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 publicly-traded Delaware corporation.
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 to utility
and industrial companies in Japan, Taiwan and South Korea. See
"The Joint Venture" below.
The principal executive offices of the Company are at 1221
McKinney, Suite 600, Houston, Texas 77010-2015 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,
1994, VICO, in its capacity as the Joint Venture operator, had
approximately 2,000 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 materially 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.
1994
High 9-1/2 10 10 10
Low 8-3/8 8-1/2 9-1/8 9
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
Source of prices: American Stock Exchange
(b) Holders. As of February 14, 1995, 10,778,590 IPUs were
outstanding and held by approximately 4,172 holders of record.
(c) Payments per Indonesian Participating Unit.
Period Payment Date Payment
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
First Quarter - 1994 May 31, 1994 0.60
Second Quarter - 1994 August 29, 1994 0.29
Third Quarter - 1994 November 29, 1994 0.45
Fourth Quarter - 1994 March 1, 1995 0.49
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.
BUSINESS
The Joint Venture
The Joint Venture participants are INTERNATIONAL (15.625%),
VICO (7.5%), LASMO Sanga Sanga Limited (an indirect subsidiary of
LASMO) (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 1.1 million acre area in East Kalimantan (East
Kalimantan Contract Area). In accordance with the requirements of
the PSC, during both 1991 and 1994, the Joint Venture selectively
relinquished approximately 10 percent of the PSC area. The Joint
Venture must relinquish a further 10 percent of the PSC area 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 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, 1994,
the following wells were drilled in the East Kalimantan Contract
Area:
Total Completed
Field Wells Productive Dry Suspended
Location Drilled Wells Holes Wells
Badak 186 176 7 3
Nilam 161 161 - -
Semberah 57 53 4 -
Mutiara 51 43 7 1
Pamaguan 32 26 6 -
Wailawi 6 6 - -
Other 46 6 31 9
Totals 539 471 55 13
Two significant fields, Badak and Nilam, have been discovered
in the East Kalimantan Contract 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 Contract Area: Mutiara,
Semberah, Pamaguan and Wailawi.
The tables below summarize completed exploratory and
development drilling from 1992 through 1994 for the East Kalimantan
Contract Area.
EXPLORATORY DRILLING
Wells Dry
Year Drilled Discoveries Holes
1992 2 0 2
1993 3 0 3
1994 2 1 1
Totals 7 1 6
DEVELOPMENT OR FIELD EXTENSION DRILLING
Completed
Wells For For For Dual Dry
Year Drilled Gas Oil Oil & Gas Holes
1992 31 24 5 2 -
1993 31 25 1 3 2
1994 20 10 1 8 1
Totals 82 59 7 13 3
Of 471 completed productive wells in the East Kalimantan
Contract Area, approximately 268 contain more than one completion
in the same bore hole.
Three wells were in progress as of December 31, 1994. This
includes wells that were drilled but not completed at the end of
1994. 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 a below),
average sales prices (excluding transportation costs) and
production (lifting) costs of such production for the years 1992
through 1994.
Years ended December 31,
1994 1993 1992
Gas Production
for LNG (MMCF) (a) 735,116 637,847 621,600
Company's Net Share
(MMCF equivalency) (b) 90,046 80,873 77,264
Average Sales Price
per MCF (c) $2.45 $2.75 $2.92
Average Production (Lifting)
Cost per MCF $0.12 $0.13 $0.14
(a) 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.
(b) 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.
(c) 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 (a) 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.
Costs incurred to operate and maintain wells and related equipment
and field facilities are considered to be production costs.
During 1994, the Company's share of the Joint Venture's
expenditures was approximately $52 million, including $2 million of
exploration expenditures and $32 million of development
expenditures. In 1995, the Company's share of the Joint Venture's
expenditures is expected to total $49 million, including $2 million
of exploration expenditures and $29 million of development
expenditures. The 1995 budgeted expenditures primarily reflect
continued development drilling required to maintain adequate gas
deliverability and to maximize cash flow.
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, 1991, 1992, 1993 and 1994 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, 1991 135,712 7,615,739
Dec. 31, 1992 146,055 7,436,171
Dec. 31, 1993 203,068 7,187,995
Dec. 31, 1994 224,995 7,149,560*
* equivalent to approximately 6,914 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.
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 of approximately 2.5 billion cubic feet of
gas per operating day and a peak production capacity of
approximately 639,000 barrels or 101,500 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 six train
plant is the largest LNG processing facility in the world and has
the capacity to deliver 275 cargoes per year.
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; at December 31, 1994 the
floating interest rate was 6.1875 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 supplies the LNG required for the LNG sales contract with
Osaka Gas, Tokyo Gas and Toho Gas for the sale of 2,020 trillion
BTUs over a twenty-year period which commenced in 1994. In August
1991, Pertamina and an international consortium of commercial banks
completed project financing of $750 million of which $699 million
was required to fund the construction of Train F and related
support facilities at an interest rate of LIBOR plus 1.25 percent;
at December 31, 1994 the floating interest rate was 6.5625 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 which commenced in December 1994.
As a result of the production performance of Train E,
Pertamina has 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 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 14).
During 1994, Pertamina authorized construction of a seventh
LNG processing train (Train G), a third LNG/LPG dock, an additional
LPG storage tank and other support facilities at the LNG Plant.
These facilities are scheduled for completion in late 1997. The
total funding, including interest, for the project is expected to
be approximately $975 million. In January 1995, proposals were
requested from the Japanese and other commercial banks for non-
recourse financing to be repaid over ten years. Train G will
supply LNG for sales contracts agreed to during 1994 - the 1973
Sales Contract Extension, the Korea Medium Term Sales Contract and
the Taiwan Medium Term Sales Contract (see pages 14 and 15 for
contract descriptions).
In addition, preliminary studies are currently being conducted
by Pertamina, the Joint Venture and other production sharing
contractors regarding the planning, development, financing and
construction of an eighth train (Train H), which could come on
stream early in 2000, to primarily support long-term contracts
preliminarily agreed to in 1994 with CPC and Korea Gas Corporation.
