<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT 1934
For the quarterly period ended March 31, 1996
--------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT 1934
For the transition period from to
--
(Amended by Exch Act Rel No. 312905. eff 4/26/93.)
Commission File Number: 33-58831
--------
GOODRICH PETROLEUM CORPORATION
------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 76-466913
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer ID. No.)
incorporation or organization)
5847 SAN FELIPE, SUITE 700, HOUSTON, TEXAS 77057
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(713) 780-9494
--------------
(Registrant's telephone number, including area code)
NONE
----
(Former name, former address and former fiscal year, 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. [ X ] Yes [ ] No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common shares outstanding as of May 6, 1996: 41,804,510
1
<PAGE>
GOODRICH PETROLEUM CORPORATION
FORM 10-Q
MARCH 31, 1996
INDEX
PAGE NO.
--------
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
<S> <C>
Consolidated Balance Sheets
March 31, 1996 (Unaudited) and December 31, 1995........... 3
Consolidated Statements of Operations
Three Months Ended March 31, 1996 and 1995 (Unaudited)..... 5
Consolidated Statements of Cash Flows
Three Months Ended March 31, 1996 and 1995 (Unaudited)..... 6
Consolidated Statements of Stockholders' Equity
Three Months Ended March 31, 1996 and 1995 (Unaudited)..... 7
Notes to Consolidated Financial Statements.................. 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS. 10
PART II - OTHER INFORMATION 13
</TABLE>
ITEM 1. LEGAL PROCEEDINGS.
ITEM 2. CHANGES IN SECURITIES.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
ITEM 5. OTHER INFORMATION.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
2
<PAGE>
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
----------- -------------
(Unaudited)
<S> <C><C> <C><C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents.................. $ 690,478 $ 613,450
Marketable equity securities............... 969,900 759,600
Accounts receivable
Trade and other, net of allowance......... 255,376 170,593
Accrued oil and gas revenue............... 1,032,106 1,014,709
Accrued pipeline joint venture............ 758,040 530,792
Prepaid insurance.......................... 231,728 302,113
Other...................................... 41,453 33,532
---------- ------------
Total current assets................... 3,979,081 3,424,789
---------- ------------
PROPERTY AND EQUIPMENT
Oil and gas properties..................... 16,557,087 16,262,033
Furniture, fixtures and equipment.......... 108,376 101,333
---------- ------------
16,665,463 16,363,366
Less accumulated depletion, depreciation
and amortization.......................... (2,809,324) (2,217,425)
---------- ------------
Total property and equipment........... 13,856,139 14,145,941
---------- ------------
OTHER ASSETS
Investment in pipeline joint venture, net.. 4,284,394 4,676,500
Deferred charges........................... 119,573 135,486
---------- ------------
4,403,967 4,811,986
---------- ------------
TOTAL ASSETS....................... $ 22,239,187 $ 22,382,716
========== = ============
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets (Continued)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
----------- -------------
(Unaudited)
<S> <C> <C> <C><C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable...................................... $ 792,788 $ 656,886
Accrued liabilities................................... 1,240,741 1,740,028
---------- ------------
Total current liabilities......................... 2,033,529 2,396,914
---------- ------------
LONG TERM DEBT.......................................... 9,750,000 9,750,000
OTHER LIABILITIES....................................... 468,411 572,990
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, par value $1.00 per share;
authorized 10,000,000 shares; issued
811,149 at March 31, 1996 (liquidating
preference $10 per share, aggregating to
$8,111,490) and 734,859 at December
31, 1995.......................................... 811,149 734,859
Common stock, par value - $0.20 per share;
authorized 100,000,000 shares; issued
and outstanding 41,804,510........................ 8,360,902 8,360,902
Additional paid-in capital............................ 1,123,850 1,200,140
Accumulated Deficit................................... (518,954) (633,089)
Unrealized gain on marketable equity securities....... 210,300 ---
---------- ------------
Total stockholders' equity........................ 9,987,247 9,662,812
---------- ------------
TOTAL LIABILITIES AND STOCK-
HOLDERS' EQUITY............................... $ 22,239,187 $ 22,382,716
========== =============
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------------------
1996 1995
----------- ----------
<S> <C> <C>
REVENUES
Oil and gas sales............................. $ 1,902,881 1,127,089
