SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1997
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 1-959
THE LOUISIANA LAND AND EXPLORATION COMPANY
Exact name of registrant as specified in its charter
MARYLAND 72-0244700
State or other jurisdiction of I.R.S. Employer
incorporation or organization Identification No.
909 POYDRAS STREET, NEW ORLEANS, LA. 70112
Address of principal executive offices Zip Code
Registrant's telephone number, including area code 504-566-6500
NO CHANGE
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. Yes X . No .
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Outstanding at
Class July 24, 1997
CAPITAL STOCK, $.15 PAR VALUE 34,447,355 SHARES
THE LOUISIANA LAND AND EXPLORATION COMPANY
INDEX
Page
Number
_________________________________________________________________
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
(The June 30, 1997 and 1996 consolidated financial state-
ments included in this filing on Form 10-Q have been
reviewed by KPMG Peat Marwick LLP, independent auditors, in
accordance with established professional standards and
procedures for such a review. The report of KPMG Peat
Marwick LLP commenting upon their review is included
herein.)
Consolidated Balance Sheets - June 30, 1997 and
December 31, 1996............................. 3
Consolidated Statements of Earnings - three months
and six months ended June 30, 1997 and 1996... 4
Consolidated Statements of Cash Flows - six months
ended June 30, 1997 and 1996.................. 5
Notes to Consolidated Financial Statements........ 6-9
Independent Auditors' Review Report............... 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................... 11-13
Petroleum Segment Information......................... 14
Operating Data........................................ 15-16
Part II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K............ 17
Part I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
THE LOUISIANA LAND AND EXPLORATION COMPANY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Millions of dollars)
June 30, December 31,
ASSETS 1997 1996
_____________________________________________________________________________________
CURRENT ASSETS:
Cash, including cash equivalents (June 30,
1997-$3.8; December 31, 1996-$1.2) $ 15.9 9.0
Accounts and notes receivable, principally trade 115.5 150.7
Income taxes receivable .6 -
Prepaid expenses 11.9 10.7
Deferred income taxes .7 .7
_____________________________________________________________________________________
TOTAL CURRENT ASSETS 144.6 171.1
_____________________________________________________________________________________
Investments in affiliates 8.4 8.1
Property, plant and equipment 3,131.5 3,100.6
Less accumulated depletion, depreciation and amortization (1,964.2) (1,940.9)
_____________________________________________________________________________________
NET PROPERTY, PLANT AND EQUIPMENT 1,167.3 1,159.7
_____________________________________________________________________________________
Other assets 25.3 25.9
_____________________________________________________________________________________
$ 1,345.6 1,364.8
_____________________________________________________________________________________
LIABILITIES AND STOCKHOLDERS' EQUITY
_____________________________________________________________________________________
CURRENT LIABILITIES:
Accounts payable and accrued expenses 137.4 138.9
Income taxes payable 3.9 9.4
_____________________________________________________________________________________
TOTAL CURRENT LIABILITIES 141.3 148.3
_____________________________________________________________________________________
Deferred income taxes 82.3 78.4
Long-term debt 460.1 505.7
Other liabilities 160.2 157.8
_____________________________________________________________________________________
STOCKHOLDERS' EQUITY:
Capital stock 5.2 5.1
Additional paid-in capital 48.3 44.6
Retained earnings 448.2 424.9
_____________________________________________________________________________________
TOTAL STOCKHOLDERS' EQUITY 501.7 474.6
_____________________________________________________________________________________
$ 1,345.6 1,364.8
_____________________________________________________________________________________
See accompanying notes to consolidated financial statements.
