UNIMAR COMPANY
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Earnings
For the Three Months and Six Months ended
June 30, 1996 and June 30, 1995 . . . . . . .1
Condensed Consolidated Balance Sheets as of
June 30, 1996 and December 31, 1995. . . . . .2
Condensed Consolidated Statements of
Cash Flows for the Six Months ended
June 30, 1996 and June 30, 1995. . . . . . . .3
Notes to Condensed Consolidated Financial
Statements as of June 30, 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. . . . . . . . . . . . . . . .9
Item 6. Exhibits and Reports on Form 8-K . . . . . . . .9
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . .10
PART I. FINANCIAL INFORMATION
UNIMAR COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(Thousands of dollars)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
Oil and gas production revenues $57,615 $53,261 $126,211 $113,800
Production costs 6,009 6,473 11,882 12,246
Depletion, depreciation and
amortization 10,856 10,517 23,704 22,708
Exploration costs including
dry holes (111) - 247 (19)
Operating profit 40,861 36,271 90,378 78,865
General and administrative
expenses 332 329 569 655
Other income (66) (116) (155) (221)
Earnings before income taxes 40,595 36,058 89,964 78,431
Income tax expense
Current 30,284 26,411 64,068 55,338
Deferred (1,876) (1,375) (3,752) (2,101)
28,408 25,036 60,316 53,237
Net earnings $12,187 $11,022 $ 29,648 $ 25,194
See accompanying Notes to Condensed Consolidated Financial Statements.
UNIMAR COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Thousands of dollars)
June 30, December 31,
1996 1995
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 4,661 $ 4,882
Accounts and notes receivable 13,065 7,415
Inventories 8,380 9,839
Other current assets 2,193 3,372
Total current assets 28,299 25,508
Property, plant and equipment, at cost:
Oil and gas properties
(successful efforts method) 1,060,530 1,049,708
Other 2,274 2,264
1,062,804 1,051,972
Less: accumulated depreciation and
depletion 697,384 673,543
Net property, plant and equipment 365,420 378,429
Other assets 3,627 3,277
$ 397,346 $ 407,214
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Accounts payable $ 2,488 $ 2,394
Advances from joint venture partners 948 2,777
Accrued liabilities 13,944 14,595
Income taxes 12,781 11,697
Total current liabilities 30,161 31,463
Deferred income taxes 154,612 158,364
Other liabilities 12,759 12,321
Partners' capital 279,814 285,066
Less: demand notes receivable 80,000 80,000
199,814 205,066
$ 397,346 $ 407,214
See accompanying Notes to Condensed Consolidated Financial Statements.
UNIMAR COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Thousands of dollars)
(Unaudited)
Six Months Ended
June 30,
1996 1995
Net earnings $ 29,648 $ 25,194
Adjustments to reconcile to net cash
provided by operating activities:
Depletion, depreciation and amortization 23,841 22,874
Deferred income taxes (3,752) (2,101)
Exploratory dry hole costs - (22)
Changes in working capital and other (2,397) (5,560)
Net cash provided by operating activities 47,340 40,385
Investment activities:
Capital expenditures (10,832) (10,875)
Net cash used in investing activities (10,832) (10,875)
Financing activities:
Capital contributions 12,940 20,800
Capital distributions (47,840) (48,000)
Net cash used in financing activities (34,900) (27,200)
Increase (Decrease) in advances from joint
venture partners (1,829) 1,451
Increase (Decrease) in cash and cash equivalents (221) 3,761
Cash and cash equivalents
at beginning of period 4,882 3,421
Cash and cash equivalents at end of period $ 4,661 $ 7,182
IPU distributions paid $ 11,641 $ 10,456
Income taxes paid $ 62,984 $ 53,354
See accompanying Notes to Condensed Consolidated Financial Statements.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
June 30, 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
June 30, 1996
(Unaudited)
(3) The table below outlines the calculation of the Indonesian
Participating Unit (IPU) participation payment for the second
quarter of 1996.
1996
Second Quarter
(Thousands of dollars)
Positive cash flow:
Gas receipts $ 52,160
Oil and condensate receipts 7,494
Other non-revenue cash receipts
from Joint Venture 1,709
Total positive cash flow 61,363
Less negative cash flow:
Expenditures to Joint Venture 11,020
Indonesian income taxes 27,104
Total negative cash flow 38,124
Net positive cash flow from
23.125% interest in Joint Venture $ 23,239
Net cash flow for benefit of
IPU holders* $ 5,713
Participation Payment per IPU* $ .53
* 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 June 30, 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 six months ended June 30,
1996 amounted to $47 million, an increase of $7 million as compared
to the same period in 1995. The increase resulted primarily from
higher sales prices and higher LNG sales volumes. Capital
expenditures and net distributions to the partners for the first
six months of 1996 were $11 million and $35 million, respectively.
