section 5.02(d) of the Agreement is hereby
amended and restated to read in its entirety as follows:
(d) Advance Request Form. The Agent shall have received
an Advance Request Form pursuant to Section 2.05 hereof with respect
to such Advance or Letter of Credit and, with respect to each Letter
of Credit and the documentation required by the Agent in accordance
with subsection 2.01(b)(i).
FOURTH AMENDMENT TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT - Page 6
<PAGE> 7
Section 2.15. Amendment to Section 6.01(t) of the Agreement.
Effective as of the date hereof, Section 6.01(t) of the Agreement is hereby
amended and restated to read in its entirety as follows:
(t) Principal Place of Business; Location of Collateral. The
principal place of business and chief executive office of each Credit
Party (other than Coho Canada) and the place where each such Credit
Party (other than Coho Canada) keeps its books and records is located
at the address of such Credit Party set forth on Schedule 6.01(t). The
title opinions delivered to Agent in connection with the previously
executed Loan Documents and the title opinion described in Section
5.01(d) (xi) identify all of the Pledging Parties' material Petroleum
and Natural Gas Rights as of the Renewal Date and the location of the
ING Systems (as defined in the ING Acquisition Agreement). Schedule
6.01(t) specifically sets forth all locations where each Credit Party
(other than Coho Canada) maintains the Collateral that it owns and all
other locations where such Credit Party maintains a place of business
as of the Renewal Date. Such title opinions and Schedule 6.O1(t)
correctly identify each location where each Credit Party's (other than
Coho Canada's) inventory or equipment which constitutes Collateral
(other than mobile goods) is located. No Persons have possession of
any Collateral other than (i) Hydrocarbons held by operators engaged
with respect to Pledging Parties' Petroleum and Natural Gas Rights;
(ii) the Persons who hold hedge accounts of the Credit Parties (other
than Coho Canada); (iii) the Credit Parties (other than Coho Canada);
and (iv) such other Persons identified to Agent pursuant to the
Security Documents. As of the Renewal Date, Amerada Hess Corporation,
Koch Oil Company and Exxon Supply Company are the only purchasers of
Borrower's Hydrocarbons produced from Petroleum and Natural Gas Rights
which constitute Collateral owned by Borrower and the purchasers
identified on the list delivered in accordance with Section
5.01(d)(iv) are the only purchasers of the Production Company's
Hydrocarbons produced from Petroleum and Natural Gas Rights which
constitute Collateral owned by the Production Company. None of the
Collateral constituting "goods" has been located in any location not
identified in Schedule 6.01(t) or in such title opinions within the
past four (4) months from the date hereof other than with respect to
mobile goods.
Section 2.16. Amendment to Section 7.01(d)(iii) of the
Agreement. Effective as of the date hereof, Section 7.01(d)(iii) of the
Agreement is hereby amended and restated to read in its entirety as follows:
(iii) as soon as available and in any event within thirty
(30) days after the end of each calendar quarter, a Production Report
for such quarter and, when the Borrowing Base Utilization (as defined
in the definition of Applicable Margin) is to be calculated, a
report showing the calculation thereof for the calendar quarter
then ended and showing a calculation of the Applicable Margin for the
quarter succeeding the quarter for which such Borrowing Base
Utilization was calculated;
FOURTH AMENDMENT TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT - Page 7
<PAGE> 8
Section 2.17. Termination of Stored Gas Commitment. Effective as of
the date hereof, the Stored Gas Commitment is terminated and the Lenders have
no obligation to make Stored Gas Advances.
