PART I
Item 1. Business
General
Unimar Company (the Company) was organized as a general
partnership in 1984 under the Texas Uniform Partnership Act. The
partners are LASMO (Ustar), Inc. (Ultrastar), a Delaware
corporation and an indirect, wholly owned subsidiary of LASMO plc
(LASMO), a public limited company organized under the laws of
England, and Unistar, Inc. (Unistar), a Delaware corporation and
a direct subsidiary of Union Texas Petroleum Holdings, Inc.
(UTPH), a Delaware corporation. UTPH is approximately 38 percent
owned by two partnerships controlled by an affiliate of Kohlberg
Kravis Roberts & Co. (KKR) with the remaining outstanding common
stock publicly held.
The Company's sole business is its ownership of ENSTAR
Corporation (ENSTAR) which, through its wholly-owned
subsidiaries, Virginia International Company (INTERNATIONAL) and
Virginia Indonesia Company (VICO), has a 23.125 percent working
interest in, and is the operator of, a joint venture (the Joint
Venture) for the exploration, development and production of oil
and natural gas (gas) in East Kalimantan, Indonesia, under a
production sharing contract (Production Sharing Contract or PSC)
with Perusahaan Pertambangan Minyak Dan Gas Bumi Negara
(Pertamina), the state petroleum enterprise of the Republic of
Indonesia. The majority of the revenue derived from the Joint
Venture results from the sale of liquefied natural gas (LNG).
Currently, the LNG is sold principally to utility and industrial
companies in Japan, Taiwan and Korea. See "The Joint Venture"
below.
The principal executive offices of the Company are at 1221
McKinney, Suite 600, Houston, Texas 77010 and its telephone
number is (713) 654-8550. A Management Board consisting of six
members, three appointed by each partner, exercises management,
budgeting and financial control of the Company. As of December
31, 1993, VICO, in its capacity as the Joint Venture operator,
had approximately 2,130 employees in the United States and
Indonesia. The Company presently does not have any other
employees. All aspects of the Company's business that are not
associated with the management of the Joint Venture, such as
operations, legal, accounting, tax and other management
functions, are supplied by employees of the partners in
accordance with management agreements.
The Company can give no assurance as to the future trend of
its business and earnings, or as to future events and
developments that could affect the Company in particular or the
oil industry in general. These include such matters as
environmental quality control standards, new discoveries of
hydrocarbons, and the demand for petroleum products.
Furthermore, the Company's business could be profoundly affected
by future events including price changes or controls, payment
delays, increased expenditures, legislation and regulations
affecting the Company's business, expropriation of assets,
renegotiation of contracts with foreign governments, political
instability, currency exchange and repatriation losses, taxes,
litigation, the competitive environment, and international
economic and political developments including actions of members
of the Organization of Petroleum Exporting Countries (OPEC). See
Item 7 - Management Discussion and Analysis of Financial
Condition and Results of Operations.
Description of the Company's Indonesian Participating Units
(a) Market information. The Company's Indonesian
Participating Units (IPUs) are listed for trading on the American
Stock Exchange under the symbol "UMR." The following table shows
the reported high and low sales prices of the IPUs on a quarterly
basis:
INDONESIAN PARTICIPATING UNITS' PRICE RANGE
First Qtr. Second Qtr. Third Qtr. Fourth
Qtr.
1993
High 9-1/8 10-1/4 9-3/4 9-1/2
Low 6-7/8 8-1/4 8-5/8 8-1/4
1992
High 8 6-1/2 7 7-5/8
Low 5 5-1/4 5-3/4 6-3/8
Source of prices: American Stock Exchange
(b) Holders. As of March 1, 1994, 10,778,590 IPUs were
outstanding and held by approximately 4,301 holders of record.
(c) Payments per Indonesian Participating Unit.
Period Payment Date Payment
First Quarter - 1992 June 1, 1992 0.35
Second Quarter - 1992 August 31, 1992 0.37
Third Quarter - 1992 November 30, 1992 0.54
Fourth Quarter - 1992 March 1, 1993 0.44
First Quarter - 1993 June 1, 1993 0.46
Second Quarter - 1993 August 30, 1993 0.28
Third Quarter - 1993 November 29, 1993 0.45
Fourth Quarter - 1993 March 1, 1994 0.38
Each IPU entitles the holder thereof to receive until
September 25, 1999, a payment (Participation Payment) for any
quarterly period equal to the product of (i) a fraction, the
numerator of which is 1 and the denominator of which is equal to
the number of IPUs outstanding on the last business day of such
quarterly period, multiplied by (ii) the amount by which
cumulative Net Cash Flow (as defined below) through the end of
such quarterly period exceeds the aggregate amount of all
preceding Participation Payments in respect of all IPUs. If Net
Cash Flow is zero or negative for any quarterly period, no
Participation Payment for that quarter will be made.
The amount of Net Cash Flow for any quarterly period is
equal to the product of (i) a fraction, the numerator of which is
equal to the number of IPUs outstanding on the last business day
of such quarterly period, and the denominator of which is
14,077,747, multiplied by (ii) 32 percent of (a) all cash
actually received in the United States by INTERNATIONAL and VICO
(for purposes hereof, the Special Subsidiaries) during such
quarterly period from their aggregate 23.125 percent interest in
the Joint Venture (or actually received by them outside the
United States if they voluntarily elect not to repatriate such
cash) minus (b) an amount equal to the sum of (A) the aggregate
amount of all accruals or expenditures made by the Special
Subsidiaries during such quarterly period as a result of their
interest in the Joint Venture, (B) foreign or domestic taxes paid
by the Special Subsidiaries, (C) any award, judgment or
settlement and related legal fees incurred by the Special
Subsidiaries, (D) certain operating expenses incurred by the
Special Subsidiaries, and (E) the amortization of capitalized
advances made by the Special Subsidiaries for certain major
capital expenditures, together with interest thereon.
Participation Payments for any quarterly period will be paid
60 days in arrears to holders of record on the date 45 days after
the last day of the period. Participation Payments of less than
$0.01 per IPU for any quarterly period will be accumulated and
paid when Participation Payments in any succeeding quarter,
together with previously unpaid amounts, exceed $0.01 per IPU.
Units of Measure Restatement
In order to better conform the Company's disclosures to
those of its partners, the definition of a Net Equivalent Cargo
and MCF have been revised. All relevant disclosures relating to
prior years have been restated to conform to these two new
definitions.
Net Equivalent Cargo (NEC)
In prior years one NEC equaled the quantity of LNG delivered
for the Joint Venture's 97.9 percent interest in a 1973 Sales
Contract shipment or any average of 2,873 BBTUs of gas. The
definition of a NEC has now been changed to the quantity of LNG
delivered in a 1973 Sales Contract shipment or an average of
2,942 BBTUs.
MMCF of Gas
In prior years an MMCF of gas was referred to as "wet gas"
which contained residual amounts of condensate. This definition
has been changed to "dry gas" after any residual condensate has
been removed. As an example, approximately 3.1 billion cubic
feet of wet gas are required to produce 2.9 trillion BTUs of LNG;
whereas, approximately 3.0 billion cubic feet of dry gas are
required to produce 2.9 trillion BTUs of LNG.
BUSINESS
The Joint Venture
The Joint Venture participants are INTERNATIONAL (15.625%),
VICO (7.5%), LASMO Sanga Sanga Limited (an indirect subsidiary of
LASMO formerly called Ultramar Indonesia Limited) (26.25%), Union
Texas East Kalimantan Limited (an indirect subsidiary of UTPH)
(26.25%), and Universe Gas & Oil Company, Inc. (a subsidiary of a
consortium led by Japan Petroleum Exploration Co., Ltd.) (4.375
%). In addition, Opicoil Houston, Inc. (an affiliate of the
Chinese Petroleum Corporation) holds a 16.67 percent equity
interest and a 20 percent voting interest, with the remaining
3.33 percent non-voting equity interest held by assignees of
Opicoil Houston, Inc. VICO in its capacity as the Joint Venture
operator conducts exploration and development activities within
the PSC area. The cost of such activities is funded by the Joint
Venture participants. The vote of participants holding 66-2/3
percent of the total ownership is generally required for approval
of significant matters pertaining to the Joint Venture.
Terms of Production Sharing Contract
Under a PSC with Pertamina that was amended and extended in
1990 until August 7, 2018, the Joint Venture is authorized to
explore for, develop, and produce petroleum reserves in an
approximate 1.4 million acre area in East Kalimantan. In
accordance with the requirements of the PSC, during 1991, the
Joint Venture selectively relinquished approximately 10 percent
of the PSC area. The Joint Venture must relinquish 10 percent of
the PSC area by April 23, 1994; 10 percent by August 7, 1998; 10
percent by December 31, 2000; 15 percent by December 31, 2002 and
15 percent by December 31, 2004. However, the Joint Venture is
not required to relinquish any of the PSC area in which oil or
gas is held for production. Additionally, pursuant to the terms
of the PSC, the Joint Venture, having produced 185 million
barrels of oil, paid Pertamina a $5 million non-cost recoverable
bonus in March 1993.
Under the PSC, the Joint Venture participants are entitled
to recover cumulative operating and certain capital costs out of
the crude oil, condensate and gas produced each year, and to
receive a share of the remaining crude oil and condensate
production and a share of the remaining revenues from the sale of
gas on an after-Indonesian tax basis. The method of recovery of
capital costs is a system of depreciation and amortization that
is similar to U.S. tax accounting methods. The share of revenues
from the sale of gas after cost recovery through August 7, 1998
will remain at 35 percent to the Joint Venture after Indonesian
income taxes and 65 percent to Pertamina. The split after August
7, 1998, will be 25 percent to the Joint Venture after Indonesian
income taxes and 75 percent to Pertamina for gas sales under the
1973 and 1981 LNG Sales Contracts, Korean carryover quantities
and the seven 1986 liquefied petroleum gas (LPG) Sales Contracts
(and any extensions thereto) to the extent that the gas to
fulfill these contracts is committed from the Badak or Nilam
fields; after August 7, 1998, all other LNG sales contract
revenues will be split 30 percent to the Joint Venture after
Indonesian income taxes and 70 percent to Pertamina. Based on
current and projected oil production, the revenue split from oil
sales after cost recovery through August 7, 2018 will remain at
15 percent to the Joint Venture after Indonesian income taxes and
85 percent to Pertamina. These revenue splits are based on
Indonesian income tax rates of 56 percent through August 7, 1998
and 48 percent thereafter.
In addition, the Joint Venture is required to sell out of
its share of production 8.5 percent (7.2 percent after August 7,
1998) of the total oil and gas condensate production from the
contract area for Indonesian domestic consumption. The sales
price for the domestic market consumption is $0.20 per barrel
with respect to fields commencing production prior to February
23, 1989. For fields commencing production after that date,
domestic market consumption is priced at 10 percent of the
weighted average price of crude oil sold from such fields.
However, for the first sixty consecutive months of production
from new fields, domestic market consumption is priced at the
official Indonesian Crude Price (ICP). The participants'
remaining oil and condensate production is generally sold in
world markets.
The Joint Venture has no ownership interest in the oil and
gas reserves. The Joint Venture has long-term supply agreements
with Pertamina for the supply of gas and petroleum gas to be
liquefied at a liquefaction plant owned by Pertamina at Bontang
Bay (the LNG Plant) and sold to certain buyers pursuant to sales
contracts. The Joint Venture, other participating production
sharing contractors and Pertamina together market the LNG and the
LPG produced at the LNG Plant and LPG facilities and, as to the
amounts allocable to the PSC, the Joint Venture and Pertamina
divide the net proceeds in accordance with the percentages set
out above.
Payment for LNG and LPG is made in U. S. dollars to a U. S.
bank as trustee for Pertamina, the Joint Venture, other
participating production sharing contractors and lenders that
have provided funds to build the LNG Plant and the LPG
facilities. The LNG Plant's processing costs, principal and
interest payable on borrowings from such lenders, transportation
costs, and certain other miscellaneous costs are deducted from
the gross LNG and LPG sales proceeds. The remaining amount
represents the net proceeds for gas delivered to the LNG Plant
and is divided among Pertamina, the Joint Venture, and the other
production sharing contractors in accordance with the terms of
their respective agreements.
Exploration and Development
From inception in 1972 up to and including December 31,
1993, the following wells were drilled in the East Kalimantan
contract area:
Total Completed
Field Wells Productive Dry Suspended
Location Drilled Wells Holes Wells
Badak 184 174 7 3
Nilam 154 154 - -
Semberah 53 49 4 -
Mutiara 44 37 6 1
Pamaguan 32 26 6 -
Wailawi 6 6 - -
Other 44 8 30 6
Totals 517 454 53 10
Two significant fields, Badak and Nilam, have been
discovered in the East Kalimantan area. The Badak field is in
the northeast portion of the East Kalimantan contract area, and
the Nilam field is located immediately south of the Badak field.
Total Indonesie and Indonesia Petroleum, Ltd. (the Total Group),
who are not parties to the Joint Venture but have interests in
the Nilam and Badak fields, are parties to unitization agreements
with the Joint Venture in both fields. All gas and condensate
from the Badak and Nilam fields and all oil from the Nilam field,
as well as all allowable costs incurred in connection therewith,
are deemed attributable to the Joint Venture and the Total Group
in the ratio of their respective participating interests under
the Badak and Nilam unitization agreements. VICO acts as
operator for the Joint Venture and the Total Group in both
fields. See "Business - The Joint Venture." The Joint Venture
is also producing from four additional fields in the East
Kalimantan area: Pamaguan, Mutiara, Semberah and Wailawi.
The tables below summarize completed exploratory and
development drilling from 1991 through 1993 for the East
Kalimantan contract area.
EXPLORATORY DRILLING
Wells Dry
Year Drilled Discoveries Holes
1991 2 1 1
1992 2 0 2
1993 3 0 3
Totals 7 1 6
DEVELOPMENT OR FIELD EXTENSION DRILLING
Completed
Wells For For For Dual Dry
Year Drilled Gas Oil Oil & Gas Holes
1991 37 30 3 4 -
1992 31 24 5 2 -
1993 31 25 1 3 2
Totals 99 79 9 9 2
Of 454 completed productive wells in the East Kalimantan
contract area, approximately 250 contain more than one completion
in the same bore hole.
Six wells were in progress as of December 31, 1993. This
includes wells that were drilled but not completed at the end of
1993. None of the suspended or "in-progress" wells are included
in the tables above.
The Company's share of the costs of the above wells ranged
from 18.53 percent to 23.125 percent.
The following table sets forth total gas liquefied and sold
as LNG, the Company's net share of such production (calculated on
a million cubic feet equivalency basis as described in Note b
below), average sales prices (excluding transportation costs) and
production (lifting) costs of such production for the years 1991
through 1993.
Years ended December 31, (a)
1993 1992 1991
(Restated)
Gas Production
for LNG (MMCF) (b) 637,847 621,600 579,001
Company's Net Share
(MMCF equivalency) (c) 80,873 77,264 78,598
Average Sales Price
per MCF (d) $2.75 $2.92 $3.07
Average Production (Lifting)
Cost per MCF $0.13 $0.14 $0.15
(a) All amounts appearing in this table are for dry gas. The
1992 and 1991 amounts were previously reported on a wet gas
basis and have been restated as dry gas.
(b) Represents the volumes of LNG delivered and sold to
purchasers which is measured by its British Thermal Unit
(BTU) content and, for purposes of this table, has been
converted to MMCF equivalents based on a ratio of
approximately 3.0 billion cubic feet (BCF) of gas required
at the plant to produce 2.9 trillion BTUs of LNG. The Gas
Production for LNG includes production attributable to
UNOCAL Indonesia Ltd., the Total Group and Pertamina. The
term "MMCF" refers to 1,000,000 cubic feet of gas measured
at 60 degrees Fahrenheit and 14.7 pounds per square inch of
pressure.
(c) The net share figures shown above have been calculated by
dividing the Company's total LNG revenues for each year by
the average price per MCF (in the form of LNG) received by
Pertamina for the sale of LNG during such year. The result
represents the MCF equivalent of the Company's LNG revenues.
(d) The sales price is based on the average sales price
(excluding transportation) per MMBTU of LNG received by
Pertamina. The term "MMBTU" refers to 1,000,000 British
Thermal Units. The sales price per MMBTU has been converted
to a price per MCF based on the conversion ratio referred to
in note (b) above. The term "MCF" refers to 1,000 cubic
feet of gas measured at 60 degrees Fahrenheit and 14.7
pounds per square inch of pressure.
