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Filed pursuant to Rules 424(b)(3) and
424(c). Commission File No. 33-99388
PROSPECTUS SUPPLEMENT DATED AUGUST 27, 1996
TO THE PROSPECTUS OF TATHAM OFFSHORE, INC. DATED
DECEMBER 26, 1995, AS PREVIOUSLY SUPPLEMENTED
BY THE PROSPECTUS SUPPLEMENTS
DATED FEBRUARY 16, 1996, APRIL 11, 1996, MAY 24, 1996 AND JUNE 25, 1996
This Prospectus Supplement dated August 27, 1996 supplements and is a
part of the Prospectus of Tatham Offshore, Inc. dated December 26, 1995, as
previously supplemented by the Prospectus Supplements dated February 16, 1996,
April 11, 1996, May 24, 1996 and June 25, 1996 (as so supplemented, the
"Prospectus"). Accordingly, this Prospectus Supplement should be read in
conjunction with the Prospectus. Capitalized terms used herein but not
otherwise defined shall have the meanings set forth in the Prospectus.
1996 EARNINGS
Tatham Offshore, Inc., a Delaware corporation ("Tatham Offshore" or
the "Company") reported net income available to common shareholders for the
year ended June 30, 1996 totaled $0.5 million, or $0.02 per share, as compared
with a net loss of $34.8 million, or $1.39 per share for the year ended June
30, 1995. The net income for the year ended June 30, 1996 includes the
recognition of a $22.6 million gain attributable to the sale of working
interests in three offshore properties to Flextrend Development Company, L.L.C.
("Flextrend Development") as well as an $8.0 million write-down of Tatham
Offshore's investment in its Genuine Risk project located in Ship Shoal Block
331, offshore Louisiana. The sale of the properties to Flextrend Development,
which is subject to a reversionary interest held by Tatham Offshore, resulted
in Tatham Offshore recording net deferred revenue of $22.6 million at June 30,
1995.
Revenue for the year ended June 30, 1996 totaled $16.1 million as
compared with $8.1 million for the same period in 1995. The increase in
revenue is primarily attributable to gas sales from the Phar Lap field. In
addition, the Ewing Bank 914 #2 well was shut-in for approximately four months
during the year ended June 30, 1995 while the flow lines that connect the
subsea wellhead to a shallow water platform were replaced.
Production and operating expenses for the year ended June 30, 1996
totaled $13.2 million as compared with $13.7 million for the year ended June
30, 1995. The decrease in production and operating expenses is due primarily
to a restructuring of Tatham Offshore's transportation contracts, partially
offset by additional operating costs relating to Tatham Offshore's 25% working
interest in the Phar Lap field.
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Exploration expenses for the year ended June 30, 1996 totaled $0.6
million as compared with $11.5 million for the year ended June 30, 1995.
During the year ended June 30, 1995, Tatham Offshore expensed costs incurred in
the drilling of its Ewing Bank 915 #4 and Viosca Knoll 818 #1 wells, resulting
in exploration expenses of $10.6 million.
General and administrative expenses for the year ended June 30, 1996
totaled $6.3 million compared with $7.1 million for the year ended June 30,
1995. Depreciation and depletion increased $8.5 million for the year ended
June 30, 1996 primarily as a result of an $8.0 million charge to the investment
in Tatham Offshore's Genuine Risk project.
The following provides certain unaudited comparative financial
information for the fiscal years ended June 30, 1996 and June 30, 1995.
TATHAM OFFSHORE, INC.
RESULTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
For the Year
Ended June 30
-------------
1996 1995
---- ----
<S> <C> <C>
Oil and Gas revenue $ 16,070 $ 8,054
----------- -----------
Production and operating expenses 13,203 13,745
Exploration expenses 637 11,459
General and administrative expenses 6,275 7,112
Depreciation and depletion 9,758 1,210
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Total operating expense 29,873 33,526
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Operating loss (13,803) (25,472)
Gain on sale of assets 22,641 1,496
Net interest expense and other (8,048) (10,795)
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Net income (loss) $ 790 $ (34,771)
=========== =========
Net income (loss) available to common
shareholders $ 509 $ (34,771)
=========== =========
Net income (loss) per share $ 0.02 $ (1.39)
=========== ========
Weighted average number of
shares outstanding 41,312 25,000
=========== ========
</TABLE>
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EXERCISE OF WARRANTS TO PURCHASE SERIES A CONVERTIBLE EXCHANGEABLE PREFERRED
STOCK
The period for purchasing Tatham Offshore's Series A 12% Convertible
Exchangeable Preferred Stock expired on July 1, 1996. ChaseMellon Shareholder
Services, L.L.C., the Company's Information Agent, has indicated that of the
25,120,948 Warrants outstanding, Warrant holders purchased a total of
approximately 18,717,030 shares of Series A 12% Convertible Exchangeable
Preferred Stock prior to the expiration date. The Series A 12% Convertible
Exchangeable Preferred Stock will be traded in the over the counter market
under the trading symbol "TOFFL".
Holders of the unexercised Warrants are entitled to purchase, for
$1.00 per share, one share of either:
o Series B 8% Convertible Exchangeable Preferred Stock, with a liquidation
preference of $1.00 per share and accruing dividends at the annual rate of
$0.08 per share on or before October 1, 1996; or
o Series C 4% Convertible Exchangeable Preferred Stock, with a liquidation
preference of $0.50 per share and accruing dividends at the annual rate of
$0.02 per share, on or before January 1, 1997.
Each Warrant remaining unexercised at 5:00 p.m., Eastern time, on
January 1, 1997, will be converted, without any action on the part of the
holder thereof, into one share of Mandatory Redeemable Preferred Stock, which
will have a liquidation preference of $0.50 per share and which the Company
will be required to redeem under certain circumstances.
At any time after July 1, 1996 and until December 31, 1998, each share
of Convertible Exchangeable Preferred Stock (including any accrued and unpaid
dividends thereon) may be exchanged for four Exchange Warrants, each entitling
the holder thereof to purchase one share of Tatham Offshore Common Stock for
$0.653 per share. The Exchange Warrants will expire on July 1, 1999.
Alternatively, at any time after July 1, 1996, each holder of shares of any
series of Convertible Exchangeable Preferred Stock will have the right, at the
holder's option, to convert the liquidation preference thereof, plus any
accrued and unpaid dividends thereon, into shares of Common Stock at a rate of
$0.653 per share.
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The date of this Prospectus Supplement is August 27, 1996.