Section 2.18. Sale of Collateral, Release of Liens. The Borrower has
notified the Agent that the Borrower has entered into an agreement to sell all
of the issued and outstanding capital stock of Mid Louisiana Gas Company, Mid
Louisiana Gas Transmission Company, and Mid Louisiana Marketing Company
(collectively, the "Pipeline Stock"). Notwithstanding the provisions of
Section 7.02(d) of the Agreement, the Agent and the Lenders consent to the sale
of the Pipeline Stock and agree that (i) the Agent shall, concurrently with the
sale of the Pipeline Stock, release the Liens held by the Agent for the benefit
of the Lenders in the Pipeline Stock and the assets of Mid Louisiana Gas
Company, Mid Louisiana Gas Transmission Company, and Mid Louisiana Marketing
Company and (ii) the Agent and the Lenders shall, concurrently with the sale of
the Pipeline Stock, release the Subsidiary Guaranties by Mid Louisiana Gas
Company, Mid Louisiana Gas Transmission Company and Mid Louisiana Marketing
Company; provided, however, that the agreement of the Agent and the Lenders to
execute and deliver such releases described in clauses (i) and (ii) preceding
is conditioned upon (a) the receipt by the Agent at its principal office, for
the benefit of the Lenders, of at least $20,500,000 in immediately available
funds from the net sales proceeds of the sale of the Pipeline Stock, which
amount shall be applied by the Agent to repay all outstanding Stored Gas
Advances, and to the extent of any excess, to reduce the outstanding balance of
the remaining Advances, and (b) the satisfaction of the other terms and
conditions of this Amendment. The prepayment of the Advances described in the
preceding sentence is referred to as the "Pipeline Sale Prepayment." The
Agent and each of the Lenders waives (i) any requirement of prior notice by the
Borrower of the Pipeline Sale Prepayment, (ii) the requirement of Section
3.02(a) of the Agreement that prepayments may only be made in certain minimum
amounts or integral multiples thereof, and (iii) any rights to additional
compensation under Section 3.02(a) or Section 4.05 of the Agreement as a result
of the Pipeline Sale Prepayment being made prior to the last day of the
Interest Periods relating to some or all of the Advances being prepaid by the
Pipeline Sale Prepayment. The Agent and each of the Lenders consent to the
release of Mid Louisiana Gas Company, Mid Louisiana Gas Transmission Company
and Mid Louisiana Marketing Company from their obligations under the
Contribution and Reimbursement Agreement concurrently with the sale of the
Pipeline Stock.
Section 2.19. Advance Request Form. Exhibit B to the Agreement is hereby
amended and restated to read in its entirety as shown on Exhibit B to this
Amendment.
Section 2.20. Amendment to Schedule 6.01(e). Schedule 6.01(e) to the
Agreement is hereby amended and restated to read in its entirety as shown on
Schedule 6.01(e) to this Amendment.
Section 2.21. Amendment to Schedule 6.01(f) Schedule 6.01(f) to the
Agreement is hereby amended and restated to read in its entirety as shown on
Schedule 6.01(f) to this Amendment.
FOURTH AMENDMENT TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT - Page 8
<PAGE> 9
Section 2.22. Amendment to Schedule 6.0l(t). Schedule 6.01(t) to the
Agreement is hereby amended and restated to read in its entirety as shown on
Schedule 6.01(t) to this Amendment.
ARTICLE III
Ratifications, Representations and Warranties
Section 3.01. Ratifications; Waiver of Claims. The terms and
provisions set forth in this Amendment shall modify and supersede all
inconsistent terms and provisions set forth in the Agreement and except as
expressly modified and superseded by this Amendment, the Borrower and the
Guarantor agree that the terms and provisions of the Agreement and the other
Loan Documents are ratified and confirmed and shall continue in full force and
effect. Borrower, Guarantor, Agent and the Lenders agree that the Agreement as
amended hereby and the other Loan Documents shall continue to be legal, valid,
binding and enforceable in accordance with their respective terms. In
furtherance and not in limitation of the provisions of this Section 3.01,
Borrower and Guarantor hereby jointly and severally waive and release any and
all claims or offsets against, or defenses to, the payment and performance of
the Obligations that any of them may have at law, in equity or otherwise, based
on any and all actions or alleged actions, omissions or related omissions, of
Agent and/or the Lenders or any of Agent's and/or the Lenders' affiliates,
directors, officers, employees, attorneys, representatives or agents which have
occurred on or prior to the date hereof and each such party hereby represents
and warrants that no such claims, offsets, or defenses exist as of such date.
Section 3.02. Representations and Warranties. Each of Borrower and
Guarantor hereby represents and warrants to Agent and the Lenders that (a) the
execution, delivery and performance of this Amendment and any and all other
Loan Documents executed and/or delivered in connection herewith have been
authorized by all requisite corporate action on the part of each Company and
will not violate the articles or certificate of incorporation or bylaws of any
Company, (b) the representations and warranties contained in the Agreement as
amended hereby and any other Loan Document (other than those which by their
terms are limited to a specific date) are true and correct on and as of the
date hereof as though made on and as of the date hereof, (c) no Potential
Default or Event of Default has occurred and is continuing and (d) the
Companies are in full compliance with all covenants and agreements contained in
the Agreement as amended hereby.
ARTICLE IV
Miscellaneous
Section 4.01. Conditions Precedent. The effectiveness of this
Amendment is conditioned upon the satisfaction of the following conditions
precedent:
(a) No Default. No Default or Potential Default shall
exist or would result from the consummation of the transactions
contemplated by this Amendment.
