SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1995 Commission File No. 1-3183
ENSERCH CORPORATION
Incorporated - State of Texas I.R.S. Identification No. 75-0399066
ENSERCH Center, 300 South St. Paul, Dallas, Texas 75201
Registrant's telephone number, including Area Code: 214-651-8700
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 twelve months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
Number of shares of Common Stock of Registrant outstanding as of
May 12, 1995: 67,088,734
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ENSERCH CORPORATION AND SUBSIDIARY COMPANIES
CONDENSED STATEMENTS OF CONSOLIDATED INCOME (UNAUDITED)
Three Months Ended
March 31
--------------------------
1995 1994
---- ----
(In thousands except
per share amounts)
Revenues
Natural gas transmission and distribution. . . . $504,805 $531,138
Natural gas and oil exploration and production . 41,661 50,737
Natural gas liquids processing . . . . . . . . . 21,679 19,967
Power. . . . . . . . . . . . . . . . . . . . . . 8,591 8,187
Less intercompany revenues . . . . . . . . . . . (28,835) (44,327)
-------- --------
Total. . . . . . . . . . . . . . . . . . . . 547,901 565,702
-------- --------
Costs and Expenses
Gas purchase . . . . . . . . . . . . . . . . . . 336,946 348,669
Operating expenses . . . . . . . . . . . . . . . 87,628 85,826
Depreciation and amortization. . . . . . . . . . 31,158 34,010
Gross receipts and production taxes. . . . . . . 16,423 17,596
Payroll, ad valorem and other taxes. . . . . . . 9,204 8,692
-------- --------
Total . . . . . . . . . . . . . . . . . . . . 481,359 494,793
-------- --------
Operating Income . . . . . . . . . . . . . . . . . 66,542 70,909
Other Income (Expense) - Net . . . . . . . . . . . (1,003) (1,441)
Interest Expense . . . . . . . . . . . . . . . . . (17,315) (16,346)
-------- --------
Income before Income Taxes . . . . . . . . . . . . 48,224 53,122
Income Taxes . . . . . . . . . . . . . . . . . . . 17,838 17,758
-------- --------
Income from Continuing Operations. . . . . . . . . . 30,386 35,364
Income from Discontinued Operations. . . . . . . . . 562
-------- --------
Net Income . . . . . . . . . . . . . . . . . . . . 30,386 35,926
Provision for Dividends on Preferred Stock . . . . 3,036 2,844
-------- --------
Earnings Applicable to Common Stock. . . . . . . . $ 27,350 $ 33,082
======== ========
Per Share of Common Stock
Income from continuing operations after provision
for dividends on preferred stock . . . . . . . $ .41 $ .49
Discontinued operations. . . . . . . . . . . . . .01
-------- --------
Earnings applicable to common stock. . . . . . $ .41 $ .50
======== ========
Cash dividends declared. . . . . . . . . . . . . $ .05 $ .05
======== ========
Average Common and Dilutive Common
Equivalent Shares Outstanding. . . . . . . . . . 66,936 66,817
======== ========
Operating Income (Loss) of Major Businesses
Natural gas transmission and distribution. . . . $ 67,085 $ 65,401
Natural gas and oil exploration and production . 356 9,597
Natural gas liquids processing . . . . . . . . . 898 (1,022)
Power. . . . . . . . . . . . . . . . . . . . . . 273 (551)
<FN>
See accompanying Notes.
