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 NOVEMBER 30, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
COMMISSION FILE NUMBER: 1-7864
TRITON ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<C> <S>
TEXAS 75-1151855
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
</TABLE>
6688 N. CENTRAL EXPRESSWAY, SUITE 1400, DALLAS, TEXAS 75206
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (214)691-5200
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 NO
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
<S> <C>
Title of Each Class of Common Stock Number of Shares
Outstanding at December 31, 1994
Common Stock, par value $1.00 per share 35,531,172
</TABLE>
<PAGE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
<S> <C>
PART I. FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements
Consolidated Condensed Statements of Operations -
Three and six months ended November 30, 1994 and 1993 2
Consolidated Condensed Balance Sheets -
November 30, 1994 and May 31, 1994 3
Consolidated Condensed Statements of Cash Flows -
Six months ended November 30, 1994 and 1993 4
Consolidated Condensed Statement of Shareholders' Equity -
Six months ended November 30, 1994 5
Notes to Consolidated Condensed Financial Statements 6
Review of Independent Accountants 10
Review Report of Independent Accountants 11
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 12
PART II. OTHER INFORMATION
Item 4. Results of Votes of Security Holders 19
Item 6. Exhibits and Reports on Form 8-K 19
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TRITON ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
THREE MONTHS ENDED SIX MONTHS ENDED
NOVEMBER 30, NOVEMBER 30,
1994 1993 1994 1993
REVENUES:
Sales and other operating revenues $ 10,324 $ 13,407 $ 22,938 $35,972
Gain on sale of Triton Canada common stock --- --- --- 47,865
Other income 1,686 3,964 3,936 9,506
12,010 17,371 26,874 93,343
COSTS AND EXPENSES:
Operating, including $2,075 to affiliate
for six months ended November 30, 1993 7,075 11,596 15,027 24,870
General and administrative 6,979 8,954 13,989 16,014
Depreciation, depletion and amortization 3,273 4,576 6,611 12,814
Writedown of assets --- 11,634 984 23,896
Interest 3,312 --- 6,234 2,918
Equity in (earnings) loss of affiliates, net 546 392 (102) 30
Foreign exchange (gain) loss (422) 557 (434) (609)
20,763 37,709 42,309 79,933
EARNINGS (LOSS) BEFORE INCOME TAXES
AND MINORITY INTEREST (8,753) (20,338) (15,435) 13,410
Income tax (benefit) expense 2,347 (5,826) 3,838 (3,872)
(11,100) (14,512) (19,273) 17,282
Minority interest in loss of subsidiaries --- 3,275 --- 6,559
NET EARNINGS (LOSS) (11,100) (11,237) (19,273) 23,841
Dividends on preferred stock 449 --- 449 ---
EARNINGS (LOSS) APPLICABLE TO COMMON STOCK $ (11,549) $ (11,237) $ (19,722) $23,841
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 34,953 34,718 34,938 34,684
NET EARNINGS (LOSS) PER COMMON SHARE $ (0.33) $ (0.32) $ (0.56) $ 0.69
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
TRITON ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30,
ASSETS 1994 MAY 31,
(UNAUDITED) 1994
CURRENT ASSETS:
Cash and equivalents $ 11,007 $ 69,005
Short-term marketable securities 39,155 63,431
Receivables, principally trade 17,146 14,579
Inventories 2,795 3,396
Net assets of discontinued operations --- 4,566
Prepaid expenses and other 4,726 699
TOTAL CURRENT ASSETS 74,829 155,676
Long-term marketable securities 28,347 28,831
Property and equipment, at cost, less accumulated depreciation and
depletion of $492,282 and $488,624, respectively 386,625 308,498
Investments and other assets 121,733 123,096
$ 611,534 $ 616,101
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current installments of long-term debt $ 257 $ 312
Short-term borrowings 7,669 1,640
Accounts payable and accrued liabilities 23,012 30,251
Liabilities of discontinued operations --- 6,700
TOTAL CURRENT LIABILITIES 30,938 38,903
Long-term debt, excluding current installments 312,419 294,441
Deferred income taxes 14,655 10,037
Deferred income and other 8,234 9,298
Convertible debentures due to employees --- ---
SHAREHOLDERS' EQUITY:
Preferred stock, no par value 17,978 17,978
Common stock, par value $1 35,575 35,519
Additional paid-in capital 505,240 505,122
Accumulated deficit (305,579) (286,306)
Foreign currency translation adjustment (5,974) (7,163)
Other (1,375) (1,046)
245,865 264,104
Less cost of common stock in treasury 577 682
TOTAL SHAREHOLDERS' EQUITY 245,288 263,422
COMMITMENTS AND CONTINGENCIES (NOTE 5) 611,534 616,101
</TABLE>
OIL AND GAS PROPERTIES ARE ACCOUNTED FOR USING THE FULL COST METHOD
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
<PAGE>
TRITON ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED NOVEMBER 30, 1994 AND 1993
(THOUSANDS OF DOLLARS)
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
1994 1993
CASH FLOWS FROM OPERATING ACTIVITIES:
