<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 JUNE 30, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT 1934
For the transition period from to
Commission File Number: 1-7940
GOODRICH PETROLEUM CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 76-0466913
- --------------------------------------------------------------------------------
(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 July 31, 1997: 41,859,222
<PAGE>
GOODRICH PETROLEUM CORPORATION
FORM 10-Q
June 30, 1997
INDEX
Page No.
--------
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Consolidated Balance Sheets
June 30, 1997 (Unaudited) and December 31, 1996.................. 3-4
Consolidated Statements of Operations (Unaudited)
Six Months Ended June 30, 1997 and 1996.......................... 5
Three Months Ended June 30, 1997 and 1996........................ 6
Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended June 30, 1997 and 1996.......................... 7
Consolidated Statements of Stockholders' Equity (Unaudited)
Six Months Ended June 30, 1997 and 1996.......................... 8
Notes to Consolidated Financial Statements.......................... 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.............................. 11
PART II - OTHER INFORMATION 15
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>
June 30, December 31,
1997 1996
----------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents........................... $ 333,476 $ 344,551
Marketable equity securities........................ 633,000 569,700
Accounts receivable
Trade and other, net of allowance.................. 1,584,771 744,221
Accrued oil and gas revenue........................ 1,801,074 1,482,503
Accrued pipeline joint venture..................... 432,000 532,000
Prepaid insurance................................... 124,404 235,578
Other............................................... 15,848 4,888
----------- -----------
Total current assets............................ 4,924,573 3,913,441
----------- -----------
PROPERTY AND EQUIPMENT
Oil and gas properties (successful efforts method).. 37,783,799 19,129,512
Furniture, fixtures and equipment................... 161,277 107,056
----------- -----------
37,945,076 19,236,568
Less accumulated depletion, depreciation
and amortization................................... (6,698,859) (4,918,856)
----------- -----------
Net property and equipment...................... 31,246,217 14,317,712
----------- -----------
OTHER ASSETS
Investment in pipeline joint venture, net........... 3,049,984 3,616,360
Deferred charges and other investments.............. 280,406 551,471
----------- -----------
3,330,390 4,167,831
----------- -----------
TOTAL ASSETS................................ $39,501,180 $22,398,984
=========== ===========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONTINUED)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
----------- -----------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable...................................... $ 1,825,802 $ 1,108,534
Accrued liabilities................................... 2,773,262 1,994,730
----------- -----------
Total current liabilities......................... 4,599,064 3,103,264
----------- -----------
LONG TERM DEBT.......................................... 18,000,000 10,000,000
OTHER LIABILITIES....................................... --- 160,520
STOCKHOLDERS' EQUITY
Series A convertible preferred stock, par
value $1.00 per share; authorized
10,000,000 shares; issued and out-
standing 797,318 and 801,149 shares
(liquidation preference $10 per share,
aggregating to $7,973,180 and
$8,011,490)....................................... 797,318 801,149
Series B convertible preferred stock, par
value $1.00 per share; authorized
10,000,000 shares; issued and out-
standing 750,000 shares (liquidation
preference $10 per share, aggregating
to $7,500,000).................................... 750,000 ---
Common stock, par value - $0.20 per
share; authorized 100,000,000 shares;
issued and outstanding 41,859,222
and 41,804,510 shares............................. 8,371,845 8,360,902
Additional paid-in capital............................ 7,827,381 1,059,493
Accumulated deficit................................... (717,828) (896,444)
Unrealized loss on marketable equity securities....... (126,600) (189,900)
----------- -----------
Total stockholders' equity........................ 16,902,116 9,135,200
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY........ $39,501,180 $22,398,984
=========== ===========
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Six Months Ended
June 30,
-----------------------
1997 1996
----------- ----------
REVENUES
Oil and gas sales............................. $ 5,596,188 3,783,139
Pipeline joint venture........................ 819,001 825,901
Other......................................... 250,685 204,467
----------- ----------
Total revenues............................... 6,665,874 4,813,507
----------- ----------
EXPENSES
Lease operating expense and production taxes.. 1,085,281 704,833
Depletion, depreciation and amortization...... 2,649,929 1,864,064
Exploration................................... 399,038 764,779
Interest expense.............................. 686,196 412,533
General and administrative.................... 1,089,397 1,073,412
----------- -----------
Total costs and expenses..................... 5,909,841 4,819,621
----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES.............. 756,033 (6,114)
Income taxes.................................. --- ---
----------- -----------
NET INCOME (LOSS).............................. 756,033 (6,114)
Preferred stock dividends..................... 577,417 324,420
----------- -----------
EARNINGS (LOSS) APPLICABLE TO COMMON STOCK...... $ 178,616 (330,534)
=========== ===========
EARNINGS (LOSS) PER AVERAGE COMMON SHARE........ $ --- (.01)
=========== ===========
AVERAGE COMMON SHARES OUTSTANDING............... 41,809,271 41,804,510
=========== ===========
See notes to consolidated financial statements.