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 major 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 1994 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 294,000 189,630 2000 Taiwan LNG Sales
Contract
Train F and
Support
Facilities 699,000 688,285 2004 Train F LNG
Sales Contract
2nd Loading Dock
& Train E
Support
Facilities 135,000 16,200 1995 1973 LNG Sales
Contract (a)
LPG Facilities 157,700 74,165 1999 LPG Sales
Contract
(a) 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
1992 211 606 $3.00
1993 216 621 $2.82
1994 247 716 $2.52
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 Joint Venture and other gas producers in Indonesia 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. The Joint
Venture's allocation in the LNG sales contracts has declined over
time since the initial 1973 Sales Contract, when the Joint Venture
was virtually the only supplier to the LNG Plant, to the present
when there are several other major production sharing contractors
supplying gas to the LNG Plant and sharing in the allocation of
volumes. 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 1994 Remaining Base LNG Price
Volumes Cargoes Cargoes Per MMBTU (a)
Package and Equity Interest TBTUs Gross/Net Gross/Net 12/31/94 2/24/95
(b) (b)
Package I - 97.9%
1973 LNG Sales Contract
Term: 1977 - 1999 462 66/63 157/154 $2.58 $2.84
Package II - 66.4%
1981 LNG Sales Contract
Term: 1983 -2003 1,409 61/40 484/318 $2.54 $2.82
Package IIIA - 50%
Korean Carryover Sales
Contract
Term: 1986 - 2006 180 5/3 61/31 $2.58 $2.84
Package IIIB - 29.6%
Taiwan LNG Sales Contract
Term: 1990 - 2009 1,369 29/9 432/138 $2.52 $2.79
Toho LNG Sales Contract
Term: 1988 - 1997 17 2/- 6/2 $2.58 $2.84
Additional 1981 Sales
Contract cargoes
Term: 1990 - 2003 146 6/2 50/14 $2.54 $2.82
Package IV - 27.2%
Train F LNG Sales Contract
Term: 1994 - 2013 2,271 36/10 772/210 $2.40 $2.66
Korea II LNG Sales Contract
Term: 1994 - 2014 1,115 7/2 379/103 $2.42 $2.68
1973 LNG Sales Contract
Extension
Term: 1997 - 1999 459 - 156/42 - -
Medium City Gas Company
Sales Contract
Term: 1996 - 2015 185 - 438/17 - -
Other LNG Sales Contracts
Terms: Various ranging
from 1990 - 1999 32 35/9 11/4 $2.40 $2.66
Package V (c)
1973 Sales Contract
Extension
Term: 2000 - 2009 4,368 - 1,522/335 - -
Korea Medium Term Sales
Contract
Term: 1995 - 1999 315 - 108/24 - -
Taiwan Medium Term Sales
Contract
Term: 1998 - 1999 46 - 16/4 - -
Package VI (d)
1981 Sales Contract Extension
Term: 2003 - 2008 941 - 320/70 - -
Totals 13,315 247/138 4,912/1,466
(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) The Company expects the Joint Venture's final participation to be in a range from 20 percent to 24 percent, subject
to final agreement with Pertamina and the other East Kalimantan producers. In the interim the Company has used a
provisional rate of 22 percent.
(d) The IJV's percentage in Package VI sales is expected to be similar to that of Package V, between 20 percent and 24
percent, in the absence of any significant additional reserves in the IJV or other contractor areas.
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 the 1981 LNG Sales
Contract, the Train F LNG Sales Contract and the Korea II LNG Sales
Contract, where the buyers bear the risk of loss and the
transportation costs. In those instances where the seller bears
the risk of loss during shipment, the cargoes are insured.
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.
In January of 1994, deliveries began under a 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 ending in 2013.
In July of 1994, deliveries began under a LNG sales contract
with Korea Gas Corporation (Korea II LNG Sales Contract) for the
sale of at least 2,044 trillion BTUs over a twenty-year period
ending in 2014. The LNG Plant will provide 50 percent and the Arun
Plant 50 percent of the LNG requirements for the contract.
In January of 1995, deliveries began under the Korea Medium
Term Sales Contract with Korea Gas Corporation for the sale of 315
trillion BTUs (108 cargoes) over a five-year period ending in 1999.
The Joint Venture has been allocated a 22 percent equity interest
in these deliveries pending final agreement among Pertamina and the
East Kalimantan producers.
During 1994, Pertamina reached agreement to extend the 1973
and 1981 LNG Sales Contracts. The 1973 Sales Contract Extension
involves the sale of 4,368 trillion BTUs (1,522 cargoes) over a
ten-year period commencing in 2000. The 1981 Sales Contract
Extension involves the sale of 941 trillion BTUs (320 cargoes) over
a five-year period commencing in 2003. Also executed was the
Taiwan Medium-Term Sales Contract for the sale of 46 trillion BTUs
(16 cargoes) between 1998 and 1999. The Joint Venture has been
allocated a provisional 22 percent equity interest in deliveries
under the 1973 LNG Sales Contract Extension and the Taiwan Medium-
Term Sales Contract (both included in Package V). The equity
sharing percentage for the 1981 Sales Contract Extension (included
in Package VI) is expected to be similar to that of Package V.
Other Gas Sales - The Joint Venture is 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. In 1994, Pertamina executed a twenty-year
contract, commencing in November of 1997, for the sale of
approximately 70 MMCF per day of gas to be supplied by the Joint
Venture to a local methanol plant at a price not less than $1.25
per MMBTU for the first ten years.
Marketing and Distribution of LPG
Pertamina has individual sales contracts with seven Japanese
utility companies for the sale and delivery of 9,217,000 metric
tons of LPG through the year 1998, of which 3,877,000 metric tons
will be produced by the LPG facilities at the LNG Plant. In 1994,
23 cargoes, including spot sales, totaling 827,000 metric tons were
shipped to Japan. The first 385,000 metric tons of LPG sold under
the contract were sold at the weighted average price for all LPG
imported into Japan, except from Indonesia and Abu Dhabi, plus a
premium of $10.97 per ton. The next 305,000 metric tons of LPG
sold under the contract were sold at the aforementioned price plus
a premium of $18.31 per metric ton. The remaining LPG was sold on
the spot market at prevailing prices. The LPG is extracted from
the gas stream and stored at facilities at the LNG plant. The
Joint Venture was allocated a Package IIIB equity rate for the
revenues from the first 379,000 metric tons sold, a Package IV
equity rate for the revenues from the next 147,000 metric tons
sold, and a Package V equity rate (on a provisional basis) for the
revenues from the remaining 301,000 metric tons sold during 1994,
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
1992 through 1994 are:
Years ended December 31,
1994 1993 1992
Total Oil and
Condensate Sales
(barrels) (a) 22,635,461 20,905,232 18,633,441
Company's Net Share
(barrel equivalency) (a) 1,966,686 1,928,005 1,804,511
Average Sale Price - f.o.b.