THE LOUISIANA LAND AND EXPLORATION COMPANY
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(Millions, except per share data)
Three months ended Six months ended
June 30, June 30,
1997 1996 1997 1996
_____________________________________________________________________________________
REVENUES:
Oil and gas $134.4 135.8 305.2 283.5
Refined products - 110.2 - 225.0
Gain on sale of oil and gas properties - .3 .4 .3
_____________________________________________________________________________________
134.4 246.3 305.6 508.8
_____________________________________________________________________________________
COSTS AND EXPENSES:
Lease operating and facility expenses 30.0 27.9 61.1 57.9
Refinery cost of sales and operating
expenses - 101.7 - 216.1
Dry holes and exploratory charges 29.5 21.8 75.8 43.3
Depletion, depreciation and amortization 44.9 44.6 88.6 88.1
Taxes, other than on earnings 5.2 6.3 11.5 12.5
General, administrative and other
expenses 9.8 9.1 19.1 18.0
_____________________________________________________________________________________
119.4 211.4 256.1 435.9
_____________________________________________________________________________________
15.0 34.9 49.5 72.9
OTHER INCOME (EXPENSE):
Interest and debt expenses (6.5) (8.9) (14.4) (18.1)
Other income (expense), net 1.3 .5 7.8 3.5
_____________________________________________________________________________________
Earnings before income taxes 9.8 26.5 42.9 58.3
Income tax expense 3.6 9.3 15.5 20.5
_____________________________________________________________________________________
NET EARNINGS $ 6.2 17.2 27.4 37.8
_____________________________________________________________________________________
EARNINGS PER SHARE $ 0.18 0.50 0.79 1.11
_____________________________________________________________________________________
AVERAGE SHARES 34.5 34.2 34.5 34.0
_____________________________________________________________________________________
CASH DIVIDENDS PER SHARE $ 0.06 0.06 0.12 0.12
_____________________________________________________________________________________
See accompanying notes to consolidated financial statements.
THE LOUISIANA LAND AND EXPLORATION COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Millions of dollars)
Six months ended
June 30,
1997 1996
_____________________________________________________________________________________
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 27.4 37.8
Adjustments to reconcile to cash flows
from operations:
Gain on sale of oil and gas properties (.4) (.3)
Depletion, depreciation and amortization 88.6 88.1
Deferred income taxes 3.9 12.6
Dry holes and impairment charges 49.7 22.3
Other .1 6.1
_____________________________________________________________________________________
169.3 166.6
Changes in operating assets and liabilities:
Net decrease in receivables 37.3 10.4
Net increase in inventories - (4.3)
Net increase in prepaid items (1.2) (1.3)
Net increase (decrease) in payables (9.5) 7.8
Other 1.7 (2.1)
_____________________________________________________________________________________
NET CASH FLOWS FROM OPERATING ACTIVITIES 197.6 177.1
_____________________________________________________________________________________
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (146.5) (99.7)
Proceeds from asset sales 6.1 .5
Other (3.2) .5
_____________________________________________________________________________________
NET CASH FLOWS FROM INVESTING ACTIVITIES (143.6) (98.7)
_____________________________________________________________________________________
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt (45.6) (99.2)
Advances against cash surrender value - 9.6
Dividends (4.1) (4.1)
Repayment of loans to ESOP - 1.2
Other 2.6 15.5
_____________________________________________________________________________________
NET CASH FLOWS FROM FINANCING ACTIVITIES (47.1) (77.0)
_____________________________________________________________________________________
INCREASE IN CASH AND CASH EQUIVALENTS $ 6.9 1.4
_____________________________________________________________________________________
See accompanying notes to consolidated financial statements.
THE LOUISIANA LAND AND EXPLORATION COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting only of
normal recurring accruals) necessary to present fairly the financial
position as of June 30, 1997, and the results of operations and cash
flows for the three-month and six-month periods ended June 30, 1997
and 1996. Certain amounts have been reclassified to conform with the
current period's presentation.
2. On July 31, 1996, the Company completed the sale of its crude oil
refinery and terminal near Mobile, Alabama, including crude oil and
refined product inventories, for approximately $70 million resulting
in a pretax gain of approximately $2 million. The net book value of
refinery property, plant and equipment at that date totaled
approximately $33 million. The following table sets forth the
refinery operating results for the periods indicated.