5
<PAGE>
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
June 30,
1997 1996
----------- ----------
REVENUES
Oil and gas sales............................. $ 2,713,055 1,880,258
Pipeline joint venture........................ 268,491 243,591
Other......................................... 86,909 38,870
----------- -----------
Total revenues............................... 3,068,455 2,162,719
----------- -----------
EXPENSES
Lease operating expense and production taxes.. 532,440 376,741
Depletion, depreciation and amortization...... 1,358,214 770,859
Exploration................................... 262,626 546,762
Interest expense.............................. 366,484 205,702
General and administrative.................... 529,616 545,134
----------- -----------
Total costs and expenses..................... 3,049,380 2,445,198
----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES.............. 19,075 (282,479)
Income taxes.................................. --- ---
----------- -----------
NET INCOME (LOSS).............................. 19,075 (282,479)
Preferred stock dividends..................... 314,102 162,190
----------- -----------
EARNINGS (LOSS) APPLICABLE TO COMMON STOCK..... $ (295,027) (444,669)
=========== ===========
EARNINGS (LOSS) PER AVERAGE COMMON SHARE....... $ (.01) (.01)
=========== ===========
AVERAGE COMMON SHARES OUTSTANDING.............. 41,813,980 41,804,510
=========== ==========
See notes to consolidated financial statements.
6
<PAGE>
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months
Ended June 30,
----------------------------
1997 1996
------------ -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss).................................. $ 756,033 (6,114)
Adjustments to reconcile net income to
net cash provided by operating activities:
Depletion, depreciation and amortization....... 2,649,929 1,864,064
Amortization of leasehold costs................ 116,141 88,608
Amortization of deferred debt financing costs.. 27,694 40,347
Gain on sale of oil and gas properties......... (18) (47,123)
Capital expenditures charged to income......... 14,609 470,351
Payment of contingent liability................ (82,751) ---
Payment of other liabilities................... (160,520) (203,305)
----------- ----------
3,321,117 2,206,828
Changes in current assets and liabilities:
Accounts receivable............................ (30,954) 67,766
Prepaid insurance and other.................... 100,214 112,340
Accounts payable............................... 717,268 76,134
Accrued liabilities............................ 755,821 (108,839)
----------- ----------
Net cash provided by operating activities.. 4,863,466 2,354,229
----------- ----------
INVESTING ACTIVITIES
Proceeds from sales of oil and gas properties...... 370,000 277,500
Capital expenditures............................... (3,416,584) (1,680,128)
Cash paid in connection with business combination.. (9,250,540) ---
----------- ----------
Net cash used in investing activities...... (12,297,124) (1,402,628)
----------- ----------
FINANCING ACTIVITIES
Proceeds from bank borrowings...................... 9,000,000 ---
Principal payments of bank borrowings.............. (1,000,000) (750,000)
Payment of debt financing costs.................... --- (10,256)
Preferred stock dividends.......................... (577,417) (324,420)
----------- ----------
Net cash provided by
(used in) financing activities........... 7,422,583 (1,084,676)
----------- ----------
NET DECREASE IN CASH AND CASH EQUIVALENTS............ (11,075) (133,075)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD................................ 344,551 613,450
----------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD............ $ 333,476 480,375
=========== ==========
</TABLE>
See notes to consolidated financial statements.