The Company's production costs are small in relation to its
revenues because the Joint Venture's revenues under the LNG
contracts are net of costs associated with transporting and
converting the gas to LNG and shipping the LNG to the purchasers.
The costs, which are considered to be production costs, are those
costs incurred to operate and maintain wells and related
equipment and facilities.
During 1993, the Company's share of the Joint Venture's
expenditures was approximately $59 million, including $5 million
of exploration expenditures and $37 million of development
expenditures. In 1994, the Company's share of the Joint
Venture's expenditures is expected to total $56 million,
including $3 million of exploration expenditures and $35 million
of development expenditures. The 1994 budgeted expenditures
primarily reflect continued development drilling required to
maintain adequate gas deliverability.
Reserves
The Company files no reports which include estimates of oil
or gas reserves with any federal agency other than the Securities
and Exchange Commission.
The estimated proved reserves of gas and of oil and
condensate as of December 31, 1990, 1991, 1992 and 1993
attributable to the Joint Venture's interest in the PSC in East
Kalimantan were prepared by petroleum engineers employed by
LASMO, an affiliate of Ultrastar. Gross proved field reserves
are as follows:
Crude Oil and
Condensate Gas
Total Proved Reserves (000's barrels) (Dry MMCFs)
Dec. 31, 1990 (Gas restated) 149,194 7,294,804
Dec. 31, 1991 (Gas restated) 135,712 7,615,739
Dec. 31, 1992 (Gas restated) 146,055 7,436,171
Dec. 31, 1993 203,068 7,187,995*
* equivalent to approximately 6,966 trillion BTUs.
The Joint Venture, and thus the Company, has no ownership
interest in oil and gas reserves but rather has the right to
receive production and revenues from the sale of oil, condensate,
gas, LNG and LPG in accordance with the PSC and other agreements.
The Company has revised its method of disclosing all proved
and proved developed gas reserves from a wet gas basis to a dry
gas basis. This change has been effected to conform to the
reporting method used by the Company's partners. The Company's
estimates of its net share of proved developed and undeveloped
reserves, as of December 31 of each year since 1990, are included
in the Supplemental Financial Information in Item 8.
LNG Plant
Gas produced from the Joint Venture's interest in the PSC
reserves is liquefied at the LNG Plant, which is owned by
Pertamina and operated on a cost-reimbursement basis by a
corporation in which the Joint Venture owns a 20 percent
interest. The LNG Plant currently consists of six processing
units (trains) having a combined input capacity at year-end 1993
of approximately 2.6 billion cubic feet of gas per operating day
and a production capacity of approximately 626,000 barrels or
99,500 cubic meters of LNG and 28,000 barrels of condensate per
day. The five storage tanks at the LNG Plant have a total
capacity of 3.2 million barrels of LNG. Gas is supplied to the
plant through three pipelines (two 36 inch and one 42 inch) which
are connected to the central gas facilities at the Badak field,
35 miles south of the LNG Plant.
The LNG Plant has been developed in four phases. The
original facility, which consisted of two trains (Trains A and B)
and a dock, was constructed with financing arranged by Pertamina
with the Central Bank of the Republic of Indonesia, a consortium
of Japanese banks and a corporation owned substantially by the
Japanese LNG purchasers, and became fully operational in August
1977. Final payment on the loans was made in the first quarter
of 1990.
Expansion of the LNG Plant from two to four trains (Trains C
and D) was completed in 1983. Funding was arranged by Pertamina
with Japan Indonesia LNG Co., Ltd. (JILCO). Final payment on
this financing arrangement was made in the third quarter of 1993.
A fifth processing train (Train E) was completed in 1989 and
supplies LNG required for the Taiwan LNG Sales Contract with the
Chinese Petroleum Corporation (CPC), the state petroleum
enterprise of the Republic of China (Taiwan). Project financing
was arranged through a trustee borrowing with a consortium of
Japanese banks and is supported by revenues from such sales
contract, as well as in certain limited circumstances by portions
of other revenue streams. The financing contains two tranches,
with tranche A totalling $176.4 million at a fixed interest rate
of 11.5 percent, and tranche B totalling $117.6 million at a
floating interest rate initially of LIBOR plus 1 percent. The
financing is repayable in graduated quarterly payments over ten
years that began in the fourth quarter of 1990.
The sixth processing train (Train F) was completed in
November 1993 and will supply the LNG required for the LNG sales
contract signed in October 1990 with Osaka Gas, Tokyo Gas and
Toho Gas (the Buyers) for the sale of 2,020 trillion BTUs over a
twenty-year period commencing in 1994. In August 1991, Pertamina
and an international consortium of commercial banks completed
project financing of $750 million to fund the construction of
Train F and related support facilities at an interest rate of
LIBOR plus 1.25 percent. Financial support for the financing is
limited to revenues from such sales contract. The financing is
repayable over ten years in graduated quarterly payments
commencing in December 1994. Only $699 million of the $750
million project financing will be required to complete the
construction of Train F and its related support facilities.
As a result of the production performance of Train E,
Pertamina had undertaken modifications to Trains A through D
known as "debottlenecking." Trains C and D were modified in 1992
during regularly scheduled maintenance shutdowns. Likewise,
Trains A and B were modified in 1993 during regularly scheduled
maintenance shutdowns. Capacity tests on all four trains
exceeded design rates such that Trains A through D are now
capable of LNG production rates comparable to the most recently
completed Train F, an increase of 14 percent, or 22 cargoes in
total. The total cost of the Trains A through D debottlenecking
project amounted to $79 million. These costs were funded through
Package IV revenues (See description of Package IV beginning on
page 15).
With the completion of Train F and the debottlenecking
project, the expanded six train plant is expected to have the
capacity to deliver 275 cargoes per year.
LPG Facilities and Second Dock
The LPG processing facilities at the LNG Plant were
constructed concurrently with the fifth processing train. The
LPG facilities were completed in 1988, at a cost of approximately
$158 million. Financing was made available to Pertamina through
a consortium of Japanese banks. A significant portion of the LPG
sales proceeds is dedicated to the financing, which is repayable
through 1999.
A second dock facility at the LNG Plant is used for both LNG
and LPG deliveries. The portion of the second dock costs
attributable to the LPG trade was financed through the same
consortium of Japanese banks that financed the LPG processing
facilities at the LNG Plant. Financing for the LNG portion of
the second dock was provided by a trustee borrowing from Japanese
banks.
The table below sets forth information regarding the status
of the project financings incurred or arranged by Pertamina to
construct the LNG Plant:
Original
Principal/ Balance at Final Primary
Payment December 31, Payment Source of
Financing Amount 1993 Date Repayment
(000's) (000's)
Trains A&B
and 1st
Loading Dock $771,500 $ - - 1973 LNG Sales
Contract
Trains C & D 995,800 - - 1981 LNG Sales
Contract
Train E 294,000 217,560 2000 Taiwan LNG
Sales Contract
Train F and
Support
Facilities (a) 750,000 633,000 2004 Train F LNG
Sales Contract
Misc. Capital
Projects 42,700 - - 1973 LNG Sales
Contract (b)
2nd Loading Dock
& Train E
Support
Facilities 135,000 48,600 1995 1973 LNG Sales
Contract (b)
LPG Facilities 157,700 91,640 1999 LPG Sales
Contract
(a) Total financing required is not expected to exceed $699
million.
(b) Debt service is allocated among all of the gas producers
according to the quantity of gas delivered.
Marketing and Distribution of LNG
Certain information regarding deliveries of LNG from the LNG
Plant is set forth below:
BTUs Average
Number of LNG in Trillions Price Per
Tanker Liftings (Approximate) MMBTU
1991 . . . . . 197 564 $3.16
1992 . . . . . 211 606 $3.00
1993 . . . . . 216 621 $2.82
As a result of variations in LNG tanker capacity among the
various sales contracts, the measure of a net equivalent cargo
has been established. One net equivalent cargo equates to the
quantity of LNG delivered in a 1973 Sales Contract shipment or an
average of 2,942 BBTUs.
The following table sets forth information regarding the LNG
Plant share of the LNG Sales Contracts grouped together by the
Joint Venture's participating percentages in the sales contracts
(each such group being referred to as a "package"):
Remaining
LNG Sales 1993 Remaining Base LNG Price
Volumes Cargoes Cargoes Per MMBTU (a)
Package and Equity Interest TBTUs Gross/Net Gross/Net 12/31/93 2/25/94
(b) (b)
Package I - 97.9%
1973 LNG Sales Contract
Term: 1977 - 1999 647 63/60 220/215 $2.30 $2.42
Package II - 66.4%
1981 LNG Sales Contract
Term: 1983 -2003 1,578 57/38 542/356 $2.26 $2.37
Package IIIA - 50%
Korean Carryover Sales
Contract
Term: 1986 - 2006 194 5/2 66/33 $2.30 $2.42
Package IIIB - 29.6%
Taiwan LNG Sales Contract
Term: 1990 - 2009 1,451 29/9 458/146 $2.23 $2.35
Osaka and Toho
Terms: Various ranging from
1987 to 1999 19 7/2 6/2 $2.30 $2.42
Additional 1981 Sales
Contract cargoes
Term: 1990 - 2003 169 5/2 58/17 $2.26 $2.37
Package IV - 27.2% (c)
Train F LNG Sales
Contract 2,389 - 812/222 - $2.24
Term: 1994 - 2013
Korea II LNG Sales
Contract 1,130 - 384/104 - $2.25
Term: 1994 - 2014
Other LNG Sales Contracts
Terms: Various ranging
from 1990 - 2015 986 50/14 718/91 $2.30 $2.42
Totals 8,563 216/127 3,264/1,186
(a) Excludes transportation costs.
(b) The gross amounts represent the LNG Plant's deliveries, the net amounts represent the
Joint Venture's equity in such deliveries.
(c) In early January of 1994, Pertamina and the East Kalimantan producers reached final
agreement on Package IV revenue sharing percentages with the Joint Venture's
interest being 27.2064 percent. Included in 1993 are 1.9 net equivalent cargoes
which represent the adjustment from the interim revenue sharing percentage of 25
percent to the final Joint Venture share for all Package IV deliveries prior to
December 31, 1993.
Commencing in 1994, LNG is primarily sold under five long-
term sales contracts between Pertamina and buyers in Japan,
Taiwan and Korea. These contracts are the 1973 LNG Sales
Contract (Package I), the 1981 LNG Sales Contract (Package II),
the Taiwan LNG Sales Contract (included in Package IIIB), the
Train F LNG Sales Contract and the Korea II LNG Sales Contract
(both included in Package IV). The gas processed by the LNG
Plant is supplied from the Joint Venture's contract area as well
as other fields in which the Joint Venture has no interest.
LNG sales contracts and amendments thereto are executed
between Pertamina and the buyers for the sale and delivery of a
fixed quantity of BTUs of LNG at a price that reflects an LNG
element derived from a basket of Indonesian crude oil prices that
is recalculated monthly. A transportation charge is added to the
LNG element under all contracts except for Package II where the
buyers bear the risk of loss and the transportation costs. In
those instances when the seller bears the risk of loss during
shipment, the cargoes are insured. The buyers also bear the risk
of loss and transportation costs for cargoes under the Train F
LNG Sales Contract (included in Package IV), which commenced
deliveries in early 1994.
The LNG to be delivered under the sales contracts is
supplied from the LNG Plant and from a separate facility at Arun
in Sumatra (Arun Plant). The Joint Venture does not supply gas
to the Arun Plant or have any interest in revenues from the sale
of its product. The allocation of contract quantities between
the LNG Plant and the Arun Plant is determined by Pertamina.
Presently, all deliveries under the 1981 LNG Sales Contract
(Package II), the Taiwan LNG Sales Contract (included in Package
IIIB) and the Train F LNG Sales Contract (included in Package IV)
are exclusively supplied by the LNG Plant.
The Joint Venture and other gas producers in this area have
the opportunity to participate in each sales package. The Joint
Venture's equity interest in a sales package is based on its
share of gas reserves available for commitment to the package and
represents the percentage of gross revenues attributable to the
Joint Venture before deducting plant operating costs and debt
service.
In January of 1990, certain of the buyers under the 1973
Sales Contract agreed to increase their purchased commitments
during the years 1997 through 1999 by approximately 667 trillion
BTUs. The LNG Plant will provide 67.1 percent of the additional
quantities and the Arun Plant the remainder. The Joint Venture's
participation percentage for these quantities was finalized at
27.2064 percent in early January of 1994 after agreement with
Pertamina and the East Kalimantan producers.
In October of 1990, Pertamina signed an LNG sales contract
with Osaka Gas, Tokyo Gas, and Toho Gas (Train F LNG Sales
Contract) for the sale of at least 2,020 trillion BTUs over a
twenty-year period commencing in January 1994.
In May of 1991, Pertamina signed an LNG sales contract with
Korea Gas Corporation for the sale of at least 2,044 trillion
BTUs over a twenty-year period commencing in July 1994, at a
price similar to the LNG element of the 1973 LNG Sales Contract.
The LNG Plant will provide 50 percent and the Arun Plant 50
percent of the LNG requirements for the contract. In August of
1991, Pertamina signed a contract with Tokyo Gas for delivery of
six cargoes from the LNG Plant over two years commencing in 1992.
Three of the six cargoes were delivered in 1992 and the remaining
three were delivered in 1993. The contract price is similar to
the 1973 LNG Sales Contract price. The Joint Venture's
participation percentage for these contracts was finalized at
27.2064 percent in early January of 1994 after agreement with
Pertamina and the East Kalimantan producers.
In October and November of 1991, Pertamina signed agreements
with Osaka Gas and Toho Gas to increase deliveries in 1992 and
1993 by 69 cargoes, of which 51 cargoes would be shipped from the
LNG Plant. Of the cargoes to be supplied by the LNG Plant, 25
were shipped in 1992 and the remaining 26 were shipped in 1993.
These contracts were split between Package III and Package IV
sharing percentages.
In December of 1991, Pertamina entered into an LNG sales
contract with several Japanese buyers (the Medium City Gas
Companies) for the sale of 358 trillion BTUs over a twenty-year
period commencing in 1996. The LNG Plant will provide 50 percent
of the LNG requirements for the contract. The Joint Venture's
participation percentage for this contract was finalized at
27.2064 percent in early January of 1994 after agreement with
Pertamina and the East Kalimantan producers.
As a result of the sales agreements entered into by
Pertamina and expected spot sales, the Company anticipates that
the Joint Venture will ship approximately 135 net equivalent
cargoes in 1994.
Other Gas Sales - The Joint Venture is also obligated to
supply approximately 74 MMCF per day of gas to three local
fertilizer plants at a price of $1.00 per MMBTU subject to a
pipeline tariff. In addition, the Joint Venture is required to
supply approximately 5 MMCF per day of gas to the Balikpapan
refinery at a price of $1.49 per MMBTU.
Marketing and Distribution of LPG
Pertamina has individual sales contracts with seven Japanese
utility companies for the sale and delivery of 1,950,000 metric
tons per year of LPG through the year 1998, of which 315,000
metric tons, subject to Pertamina's right to increase or decrease
such amount, will be produced by the LPG facilities at the LNG
Plant. In 1993, 23 cargoes, including spot sales, totaling
453,000 metric tons were shipped to Japan. The first 285,000
metric tons of LPG sold under the contract were sold at the
weighted average price for all LPG imported into Japan, except
Indonesia and Abu Dhabi, plus $3 per ton. The next 168,000
metric tons of LPG were sold at the aforementioned price plus a
premium of $20 to $22 per metric ton. The LPG is extracted from
the LNG stream and stored at facilities at the LNG Plant. Based
on dedicated reserves, the Joint Venture is allocated 29.6
percent of the revenues from the first 385,000 metric tons sold
and 27.2 percent for sales in excess of 385,000 metric tons per
year, after deducting LPG-related operating costs and debt
service.
Marketing of Oil and Condensate
Each party to the Joint Venture and Pertamina are entitled
to take their respective shares of oil and condensate in kind and
to market such shares separately. The Company, through
affiliates of Ultrastar and Unistar, markets its share of oil and
condensate f.o.b. Santan Terminal, in East Kalimantan,
independently of Pertamina and the other Joint Venture
participants. The Santan Terminal (operated by UNOCAL Indonesia
Ltd.) is used for storing and loading oil produced by the Joint
Venture.
