<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
<TABLE>
<S> <C> <C>
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
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
</TABLE>
COHO ENERGY, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
TEXAS 75-2488635
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
14785 PRESTON ROAD, SUITE 860 75240
DALLAS, TX (Zip Code)
(Address of principal executive offices)
</TABLE>
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.
<TABLE>
<CAPTION>
CLASS OUTSTANDING AT AUGUST 1, 1997
----- -----------------------------
<C> <C>
Common Shares, $.01 par value 20,464,630
</TABLE>
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<PAGE> 2
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -- December 31, 1996
and June 30, 1997........................................... 1
Condensed Consolidated Statements of Operations -- three and
six months ended June 30, 1996 and 1997..................... 2
Condensed Consolidated Statements of Cash Flows -- six
months ended June 30, 1996 and 1997......................... 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
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
COHO ENERGY, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
ASSETS
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1996 1997
------------ -----------
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents.......................................... $ 1,864 $ 936
Accounts receivable, principally trade............................. 11,884 7,908
Deferred income taxes.............................................. 913 913
Investment in marketable securities................................ 1,962 --
Other current assets............................................... 995 1,002
------------ -----------
17,618 10,759
PROPERTY AND EQUIPMENT, at cost net of accumulated depletion and
depreciation, based on full cost accounting method (note 2)........ 210,212 234,545
OTHER ASSETS......................................................... 2,211 1,980
------------ -----------
$230,041 $ 247,284
========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable, principally trade................................ $ 5,752 $ 7,167
Accrued liabilities and other payables............................. 5,043 5,649
Current portion of long term debt.................................. 161 61
------------ -----------
10,956 12,877
LONG TERM DEBT excluding current portion............................. 122,777 132,350
DEFERRED INCOME TAXES................................................ 14,842 16,829
------------ -----------
148,575 162,056
------------ -----------
COMMITMENTS AND CONTINGENCIES (note 4)
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 20,443,899 shares........................................ 203 204
Additional paid-in capital......................................... 83,516 84,092
Retained earnings (deficit)........................................ (2,253) 932
------------ -----------
Total shareholders' equity......................................... 81,466 85,228
------------ -----------
$230,041 $ 247,284
========== =========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements
1
<PAGE> 4
COHO ENERGY, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30 JUNE 30
------------------ ------------------
1996 1997 1996 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
OPERATING REVENUES
Net crude oil and natural gas production.............. $25,305 $29,521 $12,938 $13,985
------- ------- ------- -------
OPERATING EXPENSES
Crude oil and natural gas production.................. 5,541 6,113 2,711 3,033
Taxes on crude oil and natural gas production......... 1,266 1,070 669 530
General and administrative............................ 3,299 3,623 1,840 1,847
Depletion and depreciation............................ 7,885 8,960 3,980 4,424
------- ------- ------- -------
Total operating expenses...................... 17,991 19,766 9,200 9,834
------- ------- ------- -------
OPERATING INCOME........................................ 7,314 9,755 3,738 4,151
------- ------- ------- -------
OTHER INCOME AND EXPENSES
Interest and other income (expense)................... 510 149 33 (44)
Interest expense...................................... (4,233) (4,682) (1,921) (2,391)
------- ------- ------- -------
(3,723) (4,533) (1,888) (2,435)
------- ------- ------- -------
EARNINGS FROM OPERATIONS BEFORE INCOME TAXES............ 3,591 5,222 1,850 1,716
INCOME TAX PROVISION.................................... 1,453 2,037 747 635
------- ------- ------- -------
NET EARNINGS............................................ $ 2,138 $ 3,185 $ 1,103 $ 1,081
======= ======= ======= =======
EARNINGS PER COMMON SHARE (note 3)...................... $ 0.11 $ 0.15 $ 0.06 $ 0.05
======= ======= ======= =======
</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>
<CAPTION>
SIX MONTHS ENDED
JUNE 30
---------------------
1996 1997
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings......................................................... $ 2,138 $ 3,185
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depletion and depreciation........................................ 7,885 8,960
Deferred income taxes............................................. 1,345 1,987
Amortization of debt issue costs and other items.................. 425 275
Changes in operating assets and liabilities:
Accounts receivable and other assets.............................. (2,265) 4,019
Accounts payable and accrued liabilities.......................... 801 (3,067)
Investment in marketable securities............................... -- 1,962
-------- --------
Net cash provided by operating activities.................... 10,329 17,321
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Property and equipment............................................... (24,199) (33,294)
Changes in accounts payable and accrued liabilities related to
exploration and development....................................... 2,903 5,089
Net proceeds from sale of marketing and transportation operations.... 21,509 --
-------- --------
Net cash provided by (used in) investing activities.......... 213 (28,205)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in long term debt........................................... 15,107 17,000
Repayment on long term debt.......................................... (26,706) (7,621)
Proceeds from exercise of stock options.............................. 36 577
-------- --------
Net cash provided by (used in) financing activities.......... (11,563) 9,956
-------- --------
NET DECREASE IN CASH AND CASH EQUIVALENTS.............................. (1,021) (928)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD....................... 1,430 1,864
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD............................. $ 409 $ 936
======== ========
CASH PAID (RECEIVED) DURING THE PERIOD FOR:
Interest............................................................. $ 4,600 $ 4,312
Income taxes......................................................... $ 533 $ 639
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements
3
<PAGE> 6
COHO ENERGY, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 1997
(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 six month
period ended June 30, 1997 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, 1996.
2. PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1996 1997
------------ ---------
<S> <C> <C>
Crude oil and natural gas leases and rights including
exploration, development and equipment thereon, at cost... $ 328,836 $ 362,129
Accumulated depletion and depreciation...................... (118,624) (127,584)
------------ ---------
$ 210,212 $ 234,545
========== =========
</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 $1,201,000 and
$1,454,000 for the six months ended June 30, 1996 and 1997, respectively.
During the six months ended June 30, 1996 and 1997, 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, 1996 and June 30, 1997, unproved crude oil and natural gas
properties totalling $8,284,000 and $6,166,000, respectively, 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.
3. 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 six
months ended June 30, 1996 and 1997, of 20,336,803 and 20,991,484, respectively,
and for the three months ended June 30, 1996 and 1997, of 20,417,772 and
21,078,544, respectively.
4. 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
4
<PAGE> 7
COHO ENERGY, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
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; however, an unfavorable
outcome could have a material adverse effect on the current year results.
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 operating revenues when
the future production sale occurs. The Company has 920,000 Mmbtu of natural gas
production hedged over the period from July through September 1997, at an
average price of $2.35 per Mmbtu. The Company has also entered into certain
arrangements which fix a minimum West Texas Intermediate ("WTI") price per
barrel of $19.00 and a maximum WTI price of $23.90 for 4,000 barrels of oil
production per day through December 31, 1997.
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 six months ended June 30,
1997, 74% of production revenues were attributable to the sale of crude oil and
the remaining 26% were derived from natural gas as compared to 75% from crude
oil sales and 25% from natural gas sales during the first half of 1996.
The Company increased its crude oil production in the first six months of
1997 as a result of ongoing development activities on its existing properties in
Mississippi. Average net daily barrel of oil equivalent ("BOE") production was
10,348 BOE for the six months ended June 30, 1997 as compared to 9,602 BOE for
the same period in 1996. For purposes of determining BOE herein, natural gas is
converted to barrels ("Bbl") on a 6 thousand cubic feet ("Mcf") to 1 Bbl basis.
Crude oil and natural 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. 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 six months ended June 30, 1997, cash flow
generated from operating activities was $17.3 million compared with $10.3
million for the same period in 1996. Production increases of 7% and 9% in crude
oil and natural gas, respectively, for the six months ended June 30, 1997,
compared to the same period in 1996 and price increases of 8% and 11% for crude
oil and natural gas, respectively, realized in 1997 are the major factors
contributing to this increase. See results of operations for a discussion of
operating results.
At June 30, 1997, the Company had a working capital deficit of $2.1 million
primarily due to current payables associated with drilling and recompletion
activity which will be funded with cash flow from operations and borrowings
under the revolving credit facility.
As of June 30, 1997, the amount available to the Company ("Borrowing Base")
under its revolving credit facility (the "Restated Credit Agreement") was $150
million, with an additional $20 million immediately available to the Company to
provide bridge financing for acquisitions. Outstanding advances under the
Restated Credit Agreement at June 30, 1997 were $130 million, all of which was
classified as long term. The Company also had letters of credit aggregating $2.3
million outstanding under the Restated Credit Agreement as of June 30, 1997, to
secure promissory notes issued in August 1995 relating to the acquisition of the
Brookhaven field in Mississippi, leaving $17.7 million available under the
facility at June 30, 1997. The Restated Credit Agreement permits advances and
repayments until January 1, 2000, at which time the loan converts to a term
facility that requires quarterly principal repayments until the loan is fully
repaid in 2003.
The Restated Credit Agreement contains certain financial and other
covenants including (i) the maintenance of minimum amounts of shareholders'
equity ($65 million plus 50% of consolidated net income beginning in 1994), (ii)
maintenance of minimum ratios of cash flow to interest expense (2.5 : 1) as well
as current assets (including unused Borrowing Base) to current liabilities
(1:1), (iii) limitations on the Company's ability to incur additional debt and
(iv) restrictions on the payment of dividends.