-1-
ENSERCH CORPORATION AND SUBSIDIARY COMPANIES
CONDENSED STATEMENTS OF CONSOLIDATED
CASH FLOWS (UNAUDITED)
Three Months Ended
March 31
-----------------------
1995 1994
---- ----
(In thousands)
OPERATING ACTIVITIES
Income from continuing operations . . . . . . . . . . . . . . . $ 30,386 $ 35,364
Depreciation and amortization. . . . . . . . . . . . . . . . . . 31,158 34,010
Deferred income-tax expense. . . . . . . . . . . . . . . . . . . 17,797 17,620
Recoveries of gas-purchase contract settlements. . . . . . . . . 19,975 17,053
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,016 (13,124)
Changes in current operating assets and liabilities:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . 37,749 31,064
Other current assets. . . . . . . . . . . . . . . . . . . . . 58,959 25,055
Accounts payable and other accrued liabilities. . . . . . . . (51,325) (37,468)
Other current liabilities . . . . . . . . . . . . . . . . . . (17,172) (49,487)
Litigation judgement payable. . . . . . . . . . . . . . . . . (62,498)
-------- --------
Net cash flows from (used for) operating activities . . . . 134,543 (2,411)
-------- --------
INVESTING ACTIVITIES
Additions of property, plant and equipment . . . . . . . . . . (65,700) (52,915)
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (32,763) (17,896)
Discontinued operations. . . . . . . . . . . . . . . . . . . . 14,218 (56,616)
-------- --------
Net cash flows used for investing activities. . . . . . . . (84,245) (127,427)
-------- --------
FINANCING ACTIVITIES
Change in commercial paper and other short-term borrowings . . (38,400) 152,550
Issuance of senior long-term debt. . . . . . . . . . . . . . . 149,117
Retirement of senior long-term debt. . . . . . . . . . . . . . (75,067)
Retirement of Series D Preferred Stock . . . . . . . . . . . . (75,000)
Other financing activities - net . . . . . . . . . . . . . . . (5,956) (25,017)
Issuance of common stock . . . . . . . . . . . . . . . . . . . 1,003 1,746
Cash dividends paid. . . . . . . . . . . . . . . . . . . . . . (6,384) (7,119)
-------- --------
Net cash flows from (used for) financing activities . . . . (49,737) 121,210
-------- --------
Net Increase (Decrease) in Cash and Equivalents. . . . . . . . . 561 (8,628)
Cash and Equivalents at Beginning of Period. . . . . . . . . . . 2,885 19,203
-------- --------
Cash and Equivalents at End of Period. . . . . . . . . . . . . . $ 3,446 $ 10,575
======== ========
<FN>
See accompanying Notes.
-2-
ENSERCH CORPORATION AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(March 31, 1995 Unaudited)
March 31 December 31
1995 1994
----------- -----------
(In thousands)
ASSETS
Current Assets
Cash and equivalents . . . . . . . . . . . . . . . . . . . . $ 3,446 $ 2,885
Accounts receivable. . . . . . . . . . . . . . . . . . . . . 155,944 193,385
Gas stored underground . . . . . . . . . . . . . . . . . . . 85,475 114,862
Advances and prepayments for gas . . . . . . . . . . . . . . 22,433 28,622
Gas-purchase settlements recoverable from customers. . . . . 15,349 23,943
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,774 126,896
---------- ----------
Total current assets. . . . . . . . . . . . . . . . . . . . 354,421 490,593
---------- ----------
Investments. . . . . . . . . . . . . . . . . . . . . . . . . . 55,119 56,010
---------- ----------
Property, Plant and Equipment (full-cost
method for gas and oil properties) . . . . . . . . . . . . . 3,860,882 3,802,282
Less accumulated depreciation and amortization . . . . . . . (1,577,969) (1,549,717)
---------- ----------
Net property, plant and equipment. . . . . . . . . . . . . 2,282,913 2,252,565
---------- ----------
Other Assets . . . . . . . . . . . . . . . . . . . . . . . . . 44,586 47,131
---------- ----------
Total. . . . . . . . . . . . . . . . . . . . . . . . . $2,737,039 $2,846,299
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Commercial paper . . . . . . . . . . . . . . . . . . . . . . $ 112,600 $ 151,000
Current maturities of senior long-term debt. . . . . . . . . 10,600 10,600
Accounts payable and other accrued liabilities . . . . . . . 309,564 401,587
Accrued interest . . . . . . . . . . . . . . . . . . . . . . 12,439 35,885
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,636 52,522
---------- ----------
Total current liabilities . . . . . . . . . . . . . . . . . 484,839 651,594
---------- ----------
Senior Long-term Debt. . . . . . . . . . . . . . . . . . . . . 714,376 714,324
---------- ----------
Convertible Subordinated Debentures. . . . . . . . . . . . . . 90,750 90,750
---------- ----------
Deferred Income Taxes. . . . . . . . . . . . . . . . . . . . . 299,922 280,051
---------- ----------
Other Liabilities. . . . . . . . . . . . . . . . . . . . . . . 221,580 209,110
---------- ----------
Shareholders' Equity
Adjustable rate preferred stock. . . . . . . . . . . . . . . 175,000 175,000
---------- ----------
Common shareholders' equity
Common stock (100,000 shares authorized;
67,060 and 66,954 shares outstanding) . . . . . . . . . . 298,416 297,943
Paid in capital . . . . . . . . . . . . . . . . . . . . . . 341,164 340,019
Retained earnings . . . . . . . . . . . . . . . . . . . . . 112,352 88,348
Unamortized restricted stock compensation . . . . . . . . . (1,360) (840)
---------- ----------
Common shareholders' equity . . . . . . . . . . . . . . . 750,572 725,470
---------- ----------
Shareholders' equity. . . . . . . . . . . . . . . . . . 925,572 900,470
---------- ----------
Total. . . . . . . . . . . . . . . . . . . . . . . . . $2,737,039 $2,846,299
========== ==========
<FN>
See accompanying Notes.