NET EARNINGS (LOSS) $(19,273) $ 23,841
ADJUSTMENTS TO RECONCILE NET EARNINGS (LOSS) TO NET CASH
USED BY OPERATING ACTIVITIES:
Depreciation, depletion and amortization 6,611 12,814
Amortization of debt discount 6,234 2,918
Gain on sale of Triton Canada common stock --- (47,865)
Gain on sale of domestic properties --- (7,033)
Equity in (earnings) loss of affiliates (102) 637
Writedown of assets 984 23,896
Foreign exchange (gain) loss (434) (609)
Deferred income taxes, minority interest and other 5,827 (16,555)
Changes in working capital pertaining to operating activities (4,398) (6,501)
NET CASH USED BY OPERATING ACTIVITIES (4,551) (14,457)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures and investments (76,491) (40,951)
Proceeds from sale of Triton Canada common stock --- 59,029
Proceeds from sale of domestic properties --- 19,590
Purchases of short-term investments (5,879) (5,364)
Proceeds from short-term investments 19,516 28,788
Other, principally pledged securities in 1994 3,347 9,761
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (59,507) 70,853
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term borrowings with maturities
greater than three months 7,989 ---
Short-term borrowings, net (1,960) (820)
Proceeds from long-term debt 1,701 1,443
Payments on long-term debt (192) (2,657)
Other (1,967) (1,917)
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 5,571 (3,951)
Effect of exchange rate changes on cash and equivalents 489 40
Net (decrease) increase in cash and equivalents (57,998) 52,485
Cash and equivalents at beginning of period 69,005 52,939
CASH AND EQUIVALENTS AT END OF PERIOD $ 11,007 $105,424
</TABLE>
See accompanying notes to consolicated condensed financial statements.
5
TRITON ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY
SIX MONTHS ENDED NOVEMBER 30, 1994
(THOUSANDS OF DOLLARS)
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONAL TOTAL
PREFERRED COMMON PAID-IN ACCUMULATED TREASURY SHAREHOLDERS'
STOCK STOCK CAPITAL DEFICIT OTHER STOCK EQUITY
BALANCES AT MAY 31, 1994 $ 17,978 $35,519 $ 505,122 $(286,306) $ (8,209) $ (682) $ 263,422
Net loss --- --- --- (19,273) --- --- (19,273)
Dividends on preferred
stock --- --- (449) --- --- --- (449)
Foreign currency translation
adjustment --- --- --- --- 1,189 --- 1,189
Exercise of employee stock
options --- 56 450 --- --- --- 506
Other --- --- 117 --- (329) 105 (107)
BALANCES AT
NOVEMBER 30, 1994 $ 17,978 $35,575 $ 505,240 $ (305,579) $ (7,349) $ (577) $ 245,288
</TABLE>
See accompanying notes to consolidated condensed financial statements.
TRITON ENERGY CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. GENERAL
In the opinion of management, the accompanying unaudited consolidated
condensed financial statements of Triton Energy Corporation and subsidiaries
(collectively, the "Company") contain all adjustments of a normal recurring
nature necessary to present fairly the Company's financial position as of
November 30, 1994, and the results of its operations for the three and six
months ended November 30, 1994 and 1993, its cash flows for the six months
ended November 30, 1994 and 1993, and shareholders' equity for the six months
ended November 30, 1994. The results of operations for the three and six
months ended November 30, 1994 and 1993, are not necessarily indicative of the
final results to be expected for the full year.
The consolidated condensed financial statements should be read in conjunction
with the Notes to Consolidated Financial Statements, which are included as
part of the Company's Annual Report on Form 10-K for the year ended May 31,
1994.
2. INVESTMENTS IN MARKETABLE SECURITIES
Effective May 31, 1994, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and
Equity Securities", which requires that all investments in debt securities and
certain investments in equity securities be reported at fair value except for
those investments which management has the positive intent and the ability to
hold to maturity. Investments available-for-sale are classified based on the
stated maturity of the securities and changes in fair value are reported as a
separate component of shareholders' equity. Trading investments are
classified as current regardless of the stated maturity of the underlying
securities and changes in fair value are reported in other income.
Investments that will be held-to-maturity are classified based on the stated
maturity of the securities. The cumulative effect of adopting this standard
of $1 million as of May 31, 1994 was recorded as a valuation reserve in
shareholders' equity. The valuation reserve in shareholders' equity was $1.3
million at November 30, 1994. Prior to the adoption of SFAS No. 115, the
Company accounted for its investments in debt securities at amortized cost and
classified such investments according to the stated maturity of the underlying
securities.