(Unaudited)
Periods ended
June 30, 1996
Three Six
Months Months
________________________________________________________________________________
REFINING OPERATIONS
Refining Operating Profit:
Revenues:
Refined products* $117.9 239.0
Other .2 .3
________________________________________________________________________________
118.1 239.3
________________________________________________________________________________
Cost and expenses:
Cost of sales* 98.2 207.4
Operating expenses 11.2 22.7
Depreciation .5 .9
Taxes, other than income .4 .8
________________________________________________________________________________
110.3 231.8
________________________________________________________________________________
$ 7.8 7.5
________________________________________________________________________________
*Before the elimination of intercompany
transfers to the company's refinery $ 7.7 14.0
________________________________________________________________________________
3. For the three months ended June 30, 1997 and 1996, interest costs
incurred were $9.2 million and $11.8 million, respectively, of which
$2.7 million and $2.9 million, respectively, were capitalized as part
of the cost of property, plant and equipment. For the six months ended
June 30, 1997 and 1996, interest costs incurred were $18.7 million and
$24.4 million, respectively, of which $4.3 million and $6.3 million,
respectively, were capitalized as part of the cost of property, plant
and equipment.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. As prescribed by Accounting Principles Board Opinion No. 15, "Earnings
Per Share" ("Opinion No. 15"), earnings per share are calculated on the
weighted average number of shares outstanding during each period for
capital stock and, when dilutive, capital stock equivalents, which
assumes exercise of stock options.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards Statement No. 128,
"Earnings Per Share" ("SFAS No. 128"). SFAS No. 128 supersedes Opinion
No. 15, will be effective for the Company's year ended December 31,
1997, and cannot be adopted earlier. After adoption, all prior period
earnings per share must be restated to conform with SFAS No. 128. Due
to the insignificant number of potentially dilutive securities (stock
options) outstanding, SFAS No. 128 will not have a material impact on
the Company's earnings per share.
5. In accordance with Regulation S-X, Rule 3-09, the audited consolidated
financial statements of the Company's 50%-owned affiliate, MaraLou
Netherlands Partnership (MaraLou) and its wholly-owned consolidated
subsidiary, CLAM Petroleum Company (CLAM), were filed with the
Company's Annual Report on Form 10-K for the year ended December 31,
1996.
Accordingly, the following unaudited summarized consolidated income
statement information for MaraLou and its consolidated subsidiary,
CLAM, for the three-month and six-month periods ended June 30, 1997 and
1996 are presented in accordance with Regulation S-X, Rule 10-01(b).
(Unaudited)
Three months ended Six months ended
June 30, June 30,
1997 1996 1997 1996
________________________________________________________________________________
Gross revenues $ 20.9 21.4 48.9 53.1
________________________________________________________________________________
Operating profit 10.1 7.4 26.7 24.3
________________________________________________________________________________
Net earnings 2.3 3.8 8.8 11.8
________________________________________________________________________________
6. The Company uses derivative commodity instruments to manage commodity
price risks associated with future natural gas and crude oil production
but does not use them for speculative purposes. The company's
commodity price hedging program utilizes futures, forwards, options and
swap contracts in series of transactions designed to set a floor price
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
for future production and at the same time allow the Company to
participate in market price increases above a set level over the floor
price and outside of specific ranges. To qualify as a hedge, these
contracts must correlate to anticipated future production such that the
Company's exposure to the effects of price changes is reduced. The
Company uses the accrual method of accounting for derivative commodity
instruments. At inception, the contract premiums paid are recorded as
prepaid expenses and, upon settlement of the hedged production month,
are included with the gains and losses on the contracts in oil and gas
revenues.
At June 30, 1997, approximately 46 trillion BTU of domestic natural gas
production for the remainder of 1997 were covered by a series of
transactions designed to set an average floor price of $1.82 per
million BTU with the Company's nonparticipation in market price
increases above the floor price limited to $0.18 per million BTU. For
1998, approximately 57 trillion BTU of domestic natural gas were
similarly hedged at an average floor price of $1.80 per million BTU
with the Company's nonparticipation in market price increases above the
floor price limited to $0.24 per million BTU. For 1999, approximately
14 trillion BTU of domestic natural gas were similarly hedged at an
average floor price of $1.92 per million BTU with the Company's
nonparticipation in market price increases above the floor price
limited to $0.37 per million BTU. While these transactions have
nominal carrying values, their fair value, represented by the estimated
amount that would be required to terminate the contracts, were a net
cost of $3.0 million for the 1997 hedges, a net benefit of $.5 million
for the 1998 hedges and a net benefit of $1.1 million for 1999 hedges.
