<PAGE> 1
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ 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
Commission File Number 0-23166
HUGOTON ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
KANSAS 48-1036256
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
301 N. MAIN, SUITE 1900, WICHITA, KANSAS 67202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (316) 262-1522
NONE
(Former name or former address, if changed since last report)
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 of each of the issuer's classes of common stock,
as of the latest practicable date:
CLASS OUTSTANDING AS OF JULY 31, 1997
Common stock, no par value 19,838,574
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<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I FINANCIAL INFORMATION (UNAUDITED)
Item 1. Consolidated Financial Statements
Consolidated Statements of Operations
for the six months ended June 30,
1997 and 1996 3
Consolidated Balance Sheets at June 30,
1997 and December 31, 1996 4
Consolidated Statements of Cash Flows
for the six months ended June 30,
1997 and 1996 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II OTHER INFORMATION 12
SIGNATURE 13
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
HUGOTON ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- --------------------
1997 1996 1997 1996
---------- -------- -------- --------
<S> <C> <C> <C> <C>
REVENUES:
Oil and Gas $ 17,064 $ 15,900 $ 40,648 $ 31,474
Gas Plant 268 409 667 919
Gain on sales of properties 2 -- 18 --
Gain on certain gas swap contracts -- -- -- 10
-------- -------- -------- --------
TOTAL REVENUES 17,334 16,309 41,333 32,403
-------- -------- -------- --------
EXPENSES:
Production
Lease operations 4,947 4,040 9,601 8,365
Production and severance tax 836 721 1,964 1,582
Gathering, transportation and other 473 684 695 847
Gas plant 242 353 547 693
Exploration 1,511 373 2,549 507
General and administrative 2,380 1,588 5,071 3,356
Depreciation, depletion, amortization 9,499 6,033 15,751 12,272
-------- -------- -------- --------
TOTAL EXPENSES 19,888 13,792 36,178 27,622
-------- -------- -------- --------
OPERATING INCOME (LOSS) (2,554) 2,517 5,155 4,781
OTHER INCOME (EXPENSES):
Interest (1,657) (1,453) (3,131) (2,981)
Other 20 67 84 90
-------- -------- -------- --------
TOTAL OTHER INCOME (EXPENSES) (1,637) (1,386) (3,047) (2,891)
-------- -------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES (4,191) 1,131 2,108 1,890
(Provision) benefit for income taxes 1,718 (430) (864) (718)
======== ======== ======== ========
NET INCOME (LOSS) $ (2,473) $ 701 $ 1,244 $ 1,172
======== ======== ======== ========
NET INCOME (LOSS) PER COMMON SHARE $ (0.12) $ 0.04 $ 0.06 $ 0.06
======== ======== ======== ========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 19,811 19,697 19,774 19,697
======== ======== ======== ========
</TABLE>
See accompanying notes.
3
<PAGE> 4
HUGOTON ENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
--------- ---------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 1,172 $ 3,732
Accounts receivable, less allowance for doubtful accounts
of $184 ($146 in 1996) 9,951 12,985
Other 462 568
--------- ---------
TOTAL CURRENT ASSETS 11,585 17,285
--------- ---------
PROPERTIES AND EQUIPMENT, AT COST (SUCCESSFUL EFFORTS METHOD)
Proved properties 280,860 253,419
Unproved properties 25,877 24,696
Gas plant 1,478 1,478
Other 6,705 6,303
--------- ---------
314,920 285,896
Less accumulated depreciation, depletion and amortization (68,625) (53,118)
--------- ---------
246,295 232,778
--------- ---------
OTHER ASSETS, NET 1,746 1,866
--------- ---------
TOTAL ASSETS $ 259,626 $ 251,929
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 5,524 $ 6,534
Other accrued liabilities 1,120 1,104
Accrued property taxes payable 840 505
Accrued interest payable 877 597
--------- ---------
TOTAL CURRENT LIABILITIES 8,361 8,740
--------- ---------
LONG-TERM DEBT 100,000 95,000
DEFERRED INCOME TAXES 17,006 16,142
OTHER DEFERRED LIABILITIES 490 520
COMMITMENTS AND CONTINGENCIES -- --
SHAREHOLDERS' EQUITY:
Preferred stock, no par value, 10,000,000 shares authorized,
none issued and outstanding -- --
Common Stock, no par value, 100,000,000 shares authorized,
19,838,574 shares issued and outstanding (19,702,036 in 1996) 198 197
Paid-in capital 135,538 134,541
Retained (deficit) (1,967) (3,211)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 133,769 131,527
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 259,626 $ 251,929
========= =========
</TABLE>
See accompanying notes.