The Company's percentage share of the Joint Venture's oil
and condensate, except for that sold to Pertamina for Indonesian
domestic consumption, is sold at ICP. Prior to July 1, 1993, the
price for crude and condensate sales reflected world market
conditions at the time of sale. The sales price for the domestic
market consumption is $0.20 per barrel with respect to fields
commencing production prior to February 23, 1989. For fields
commencing production after that date, domestic market
consumption is priced at 10 percent of the weighted average price
of crude oil sold from such fields. However, for the first sixty
consecutive months of production from new fields, domestic market
consumption is priced at ICP.
Substantially all of the oil and condensate currently being
produced by the Joint Venture from the PSC contract area is being
produced from the Badak, Nilam, Mutiara and Semberah fields. The
Company's average sales prices and production (lifting) costs for
1991 through 1993 are:
Years ended December 31,
1993 1992 1991
Total Oil and
Condensate Sales
(barrels) (a) 20,905,232 18,633,441 15,089,945
Company's Net Share
(barrel equivalency) (a) 1,928,005 1,804,511 1,337,349
Average Sale Price - f.o.b.
Indonesia (per barrel) (b) $18.31 $20.65 $20.59
Average Production (Lifting)
Cost (per barrel) $0.77 $ 0.80 $ 0.84
(a) The total oil and condensate sales include production
attributable to other contractors' shares of unitized
operations in the Badak and Nilam fields. See "Exploration
and Development." The net share figures shown above have
been calculated by dividing the Company's total oil revenues
for each year by the average price per barrel received for
sale of oil during such year. The result represents the
barrel equivalent of the Company's oil revenues.
(b) Excludes domestic consumption sales. Also excluded are
gains or losses incurred on the sale of the Company's share
of oil, which resulted in marketing gains/(losses) of
$(0.32), $(0.02) and $0.07 per barrel in 1993, 1992 and
1991, respectively. Effective July 1, 1993, the Company is
no longer exposed to marketing gains/(losses) incurred on
the sale of its share of oil and condensate.
The Joint Venture's sales of oil and condensate averaged
approximately 48,600 barrels per day (BOPD) during 1993, compared
to approximately 42,700 BOPD during 1992.
Competition and Risks
Indonesian oil competes in the world market with oil
produced from other nations. Indonesia is a member of OPEC, and
any OPEC-imposed restrictions on oil or LNG exports in which
Indonesia participates could have a material adverse effect on
the Company.
In addition to the LNG being sold from the Arun Plant, LNG
plants in the Middle East, Australia, Malaysia, or elsewhere may
provide competition for sales of any additional Joint Venture LNG
to Japanese and other markets, beyond the amount under current
contracts.
The Joint Venture's activities in Indonesia are subject to
risks common to foreign operations in the oil and gas industry,
including political and economic uncertainties, the risks of
cancellation or unilateral modification of contract rights,
operating restrictions, currency repatriation restrictions,
expropriation, export restrictions, increased taxes and other
risks arising out of foreign governmental sovereignty over areas
in which the Joint Venture's operations are conducted. The
Company's foreign operations and investment may also be subject
to the laws and policies of the U. S. affecting foreign trade,
investment and taxation that could affect the conduct and
profitability of those operations.
All of the Company's oil and gas activities are subject to
the risks normally incident to exploration for and production of
oil and gas, including blowouts, cratering and fires, each of
which could result in damage to life and property. Production
from the LNG Plant, which is the source of most of the Company's
revenues, is subject to the risks associated with maintaining and
operating a complex, technologically intensive processing plant,
including the risks of equipment failures, fire and explosion.
To the extent that the seller of the LNG produced by the LNG
Plant bears the risk of loss of cargoes, the seller is subject to
the usual risks of maritime transportation, including adverse
incidents arising from loading and unloading cargoes. In
accordance with customary industry practices, the Company carries
insurance against some, but not all, of these risks. Losses and
liabilities arising from such events would reduce revenues and
increase costs of the Company to the extent not covered by
insurance.
Item 2. Properties
See Item 1. Business.
Item 3. Legal Proceedings
The Company has pending litigation arising in the ordinary
course of its business. However, none of the litigation is
expected to have a material adverse effect on the Company's
financial position or results of operations.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5. Market for Registrant's Common Equity and Shareholder
Matters
Refer to Item 12 for a description of the Registrant's Equity.
Refer to Item 1 for a description of the Indonesian Participating
Units.
Item 6. Selected Financial Data
The following financial data was derived from the audited
consolidated financial statements of the Company and should be
read in conjunction with the consolidated financial statements
and related notes included elsewhere herein.
1993 1992 1991 1990 1989
(millions of dollars)
Operating revenues $201 $206 $208 $203 $146
Earnings (loss) from
continuing operations 30 24 18 7 (15)
Net earnings 30 24 18 11 11
Total assets 449 472 500 519 608
Debt and security
subject to
mandatory redemption 33 32 31 50 111
See Note 2(e) to Notes to Consolidated Financial Statements.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
Cash flow from operations amounted to $81.5 million in 1993,
compared to 1992 cash flow of $93.4 million. Capital
expenditures of $40.1 million were primarily spent on continued
development drilling in the Badak, Nilam, Mutiara and Semberah
fields as was the case in 1992. Net capital distributions in
1993 to the partners from the Company were $41.1 million (1992,
$58.2 million).
On January 5, 1994, the Company redeemed its 8-1/4 percent
convertible subordinated guaranteed debentures, originally due in
1995, in the amount of $36.4 million at a loss of $3.1 million.
The redemption was funded through contributions from the partners
of the Company.
The Company's ability to generate cash is primarily
dependent on the prices it receives for the sale of LNG, and to a
lesser extent, the sale of crude oil and LPG. In the event cash
generated from operations is not sufficient to meet capital
investment and other requirements, any shortfall will be funded
through additional cash contributions by the partners. The
Company cannot predict with any degree of certainty the prices it
will receive in 1994 and future years for its crude oil and LNG.
The Company's financial condition, operating results and
liquidity will be materially affected by any significant
fluctuations in sales prices.
LNG sales are made under five principal long-term contracts
and several short- and medium-term contracts with Japanese,
Korean and Taiwanese industrial and utility companies. Sales
pursuant to the fourth long-term contract (Train F LNG Sales
Contract) commenced in the first quarter of 1994; sales under the
fifth long- term contract will commence in July 1994. The long-
term contracts contain take-or-pay provisions that generally
require that the purchasers either take the contracted quantities
or pay for such quantities if not taken; such provisions tend to
support the Company's ability to generate cash. During 1993, 127
net equivalent cargoes were shipped, of which 107 were under
these long-term contracts. In 1994, the Company anticipates
shipping approximately 135 net equivalent cargoes.
The sixth processing train (Train F) was completed in
November 1993 and will supply the LNG required for the fourth
long-term LNG sales contract signed in October 1990 with Osaka
Gas, Tokyo Gas and Toho Gas for the sale of at least 2,020
trillion BTUs over a twenty-year period commencing in 1994.
In January of 1990, certain of the buyers under the 1973
Sales Contract agreed to increase their purchased commitments
during the years 1997 through 1999 by approximately 667 trillion
BTUs. The LNG Plant will provide 67.1 percent of the additional
quantities and the Arun Plant the remainder.
In May of 1991, Pertamina signed an LNG sales contract with
Korea Gas Corporation for the sale of at least 2,044 trillion
BTUs over a twenty-year period commencing in July 1994, at a
price similar to the LNG element of the 1973 LNG Sales Contract.
The LNG Plant will provide 50 percent and the Arun Plant 50
percent of the LNG requirements for the contract.
In December of 1991, Pertamina entered into an LNG sales
contract with several Japanese buyers (the Medium City Gas
Companies) for the sale of 358 trillion BTUs over a twenty-year
period commencing in 1996. The LNG Plant will provide 50 percent
of the LNG requirements for the contract.
The debottlenecking of Trains A through D was completed in
1993. Capacity tests on all four trains exceeded design rates
such that the four trains are now capable of LNG production rates
comparable to the recently completed Train F, an increase of 14
percent or 22 cargoes in total.
The Company's operating and capital expenditures are
directed toward the Joint Venture. Capital expenditures of the
Joint Venture relate to the exploration and development of the
oil and gas fields. In 1994, the Company's share of the Joint
Venture expenditures is expected to total $56 million, including
$3 million of exploration expenditures and $35 million of
development expenditures. The 1994 budgeted expenditures
primarily reflect continued development drilling required to
maintain gas deliverability.
The Company can give no assurance as to the future trend of
its business and earnings, or as to future events and
developments that could affect the Company in particular or the
oil industry in general. These include such matters as
environmental quality control standards, new discoveries of
hydrocarbons and the demand for petroleum products. Furthermore,
the Company's business could be profoundly affected by future
events including price changes or controls, payment delays,
increased expenditures, legislation and regulations affecting the
Company's business, expropriation of assets, renegotiation of
contracts with foreign governments, political instability,
currency exchange and repatriation losses, taxes, litigation, the
competitive environment and international economic and political
developments including actions of members of the Organization of
Petroleum Exporting Countries (OPEC).
The Company's revenues are predominately based on the market
price of crude oil, which is denominated in U. S. dollars.
Certain operating costs, taxes and capital costs represent
commitments settled in foreign currency. Currency exchange rate
fluctuations on transactions in currencies other than U. S.
dollars are recognized as adjustments to the U. S. dollar cost of
the transaction.
The Company is unaware of any unrecorded environmental
claims as at December 31, 1993 which would have a material impact
upon the Company's financial condition or operations.
Results of Operations
1993 Compared to 1992
Net earnings for the year 1993 were $30.5 million as
compared to $23.7 million in 1992. Cash flow from operations for
1993 was $81.5 million (1992, $93.4 million).
Oil and gas production revenues for 1993 were $200.6
million, or lower by $5.3 million when compared to 1992 revenues
of $205.9 million. The increase in the Joint Venture's share of
delivered LNG sales volumes was not sufficient to offset a
decline in the average LNG sales price. The quantity of LNG
delivered from the LNG Plant was 621 trillion BTU's (216 cargoes)
in 1993 as compared to 606 trillion BTU's (211 cargoes) in 1992.
The Joint Venture's interest in the LNG delivered was 369
trillion BTU's (127 net equivalent cargoes) in 1993 as compared
to 363 trillion BTU's (124 net equivalent cargoes) in 1992. The
average LNG sales price, excluding transportation charges,
declined to $2.82 per million BTU's in 1993 as compared to $3.00
per million BTU's in 1992. Crude oil sales volumes of 1.93
million barrels were higher by 7 percent in 1993 as compared to
1992's 1.8 million barrels, while the average crude oil realized
sales price of $17.99 per barrel was lower than 1992 by $2.64 per
barrel.
Production costs of $18.8 million were lower than 1992 costs
by about $6.8 million. This improvement in production costs was
caused by a provision included in 1992 related to the Company's
prior years' windfall profits tax liability. After a re-
evaluation of the ultimate exposure on this tax liability, the
Company has reversed $3.5 million as being no longer required.
At the same time, the Company has provided an offsetting amount
for the potential exposure in a royalty dispute.
Depletion , depreciation and amortization of $52.7 million
was lower than 1992 by $4.6 million primarily as a result of a
lower depletion rate associated with the increase in proved
reserves that more than offset the higher level of LNG volumes
delivered.
Exploration costs, including dry holes, of $4.9 million were
lower than 1992 by $4.2 million due to a lower level of seismic
and dry hole costs.
General and administrative expenses of $1.8 million were
$1.0 million lower than last year's $2.8 million due to the
absence of certain non-recurring charges. Both interest expense
and interest income were in line with last year's results. Other
income in 1992 included a non-recurring benefit due to the
favorable disposition of a legal action.
The effective tax rates for 1993 and 1992 were 74 percent
and 78 percent respectively. These rates were the aggregate of
Indonesian source income taxed at a 56 percent rate, and certain
expenses attributable to the Unimar activities which are not
deductible in the partnership.
1992 Compared to 1991
Net earnings for 1992 were $23.7 million as compared to
$18.3 million in 1991. Revenues of $205.9 million in 1992 were
lower by $1.9 million when compared to last year as an increase
in the Joint Venture's share of delivered LNG volumes was not
sufficient to offset a decline in the average LNG price. The
quantity of LNG delivered from the LNG Plant increased to 606
trillion BTUs (211 cargoes) in 1992 from 564 trillion BTUs (197
cargoes) in 1991. The Joint Venture's interest in the LNG
delivered was 363 trillion BTUs (126 net equivalent cargoes) in
1992 as compared to 354 trillion BTUs (123 net equivalent
cargoes) in 1991. The average unit LNG price, excluding delivery
charges, declined to $3.00 per million BTUs in 1992 from $3.16
per million BTUs in 1991. The average realized crude oil price
decreased slightly to $20.63 per barrel in 1992 from $20.64 per
barrel in 1991, while crude oil sales volumes increased 36
percent to 1.8 million barrels.
Production costs of $25.6 million increased $5.0 million and
included an amount related to a proposed adjustment by the U. S.
federal tax authorities relating to the Company's prior years'
windfall profit tax liability.
Depletion, depreciation and amortization of $57.3 million
declined $4.2 million principally as a result of a lower
depletion rate associated with an increase in proved developed
reserves that more than offset the impact of the higher level of
volumes delivered.
Exploration costs of $9.1 million decreased $0.6 million
over last year's costs.
General and administrative expenses of $2.8 million were
$0.3 million lower than last year's level. Interest expense of
$4.7 million declined $5.0 million primarily as a result of the
payoff of an Indonesian Production Payment bank loan in 1991.
Interest income of $0.6 million was $0.7 million lower than 1991
primarily as a result of declining interest rates on short-term
deposits.
Other income of $1.2 million in 1992 principally represented
the reversal of a provision due to a favorable disposition of
certain legal action. In 1991, other (expense) of $0.9 million
was mainly a provision for residual domestic operations costs.
The effective tax rates relating to continuing operations
for the 1992 and 1991 periods were 78 percent and 82 percent
respectively. These rates were the aggregate of Indonesian
source income taxed at a 56 percent rate and certain expenses
attributable to Unimar activities not deductible in the
partnership. The decrease in the effective rate is principally
the result of decreased non-deductible interest expense.
In 1992, the Company adopted Financial Accounting Standards
Board (FASB) Statement No. 109, "Accounting for Income Taxes".
The effect of adopting Statement 109 was to decrease net income
by $0.3 million and $2.6 million for the years ended December 31,
1991 and 1990 respectively. Refer to Note 2(e) of the Notes to
Consolidated Financial Statements for further discussion of the
effects of this adoption.
In 1992, the Company adopted FASB Statement No. 106,
"Employers' Accounting for Postretirement Benefits Other Than
Pensions". The effect of adopting the new rules did not
significantly impact the Company's profits. Postretirement
benefit costs for 1991 and 1990, which were recorded on a cash
basis, have not been restated.
Item 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT AUDITORS
To The Partners of
Unimar Company
We have audited the accompanying consolidated balance sheets of
Unimar Company and subsidiaries as of December 31, 1993 and 1992,
and the related consolidated statements of earnings, cash flows
and partners' capital for each of the three years in the period
ending December 31, 1993. Our audits also included the financial
statement schedules listed in the Index at Item 14(a). These
financial statements and schedules are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
As more fully described in the notes to the consolidated
financial statements, the Company has material transactions with
its partners and affiliates.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of Unimar Company and subsidiaries at December
31, 1993 and 1992, and the consolidated results of their
operations and their cash flows for each of the three years in
the period ended December 31, 1993, in conformity with generally
accepted accounting principles. Also, in our opinion, the
related financial statement schedules, when considered in
relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth
therein.
Houston, Texas
February 28, 1994
UNIMAR COMPANY AND SUBSIDIARIES
Consolidated Balance Sheet
December 31, 1993 and 1992
(Thousands of dollars)
1993 1992
ASSETS
Current assets:
Cash and cash equivalents $ 8,284 $ 6,461
Accounts and notes receivable 11,604 15,931
Inventories 10,886 15,143
Other current assets 2,381 1,051
Total current assets 33,155 38,586
Property, plant and equipment, at cost:
Oil and gas properties
(successful efforts method) 991,901 955,299
Other 3,283 3,431
995,184 958,730
Less: accumulated depreciation and depletion 580,807 528,043
Net property, plant and equipment 414,377 430,687
Other assets 1,252 2,421
$448,784 $471,694
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Current maturities of long term debt $ 33,292 $ -
Accounts payable 3,229 9,265
Advances from joint venture partners 3,589 2,063
Accrued liabilities 9,314 14,035
Income and other taxes 19,280 22,921
Total current liabilities 68,704 48,284
Long-term debt - 31,818
Deferred income taxes 167,206 170,371
Other liabilities 10,048 7,642
Partners' capital 282,826 293,579
Less: demand notes receivable 80,000 80,000
202,826 213,579
$448,784 $471,694
See accompanying Notes to Consolidated Financial Statements.