Pipeline joint venture........................ 582,310 ---
Other, net.................................... 165,597 6,331
----------- ----------
Total revenues............................ 2,650,788 1,133,420
----------- ----------
EXPENSES
Lease operating expense and production taxes.. 328,092 149,949
Depletion, depreciation and amortization...... 1,093,205 228,245
Exploration................................... 218,017 ---
Interest Expense.............................. 206,831 274,845
General and administrative.................... 528,278 22,329
----------- ----------
Total costs and expenses.................. 2,374,423 675,368
----------- ----------
INCOME BEFORE INCOME TAXES...................... 276,365 $ 458,052
==========
Income taxes.................................. ---
-----------
NET INCOME...................................... $ 276,365
Preferred stock dividend...................... 162,230
-----------
EARNINGS AVAILABLE TO COMMON STOCK.............. $ 114,135
===========
EARNINGS PER AVERAGE COMMON SHARE............... $ ---
===========
AVERAGE COMMON SHARES OUTSTANDING............... 41,804,510
===========
PRO FORMA INFORMATION:
Income before income taxes...................... 458,052
Pro forma income taxes *........................ 178,640
----------
Pro forma net income............................ 279,412
==========
Pro forma earnings per average common share..... $ .01
==========
Pro forma average common shares outstanding**... 19,765,226
==========
- --------------------
</TABLE>
* No provision for income taxes is included in the consolidated statements of
operations for the three months ended March 31, 1995, for the operations of
La/Cal Energy Partners (predecessor company), due to La/Cal being a
partnership and income taxes were the responsibility of the individual
partners of La/Cal. Certain unaudited pro forma information relating to the
Company's results of operations had La/Cal been a corporation, is shown here.
**For purposes of this presentation the number of pro forma shares used for the
three months ended March 31, 1995, is 19,765,226 shares, the number issued by
the Company in exchange for La/Cal's net assets contributed.
See notes to consolidated financial statements.
5
<PAGE>
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
-----------------------------------
1996 1995
------------- -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income........................................... $ 276,365 458,052
Adjustments to reconcile net income to
net cash provided by operating activities:
Depletion, depreciation and amortization......... 1,093,205 228,245
Amortization of deferred debt financing costs.... 19,998 28,697
Gain on sale of oil and gas properties........... (44,123) ---
Exploration costs charged to income.............. 218,017 ---
Payment of other liabilities..................... (104,579) ---
(Increase) decrease in:
Accounts receivable.......................... (329,428) 195,697
Prepaid insurance and other.................. 62,464 ---
(Decrease) increase in
Accounts payable............................. 135,902 145,200
Accrued liabilities.......................... (499,287) (44,309)
--------- ----------
Net cash provided by operating activities.. 828,534 1,011,582
--------- ----------
INVESTING ACTIVITIES
Proceeds from sales of oil and gas properties........ 274,500 ---
Capital expenditures................................. (911,146) ---
Other................................................ 55,952 ---
--------- ----------
Net cash used in investing activities...... (580,694) ---
--------- ----------
FINANCING ACTIVITIES
Principal payments of bank borrowings................ --- (479,473)
Partnership distributions............................ --- (357,084)
Payment of debt financing costs..................... (8,582) ---
Preferred stock dividends............................ (162,230) ---
Organizational costs incurred........................ --- (174,952)
--------- ----------
Net cash used in financing activities...... (170,812) (1,011,509)
--------- ----------
NET DECREASE IN CASH AND CASH EQUIVALENTS.............. 77,028 73
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD.................................. 613,450 710,762
--------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD........................................ $ 690,478 710,835
========== ==========
</TABLE>
See notes to consolidated financial statements.
6
<PAGE>
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
Consolidated Statement of Stockholders' Equity
Three Months Ended March 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Preferred Stock Common Stock
Partners' --------------------------- --------------------------- Additional
Capital Number Number Paid-In
(Deficit) of shares Par Value of shares Par Value Capital
------------- ------------ ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, $(2,081,217) --- $ --- --- $ --- ---
1994......................