4
<PAGE> 5
HUGOTON ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------------------
1997 1996
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,244 $ 1,172
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY
OPERATING ACTIVITIES:
Depreciation, depletion, and amortization 15,751 12,272
Gain on sale of properties and other assets (34) (70)
Leasehold abandonments 191 --
Deferred income taxes 864 718
Other non-cash charges 150 109
CHANGES IN OPERATING ASSETS AND LIABILITIES:
Accounts receivable 3,034 (1,168)
Other current assets 106 367
Other (12) 548
Accounts payable (1,010) (1,256)
Accrued liabilities 631 942
Accrued swap contract liability -- (1,646)
Deferred liabilities (30) --
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 20,885 11,988
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to properties and equipment (29,618) (28,682)
Proceeds from sale of proved properties and other assets 175 6,302
-------- --------
NET CASH USED IN INVESTING ACTIVITIES (29,443) (22,380)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long term debt 10,000 22,000
Repayment of long term debt (5,000) (10,000)
Proceeds from exercised stock options 998 --
-------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 5,998 12,000
-------- --------
Net increase (decrease) in cash (2,560) 1,608
Cash at beginning of period 3,732 3,914
-------- --------
Cash at end of period $ 1,172 $ 5,522
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid $ 2,972 $ 2,561
</TABLE>
See accompanying notes.
5
<PAGE> 6
HUGOTON ENERGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. INTERIM FINANCIAL STATEMENTS
The consolidated financial statements at June 30, 1997 and for the six
month period then ended are unaudited and reflect all adjustments (consisting
of only normal recurring adjustments) which are, in the opinion of management,
necessary for a fair presentation of the financial position and operating
results for the interim period. The consolidated financial statements should
be read in conjunction with the consolidated financial statements and notes
thereto, together with management's discussion and analysis of financial
condition and results of operations, contained in the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1996. The results of
operations for the six months ended June 30, 1997 are not necessarily
indicative of the results which may be expected for any other interim period or
for the entire fiscal year ending December 31, 1997.
NOTE 2. EARNINGS PER COMMON SHARE AND RECENTLY ISSUED ACCOUNTING STANDARDS
The Company's earnings per common share has been computed based on the
weighted average number of shares outstanding during the period.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share" ("FAS
128"), which specifies the computation, presentation, and disclosure
requirements for earnings per share with the objective to simplify the
computation of earnings per share. FAS 128 is effective for financial
statements for periods ending after December 15, 1997 and earlier application
is not permitted. After the effective date, all prior periods earnings per
share data shall be restated to conform with the provision of FAS 128. The
adoption of FAS 128 is not expected to have a material impact on the Company's
earnings per share data.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
Hugoton Energy Corporation (the "Company") is a rapidly growing
independent oil and natural gas company engaged in the exploration for and the
development, exploitation, production and acquisition of oil and natural gas
reserves and properties. The Company has historically been one of the most
active independent operators in the Hugoton Field and has expanded its
operations throughout the Mid-Continent area in Kansas, Oklahoma and Texas, and
into the Permian Basin in West Texas and New Mexico, the Austin Chalk Trend of
Texas and Louisiana and the Williston Basin in Montana and North Dakota. The
Company intends to expand its reserve base by continuing its drilling and
acquisition activities primarily in its four core areas. The Company focuses on
exploring and developing properties that it believes possess significant upside
potential, which can be realized through the application of 3-D seismic
technology and traditional geologic studies, as well as advanced drilling and
completion techniques.