(The Company estimates that its domestic natural gas production
averages approximately 1.07 million BTU for each thousand cubic feet.)
In addition, approximately 3.4 million barrels of the Company's
worldwide crude oil production for the remainder of 1997 were similarly
hedged at an average floor price of $17.80 per barrel with the
Company's nonparticiation in market price increases above the floor
price limited to $1.16 per barrel. These transactions also have
nominal carrying values, but their fair value at June 30, 1997 amounted
to a net benefit of $.9 million.
7. On July 16, 1997, the Company signed a definitive agreement to combine
with Burlington Resources Inc. (BR) in a transaction intended to be
accounted for under the pooling of interests method of accounting for
business combinations. Under the terms of the agreement, which is
subject to the approvals of regulatory agencies and the shareholders
of both companies, a wholly owned subsidiary of BR will merge into the
Company and the Company's shareholders will receive 1.525 shares of BR
common stock for each Company share held and the Company will become
a wholly owned subsidiary of BR. The transaction is expected to
qualify as a tax-free reorganization.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
8. The Company has been notified by the U.S. Environmental Protection
Agency that it is one of many Potentially Responsible Parties (PRP)
with respect to certain National Priorities List sites. Based on its
evaluation of the potential total cleanup costs, its estimate of its
potential exposure, and the viability of the other PRP's, the Company
believes that any costs ultimately required to be borne by it at these
sites will not have a material adverse effect on the results of
operations, cash flow or financial position of the Company.
The Company is subject to other legal proceedings, claims and
liabilities which arise in the ordinary course of its business. In the
opinion of Management, the amount of ultimate liability with respect
to these actions will not have a material adverse effect on results of
operations, cash flow or financial position of the Company.
INDEPENDENT AUDITORS' REVIEW REPORT
The Board of Directors
The Louisiana Land and Exploration Company:
We have reviewed the consolidated balance sheet of The Louisiana Land and
Exploration Company and subsidiaries as of June 30, 1997, and the related
consolidated statements of earnings and cash flows for the three-month and
six-month periods ended June 30, 1997 and 1996. These consolidated
financial statements are 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 consolidated financial statements referred to above
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 The Louisiana Land and
Exploration Company and subsidiaries as of December 31, 1996, and the
related consolidated statements of earnings, stockholders' equity, and
cash flows for the year then ended (not presented herein); and in our
report dated February 7, 1997, we expressed an unqualified opinion on
those consolidated financial statements. In our opinion, the information
set forth in the accompanying consolidated balance sheet as of
December 31, 1996, is fairly presented, in all material respects, in
relation to the consolidated balance sheet from which it has been derived.
/KPMG PEAT MARWICK LLP
KPMG PEAT MARWICK LLP
New Orleans, Louisiana
July 28, 1997
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995
Statements, other than historical facts, contained in this Quarterly
Report on Form 10-Q, including statements of estimated oil and gas
production and reserves, drilling plans, future cash flows, anticipated
capital expenditures and Management's strategies, plans and objectives,
are "forward looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Although the Company believes that its
forward looking statements are based on reasonable assumptions, it
cautions that such statements are subject to a wide range of risks and
uncertainties incident to the exploration for, acquisition, development
and marketing of oil and gas, and it can give no assurance that its
estimates and expectations will be realized. Important factors that could
cause actual results to differ materially from the forward looking
statements include, but are not limited to, changes in production volumes,
worldwide demand, and commodity prices for petroleum natural resources;
the timing and extent of the Company's success in discovering, acquiring,
developing and producing oil and gas reserves; risks incident to the
drilling and operation of oil and gas wells; future production and
development costs; the effect of existing and future laws, governmental
regulations and the political and economic climate of the United States
and foreign countries in which the Company operates; the effect of hedging
activities; and conditions in the capital markets. Other risk factors are
discussed elsewhere in this Form 10-Q, including those risk factors
described in Note 8 of "Notes to Consolidated Financial Statements" and
in the Company's Form 10-K.