7
<PAGE>
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
Series A Series B
Preferred Stock Preferred Stock Common Stock
----------------------------- ----------------------------- -----------------------------
Number Number Number
of Shares Par Value of shares Par Value of shares Par Value
------------ ----------- ----------- ------------ ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31,
1995...................... 734,859 $734,859 --- $ --- 41,804,510 $8,360,902
Net income................. --- --- --- --- --- ---
Unrealized appreciation of
marketable securities
available for sale........ --- --- --- --- --- ---
Preferred stock dividends.. --- --- --- --- --- ---
Reinstatement of preferred
stock under appraisal
rights.................... 76,290 76,290 --- --- --- ---
------- ------- ----------- -------- ---------- ----------
Balance at June 30, 1996... 811,149 $811,149 --- $ --- 41,804,510 $8,360,902
======= ======== =========== ======== ========== ==========
Balance at December 31,
1996...................... 801,149 $801,149 --- $ --- 41,804,510 $8,360,902
Net income................. --- --- --- --- --- ---
Unrealized appreciation of
marketable securities
available for sale........ --- --- --- --- --- ---
Issuance of Series B
Preferred Stock........... --- --- 750,000 750,000 --- ---
Preferred stock dividends.. --- --- --- --- --- ---
Conversion of preferred
stock to common stock..... (3,831) (3,831) --- --- 23,944 4,789
Employee stock grants...... --- --- --- --- 30,768 6,154
------- -------- -------- -------- ---------- ----------
Balance at June 30, 1997... 797,318 $797,318 750,000 $750,000 41,859,222 $8,371,845
======= ======== ======== ======== ========== ==========
</TABLE>
<TABLE>
<CAPTION> UNREALIZED
ADDITIONAL GAIN (LOSS) ON TOTAL
PAID-IN ACCUMULATED MARKETABLE STOCKHOLDERS'
CAPITAL DEFICIT EQUITY SECURITIES EQUITY
---------- ----------- ----------------- -------------
<S> <C> <C> <C> <C>
BALANCE AT DECEMBER 31,
1995...................... $1,200,140 $(633,089) $ --- $ 9,662,812
Net income................. --- (6,114) --- (6,114)
Unrealized appreciation of
marketable securities
available for sale........ --- --- 126,600 126,600
Preferred stock dividends.. --- (324,420) --- (324,420)
Reinstatement of preferred
stock under appraisal
rights.................... (76,290) --- --- ---
---------- --------- --------- -----------
Balance at June 30, 1996... $1,123,850 $(963,623) $ 126,600 $ 9,458,878
========== ========= ========= ===========
Balance at December 31,
1996...................... $1,059,493 $(896,444) $(189,900) $ 9,135,200
Net income................. --- 756,033 --- 756,033
Unrealized appreciation of
marketable securities
available for sale........ --- --- 63,300 63,300
Issuance of Series B
Preferred Stock........... 6,750,000 --- --- 7,500,000
Preferred stock dividends.. --- (577,417) --- (577,417)
Conversion of preferred
stock to common stock..... (958) --- --- ---
Employee stock grants...... 18,846 --- --- 25,000
---------- --------- --------- -----------
Balance at June 30, 1997... $7,827,381 $(717,828) $(126,000) $16,902,116
========== ========= ========= ===========
</TABLE>
See notes to consolidated financial statements.
8
<PAGE>
GOODRICH PETROLEUM CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1997 AND 1996
NOTE A - 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, 1996.
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 June 30, 1997 and the results of its operations for the six and three months
ended June 30, 1997 and 1996.
The results of operations for the six and three month periods ended June 30,
1997 are not necessarily indicative of the results to be expected for the full
year.
NOTE B - ACQUISITION OF OIL AND GAS PROPERTIES
On January 31, 1997, the Company acquired the oil and gas properties of La/Cal
Energy Partners II ("La/Cal II") and certain working interest owners for a
purchase price of $16.5 million ("La/Cal II Acquisition"). The purchase price
was comprised of $1.5 million cash, the assumption of $7.5 million of La/Cal II
long-term debt and the issuance of 750,000 shares of Series B convertible
preferred stock of the Company ("Series B Preferred Stock") with an aggregate
liquidation value of $7.5 million. In connection with the La/Cal II
Acquisition, the Company borrowed an additional $9 million under its bank credit
facility, which was used to repay $7.5 million of La/Cal II debt and to pay the
$1.5 million cash portion of the purchase price. The Series B Preferred Stock
has a dividend rate of 8.25% per annum and each share of Series B Preferred
Stock is convertible into 8.92 shares of common stock. Such shares are
redeemable by the Company after January 31, 2001 at $10.00 per share.