Indonesia (per barrel) (b) $16.58 $18.31 $20.65
Average Production (Lifting)
Cost (per barrel) $0.72 $ 0.77 $ 0.80
(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 losses of $0.32 and $0.02 per
barrel in 1993 and 1992 respectively. Effective July 1, 1993,
the Company is no longer exposed to marketing fluctuations
incurred on the sale of its share of oil and condensate.
The Joint Venture's sales of oil and condensate averaged
approximately 49,700 barrels per day (BOPD) during 1994, compared
to approximately 48,600 BOPD during 1993.
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.
1994 1993 1992 1991 1990
(millions of dollars)
Operating revenues $198 $201 $206 $208 $203
Earnings from
continuing operations 36 30 24 18 7
Net earnings 33 30 24 18 11
Total assets 422 449 472 500 519
Debt and security
subject to
mandatory redemption - 33 32 31 50
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
Cash flow from operations amounted to $85.6 million in 1994,
compared to 1993 cash flow of $81.5 million. Capital expenditures
of $34.4 million were primarily spent on continued development
drilling in the Badak, Nilam, Mutiara and Semberah fields as was
the case in 1993. Net capital distributions in 1994 to the
partners from the Company were $18.1 million (1993, $41.1 million).
The decrease in distributions to the partners was primarily
attributable to the redemption of $36.4 million of debt as
discussed below.
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.
During 1994, the Company paid the Internal Revenue Service
$4.0 million to settle its 1984 windfall profit tax dispute. The
Company had fully reserved for this liability. The Company
continues to maintain a $3.8 million reserve and accrue interest
for the potential exposure in a royalty dispute.
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. 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 1995 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, South
Korean and Taiwanese industrial and utility companies. 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 1994, 138
net equivalent cargoes were shipped, of which 124 were under these
long-term contracts. In 1995, the Company anticipates shipping
approximately 134 net equivalent cargoes.
In the first quarter of 1994 the LNG plant began deliveries of
LNG under a twenty year sales contract with Osaka Gas, Tokyo Gas
and Toho Gas (Train F LNG Sales Contract) for the delivery of 2,020
trillion BTUs. In July 1994, the plant began deliveries to Korea
Gas Corporation (Korea II LNG Sales Contract) under the terms of
another twenty-year sales contract for 2,044 trillion BTUs, 50
percent of which will be supplied by the LNG plant.
During 1994, Pertamina entered into the Korea Medium Term
Sales Contract with Korea Gas Corporation for the delivery of 315
trillion BTUs or 108 LNG cargoes which deliveries commenced in
January 1995 and continue until 1999. The Joint Venture's revenue
sharing percentage is provisionally determined to be 22.0 percent
with a retroactive adjustment to be made upon finalizing the
revenue sharing percentage between all parties.
During 1994, Pertamina executed agreements to extend the 1973
and 1981 LNG Sales Contracts. The 1973 Sales Contract Extension
involves the sale of 4,368 trillion BTUs (1,522 cargoes) over a
ten-year period commencing in 2000. The 1981 Sales Contract
Extension involves the sale of 941 trillion BTUs (320 cargoes) over
a five-year period commencing in 2003. Also executed was the
Taiwan Medium-Term Sales Contract for the sale of 46 trillion BTUs
(16 cargoes) between 1998 and 1999. The Joint Venture has been
allocated a provisional 22 percent equity interest in deliveries
under the 1973 LNG Sales Contract Extension and the Taiwan Medium-
Term Sales Contract (both included in Package V). The equity
sharing percentage for the 1981 Sales Contract Extension (included
in Package VI) is expected to be similar to that of Package V.
Capital expenditures of the Joint Venture relate to the
exploration and development of the oil and gas fields. In 1995,
the Company's share of the Joint Venture expenditures is expected
to total $49 million, including $2 million of exploration
expenditures and $29 million of development expenditures. The 1995
budgeted expenditures primarily reflect continued development
drilling required to maintain gas deliverability and to maximize
cash flow.
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, 1994 which would have a material impact upon the
Company's financial condition or operations.
Results of Operations
1994 Compared to 1993
Net earnings for the year ended December 31, 1994 were $33.1
million as compared to $30.5 million for the year ended December
31, 1993. Included in the 1994 results was an extraordinary loss
of $3.1 million for the redemption of its 8 1/4 percent debentures.
The increased net earnings for the 1994 period benefitted from
decreased interest expense, depletion, and exploration cost
partially offset by lower oil and gas revenues. Cash flow from
operations for the year ended December 31, 1994 was $85.6 million
as compared to $81.5 million for the year ended December 31, 1993.
Revenues for the year ended December 31, 1994 were $197.9
million compared to $200.6 million in the corresponding 1993
period. The decrease in revenues was attributable to an 11 percent
and 9 percent decrease in the average price received for LNG and
crude oil, respectively, partially offset by a 9 percent increase
in LNG volumes. The Joint Venture's share of LNG volumes in 1994
increased 35 trillion BTUs to 404 trillion BTUs (138 net equivalent
cargoes) as compared to 369 trillion BTUs (127 net equivalent
cargoes) in the 1993 corresponding period. The increase in LNG
volumes was made possible by the completion of the plant expansion
in late 1993 allowing for the commencement of two twenty-year
contracts with certain Japanese and South Korean buyers. Crude oil
and condensate volumes net to the Company in 1994 and 1993 were 2.0
million barrels and 1.9 million barrels respectively.
The average price received for LNG in 1994 decreased to $2.52
per million BTUs as compared to $2.82 per million BTUs for the
corresponding 1993 period. The realized crude oil price fell
$1.53 per barrel to $16.46 per barrel in 1994 as compared to $17.99
per barrel in the same 1993 period. Additionally, the 1994 results
benefitted from a favorable non-taxable crude oil revenue final
settlement from 1993 reflecting a reallocation of certain capital
expenditures from gas to oil.