FOURTH AMENDMENT TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT - Page 9
<PAGE> 10
(b) Corporate Certificates. The Agent shall have received
corporate certificates executed by the Borrower and the Guarantor, in
form and substance acceptable to the Agent, certifying as to the
officers, articles of incorporation, bylaws, existence and good
standing of the Borrower and the Guarantor and as to resolutions
of the Borrower and the Guarantor relating to the transactions
contemplated by this Amendment.
(c) Amendment to Pledge Agreement. The Agent shall have
received a fully executed First Amendment to Pledge Agreement in the
form attached hereto as Exhibit A.
Section 4.02. Survival of Representations and Warranties. All
representations and warranties made in this Amendment or any other Loan
Document, including any Loan Document furnished in connection with this
Amendment, shall survive the execution and delivery of this Amendment and the
other Loan Documents, and no investigation by Agent and/or the Lenders or any
closing shall affect the representations and warranties or the right of Agent
and/or the Lenders to rely upon them.
Section 4.03. Reference to Agreement. Each of the Loan Documents,
including the Agreement and any and all other agreements, instruments or other
documentation now or hereafter executed and delivered pursuant to the terms
hereof or pursuant to the terms of the Agreement as amended hereby, are hereby
amended so that any reference in such Loan Documents to the Agreement shall
mean a reference to the Agreement as amended hereby.
Section 4.04. Expenses of Agent and Lenders. As provided in the
Agreement, Borrower agrees to pay on demand all costs and expenses incurred in
connection with the preparation, negotiation and execution of this Amendment
and the other Loan Documents executed pursuant hereto and any and all
amendments, modifications and supplements thereto, including without limitation
the costs and fees of Agent's legal counsel and all costs and expenses incurred
in connection with the enforcement or preservation of any rights under the
Agreement as amended hereby, or any other Loan Document, including, without
limitation, the costs and fees of Agent's legal counsel.
Section 4.05. Severability. Any provision of this Amendment held by
a court of competent jurisdiction to be invalid or unenforceable shall not
impair or invalidate the remainder of this Amendment and the effect thereof
shall be confined to the provision so held to be invalid or unenforceable.
Section 4.06. Applicable Law. This Amendment and all other Loan
Documents executed pursuant hereto shall be deemed to have been made and to be
performable in Harris County, Texas and shall be governed by and construed in
accordance with the laws of the State of Texas and the applicable laws of the
United States of America.
Section 4.07. Successors and Assigns. This Amendment is binding upon
and shall inure to the benefit of Agent, the Lenders, Guarantor and Borrower
and their respective successors and assigns, except neither Borrower nor
Guarantor may assign or transfer any of its rights or obligations hereunder
without the prior written consent of the Lenders.
FOURTH AMENDMENT TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT - Page 10
<PAGE> 11
Section 4.08. Counterparts. This Amendment may be executed in one or
more counterparts and on facsimile counterparts, each of which when so executed
shall be deemed to be an original, but all of which when taken together shall
constitute one and the same agreement.
Section 4.09. Effect of Waiver. No consent or waiver, express or implied,
by Agent or any Lender to or for any breach of or deviation from any covenant,
condition or duty by Borrower or Guarantor shall be deemed a consent to or
waiver of any other breach of the same or any other covenant, condition or
duty.
Section 4.10. Headings. The headings, captions and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
SECTION 4.11. ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER
INSTRUMENTS, AGREEMENTS AND DOCUMENTATION EXECUTED AND DELIVERED IN CONNECTION
WITH THIS AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO
AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT, AND MAY
NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO
ORAL AGREEMENTS AMONG THE PARTIES HERETO.
Executed as of the date first written above.
BORROWER:
---------
COHO RESOURCES, INC
By: /s/ EDDIE LEBLANC
--------------------------------
Eddie LeBlanc
Senior Vice President and
Chief Financial Officer
GUARANTOR:
----------
COHO ENERGY INC.
By: EDDIE LEBLANC
----------------------------
Eddie LeBlanc
Senior Vice President and
Chief Financial Officer
FOURTH AMENDMENT TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT - Page 11
<PAGE> 12
AGENT AND LENDERS:
BANQUE PARIBAS,
as Agent for the Lenders and as a Lender
By: /s/ ROBERT S. BOWERS, II
--------------------------------
Robert S. Bowers, II
Vice President
By: /s/ KENNETH E. MOORE, JR.
-------------------------------
Name: KENNETH E. MOORE, JR.