9
<PAGE>
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 disposal site in Vermilion Parish, Louisiana.
The PRPs have estimated that the remaining cost of long-term clean-up of the
site will be approximately $3.5 million with the Company's percentage of
responsibility to be approximately 3.05%. As of June 30, 1997, the Company has
paid approximately $211,000 in costs related to this matter and accrued an
additional $199,000 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. These costs have not been discounted to their present value. There can
be no assurance that the cost of clean-up and the Company's percentage
responsibility will not be higher than currently estimated. In addition, under
the federal environmental laws, the liability for costs related to the clean-up
of the site is borne jointly and severally 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 - INCOME TAXES
No provision for income taxes has been recorded for the Company due to its
ability to utilize net operating loss carryforwards to offset financial taxable
income.
NOTE E - PRO FORMA FINANCIAL RESULTS OF OPERATIONS
Selected results of operations on a pro forma basis as if the acquisition
transactions had occurred on January 1, 1997 for the six months ended June 30,
1997 and January 1, 1996 for the six months ended June 30, 1996.
For the six months For the six months
ended ended
June 30, 1997 June 30, 1996
------------------ ------------------
Revenues..................... $7,187,000 6,932,000
Net income................... 991,000 494,000
Income (loss) applicable to
common stock.............. 361,200 (139,000)
Income (loss) per average
common share.............. $ .01 (---)
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
1997 ACQUISITION
On January 31, 1997, the Company acquired the oil and gas properties of La/Cal
Energy Partners II ("La/Cal II") and certain working interest owners (the
"La/Cal II Properties") for a purchase price of $16.5 million ("La/Cal II
Acquisition"). The purchase price was comprised of $1.5 million cash, the
assumption of $7.5 million of La/Cal II long-term debt and the issuance of
750,000 shares of Series B convertible preferred stock of the Company ("Series B
Preferred Stock") with an aggregate liquidation value of $7.5 million. In
connection with the La/Cal II Acquisition, the Company borrowed an additional $9
million under its bank credit facility, which was used to repay $7.5 million of
La/Cal II debt and to pay the $1.5 million cash portion of the purchase price.
The Series B Preferred Stock has a dividend rate of 8.25% per annum and each
share of Series B Preferred Stock is convertible into 8.92 shares of common
stock. Such shares are redeemable by the Company after January 31, 2001 at
$10.00 per share.
CHANGES IN RESULTS OF OPERATIONS
Six months ended June 30, 1997 versus six months ended June 30,1996
Total revenues for the six months ended June 30, 1997 amounted to $6,666,000 and
were $1,852,000 higher than the $4,814,000 for the six months ended June 30,
1996. Oil and gas sales were $1,813,000 higher due substantially to increased
revenues as a result of the La/Cal II Acquisition (effective January 31, 1997).
The following table reflects the production volumes and pricing information for
the periods presented.
Six months Six months
ended June 30, 1997 ended June 30, 1996
------------------------- -------------------------
Production Average Price Production Average Price
---------- ------------- ---------- -------------
Gas (Mcf)... 1,269,607 $ 2.33 813,565 $ 2.52
Oil (Bbls).. 138,087 19.06 87,046 19.87
Lease operating expense and production taxes were $1,085,000 for the six months
ended June 30, 1997, versus $705,000 for the six months ended June 30, 1996, or
$380,000 higher due primarily to the addition of the La/Cal II Properties.
Depletion, deprecation and amortization was $2,650,000 for the six months ended
June 30, 1997, versus $1,864,000 for the six months ended June 30, 1996, or
$786,000 higher than the six months ended 1996 due substantially to the
11
<PAGE>
addition of the La/Cal II Properties. Included in depletion, depreciation and
amortization is depletion of oil and gas properties of $2,034,000 ($.97 per
Mcfe) and $1,252, 000 ($.94 per Mcfe), respectively. The 1997 amount includes
$98,000 related to accelerated depletion on a well to be plugged and abandoned.