The table below summarizes the volumes and average prices for
the Company's sales for the years ended December 31, 1994 and 1993:
1994 1993
Volumes
LNG (TBTUs) 93.4 85.3
Crude (MMBLS) 2.0 1.9
Prices
LNG ($/MMBTU) 2.52 2.82
Realized Crude Oil ($/BBL) 16.46 17.99
Production costs for 1994 increased $0.9 million to $19.6
million as compared to the prior year. Depletion, depreciation and
amortization for 1994 was $50.6 million, a decrease of $2.2 million
from the prior year, reflecting higher proved reserves partially
offset by higher levels of production. During 1994, proved
reserve additions included approximately 2.7 million barrels of oil
and 96.3 billion cubic feet of gas.
Interest expense for 1994 decreased $4.5 million from the
prior year reflecting the repayment of the Company's 8 1/4%
debentures on January 5, 1994. An extraordinary loss of $3.1
million was recognized due to the redemption of the debentures.
Exploration costs decreased in 1994 as compared to the prior
period due to lower dry hole costs and lower seismic costs. During
1994, the Company drilled two exploration wells, making one
discovery as compared to 1993 when the Company wrote off three dry
holes.
General and administrative expenses for 1994 were $1.9 million
a slight increase over the prior year.
The effective tax rates for 1994 and 1993 were 70 percent and
74 percent respectively. These rates were the aggregate of
Indonesian source income taxed at a 56 percent rate, and certain
expenses attributable to Unimar activities which are not
deductible in the partnership. The decrease in the effective rate
was principally the result of decreased non-deductible interest
expense.
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
reversed $3.5 million in 1993 as being no longer required. At the
same time, the Company 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 the $2.8 million in 1992 due to the absence of
certain non-recurring charges. Both interest expense and interest
income were in line with the results for 1992. 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.
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, 1994 and 1993,
and the related consolidated statements of earnings, cash flows,
and partners' capital for each of the three years in the period
ended December 31, 1994. These financial statements are the
responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements 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, 1994 and 1993, and the consolidated results of their operations
and their cash flows for each of the three years in the period
ended December 31, 1994, in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
Houston, Texas
February 24, 1995
UNIMAR COMPANY AND SUBSIDIARIES
Consolidated Balance Sheet
December 31, 1994 and 1993
(Thousands of dollars)
1994 1993
ASSETS
Current assets:
Cash and cash equivalents $ 3,421 $ 8,284
Accounts and notes receivable 5,882 11,604
Inventories 12,467 10,886
Other current assets 2,682 2,381
Total current assets 24,452 33,155
Property, plant and equipment, at cost:
Oil and gas properties (successful
efforts method) 1,023,546 991,901
Other 2,113 3,283
1,025,659 995,184
Less: accumulated depreciation and
depletion 631,499 580,807
Net property, plant and equipment 394,160 414,377
Other assets 3,567 1,252
$ 422,179 $ 448,784
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Current maturities of long term debt $ - $ 33,292
Accounts payable 2,620 3,229
Advances from joint venture partners 1,629 3,589
Accrued liabilities 14,987 9,314
Income and other taxes 11,326 19,280
Total current liabilities 30,562 68,704
Deferred income taxes 162,966 167,206
Other liabilities 10,403 10,048
Commitments and Contingencies
Partners' capital 298,248 282,826
Less: demand notes receivable 80,000 80,000
218,248 202,826
$ 422,179 $ 448,784
See accompanying Notes to Consolidated Financial Statements.
UNIMAR COMPANY AND SUBSIDIARIES
Consolidated Statement of Earnings
Years ended December 31, 1994, 1993 and 1992
(Thousands of dollars)
1994 1993 1992
Oil and gas production revenues $197,925 $200,588 $205,897
Production costs 19,623 18,751 25,600
Depletion, depreciation and
amortization 50,554 52,710 57,275
Exploration costs including dry holes 2,787 4,947 9,066
Operating profit 124,961 124,180 113,956
General and administrative expenses (1,923) (1,778) (2,819)
Interest expense (55) (4,542) (4,701)
Interest income 274 309 605
Other income (expense) (624) 18 1,236
Earnings before income taxes and 122,633 118,187 108,277
extraordinary item
Income tax expense (benefit)
Current 90,661 90,876 90,121
Deferred (4,240) (3,164) (5,520)
86,421 87,712 84,601
Earnings before extraordinary item 36,212 30,475 23,676
Extraordinary loss on redemption
of debt 3,108 - -
Net earnings $ 33,104 $ 30,475 $23,676
See accompanying Notes to Consolidated Financial Statements.
/TABLE
UNIMAR COMPANY AND SUBSIDIARIES
Consolidated Statement of Cash Flows
Years ended December 31, 1994, 1993 and 1992
(Thousands of dollars)
1994 1993 1992
Net earnings $ 33,104 $ 30,475 $ 23,676
Adjustments to reconcile to net cash
provided by operating activities:
Loss on extraordinary item 3,108 - -
Depletion, depreciation and
amortization 50,889 53,087 57,622
Deferred income taxes (4,240) (3,164) (5,520)
Exploratory dry hole costs 2,635 3,365 6,444
Interest accretion - 1,473 1,294
Loss on sale of assets 710 - -
(Increase) Decrease in operating
receivables 5,722 4,327 (6,153)
(Increase) Decrease in inventories (1,581) 4,257 4,372
Increase (Decrease) in operating payables
and accruals 5,482 (14,526) 10,880
Increase (Decrease) in other operating
assets and liabilities (10,215) 2,245 789
Net cash provided by operating
activities 85,614 81,539 93,404
Investment activities:
Capital expenditures (34,399) (40,142) (39,217)
Proceeds from sale of assets 382 - -
Net cash used in investing activities (34,017) (40,142) (39,217)
Financing activities:
Capital distributions, net (18,100) (41,100) (58,240)
Debt repaid (36,400) - -
Net cash used in financing activities (54,500) (41,100) (58,240)
Increase (Decrease) in advances from joint
venture partners (1,960) 1,526 165
Net increase (decrease) in cash and
cash equivalents (4,863) 1,823 (3,888)
Cash and cash equivalents at beginning
of year 8,284 6,461 10,349
Cash and cash equivalents at end
of year $ 3,421 $ 8,284 $ 6,461
IPU distributions paid $ 18,539 $ 17,569 $ 17,352
Interest paid $ 331 $ 3,072 $ 3,405
Income taxes paid $ 94,174 $ 88,787 $ 83,473
See accompanying Notes to Consolidated Financial Statements.