3. DIVESTITURES
In fiscal 1993, the Company initiated a plan to discontinue the wholesale fuel
products segment. On October 7, 1994, the Company completed the sale of this
segment. The proceeds were used principally to retire existing obligations of
this operation.
<PAGE>
TRITON ENERGY CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
As a result of selling its 76% interest in the common stock of Triton Canada
Resources Ltd. ("Triton Canada"), the Company recorded a pretax gain of $47.9
million during the first quarter of fiscal 1994. Net proceeds of $59 million
were received in the second quarter of fiscal 1994.
In August and October 1993, the Company sold its United States working
interest properties for net proceeds of $19.6 million, resulting in a pretax
gain of $7 million. The properties that were sold accounted for approximately
55.7% of discounted future net revenues associated with United States proved
reserves at May 31, 1993.
4. WRITEDOWN OF ASSETS
During the six months ended November 30, 1994, the carrying amount of the
Company's evaluated oil and gas properties in the United States were written
down by $1 million, and in 1993, oil properties in France were written down by
$23.9 million principally as a result of lower oil and gas prices used in the
calculation of the ceiling limitation prescribed by the Securities and
Exchange Commission (the "Commission").
5. COMMITMENTS AND CONTINGENCIES
COMMITMENTS
The Company is currently involved in the development of significant
discoveries in the Cusiana and Cupiagua fields (the "Fields") of Colombia.
During the second quarter, start up activities commenced on the first
production unit in the Cusiana central processing facilities. Start up of the
second production unit began in December 1994, with gross production expected
to increase to 90,000 barrels per day by early calendar 1995. The Company's
capital budget for the seven months ended December 31, 1994 was approximately
$110 million, excluding capitalized interest, of which approximately $85
million related to Colombia. Capital expenditures for the seven months ended
December 31, 1994 are expected to be below the original budget due to timing
of expenditures by the operator of the Fields. Capital requirements for full
field development of the Fields are expected to continue at substantial levels
into 1997.
Negotiations that are continuing among the Company and the other working
interest owners of the Fields and TransCanada PipeLine Colombia Limited and
IPL Energy (Colombia) Ltd. led to the execution in December 1994 of certain of
the contemplated agreements and the formation of the pipeline company in the
form of a joint stock company called Oleoducto Central S.A. ("OCENSA").
OCENSA placed its initial order for pipe in December 1994. The Company's 9.6%
share of OCENSA is owned through a wholly-owned subsidiary, Triton Pipeline
Colombia, Inc. ("Triton Pipeline").
<PAGE>
TRITON ENERGY CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
The agreements contemplate that capitalization of OCENSA will be approximately
70% senior debt and 30% equity. OCENSA is expected to borrow all senior debt
in four tranches, each of which would be severally supported by performance
obligations under various transportation and equity subscription agreements of
each of the initial shipper groups consisting of the Company, Ecopetrol, BP
Exploration Company (Colombia) ltd. and Total Exploratie. The Company has
guaranteed Triton Pipeline's performance under the separate equity
subscription agreement with OCENSA.
The Company's capital budget for calendar and fiscal year ending December 31,
1995 is approximately $175 million, excluding capitalized interest, of which
approximately $100 million relates to the Cusiana and Cupiagua fields and $29
million relates to Block A-18 of the Malaysia-Thailand joint development area.
The Company expects to meet the balance of its direct capital needs in 1995
and later years with cash on hand, marketable securities, increasing cash flow
from Colombian operations, proceeds from asset sales (including possible
forward sales of oil), and possibly the issuance of equity or other
securities.
During the normal course of business, the Company is subject to the terms of
various operating agreements and capital commitments associated with the
exploration and development of its oil and gas properties. Many of these
commitments are discretionary on the part of the Company. It is management's
belief that such commitments, including the capital requirements in Colombia
and Malaysia-Thailand, discussed above, will be met without any material
adverse effect on the Company's consolidated financial condition.
GUARANTEES
The Company has guaranteed $7.8 million of loans related to its ownership in a
Colombian pipeline and $9.4 million for future exploration in various
countries. Of these guarantees, $12.2 million are backed by letters of credit
with various banks.
REGULATORY MATTERS
The Company continues to cooperate with inquiries by the Commission and the
Department of Justice (the "Department") regarding possible violations of the
Foreign Corrupt Practices Act in connection with the Company's operations in
Indonesia. Based upon the information available to the Company to date, the
Company believes that it will be able to resolve any issues that either the
Commission or the Department ultimately might raise concerning these matters
in a manner that would not have a material adverse effect on the Company's
consolidated financial condition.
<PAGE>
TRITON ENERGY CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
OTHER LITIGATION
The Company is subject to ordinary litigation that is incidental to its
business, none of which is expected to have a material adverse effect on the
Company's consolidated financial condition.
