UNIMAR COMPANY
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Earnings
For the Three Months ended
March 31, 1996 and March 31, 1995 . . . . .1
Condensed Consolidated Balance Sheets as of
March 31, 1996 and December 31, 1995. . . .2
Condensed Consolidated Statements of
Cash Flows for the Three Months ended
March 31, 1996 and March 31, 1995 . . . . .3
Notes to Condensed Consolidated Financial
Statements as of March 31, 1996 . . . . . .4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations. . . . . . . . . . . . . . . . .6
PART II. OTHER INFORMATION
Item 5. Other Information . . . . . . . . . . . . . .8
Item 6. Exhibits and Reports on Form 8-K. . . . . . .8
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . .9
PART I. FINANCIAL INFORMATION
UNIMAR COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(Thousands of dollars)
(Unaudited)
Three Months Ended
March 31,
1996 1995
Oil and gas production revenues $68,596 $60,539
Production costs 5,873 5,772
Depletion, depreciation and amortization 12,848 12,191
Exploration costs including dry holes 358 (18)
Operating profit 49,517 42,594
General and administrative expenses 237 326
Other income (89) (105)
Earnings before income taxes 49,369 42,373
Income tax expense
Current 33,784 28,927
Deferred (1,876) (726)
31,908 28,201
Net earnings $17,461 $14,172
See accompanying Notes to Condensed Consolidated Financial Statements.
UNIMAR COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Thousands of dollars)
March 31, December 31,
1996 1995
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 6,444 $ 4,882
Accounts and notes receivable 10,008 7,415
Inventories 8,791 9,839
Other current assets 2,863 3,372
Total current assets 28,106 25,508
Property, plant and equipment, at cost:
Oil and gas properties
(successful efforts method) 1,055,477 1,049,708
Other 2,268 2,264
1,057,745 1,051,972
Less: accumulated depreciation and
depletion 686,466 673,543
Net property, plant and equipment 371,279 378,429
Other assets 3,645 3,277
$ 403,030 $ 407,214
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable $ 2,097 $ 2,394
Advances from joint venture partners 2,475 2,777
Accrued liabilities 15,910 14,595
Income taxes 15,297 11,697
Total current liabilities 35,779 31,463
Deferred income taxes 156,488 158,364
Other liabilities 12,336 12,321
Partners' capital 278,427 285,066
Less: demand notes receivable 80,000 80,000
198,427 205,066
$ 403,030 $ 407,214
See accompanying Notes to Condensed Consolidated Financial Statements.
UNIMAR COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Thousands of dollars)
(Unaudited)
Three Months Ended
March 31,
1996 1995
Net earnings $ 17,461 $ 14,172
Adjustments to reconcile to net cash
provided by operating activities:
Depletion, depreciation and amortization 12,923 12,273
Deferred income taxes (1,876) (726)
Exploratory dry hole costs - (22)
Changes in working capital and other 3,229 (2,806)
Net cash provided by operating activities 31,737 22,891
Investment activities:
Capital expenditures (5,773) (5,207)
Net cash used in investing activities (5,773) (5,207)
Financing activities:
Capital contributions 7,800 8,200
Capital distributions (31,900) (24,600)
Net cash used in financing activities (24,100) (16,400)
Decrease in advances from joint
venture partners (302) (1,530)
Increase (decrease) in cash and cash equivalents 1,562 (246)
Cash and cash equivalents at beginning of period 4,882 3,421
Cash and cash equivalents at end of period $ 6,444 $ 3,175
IPU distributions paid $ 4,635 $ 5,281
Income taxes paid $ 30,184 $ 24,739
See accompanying Notes to Condensed Consolidated Financial Statements.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 1996
(Unaudited)
(1) 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., a
Delaware corporation, and LASMO (Ustar) Inc., a Delaware
corporation and an indirect wholly-owned subsidiary of LASMO
plc, 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) These condensed consolidated financial statements should be
read in the context of the consolidated financial statements
and notes thereto included in the Company's 1995 annual report
on Form 10-K. In the opinion of management, the accompanying
financial statements contain all adjustments of a normal
recurring nature necessary for a fair presentation. Interim
results are not necessarily indicative of results on an
annualized basis.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements, Continued
March 31, 1996
(Unaudited)
(3) The table below outlines the calculation of the Indonesian
Participating Unit (IPU) participation payment for the first
quarter of 1996.