For the six months ended June 30, 1995, capital expenditures and
net distributions to the partners were $11 million and $27 million,
respectively.
The Company's share of the 1996 Indonesian Joint Venture (IJV)
expenditures is expected to be approximately $44 million of which
$24 million is anticipated for exploration and development
activities. During the first six months of 1996, $25 million was
called by the IJV as compared to $28 million for the six months
ended June 30, 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. LNG and LPG are primarily
sold under long term contracts whose prices are indexed by a basket
of Indonesian crudes. 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 its sales prices.
Results of Operations
Quarter Ended June 30, 1996
Compared to Quarter Ended June 30, 1995
Net earnings for the second quarter of 1996 were $12 million,
as compared to $11 million in the prior year. The increase in
earnings was mainly due to higher revenues as discussed below.
UNIMAR COMPANY AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Second quarter 1996 revenues were $58 million, an increase of
$5 million over the corresponding 1995 quarter. The increased
revenues were primarily attributable to a 6 percent increase in
both LNG sales prices and volumes, and a 5 percent increase in
crude oil sales prices, which were partially offset by a 20 percent
decrease in crude oil sales volumes.
The average price received for LNG during the second quarter
of 1996 increased to $3.00 per million BTUs as compared to $2.84
for the same period in 1995. The average crude oil price increased
$0.98 to $18.91 per barrel in the second quarter of 1996.
Gross LNG sales increased 18% to 67 cargoes in the second
quarter of 1996. The IJV's share of the LNG sold increased 6% to
100 trillion BTUs (33.8 net equivalent cargoes) from 94 trillion
BTUs (31.8 net equivalent cargoes). The percentage increase in
gross cargoes was greater than the percentage increase in the IJV's
share because the additional cargoes delivered were under those
contracts in which the IJV has a lower net revenue sharing
interest. Crude oil volumes net to the Company decreased by 81
thousand barrels to 323 thousand barrels, due primarily to the
timing of crude oil liftings.
Indonesian income tax expense in the second quarter of 1996
increased $3 million to $28 million. The increase in current
income tax expense during the 1996 second quarter was primarily due
to higher second quarter revenues. The effective tax rates for the
1996 and 1995 second quarters were 70 percent and 69 percent,
respectively. These rates are 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.
Six Months Ended June 30, 1996
Compared to Six Months Ended June 30, 1995
Net earnings for the first six months of 1996 were $30
million, an increase of $5 million over the same period in 1995.
The increase in earnings was mainly the result of higher revenues
as discussed below.
Revenues for the first half of 1996 were $126 million, or $12
million higher than the first half of 1995. Of the $12 million
increase, $11 million was from higher prices received for LNG and
crude oil sales. The average price received for LNG for the first
six months of 1996 was $2.98 per million BTUs, as compared to $2.76
for the same period in 1995. The price received for crude oil
sales averaged $18.84 per barrel, an increase of $1.14 per barrel
from the 1995 six month average. The prices received by the
UNIMAR COMPANY AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Company for its products reflected higher worldwide crude oil
prices during the first half of 1996 as compared to the first half
of 1995.
Gross LNG sales increased 8% to 141 cargoes in the first half
of 1996. The IJV's share of LNG volumes increased 2% to 213
trillion BTUs (72.4 net equivalent cargoes) from 208 trillion BTUs
(70.6 net equivalent cargoes). The percentage increase in gross
cargoes was greater than the percentage increase in the IJV's share
because the additional cargoes delivered were under those contracts
in which the IJV has a lower net revenue sharing interest. Crude
oil volumes of 869 thousand barrels, net to the Company, were
comparable to last year's 873 thousand barrels for the first six
months.
Exploration costs increased during the first six months of
1996, due to the current year seismic program. These costs reflect
an increased budget for seismic expenditures in 1996.
Depletion, depreciation and amortization charges increased $1
million to $24 million, mainly due to the increased level of
production in the first half of 1996.
Income taxes in the first half of 1996 increased $7 million to
$60 million. The increase in current tax expense during the first
six months of 1996 was primarily due to higher revenues. The
effective tax rates for the 1996 and 1995 six months were 67
percent and 68 percent respectively. These rates are 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.
PART II. OTHER INFORMATION
Item 5. Other Information
During April 1996, Pertamina established 16.5399% as the
participation percentage of the IJV in deliveries during the years
2000 to 2017 under long-term LNG sales contracts with the Chinese
Petroleum Corporation and Korea Gas Corporation, respectively, and
in certain deliveries under an extension of a long-term contract,
originally signed in 1981, with Japanese industrial and utility
customers.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(27)-1- Financial Data Schedule for the six months
ended June 30, 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: August 9, 1996