------------------------------
Title: Vice President
------------------------------
CHRISTIANIA BANK OG KREDITKASSE
By: /s/ JOHN O. ROISING
-------------------------------
Name: John O. Roising
Title: First Vice President
By: /s/ STEVE PHILLIPS
-------------------------------
Name: Steve Phillips
Title: Vice President
DEN NORSKE BANK ASA
By: /s/ HAAKON SANDBORG
-------------------------------
Name: Haakon Sandborg
Title: Senior Vice President
By: /s/ JAN MORTEN KREUTZ
-------------------------------
Name: Jan Morten Kreutz
Title: Vice President
FOURTH AMENDMENT TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT - Page 12
<PAGE> 13
BANK OF SCOTLAND
By: /s/ CATHERINE M. ONIFFREY
-------------------------------
Name: Catherine M. Oniffrey
Title: Vice President
MEESPIERSON N.V.
By: /s/ K. LOUMAN
-------------------------------
Name: K. Louman
Title: Vice President
FOURTH AMENDMENT TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT - Page 13
<PAGE> 14
BANK ONE, TEXAS, N.A.
By: /s/ MYNAN C. FELDMAN
-------------------------------
Name: Mynan C. Feldman
Title: Vice President
FOURTH AMENDMENT TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT - Page 14
<PAGE> 15
ACKNOWLEDGMENT
The undersigned hereby consent and agree to the execution and delivery of
this Amendment and ratify and confirm that the Loan Documents that each has
executed are in full force and effect and continue to be legal, valid, binding
and enforceable in accordance with their terms.
INTERSTATE NATURAL GAS COMPANY
MID LOUISIANA PRODUCTION COMPANY
MID LOUISIANA GATHERING COMPANY
FAIRBANKS GATHERING COMPANY
By: /s/ EDDIE LEBLANC
------------------------------
Eddie LeBlanc
Senior Vice President and
Chief Financial Officer of
each of the above parties to
the Loan Documents
COHO RESOURCES, LIMITED
By: /s/ EDDIE LEBLANC
------------------------------
Eddie LeBlanc
Treasurer
FOURTH AMENDMENT TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT - Page 15
<PAGE> 16
EXHIBIT A
Amendment to Pledge Agreement
EXHIBIT "A" TO
FOURTH AMENDMENT TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT - Cover Page
<PAGE> 17
FIRST AMENDMENT TO PLEDGE AGREEMENT
THIS FIRST AMENDMENT TO PLEDGE AGREEMENT (the "Amendment") is entered into
effective as of the _ day of March, 1996, by and between INTERSTATE NATURAL GAS
COMPANY, a Delaware corporation (the "Pledgor"), and BANQUE PARIBAS, a bank
organized under the laws of the Republic of France acting through its Houston
agency, as agent for itself as a Lender and for the other Lenders (as defined
in the Credit Agreement as hereinafter defined) (in such capacity as agent, the
"Agent").
WITNESSETH:
WHEREAS, Coho Resources, Inc., Coho Energy, Inc., Agent and the Lenders
have entered into that certain Second Amended and Restated Credit Agreement
dated as of December 2, 1994 (as amended by that certain First Amendment to
Second Amended and Restated Credit Agreement dated as of June 30, 1995, that
certain Second Amendment to Second Amended and Restated Credit Agreement dated
as of August 4, 1995, and that certain Third Amendment to Second Amended and
Restated Credit Agreement dated as of November 1, 1995, the "Original Credit
Agreement");
WHEREAS, concurrently with the execution of the Original Credit Agreement,
the Pledgor executed and delivered to the Agent, for the benefit of the
Lenders, that certain Pledge Agreement dated as of December 2, 1994 (the
"Pledge Agreement");
WHEREAS, concurrently herewith, Coho Resources, Inc., Coho Energy, Inc.,
the Agent and the Lenders are entering into that certain Fourth Amendment to
Second Amended and Restated Credit Agreement (the "Fourth Amendment) (the
Original Credit Agreement, as amended by the Fourth Amendment, is referred to
hereinafter as the "Credit Agreement"); and
WHEREAS, the Agent and the Lenders have conditioned their obligations under
the Fourth Amendment upon the execution and delivery of this Amendment by the
Pledgor.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Terms. All capitalized terms defined in the Credit Agreement
and not otherwise defined herein shall have the same definitions when used
herein as set forth in the Credit Agreement.
2. Amendment to Exhibit A. Effective as of the date hereof, Exhibit A
to the Pledge Agreement is hereby amended and restated to read as shown on
Exhibit A to this Amendment.
3 . Representations and Warranties. The representations and warranties
of the Pledgor made in the Pledge Agreement (other than those which by their
terms are limited to a specific date) are true and correct as of the date
hereof as if made on the date hereof
4. Miscellaneous.
<PAGE> 18
4.1 Headings. Section headings are for reference only,
and shall not affect the interpretation or meaning of any provision of this
Amendment.