The Company incurred $399,000 of exploration expense in the six months ended
June 30 1997, versus $765,000 in 1996, or $366,000 lower primarily due to dry
hole costs of $14,000 in the first six months of 1997 versus $470,000 in 1996.
Interest expense was $686,000 in the six months ended June 30, 1997 compared to
$413,000 in the six months of 1996 due to borrowings by the Company of
$9,000,000 on January 31, 1997 ($1,000,000 subsequently repaid) in connection
with the La/Cal II Acquisition, resulting in higher average debt outstanding.
General and administrative expenses amounted to $1,089,000 in the six months
ended June 30, 1997 versus $1,073,000 in the first half of 1996.
The Company's preferred stock dividends amounted to $578,000 for the six months
ended June 30, 1997 compared to $324,000 in 1996. The increase was due to
dividends paid on the Company's Series B Convertible Preferred Stock issued on
January 31, 1997 in connection with the La/Cal II Acquisition.
Three months ended June 30, 1997 versus three months ended June 30,1996
Total revenues for the three months ended June 30, 1997 amounted to $3,068,000
and were $905,000 higher than the $2,163,000 for the three months ended June 30,
1996. Oil and gas sales were $833,000 higher due primarily to increased oil and
gas revenues as a result of the La/Cal II Acquisition offset, somewhat by lower
prices received.
The following table reflects the production volumes and pricing information for
the periods presented.
Three months Three months
ended June 30, 1997 ended June 30, 1996
------------------------- -------------------------
Production Average Price Production Average Price
---------- ------------- ---------- -------------
Gas (Mcf)... 681,729 $ 2.15 402,789 $ 2.59
Oil (Bbls).. 71,730 17.36 39,702 21.11
Lease operating expense and production taxes were $532,000 for the three months
ended June 30, 1997, versus $377,000 for the three months ended June 30, 1996,
or $155,000 higher due substantially to the addition of the La/Cal II
Properties. Depletion, deprecation and amortization was $1,358,000 for the
three months ended June 30, 1997, versus $771,000 for the three months ended
June 30, 1996, or $587,000 higher than the second quarter of 1996 due primarily
to the addition of the La/Cal II Properties. Included in depletion,
depreciation and amortization is depletion of oil and gas properties of
$1,160,000 ($1.04 per Mcfe) and $573,000 ($.89 per Mcfe).
12
<PAGE>
The 1997 amount includes $98,000 related to accelerated depletion on a well to
be plugged and abandoned. The Company incurred $263,000 of exploration expense
in the second quarter of 1997, versus $547,000 in the second quarter of 1996, or
$284,000 lower primarily due to dry hole costs of $418,000 in the second quarter
of 1996 versus $14,000 in 1997.
Interest expense was $366,000 in the three months ended June 30, 1997 compared
to $206,000 in the second quarter of 1996 due to the Company carrying an
additional $8,000,000 in debt during the 1997 quarter as the result of
additional borrowings in connection with the La/Cal II Acquisition, resulting in
higher average debt outstanding.
General and administrative expenses amounted to $530,000 in the three months
ended June 30, 1997 versus $545,000 in the second quarter of 1996.
The Company's preferred stock dividends amounted to $314,000 for the three
months ended June 30, 1997 compared to $162,000 for the prior year. The
increase is due to dividends paid on the Company's Series B Preferred Stock
issued on January 31, 1997 in connection with the La/Cal II Acquisition.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $4,765,000 in the six months ended
June 30, 1997 compared to $2,422,000 in the six months ended June 30, 1996. 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.
Net cash used in investing activities totaled $12,198,000 for the first six
months of 1997 compared to $1,470,000 in 1996. The six months ended June 30,
1997 reflects $9,251,000 cash paid in connection with the La/Cal II Acquisition
and $3,318,000 in capital expenditures offset by $370,000 in proceeds from the
sale of certain oil and gas properties located in Montana. The six months ended
June 30, 1996 reflects $1,748,000 in capital expenditures offset by $278,000 in
proceeds from the sale of certain oil and gas properties in Montana and North
Dakota.