-3-
ENSERCH CORPORATION AND SUBSIDIARY COMPANIES
Notes to Condensed Financial Statements
1. Prior period results have been restated to reflect the environmental
business sold in 1994 as a discontinued operation.
2. Earnings per share applicable to common stock are based on the weighted
average number of common shares outstanding during the period, including
common equivalent shares when dilutive. Fully diluted earnings per share
are not presented since the assumed exercise of stock options and
conversion of debentures would not be dilutive.
3. In April 1995, Enserch Exploration, Inc. (EEX), 99.2% owned by ENSERCH,
entered into a definitive agreement to acquire 100% of the capital stock
of DALEN Corporation for $340 million plus the assumption of $115 million
of bank debt. Also in April 1995, a Mobil Corporation affiliate exercised
its option to acquire a 40% working interest in EEX's Garden Banks unit.
4. In the opinion of management, all adjustments (consisting only of normal
recurring accruals) necessary for a fair presentation of the results of
operations for the interim periods included herein have been made.
-4-
INDEPENDENT ACCOUNTANTS' REPORT
ENSERCH Corporation:
We have reviewed the accompanying condensed consolidated balance sheet of
ENSERCH Corporation and subsidiary companies as of March 31, 1995, and the
related condensed statements of consolidated income and cash flows for the
three months ended March 31, 1995 and 1994. These financial statements are
the responsibility of the Corporation'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 review
procedures to financial data, and making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope than an
audit 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 such condensed consolidated financial statements for them
to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of ENSERCH Corporation and
subsidiary companies as of December 31, 1994, and the related statements of
consolidated income, cash flows and common shareholders' equity for the year
then ended (not presented herein); and in our report dated February 10, 1995,
we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 1994, is fairly stated
in all material respects, in relation to the consolidated balance sheet from
which it has been derived.
DELOITTE & TOUCHE LLP
Dallas, Texas
April 26, 1995
-5-
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
CONSOLIDATED RESULTS - ENSERCH Corporation's earnings applicable to common
stock for the first quarter of 1995 were $27 million ($.41 per share),
compared with $33 million ($.50 per share) for the 1994 first quarter. Income
from continuing operations for the first quarter was $30 million, $5 million
less than the first quarter of 1994. Operating income for the first three
months of 1995 was $67 million versus $71 million for the like period a year
ago. The results reflect a decline in both prices and sales volumes for
natural gas production, which caused results for the Exploration and
Production segment to be significantly below the prior year's first quarter,
and the impact of warmer weather on margins from gas sales to residential and
commercial customers of the Transmission and Distribution segment.
First-quarter interest expense of $17 million was $1 million higher than the
same period last year, and the provision for preferred dividends of $3 million
was slightly higher than in the year-ago period.
NATURAL GAS TRANSMISSION AND DISTRIBUTION - Although the first quarter of 1995
was one of the warmest winters ever recorded in Lone Star Gas Company's
service area, operating income for Transmission and Distribution operations
of $67 million increased $1.7 million from the 1994 first quarter. Heating
degree days were 20% below normal and 9% less than the first quarter last
year; however, margins from the residential and commercial customer base,
which provides a significant percentage of the total annual margin, showed
improvement from the first quarter of 1994, and expense savings from the re-
engineering of distribution operations began to be realized. First-quarter
1995 margins from Enserch Gas Company (EGC), the ENSERCH gas marketing
affiliate, were also up from the year-ago first quarter. Total system
throughput declined 2%, with lower residential and commercial sales volumes
and less transportation volumes partially offset by an increase in sales off
of Lone Star's system by EGC.