UNIMAR COMPANY AND SUBSIDIARIES
Consolidated Statement of Earnings
Years ended December 31, 1993, 1992 and 1991
(Thousands of dollars)
1993 1992 1991
Oil and gas production revenues $200,588 $205,897 $207,846
Production costs 18,751 25,600 20,557
Depletion, depreciation and
amortization 52,710 57,275 61,491
Exploration costs including dry holes 4,947 9,066 9,634
Operating profit 124,180 113,956 116,164
General and administrative
expenses (1,778) (2,819) (3,143)
Interest expense (4,542) (4,701) (9,707)
Interest income 309 605 1,330
Other income (expense) 18 1,236 (915)
Earnings before income taxes 118,187 108,277 103,729
Income tax expense (benefit)
Current 90,876 90,121 91,074
Deferred (3,164) (5,520) (5,599)
87,712 84,601 85,475
Net earnings $ 30,475 $ 23,676 $ 18,254
See accompanying Notes to Consolidated Financial Statements.
UNIMAR COMPANY AND SUBSIDIARIES
Consolidated Statement of Cash Flows
Years ended December 31, 1993, 1992 and 1991
(Thousands of dollars)
1993 1992 1991
Net earnings $ 30,475 $ 23,676 $ 18,254
Adjustments to reconcile to net cash
provided by operating activities:
Depletion, depreciation and
amortization 53,087 57,622 61,805
Deferred income taxes (3,164) (5,520) (5,599)
Exploratory dry hole costs 3,365 6,444 9,201
Interest accretion 1,473 1,294 1,130
LNG price refund - - (212)
(Increase) Decrease in operating
receivables 4,327 (6,153) 3,756
(Increase) Decrease in inventories 4,257 4,372 (4,368)
Increase (Decrease) in operating
payables and accruals (14,526) 10,880 (13,525)
Increase in other operating assets
and liabilities 2,245 789 854
Other - - (32)
Net cash provided by operating
activities 81,539 93,404 71,264
Investment activities:
Capital expenditures (40,142) (39,217) (55,849)
Net cash used in investing activities (40,142) (39,217) (55,849)
Financing activities:
Capital contributions (distributions) -
net (41,100) (58,240) 62,110
Debt repaid - - (78,925)
Redemption of ENSTAR Indonesia, Inc.
participating preferred stock - - (1,375)
Net cash used in financing activities (41,100) (58,240) (18,190)
Increase (Decrease) in advances from
joint venture partners 1,526 165 (3,268)
Net increase (decrease) in cash and
cash equivalents 1,823 (3,888) (6,043)
Cash and cash equivalents at beginning
of year 6,461 10,349 16,392
Cash and cash equivalents at end
of year $ 8,284 $ 6,461 $ 10,349
IPU distributions paid $ 17,569 $ 17,352 $ 19,139
Interest paid $ 3,072 $ 3,405 $ 7,613
Income taxes paid $ 88,787 $ 83,473 $ 98,015
See accompanying Notes to Consolidated Financial Statements.
UNIMAR COMPANY AND SUBSIDIARIES
Consolidated Statement of Changes in Partners' Capital
Years ended December 31, 1993, 1992 and 1991
(Thousands of dollars)
Ultrastar Unistar,
Inc. Inc. Total
Balance, January 1, 1991 $117,773 $129,032 $246,805
Contributions 33,055 33,055 66,110
Cash distributions (2,000) (2,000) (4,000)
Redemption of subsidiary's
preferred stock 1,253 1,254 2,507
ENSTAR pension liability
adjustment (658) (659) (1,317)
Net earnings 9,127 9,127 18,254
Balance, December 31, 1991 158,550 169,809 328,359
Contributions 7,480 7,480 14,960
Cash distributions (36,600) (36,600) (73,200)
ENSTAR pension liability
adjustment (108) (108) (216)
Net earnings 11,838 11,838 23,676
Balance, December 31, 1992 141,160 152,419 293,579
Contributions 13,550 13,550 27,100
Cash distributions (34,100) (34,100) (68,200)
ENSTAR pension liability
adjustment (64) (64) (128)
Net earnings 15,238 15,238 30,476
Balance, December 31, 1993 $135,784 $147,043 $282,827
See accompanying Notes to Consolidated Financial Statements.
/TABLE
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(in thousands of dollars unless otherwise indicated)
(1) THE COMPANY
Unimar Company (the Company) is a general partnership
organized under the Texas Uniform Partnership Act, whose
partners are Unistar, Inc., a Delaware corporation and a
direct subsidiary of Union Texas Petroleum Holdings, Inc.
(UTPH), a Delaware corporation, and LASMO (Ustar), Inc.
(Ultrastar), a Delaware corporation and an indirect wholly-
owned subsidiary of LASMO plc (LASMO), a public limited
company organized under the laws of England. Each partner
shares equally in the Company's net earnings, distributions
and capital contributions.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Presentation
The Company's consolidated financial statements include
the accounts of the Company and its subsidiaries
including its proportionate share of the activities of
an Indonesian joint venture (the Joint Venture). All
significant intercompany accounts and transactions have
been eliminated.
(b) Inventories
Inventories primarily consist of materials and supplies
and are generally priced at the lower of cost (moving
average cost method) or net realizable value.
(c) Accounting for Oil and Gas Properties
Oil and gas exploration, development and production
activities are accounted for by the successful efforts
method of accounting. Under this method of accounting,
the cost of acquiring undeveloped oil and gas leasehold
acreage, including lease bonuses, brokers' fees and
other related costs are capitalized. Provisions for
impairment of undeveloped oil and gas leases are based
on periodic evaluation and exploratory experience.
Costs to drill and equip exploratory wells that find
proved reserves are capitalized while costs associated
with unsuccessful exploratory wells are expensed.
Other exploratory expenditures, including geological
and geophysical costs and annual lease rentals are
expensed as incurred. Costs incurred to drill and equip
productive wells, including development dry holes and
related production facilities are capitalized.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(c) Accounting for Oil and Gas Properties (continued)
Depreciation, depletion, and amortization of successful
oil and gas exploration wells and all development costs
are determined under the unit-of-production method
based on estimated recoverable proved developed
reserves. Leasehold costs of producing properties are
depleted on the unit-of-production method based on
estimated proved developed and undeveloped reserves.
The Company generally provides for depreciation of
other property, plant and equipment on a straight-line
method over the estimated useful life of the assets.
The range of rates used to calculate depreciation is 2-
1/2 percent to 11 percent on buildings and 3 percent to
33-1/3 percent for other property items.
(d) LNG Revenue Recognition
The Company recognizes its share of liquefied natural
gas (LNG) revenues net of Pertamina's plant operating
costs, transportation charges and project debt service.
(e) Income and Other Taxes
The Company is a partnership and, therefore, does not
pay income taxes. Since the Company's subsidiaries are
corporations, income taxes included in the accompanying
financial statements represent the domestic and foreign
taxes applicable to such entities.
The Company's subsidiary, ENSTAR Corporation (ENSTAR),
and its subsidiaries file a consolidated Federal
corporate income tax return.
Certain income and expense items are recorded during
different periods for financial statement and income
tax purposes. Deferred income taxes are provided for
these differences.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(e) Income and Other Taxes (continued)
The Company follows the Statement of Financial
Accounting Standards No. 109 (Statement 109),
"Accounting for Income Taxes." Under Statement 109,
the liability method is used in accounting for income
taxes. Under this method, deferred tax assets and
liabilities are determined based on differences between
financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax
rates and laws that will be in effect when the
differences are expected to reverse. An impairment
evaluation, with reserves recorded as necessary for any
tax benefit not expected to be realized, is required of
deferred tax assets. A current tax expense or benefit
is recognized for estimated taxes payable or refundable
on tax returns for the current year.
(f) Concentrations of Credit Risk
Financial instruments which may subject the Company to
concentrations of credit risk consist principally of
short-term investments and trade receivables. The
Company's excess cash is invested in time deposits with
major banks. Thesedeposi ts are purchased at a
maturity of three months or less, and have minimal
risk.
The Company's receivables consist primarily of the
revenues derived from the sale of LNG under long-term
contracts with utility and industrial companies in
Japan, Taiwan and Korea. The buyers of the LNG make
payment in United States dollars to a U.S. bank as
trustee for the Joint Venture and other parties. The
trustee, after deducting plant operating costs,
transportation charges and project debt service from
the gross LNG sales proceeds, distributes the net
proceeds to the Joint Venture participants and other
parties. The Company's trade receivables at December
31, 1993 result principally from sales of LNG and oil
and are considered current and collectible, and
collateral is not required to secure such receivables.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(g) Fair Value of Financial Instruments
The Company has various types of financial instruments
consisting of cash and cash equivalents, accounts
receivable, accounts payable, and accrued liabilities.
The carrying amount approximates fair value because of
the short maturity of these instruments.
(h) Foreign Currency
The functional currency for translating the accounts of
foreign subsidiaries is the U. S. dollar. Transaction
gains and losses resulting from the effect of exchange
rate fluctuations on transactions in currencies other
than the functional currency are included in the
determination of net income.
(3) INDONESIAN OIL AND GAS PROPERTIES
The Company, through its subsidiaries, has a 23.125 percent
interest in, and is the operator of, the Joint Venture that
has certain oil and gas exploration and production rights in
Indonesia through a Production Sharing Contract (PSC) which
was amended and extended in 1990 until August 7, 2018 with
Pertamina, the state petroleum enterprise of the Republic of
Indonesia.
Virginia Indonesia Company (VICO), a subsidiary of the
Company, is the operator of the Joint Venture and is
responsible for conducting exploration and development
activities within the PSC area. The cost of such activities
is funded by the Joint Venture partners to VICO. In
addition to operating management responsibility, the
operator acts as a custodian of Joint Venture cash received
from its partners until disbursed in payment of operating
and capital expenditures. At December 31, 1993 and 1992,
cash and cash equivalents included $3,589 and $2,063,
respectively, advanced from the other Joint Venture
partners.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(3) INDONESIAN OIL AND GAS PROPERTIES (continued)
In addition, other subsidiaries of UTPH and LASMO each own a
26.25 percent interest in the Joint Venture. The PSC
permits the Joint Venture to recover their costs of
exploration, development and production - including general
and administrative expenses - from oil and gas revenues as
follows: capital costs are based on recoverable double-
declining balance depreciation over various useful lives,
which average fourteen years; non-capital costs are
recovered in the year incurred. The Joint Venture, and thus
the Company, has no ownership interest in oil and gas
reserves but rather receives revenues from the sale of oil,
condensate, LPG and LNG in accordance with the PSC. The
Joint Venture is required to sell out of its share of
production 8.5 percent (7.2 percent after August 7, 1998) of
the total oil and gas condensate production from the
contract area for Indonesian domestic consumption. Such
amounts were purchased for domestic use in 1993, 1992 and
1991. The sales price for the domestic market consumption
is $0.20 per barrel with respect to fields commencing
production prior to February 23, 1989. For fields
commencing production after that date, domestic market
consumption is priced at 10 percent of the weighted average
price of crude oil sold from such fields. However, for the
first sixty consecutive months of production from new
fields, domestic market consumption is priced at the
official Indonesian crude price. The Semberah field which
commenced production in December 1991 is exempt from the
domestic obligation pricing until December 1996. In
addition, the share of revenues from the sale of gas after
cost recovery through August 7, 1998, will remain at 35
percent to the Joint Venture after Indonesian income taxes
and 65 percent to Pertamina. The split after August 7,
1998, will be 25 percent to the Joint Venture after
Indonesian income taxes and 75 percent to Pertamina for gas
sales under the 1973 and 1981 LNG Sales Contracts, Korean
carryover quantities and seven 1986 LPG Sales Contracts to
the extent that the gas to fulfill these contracts is
supplied from the Badak or Nilam fields; after August 7,
1998, all other LNG sales contract revenues will be split 30
percent after Indonesian income taxes to the Joint Venture
and 70 percent to Pertamina. Based on current and projected
oil production, the revenue split from oil sales after cost
recovery through August 7, 2018, will remain at 15 percent
to the Joint Venture after Indonesian income taxes and 85
percent to Pertamina. These revenue splits are based on
Indonesian income taxes of 56 percent through August 7,
1998, and 48 percent thereafter.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(3) INDONESIAN OIL AND GAS PROPERTIES (continued)
Pertamina currently sells liquefied natural gas to Japanese,
Korean and Taiwanese utility and industrial customers
primarily under five long-term contracts that expire in
1999, 2003, 2009, 2013 and 2014, respectively. Contracted
sales of LNG to these customers approximated 73 percent, 75
percent, and 74 percent of the Company's revenues in 1993,
1992 and 1991, respectively.
Pertamina began deliveries of gas in the first quarter of
1994, under the terms of a new twenty-year gas contract with
certain Japanese buyers. The contract calls for delivery of
at least 2,020 trillion BTUs which will settle among the
East Kalimantan producers as a Package IV contract. During
1994, the Company expects the Joint Venture to deliver
approximately 106 trillion BTUs in 36 cargoes or 9.8 net
equivalent cargoes.
Pertamina will begin deliveries of gas in July 1994, under
the terms of a new twenty-year gas contract with Korea Gas
Corporation. The contract calls for delivery of at least
2,044 trillion BTUs of which the Bontang LNG Plant will
supply 50 percent of the contracted volumes and will settle
among the East Kalimantan producers as a Package IV
contract. During 1994, the Company expects the Joint
Venture to deliver approximately 56 trillion BTUs in 19
cargoes or 5.2 net equivalent cargoes.
(4) CASH AND CASH EQUIVALENTS
At December 31, 1993 and 1992, cash and cash equivalents
includes short-term deposits and highly liquid debt
instruments, purchased at a maturity with three months or
less, of $8,284 and $6,461, respectively.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(5) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is as follows:
1993 1992
Oil and gas producing properties
Proved properties $991,447 $954,055
Uncompleted wells in progress 454 1,244
991,901 955,299
Less: Accumulated depletion 579,860 527,150
412,041 428,149
Other, net of accumulated depreciation
of $947 in 1993 and $893 in 1992 2,336 2,538
$414,377 $430,687
(6) ACCRUED LIABILITIES
As at December 31, 1993 and 1992, accrued liabilities
consisted of:
1993 1992
Accrued IPU liability $ 4,804 $ 5,219
Indonesian operating accruals 2,358 7,148
Other 2,152 1,668
$ 9,314 $14,035
(7) INCOME AND OTHER TAXES
At December 31, 1993, the Company had investment tax credit
carryovers of $3,524 that expire in 1995 through 2001, net
foreign tax credit carryovers of $22,985 for regular tax
purposes expiring in 1998 and $106,481 for alternative
minimum tax purposes expiring in 1998. The Company has a
minimum tax credit of $12,938 that carries forward
indefinitely. Deferred tax assets of $22,985 and $19,674
for foreign tax credit carryforwards and $3,524 and $3,800
for investment tax credit carryforwards at December 31, 1993
and 1992, respectively, have been offset by a valuation
allowance.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(7) INCOME AND OTHER TAXES (continued)
Deferred income taxes reflect the net tax effects of
temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the
amounts used for income tax purposes. Significant
components of the Company's deferred tax liabilities and
assets as of December 31, 1993 and 1992 are as follows:
1993 1992
Deferred tax liabilities:
Oil and gas proven property costs
capitalized for financial purposes
and deducted for foreign taxes $167,206 $170,371
For financial reporting purposes, income before income taxes
includes the following components:
1993 1992 1991
Pretax income:
U. S. $ (7,026) $(12,089) $ (7,083)
Foreign 125,213 120,366 110,812
$118,187 $108,277 $103,729
Significant components of the provision for income taxes
attributable to continuing operations are as follows:
1993 1992 1991
Current:
Federal $ 2,446 $ 2,942 $ 2,600
Foreign 88,430 87,179 88,474
$90,876 $90,121 $91,074
Deferred:
Federal $ - $ - $ -
Foreign (3,164) (5,520) (5,599)
$(3,164) $(5,520) $(5,599)
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(7) INCOME AND OTHER TAXES (continued)
The reconciliation of income tax attributable to continuing
operations computed at the U.S. federal statutory rates to
income tax expense is:
1993 1992 1991
Tax at U.S. Statutory Rate 35.0% 34.0% 34.0%
Foreign statutory tax rate
in excess of federal
statutory tax rate 21.0% 22.0% 22.0%
Expenses not deductible in
calculating Indonesian
taxes 12.8% 13.1% 20.1%
Unutilized domestic book
losses 2.1% 3.8% 2.3%
Domestic income taxed at
less than foreign statutory
rate 1.2% 2.5% 1.5%
U.S. taxes related to
foreign operations 2.1% 2.7% 2.5%
Total 74.2% 78.1% 82.4%
The Internal Revenue Service (IRS) is continuing its
examination of ENSTAR's 1984 Windfall Profits Tax (WPT)
return. On January 14, 1993, ENSTAR received the report of
the WPT examination changes for the year 1984. In that
report, the agent has proposed adjustments which could, if
sustained, result in additional WPT of approximately $4
million. The IRS has not yet assessed interest on the tax
deficiency which would be due as a result of the assessment.