4.2 Effect of this Amendment. The Pledge Agreement, as
amended by this Amendment, shall remain in full force and effect except that
any reference therein, or in any other Loan Document, referring to the Pledge
Agreement, shall be deemed to refer to the Pledge Agreement as amended by this
Amendment.
4.3 Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
4.4 Counterparts. This Amendment may be executed by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed an original but all such counterparts shall
constitute but one and the same Amendment.
4.5 NO ORAL AGREEMENTS. THE PLEDGE AGREEMENT, AS
AMENDED BY THIS AMENDMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS, REPRESENTS
THE ENTIRE AGREEMENT BETWEEN THE PARTIES, AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective duly authorized officers as of the date first
above written.
PLEDGOR:
INTERSTATE NATURAL GAS COMPANY
By:
------------------------------
Name: Eddie LeBlanc
Title: Senior Vice President and
Chief Financial Officer
2
<PAGE> 19
AGENT:
BANQUE PARIBAS, as Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
3
<PAGE> 20
EXHIBIT A
to
First Amendment to Pledge Agreement
between
Interstate Natural Gas Company
and
Banque Paribas, as Agent
Description of Pledged Stock
<TABLE>
<CAPTION>
=====================================================================================================
Type of Par Number Certificate
Company Stock Value of Shares Number(s)
- - -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Mid Louisiana Common $.10 1,000 1
Production Company,
a Delaware
corporation
- - -----------------------------------------------------------------------------------------------------
2. Fairbanks Gathering Common $.10 1,000 2
Company, a Delaware
corporation
- - -----------------------------------------------------------------------------------------------------
3. Mid Louisiana Common $.10 1,000 2
Gathering Company, a
Delaware corporation
=====================================================================================================
Exhibit A - Solo Page
1
</TABLE>
<PAGE> 21
EXHIBIT B
Advance Request Form
EXHIBIT "B" TO
FOURTH AMENDMENT TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT - Cover Page
<PAGE> 22
ADVANCE REQUEST FORM
TO: Banque Paribas, as Agent
1200 Smith Street, Suite 3100
Houston, Texas 77002
Gentlemen:
The undersigned is an officer of Coho Resources, Inc. (the "Borrower"),
and is authorized to make and deliver this certificate pursuant to that certain
Second Amended and Restated Credit Agreement (as amended, the "Credit
Agreement") dated as of December 2, 1994 among Borrower, Coho Energy, Inc.,
Banque Paribas, as agent for itself and certain other lenders (the "Agent") and
the lenders. All terms defined in the Credit Agreement shall have the same
meaning herein. In accordance with the Credit Agreement, Borrower hereby
(check whichever is applicable):
_________ 1. Requests that the Lenders make Prime Rate Advances in
the aggregate amount set forth in item (k)(i) below;
_________ 2. Requests that the Lenders make Eurodollar Advances in
the aggregate amount set forth in item (k)(ii) below;
and/or
_________ 3. Request Agent to issue a Letter of Credit in the form
attached hereto as Exhibit "A" supporting the
transaction described on Exhibit "B".
In connection with the foregoing and pursuant to the terms and provisions
of the Credit Agreement, the undersigned hereby represents and warrants to the
Agent and each Lender that the following statements are true and correct:
(i) The representations and warranties (other than those
expressly limited by their terms to the date originally given)
contained in Article VI of the Credit Agreement and in each of the
other Loan Documents are true and correct on and as of the date hereof
with the same force and effect as if made on and as of such date.
(ii) No Event of Default or Potential Default has occurred
and is continuing or would result from the Advances requested
hereunder or Letter of Credit requested hereunder.
(iii) Since _________ 19____, (1) there has been no
Material Adverse Change.
- - ------------------------------
(1) Insert the effective date of the most recent financial statements
referred to in Section 7.01(d) of the Credit Agreement.
ADVANCE REQUEST FORM - PAGE 1
<PAGE> 23
(iv) The amount of the Advance requested hereby and the amount of the
Letter of Credit Liabilities related to the Letter of Credit requested hereby,
when added to all outstanding Advances and all outstanding Letters of Credit
Liabilities, will not exceed the Borrowing Base.
(v) The Advance requested hereby will not be readvanced or, if the
blank in this subparagraph (v) is filled in, is to be readvanced to the
following Intercompany Borrower or Coho Shell, as the case may be:____________
(vi) The aggregate amount of Permitted Coho Shell Advances, after
taking the Permitted Coho Advance requested hereby into account, is $_________
(vii) The aggregate amount of Permitted Intercompany Advances to each
Intercompany Borrower, after taking the Permitted Intercompany Advance
requested hereby into account, is: ___________________________________________
Name of Intercompany Borrower: Aggregate Amount:
------------------------------ ----------------
------------------------------ ----------------
(viii) All information supplied below is true, correct, and complete as
of the date hereof.