REVIEW OF OPERATIONS
Second quarter and first half 1997 net earnings totaled $6.2 million
and $27.4 million, respectively, down from the $17.2 million and $37.8
million earned for the respective 1996 periods. The decline in net
earnings resulted primarily from reduced liquids volumes, lower domestic
natural gas prices and higher exploratory costs in both 1997 periods and
the inclusion in the comparable 1996 periods of operating results from the
Company's Mobile refinery, which was sold in July 1996.
OIL AND GAS OPERATIONS
Revenues from the Company's oil and gas operations were down $1 million
from the second quarter of 1996 due to lower liquids revenues. Liquids
revenues were down $5 million due to lower crude oil volumes ($3 million)
and prices ($2 million). Natural gas revenues were up almost $3 million
as a result of higher domestic deliveries ($9 million). The effect of
higher domestic natural gas deliveries was partially offset by lower
prices ($6 million).
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. (CONTINUED)
In the first half of 1997 revenues from the Company's oil and gas
operations were up $22 million from the first half of 1996. Liquids
revenues were up $6 million primarily due to the higher worldwide crude
oil prices. Natural gas revenues were up almost $15 million as a result
of higher domestic deliveries ($20 million), partially offset by lower
prices ($5 million).
Crude oil volumes in the second quarter and first half of 1997
decreased 2100 and 1500 barrels per day (BPD), respectively, from the
comparable 1996 periods primarily due to production declines at the North
Sea. North Sea operations were down 2700 BPD and 2300 BPD in the 1997
second quarter and first half, respectively, as wells shut-in due to
pipeline maintenance and natural declines more than offset new production
from the Thelma Field. While new wells onstream in south Louisiana and
the Gulf of Mexico properties contributed to higher domestic volumes in
the first half, which were up 500 BPD, natural declines and the effect of
properties sold resulted in a decline of 700 BPD in the second quarter of
1997. Other foreign crude volumes were up 1300 BPD and 300 BPD in the
second quarter and first half, respectively, due to new wells onstream at
the KAKAP concession, offshore Indonesia.
Natural gas deliveries were up 39 million and 37 million cubic feet per
day in the second quarter and first half of 1997, respectively, due to
higher domestic production. Domestic deliveries were up due to new wells
onstream in the Gulf of Mexico and south Louisiana. The higher domestic
deliveries were partially offset by the effects of natural declines at
mature producing properties and wells shut-in for maintenance and repairs.
Partially offsetting the higher domestic production were lower volumes
from the North Sea operations due to the aforementioned shut-ins and
natural declines and demand-induced declines from the Company's 50%-owned
affiliate, CLAM Petroleum Company.
Lease operating and facility expenses (LOE) were up in both 1997
periods as higher workover costs and facilities expenses offset reductions
in operating costs and repair charges. Depletion, depreciation and
amortization (DD&A) was up marginally in both periods as a result of the
DD&A associated with new wells onstream. This increase in DD&A was
partially offset by natural production declines on mature producing
properties. Dry holes and exploratory charges increased due to the write-
off of unsuccessful exploratory wells and higher seismic costs incurred.
Interest and debt expenses were down from the 1996 periods as a result of
the significant reduction in long-term debt over the last twelve months.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES
In the first half of 1997, the Company generated approximately $198
million in cash from operations which, along with available cash, was used
for capital projects ($147 million), reductions of long-term debt ($46
million) and dividends paid ($4 million).
In June 1997, the Company replaced its existing $350 million Revolving
Credit Facility with a Revolving Credit Facility of a like amount, the
primary objectives of which were to avail the Company of lower market
pricing, extend the maturity by one year to 2002 and obtain other terms
and conditions which are more favorable to the Company.
The Company expects to fund its 1997 expenditures, including capital
and exploration expenditures of approximately $320 million, primarily from
operating cash flows. The Company's expenditures are continually
reviewed, and revised as necessary, based on perceived current and long-
term economic conditions.