Net cash provided by financing activities was $7,422,000 for the current period
as compared to net cash used in financing activities of $1,085,000 in the prior
year period. The 1997 amount included the borrowing of $9,000,000 by the
Company under its line of credit which was used to payoff the debt assumed in
the La/Cal II Acquisition and to pay the cash portion of the purchase price.
Additionally, the Company paid down $1,000,000 under this line of credit in the
first quarter of 1997. The current period also includes preferred dividends of
$578,000 (Series A and Series B), whereas the first quarter of 1996 consists
primarily of repayments of bank borrowings of $750,000 and preferred stock
dividends of $324,000 (Series A only).
The Company has a credit facility with a bank which provides for a total
borrowing base determined by the bank every six months based in part, on the
Company's oil and gas reserve information. Such borrowing base is currently
$21,000,000. The maturity date for all amounts
13
<PAGE>
drawn under the bank credit facility is June 1, 2000. Interest 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 option of the Company. The Company's
credit facility requires that minimum net worth and debt service ratios be
maintained by the Company. Accordingly, the Company had $1,994,000 available for
the payment of dividends at June 30, 1997. The amount outstanding under this
facility as of June 30, 1997 was $18,000,000.
The Company had $3,318,000 in capital expenditures in the six months ended June
30, 1997. The Company plans to incur capital expenditures in the amount of
approximately $4,000,000 in the remainder of 1997. The Company expects to fund
such expenditures from operating cash flows and additional borrowings under its
line of credit.
RECENTLY ISSUED ACCOUNTING STANDARD
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 128 "Earnings per Share." The
purpose of SFAS No. 128 is to simplify computation of earnings per share ("EPS")
and to make the U.S. standard for computing EPS compatible with the EPS
standards of other countries and with that of the International Accounting
Standards Committee. The effective date for the application of SFAS No. 128 is
for both interim and annual periods after December 15, 1997. Earlier
application is not permitted. The Company does not expect the application of
SFAS No. 128 to have a material impact on its EPS calculation.
14
<PAGE>
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.
The Annual Meeting of Shareholders of the Company was held on May 22, 1996.
Set forth below is a brief description of each matter acted upon at the meeting
and the number of votes cast for, against or withheld, and abstaining or not
voting as to each matter.
ELECTION OF CLASS II DIRECTORS
FOR WITHHELD
Basil M. Briggs 29,910,544 2,207,428
Henry Goodrich 29,910,544 2,207,428
Approval of the Amendment to the 1995 Goodrich Petroleum Corporation Nonemployee
Directors Stock Option Plan
FOR AGAINST ABSTAIN
29,165,721 2,876,253 75,998
Ratification of the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors for 1997
FOR AGAINST ABSTAIN
30,049,170 2,011,021 57,781
15
<PAGE>
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
27 - Financial Data Schedule
(b) Reports on Form 8-K
None
16
<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
(registrant)
August 8, 1997 /s/ Walter G. Goodrich
- ----------------------- --------------------------------------
Date Walter G. Goodrich, President
and Chief Executive Officer
August 8, 1997 /s/ Roland L. Frautschi
- ------------------------ --------------------------------------
Date Roland L. Frautschi,
Senior Vice President, Chief Financial
Officer and Treasurer
17
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 333,476
<SECURITIES> 633,000
<RECEIVABLES> 3,842,835
<ALLOWANCES> 24,990
<INVENTORY> 0
<CURRENT-ASSETS> 4,924,573
<PP&E> 37,945,076
<DEPRECIATION> 6,698,859
<TOTAL-ASSETS> 39,501,180
<CURRENT-LIABILITIES> 4,599,064
<BONDS> 18,000,000
0
1,547,318
<COMMON> 8,371,845
<OTHER-SE> 6,982,953
<TOTAL-LIABILITY-AND-EQUITY> 39,501,180
<SALES> 6,415,189
<TOTAL-REVENUES> 6,665,874
<CGS> 0
<TOTAL-COSTS> 5,223,645
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 686,196
<INCOME-PRETAX> 756,033
<INCOME-TAX> 0
<INCOME-CONTINUING> 756,033
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 756,033
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