6
<PAGE> 9
Capital Expenditures. During the first six months of 1997, the Company
incurred capital expenditures of $33.3 million compared with $24.2 million for
the first six months of 1996. The capital expenditures incurred during the first
six months of 1997 were largely in connection with the continuing development
efforts, including recompletions, workovers and waterfloods, on existing wells
in the Company's Brookhaven, Laurel, Martinville and Soso fields. In addition
during the first six months of 1997, the Company drilled fifteen wells as
follows: three producing oil wells in the Laurel field, one producing oil well
and one dryhole in the Martinville field, one producing oil well in the Soso
field, two producing oil wells and one producing gas well in the Brookhaven
field, five producing gas wells in the Monroe field and one producing offshore
gas well in the North Padre field. The Company also had four drilling wells at
June 30, 1997, one in each of the Brookhaven, Martinville, Laurel and North
Padre fields. General and administrative costs directly associated with the
Company's exploration and development activities were $1.5 million for the first
six months of 1997, compared with $1.2 million for the first six months of 1996,
and are included in total capital expenditures.
In June 1997, the Board of Directors approved a $10 million increase in the
1997 capital expenditure program to a total of $54 million.
The Company has no material capital commitments and is consequently able to
adjust the level of its expenditures as circumstances warrant.
RESULTS OF OPERATIONS
Selected Operating Data
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30 JUNE 30
------------------ ------------------
1996 1997 1996 1997
------- ------- ------- -------
(IN THOUSANDS, EXCEPT PER DAY,
PER BBL AND PER MCF DATA)
<S> <C> <C> <C> <C>
Production
Crude Oil (Bbl/day)............................... 6,612 7,084 6,615 7,439
Natural Gas (Mcf/day)............................. 17,938 19,583 17,992 19,665
BOE (Bbl/day)..................................... 9,602 10,348 9,614 10,717
Average Sales Prices
Crude Oil per Bbl................................. $ 15.71 $ 17.03 $ 16.25 $ 15.85
Natural Gas per Mcf............................... $ 1.96 $ 2.17 $ 1.93 $ 1.82
Other
Production costs per BOE(1)....................... $ 3.90 $ 3.83 $ 3.86 $ 3.65
Depletion per BOE................................. $ 4.51 $ 4.80 $ 4.55 $ 4.56
Revenues
Production revenues
Crude Oil...................................... $18,902 $21,826 $ 9,781 $10,725
Natural Gas.................................... 6,403 7,695 3,157 3,260
------- ------- ------- -------
$25,305 $29,521 $12,938 $13,985
======= ======= ======= =======
</TABLE>
- ---------------
(1) Includes lease operating expenses and production taxes.
Operating Revenues. During the first six months of 1997, production
revenues increased 17% to $29.5 million as compared to $25.3 million for the
same period in 1996. This increase was principally due to a 7% increase in crude
oil production, a 9% increase in natural gas production, and increases in the
prices received for crude oil and natural gas (including hedging gains and
losses discussed below) of 8% and 11%, respectively. For the three months ended
June 30, 1997, production revenue increased 8% to $14.0 million as compared to
$12.9 million for the same period in 1996. This increase was principally due to
a 12% increase in crude oil production and a 9% increase in natural gas
production. The increased revenue from production increases was partially offset
by decreases in the prices received for crude oil and natural gas of 2% and 6%,
respectively.
7
<PAGE> 10
The 9% increase in daily natural gas production is primarily a result of
the continued positive response from the Company's development efforts in the
Martinville and Brookhaven fields. The 7% increase in daily crude oil production
during the first half of 1997 is due to significant production increases made in
the Martinville, Soso and Brookhaven fields, with production increasing by 201%,
49% and 81%, respectively. These production increases were offset by production
decreases in the Summerland and Laurel fields due to the unusually high
frequency of weather-related power outages and mechanical problems during the
first quarter of 1997. In addition, the Summerland field is experiencing normal
production declines due to the maturity of the field.
Average crude oil prices increased during the first half of 1997 compared
to the same period in 1996 due to the strong demand for crude oil and higher oil
prices in the first quarter of 1997 as compared to the first quarter of 1996.
The effect of higher first quarter prices was partially offset by lower oil
prices in the second quarter of 1997 as compared to the same quarter in 1996 due
to a softening in the market demand. The posted price for the Company's crude
oil averaged $19.35 for the six months ended June 30, 1997, a 2% increase over
the average posted price of $19.04 experienced in the first six months of 1996.
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 price for the Company's natural gas, including hedging gains and
losses, increased 11% from $1.96 in the first six months of 1996 to $2.17 in the
first six months of 1997, due to increased heating needs during the winter
season and an overall tightening of supply and demand in the market. Natural gas
prices also softened in the second quarter of 1997 so the effect of the higher
gas prices received in the first quarter of 1997 as compared to first quarter of
1996 was partially offset by lower natural gas prices in the second quarter of
1997 as compared to the same quarter in 1996.