The Company has accumulated an acreage position of approximately
567,000 net acres, including 165,000 net acres that were added during 1996.
These acreage holdings are located in the Company's four core areas and have
exploration and development opportunities with multiple pay horizons. The
Company believes that it has sufficient drilling prospects in its acreage
inventory to allow it to continue its drilling program through 1999, and it
intends to continue to add acreage to its holdings. The Company's 1997 capital
budget is $75 million, an increase of 63% over 1996 capital expenditures, and
includes $50 million for the drilling of approximately 200 wells, $10 million
for 3-D seismic and land costs and $15 million for small strategic
acquisitions. In its 1997 drilling budget, the Company has assembled prospects
with a wide range of risk profiles, with approximately 60% of the budget to be
spent for relatively lower risk development drilling, and approximately 40% for
exploratory drilling. The drilling budget will be expended 30% in the Hugoton
Producing Area and other fields in the Mid-Continent areas, 30% in the Permian
Basin, 20% in the Austin Chalk Trend, and 20% in the Williston Basin.
CURRENT DEVELOPMENTS
The Company drilled 56 wells during the first six months of 1997 and
completed 54 of them for a success rate of 96%. The Company currently has
eight drilling rigs running in the Mid-Continent area, the Permian Basin and
the Austin Chalk and is currently drilling its initial exploratory well in the
Williston Basin. The Company's $50 million drilling budget for 1997 allows for
drilling up to 200 wells during 1997.
In June 1997, the Company hired Petrie Parkman & Co. to assist it in
evaluating strategic alternatives, including a possible sale or merger of the
Company. The Company has received a large number of inquires and indications
of interest from other companies and investment bankers and plans to open a
data room by early September.
7
<PAGE> 8
RESULTS OF OPERATIONS
The following table sets forth certain operating information of the
Company for the periods shown:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net production (1):
Natural gas (MMCF) 4,878 4,877 9,727 9,719
Oil (MBBLS) 419 405 876 857
Natural gas equivalents (MMCFE) 7,392 7,307 14,983 14,861
Average net daily production (1):
Natural gas (MCF) 53,606 53,596 53,742 53,402
Oil (BBLS) 4,607 4,453 4,840 4,706
Natural gas equivalents (MCFE) 81,248 80,314 82,782 81,638
Average sales price per unit (2):
Natural Gas ($/MCF) $1.91 $1.78 $2.34 $1.70
Oil ($/BBL) 18.50 17.84 20.37 17.42
Natural gas equivalents ($/MCFE) 2.31 2.18 2.71 2.12
</TABLE>
- ---------
(1) Net production and average net daily production excludes NGLs and
natural gas purchased by AmGas (100% owned subsidiary of the Company)
from and sold to unrelated third parties.
(2) Average prices received from sales of natural gas include revenues
attributable to NGLs as the Company has not historically accounted
separately for production or revenues attributable to NGLs.
Three Months Ended June 30, 1997 Compared to Three Months Ended
June 30, 1996
Net Income or Loss and Cash Flow from Operating Activities. The
Company reported net loss of $2.5 million, or $.12 per share, on total revenues
of $17.3 million for the three months ended June 30, 1997. This compares to
net income of $0.7 million, or $.04 per share, on total revenues of $16.3
million for the three months ended June 30, 1996. Cash flows from operating
activities for the three months ended June 30, 1997 decreased to $7.5 million
from $7.6 million for the same period in 1996. Total revenues increased for
1997 due largely to higher average sales prices per MCFE ($2.31 in 1997 versus
$2.18 in 1996).
Oil and Gas Revenues. Revenues from oil and gas operations increased
by 7% to $17.1 million for the three months ended June 30, 1997 compared to
$15.9 million for the same period during 1996. The increase is attributed to
the higher oil and natural gas prices received by the Company during 1997.
Production Expense. Production expense for the three months ended
June 30, 1997, increased by 17% to $6.3 million compared to $5.4 million during
the same period of 1996. Lease operating costs rose $0.9 million, production
and severance taxes increased by $0.1 million while gathering, transportation
and other declined by $0.1 million. The rise in lease operating costs comprised
the majority of the overall increase in the category and is primarily a result
of continued increasing price pressures encountered in the service and supply
sector of the economy.