At March 31, 1995, Lone Star had an unrecovered balance of gas-purchase
contract settlements of $41 million, including $25 million that represented
prepayments expected to be recouped under contracts covering future gas
purchases. The remaining $16 million represented amounts to be recovered from
customers under existing gas-cost recovery provisions. Based on Lone Star's
estimated gas demand, which assumes normal weather conditions, gas purchases
are expected to substantially satisfy purchase obligations for the year 1995
and thereafter. At March 31, 1995, outstanding supplier claims approximated
$10 million. Lone Star expects to recoup or recover the remaining balances
of gas settlement payments made to date, as well as any future payments made
in settlement of remaining claims.
NATURAL GAS AND OIL EXPLORATION AND PRODUCTION - First-quarter 1995 operating
income from Exploration and Production operations was $356 thousand, compared
with $9.6 million for the first quarter last year. The average natural-gas
price received fell from $2.31 per thousand cubic feet (Mcf) in the first
quarter of 1994 to $2.22 per Mcf in the first quarter of 1995. The average
price received benefited from gas price hedge positions and longer term
-6-
contracts at prices above current spot market prices. Natural-gas sales
volumes from production were 14.4 billion cubic feet (Bcf) versus 18.4 Bcf in
the year-earlier period. The decline in sales volumes reflects lower output
from Gulf of Mexico properties, partially due to maintenance work; lower
output from East Texas fields, partially due to timing differences on annual
delivery requirements on reserves sold in 1988; and reduced expenditures for
replacing gas production because of lower gas prices. Oil sales volumes for
the first quarter of 1995 of 533 thousand barrels were up 4% from the prior-
year period, and the average price per barrel of oil for the first quarter was
$16.79, compared with $14.80 for the first quarter last year.
ENSERCH uses gas and oil swaps, collars and futures agreements to hedge
volatile product prices for a portion (normally 30 to 70 percent) of
anticipated future gas and oil production. Hedges increased gas revenues by
$3.0 million in the first quarter of 1995, compared with virtually no impact
on revenues in the 1994 first quarter. Hedges reduced first-quarter 1995 oil
revenues by $.1 million but added $.7 million in the first quarter of 1994.
At March 31, 1995, ENSERCH had outstanding swaps, collars and futures
agreements extending through June 1996 to exchange payments on some 13.3 Bcf
of gas and 1.2 million barrels (MMBbls) of oil on which ENSERCH had
$1.4 million of net unrealized gains. At March 31, 1995, realized gains on
hedging activities of $.6 million were deferred.
Production and operating costs for the first quarter of 1995 increased due to
higher maintenance costs, while general, administrative and other expenses for
the first three months of 1995 were up due to year-to-year variances in the
provision for the deductible portion of injuries and damages claims.
Depreciation and amortization decreased due to the decline in production,
partially offset by a higher-per-unit amortization of capitalized costs caused
by higher onshore exploratory expenditures and costs for equipment under
capital leases. Product prices are subject to seasonal and other
fluctuations. A decline in prices from March levels or other factors, without
mitigating circumstances, would cause a future write-down of capitalized costs
that could be significant and a noncash charge against earnings.
Operating results for 1995 will be impacted by the third-quarter commencement
of production from Garden Banks Block 388. Revenues from the early levels of
production on the two pre-drilled wells may not be sufficient to cover
operating costs, amortization and the equipment lease costs on the floating
production platform and related facilities. Some operating costs and
amortization vary with production; however, other costs and the equipment
lease costs are essentially fixed. Operating results are expected to improve
significantly for 1996 as production begins from several development wells and
equipment lease and other fixed costs are spread over significantly more
production.
NATURAL GAS LIQUIDS PROCESSING - Natural gas liquids (NGL) processing
activities contributed operating income of $.9 million, compared with last
year's first-quarter loss of $1 million. The average sales price per barrel
increased to $12.15 for the first quarter of 1995 from $10.71 for the 1994
first quarter. In addition, margins improved due to lower costs for natural-
gas feedstock. NGL processing sales volumes for the first quarter decreased
-7-
9% to 1.4 MMBbls due to diverting increased volumes to inventory for later
sale.