Advance Request Information
<TABLE>
<S> <C>
(a) Outstanding principal amount of Advances
(b) Outstanding Letter of Credit Liabilities............... $
---------
(c) Outstanding 7.02 (b)(xi) letter of credit liabilities.. $
---------
(d) Present maximum amount of Permitted Over advances...... $5,000,000
(e) Borrowing Base......................................... $
---------
(f) Net Availability for Advances/Letters
of Credit: [item (e) minus item (a)
and minus item (b) and minus item (c) plus item (d)(2)]. $
---------
</TABLE>
- - ------------------------------
(2) Applicable only from November 1, 1995, to but excluding the
Permitted Overadvance Termination Date.
ADVANCE REQUEST FORM - PAGE 2
<PAGE> 24
<TABLE>
<S> <C>
(f) Aggregate Amount of Requested Advance
or applicable Letter of Credit Liabilities....... $_________
(g) Aggregate amount of Permitted Overadvances
after giving effect to the Requested Advance
[sum of item (a) plus item (b) plus item (c) plus
item (f) minus item (e)](3)....................... $_________
Advance Request Information
(h) Date of Requested Advance
or issuance of Letter of Credit.................. _____, 19 __
(i) Type of Advance
Type Amount
(i) Prime Rate Advances.......... $_________
(ii) EuroDollar Advances.......... $_________
(j) Duration of Interest Period if
EuroDollar Advances:
Advance Amount Duration
(i) $ ___________ ____________
(ii) $ ___________ ____________
(iii) $ ___________ ____________
(iv) $ ___________ ____________
</TABLE>
BORROWER:
COHO RESOURCES, INC.
By: ________________________________
Name:___________________________
Title:__________________________
Dated as of: _______________________
[insert proposed date
of Requested Advance or
issuance of Letter of Credit]
_____________________
(3) Applicable only from November 1, 1995, to but excluding the Permitted
Overadvance Termination Date.
ADVANCE REQUEST FORM - PAGE 3
<PAGE> 25
SCHEDULE 6.01(e)
to
COHO RESOURCES, INC.
FOURTH AMENDMENT TO
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
SUBSIDIARIES
<TABLE>
<CAPTION>
========================================================================================================
Jurisdiction Authorized
Subsidiary Of Incorporation Capitalization Outstanding % Owned
========================================================================================================
A. Guarantor
- - --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Coho Canada Alberta, Canada 1. Unlimited 1. 31,432,51 100%
Common 7
2. 2,000,000 first 2. None
perferred shares 3. None
3. 5,000,000 4. None
second
perferred shares
4. Unlimited
nonvoting
common
- - --------------------------------------------------------------------------------------------------------
2. Coho Shell Delaware 1000 shares common 1000 100%
- - --------------------------------------------------------------------------------------------------------
3. Borrower Nevada 1. 50,000,000 1. 3,846,775 100% of
common stock, common,
$.01 par value 100% of
2. 8,000,000 class Class A
A Common 2. 8,000,000 common
Stock, $.01 par through
value Coho
3. 10,000,000 Canada
shares of 3. None
preferred stock
$.01 par value
- - ------------------------------------------------------------------------------------------------------------
4. ING Delaware 1. 600,000 1. 20,000 64% of
common stock, Common
$.01 par value 2. 200,025 64% of
series 8% Preferred
2. 250,000 preferred
preferred stock,
$.01 par value
- - ------------------------------------------------------------------------------------------------------------
B. Coho Canada
- - ------------------------------------------------------------------------------------------------------------
</TABLE>
SCHEDULE 6.01(e), PAGE 1 OF 3
<PAGE> 26
<TABLE>
<CAPTION>
================================================================================
Jurisdiction
of Incorporation Authorized
Subsidiary Capitalization Outstanding % Owned
- - --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Borrower Nevada 1. 50,000,000 1.
common stock,
$.01 par value
2. 8,000,000 class
A Common 2. 8,000,000 100% of
Stock, $.01 par Class A
value Common
3. 10,000,000
shares of
preferred stock 3. None.