Exploration Expense. Exploration expense for the three months ended
June 30, 1997, increased to $1.5 million compared to $0.4 million during the
same period of 1996. The increase is due to $1.3 million in delay rentals paid
on the Company's Austin Chalk acreage in Louisiana.
General and Administrative Expense. General and administrative
expense increased to $2.4 million in the three month period ended June 30,
1997, compared to $1.6 million for the same period in 1996. The increase is
primarily attributable to costs associated with the sale of the Company's
common stock by selling shareholders and costs related to the Company's review
of strategic alternatives that is currently underway.
8
<PAGE> 9
Depreciation, Depletion and Amortization Expense. Depreciation,
depletion and amortization ("DD&A") for the three months ended June 30, 1997
was $9.5 million compared to $6.0 million for the same period of 1996. During
the second quarter of 1997, the Company recorded an additional $3.4 million in
DD&A expense for the three months ended June 30, 1997. The additional DD&A
recorded was primarily attributed to the Company's Austin Chalk Properties.
Income Taxes. For the three months ended June 30, 1997, the Company
recorded a tax benefit of $1.7 million compared to a tax provision of $0.4
million for the same period of 1996. The benefit recorded in 1997 represents
the Company's net loss for the three months ended at its expected effective tax
rate for 1997 of 41%. The effective tax rate used by the Company in 1997
differs from the 1996 rate due to the inclusion of certain non-deductible
amortization present in 1997.
Six Months Ended June 30, 1997 Compared to Six Months Ended June 30,
1996
Net Income or Loss and Cash Flow from Operating Activities. The
Company reported net income of $1.2 million, or $.06 per share, on total
revenues of $41.3 million for the six months ended June 30, 1997. This
compares to net income of $1.2 million, or $.06 per share, on total revenues of
$32.4 million for the six months ended June 30, 1996. Cash flows from
operating activities for the six months ended June 30, 1997 increased to $20.1
million from $12.0 million for the same period in 1996. The increase in total
revenues and cash flows for 1997 is largely attributable to higher average
sales prices per MCFE ($2.71 in 1997 versus $2.12 in 1996). Additionally, the
Company's realized prices for the first six months of 1997 were positively
impacted by $.49/BBL and $.14/MCF due to hedging transactions established
during the fourth quarter of 1996. The net effect of the hedging transactions
was an increase of $1.1 million in net income for the first six months of 1997.
Oil and Gas Revenues. Revenues from oil and gas operations increased
by 29% to $40.6 million for the six months ended June 30, 1997 compared to
$31.5 million for the same period during 1996. The increase is attributed to
the higher oil and natural gas prices received by the Company during 1997 and
the positive impact of hedging transactions in place during 1997, as previously
mentioned above.
Production Expense. Production expense for the six months ended June
30, 1997, increased to $12.3 million compared to $10.8 million during the same
period of 1996. Lease operating costs rose $1.2 million, production and
severance taxes increased by $0.4 million while gathering, transportation and
other declined by $0.2 million. The rise in lease operating costs comprised the
majority of the overall increase in the category and is primarily a result of
continued increasing price pressures encountered in the service and supply
sector of the economy. Higher prices per MCFE during 1997 ($2.71 vs. $2.12) is
attributed to the increase in production and severance taxes.
Exploration Expense. Exploration expense for the six months ended
June 30, 1997, increased to $2.5 million compared to $0.5 million during the
same period of 1996. The increase is due to $.5 million in seismic costs, $1.5
million in delay rental and $0.2 million in abandoned undeveloped acreage
costs.
General and Administrative Expense. General and administrative
expense increased to $5.1 million in the six month period ended June 30, 1997,
compared to $3.4 million for the same period in 1996. The increase is
primarily attributable to costs associated with the sale of the Company's
common stock by selling shareholders and costs related to the Company's review
of strategic alternatives that is currently underway.