Production revenues for the six months ended June 30, 1997 included crude
oil hedging losses of $396,000 ($.31 per Bbl) compared to the hedging losses of
$1.3 million ($1.09 per Bbl) for the same period in 1996. Production revenues in
1997 also included natural gas hedging gains of $86,000 ($.02 per Mcf) compared
with natural gas hedging losses of $1.1 million ($0.33 per Mcf) for the same
period in 1996. There were no crude oil or natural gas hedging gains or losses
for the three months ended June 30, 1997 compared to crude oil hedging losses of
$928,000 ($1.56 per Bbl) and natural gas hedging losses of $372,000 ($0.23 per
Mcf) for the same period in 1996. Additionally, the Company has entered into
certain arrangements which fix a minimum WTI price per barrel of $19.00 and a
maximum WTI price of $23.90 for 4,000 barrels of production per day through
December 31, 1997. The Company also has 920,000 Mmbtu of natural gas production
hedged over the July through September 1997 period at an average price of $2.35
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 New York Mercantile Exchange 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 decreased to $149,000 in the first half of 1997
from $510,000 in 1996 primarily due to $472,000 of interest earned during 1996
on the receivable from the sale of the marketing and pipeline segment of
operations, partially offset by $137,000 of interest received in the first
quarter of 1997 on a federal tax refund.
Expenses. Production expenses (including production taxes) were $7.2
million for the first six months of 1997 compared to $6.8 million for the first
six months of 1996 and $3.6 million for the second quarter of 1997 compared to
$3.4 million for the same period in 1996. This increase primarily reflects
additional production volumes. On a BOE basis, production costs decreased to
$3.83 per BOE in 1997 compared to $3.90 per BOE in 1996 for the six month
periods and $3.65 per BOE in 1997 compared to $3.86 per BOE in 1996 for the
three month periods.
General and administrative costs increased 10% between the comparable six
month periods from $3.3 million in 1996 to $3.6 million in 1997, primarily due
to staff additions to handle the increased drilling and recompletion activity
and remained stable at $1.8 million for the comparable three month periods.
8
<PAGE> 11
Interest expense increased 24% and 11% for the three and six month periods
ended June 30, 1997, respectively, compared to the same periods in 1996, due to
higher borrowing levels during 1997 as compared to 1996. The significant
increase for the comparative three month periods is due to the $20 million
repayment in borrowings in April, 1996 from the proceeds from the sale of the
pipeline operations. The borrowing levels increased during the last half of 1996
and the first half of 1997 due to additional borrowings to fund Coho's capital
expenditure program.
Depletion and depreciation expense increased 20% to $9.0 million for the
six months ended June 30, 1997 from $7.9 million in 1996. Depletion and
depreciation expense increased to $4.4 million for the three months ended June
30, 1997 as compared to $4.0 million for the comparable period in 1996. These
increases are primarily the result of increased production volumes and an
increased rate per BOE, which increased to $4.80 versus $4.51 for the comparable
six month period in 1996 and to $4.56 in 1997 versus $4.55 in 1996 for the
comparable three month periods. The depletion and depreciation rate decreased
from $5.05 per BOE in the first quarter of 1997 to $4.56 per BOE in the second
quarter of 1997 primarily due to significant reserve additions from the
exploration success in the Brookhaven field.
The Company's net earnings for the three and six months ended June 30, 1997
were $1.1 million and $3.2 million, respectively, as compared to net earnings of
$1.1 million and $2.1 million, respectively, for the same periods in 1996 for
the reasons discussed above.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
None
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
At the Company's Annual Meeting of Shareholders held on May 12, 1997, the
shareholders approved an amendment to the 1993 Stock Option Plan that increased
the number of shares issuable thereunder by 775,000. With respect to the
proposal, out of a total of 20,375,126 shares of Common Stock outstanding and
entitled to vote, 15,325,712 shares voted "for", 945,010 shares voted "against"
and 19,922 shares abstained from voting. There were no broker non-votes with
respect to this proposal.
The shareholders ratified the selection, by the Board of Directors, of the
firm of Arthur Andersen LLP as independent auditors for the Company for 1997.
With respect to the proposal, out of a total of 20,375,126 shares of Common
Stock outstanding and entitled to vote, 16,443,220 voted "for", 22,600 voted
"against" and 4,852 shares abstained from voting. There were no broker non-votes
with respect to this proposal.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
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.
COHO ENERGY, INC.
(Registrant)
Date: August 14, 1997
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)
11
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- -------------------- ------------------------------------------------------------------------
<C> <S>
27 -- Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 936
<SECURITIES> 0
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0
0
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</TABLE>