/TABLE
UNIMAR COMPANY AND SUBSIDIARIES
Consolidated Statement of Changes in Partners' Capital
Years ended December 31, 1994, 1993 and 1992
(Thousands of dollars)
Ultrastar Unistar Total
Balance, January 1, 1992 $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
Contributions 32,900 32,900 65,800
Cash distributions (41,950) (41,950) (83,900)
ENSTAR pension liability
adjustment 209 209 418
Net earnings 16,552 16,552 33,104
Balance, December 31, 1994 $143,495 $154,754 $298,249
See accompanying Notes to Consolidated Financial Statements.
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.
Oil and gas assets are reviewed when they are fully
placed in service to insure that capitalized costs of the
asset do not exceed undiscounted future net pre-tax cash
flows and are reviewed annually.
(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. The
Company is not a party to any gas balancing arrangements.
(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. These deposits 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, 1994 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, 1994 and 1993, cash and cash
equivalents included $1,629 and $3,589, 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 and
related assets, 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 1994, 1993 and 1992. 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 72 percent, 68 percent,
and 69 percent of the Company's gross revenues in 1994, 1993
and 1992, respectively.
(4) CASH AND CASH EQUIVALENTS
At December 31, 1994 and 1993, cash and cash equivalents
includes short-term deposits and highly liquid debt
instruments, purchased at a maturity with three months or
less, of $3,421 and $8,284, respectively.
(5) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is as follows:
1994 1993
Oil and gas producing properties
Proved properties $1,023,546 $991,447
Uncompleted wells in progress - 454
1,023,546 991,901
Less: Accumulated depletion 630,414 579,860
393,132 412,041
Other, net of accumulated depreciation
of $1,085 in 1994 and $947 in 1993 1,028 2,336
$394,160 $414,377
(6) ACCRUED LIABILITIES
As at December 31, 1994 and 1993, accrued liabilities
consisted of:
1994 1993
Accrued IPU liability $ 5,792 $ 4,804
Indonesian operating accruals 8,179 2,358
Other 1,016 2,152
$14,987 $ 9,314
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(7) LEASES
VICO leases office space in Indonesia, Singapore and the
United States in connection with the operations of the Joint
Venture. Rental expense amounted to $4,553, $4,982 and $5,230
in 1994, 1993 and 1992 respectively. Minimum annual rental
commitments as at December 31, 1994 under non-cancelable
leases are as follows:
1995 $10,827
1996 3,376
1997 1,875
1998 1,371
1999 1,370
2000 and thereafter 1,485
Total minimum lease payments $20,304
Minimum payments have not been reduced by future minimum
sublease rentals of $1,717 due under non-cancelable leases.
Certain leases contain renewal options and escalation clauses
which require payments of additional rent to the extent of
related operating cost increases.
(8) INCOME AND OTHER TAXES
At December 31, 1994, the Company had investment tax credit
carryovers of $3,523 that expire in 1995 through 2001, net
foreign tax credit carryovers of $23,493 for regular tax
purposes and $130,358 for alternative minimum tax purposes
both of which expire in 1995 through 1999. The Company has a
minimum tax credit of $13,187 that carries forward
indefinitely. Deferred tax assets of $23,493 and $22,985 for
foreign tax credit carryforwards and $3,523 and $3,523 for
investment tax credit carryforwards at December 31, 1994 and
1993, 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)
(8) 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 as of December 31, 1994 and
1993 are as follows:
1994 1993
Deferred tax liabilities:
Oil and gas proven property costs
capitalized for financial purposes
and deducted for foreign taxes $162,966 $167,206
For financial reporting purposes, income before income taxes
includes the following components:
1994 1993 1992
Pretax income:
U. S. $ (2,423) $ (7,026) $(12,089)
Foreign 125,056 125,213 120,366
$122,633 $118,187 $108,277
Significant components of the provision for income taxes
attributable to continuing operations are as follows:
1994 1993 1992
Current:
Federal $ 2,884 $ 2,446 $ 2,942
Foreign 87,777 88,430 87,179
$90,661 $90,876 $90,121
Deferred:
Federal $ - $ - $ -
Foreign (4,240) (3,164) (5,520)
$(4,240) $(3,164) $(5,520)
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(8) 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:
1994 1993 1992
Tax at U.S. Statutory Rate 35.0% 35.0% 34.0%
Foreign statutory tax rate
in excess of federal
statutory tax rate 21.0% 21.0% 22.0%
Expenses not deductible in
calculating Indonesian
taxes 11.0% 12.8% 13.1%
Unutilized domestic book
losses 0.7% 2.1% 3.8%
Domestic income taxed at
less than foreign statutory
rate 0.4% 1.2% 2.5%
U.S. taxes related to
foreign operations 2.4% 2.1% 2.7%
Total 70.5% 74.2% 78.1%
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(9) 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 September 25,
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, 1994 and 1993, there
were 10,778,590 IPUs issued and outstanding. Based on the
closing price on the American Stock Exchange of the IPUs at
December 31, 1994 of $9.125 per unit, the outstanding IPUs had
a total market valuation of $98 million.
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
1994 1993
Positive cash flow:
Gas receipts $188,211 $175,840
Oil and condensate receipts 33,411 34,741
Other non-revenue cash receipts from
Joint Venture 5,370 9,799
Total positive cash flow 226,992 220,380
Less negative cash flow:
Expenditures to Joint Venture 56,150 66,184
Indonesian income taxes 90,264 85,401
Total negative cash flow 146,414 151,585
Net positive cash flow from 23.125%
interest in Joint Venture $ 80,578 $ 68,795
Net cash flow for benefit of IPU holders $ 19,724 $ 16,922
Participation Payment per unit $ 1.83 $ 1.57
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(10) LONG-TERM DEBT
The 8-1/4% convertible subordinated guaranteed debentures, due
in December 1995, were repaid on January 5, 1994 in the
principal amount of $36,400. The debentures had a carrying
value at December 31, 1993 of $33,292 resulting in an
extraordinary loss on redemption of $3,108, which was
recognized in the first quarter of 1994.
(11) 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, 1994, 1993 and 1992 was $211, $263 and $200, respectively.