Depreciation, Depletion and Amortization Expense. Depreciation,
depletion and amortization ("DD&A") for the six months ended June 30, 1997 was
$15.8 million compared to $12.3 million for the same period of 1996. During
the second quarter of 1997, the Company recorded an additional $3.4 million in
DD&A expense for the three months ended June 30, 1997. The additional DD&A
recorded was primarily attributed to the Company's Austin Chalk Properties.
Income Taxes. For the six months ended June 30, 1997, the Company
recorded a tax provision of $0.9 million compared to a tax provision of $0.7
million for the same period of 1996. The provision recorded in 1997 represents
the Company's net income for the six months ended at an effective tax rate of
41%. The effective tax rate used by the Company in 1997 differs from the 1996
rate due to the inclusion of certain non-deductible amortization present in
1997.
9
<PAGE> 10
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital position decreased by $5.3 million from
year-end 1996 to $3.2 million at June 30, 1997. Cash and accounts receivable
decreased by $2.6 million and $3.0 million, respectively. The Company's
current ratio of current assets to current liabilities was 1.4 to 1.0 at June
30, 1997 and 2.0 to 1.0 at December 31, 1996.
Capital Expenditures. The Company's primary needs for cash are for
exploration, development and acquisitions of oil and gas properties, payment of
interest on outstanding indebtedness and working capital obligations. The
Company's 1997 capital expenditure budget has been set at $75 million of which
approximately $50 million is committed to drilling, $10 million for 3-D seismic
and land costs and $15 million for small strategic acquisitions. Through June
30, 1997, the Company has expended approximately $30 million of its capital
budget. Funding for the Company's exploration and development activities and
its working capital obligations is provided primarily by internally-generated
cash flow. The Company budgets its capital expenditures based on projected
cash flows and routinely adjusts the level of its capital expenditures in
response to anticipated changes in cash flows.
During the first six months of 1997, the Company's borrowings
increased by $5 million. Proceeds from the borrowings were used to fund
various acquisitions totaling approximately $4.0 million and general corporate
uses of $1.0 million.
Capital Resources. The Company's capital resources consist of cash
flow from operating activities and funds available under its bank credit
facility (the "Credit Facility"). The Company's Credit Facility is an
unsecured $250 million revolving credit agreement that is due September 7,
1999. The new facility is provided by a group of seven commercial banks led by
Bank One, Texas, N.A. as agent (the "Agent Bank"). The Borrowing Base, as
defined in the loan agreement, is currently set at $135 million, and is subject
to semi-annual redetermination. Outstanding borrowings were $100 million at
June 30, 1997.
The Credit Facility provides the option of borrowing at floating
interest rates based on the Agent Bank's base rate or at a Eurodollar option
based on the London Interbank Offered Rates ("LIBOR") plus 3/4 of 1% to 1.25%,
depending on the outstanding loan balance. Interest is paid quarterly or at
the end of each interest period. The current weighted average interest rate is
6.77%. The Company also incurs a commitment fee of 1/4 of 1% on the unused
portion of the Borrowing Base. The Credit Facility contains customary
restrictive covenants, including restrictions on the payment of dividends and
requires the Company to maintain certain financial ratios.
The Company has historically funded its operations and capital
spending programs with cash flow from operations and borrowings under bank
credit facilities. The Company believes that cash flow from operations and the
borrowing availability under the Credit Facility will be sufficient to meet its
anticipated capital requirements for 1997. However, because future cash flows
and the availability of financing are subject to a number of variables, such as
the level of production and the prices received for natural gas and oil, there
can be no assurance that the Company's capital resources will be sufficient to
maintain currently planned levels of capital expenditures.
In general, because the Company's principal natural gas and oil
reserves are depleted by production, its success is dependent upon the results
of its development, acquisition and exploration activities.
Hedging Transactions. With the objective of achieving more
predictable revenues and cash flows and reducing the exposure to fluctuations
in oil and natural gas prices, the Company periodically enters into hedging
transactions of various kinds with respect to both oil and natural gas. While
the use of these hedging arrangements limits the downside risk of adverse price
movements, it may also limit future revenues from favorable price movements.