POWER - Power activities, comprised of Enserch Development Corporation and
Lone Star Energy Company, had 1995 first-quarter operating income of
$273 thousand, compared with a loss of $551 thousand in the year-ago first
quarter. The improvement reflects maturing operations at cogeneration plants.
LIQUIDITY AND FINANCIAL RESOURCES - Operating activities of continuing
operations for the first quarter of 1995 provided net cash flows of
$135 million, a significant improvement from the $2.4 million required in the
year-ago first quarter, which included a $62 million payment relating to an
adverse judgment in litigation. There was also a $59 million year-to-year
improvement in operating working capital.
Investing activities required net cash flows of $84 million versus
$127 million in the first quarter of 1994. Discontinued operations provided
cash of $14 million in the first quarter of 1995 but required cash of
$57 million in the 1994 first quarter.
Originally planned property, plant and equipment additions for 1995 total
$262 million and include $96 million designated for Transmission and
Distribution, $160 million for Exploration and Production and $6 million for
other requirements. However, expenditures will be reduced if cash flows from
operations prove to be less than anticipated. The expenditures are expected
to be funded from internal cash flow and external financings as required.
Costs of the floating production platform and related facilities for the
Garden Banks project, which are financed by an operating lease arrangement,
are not included. During the first quarter of 1995, the lease arrangement for
the Garden Banks facilities was increased from $235 million to $350 million
to cover design modifications and other costs for Block 388 facilities and for
Block 387 facilities.
As a percentage of total capitalization, common shareholders' equity increased
to 43.1% at March 31, 1995 from 42.3% at year-end 1994. At March 31, 1995,
the current ratio was .73 versus .75 at December 31, 1994. The Corporation
has bank lines in the form of a three-year revolving agreement totaling
$600 million, which were all unused at March 31, 1995.
RECENT EVENTS - Acquisition of DALEN Corporation (DALEN) - On April 13, 1995,
Enserch Exploration, Inc. (EEX), 99.2% owned by ENSERCH, entered into a
definitive agreement, subject to regulatory review and approval, to acquire
100% of the capital stock of DALEN for $340 million and the refinancing of
$115 million of DALEN's bank debt. The closing is expected by early
June 1995. The purchase price will be funded initially through EEX bank
lines. A $150 million bridge loan will be used to refinance DALEN's bank debt
and reduce advances from ENSERCH. The bridge loan is expected to be paid
later in the year with the proceeds of a $150 million asset-based financing.
EEX intends to issue common stock in a public offering later this year to
repay all or a portion of the EEX bank line financing used to make the
acquisition. The common stock issue is expected to increase the public
ownership in EEX from less than 1% to approximately 20%. DALEN's exploration
-8-
and production activities are primarily focused in the Gulf Coast, Gulf of
Mexico and Mid-Continent areas.
Garden Banks - Also in April 1995, a Mobil Corporation affiliate exercised its
option to acquire a 40% working interest in EEX's Garden Banks unit for
undisclosed consideration. Mobil will also be funding 40% of the costs of the
production system and drilling and completion costs. Production at Garden
Banks is expected to begin in the third quarter of 1995, with initial
production from the first two wells expected to aggregate approximately
nine thousand barrels per day. A third well is expected to be drilled and
connected to the system by year-end, with additional wells added throughout
1996.
Green Canyon - DeGolyer and MacNaughton (D&M), independent petroleum
engineers, have recently recognized gross proven reserve levels at Green
Canyon Block 254 to be 50 MMBbls of oil and 102 Bcf of natural gas.
Separately, a Mobil Corporation affiliate has signed a letter of intent to
purchase a 40% interest in the Green Canyon project, which is subject to
mutually acceptable consummation documents. Also, Reading & Bates signed a
letter of intent to purchase a 20% interest in the project. EEX will have a
40% interest and will remain operator. The Green Canyon project provides a
significant addition to EEX's proven reserves. Proven reserves for EEX
recognized by D&M at December 31, 1994, which did not include the Green Canyon
project, were 46.1 MMBbls of oil and 1,042 Bcf of natural gas.