6. SUBSEQUENT EVENTS
On December 30, 1994, the Company entered into a $25 million line of credit
with a bank. The line accrues interest at prime plus 1/2%, is collateralized
by Crusader common stock owned by the Company and matures on March 30, 1995.
The Company borrowed $10 million under this line of credit on December 30,
1994.
<PAGE>
REVIEW OF INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP, independent accountants, have reviewed the consolidated
condensed balance sheet as of November 30, 1994, and the related consolidated
condensed statements of operations for the three and six months ended November
30, 1994 and 1993, the consolidated condensed statements of cash flows for the
six months ended November 30, 1994 and 1993, and the consolidated condensed
statement of shareholders' equity for the six months ended November 30, 1994,
included in this report. Such review was made in accordance with standards
established by the American Institute of Certified Public Accountants. See
accompanying report of independent accountants.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To The Board of Directors and Shareholders of
Triton Energy Corporation
We have reviewed the accompanying consolidated condensed balance sheet of
Triton Energy Corporation and subsidiaries as of November 30, 1994, the
related consolidated condensed statements of operations for the three and six
months ended November 30, 1994 and 1993, the consolidated condensed statements
of cash flows for the six months ended November 30, 1994 and 1993 and the
consolidated condensed statement of shareholders' equity for the six months
ended November 30, 1994. This financial information is the responsibility of
the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying interim financial information for it to be
in conformity with generally accepted accounting principles.
We previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of May 31, 1994, and the related
consolidated statements of operations, of shareholders' equity and of cash
flows for the year then ended (not presented herein), and in our report dated
July 19, 1994, we expressed an unqualified opinion on those consolidated
financial statements. Our report included a paragraph explaining that the
Company changed its method of accounting for investments in marketable
securities at May 31, 1994 and its accounting for income taxes in 1993. In
our opinion, the information set forth in the accompanying consolidated
condensed balance sheet as of May 31, 1994, is fairly stated in all material
respects in relation to the consolidated balance sheet from which it has been
derived.
PRICE WATERHOUSE LLP
Dallas, Texas
January 10, 1995
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
Net working capital was $43.9 million and $116.8 million at November 30,
1994 and May 31, 1994, respectively, while the Company's debt as a percentage
of total capital was 57% at November 30, 1994 and 53% at May 31, 1994. Cash,
cash equivalents and marketable securities totaled $78.5 million and $161.3
million at November 30, 1994 and May 31, 1994, respectively.
The Company incurred capital expenditures and other capital investments
of $76.5 million and $41 million during the six months ended November 30, 1994
and 1993, respectively, primarily for exploration and development of the
Cusiana and Cupiagua fields (the "Fields") in Colombia. Capital expenditures
incurred during the six months ended November 30, 1994 were funded by cash and
equivalents and net proceeds from both marketable securities ($13.6 million)
and debt ($7.5 million). The principal source of funds for the six months
ended November 30, 1993 used to support operations, capital expenditures and
build cash reserves were the sale of the Company's investment in Triton Canada
($59 million), the sale of United States properties ($19.6 million) and net
proceeds from short-term investments ($23.4 million).
Capital Requirements and Funding Alternatives
Continued funding for development of the oil fields in Colombia,
including drilling and production facilities, as well as commitments for
seismic, drilling and other exploration expenditures under various license,
production sharing and other agreements, will require significant capital.
The Company's capital budget for the calendar and fiscal year ending December
31, 1995 is approximately $175 million, excluding capitalized interest, of
which approximately $100 million relates to the Cusiana and Cupiagua fields
and $29 million relates to Block A-18 of the Malaysia-Thailand joint
development area. Capital requirements for full field development of the
Fields in Colombia are expected to continue at substantial levels into 1997.
Negotiations that are continuing among the Company and the other working
interest owners of the Fields and TransCanada PipeLine Colombia Limited and
IPL Energy (Colombia) Ltd. led to the execution in December 1994 of certain of
the contemplated agreements and the formation of the pipeline company in the
form of a joint stock company called Oleoducto Central S.A. ("OCENSA"). OCENSA
placed its initial order for pipe in December 1994.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The agreements contemplate that the capitalization of OCENSA will be
approximately 70% senior debt and 30% equity. OCENSA is expected to borrow
all senior debt in four tranches, each of which would be severally supported
by performance obligations under various transportation and equity
subscription agreements of each of the initial shipper groups consisting of
the Company, Ecopetrol, BP Exploration Company (Colombia) ltd. and Total
Exploratie.
The participation of each participant and the business plan of the
pipeline company are reflected in the recently executed agreements. The
continued participation of each participant is subject to approval of the
agreements by its board of directors, the negotiation and execution of further
agreements dealing with the operation of the pipeline, the pipeline company's
financing, the relative transportation rights and obligations between the
pipeline company and initial shippers and other matters. Proposals for the
contemplated debt financing of the pipeline company are being evaluated,
although no commitments have been received.