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 $1.1 million,
$0.2 million and $1.4 million for the years ended December 31,
1994, 1993 and 1992 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, 1994, 1993 and 1992
respectively was as follows:
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(11) BENEFIT PLANS (continued)
1994 1993 1992
Actuarial present value of:
Vested accumulated benefit
obligation $(16,155) $(17,763) $(16,913)
Projected vested benefit
obligation $(16,155) $(17,763) $(16,913)
Fair value of plan assets 13,902 14,902 14,353
Unfunded projected benefit
obligation (2,253) (2,861) (2,560)
Unrecognized net
loss 1,243 1,661 1,533
Unrecognized net transition
obligation 837 872 907
Adjustment required to
recognize minimum
liability (2,080) (2,533) (2,440)
Accrued pension cost
recognized in the
Consolidated Balance
Sheet $ (2,253) $ (2,861) $ (2,560)
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 was required at
December 31, 1993 and 1992 since the intangible asset
recognized did not exceed the amount of unrecognized prior
service cost.
The pension expense for 1994, 1993 and 1992 was composed of
the following:
1994 1993 1992
Interest cost $ 1,317 $ 1,300 $ 1,303
Expected return on plan
assets (1,063) (1,107) (1,108)
Net amortization and deferral 35 35 35
$ 289 $ 228 $ 230
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(in thousands of dollars unless otherwise indicated)
(11) BENEFIT PLANS (continued)
The assumed rate of return used in determining the projected
benefit obligation was 8.5 percent, 7.5 percent and 8 percent
for 1994, 1993 and 1992, respectively. The assumed long-term
rate of return on plan assets was 8 percent for 1994, 1993 and
1992. Plan assets are invested in equity and fixed income
securities.
(12) 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 a reserve of $3.8 million for potential exposure in a
royalty dispute. The Company believes it may have valid
defenses against such claims.
(13) RELATED PARTY TRANSACTIONS
All aspects of the Company's business that are not associated
with the operating management of the Joint Venture, such as
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 1994, 1993 and 1992, the charges approximated $400, $500
and $600, 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.
In addition to acting as the operator of the Joint Venture,
VICO performs engineering, pipeline maintenance, and human
resource related services for the operator of the LNG Plant,
P.T. Badak Natural Gas Liquefaction Company (P.T. Badak).
During the years ended December 31, 1994 and 1993 VICO billed
P.T. Badak $21.8 and $33.5 million for services rendered.
Accounts receivable from P.T. Badak approximated $2.4 million
and $3.3 million at December 31, 1994 and 1993, 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, 1994, 1993
and 1992 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
Proved Developed and Undeveloped
Reserves:
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
Revisions to previous estimates 2,724 96,257
Production (1,891) (92,408)
As of December 31, 1994 14,387 1,079,089
Proved Developed Reserves:
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
As of December 31, 1994 11,731 877,140
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, 1994, 1993 and 1992
(Thousands of dollars)
1994 1993 1992
Exploration costs $ 2,545 $ 5,223 $ 7,193
Development costs 31,878 36,328 34,407
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, 1994, 1993, and 1992
(Thousands of dollars)
1994 1993 1992
Revenues $197,925 $200,581 $205,847
Production costs 19,618 17,836 19,068
Exploration costs 2,787 4,947 9,066
Depreciation, depletion
and amortization 50,554 52,710 57,275
Income tax expense 86,357 87,640 81,386
Results of operations for
producing activities (1) $ 38,609 $ 37,448 $ 39,052
(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, 1994, 1993 and 1992
(Thousands of dollars)
1994 1993 1992
Future cash inflows $2,372,316 $2,085,222 $2,627,497
Future production and
development costs (593,791) (589,163) (573,047)
Future income tax expenses (874,477) (740,808) (1,037,570)
Future net cash flows 904,048 755,251 1,016,880
10% annual discount for
estimated timing of
cash flows (442,377) (375,500) (496,070)
Standardized measure of
discounted future net
cash flows $ 461,671 $ 379,751 $ 520,810
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 1994, 1993 and 1992.
1994 1993 1992
(Thousands of dollars)
Standardized measure of discounted
future net cash flows at
beginning of period $ 379,751 $ 520,810 $ 550,113
Sales and transfers of oil and gas
produced, net of
production costs (176,275) (177,720) (180,139)
Net changes in prices and
production costs 159,985 (367,050) (108,119)
Development costs incurred
during the period 31,878 36,328 34,407
Revisions of previous
quantity estimates 67,590 104,367 78,074
Accretion of discount 71,775 92,991 100,530
Net change in income taxes (73,033) 170,025 45,944
Standardized measure of discounted
future net cash flows at end
of period $ 461,671 $ 379,751 $ 520,810
Note: The standardized measure of discounted future net cash flows at
December 31, 1994, 1993 and 1992 included $59,571, $59,629 and
$90,683, respectively, in future net cash flows attributable to
IPU holders (See Footnote 9).
b) INTERIM FINANCIAL DATA (Unaudited)
The following table shows summary quarterly data for 1994, 1993 and 1992:
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter
Year Ended December 31, 1994
Revenues $ 55,151 $ 42,717 $ 51,941 $ 48,116
Operating profit $ 35,384 $ 26,018 $ 31,029 $ 32,530
Earnings before
Extraordinary
item $ 9,818 $ 8,509 $ 10,088 $ 7,797
Net earnings $ 6,710 $ 8,509 $ 10,088 $ 7,797
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
(a) Includes a $6,400 provision for prior year's windfall profit tax liability.
/TABLE
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 48) 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 45) 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.
ANDREW E. CROUCH (age 36) was appointed to the Company's
Management Board in May 1994. He is also director of ENSTAR and
certain of its affiliates. Since May 1994 he has been President
and Director of LASMO America Ltd., the holding company for LASMO
US subsidiaries. He previously served in a number of senior
management positions in LASMO's London, England head office.
LARRY D. KALMBACH (age 43) was appointed to the Company's
Management Board in February 1993. He is also a Director of ENSTAR
and certain of its affiliates. Since February 1995 he has been
Vice President and Chief Financial Officer of UTPH. Prior to that
he held several executive and management positions with UTPH
including Vice President - Finance from 1993 to 1995 and Vice
President and Controller from 1986 to 1993.