ENSTAR has prepared a protest vigorously objecting to
certain of the proposed adjustments. The IRS is currently
reviewing the protest. ENSTAR believes that any tax
liability, and interest assessment which may arise as a
result of the WPT examination has been adequately provided
for in the financial statements.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(8) INDONESIAN PARTICIPATING UNITS (IPUs)
The IPUs were issued, with no assigned value, in connection
with the acquisition of ENSTAR in 1984 and represent a
general obligation of the Company to make quarterly
participation payments until September 1999, the amount of
which will be measured by a fixed percentage of Net Cash
Flow (as defined below) from the Joint Venture. While the
amount of the Participation Payments, which are treated as
reductions from revenues, will vary quarter to quarter
depending upon the amount of Net Cash Flow, payment of the
amounts due to the IPU holders is an obligation of the
Company, not dependent upon the discretion of the partners
of the Company. The rights of the IPU holders are those of
a general creditor of the Company and thus the IPU holders
have no equity interest in the Company in the nature of a
general or limited partnership interest or otherwise. The
IPU holders derive no economic benefit from the business
activities of the Company other than the Joint Venture.
Each IPU entitles the holder to receive, until 1999, a
quarterly participation payment equal to 1/14,077,747 of 32
percent of net positive cash flow. Net Cash Flow,
attributable to IPU holders, is equal to the product of (i)
a fraction, the numerator of which is equal to the number of
IPUs outstanding on the last business day of such quarterly
period, and the denominator of which is 14,077,747,
multiplied by (ii) 32 percent of specified revenues net of
specified expenditures from the Joint Venture. The above
calculation was the result of negotiations among the parties
to the 1984 merger of ENSTAR Corporation into the Company
and represents the amount of future income from the Joint
Venture that the Company has agreed to pay to the former
stockholders of ENSTAR in the form of payments on the IPUs.
If Net Cash Flow is zero or negative for any quarterly
period, no Participation Payments for that quarter will be
made. The Company maintains an irrevocable letter of credit
for the benefit of the IPU holders in an amount equal to 240
percent of the most recent quarterly distribution. At
December 31, 1993 and 1992, there were 10,778,590 IPUs
issued and outstanding.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
Calculation of Net Cash Flow and
Participation Payments
1993 1992
Positive cash flow:
Gas receipts $175,840 $185,006
Oil and condensate receipts 34,741 36,448
Other non-revenue cash receipts from
Joint Venture 9,799 6,712
Total positive cash flow 220,380 228,166
Less negative cash flow:
Expenditures to Joint Venture 66,184 65,425
Indonesian income taxes 85,401 87,815
Total negative cash flow 151,585 153,240
Net positive cash flow from 23.125%
interest in Joint Venture $ 68,795 $ 74,926
Net cash flow for benefit of IPU holders $ 16,922 $ 18,312
Participation Payment per unit $ 1.57 $ 1.70
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(9) LONG-TERM DEBT
Long-term debt, excluding current maturities, consists of
the following:
1993 1992
8-1/4% convertible subordinated
guaranteed debentures, due 1995 $ - $ 31,818
The 8-1/4% convertible subordinated guaranteed debentures,
due in December 1995, were reclassed to Current liabilities
as these debentures were repaid on January 5, 1994 in the
principal amount of $36,400. The loss on redemption of
$3,108 on these debentures will be recognized in the first
quarter of 1994.
(10) BENEFIT PLANS
VICO has a defined contribution retirement plan that covers
its eligible employees. Although VICO expects to provide
an annual contribution based on a percentage of each
eligible employee's salary, the actual contribution is
determined at the end of each year by its Board of
Directors and may vary depending upon circumstances.
Defined contribution pension expense is funded by the Joint
Venture participants and the Company's share of such
expense for the years ended December 31, 1993, 1992 and
1991 was $263, $200 and $168, respectively.
In addition, VICO provides severance pay to its employees
based upon salary and length of service. Such severance
pay is accrued over the service life of the employees and
is funded by the Joint Venture. The Company has provided
approximately $.2 million, $1.4 million and $1.8 million
for the years ended December 31, 1993, 1992 and 1991,
respectively for its share of future severance payments.
The Company has a defined benefit pension plan established
by ENSTAR that covers ENSTAR's former employees who are
considered terminated and fully vested. ENSTAR's pension
funding policy is to contribute an amount meeting the
requirement of the Employees Retirement Income Security
Act. The estimated reconciliation of the funded status of
ENSTAR's pension plan as at December 31, 1993, 1992 and
1991 respectively is as follows:
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(10) BENEFIT PLANS (continued)
1993 1992 1991
Actuarial present value of:
Vested accumulated benefit
obligation $(17,763) $(16,913) $(16,934)
Projected vested benefit
obligation $(17,763) $(16,913) $(16,934)
Fair value of plan assets 14,902 14,353 14,249
Unfunded projected benefit
obligation (2,861) (2,560) (2,685)
Unrecognized net
loss 1,661 1,533 1,317
Unrecognized net transition
obligation 872 907 941
Adjustment required to
recognize minimum
liability (2,533) (2,440) (2,258)
Accrued pension cost
recognized in the
Consolidated Balance
Sheet $ (2,861) $ (2,560) $ (2,685)
The minimum liability that must be recognized is equal to
the excess of the accumulated benefit obligation over the
fair value of plan assets. A corresponding amount is
recognized as either an intangible asset or a reduction to
Partners' Capital. A reduction of Partners' Capital is
required at December 31, 1993, 1992 and 1991 since the
intangible asset recognized may not exceed the amount of
unrecognized prior service cost.
The pension expense for 1993, 1992 and 1991 is composed of
the following:
1993 1992 1991
Interest cost $ 1,300 $ 1,303 $ 1,207
Expected return on plan
assets (1,107) (1,108) (1,060)
Net amortization and deferral 35 35 35
$ 228 $ 230 $ 182
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(10) BENEFIT PLANS (continued)
The assumed rate of return used in determining the projected
benefit obligation was 7.5 percent, 8 percent and 8 percent
for 1993, 1992 and 1991, respectively. The assumed long-
term rate of return on plan assets was 8 percent, 8 percent
and 9 percent for 1993, 1992 and 1991. Plan assets are
invested in equity and fixed income securities.
(11) OTHER POSTRETIREMENT BENEFITS
In 1992, the Company adopted FASB Statement No. 106,
"Employers' Accounting for Postretirement Benefits Other
Than Pensions". The effect of adopting the new rules did
not significantly impact the Company's profits.
Postretirement benefit costs for 1991 which were recorded on
a cash basis have not been restated.
(12) REDEMPTION OF PARTICIPATING PREFERRED STOCK OF ENSTAR
INDONESIA, INC.
On March 12, 1991, ENSTAR Indonesia, Inc. redeemed all of
its 1,297,431 outstanding shares of participating preferred
stock, $.01 par value, at an aggregate cost of $1,842 or
$1.42 per share. The aggregate cost included $467 ($.36 per
share) for the semi-annual dividend for the period ending
December 31, 1990 and $1,375 ($1.06 per share) for the stock
redemption. Partners' capital was credited $2,507 for the
excess of the book value of the preferred stock over the
redemption amount.
(13) CLAIMS AND LITIGATION
The Company has pending litigation arising in the ordinary
course of its business. However, none of the litigation is
expected to have a material adverse effect on the Company's
financial position or results of operations. The Company
also has established a reserve of $3.5 million for potential
exposure in a royalty dispute. The Company believes it may
have valid defenses against such claims.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(14) RELATED PARTY TRANSACTIONS
All aspects of the Company's business that are not
associated with the operating management of the Joint
Venture, such as operations, legal, accounting, tax and
other management functions are supplied by employees of the
partners in accordance with management agreements negotiated
among the parties. For the years 1993, 1992 and 1991, the
charges approximated $500, $600 and $800, respectively.
The Company holds demand notes in the amount of $40,000 from
or guaranteed by affiliates of each partner. These funds
will be made available to the Company if additional working
capital is required.
As operator of the Joint Venture, VICO performs services
for the operator of the LNG Plant, P.T. Badak Natural Gas
Liquefaction Company (P.T. Badak). During the years ended
December 31, 1993 and 1992, VICO charged P.T. Badak
approximately $1.5 million and $1.8 million, respectively,
principally for field pipeline maintenance services. Also,
during the same periods, VICO billed P.T. Badak
approximately $32 million and $41 million, respectively, for
engineering services and costs incurred on P.T. Badak's
behalf. The costs include approximately $7.2 million in
1993 and $17.2 million in 1992 relating to the modifications
of Trains A through D at the LNG Plant. Accounts receivable
from P.T. Badak approximated $3.3 million and $3.0 million
at December 31, 1993 and 1992, respectively.
UNIMAR COMPANY AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited)
The following items are contained in this section:
(a) Indonesian oil and gas operations
(b) Interim financial data
(a) INDONESIAN OIL AND GAS OPERATIONS
The Company's estimated net share of Indonesian oil and gas
reserves is shown in Table 1. The estimated proved reserves
of gas and oil and condensate as of December 31, 1993, 1992
and 1991 attributable to the Joint Venture's interest in the
production sharing contract in East Kalimantan were prepared
by petroleum engineers employed by LASMO, an affiliate of
Ultrastar.
Net share estimates are the Company's present best estimates
of the share of proved Indonesian reserves attributable to
revenue the Company would receive, before Indonesian income
taxes, under the terms of the Production Sharing Contract,
as extended through August 7, 2018 based upon assumptions
regarding levels of Joint Venture expenditures over the life
of the project, oil and gas prices, firm contract sales
commitments and potential sales opportunities and upon
numerous other assumptions. The Company has no ownership
interest in the Indonesian reserves in place, but rather
shares in production and revenue from the sale of oil,
condensate, LPG and LNG in accordance with the Production
Sharing Contract. The reserve estimates are subject to
revision as prices fluctuate due to the cost recovery
feature for field and other operating costs under the
Production Sharing Contract and for changes in the
Indonesian income tax rate. Because of the number and range
of these variables, no representation can be made that the
net share estimates set forth below are accurate, and any
changes in such variables will impact such estimates and the
cash flows the Company may realize in the future.
Oil and gas reserves are considered proved if economic
producibility is supported by either actual production or
conclusive formation tests. Proved developed reserves are
reserves that can be expected to be recovered through
existing wells with existing equipment and operating
methods. Proved undeveloped reserves are reserves that are
expected to be recovered from new wells on undrilled acreage
or from existing
INDONESIAN OIL AND GAS OPERATIONS (continued)
wells where a relatively significant expenditure is required
to permit production. These estimates do not include
reserves which may be found by extension of proved areas,
reserves which have been estimated considering known
geological and seismic data and previous experience with
similar reservoirs, or reserves recoverable by secondary or
tertiary recovery methods unless these methods are in
operation and showing successful results. These estimates
include reserves that are not currently under contract, but
which management expects may be marketed during the
remaining period in which the Company has the right to
produce such reserves, but for which there is no assurance
of sales. Estimates of reserves require extensive judgments
of reservoir engineering data and are generally less precise
than other estimates used in connection with financial
reporting. Actual future revenues from proved reserves
estimates may vary significantly from estimated future cash
flows due to changes in prices of oil and gas, and in the
timing of actual production in future periods. Actual
production and development costs will vary from those
estimated due to inflation and other factors.
INDONESIAN OIL AND GAS OPERATIONS (continued)
TABLE 1
Quantities of Oil and Gas Reserves
(Oil in Thousands of BBLS; Gas in MMCF)
Oil Gas (a)
Proved Developed and Undeveloped
Reserves:
As of December 31, 1990 9,976 1,026,498
Revisions to previous estimates 2,503 66,027
Production (1,329) (81,144)
As of December 31, 1991 11,150 1,011,381
Revisions to previous estimates 1,874 98,117
Production (1,736) (83,158)
As of December 31, 1992 11,288 1,026,340
Revisions to previous estimates 4,044 133,820
Production (1,778) (84,920)
As of December 31, 1993 13,554 1,075,240
Proved Developed Reserves:
As of December 31, 1990 8,450 552,257
As of December 31, 1991 8,792 656,546
As of December 31, 1992 7,632 733,354
As of December 31, 1993 10,281 727,536
(a) Amounts for years prior to 1993 have been restated from a
wet gas basis to a dry gas basis.
INDONESIAN OIL AND GAS OPERATIONS (continued)
Table 2 shows costs incurred in oil and gas property acquisition,
exploration and development activities.
TABLE 2
Costs Incurred in Oil and Gas Property Acquisition,
Exploration and Development Activities
Years ended December 31, 1993, 1992 and 1991
(Thousands of dollars)
1993 1992 1991
Exploration costs $ 5,223 $ 7,193 $11,503
Development costs 36,328 34,407 43,269
Table 3 shows results of operations for oil and gas producing
activities.
TABLE 3
Results of Operations for Oil and Gas Producing Activities
Years ended December 31, 1993, 1992, and 1991
(Thousands of dollars)
1993 1992 1991
Revenues $200,581 $205,847 $207,846
Production costs 17,836 19,068 20,557
Exploration costs 4,947 9,066 9,634
Depreciation, depletion
and amortization 52,710 57,275 61,491
Income tax expense 87,640 81,386 82,804
Results of operations for
producing activities (1) $ 37,448 $ 39,052 $ 33,360
(1) Excludes corporate overhead and interest costs.
INDONESIAN OIL AND GAS OPERATIONS (continued)
Table 4 shows a standardized measure of discounted future
net cash flows and changes therein relating to proved oil and gas
reserves using an annual discount of 10 percent and the Company's
net share estimates referred to in the preface to Table 1.
Generally, estimated future cash inflows have been computed by
applying year-end prices of oil and gas to estimated future
production of proved oil and gas reserves. Future development
and production costs have been computed by estimating the future
expenditures (based on year-end costs) to be incurred in
developing and producing the proved reserves, assuming
continuation of existing economic conditions. Future income tax
expenses have been calculated by using the year-end statutory tax
rate for Indonesia of 56 percent through August 7, 1998 and 48
percent thereafter. Indonesian net cash flow estimates are the
Company's present best estimates of the share of future net
revenues, after Indonesian taxes and capital and operating
contributions to the Joint Venture, that the Company would
receive if proved reserves are produced under the terms of the
Production Sharing Contract, as extended, based upon assumptions
regarding levels of Joint Venture expenditures over the life of
the project, firm contract sales commitments and potential sales
opportunities and upon numerous other assumptions. Additionally,
the net cash flow estimates include amounts due IPU holders.
Because of the number and range of these variables, no
representation can be made that the net cash flow estimates set
forth below are accurate, and any change in such variables will
impact the cash flows the Company may realize in the future.
TABLE 4
Standardized Measure of Discounted Future Net Cash Flows and
Changes Therein Relating to Proved Oil and Gas Reserves
At December 31, 1993, 1992 and 1991
(Thousands of dollars)
1993 1992 1991
Future cash inflows $2,085,222 $2,627,497 $2,732,366
Future production and
development costs (589,163) (573,047) (556,121)
Future income tax expenses (740,808) (1,037,570) (1,109,377)
Future net cash flows 755,251 1,016,880 1,066,868
10% annual discount for
estimated timing of
cash flows (375,500) (496,070) (516,755)
Standardized measure of
discounted future net
cash flows $ 379,751 $ 520,810 $ 550,113
INDONESIAN OIL AND GAS OPERATIONS (continued)
The following are the principal sources of changes in the
standardized measure of discounted future net cash flows for
proved reserves during 1993, 1992 and 1991.