CAPITAL STOCK, DIVIDENDS AND OTHER MARKET DATA
On July 16, 1997 the Company signed a definitive agreement to combine
with Burlington Resources Inc. (BR) in a transaction intended to be
accounted for under the pooling of interests method of accounting for
business combinations. Under the terms of the agreement, which is subject
to the approvals of regulatory agencies and the shareholders of both
companies, a wholly owned subsidiary of BR will merge into the Company and
the Company's shareholders will receive 1.525 shares of BR common stock
for each Company share held and the Company will become a wholly owned
subsidiary of BR. The transaction is expected to qualify as a tax-free
reorganization.
In February 1997, the Company's Board of Directors authorized the
repurchase of up to two million shares of the Company's capital stock.
No shares have been repurchased under the program. In connection with the
agreement with BR discussed above, the Company's Board of Directors has
agreed to terminate such repurchase program.
NOTE: The accompanying consolidated financial statements and notes
thereto included in Item 1. of this Form 10-Q and the petroleum
segment information and operating data following this Item 2. are
an integral part of this discussion and analysis and should be
read in conjunction herewith.
THE LOUISIANA LAND AND EXPLORATION COMPANY
PETROLEUM SEGMENT INFORMATION
(Millions of dollars)
Three months ended Six months ended
June 30, June 30,
1997 1996 1997 1996
_____________________________________________________________________________________
Sales to unaffiliated customers:
Domestic1 $ 96.9 207.3 223.9 426.2
North Sea 29.1 33.0 67.5 70.1
Other foreign 8.4 6.0 14.2 12.5
_____________________________________________________________________________________
Total revenues $134.4 246.3 305.6 508.8
_____________________________________________________________________________________
Earnings before income taxes:
Operating profit (loss):
Domestic1 23.9 38.7 58.0 80.4
North Sea 8.0 10.0 24.7 22.1
Other foreign (2.2) (2.9) (6.8) (7.2)
_____________________________________________________________________________________
29.7 45.8 75.9 95.3
Other income (expense), net (19.9) (19.3) (33.0) (37.0)
_____________________________________________________________________________________
Earnings before income taxes $ 9.8 26.5 42.9 58.3
_____________________________________________________________________________________
Capital expenditures:
Exploration:
Domestic 51.0 26.0 83.9 43.9
North Sea 1.6 .8 2.6 .8
Other foreign 7.5 4.3 12.1 6.4
_____________________________________________________________________________________
60.1 31.1 98.6 51.1
_____________________________________________________________________________________
Development:
Domestic 16.4 20.9 29.7 31.1
North Sea 5.7 4.3 9.7 10.3
Other foreign 2.1 2.4 5.6 4.8
_____________________________________________________________________________________
24.2 27.6 45.0 46.2
_____________________________________________________________________________________
84.3 58.7 143.6 97.3
Capitalized interest 2.7 2.9 4.3 6.3
Other 1.2 .6 1.8 1.4
_____________________________________________________________________________________
$ 88.2 62.2 149.7 105.0
_____________________________________________________________________________________
1 The 1996 period includes the operations of the Company's refinery which was sold in
July 1996. See Note 2 of "Notes to Consolidated Financial Statements."
THE LOUISIANA LAND AND EXPLORATION COMPANY
OPERATING DATA
Three months ended Six months ended
June 30, June 30,
1997 1996 1997 1996
_____________________________________________________________________________________
OIL AND GAS OPERATIONS1
CRUDE AND CONDENSATE2
Production (thousands of barrels per day):
Domestic 21.0 21.7 21.3 20.8
North Sea 13.4 16.1 13.9 16.2
Other foreign 5.2 3.9 4.2 3.9
_____________________________________________________________________________________
39.6 41.7 39.4 40.9
_____________________________________________________________________________________
Average price received (per barrel):
Domestic $18.57 19.29 20.48 19.18
North Sea 17.91 18.33 19.70 18.55
Other foreign 17.70 17.40 18.45 17.55
Consolidated 18.23 18.74 19.99 18.77
_____________________________________________________________________________________
PLANT PRODUCTS
Production (thousands of barrels per day):
Domestic 3.1 2.1 2.9 2.0
North Sea .8 .9 .8 .9
_____________________________________________________________________________________
3.9 3.0 3.7 2.9
_____________________________________________________________________________________
Average price received (per barrel):
Domestic $11.22 12.53 14.79 12.45
North Sea 14.11 14.26 19.23 15.39
Consolidated 11.83 13.06 15.83 13.37
_____________________________________________________________________________________
NATURAL GAS
Production (millions of cubic feet per day):
Domestic 315.7 272.1 308.4 263.6
North Sea 27.0 28.3 32.2 33.1
CLAM Petroleum Company 41.3 44.3 45.3 52.2
_____________________________________________________________________________________
384.0 344.7 385.9 348.9
_____________________________________________________________________________________
Average price received (per MCF):
Domestic $ 1.99 2.23 2.41 2.54
North Sea 2.58 2.17 2.66 2.19
CLAM Petroleum Company 2.81 2.64 2.82 2.75
Consolidated 2.12 2.27 2.48 2.54
_____________________________________________________________________________________
1 Includes the Company's 50% equity interest in its unconsolidated affiliate, CLAM
Petroleum Company.