-9-
ENSERCH CORPORATION AND SUBSIDIARY COMPANIES
Operating Data (Unaudited)
Three Months Ended
March 31
---------------------
1995 1994
---- ----
NATURAL GAS TRANSMISSION AND DISTRIBUTION:
Operating Income (in millions). . . . . . . . . . $ 67.1 $ 65.4
====== ======
Natural Gas Sales Revenues by Customer (in millions):
Residential & commercial . . . . . . . . . . . . $328.1 $321.7
Industrial & electric generation . . . . . . . . 68.8 83.6
Gas marketers, pipelines & other . . . . . . . . 90.5 107.6
------ ------
Total gas sales revenues . . . . . . . . . . . $487.4 $512.9
====== ======
Natural Gas Revenues (in millions):
Lone Star Gas Company sales. . . . . . . . . . . $358.0 $356.7
Enserch Gas Company sales. . . . . . . . . . . . 129.4 156.2
------ ------
Total gas sales revenues . . . . . . . . . . . 487.4 512.9
Gas transportation . . . . . . . . . . . . . . . 13.0 14.1
------ ------
Total natural gas revenues . . . . . . . . . . 500.4 527.0
Other. . . . . . . . . . . . . . . . . . . . . . 4.4 4.1
------ ------
Total revenues . . . . . . . . . . . . . . . . $504.8 $531.1
====== ======
Natural Gas Sales Volumes by Customer (Bcf):
Residential & commercial . . . . . . . . . . . . 54.4 58.4
Industrial & electric generation . . . . . . . . 29.7 30.7
Gas marketers, pipelines & other . . . . . . . . 58.7 49.3
------ ------
Total gas sales volumes. . . . . . . . . . . . 142.8 138.4
====== ======
Natural Gas Volumes (Bcf):
Lone Star Gas Company sales. . . . . . . . . . . 61.6 67.0
Enserch Gas Company sales. . . . . . . . . . . . 81.2 71.4
------ ------
Total gas sales volumes. . . . . . . . . . . . 142.8 138.4
====== ======
Gas transportation:
For associated . . . . . . . . . . . . . . . . 28.3 38.1
For others (nonassociated) . . . . . . . . . . 59.8 67.7
------ ------
Total. . . . . . . . . . . . . . . . . . . . 88.1 105.8
====== ======
Lone Star system throughput . . . . . . . . . . 150.0 174.5
Off-system sales (a) . . . . . . . . . . . . . . 52.6 31.6
------ ------
Total throughput (b) . . . . . . . . . . . . . 202.6 206.1
====== ======
Natural Gas Sales Revenues (per Mcf):
by Customer
Residential & commerical . . . . . . . . . . . . $ 6.04 $ 5.50
Industrial & electric generation . . . . . . . . 2.31 2.73
Gas marketers, pipelines & other . . . . . . . . 1.54 2.18
Natural Gas Sales Revenues (per Mcf):
Lone Star Gas Company. . . . . . . . . . . . . . $ 5.82 $ 5.32
Enserch Gas Company. . . . . . . . . . . . . . . 1.59 2.19
Natural Gas Purchase Cost (per Mcf):
Lone Star Gas Company. . . . . . . . . . . . . . $ 3.55 $ 3.23
Enserch Gas Company. . . . . . . . . . . . . . . 1.55 2.12
Gas Transportation Rate (per Mcf) . . . . . . . . $ .15 $ .13
Heating Degree Days (as a percentage of normal) (c) 80% 88%
<FN>
(a) Represents off-system sales never entering Lone Star's pipeline system.
(b) Total throughput is the sum of gas sales volumes and gas transportation volumes for others. Gas
transported by Lone Star for Enserch Gas Company is reported in both sales and associated transportation.
(c) Based on National Weather Service data for the 30-year period 1961-1990, as determined by the Department
of Commerce.