WILLIAM M. KRIPS (age 55) was appointed to the Company's
Management Board in January 1987 and in May 1994 was appointed
Chairman of the Management Board. He is also a Director of ENSTAR
and certain of its affiliates. Since 1990, he has been Senior Vice
President-Exploration & Production of UTPH. Prior to that time, he
served as Senior Vice President - U. S. Exploration and Production,
Senior Vice President - Hydrocarbon Products Group and Vice
President - International Operations.
ARTHUR W. PEABODY, JR. (age 51) was appointed to the Company's
Management Board in February 1992. He is also a Director of
ENSTAR, ENSTAR Indonesia, Inc., International and VICO. Since May
1994, he has served as Senior Vice President of UTPH and has held
several executive positions with UTPH including Senior Vice
President - Exploration and Production, Senior Vice President and
General Manager - Hydrocarbon Products Group, Vice President -
Planning and Administration and Vice President - Acquisitions and
Planning.
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 and its subsidiaries, have 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, 1995:
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 $434 and $508
was charged in 1994 and 1993, respectively, including $109 ($138 in
1993) 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 engineering, pipeline maintenance and human
resource related services for the operator of the LNG Plant, P.T.
Badak Natural Gas Liquefaction Company (P.T. Badak). For the year
ended December 31, 1994 and 1993 VICO billed P.T. Badak $21.8
million and $33.5 million respectively for services rendered.
Accounts receivable from P.T. Badak approximated $2.4 million at
December 31, 1994 ($3.3 million at December 31, 1993).
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, 1994 and 1993 26
Consolidated Statement of Earnings,
Years ended December 31, 1994,
1993 and 1992 27
Consolidated Statement of Cash Flows,
Years ended December 31, 1994,
1993 and 1992 28
Consolidated Statement of Changes in
Partners' Capital, Years ended
December 31, 1994, 1993 and 1992 29
Notes to Consolidated Financial
Statements 30-43
Supplemental Financial Information
(unaudited) 44-50
All schedules are omitted as they 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. (filed as
Exhibit (10)-3- to the Company's 1993 Form 10-K (No.
1-8791)).*
(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. (filed as Exhibit (10)-4- to
the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-
5- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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- Fourth 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. (filed
as Exhibit (10)-8- to the Company's 1993 Form 10-K
(No. 1-8791)).*
(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. (filed
as Exhibit (10)-9- to the Company's 1993 Form 10-K
(No. 1-8791)).*
(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. (filed as Exhibit (10)-10- to the Company's
1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit
(10)-11- to the Company's 1993 Form 10-K (No. 1-
8791)).*
(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. (filed as Exhibit
(10)-12- to the Company's 1993 Form 10-K (No. 1-
8791)).*
* Incorporated herein by reference.
(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. (filed as Exhibit (10)-13- to
the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as
Exhibit (10)-14- to the Company's 1993 Form 10-K
(No. 1-8791)).*
(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.
(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. (filed as
Exhibit (10)-17- to the Company's 1993 Form 10-K
(No. 1-8791)).*
(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.
(filed as Exhibit (10)-18- to the Company's 1993
Form 10-K (No. 1-8791)).*
* Incorporated herein by reference.
(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. (filed as Exhibit (10)-19- to the
Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-20- to the
Company's 1993 Form 10-K (No. 1-8791)).*
(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.
(filed as Exhibit (10)-21- to the Company's 1993
Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-23-
to the Company's 1993 Form 10-K (No. 1-8791)).*
* Incorporated herein by reference.
(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)).*
(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.
(10)-27- Letter agreement between Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara and Chinese Petroleum
Corporation, dated December 1, 1989. (filed as
Exhibit (10)-27- to the Company's 1993 Form 10-K
(No. 1-8791)).*
(10)-28- 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. (filed as Exhibit (10)-29- to the Company's
1993 Form 10-K (No. 1-8791)).*
(10)-29- 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. (filed as Exhibit
(10)-30- to the Company's 1993 Form 10-K (No. 1-
8791)).*
* Incorporated herein by reference.
(10)-30- 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.
(filed as Exhibit (10)-31- to the Company's 1993
Form 10-K (No. 1-8791)).*
(10)-31- 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. (filed as
Exhibit (10)-32- to the Company's 1993 Form 10-K
(No. 1-8791)).*
(10)-32- 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.
(filed as Exhibit (10)-33- to the Company's 1993
Form 10-K (No. 1-8791)).*
(10)-33- 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.
(filed as Exhibit (10)-34- to the Company's 1993
Form 10-K (No. 1-8791)).*
(10)-34- 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.
(filed as Exhibit (10)-35- to the Company's 1993
Form 10-K (No. 1-8791)).*
* Incorporated herein by reference.
(10)-35- 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. (filed as
Exhibit (10)-36- to the Company's 1993 Form 10-K
(No. 1-8791)).*
(10)-36- $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. (filed as Exhibit
(10)-37- to the Company's 1993 Form 10-K (No. 1-
8791)).*
(10)-37- 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. (filed as Exhibit (10)-38- to the
Company's 1993 Form 10-K (No. 1-8791)).*
(10)-38- 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)).*
* Incorporated herein by reference.
(10)-39- 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)-40- 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. (filed as Exhibit (10)-42- to the
Company's 1993 Form 10-K (No. 1-8791)).*
(10)-41- 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. (filed as Exhibit
(10)-43- to the Company's 1993 Form 10-K (No. 1-
8791)).*
(10)-42- 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.
(10)-43- Amendments to Arun and Bontang LPG Sales and
Purchase Contract, dated October 5, 1994, between
Pertamina, as Seller, and Mitsubishi Corporation,
Cosmo Oil Co., Ltd., Nippon Petroleum Gas Co., Ltd.,
Showa Shell Sekiyu K.K., Japan Energy Corporation,
Idemitsu Kosan Co., Ltd., and Mitsui Oil & Gas Co.,
Ltd., as Buyers. (filed as Exhibit 10.88 to the
Union Texas Petroleum Holdings, Inc.'s 1994 Form 10-
K (Commission File No. 1-9019)).*
(10)-44- 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. (filed as Exhibit (10)-45- to the
Company's 1993 Form 10-K (No. 1-8791)).*
* Incorporated herein by reference.
(10)-45- 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)-46- 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. (filed as
Exhibit (10)-47- to the Company's 1993 Form 10-K
(No. 1-8791)).*
(10)-47- 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.