Net income................. 458,052 --- --- --- --- ---
Partnership distribution... (357,084) --- --- --- --- ---
-----------
BALANCE AT MARCH 31, 1995.. (1,980,249) --- --- --- --- ---
=========== ======= ======== ========== ========== =========
BALANCE AT DECEMBER 31,
1995...................... --- 734,859 734,859 41,804,510 8,360,902 1,200,140
Net income................. --- --- --- --- --- ---
Unrealized appreciation of
marketable securities
available for sale........ --- --- --- --- --- ---
Preferred stock dividend... --- --- --- --- --- ---
Reinstatement of preferred
stock under appraisal
rights....... --- 76,290 $ 76,290 --- --- (76,290)
----------- ------- -------- ---------- ---------- ---------
BALANCE AT MARCH 31, 1996.. $ --- 811,149 $811,149 41,804,510 $8,360,902 1,123,850
=========== ======= ======== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Unrealized
Gain on
Marketable Total
Accumulated Equity Stockholders'
Deficit Securities Equity (Deficit)
----------- ----------- -----------------
<S> <C> <C> <C>
BALANCE AT DECEMBER 31, --- --- (2,081,217)
1994......................
Net income................. --- --- 458,052
Partnership distribution... --- --- (357,084)
----------
BALANCE AT MARCH 31, 1995.. --- --- (1,980,249)
======== ======= ==========
BALANCE AT DECEMBER 31, (633,089) --- 9,662,812
1995......................
Net income................. 276,365 --- 276,365
Unrealized appreciation of
marketable securities
available for sale........ --- 210,300 210,300
Preferred stock dividend... (162,230) --- (162,230)
Reinstatement of preferred
stock under appraisal
rights.................... --- --- ---
-------- ------- ----------
BALANCE AT MARCH 31, 1996.. (518,954) 210,300 9,987,247
======== ======= ==========
</TABLE>
See notes to consolidated financial statements.
7
<PAGE>
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
March 31, 1996 and 1995
NOTE A - BUSINESS COMBINATION
As noted in the Company's 1995 annual report on Form 10-K, a business
combination of Patrick Petroleum Company ("Patrick"), La/Cal Energy Partners
("La/Cal") and Goodrich Petroleum Corporation (the "Company") took place in
August, 1995. As a result of the accounting for the combination transactions,
the financial statements for the three months ended March 31, 1995 reflect
solely the operations of La/Cal whereas the financial statements for the three
months ended March 31, 1996 reflect the operations of the combined entities.
NOTE B - BASIS OF PRESENTATION
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to rules and regulations of the
Securities and Exchange Commission; however, the Company believes the
disclosures which are made are adequate to make the information presented not
misleading. The financial statements and footnotes included in this Form 10-Q
should be read in conjunction with the financial statements and notes thereto
included in the Company's annual report on Form 10-K for the year ended December
31, 1995, specifically as it relates to the business combination and the related
impact on the basis of presentation of the accompanying financial statements.
In the opinion of the Company, the accompanying unaudited consolidated financial
statements contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position of the Company as
of March 31, 1996 and the results of its operations for the three months ended
March 31, 1996 and 1995.
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.
NOTE C - COMMITMENTS AND CONTINGENCIES
The U.S. Environmental Protection Agency ("EPA") has identified the Company as a
potentially responsible party ("PRP") for the cost of clean-up of "hazardous
substances" at an oil field waste
8
<PAGE>
disposal site in Vermilion Parish, Louisiana. The EPA has estimated that the
total cost of long-term clean-up of the site will be approximately $15.4 million
with the Company's percentage of responsibility to be approximately 3.09%. As of
March 31, 1996, the Company has paid approximately $115,000 in costs related to
this matter and accrued an additional $400,000 for the remaining liability. The
EPA and PRPs will continue to evaluate the site and revise estimates for the
long-term clean-up of the site. There can be no assurance that the cost of
clean-up and the Company's percentage responsibility will not be higher than
currently estimated by the EPA. In addition, under the federal environmental
laws, the liability costs for the clean-up of the site is joint and several
among all PRPs. Therefore, the ultimate cost of the clean-up to the Company
could be significantly higher than the amount presently accrued for this
liability.