$.01 par value
- - --------------------------------------------------------------------------------
2. Profile Alberta Unlimited common 888,002 100%
Petroleum Ltd. shares, no par value
- - --------------------------------------------------------------------------------
3. Grayon Alberta 1. Unlimited 1. 5,290,020 100%
Developments common shares,
Ltd. no par value
2. Unlimited First
Preferred, no 2. 320,250 100%
par value
3. Unlimited
Second
Preferred, no 3. 2,000 100%
par value
- - --------------------------------------------------------------------------------
4. Coho Bahamas 5,000 common shares, 3,000 100%
International $1 par value
Ltd.
- - --------------------------------------------------------------------------------
5. 253741 Alberta Alberta 1,000 common stock 1,000 1
Ltd.
- - --------------------------------------------------------------------------------
C. Borrower
- - --------------------------------------------------------------------------------
1. Tierra Nevada 2,500 common stock, 100 100%
Exploration, Inc. $0.01 par value
- - --------------------------------------------------------------------------------
2. Coho Marketing Nevada 1. 1,000 common 1. 100 100%
and stock, no par
Transportation, value
Inc.
2. 1,000 shares of
preferred stock, 2. None
no par value
================================================================================
</TABLE>
SCHEDULE 6.01(e), PAGE 2 OF 3
<PAGE> 27
<TABLE>
<CAPTION>
================================================================================
Jurisdiction
of Incorporation Authorized
Subsidiary Capitalization Outstanding % Owned
- - --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
3. ING Delaware 1. 600,000
common stock, 1. 20,000 36% of
$.01 par value
2. 250,000 2. 200,025 36% of
preferred stock, series 8% Preferred
$.01 par value Preferred
- - --------------------------------------------------------------------------------
4. Coho Anaguid Delaware 1. 9,870 common 1. 2,700 100%
Inc. stock, $0.01
par value
2. 130 preferred 2. 120 100% by
stock, $20,000 Coho
par value Interna-
ational
- - --------------------------------------------------------------------------------
D. ING
- - --------------------------------------------------------------------------------
1. Production Delaware 1,000 shares of 1,000 100%
Company common stock,
$.10 par value
- - --------------------------------------------------------------------------------
4. Fairbanks Delaware 1,000 shares of 1,000 100%
Gathering common stock,
Company $.10 par value
- - --------------------------------------------------------------------------------
5. Mid Louisiana Delaware 1,000 shares of 1,000 100%
Gathering common stock,
Company $.10 par value
- - --------------------------------------------------------------------------------
E. Production Company
- - --------------------------------------------------------------------------------
1. ING-La Louisiana 1,000 shares of 1,000 100%
common stock,
$.10 par value
================================================================================
</TABLE>
SCHEDULE 6.01(e), PAGE 3 OF 3
<PAGE> 28
SCHEDULE 6.01(f)
to
COHO RESOURCES, INC.
FOURTH AMENDMENT TO
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
LITIGATION
A. Coho Resources, Inc.
1. Wall & Redekop Petroleum Inc. vs. Coho Resources, Inc. (1983)
Alleging amounts owing by Borrower
Claim amount approximately $150,000
2. Humble Resources Management, Inc. vs. Coho Resources, Inc. (1991)
Alleging economic loss by drainage of oil
Claiming actual, incidental, compensatory and punitive damages
3. During June and July, 1994, Borrower, together with several companies,
was named as a defendant in three lawsuits filed in Mississippi. The
lawsuits, which are basically identical, involve claims by landowners
for purported damages caused by naturally occurring radioactive
materials at various wellsite locations on land leased by Borrower in
Mississippi. The plaintiffs are seeking compensatory and punitive
damages, including damages for "emotional distress". Two of these
lawsuits have been settled.
4. Douglas Osbourne and Sandra Osbourne vs. Coho Resources, Inc. Borrower
purchased an interest in the eastern part of the Laurel Field in Jones
County, Mississippi in 1993 from Mosebacher Energy, Inc. Plaintiffs
live in a house adjacent to Borrower's production facility in that
area, and have sued Borrower generally claiming contamination, nuisance
and other matters. Plaintiffs had sued Mosbacher in 1991 for these same
claims, and Mosbacher settled in 1992, receiving a general release from
plaintiffs.
5. Luther McCarthy, Administrator of the Estate of Kelvin Dale Mccarthy
vs. Coho Resources, Inc. On December 6, 1995, Kelvin Mccarthy, employee
of Smith Bros., Inc., an independent contractor, was killed when a
workover rig collapsed in the Soso Field, Mississippi. His estate filed
an action against Borrower for actual damages in the amount of lifetime
earnings (present value $470,000), damages under the
SCHEDULE 6.01(f), PAGE 1 of 2
<PAGE> 29
Mississippi Wrongful Death Act and punitive damages ($3.5
million). Borrower's insurer is defending the lawsuit on
behalf of Borrower.