1993 1992 1991
(Thousands of dollars)
Standardized measure of discounted
future net cash flows at
beginning of period $ 520,810 $ 550,113 $ 812,554
Sales and transfers of oil and gas
produced, net of production
costs (177,720) (180,139) (178,498)
Net changes in prices and
production costs (367,050) (108,119) (712,766)
Development costs incurred
during the period 36,328 34,407 43,269
Revisions of previous
quantity estimates 104,367 78,074 88,703
Accretion of discount 92,991 100,530 154,079
Net change in income taxes 170,025 45,944 342,772
Standardized measure of discounted
future net cash flows at end
of period $ 379,751 $ 520,810 $550,113
Note: The standardized measure of discounted future net cash
flows at December 31, 1993, 1992 and 1991 included $59,629,
$90,683 and $102,532, respectively, in future net cash
flows attributable to IPU holders.
b) INTERIM FINANCIAL DATA (Unaudited)
The following table shows summary quarterly data for 1993, 1992 and 1991:
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter
Year Ended December 31, 1993
Revenues............. $ 58,298 $ 38,834 $ 47,840 $ 55,616
Operating profit..... $ 37,952 $ 21,099 $ 28,331 $ 36,798
Net earnings......... $ 10,804 $ 3,618 $ 5,350 $ 10,703
Year Ended December 31, 1992
Revenues............. $ 52,814 $ 45,518 $ 56,642 $ 50,923
Operating profit..... $ 30,909 $ 25,059 $ 33,456 $ 24,532 (a)
Net earnings......... $ 7,842 $ 6,207 $ 7,766 $ 1,861
Year Ended December 31, 1991
Revenues............. $ 67,160 $ 44,227 $ 59,720 $ 36,739
Operating profit..... $ 43,630 $ 23,372 $ 31,806 $ 17,356
Net earnings......... $ 8,972 $ 1,784 $ 5,339 $ 2,159
(a) Includes a $6,400 provision for prior year's windfall profit tax liability.
/TABLE
SCHEDULE V
UNIMAR COMPANY AND SUBSIDIARIES
Property, Plant and Equipment
Years Ended December 31, 1993, 1992 and 1991
(Thousands of dollars)
Balance at Balance
Beginning Additions at End
of Period at Cost Retirements of Period
1993
Oil and gas properties
Indonesia $955,285 $ 39,967 $ (3,365) $991,887
Other 14 - - 14
Other 3,431 175 (323) 3,283
$958,730 $ 40,142 $ (3,688) $995,184
1992
Oil and gas properties
Indonesia $922,751 $ 38,978 $ (6,444) $955,285
Other 14 - - 14
Other 3,317 239 (125) 3,431
$926,082 $ 39,217 $ (6,569) $958,730
1991
Oil and gas properties
United States $ 450 $ - $ (450) $ -
Indonesia 877,613 54,339 (9,201) 922,751
Other 14 - - 14
Other 2,106 1,510 (299) 3,317
$880,183 $ 55,849 $ (9,950) $926,082
SCHEDULE VI
UNIMAR COMPANY AND SUBSIDIARIES
Accumulated Depreciation and Depletion of Property, Plant and Equipment
Years Ended December 31, 1993, 1992 and 1991
(Thousands of dollars)
Balance at Charges to Balance
Beginning Costs and Retire- at End
of Period Expenses ments of Period
1993
Oil and gas properties
Indonesia $527,150 $ 52,710 $ - $579,860
Other 893 377 (323) 947
$528,043 $ 53,087 $ (323) $580,807
1992
Oil and gas properties
Indonesia $469,875 $ 57,275 $ - $527,150
Other 671 347 (125) 893
$470,546 $ 57,622 $ (125) $528,043
1991
Oil and gas properties
United States $ 422 $ 28 $ (450) $ -
Indonesia 408,412 61,463 - 469,875
Other 656 314 (299) 671
$409,490 $ 61,805 $ (749) $470,546
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosures.
None
PART III
Item 10. Directors and Executive Officers of the Registrant.
The management, budgeting and financial control of the
Company's interest in the Indonesian Joint Venture operations are
exercised by a Management Board consisting of six members, three
appointed by each partner. The following persons currently serve
as members of the Company's Management Board:
GEORGE W. BERKO (age 47) was appointed to the Company's
Management Board in May 1992. Since May 1992, he has served as
the Partners' representative for Investor Relations, Treasurer
and Chief Financial and Accounting Officer of ENSTAR, ENSTAR
Indonesia, Inc., INTERNATIONAL, and certain of their
subsidiaries, and has been LASMO America Ltd.'s Vice President -
Unimar Accounting. From October 1990 until April 1992, he was
Vice President, Controller of Ultramar Oil and Gas Limited, and
prior to that time, he was a General Manager of American Ultramar
Ltd. from December 1984.
IAN D. BROWN (age 44) was appointed to the Company's
Management Board in February 1993. He is also Director and
Chairman of ENSTAR and certain of its affiliates. In January
1994 he was appointed President and General Manager of LASMO
Companies in Indonesia. In January 1993, he was appointed
Director, Indonesian Joint Venture for LASMO plc and a member of
the VICO Board. Since May 1986, he served as Commercial Manager
for LASMO plc, and from February 1987, Managing Director, LASMO
Trading Limited, the marketing, trading and transportation
affiliates of the parent company.
LARRY D. KALMBACH (age 42) was appointed to the Company's
Management Board in February 1993. Since February 1, 1993, he
has been Vice President-Finance of UTPH after serving as Vice
President and Controller of UTPH since September 1986. Prior to
that time, he held various financial management positions with
UTPH since 1974.
WILLIAM M. KRIPS (age 54) was appointed to the Company's
Management Board in January 1987. He is also a Director of
ENSTAR and certain of its affiliates. Since December 1991, he
has been Senior Vice President Exploration & Production of UTPH.
Prior to that time, he served as Senior Vice President and
General Manager - U. S. Exploration and Production, Senior Vice
President and General Manager - Hydrocarbon Products Group and
Vice President and General Manager - International Operations.
ARTHUR W. PEABODY (age 50) was appointed to the Company's
Management Board in February 1992 and in April 1993 was appointed
Chairman of the Management Board. He is also a Director of
ENSTAR, ENSTAR Indonesia, Inc., INTERNATIONAL and VICO. Since
February 1992, he has been Senior Vice President - Exploration
and Production of UTPH, and prior to that time, he held various
positions at UTPH including Senior Vice President and General
Manager - Hydrocarbon Products Group, Vice President - Planning
and Administration and Vice President - Acquisitions and
Planning.
JERRY L. PICKERILL (age 56) was appointed to the Company's
Management Board in June 1992 and also serves as a Director of
ENSTAR Corporation. Since February of 1989, he has served as
President of LASMO Energy Corporation and is currently President
and Director of LASMO America Limited, the holding company for
the LASMO U. S. subsidiaries. He previously served as Vice
President and General Counsel for CNG Producing Company, Tulsa
Division, Vice President and General Counsel of Mapco Oil & Gas,
Inc., and an attorney for Amerada Hess Corporation.
As set forth above, control of the Company's operations is
exercised by the Management Board. The Company, a Texas general
partnership, does not have any Executive Officers.
Item 11. Executive Compensation.
The Company has no executive officers, and no members of the
Management Board are paid directly by the Company. All members
of the Management Board are full-time employees of UTPH or LASMO,
or their respective subsidiaries, and do not receive from the
Company any remuneration for their services to the Company.
Moreover, the Company has no employees who are compensated for
their services to the Company. VICO, a subsidiary of the
Company, has employees who are responsible for the daily
operating activities of the Joint Venture and are compensated by
the Joint Venture. See Item 13 below for information concerning
the Company's reimbursement to LASMO for services rendered to the
Company by one of LASMO's designees on the Management Board.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
The Company is a Texas general partnership and as such has
no voting securities apart from the general partnership interests
owned by the partners. The table below reflects the beneficial
ownership of 100 percent of the partnership interests in the
Company as of March 15, 1994:
Name and Address of Amount Beneficially
Title of Class Beneficial Owner Owned
General Partnership LASMO plc 50%
Interest 100 Liverpool Street
London EC2M 2BB
England
Name and Address of Amount Beneficially
Title of Class Beneficial Owner Owned
General Partnership Union Texas Petroleum 50%
Interest Holdings, Inc.
1330 Post Oak Boulevard
Houston, Texas 77252
Item 13. Certain Relationships and Related Transactions.
The partners of the Company provide management expertise,
office space, and administrative, legal and professional
services. For such services, a management fee of approximately
$508 and $600 was charged in 1993 and 1992, respectively,
including $138 ($96 in 1992) paid in respect of Mr. Berko's
services.
The Company holds demand notes in the amount of $40 million
from or generated by affiliates of each partner. These funds
will be made available to the Company if additional working
capital is required.
As operator of the Joint Venture, VICO conducts exploration
and development activities within the PSC area. The cost of such
activities is funded by the Joint Venture participants to VICO.
In addition, VICO performs services for the operator of the LNG
Plant, P.T. Badak Natural Gas Liquefaction Company (P.T. Badak).
For the year ended December 31, 1993, VICO charged P.T. Badak
approximately $32 million ($41 million in 1992) for engineering
services and costs incurred on P.T. Badak's behalf. Also, during
1993 VICO billed P.T. Badak approximately $1.5 million ($1.8
million in 1992) principally for field pipeline maintenance
services. Accounts receivable from P.T. Badak approximated $3.3
million at December 31, 1993 ($3.0 million at December 31, 1992).
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K.
(a)(1) Financial Statements listed below are included as
Part II, Item 8 hereof on the pages indicated:
Report of Independent Auditors 25
Consolidated Balance Sheet,
December 31, 1993 and 1992 26
Consolidated Statement of Earnings,
Years ended December 31, 1993,
1992 and 1991 27
Consolidated Statement of Cash Flows,
Years ended December 31, 1993,
1992 and 1991 28
Consolidated Statement of Changes in
Partners' Capital, Years ended
December 31, 1993, 1992 and 1991 29
Notes to Consolidated Financial
Statements 30-44
Supplemental Financial Information
(unaudited) 45-51
(2) Financial Statement Schedules listed below are filed
as a part hereof on the pages indicated:
V - Property, Plant and Equipment 52
VI - Accumulated Depreciation and
Depletion of Property, Plant
and Equipment 53
All other schedules are omitted as they are not required or are
not applicable.
(a)(3) The following documents are included as Exhibits to
this Report. Unless it has been indicated that a
document listed below is incorporated by reference
herein, copies of the document have been filed
herewith.
(2)-1- Merger Agreement, dated May 22, 1984, and Amendment
Agreements thereto, dated June 8, 1984 and June 12,
1984 (incorporated by reference to Annex A to the
Prospectus/Proxy Statement included in the
Company's Registration Statement on Form S-14 (No.
2-93037)).*
(2)-2- Agreement of Merger, dated as of August 28, 1984
(incorporated by reference to Annex B to the
Prospectus/Proxy Statement included in the
Company's Registration Statement on Form S-14 (No.
2-93037)).*
(2)-3- Divestiture Agreement, dated June 20, 1984 (filed
as Exhibit 2.3 to the Company's Registration
Statement on Form S-14 (No. 2-93037)).*
(3)-1- Amended and Restated Agreement of General
Partnership of Unimar Company dated September 11,
1990 between Unistar, Inc. and Ultrastar, Inc.
(filed as Exhibit (3)-4- to the Company's 1990 Form
10-K (No. 18791)).*
(4)-1- Form of Indenture between Unimar and Irving Trust
Company, as Trustee (filed as Exhibit 4 to the
Company's Registration Statement on Form S-14 (No.
2-93037)).*
(4)-2- First Supplemental Indenture, dated as of October
31, 1986, to the Indenture between Unimar and
Irving Trust Co., as Trustee (Exhibit (4)-1 above)
(Filed as Exhibit 10.114 to Union Texas Petroleum
Holdings, Inc.'s Registration Statement on Form S-1
(No. 33-16267)).*
(10)-1- Joint Venture Agreement, dated August 8, 1968,
among Roy M. Huffington, Inc., Virginia
International Company, Austral Petroleum Gas
Corporation, Golden Eagle Indonesia, Limited, and
Union Texas Far East Corporation, as amended (filed
as Exhibit 6.6 to Registration Statement No. 2-
58834 of Alaska Interstate Company).*
(10)-2- Agreement dated as of October 1, 1979, among the
parties to the Joint Venture Agreement referred to
in Exhibit (10)-1- above (filed as Exhibit 5.2 to
Registration Statement No. 2-66661 of Alaska
Interstate Company).*
* Incorporated herein by reference.
(10)-3- Amendment to the Operating Agreement dated April 1,
1990, between Roy M. Huffington, Inc., a Delaware
corporation, Ultramar Indonesia Limited, a Bermuda
corporation, Virginia Indonesia Company, a Delaware
corporation, Virginia International Company, a
Delaware corporation, Union Texas East Kalimantan
Limited, a Bahamian corporation, and Universe Gas &
Oil Company, Inc., a Liberian corporation.
(10)-4- Amended and Restated Production Sharing Contract
dated April 23, 1990 (effective August 8, 1968 -
August 7, 1998) by and between Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara (Pertamina)
and Roy M. Huffington, Inc., Virginia International
Company, Virginia Indonesia Company, Ultramar
Indonesia Limited, Union Texas East Kalimantan
Limited, Universe Gas & Oil Company, Inc. and
Huffington Corporation.
(10)-5- Production Sharing Contract dated April 23, 1990
(effective August 8, 1998 - August 7, 2018) between
Perusahaan Pertambangan Minyak Dan Gas Bumi Negara
(Pertamina) and Roy M. Huffington, Inc., Virginia
International Company, Virginia Indonesia Company,
Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited, Universe Gas & Oil Company,
Inc. and Huffington Corporation.
(10)-6- Nilam Unit Agreement, effective as of January 1,
1980, to establish the manner in which the Joint
Venture and Total will cooperate to develop the
unitized area of the Nilam Field (filed as Exhibit
(10)-58- to the Company's 1991 Form 10-K (No. 1-
8791)).*
(10)-7- Third Amended and Restated Implementation
Procedures for Crude Oil Liftings, effective as of
July 1, 1993, among Virginia Indonesia Company,
LASMO Sanga Sanga Limited, Opicoil Houston, Inc.,
Union Texas East Kalimantan Limited, Universe Gas &
Oil Company, Inc. and Virginia International
Company.
(10)-8- Amended and Restated 1973 LNG Sales Contract, dated
as of the 1st day of January 1990, by and between
Perusahaan Pertambangan Minyak Dan Gas Bumi Negara,
as Seller, and Chubu Electric Power Co., Inc., The
Kansai Electric Power Co., Inc., Kyushu Electric
Power Co., Inc., Nippon Steel Corporation, Osaka
Gas Co., Ltd. and Toho Gas Co., Ltd., as Buyers.
* Incorporated herein by reference.
(10)-9- Amendment to the 1973 LNG Sales Contract dated as
of the 3rd day of December, 1973, amended by
Amendment No. 1 dated as of the 31st day of August,
1976, and amended and restated as of the 1st day of
January, 1990 ("1973 LNG Sales Contract"), is
entered into as of the 1st day of June, 1992, by
and between Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara, a state enterprise of the Republic of
Indonesia (Seller), on the one hand, and Kyushu
Electric Power Co., Inc. (Kyushu Electric), Nippon
Steel Corporation (Nippon Steel), and Toho Gas Co.,
Ltd. (Toho Gas), all corporations organized and
existing under the laws of Japan, on the other
hand.
(10)-10- Amended and Restated Supply Agreement (In Support
of the Amended and Restated 1973 LNG Sales
Contract) between Pertamina and Virginia Indonesia
Company, LASMO Sanga Sanga Limited, Opicoil
Houston, Inc., Union Texas East Kalimantan Limited,
Universe Gas & Oil Company, Inc., and Virginia
International Company dated September 22, 1993,
effective December 3, 1973.
(10)-11- Amended and Restated Badak LNG Sales Contract,
dated as of the 1st day of January, 1990, by and
between Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, as Seller, and Chubu Electric Power Co.,
Inc., The Kansai Electric Power Co., Inc., Osaka
Gas Co., Ltd. and Toho Gas Co., Ltd., as Buyers.
(10)-12- Supply Agreement, dated as of April 14, 1981
between Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara (Pertamina) and the parties to the Joint
Venture Agreement, including the Company.