Additionally, the Company is party to a number of lawsuits arising in the normal
course of business. The Company has defended and intends to continue to defend
these actions vigorously and believes, based on currently available information,
that adverse results or settlements, if any, in excess of insurance coverage or
amounts already provided, will not be material to its financial position or
results of operations.
NOTE D - PRO FORMA FINANCIAL RESULTS OF OPERATIONS
Selected results of operations on a pro forma basis as if the combination
transactions had occurred on January 1, 1995 are as follows:
<TABLE>
<CAPTION>
For the three months ended
March 31, 1995
--------------------------
<S> <C>
Revenues........................... $2,688,085
Net income......................... 385,140
Income applicable to common stock.. 150,140
Income per average common share.... $ ---
</TABLE>
9
<PAGE>
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Business Combination
- --------------------
As noted in the Company's 1995 annual report on Form 10-K, a business
combination of Patrick Petroleum Company ("Patrick"), La/Cal Energy Partners
("La/Cal") and Goodrich Petroleum Corporation (the "Company") took place in
August, 1995. As a result of the accounting for the combination transactions,
the financial statements for the three months ended March 31, 1995 reflect
solely the operations of La/Cal whereas the financial statements for the three
months ended March 31, 1996 reflect the operations of the combined entities. As
a result, comparison of the current and prior period financial statements
presented are significantly impacted by the combination transactions.
Changes in Results of Operations
- --------------------------------
Total revenues in the first quarter of 1996 amounted to $2,651,000 and were
$1,517,000 higher than the $1,133,000 in the first quarter of 1995. Oil and gas
sales were $776,000 higher due substantially to increased oil production as a
result of the inclusion of revenues of the combined entities in the first
quarter of 1996 along with increased oil prices for the period. Gas production
for the first three months of 1996 was lower primarily due to the early
abandonment of two wells producing from a gas reservoir in the Lake Charles
field and a third well producing at a reduced rate. One of the abandoned wells
has recently been recompleted to an oil reservoir. The dollar impact of this
decrease was slightly more than offset by increased gas prices for the period.
(see volume and price table below). Additionally, the first quarter of 1996
includes the revenues from the pipeline joint venture which was acquired in the
Patrick transaction and contributed $582,000 in the current period. Included in
other, net for the first quarter of 1996 ($166,000) is a gain amounting to
$44,000 on the sale of certain oil and gas properties in Montana and North
Dakota, revenue received by the Company as operator of certain wells and other
miscellaneous income items.
<TABLE>
<CAPTION>
Three months Three months
ended March 31, 1996 ended March 31, 1995
------------------------- -----------------------------
Production Average Price Production Average Price
---------- ------------- ---------- -----------------
<S> <C> <C> <C> <C>
Gas (Mcf)... 410,776 $ 2.46 611,387 $ 1.59
Oil (Bbls).. 47,344 18.83 9,830 15.85
</TABLE>
Lease operating expense and production taxes were $328,000 in the first quarter
of 1996 versus $150,000 in the first quarter of 1995 or $178,000 higher due to
the higher production volumes and depletion, deprecation and amortization was
$1,093,000 versus $228,000 or $865,000 higher
10
<PAGE>
than 1995 due to the addition of the Patrick oil and gas properties and the
pipeline joint venture subsequent to August 15, 1995. The Company incurred
$218,000 of exploration expense in 1996, whereas there was no such expense in
1995 due to La/Cal having virtually no exploration activities.
General and administrative expenses amounted to $528,000 in the first quarter of
1996 versus $22,000 in 1995 (increase of $506,000) due to the fact that La/Cal
was provided substantially all of its general and administrative expenses at no
cost by an affiliate whereas the Company provides its own general and
administrative services. Additionally, as a public company, the Company incurs
a higher level of general and administrative expenses than a privately held
company.