B. ING and ING Subsidiaries
LITIGATION
1. ARCADIA HOLINESS ASSOCIATION V. IMC CORPORATION, ET AL.
(V. MID LOUISIANA GATHERING COMPANY) 15th Judicial District
Court, Vermillion Parish, Louisiana Case No. 87-52966
Royalty owners seek asserted underpayment for production
produced by IMC Production Company and by Wintershall
Corporation/BASF Corporation. Seeking in excess of
$7,000,000.00. Mid Louisiana Gathering Company has been
indemnified by BASF for this.
ASSERTED CLAIMS
2. U.S. FISH AND WILDLIFE
USFW seeks removal of mercury meters and cleanup of associated
mercury releases in D'Arbonne and Upper Ouachita Wildlife
Refuges. $100,000 - $150,000.
SCHEDULE 6.01(f), PAGE 2 OF 2
<PAGE> 30
SCHEDULE 6.01(t)
to
COHO RESOURCES, INC.
FOURTH AMENDMENT TO
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
LOCATIONS OF COLLATERAL
1. Chief Executive Office
14785 Preston Road, Suite 860
Dallas, Texas 75240
2. Exact Corporate Name
Coho Energy, Inc.
Coho Resources, Inc.
Interstate Natural Gas Company
Mid Louisiana Production Company
Fairbanks Gathering Company
Mid Louisiana Gathering Company
Interstate Natural Gas Company
3 . Additional Locations
Interstate Natural Gas Company
a. Secretary of State, Texas
b. Harris County, Texas
Mid Louisiana Production Company
a. Livingston Parish, LA
b. Morehouse Parish, LA
C. Ouachita Parish, LA
d. Union Parish, LA
e. Amite County, MS
f Wilkinson County, MS
g. Secretary of State, MS
h. Harris County, TX
i. Secretary of State, TX
SCHEDULE 6.01(t), PAGE 1 OF 2
<PAGE> 31
Fairbanks Gathering Company
a. Morehouse Parish, LA
b. Ouachita Parish, LA
c. Union Parish, LA
d. Secretary of State, MI
e. Harris County, TX
f. Secretary of State, TX
Mid Louisiana Gathering Company
a. Morehouse Parish, LA
b. Ouachita Parish, LA
c. Union Parish, LA
d. Secretary of State, MI
e. Harris County, TX
f. Secretary of State, TX
ING-La
a. East Baton Rouge Parish, LA
b. Secretary of State, MI
c. Harris County, TX
d. Secretary of State, TX
SCHEDULE 6.01(t), PAGE 2 OF 2
<PAGE> 1
EXHIBIT 11
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION> THREE MONTHS ENDED MARCH 31
---------------------------------
1995 1996
---- ----
<S> <C> <C>
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS
- - ----------------------------------------------
Net earnings (loss) from continuing operations.............................. $ (140) $1,035
Dividends on preferred stock applicable to continuing operations(1)......... (230) ---
------ ------
Net earnings (loss) from continuing operations applicable to common stock... $(370) $1,035
====== ======
Net earnings (loss) from continuing operations per common share............. $(0.02) $ .05
====== ======
NET EARNINGS (LOSS)
- - -------------------
Net earnings (loss)......................................................... $ 177 $1,035
Dividends on preferred stock................................................ (338) ---
------ ------
Net earnings (loss) applicable to common stock.............................. $ (161) $1,035
====== ======
Net earnings (loss) per common share........................................ $(0.01) $ .05
====== ======
Weighted average common shares outstanding 6,782,925 20,230,915
========= ==========
</TABLE>
(1) Dividends on the preferred stock issued in connection with the
acquisition of ING were allocated between continuing operations and
discontinued operations based on the ratio of net assets discontinued
to the total net assets acquired from ING.
47
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,086
<SECURITIES> 0
<RECEIVABLES> 8,262
<ALLOWANCES> 0
<INVENTORY> 72
<CURRENT-ASSETS> 31,184
<PP&E> 282,213
<DEPRECIATION> 106,249
<TOTAL-ASSETS> 209,214
<CURRENT-LIABILITIES> 12,348
<BONDS> 109,416
<COMMON> 202
0
0
<OTHER-SE> 75,154
<TOTAL-LIABILITY-AND-EQUITY> 209,214
<SALES> 12,367
<TOTAL-REVENUES> 12,367
<CGS> 3,427
<TOTAL-COSTS> 8,791
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,312
<INCOME-PRETAX> 1,741
<INCOME-TAX> 706
<INCOME-CONTINUING> 1,035
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,035
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