(filed as Exhibit (10)-48- to the Company's 1993
Form 10-K (No. 1-8791)).*
(10)-48- Addendum to Badak IV LNG Sales Contract Supply
Agreement (effective October 23, 1990), dated
January 31, 1994, by and between Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara
("Pertamina") and Virginia Indonesia Company
("VICO"), LASMO Sanga Sanga Limited, Opicoil
Houston, Inc., Union Texas East Kalimantan Limited,
Universe Gas & Oil Company, Inc., and Virginia
International Company.
(10)-49- Memorandum of Agreement for Purchase and Sale of LNG
During 1995 - 1999 between Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara ("Pertamina") ("Seller")
and Korea Gas Corporation ("KGC") ("Buyer") for the
sale and purchase of certain quantities of LNG.
(21)-1- List of Subsidiaries of the Company.
(23)-1- Consent of Ernst & Young LLP.
(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,
1994.
* 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 22, 1995 By /S/ WILLIAM M. KRIPS
William M. Krips
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
22, 1995.
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 Chairman of the
(LASMO Representative) Management Board
(UTPH Representative)
By /S/ ANDREW E. CROUCH By /S/ ARTHUR W. PEABODY, JR.
Andrew E. Crouch Arthur W. Peabody, Jr.
Management Board Management Board
(LASMO Representative) (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. (filed
as Exhibit (10)-3- to the Company's 1993 Form 10-K
(No. 1-8791)).*
(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. (filed as Exhibit (10)-4-
to the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit
(10)-5- to the Company's 1993 Form 10-K (No. 1-
8791)).*
(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- Fourth 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.
(filed as Exhibit (10)-8- to the Company's 1993
Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-9- to the Company's
1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-
10- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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.
(filed as Exhibit (10)-11- to the Company's 1993
Form 10-K (No. 1-8791)).*
(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. (filed as
Exhibit (10)-12- to the Company's 1993 Form 10-K
(No. 1-8791)).*
* Incorporated herein by reference.
(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. (filed as Exhibit (10)-13- to
the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as
Exhibit (10)-14- to the Company's 1993 Form 10-K
(No. 1-8791)).*
(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.
(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.
(filed as Exhibit (10)-17- to the Company's 1993
Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-18- to the
Company's 1993 Form 10-K (No. 1-8791)).*
* Incorporated herein by reference.
(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. (filed as Exhibit (10)-19- to the
Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-20-
to the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-21- to the
Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit
(10)-23- to the Company's 1993 Form 10-K (No. 1-
8791)).*
* Incorporated herein by reference.
(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)).*
(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.
(10)-27- Letter agreement between Perusahaan Pertambangan
Minyak Dan Gas Bumi Negara and Chinese Petroleum
Corporation, dated December 1, 1989. (filed as
Exhibit (10)-27- to the Company's 1993 Form 10-K
(No. 1-8791)).*
(10)-28- 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. (filed as Exhibit (10)-29- to the
Company's 1993 Form 10-K (No. 1-8791)).*
(10)-29- 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. (filed as Exhibit
(10)-30- to the Company's 1993 Form 10-K (No. 1-
8791)).*
* Incorporated herein by reference.
(10)-30- 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. (filed as Exhibit (10)-31- to the Company's
1993 Form 10-K (No. 1-8791)).*
(10)-31- 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. (filed as
Exhibit (10)-32- to the Company's 1993 Form 10-K
(No. 1-8791)).*
(10)-32- 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. (filed as Exhibit (10)-33- to the
Company's 1993 Form 10-K (No. 1-8791)).*
(10)-33- 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.
(filed as Exhibit (10)-34- to the Company's 1993
Form 10-K (No. 1-8791)).*
(10)-34- 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. (filed as Exhibit (10)-35- to the Company's
1993 Form 10-K (No. 1-8791)).*
* Incorporated herein by reference.
(10)-35- 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.
(filed as Exhibit (10)-36- to the Company's 1993
Form 10-K (No. 1-8791)).*
(10)-36- $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. (filed as Exhibit
(10)-37- to the Company's 1993 Form 10-K (No. 1-
8791)).*
(10)-37- 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. (filed as Exhibit
(10)-38- to the Company's 1993 Form 10-K (No. 1-
8791)).*
(10)-38- 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)).*
* Incorporated herein by reference.
(10)-39- 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)-40- 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. (filed as Exhibit (10)-42-
to the Company's 1993 Form 10-K (No. 1-8791)).*
(10)-41- 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. (filed as Exhibit
(10)-43- to the Company's 1993 Form 10-K (No. 1-
8791)).*
(10)-42- 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.
(10)-43- Amendments to Arun and Bontang LPG Sales and
Purchase Contract, dated October 5, 1994, between
Pertamina, as Seller, and Mitsubishi Corporation,
Cosmo Oil Co., Ltd., Nippon Petroleum Gas Co.,
Ltd., Showa Shell Sekiyu K.K., Japan Energy
Corporation, Idemitsu Kosan Co., Ltd., and Mitsui
Oil & Gas Co., Ltd., as Buyers. (filed as Exhibit
10.88 to the Union Texas Petroleum Holdings, Inc.'s
1994 Form 10-K (Commission File No. 1-9019)).*
(10)-44- 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. (filed as Exhibit (10)-45-
to the Company's 1993 Form 10-K (No. 1-8791)).*
* Incorporated herein by reference.
(10)-45- 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)-46- 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. (filed as
Exhibit (10)-47- to the Company's 1993 Form 10-K
(No. 1-8791)).*
(10)-47- 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. (filed as Exhibit (10)-48- to the
Company's 1993 Form 10-K (No. 1-8791)).*
(10)-48- Addendum to Badak IV LNG Sales Contract Supply
Agreement (effective October 23, 1990), dated
January 31, 1994, by and between Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara
("Pertamina") and Virginia Indonesia Company
("VICO"), LASMO Sanga Sanga Limited, Opicoil
Houston, Inc., Union Texas East Kalimantan Limited,
Universe Gas & Oil Company, Inc., and Virginia
International Company.
(10)-49- Memorandum of Agreement for Purchase and Sale of
LNG During 1995 - 1999 between Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara
("Pertamina") ("Seller") and Korea Gas Corporation
("KGC") ("Buyer") for the sale and purchase of
certain quantities of LNG.
(21)-1- List of Subsidiaries of the Company.
(23)-1- Consent of Ernst & Young LLP.
(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,
1994.
* Incorporated herein by reference.