Interest expense was $207,000 in the first quarter of 1996 compared to $275,000
(6% lower) in 1995 due to the Company having slightly lower average debt
outstanding and a lower effective interest rate in the first quarter of 1996
than La/Cal during the same period in 1995.
The statements of operations reflects no recorded income taxes due to the
Company's ability to utilize net operating loss carryforwards to offset taxable
income in the first quarter of 1996 and the individual partners of La/Cal being
responsible for such taxes for the first quarter of 1995.
The Company's preferred stock dividend amounted to $162,000 for the three months
ended March 31, 1996.
Liquidity and Capital Resources
- -------------------------------
Net cash provided by operating activities was $829,000 in the first quarter of
1996 compared to $1,012,000 in the first quarter of 1995. The Company's
accompanying consolidated statements of cash flows identify major differences
between net income and net cash provided by operating activities for each of the
periods presented.
The three months ended March 31, 1996 reflects $911,000 in capital expenditures
offset by $275,000 in proceeds from the sale of certain oil and gas properties
in Montana and North Dakota. La/Cal did not incur any capital expenditures
during the first quarter of 1995.
Net cash used by financing activities was $171,000 for the current period as
compared to $1,012,000 in the prior year period. The 1996 amount is composed
primarily of preferred stock dividends of $162,000. The three months ended
March 31, 1995 contained $479,000 in repayment of bank borrowings and $357,000
of partnership distributions by La/Cal.
11
<PAGE>
The Company has a credit facility with a bank which provides for a total
borrowing base determined by the bank every six months in part, based on the
Company's oil and gas reserve information. Such borrowing base will be
$12,800,000 effective June 1, 1996. Any and all amounts drawn are due and
payable on June 1, 1997. Interest on related borrowings is based on either of
two methods at the option of the Company: the bank's prime lending rate or
LIBOR plus 2%. Interest rates are set on specific draws for one, two, three or
six month periods, also at the options of the Company. The Company's credit
facility requires minimum net worth and debt service ratios be maintained by the
Company. Accordingly, the Company had $1,469,000 available for the payment of
dividends at March 31, 1996. The amount drawn by the Company under this
facility as of March 31, 1996 was $9,750,000.
The Company had $911,000 in capital expenditures in the three months ended March
31, 1996. The Company plans to incur capital expenditures in the amount of
approximately $7,000,000 in calendar 1996. The Company plans to finance such
expenditures from operating cash flow and draws on its bank credit facility.
12
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
See Management's Discussion and Analysis of Financial Condition and Results
of Operations - Liquidity and Capital Resources.
Item 3. Defaults upon Senior Securities.
None.
Item 4. Results of Votes of Security Holders.
None.
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
None.
(b) Reports on Form 8-K
None
13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Goodrich Petroleum Corporation
------------------------------
Goodrich Petroleum Corporation
May 13, 1996 /s/ Walter G. Goodrich
----------------- ----------------------
Date Walter G. Goodrich, President and
Chief Executive Officer
May 13, 1996 /s/ Roland L. Frautschi
----------------- -----------------------
Date Roland L. Frautschi, Senior Vice
President, Chief Financial Officer
and Treasurer (Principal Financial
Officer)
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 690,478
<SECURITIES> 969,900
<RECEIVABLES> 2,142,522
<ALLOWANCES> 97,000
<INVENTORY> 0
<CURRENT-ASSETS> 3,979,081
<PP&E> 16,665,463
<DEPRECIATION> 2,809,324
<TOTAL-ASSETS> 22,239,187
<CURRENT-LIABILITIES> 2,033,529
<BONDS> 9,750,000
0
811,149
<COMMON> 8,360,902
<OTHER-SE> 815,196
<TOTAL-LIABILITY-AND-EQUITY> 22,239,187
<SALES> 2,485,191
<TOTAL-REVENUES> 2,650,788
<CGS> 0
<TOTAL-COSTS> 2,167,592
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 206,831
<INCOME-PRETAX> 276,365
<INCOME-TAX> 0
<INCOME-CONTINUING> 276,365
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 276,365
<EPS-PRIMARY> .003
<EPS-DILUTED> 0
</TABLE>