-10-
ENSERCH CORPORATION AND SUBSIDIARY COMPANIES
Operating Data (Unaudited)
Three Months Ended
March 31
-------------------------
1995 1994
------ ------
NATURAL GAS AND OIL EXPLORATION AND PRODUCTION:
Operating Income (in millions). . . . . . . . . . . . . $ .4 $ 9.6
====== ======
Revenues (in millions)
Natural gas (a). . . . . . . . . . . . . . . . . . . . $ 31.9 $ 42.5
Oil and condensate . . . . . . . . . . . . . . . . . . 8.9 7.6
Natural gas liquids. . . . . . . . . . . . . . . . . . .7 .5
Other revenues - net . . . . . . . . . . . . . . . . . .1 .1
------ ------
Total revenues. . . . . . . . . . . . . . . . . . . $ 41.6 $ 50.7
====== ======
Sales Volumes
Natural gas (MMcf) (a) . . . . . . . . . . . . . . . . 14,361 18,370
Oil and condensate (MBbl). . . . . . . . . . . . . . . 533 514
Average Sales Price
Natural gas (per Mcf). . . . . . . . . . . . . . . . . $ 2.22 $ 2.31
Oil and condensate (per Bbl) . . . . . . . . . . . . . 16.79 14.80
Data in Equivalent Energy Content (per Mcfe) (b)
Product revenue. . . . . . . . . . . . . . . . . . . . $ 2.38 $ 2.38
Production and operating costs (c) . . . . . . . . . . .50 .41
Depreciation and amortization. . . . . . . . . . . . . 1.10 1.05
Net Wells
Drilled. . . . . . . . . . . . . . . . . . . . . . . . 15 16
Productive . . . . . . . . . . . . . . . . . . . . . . 10 8
NATURAL GAS LIQUIDS PROCESSING:
Operating Income (Loss) (in millions) . . . . . . . . . $ .9 $ (1.0)
====== ======
Revenues (in millions)
Natural gas liquids (a). . . . . . . . . . . . . . . . $ 16.5 $ 16.0
Other. . . . . . . . . . . . . . . . . . . . . . . . . 5.2 4.0
------ ------
Total . . . . . . . . . . . . . . . . . . . . . . . $ 21.7 $ 20.0
====== ======
Natural Gas Liquids
Sales volumes (MBbl)(a). . . . . . . . . . . . . . . . 1,359 1,492
Average sales price (per Bbl). . . . . . . . . . . . . $12.15 $10.71
<FN>
(a) Excludes products purchased for resale. Includes affiliated revenues and volumes.
(b) For the purpose of providing a common unit of measure, oil and natural gas liquids are converted to Mcf
equivalents (Mcfe) on the basis of relative energy content: one barrel of oil equals 5.33 Mcfe and one
barrel of natural gas liquids equals 4.0 Mcfe.
(c) Excludes related production, severance and ad valorem taxes.
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PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Shareholders was held on May 9, 1995. All
of the nominees for director, as listed in the Corporation's
proxy statement, were elected with the following vote:
Shares Broker
Voted Shares Non-
"For" "Withheld" Votes
---------- ---------- ------
D. W. Biegler 57,672,056 281,437 0
Frederick S. Addy 57,681,555 271,938 0
B. A. Bridgewater, Jr. 57,678,551 274,942 0
Odie C. Donald 57,652,535 300,958 0
Marvin J. Girouard 57,677,596 275,897 0
J. M. Haggar, Jr. 57,659,841 293,652 0
Thomas W. Luce, III 57,679,993 273,500 0
W. C. McCord 57,636,557 316,936 0
Diana S. Natalicio 57,668,367 285,126 0
The appointment of Deloitte & Touche LLP as independent auditors of the
Corporation was approved by the following vote:
Shares Shares Broker
Voted Voted Shares Non-
"For" "Against" "Abstaining" Votes
------ --------- ------------ ------
57,709,633 108,264 135,596 0
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
EXHIBIT (15) - Letter of Deloitte & Touche LLP dated
May 10, 1995, regarding unaudited
interim financial statements.
(b) Reports on Form 8-K
No reports on Form 8-K were filed for the three months ended
March 31, 1995.
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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.
ENSERCH Corporation
(Registrant)
Date: May 10, 1995 By /s/ S. R. Singer
---------------------------
S. R. Singer, Senior Vice
President, Finance and
Corporate Development, Chief
Financial Officer
Date: May 10, 1995 By /s/ J. W. Pinkerton
---------------------------
J. W. Pinkerton,
Vice President and Controller,
Chief Accounting Officer
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