2 Before the elimination of intercompany transfers.
THE LOUISIANA LAND AND EXPLORATION COMPANY
OPERATING DATA (CONTINUED)
Three months ended Six months ended
June 30, June 30,
1997 1996 1997 1996
_____________________________________________________________________________________
GROSS WELLS DRILLED
Working Interest
Exploratory:
Oil 6 0 7 2
Gas 6 3 8 5
Dry 8 4 10 7
_____________________________________________________________________________________
20 7 25 14
_____________________________________________________________________________________
Development:
Oil 8 5 10 10
Gas 4 2 5 3
Dry - - - -
_____________________________________________________________________________________
12 7 15 13
_____________________________________________________________________________________
Total working interest 32 14 40 27
Royalty Interest 15 5 20 7
_____________________________________________________________________________________
Total wells 47 19 60 34
_____________________________________________________________________________________
NET WELLS DRILLED
Exploratory:
Oil 2.0 - 2.5 .7
Gas 2.6 1.1 3.4 2.1
Dry 3.6 1.6 4.5 2.5
_____________________________________________________________________________________
8.2 2.7 10.4 5.3
_____________________________________________________________________________________
Development:
Oil 1.1 .5 2.5 1.1
Gas .6 1.0 1.3 1.5
Dry - - - -
_____________________________________________________________________________________
1.7 1.5 3.8 2.6
_____________________________________________________________________________________
Total net wells 9.9 4.2 14.2 7.9
_____________________________________________________________________________________
/TABLE
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
Exhibit 10.1 - Credit Agreement dated as of June 7, 1997
Exhibit 10.2 - Merger Agreement, dated as of July 16,
1997, among Burlington Resources Inc., BR Acquisition
Corporation and The Louisiana Land and Exploration
Company (incorporated by reference to Appendix A to the
registrant's Joint Proxy Statement/Prospectus included in
the Schedule 14A filed with the Commission on July 31,
1997).
Exhibit 10.3 - Stock Option Agreement, dated as of July
16, 1997, between Burlington Resources Inc. and The
Louisiana Land and Exploration Company (incorporated by
reference to Appendix B to the registrant's Joint Proxy
Statement/Prospectus included in the Schedule 14A filed
with the Commission on July 31, 1997).
Exhibit 27 - Financial Data Schedules:
Quarter ended June 30, 1997
Quarter ended June 30, 1996 (restated)
(b) Reports on Form 8-K:
On July 17, 1997, the Company filed a Current Report on
Form 8-K which included a press release announcing that
the Company had entered into an agreement and Plan of
Merger dated July 16, 1997 among the Company, Burlington
Resources Inc. and BR Acquisition Corporation, a wholly
owned subsidiary of Burlington Resources Inc, pursuant to
which BR Acquisition Corporation will merge with and into
the Company.
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.
THE LOUISIANA LAND AND EXPLORATION COMPANY
(REGISTRANT)
By: /s/ J. N. WOOD
__________________________________________
J. N. WOOD
VICE PRESIDENT AND CONTROLLER
(PRINCIPAL ACCOUNTING OFFICER)
Dated: July 30, 1997