1996
First Quarter
(Thousands of dollars)
Positive cash flow:
Gas receipts $ 64,740
Oil and condensate receipts 9,523
Other non-revenue cash receipts
from Joint Venture 1,511
Total positive cash flow 75,774
Less negative cash flow:
Expenditures to Joint Venture 13,817
Indonesian income taxes 33,196
Total negative cash flow 47,013
Net positive cash flow from
23.125% interest in Joint Venture $ 28,761
Net cash flow for benefit of
IPU holders* $ 7,006
Participation Payment per IPU* $ .65
*Each IPU is entitled to 1/14,077,747 of 32% of net positive
cash flow until September 25, 1999 at which time the Units
will expire with no residual value. As of March 31, 1996,
there were 10,778,590 IPUs issued and outstanding.
UNIMAR COMPANY AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following discussion should be read in conjunction with
the business section, consolidated financial statements, notes, and
management's discussion contained in the Company's 1995 annual
report on Form 10-K, and condensed consolidated financial
statements and notes contained in this report.
Liquidity and Capital Resources
Cash flow from operations for the three months ended March 31,
1996 amounted to $31.7 million as compared to $22.9 million for the
same period in 1995. The increase resulted primarily from higher
sales prices. Capital expenditures and net distributions to the
partners for the first quarter of 1996 were $5.8 million and $24.1
million, respectively. For the three months ended March 31, 1995,
capital expenditures and net distributions to the partners were
$5.2 million and $16.4 million, respectively.
The Company's share of the 1996 Indonesian Joint Venture
expenditures is expected to be approximately $46 million of which
$26 million is anticipated for exploration and development
activities. During the first three months of 1996, approximately
$14 million was called by the Joint Venture as compared to $15
million for the three months ended March 31, 1995.
The Company's ability to generate cash is primarily dependent
on the prices it receives for the sale of LNG, and to a lesser
extent, the sale of crude oil and LPG. In the event cash generated
from operations is not sufficient to meet capital investment and
other requirements, any shortfall will be funded through additional
cash contributions by the partners. The Company cannot predict
with any degree of certainty the prices it will receive in future
periods 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.
Results of Operations
Quarter Ended March 31, 1996
Compared to Quarter Ended March 31, 1995
For the first quarter of 1996, revenues were $68.6 million,
compared to $60.5 million in the corresponding 1995 quarter. Of
the $8.1 million revenue increase, $7.6 million was from higher
prices received for LNG and crude oil sales. The average price
received for LNG during the first quarter of 1996 increased to
$2.96 per million BTUs as compared to $2.73 for the same period in
1995. The average crude oil price increased $1.30 to $18.80 per
UNIMAR COMPANY AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations, Continued
barrel in the first quarter of 1996 from $17.50 per barrel in the
first quarter of 1995. The prices received by the Company for its
products reflected the increase in world wide crude oil prices
which occurred during the first quarter of 1996.
Gross LNG sales of 74 cargoes in the first quarter of 1996
were unchanged from the same quarter in 1995, and the Joint
Venture's share of the LNG sold, 113 trillion BTUs (38.6 net
equivalent cargoes), was comparable to 114 trillion BTUs (38.8 net
equivalent cargoes) in the first quarter of 1995. Crude oil
volumes net to the Company increased 16 percent to 546 thousand
barrels for the quarter ended March 31, 1996. The final settlement
receivable of $1.0 million from Pertamina relative to 1995
production was recorded in the first quarter of 1996 and increased
revenues by $0.8 million above a similar adjustment recorded in the
first quarter of 1995.
Indonesian income tax expense in the first quarter of 1996
increased $3.7 million to $31.9 million from $28.2 million in the
first quarter of 1995. The increase in current income tax expense
in the first quarter of 1996 was primarily due to higher first
quarter revenues. The effective tax rates for the 1996 and 1995
first quarters were 65 percent and 67 percent, respectively. These
rates are the aggregate of Indonesian source income taxed at a 56
percent rate, and certain expenses attributable to Unimar
activities not deductible in the partnership.
PART II. OTHER INFORMATION
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(27)-1- Financial Data Schedule for the three months
ended March 31, 1996.
(b) Reports on Form 8-K
None.
UNIMAR COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
UNIMAR COMPANY
By: /S/ GEORGE W. BERKO
George W. Berko
Member of the Management
Board
(principal financial officer
and the officer duly
authorized to sign on behalf
of the registrant.)
DATE: May 11, 1996