The Company has received a commitment from the Export-Import Bank of the
United States ("Eximbank") for a guarantee of up to $35 million of borrowings
to purchase United States-sourced capital equipment under credit facilities to
be negotiated.
On December 30, 1994, the Company entered into a $25 million line of
credit with a bank. The line accrues interest at prime plus 1/2%, is secured
by Crusader common stock owned by the Company, and matures on March 30, 1995.
The Company borrowed $10 million under this line of credit on December 30,
1994.
The Company expects to meet the balance of its direct capital needs in
1995 and later years with cash on hand, marketable securities, increasing cash
flow from Colombian operations, proceeds from asset sales (including possible
forward sales of oil), and possibly the issuance of equity or other
securities. Due to limitations on additional indebtedness under covenants
relating to the Company's senior subordinated notes, the Company does not
expect to rely on direct borrowings to the same extent it has in recent years.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Overview
The Company reported a net loss of $19.3 million for the six months
ended November 30, 1994 compared to net income of $23.8 million in the
comparable 1993 period. The decrease in 1994 resulted principally from gains
realized in 1993 on the sales of Triton Canada common stock and other assets.
The following table and related discussion summarize the contributions to
the Company's operating loss by its industry segments for the three and six
months ended November 30, 1994 and 1993. Operating loss represents sales and
other operating revenues, less total costs and expenses (including writedowns
of operating assets) and excludes, among other items, interest and other
income/expense and general corporate expenses.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
THREE MONTHS ENDED SIX MONTHS ENDED
NOVEMBER 30, NOVEMBER 30,
1994 1993 1994 1993
(In thousands of dollars,
except where indicated)
OIL AND GAS EXPLORATION AND PRODUCTION ACTIVITIES
EXCLUDING EQUITY AFFILIATES:
Sales and other operating revenues $ 7,854 $ 10,164 $ 17,482 $ 27,151
Operating loss (428) (15,710) (1,668) (30,112)
Writedowns --- 11,634 984 23,896
Oil production (Mbbls) 466 633 1,025 1,308
Gas production (Mmcf) 272 31 523 4,142
Weighted average price per bbl 15.92 16.14 16.16 16.44
Weighted average price per Mcf 1.58 1.90 1.56 1.29
AVIATION SALES AND SERVICES:
Sales and other operating revenues 2,392 3,296 5,248 7,387
Operating loss (587) (1,972) (780) (2,618)
</TABLE>
THREE MONTHS ENDED NOVEMBER 30, 1994 AND 1993
Consolidated Operations
Revenues
Oil and gas revenues decreased by $2.3 million and aviation sales by $.9
million. Other income decreased in 1994 due to a $2.8 million gain realized
in 1993 on the sale of United States oil and gas properties, offset by an
increase in interest income of $.3 million during 1994.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Costs and Expenses
Operating expenses for 1994 decreased $4.5 million. A decrease in the
oil and gas segment of $2.5 million resulted primarily from the sale of assets
and lower production in France and Indonesia. Operating expenses in the
aviation segment were lower by $2.2 million due to an environmental accrual of
$1.7 million recorded in 1993 and the sale of operating assets.
General and administrative expenses decreased $2 million in 1994. Such
expenses in the oil and gas segment decreased $1.8 million primarily from the
sale of assets and the restructuring of operations in Europe.
Depreciation, depletion and amortization decreased $1.3 million in 1994
due to lower depletion of $1.9 million following writedowns during 1993 in the
oil and gas segment, partially offset by increases in amortization of debt
issue costs resulting from issuance of the 9 3/4% Senior Subordinated Discount
Notes ("9 3/4% Notes") in December 1993.
During 1993, a writedown of the French full cost pool of $11.6 million
resulted from application of the SEC full cost ceiling limitation due to a
decline in oil prices.
Interest expense after capitalization increased $3.3 million due to
higher debt.
Income Taxes
The income tax expense reported for 1994 represented deferred taxes
related to capitalized costs in Colombia, Argentina and Guatemala which are
not deductible in the local jurisdictions. The benefit for 1993 resulted
primarily from the release of deferred tax liabilities following the writedown
of oil properties in France.
Minority Interest
The Company acquired the minority interest shares in Triton Europe on
March 31, 1994.
Segment Review
Oil and gas activities
Oil and gas sales decreased $2.3 million for the quarter ended
November 30, 1994 compared to the same period in 1993 primarily due to lower
production volumes in France ($1.2 million) and in Indonesia ($.9 million).