During the second quarter of 1997, the Company entered into swap
agreements fixing the price of 10,000 MMBTU of natural gas per day for the
months of May through October 1997 at a net price to the Company of $2.03 per
MMBTU and 70,000 BBLS of oil per month for the months of June through October
1997 at a net price to the Company of $21.19 per BBL.
The Company continues to evaluate whether to enter into additional
hedging transactions for 1997 and future years. In addition, the Company may
determine from time to time to terminate its then existing hedging positions.
10
<PAGE> 11
This report contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, amended. Although the Company
believes the assumptions underlying the forward looking statements contained
herein are reasonable, any of the assumptions could be inaccurate, and
therefore, there can be no assurance that the forward-looking statements
contained in the report will prove to be accurate.
11
<PAGE> 12
PART II. OTHER INFORMATION
ITEMS 1, 2, 3, 5 & 6 ARE NOT APPLICABLE AND HAVE BEEN OMITTED.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's Annual Meeting of Stockholders, held May 15, 1997, the
following individuals were elected to the Board of Directors:
Jonathan S. Linker - Class II director, term expires at annual meeting
of stockholders in 2000
William E. Macaulay - Class II director, term expires at annual
meeting of stockholders in 2000
The following members of the Board of Directors had terms which continued after
the meeting:
David S. Elkouri - Class I director, term expires at annual meeting
of stockholders in 1998
John T McNabb, II - Class I director, term expires at annual meeting
of stockholders in 1998
Alan J. Andreini - Class I director, term expires at annual meeting
of stockholders in 1998
Floyd C. Wilson - Class III director, term expires at annual meeting
of stockholders in 1999
A. Mark Womble - Class III director, term expires at annual meeting
of stockholders in 1999
J. W. Decker - Class III director, term expires at annual meeting
of stockholders in 1999
The following proposals were approved at the Company's Annual meeting:
<TABLE>
<CAPTION>
Affirmative Negative Votes
Votes Votes Withheld
----- ----- --------
<S<C> <C> <C> <C>
1. Election of two Class II directors to the 16,277,219 235 -
Board of Directors
2. Consider and approve the Hugoton Energy 16,229,619 44,800 3,035
Corporation Amended and Restated 1995
Stock Option Plan
3. Consider and approve a Nonstatutory Stock 16,132,369 136,450 8,635
Option Agreement between the Company
and Jay W. Decker dated September 8, 1996
4. Consider and ratify the appointment of 16,274,154 1,300 2,000
Ernst & Young LLP as the independent
accountants of the Company for the fiscal
year ending December 31, 1997
</TABLE>
12
<PAGE> 13
SIGNATURE
Pursuant to the requirements Section 13 or 15 (d) of the Securities Exchange
Act 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized, on the 12th day of August, 1997.
HUGOTON ENERGY CORPORATION
(Registrant)
Date: August 12, 1997 /s/ W. Mark Womble
---------------------------------------
W. Mark Womble, Executive Vice
President, Chief Financial
Officer and Director
(Chief Financial Officer and
Duly Authorized Officer)
13
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
27 - Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000914144
<NAME> HUGOTON ENERGY CORP.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,172
<SECURITIES> 0
<RECEIVABLES> 9,951
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 11,585
<PP&E> 314,920
<DEPRECIATION> 68,625
<TOTAL-ASSETS> 259,626
<CURRENT-LIABILITIES> 8,361
<BONDS> 0
0
0
<COMMON> 198
<OTHER-SE> 133,571
<TOTAL-LIABILITY-AND-EQUITY> 259,626
<SALES> 41,315
<TOTAL-REVENUES> 41,333
<CGS> 12,807
<TOTAL-COSTS> 12,807
<OTHER-EXPENSES> 23,371
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,131
<INCOME-PRETAX> 2,108
<INCOME-TAX> (864)
<INCOME-CONTINUING> 1,244
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,244
<EPS-PRIMARY> 0.06
<EPS-DILUTED> 0.06
</TABLE>