(10)-13- Seventh Supply Agreement for Excess Sales
(Additional Fixed Quantities under Badak LNG Sales
Contract as a Result of Contract Amendment and
Restatement) between Perusahaan Pertambangan Minyak
Dan Gas Bumi Negara and Virginia Indonesia Company,
Opicoil Houston, Inc., Ultramar Indonesia Limited,
Union Texas East Kalimantan Limited, Universe Gas &
Oil Company, Inc. and Virginia International
Company, dated September 28, 1992, but effective as
of January 1, 1990.
* Incorporated herein by reference.
(10)-14- Bontang II Trustee and Paying Agent Agreement
Amended and Restated as of July 15, 1991 among
Perusahaan Pertambangan Minyak Dan Gas Bumi Negara,
Virginia Indonesia Company, Virginia International
Company, Union Texas East Kalimantan Limited,
Ultramar Indonesia Limited, Opicoil Houston, Inc.,
Universe Gas & Oil Company, Inc., Total Indonesie,
Unocal Indonesia, Ltd., Indonesia Petroleum, Ltd.
and Continental Bank International.
(10)-15- Producers Agreement No. 2 dated as of June 9, 1987
by Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara (Pertamina), Roy M. Huffington, Inc.,
Virginia International Company, Ultramar Indonesia
Limited, Virginia Indonesia Company, Union Texas
East Kalimantan Limited, Universe Tankships, Inc.,
Huffington Corporation in favor of The Industrial
Bank of Japan Trust Company as Agent (filed as
Exhibit (10)-30- to the Company's 1987 Form 10-K
(No. 1-8791)).*
(10)-16- Badak III LNG Sales Contract between Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara (Pertamina)
as Seller and Chinese Petroleum Corporation as
Buyer signed on March 19, 1987 (filed as Exhibit
(10)-59- to the Company's 1991 Form 10-K (No. 1-
8791)).*
(10)-17- Badak III LNG Sales Contract Supply Agreement,
dated October 19, 1987 among Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara (Pertamina)
and the parties to the Joint Venture Agreement.
(10)-18- LNG Sales and Purchase Contract (Korea II)
effective May 7, 1991 between Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara and Korea
Gas Corporation.
(10)-19- Schedule A to the LNG Sales and Purchase Contract
(Korea II FOB) between Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara and Korea Gas
Corporation.
(10)-20- Bontang III Producers Agreement, dated February 9,
1988, among Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara (Pertamina) and the parties to the
Joint Venture Agreement.
* Incorporated herein by reference.
(10)-21- Amendment No. 1 to Bontang III Producers Agreement
dated as of May 31, 1988 among Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara, Roy M.
Huffington, Inc., Huffington Corporation, Virginia
International Company, Virginia Indonesia Company,
Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited, Universe Tankships, Inc., Total
Indonesie, Unocal Indonesia, Ltd., Indonesia
Petroleum, Ltd. and Train-E Finance Co., Ltd., as
Tranche A Lender, The Industrial Bank of Japan
Trust Company, as Agent and The Industrial Bank of
Japan Trust Company on behalf of the Tranche B
Lenders.
(10)-22- Amendment No. 2 to Producers Agreement No. 2 dated
as of May 31, 1988 among Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara, Roy M. Huffington,
Inc., Huffington Corporation, Virginia
International Company, Virginia Indonesia Company,
Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited and Universe Tankships, Inc.
(filed as Exhibit (10)-44- to the Company's 1988
Form 10-K (No. 1-8791)).*
(10)-23- $316,000,000 Bontang III Loan Agreement dated
February 9, 1988 among Continental Bank
International as Trustee, Train-E Finance Co., Ltd.
as Tranche A Lender and The Industrial Bank of
Japan Trust Company as Agent.
(10)-24- Bontang III Trustee and Paying Agent Agreement,
dated February 9, 1988, among Pertamina, Roy M.
Huffington, Inc., Huffington Corporation, Virginia
International Company, VICO, Ultrastar Indonesia
Limited, Union Texas East Kalimantan Limited,
Universe Tankships, Inc., Total Indonesia, Unocal
Indonesia, Ltd., Indonesia Petroleum, Ltd. and
Continental Bank International (filed as Exhibit
10.42 to the Union Texas Petroleum Holdings, Inc.'s
1991 Form 10-K (Commission File No. 1-9019)).*
(10)-25- Amendment No. 1 to Bontang III Trustee and Paying
Agent Agreement, dated as of December 11, 1992,
among Pertamina, VICO, Virginia International
Company, Ultramar Indonesia Limited, Union Texas
East Kalimantan Limited, Opicoil Houston, Inc.,
Universe Gas & Oil Company, Inc., Total Indonesia,
Unocal Indonesia Ltd., Indonesia Petroleum, Ltd.
and Continental Bank International, as Bontang III
Trustee (Filed as Exhibit 10.83 to the Union Texas
Petroleum Holdings, Inc.'s 1992 Form 10-K
(Commission File No. 1-9019)).*
* Incorporated herein by reference.
(10)-26- Amended and Restated Debt Service Allocation
Agreement dated February 9, 1988 among Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara and Roy M.
Huffington, Inc., Virginia International Company,
Ultramar Indonesia Limited, Virginia Indonesia
Company, Union Texas East Kalimantan Limited,
Universe Tankships, Inc., Huffington Corporation,
Total Indonesie, Unocal Indonesia, Ltd. and
Indonesia Petroleum, Ltd. (filed as Exhibit (10)-
40- to the Company's 1988 Form 10-K (No. 1-8791)).*
(10)-27- Letter agreement between Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara and Chinese Petroleum
Corporation, dated December 1, 1989.
(10)-28- Memorandum of Agreement (Yokkaichi Extension), made
as of December 21, 1989, between Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara, as Seller,
and Chubu Electric Power Co., Inc., as Buyer (filed
as Exhibit (10)-60- to the Company's 1989 Form 10-K
(No. 1-8791)).*
(10)-29- Badak IV LNG Sales Contract dated October 23, 1990
between Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara (Pertamina), as Seller and Osaka Gas Co.,
Ltd., Tokyo Gas Co., Ltd. and Toho Gas Co., Ltd.,
as Buyers.
(10)-30- LNG Sales Contract dated as of October 13, 1992
between Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, as Seller and Hiroshima Gas Co., Ltd. and
Nippon Gas Co., Ltd., as Buyers.
(10)-31- LNG Sales Contract dated as of October 13, 1992
between Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, as Seller and Osaka Gas Co., Ltd., as
Buyer.
(10)-32- Supply Agreement for Natural Gas to Badak IV LNG
Sales Contract dated August 12, 1991 between
Perusahaan Pertambangan Minyak Dan Gas Bumi Negara,
Virginia Indonesia Company, Opicoil Houston, Inc.,
Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited, Universe Gas & Oil Company,
Inc. and Virginia International Company.
(10)-33- Second Supply Agreement for Package IV Excess Sales
(Osaka Gas Contract - Package IV Quantities)
between Pertamina and Virginia Indonesia Company,
LASMO Sanga Sanga Limited, Opicoil Houston, Inc.,
Union Texas East Kalimantan Limited, Universe Gas &
Oil Company, Inc., and Virginia International
Company dated September 22, 1993, effective January
1, 1991.
* Incorporated herein by reference.
(10)-34- Third Supply Agreement for Package IV Excess Sales
(Toho Gas Contract - Package IV Quantities) between
Pertamina and Virginia Indonesia Company, LASMO
Sanga Sanga Limited, Opicoil Houston, Inc., Union
Texas East Kalimantan Limited, Universe Gas & Oil
Company, Inc., and Virginia International Company
dated September 28, effective January 1, 1991.
(10)-35- Eleventh Supply Agreement for Package IV Excess
Sales (1973 Contract Build-Down Quantities) between
Pertamina and Virginia Indonesia Company, LASMO
Sanga Sanga Limited, Opicoil Houston, Inc., Union
Texas East Kalimantan Limited, Universe Gas & Oil
Company, Inc., and Virginia International Company
dated September 22, 1993, effective January 1,
1990.
(10)-36- Bontang IV Producers Agreement dated August 26,
1991 by Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, Virginia Indonesia Company, Opicoil
Houston, Inc., Virginia International Company,
Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited, Universe Gas & Oil Company,
Inc., Total Indonesie, Unocal Indonesia, Ltd. and
Indonesia Petroleum, Ltd., in favor of The Chase
Manhattan Bank, N.A. as Agent for the Lenders.
(10)-37- $750,000,000 Bontang IV Loan Agreement dated August
26, 1991 among Continental Bank International as
Trustee under the Bontang IV Trustee and Paying
Agent Agreement as Borrower, Chase Manhattan Asia
Limited and The Mitsubishi Bank, Limited as
Coordinators, the other banks and financial
institutions named herein as Arrangers, Co-
Arrangers, Lead Managers, Managers, Co-Managers and
Lenders, The Chase Manhattan Bank, N.A. and the
Mitsubishi Bank, Limited as Co-Agents and The Chase
Manhattan Bank, N.A. as Agent.
(10)-38- Bontang IV Trustee and Paying Agent Agreement dated
August 26, 1991 among Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara, Virginia Indonesia
Company, Opicoil Houston, Inc., Virginia
International Company, Ultramar Indonesia Limited,
Union Texas East Kalimantan Limited, Universe Gas &
Oil Company, Inc., Total Indonesie, Unocal
Indonesia, Ltd., Indonesia Petroleum, Ltd. and
Continental Bank International.
* Incorporated herein by reference.
(10)-39- Amended and Restated Bontang Processing Agreement
dated February 9, 1988 among Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara and Roy M.
Huffington, Inc., Huffington Corporation, Virginia
International Company, Virginia Indonesia Company,
Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited, Universe Tankships, Inc., Total
Indonesie, Unocal Indonesia, Ltd., Indonesia
Petroleum, Ltd. and P.T. Badak Natural Gas
Liquefaction Company (filed as Exhibit (10)-39- to
the Company's 1988 Form 10-K (No. 1-8791)).*
(10)-40- Bontang Capital Projects Loan Agreement No. 1
between Continental Bank International as Trustee
under the Badak Trustee and Paying Agent Agreement,
Borrower, and The Industrial Bank of Japan Trust
Company, Agent, for the Lenders dated as of
September 10, 1986 (filed as Exhibit (4)-13- to the
Company's 1986 Form 10-K (No. 1-8791)).*
(10)-41- Bontang Capital Projects Loan Agreement No. 2 dated
June 9, 1987, among Continental Bank International,
as Trustee under the Badak Trustee and Paying Agent
Agreement (Borrower), the banks named therein as
Lead Managers and Lenders and The Industrial Bank
of Japan Trust Company (Agent) (filed as Exhibit
(10)-31 to the Company's 1987 Form 10-K (No. 1-
8791)).*
(10)-42- Bontang LPG Sales and Purchase Contract between
Perusahaan Pertambangan Minyak Dan Gas Bumi Negara,
as Seller, and National Federation of Agricultural
Co-Operative Associations (Zen-Noh), as Buyer,
dated February 21, 1992.
(10)-43- Bontang LPG Sales and Purchase Contract between
Perusahaan Pertambangan Minyak Dan Gas Bumi Negara,
as Seller, and Japan Indonesia Oil Co., Ltd., as
Buyer, dated February 20, 1992.
(10)-44- Arun and Bontang LPG Sales and Purchase Contract
between Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara (Pertamina) as Seller and Mitsubishi
Corporation, Cosmo Oil Co., Ltd., Nippon Petroleum
Gas Co., Ltd., Showa Shell Sekiyu K.K., Kyodo Oil
Co., Ltd., Idemitsu Kosan Co., Ltd. and Mitsui
Liquefied Gas Co., Ltd. as Buyers dated July 15,
1986 (filed as Exhibit (10)-60- to the Company's
1991 Form 10-K (No. 1-8791)).*
(10)-45- Bontang LPG Supply Agreement, dated November 17,
1987, between Perusahaan Pertambangan Minyak Dan
Gas Bumi Negara (Pertamina) and the parties to the
Joint Venture Agreement.
* Incorporated herein by reference.
(10)-46- Advance Payment Agreement between Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara (Pertamina)
and Arun Bontang Project Finance Co., Ltd., dated
February 16, 1987 (filed as Exhibit (4)-15- to the
Company's 1986 Form 10-K (No. 1-8791)).*
(10)-47- Agreement and Plan of Reorganization of ENSTAR
Corporation, dated December 22, 1989, by and among
Unimar Company, Ultrastar, Inc., Unistar, Inc.,
ENSTAR Corporation, Newstar Inc., Union Texas
Development Corporation, Union Texas Petroleum
Corporation and Ultramar America Limited.
(10)-48- Amendment to Agreement and Plan of Reorganization
of ENSTAR Corporation, dated May 1, 1990, by and
among Unimar Company, Ultrastar, Inc., Unistar,
Inc., ENSTAR Corporation, Ultramar Production
Company, Union Texas Development Corporation, Union
Texas Petroleum Corporation and Ultramar America
Limited.
(21)-1- List of Subsidiaries of the Company.
(23)-1- Consent of Ernst & Young.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the
last quarter of the fiscal year ended December 31,
1993.
* Incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
UNIMAR COMPANY
March 24, 1994 By /S/ ARTHUR W. PEABODY
Arthur W. Peabody
Chairman of the
Management Board
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities indicated as of
March 24, 1994.
By /S/ GEORGE W. BERKO By /S/ LARRY D. KALMBACH
George W. Berko Larry D. Kalmbach
Management Board Management Board
(LASMO Representative) (UTPH Representative)
By /S/ IAN D. BROWN By /S/ WILLIAM M. KRIPS
Ian D. Brown William M. Krips
Management Board Management Board
(LASMO Representative) (UTPH Representative)
By /S/ JERRY L. PICKERILL By /S/ ARTHUR W. PEABODY
Jerry L. Pickerill Arthur W. Peabody
Management Board Chairman of the
(LASMO Representative) Management Board
(UTPH Representative)
INDEX TO EXHIBITS
Sequential
Numbered
Exhibit Number Page
The following documents are included as Exhibits to this Report.
Unless it has been indicated that a document listed below is
incorporated by reference herein, copies of the document have
been filed herewith.
(2)-1- Merger Agreement, dated May 22, 1984, and
Amendment Agreements thereto, dated June 8, 1984
and June 12, 1984 (incorporated by reference to
Annex A to the Prospectus/Proxy Statement included
in the Company's Registration Statement on Form S-
14 (No. 2-93037)).*
(2)-2- Agreement of Merger, dated as of August 28, 1984
(incorporated by reference to Annex B to the
Prospectus/Proxy Statement included in the
Company's Registration Statement on Form S-14 (No.
2-93037)).*
(2)-3- Divestiture Agreement, dated June 20, 1984 (filed
as Exhibit 2.3 to the Company's Registration
Statement on Form S-14 (No. 2-93037)).*
(3)-1- Amended and Restated Agreement of General
Partnership of Unimar Company dated September 11,
1990 between Unistar, Inc. and Ultrastar, Inc.
(filed as Exhibit (3)-4- to the Company's 1990
Form 10-K (No. 18791)).*
(4)-1- Form of Indenture between Unimar and Irving Trust
Company, as Trustee (filed as Exhibit 4 to the
Company's Registration Statement on Form S-14 (No.
2-93037)).*
(4)-2- First Supplemental Indenture, dated as of October
31, 1986, to the Indenture between Unimar and
Irving Trust Co., as Trustee (Exhibit (4)-1 above)
(Filed as Exhibit 10.114 to Union Texas Petroleum
Holdings, Inc.'s Registration Statement on Form S-
1 (No. 33-16267)).*
(10)-1- Joint Venture Agreement, dated August 8, 1968,
among Roy M. Huffington, Inc., Virginia
International Company, Austral Petroleum Gas
Corporation, Golden Eagle Indonesia, Limited, and
Union Texas Far East Corporation, as amended
(filed as Exhibit 6.6 to Registration Statement
No. 2-58834 of Alaska Interstate Company).*
* Incorporated herein by reference.
(10)-2- Agreement dated as of October 1, 1979, among the
parties to the Joint Venture Agreement referred to
in Exhibit (10)-1- above (filed as Exhibit 5.2 to
Registration Statement No. 2-66661 of Alaska
Interstate Company).*
(10)-3- Amendment to the Operating Agreement dated April
1, 1990, between Roy M. Huffington, Inc., a
Delaware corporation, Ultramar Indonesia Limited,
a Bermuda corporation, Virginia Indonesia Company,
a Delaware corporation, Virginia International
Company, a Delaware corporation, Union Texas East
Kalimantan Limited, a Bahamian corporation, and
Universe Gas & Oil Company, Inc., a Liberian
corporation.