Start-up of the first production unit in the Cusiana central processing
facilities commenced during late October 1994. Throughput on this unit was
increased slowly to thoroughly test the facilities, and full capacity of the
unit was reached in December 1994.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Oil and gas production costs were $4.8 million in 1994 compared to
$7.3 million in 1993. The decrease was principally due to lower production in
France ($.9 million), lower production in Indonesia ($1 million) and the sale
of United States working interest properties in August and October 1993.
Also, an accrual for environmental costs of $.4 million was recorded in 1993.
General and administrative expenses decreased $1.8 million from $3.1
million in 1993. Lower expenses in 1994 were principally due to the
restructuring of operations in Europe ($1.3 million), the sale of United
States working interest properties ($.2 million) and cost savings in Indonesia
($.3 million).
The decrease in depreciation, depletion and amortization of $1.7
million resulted from lower production volumes in France and Indonesia and
prior year writedowns in France.
Aviation Sales and Services
Sales in the aviation segment decreased $.9 million principally from
the divestiture of three fixed base operations. Operating expenses decreased
$2.2 million due to an accrual of $1.7 million for environmental costs in 1993
and the aforementioned sale of fixed based operations.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
SIX MONTHS ENDED NOVEMBER 30, 1994 AND 1993
Revenues
Oil and gas revenues decreased by $9.7 million, aviation sales by $2.1
million and gas gathering and pipeline sales by $1.3 million principally from
the sale of Triton Canada and non-core assets. Total revenues in 1993
included a $47.9 million gain on the sale of the Company's investment in
Triton Canada. Other income decreased during 1994 due to a $7 million gain
realized in 1993 on the sale of United States oil and gas properties, offset
by an increase in interest income of $1.4 million during 1994.
Costs and Expenses
Operating expenses for 1994 were lower due to decreases in the oil and
gas segment ($5.6 million), the aviation segment ($3.2 million) and the gas
gathering and pipeline segment ($1.1 million), caused primarily by the sale of
operations.
The decrease in general and administrative expenses resulted from lower
expenses in the oil and gas segment of $3.1 million, which were partially
offset by the effect of increases in personnel costs at the corporate office.
Depreciation, depletion and amortization decreased primarily due to lower
depletion of $6.6 million resulting from various divestitures and writedowns
in the oil and gas segment during 1993.
Writedown of assets resulted from application of the SEC full cost
ceiling limitation. The 1994 writedown reflected lower gas prices received on
the Company's United States royalty interest properties, while the 1993
writedowns resulted from lower oil prices in France.
Interest expense before capitalization increased $7.4 million due to
higher debt. This increase was offset by higher capitalization of $4 million.
Income Taxes
The income tax expense reported for 1994 represents deferred taxes
related to capitalized costs in Colombia, Argentina and Guatemala which are
not deductible in the local jurisdiction. The expense for 1993 consisted of
$6.7 million of Canadian taxes due following the sale of the Company's
investment in Triton Canada, which were partially offset by a tax benefit of
$10.6 million resulting from the release of deferred tax liabilities following
the ceiling test writedowns of oil properties in France.
Minority Interest in Losses of Subsidiaries
The Company acquired the minority interest shares in Triton Europe on
March 31, 1994.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Segment Review
Oil and gas activities
Oil and gas sales decreased $9.7 million for the six months ended
November 30, 1994 compared to the same period in 1993 primarily due to the
sale of the Company's investment in Triton Canada ($6 million), sale of the
United States working interests ($1.4 million) and lower revenue in France
($2.4 million) and Indonesia ($1.2 million) resulting principally from a
decrease in production. The above decreases were offset by an increase of
88,000 barrels ($1.3 million effect) in production from Colombia.
Oil and gas production costs were $10.1 million in 1994 compared to
$15.7 million in 1993. The decrease was principally due to the sale of Triton
Canada and United States properties ($3.6 million effect). Average production
costs per barrel of oil and gas equivalent were $9.12 in 1994 and $7.86 in
1993. The increase per barrel in 1994 was principally due to workovers
performed in France to maintain higher production in the Villeperdue field.
General and administrative expenses decreased from $6.5 million in
1993 to $3.4 million in 1994, principally due to the restructuring of
operations in Europe ($2.2 million) and the sale of Triton Canada ($.5
million).
The decrease in depreciation, depletion and amortization of $6.6
million resulted from the sale of Triton Canada ($2.6 million), sale of the
United States working interests ($.3 million) and prior year writedowns and
decreased production in France ($3.6 million).
Aviation Sales and Services
Sales in the aviation segment decreased $2.1 million principally
from the divestiture of three fixed based operations ($2.5 million) offset by
increased revenue from maintenance services ($.4 million). Operating and
general and administrative expenses also decreased $3.2 million and $.4
million, respectively, due to the divestitures, an environmental accrual of
$1.7 million in 1993 and cost cutting activities.
<PAGE>
PART II. OTHER INFORMATION
ITEM 4. RESULTS OF VOTES OF SECURITY HOLDERS
As a result of the Annual Meeting of Shareholders held on November 10, 1994,
the shareholders re-elected four directors, Ernest E. Cook (30,030,876 for and
163,845 against), Ray H. Eubank (30,041,973 for and 141,651 against), John P.
Lewis (30,035,670 for and 154,257 against) and Wellslake D. Morse, Jr.
(30,036,355 for and 152,887 against) and one new board member was elected,
Edwin D. Williamson (30,011,537 for and 202,523 against) to serve until the
Annual Meeting of Shareholders in 1997 or until their respective successors
are duly elected and qualified. The following directors continued in office:
Thomas G. Finck, Jesse E. Hendricks, Fitzgerald S. Hudson, William I. Lee,
Michael E. McMahon, J.G.A. Tucker and J. Otis Winters.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: The following exhibits are filed as part of this Quarterly
Report on Form 10-Q:
1. Exhibits required to be filed by Item 601 of Regulation S-K. (Where the
amount of securities authorized to be issued under or the amount of any of
Triton Energy Corporation's and any of its subsidiaries' or its affiliate
Crusader's, long-term debt agreements does not exceed 10% of the Company's
assets, pursuant to paragraph (b) (4) of Item 601 of Regulation S-K, in lieu
of filing such an exhibit, the Company hereby agrees to furnish to the
Commission upon request a copy of any agreement with respect to such long-term
debt.)
4.1 Specimen Stock Certificate of Common Stock, $1.00 par value, of
the Company. (3)
4.4 Rights Agreement dated as of June 26, 1990, between Triton and
NationsBank of Texas, N.A. (f/k/a NCNB Texas National Bank), as Rights
Agent. (3)
4.5 Statement of Cancellation of Redeemable Shares, dated October 1,
1991. (7)
4.6 Form of Debt Securities. (12)
4.7 Proposed Form of Senior Indenture. (12)
4.8 Proposed Form of Senior Subordinated Indenture. (12)
4.9 Senior Subordinated Indenture by and between the Company and
United States Trust Company of New York, dated as of December 15, 1993.
(11)
4.10 First Supplemental Indenture by and between the Company and United
States Trust Company of New York, dated as of December 15, 1993. (11)
4.11 Statement of Resolution Establishing and Designating a Series of
Shares of the Company, 5 % Convertible Preferred Stock, no par value,
dated as of March 30, 1994. (13)
10.1 Triton Energy Corporation Amended and Restated Retirement Income
Plan. (11)
<PAGE>
10.2 Triton Energy Corporation Amended and Restated Supplemental Executive
Retirement Income Plan. (11)
10.3 1981 Employee Non-Qualified Stock Option Plan of Triton Energy
Corporation. (2)
10.4 Amendment No. 1 to the 1981 Employee Non-Qualified Stock Option Plan
of Triton Energy Corporation. (6)
10.5 Amendment No. 2 to the 1981 Employee Non-Qualified Stock Option Plan
of Triton Energy Corporation. (2)
10.6 Amendment No. 3 to the 1981 Employee Non-Qualified Stock Option Plan
of Triton Energy Corporation. (11)
10.7 1985 Stock Option Plan of Triton Energy Corporation. (3)
10.8 Amendment No. 1 to the 1985 Stock Option Plan of Triton Energy
Corporation. (2)
10.9 Amendment No. 2 to the 1985 Stock Option Plan of Triton Energy
Corporation. (11)
10.10 Triton Energy Corporation Amended and Restated 1986 Convertible
Debenture Plan. (11)
10.11 1988 Stock Appreciation Rights Plan of Triton Energy Corporation.