(10)-4- Amended and Restated Production Sharing Contract
dated April 23, 1990 (effective August 8, 1968 -
August 7, 1998) by and between Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara
(Pertamina) and Roy M. Huffington, Inc., Virginia
International Company, Virginia Indonesia Company,
Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited, Universe Gas & Oil Company,
Inc. and Huffington Corporation.
(10)-5- Production Sharing Contract dated April 23, 1990
(effective August 8, 1998 - August 7, 2018)
between Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara (Pertamina) and Roy M. Huffington,
Inc., Virginia International Company, Virginia
Indonesia Company, Ultramar Indonesia Limited,
Union Texas East Kalimantan Limited, Universe Gas
& Oil Company, Inc. and Huffington Corporation.
(10)-6- Nilam Unit Agreement, effective as of January 1,
1980, to establish the manner in which the Joint
Venture and Total will cooperate to develop the
unitized area of the Nilam Field (filed as Exhibit
(10)-58- to the Company's 1991 Form 10-K (No. 1-
8791)).*
(10)-7- Third Amended and Restated Implementation
Procedures for Crude Oil Liftings, effective as of
July 1, 1993, among Virginia Indonesia Company,
LASMO Sanga Sanga Limited, Opicoil Houston, Inc.,
Union Texas East Kalimantan Limited, Universe Gas
& Oil Company, Inc. and Virginia International
Company.
* Incorporated herein by reference.
(10)-8- Amended and Restated 1973 LNG Sales Contract,
dated as of the 1st day of January 1990, by and
between Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara, as Seller, and Chubu Electric Power
Co., Inc., The Kansai Electric Power Co., Inc.,
Kyushu Electric Power Co., Inc., Nippon Steel
Corporation, Osaka Gas Co., Ltd. and Toho Gas Co.,
Ltd., as Buyers.
(10)-9- Amendment to the 1973 LNG Sales Contract dated as
of the 3rd day of December, 1973, amended by
Amendment No. 1 dated as of the 31st day of
August, 1976, and amended and restated as of the
1st day of January, 1990 ("1973 LNG Sales
Contract"), is entered into as of the 1st day of
June, 1992, by and between Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara, a state enterprise of
the Republic of Indonesia (Seller), on the one
hand, and Kyushu Electric Power Co., Inc. (Kyushu
Electric), Nippon Steel Corporation (Nippon
Steel), and Toho Gas Co., Ltd. (Toho Gas), all
corporations organized and existing under the laws
of Japan, on the other hand.
(10)-10- Amended and Restated Supply Agreement (In Support
of the Amended and Restated 1973 LNG Sales
Contract) between Pertamina and Virginia Indonesia
Company, LASMO Sanga Sanga Limited, Opicoil
Houston, Inc., Union Texas East Kalimantan
Limited, Universe Gas & Oil Company, Inc., and
Virginia International Company dated September 22,
1993, effective December 3, 1973.
(10)-11- Amended and Restated Badak LNG Sales Contract,
dated as of the 1st day of January, 1990, by and
between Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara, as Seller, and Chubu Electric Power
Co., Inc., The Kansai Electric Power Co., Inc.,
Osaka Gas Co., Ltd. and Toho Gas Co., Ltd., as
Buyers.
(10)-12- Supply Agreement, dated as of April 14, 1981
between Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara (Pertamina) and the parties to the
Joint Venture Agreement, including the Company.
(10)-13- Seventh Supply Agreement for Excess Sales
(Additional Fixed Quantities under Badak LNG Sales
Contract as a Result of Contract Amendment and
Restatement) between Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara and Virginia Indonesia
Company, Opicoil Houston, Inc., Ultramar Indonesia
Limited, Union Texas East Kalimantan Limited,
Universe Gas & Oil Company, Inc. and Virginia
International Company, dated September 28, 1992,
but effective as of January 1, 1990.
* Incorporated herein by reference.
(10)-14- Bontang II Trustee and Paying Agent Agreement
Amended and Restated as of July 15, 1991 among
Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, Virginia Indonesia Company, Virginia
International Company, Union Texas East Kalimantan
Limited, Ultramar Indonesia Limited, Opicoil
Houston, Inc., Universe Gas & Oil Company, Inc.,
Total Indonesie, Unocal Indonesia, Ltd., Indonesia
Petroleum, Ltd. and Continental Bank
International.
(10)-15- Producers Agreement No. 2 dated as of June 9, 1987
by Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara (Pertamina), Roy M. Huffington, Inc.,
Virginia International Company, Ultramar Indonesia
Limited, Virginia Indonesia Company, Union Texas
East Kalimantan Limited, Universe Tankships, Inc.,
Huffington Corporation in favor of The Industrial
Bank of Japan Trust Company as Agent (filed as
Exhibit (10)-30- to the Company's 1987 Form 10-K
(No. 1-8791)).*
(10)-16- Badak III LNG Sales Contract between Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara
(Pertamina) as Seller and Chinese Petroleum
Corporation as Buyer signed on March 19, 1987
(filed as Exhibit (10)-59- to the Company's 1991
Form 10-K (No. 1-8791)).*
(10)-17- Badak III LNG Sales Contract Supply Agreement,
dated October 19, 1987 among Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara
(Pertamina) and the parties to the Joint Venture
Agreement.
(10)-18- LNG Sales and Purchase Contract (Korea II)
effective May 7, 1991 between Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara and Korea
Gas Corporation.
(10)-19- Schedule A to the LNG Sales and Purchase Contract
(Korea II FOB) between Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara and Korea Gas
Corporation.
(10)-20- Bontang III Producers Agreement, dated February 9,
1988, among Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara (Pertamina) and the parties to the
Joint Venture Agreement.
* Incorporated herein by reference.
(10)-21- Amendment No. 1 to Bontang III Producers Agreement
dated as of May 31, 1988 among Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara, Roy M.
Huffington, Inc., Huffington Corporation, Virginia
International Company, Virginia Indonesia Company,
Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited, Universe Tankships, Inc.,
Total Indonesie, Unocal Indonesia, Ltd., Indonesia
Petroleum, Ltd. and Train-E Finance Co., Ltd., as
Tranche A Lender, The Industrial Bank of Japan
Trust Company, as Agent and The Industrial Bank of
Japan Trust Company on behalf of the Tranche B
Lenders.
(10)-22- Amendment No. 2 to Producers Agreement No. 2 dated
as of May 31, 1988 among Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara, Roy M. Huffington,
Inc., Huffington Corporation, Virginia
International Company, Virginia Indonesia Company,
Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited and Universe Tankships, Inc.
(filed as Exhibit (10)-44- to the Company's 1988
Form 10-K (No. 1-8791)).*
(10)-23- $316,000,000 Bontang III Loan Agreement dated
February 9, 1988 among Continental Bank
International as Trustee, Train-E Finance Co.,
Ltd. as Tranche A Lender and The Industrial Bank
of Japan Trust Company as Agent.
(10)-24- Bontang III Trustee and Paying Agent Agreement,
dated February 9, 1988, among Pertamina, Roy M.
Huffington, Inc., Huffington Corporation, Virginia
International Company, VICO, Ultrastar Indonesia
Limited, Union Texas East Kalimantan Limited,
Universe Tankships, Inc., Total Indonesia, Unocal
Indonesia, Ltd., Indonesia Petroleum, Ltd. and
Continental Bank International (filed as Exhibit
10.42 to the Union Texas Petroleum Holdings,
Inc.'s 1991 Form 10-K (Commission File No. 1-
9019)).*
(10)-25- Amendment No. 1 to Bontang III Trustee and Paying
Agent Agreement, dated as of December 11, 1992,
among Pertamina, VICO, Virginia International
Company, Ultramar Indonesia Limited, Union Texas
East Kalimantan Limited, Opicoil Houston, Inc.,
Universe Gas & Oil Company, Inc., Total Indonesia,
Unocal Indonesia Ltd., Indonesia Petroleum, Ltd.
and Continental Bank International, as Bontang III
Trustee (Filed as Exhibit 10.83 to the Union
Texas Petroleum Holdings, Inc.'s 1992 Form 10-K
(Commission File No. 1-9019)).*
* Incorporated herein by reference.
(10)-26- Amended and Restated Debt Service Allocation
Agreement dated February 9, 1988 among Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara and Roy M.
Huffington, Inc., Virginia International Company,
Ultramar Indonesia Limited, Virginia Indonesia
Company, Union Texas East Kalimantan Limited,
Universe Tankships, Inc., Huffington Corporation,
Total Indonesie, Unocal Indonesia, Ltd. and
Indonesia Petroleum, Ltd. (filed as Exhibit (10)-
40- to the Company's 1988 Form 10-K (No.
1-8791)).*
(10)-27- Letter agreement between Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara and Chinese Petroleum
Corporation, dated December 1, 1989.
(10)-28- Memorandum of Agreement (Yokkaichi Extension),
made as of December 21, 1989, between Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara, as
Seller, and Chubu Electric Power Co., Inc., as
Buyer (filed as Exhibit (10)-60- to the Company's
1989 Form 10-K (No. 1-8791)).*
(10)-29- Badak IV LNG Sales Contract dated October 23, 1990
between Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara (Pertamina), as Seller and Osaka Gas
Co., Ltd., Tokyo Gas Co., Ltd. and Toho Gas Co.,
Ltd., as Buyers.
(10)-30- LNG Sales Contract dated as of October 13, 1992
between Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara, as Seller and Hiroshima Gas Co., Ltd.
and Nippon Gas Co., Ltd., as Buyers.
(10)-31- LNG Sales Contract dated as of October 13, 1992
between Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara, as Seller and Osaka Gas Co., Ltd., as
Buyer.
(10)-32- Supply Agreement for Natural Gas to Badak IV LNG
Sales Contract dated August 12, 1991 between
Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, Virginia Indonesia Company, Opicoil
Houston, Inc., Ultramar Indonesia Limited, Union
Texas East Kalimantan Limited, Universe Gas & Oil
Company, Inc. and Virginia International Company.
(10)-33- Second Supply Agreement for Package IV Excess
Sales (Osaka Gas Contract - Package IV Quantities)
between Pertamina and Virginia Indonesia Company,
LASMO Sanga Sanga Limited, Opicoil Houston, Inc.,
Union Texas East Kalimantan Limited, Universe Gas
& Oil Company, Inc., and Virginia International
Company dated September 22, 1993, effective
January 1, 1991.
* Incorporated herein by reference.
(10)-34- Third Supply Agreement for Package IV Excess Sales
(Toho Gas Contract - Package IV Quantities)
between Pertamina and Virginia Indonesia Company,
LASMO Sanga Sanga Limited, Opicoil Houston, Inc.,
Union Texas East Kalimantan Limited, Universe Gas
& Oil Company, Inc., and Virginia International
Company dated September 28, effective January 1,
1991.
(10)-35- Eleventh Supply Agreement for Package IV Excess
Sales (1973 Contract Build-Down Quantities)
between Pertamina and Virginia Indonesia Company,
LASMO Sanga Sanga Limited, Opicoil Houston, Inc.,
Union Texas East Kalimantan Limited, Universe Gas
& Oil Company, Inc., and Virginia International
Company dated September 22, 1993, effective
January 1, 1990.
(10)-36- Bontang IV Producers Agreement dated August 26,
1991 by Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara, Virginia Indonesia Company, Opicoil
Houston, Inc., Virginia International Company,
Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited, Universe Gas & Oil Company,
Inc., Total Indonesie, Unocal Indonesia, Ltd. and
Indonesia Petroleum, Ltd., in favor of The Chase
Manhattan Bank, N.A. as Agent for the Lenders.
(10)-37- $750,000,000 Bontang IV Loan Agreement dated
August 26, 1991 among Continental Bank
International as Trustee under the Bontang IV
Trustee and Paying Agent Agreement as Borrower,
Chase Manhattan Asia Limited and The Mitsubishi
Bank, Limited as Coordinators, the other banks and
financial institutions named herein as Arrangers,
Co-Arrangers, Lead Managers, Managers, Co-Managers
and Lenders, The Chase Manhattan Bank, N.A. and
the Mitsubishi Bank, Limited as Co-Agents and The
Chase Manhattan Bank, N.A. as Agent.
(10)-38- Bontang IV Trustee and Paying Agent Agreement
dated August 26, 1991 among Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara, Virginia
Indonesia Company, Opicoil Houston, Inc., Virginia
International Company, Ultramar Indonesia Limited,
Union Texas East Kalimantan Limited, Universe Gas
& Oil Company, Inc., Total Indonesie, Unocal
Indonesia, Ltd., Indonesia Petroleum, Ltd. and
Continental Bank International.
* Incorporated herein by reference.
(10)-39- Amended and Restated Bontang Processing Agreement
dated February 9, 1988 among Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara and Roy M.
Huffington, Inc., Huffington Corporation, Virginia
International Company, Virginia Indonesia Company,
Ultramar Indonesia Limited, Union Texas East
Kalimantan Limited, Universe Tankships, Inc.,
Total Indonesie, Unocal Indonesia, Ltd., Indonesia
Petroleum, Ltd. and P.T. Badak Natural Gas
Liquefaction Company (filed as Exhibit (10)-39- to
the Company's 1988 Form 10-K (No. 1-8791)).*
(10)-40- Bontang Capital Projects Loan Agreement No. 1
between Continental Bank International as Trustee
under the Badak Trustee and Paying Agent
Agreement, Borrower, and The Industrial Bank of
Japan Trust Company, Agent, for the Lenders dated
as of September 10, 1986 (filed as Exhibit (4)-13-
to the Company's 1986 Form 10-K (No. 1-8791)).*
(10)-41- Bontang Capital Projects Loan Agreement No. 2
dated June 9, 1987, among Continental Bank
International, as Trustee under the Badak Trustee
and Paying Agent Agreement (Borrower), the banks
named therein as Lead Managers and Lenders and The
Industrial Bank of Japan Trust Company (Agent)
(filed as Exhibit (10)-31 to the Company's 1987
Form 10-K (No. 1-8791)).*
(10)-42- Bontang LPG Sales and Purchase Contract between
Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, as Seller, and National Federation of
Agricultural Co-Operative Associations (Zen-Noh),
as Buyer, dated February 21, 1992.
(10)-43- Bontang LPG Sales and Purchase Contract between
Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, as Seller, and Japan Indonesia Oil Co.,
Ltd., as Buyer, dated February 20, 1992.
(10)-44- Arun and Bontang LPG Sales and Purchase Contract
between Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara (Pertamina) as Seller and Mitsubishi
Corporation, Cosmo Oil Co., Ltd., Nippon Petroleum
Gas Co., Ltd., Showa Shell Sekiyu K.K., Kyodo Oil
Co., Ltd., Idemitsu Kosan Co., Ltd. and Mitsui
Liquefied Gas Co., Ltd. as Buyers dated July 15,
1986 (filed as Exhibit (10)-60- to the Company's
1991 Form 10-K (No. 1-8791)).*
(10)-45- Bontang LPG Supply Agreement, dated November 17,
1987, between Perusahaan Pertambangan Minyak Dan
Gas Bumi Negara (Pertamina) and the parties to the
Joint Venture Agreement.
* Incorporated herein by reference.
(10)-46- Advance Payment Agreement between Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara
(Pertamina) and Arun Bontang Project Finance Co.,
Ltd., dated February 16, 1987 (filed as Exhibit
(4)-15- to the Company's 1986 Form 10-K (No. 1-
8791)).*
(10)-47- Agreement and Plan of Reorganization of ENSTAR
Corporation, dated December 22, 1989, by and among
Unimar Company, Ultrastar, Inc., Unistar, Inc.,
ENSTAR Corporation, Newstar Inc., Union Texas
Development Corporation, Union Texas Petroleum
Corporation and Ultramar America Limited.
(10)-48- Amendment to Agreement and Plan of Reorganization
of ENSTAR Corporation, dated May 1, 1990, by and
among Unimar Company, Ultrastar, Inc., Unistar,
Inc., ENSTAR Corporation, Ultramar Production
Company, Union Texas Development Corporation,
Union Texas Petroleum Corporation and Ultramar
America Limited.
(21)-1- List of Subsidiaries of the Company.
(23)-1- Consent of Ernst & Young.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the
last quarter of the fiscal year ended December 31,
1993.
* Incorporated herein by reference.