(5)
10.12 Triton Energy Corporation 1989 Stock Option Plan. (8)
10.13 Amendment No. 1 to the Triton Energy Corporation 1989 Stock Option
Plan. (2)
10.14 Amendment No. 2 to the Triton Energy Corporation 1989 Stock Option
Plan. (11)
10.15 Triton Energy Amended and Restated 1992 Stock Option Plan . (11)
10.16 Form of Amended and Restated Employment Agreement by and among
Triton Energy Corporation and certain officers of Triton Energy
Corporation. (11)
10.17 Triton Energy Amended and Restated Restricted Stock Plan. (11)
10.18 Deed of Trust Note dated April 11, 1988, executed by Triton Aviation
Services, Inc. and API Terminal, Inc. and related documents, including
Guaranty of Triton Energy Corporation. (5)
10.19 Triton Energy Corporation Executive Life Insurance Plan. (4)
10.20 Triton Energy Corporation Long Term Disability Income Plan. (4)
10.21 Triton Energy Corporation Amended and Restated Retirement Plan for
Directors. (3)
10.22 Indenture dated as of November 13, 1992 between Triton and Chemical
Bank, with respect to the issuance of Senior Subordinated Discount Notes
due 1997. (9)
10.23 Supplemental Indenture dated as of July 1, 1993 between Triton
Energy Corporation and Chemical Bank. (5)
10.24 Supplemental Indenture dated as of August 16, 1993 between Triton
Energy Corporation and Chemical Bank. (5)
10.25 Underwriting Agreement dated June 18, 1993 among Triton Canada
Resources Ltd., Triton Energy Corporation and the underwriters named
therein. (10)
10.26 Purchase and Sale Agreement among Triton Oil and Gas Corp., Triton
Energy Corporation and Torch Energy Advisors Incorporated dated effective
as of January 1, 1993. (5)
10.27 Agreement for Purchase and Sale of Assets Among Triton Fuel Group,
Inc. and AVFUEL Corporation dated August 25, 1993. (5)
10.28 Contract for Exploration and Exploitation for Santiago de Atalayas I
with an effective date of July 1, 1982, between Triton Colombia, Inc., and
Empresa Colombiana De Petroleos. (5)
10.29 Contract for Exploration and Exploitation for Tauramena with an
effective date of July 4, 1988, between Triton Colombia, Inc., and Empresa
Colombiana De Petroleos. (5)
10.30 Summary of Assignment legalized by Public Instrument No. 1255 dated
September 15, 1987 (Assignment is in Spanish language). (5)
10.31 Summary of Assignment legalized by Public Instrument No. 1602 dated
June 11, 1990 (Assignment is in Spanish language). (5)
10.32 Summary of Assignment legalized by Public Instrument No. 2586 dated
September 9, 1992 (Assignment is in Spanish language). (5)
10.33 Guaranty between the company and Comerica Bank Texas. (11)
10.34 Triton Energy Corporation 401(K) Savings Plan. (11)
10.36 Contract between Malaysia-Thailand and Joint Authority and Petronas
Carigali SDN.BHD. and Triton Oil Company of Thailand relating to
Exploration and Production of Petroleum for Malaysia-Thailand Joint
Development Area Block A-18. (14)
15.1 Letter of Price Waterhouse LLP, acknowledging awareness of the use of
their report dated January 10, 1995, relating to the review of interim
financial information. (1)
99.1 Rio Chitamena Association Contract. (15)
99.2 Rio Chitamena Purchase and Sale Agreement. (15)
99.3 Integral Plan - Cusiana Oil Structure. (15)
99.4 Letter Agreements with co-investor in Colombia. (15)
99.5 Colombia Pipeline Memorandum of Understanding (15)
99.60 Oleoducto Central Agreement (1)
____________________
(1) Filed herewith
(2) Previously filed as an exhibit to the Company's Annual Report on
Form 10-K for the fiscal year ended May 31, 1992 and incorporated herein
by reference.
(3) Previously filed as an exhibit to the Company's Annual Report on
Form 10-K for the fiscal year ended May 31, 1990 and incorporated herein
by reference.
(4) Previously filed as an exhibit to the Company's Annual Report on
Form 10-K for the fiscal year ended May 31, 1991 and incorporated herein
by reference
(5) Previously filed as an exhibit to the Company's Annual Report on
Form 10-K for the fiscal year ended May 31, 1993 and incorporated by
reference herein.
(6) Previously filed as an exhibit to the Company's Annual Report on
Form 10-K for the fiscal year ended May 31, 1989 and incorporated by
reference herein.
(7) Previously filed as an exhibit to the Company's Registration
Statement on Form S-3 (No. 33-42430) and incorporated herein by reference.
(8) Previously filed as an exhibit to the Company's Quarterly Report
on Form 10-Q for the quarter ended November 30, 1988 and incorporated
herein by reference.
(9) Previously filed as an exhibit to the Company's Quarterly Report
on Form 10-Q for the quarter ended November 30, 1992 and incorporated
herein by reference.
(10) Previously filed as an exhibit to the Company's Current Report on
Form 8-K dated as of July 14, 1993 and incorporated herein by reference.
(11) Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the quarter ended November 30, 1993 and incorporated by
reference herein.
(12) Previously filed as an exhibit to the Company's Registration
Statement on Form S-3 (No. 33-69230) and incorporated herein by reference.
(13) Previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the quarter ended February 28, 1994 and incorporated by
reference herein.
(14) Previously filed as an exhibit to the Company's current report on
Form 8-K dated April 21, 1994 and incorporated by reference herein.
(15) Previously filed as an exhibit to the Company's current report on
Form 8-K/A dated July 15, 1994 and incorporated by reference herein.
<PAGE>
OTHER INFORMATION
(b)
Reports on Form 8-K
None
<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
TRITON ENERGY CORPORATION
/s/ Peter Rugg
Peter Rugg
Senior Vice President and Chief Financial Officer
Date: January 13, 1995
