UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________________ TO __________________
COMMISSION FILE NUMBER 0-11871
AMERICAN EXPLORATION COMPANY
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 74-2086890
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1331 LAMAR, SUITE 900
HOUSTON, TEXAS 77010
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 756-6000
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES [X] NO [ ]
ON AUGUST 9, 1995, THERE WERE OUTSTANDING 11,814,427 SHARES OF THE
REGISTRANT'S COMMON STOCK, PAR VALUE $0.05 PER SHARE.
AMERICAN EXPLORATION COMPANY AND SUBSIDIARIES
Quarterly Report on Form 10-Q
for the Quarter Ended June 30, 1995
(Unaudited)
PAGE
NUMBER
------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of June 30, 1995
and December 31, 1994..................................... 1
Condensed Consolidated Statements of Operations for the
Three Months Ended June 30, 1995 and 1994 and the Six
Months Ended June 30, 1995 and 1994....................... 2
Condensed Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 1995 and 1994....................... 3
Notes to Condensed Consolidated Financial Statements........ 4
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 9
PART II. OTHER INFORMATION
Item 1. Legal Proceedings............................................ 12
Item 2. Changes in Securities........................................ 12
Item 4. Submission of Matters to a Vote of Security Holders.......... 12
Item 5. Other Information............................................ 12
Item 6. Exhibits and Reports on Form 8-K............................. 17
SIGNATURES ......................................................... 18
AMERICAN EXPLORATION COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except for share amounts)
JUNE 30, DECEMBER 31,
1995 1994
-------- ------------
(Unaudited)
ASSETS
Current assets:
Cash and temporary cash investments ................. $ 8,972 $ 9,973
Accounts receivable ................................. 12,515 10,652
Assets held for sale ................................ 52,227 --
Receivable from partnerships ........................ -- 4,488
Other current assets ................................ 890 1,014
--------- ---------
Total current assets ............................. 74,604 26,127
--------- ---------
Property, plant and equipment:
Oil and gas properties, based on successful
efforts accounting ................................. 271,207 318,453
Other property and equipment ........................ 12,996 12,530
--------- ---------
284,203 330,983
Less: Accumulated depreciation, depletion
and amortization ............................. 134,390 135,578
--------- ---------
Property, plant and equipment, net ............... 149,813 195,405
--------- ---------
Other assets ........................................... 1,164 2,362
--------- ---------
Total assets ................................. $ 225,581 $ 223,894
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt ................... $ 7,665 $ 154
Accounts payable .................................... 13,320 14,391
Accrued liabilities ................................. 13,423 15,684
Payable to partnerships ............................. 1,725 --
--------- ---------
Total current liabilities ........................ 36,133 30,229
--------- ---------
Long-term debt ......................................... 90,045 69,712
--------- ---------
Note payable to related party .......................... -- 31,128
--------- ---------
Other liabilities ...................................... 5,106 5,115
--------- ---------
Stockholders' equity:
Convertible preferred stock, $1.00 par value,
4,000 shares issued and outstanding (1995 and 1994) 4 4
Common stock, par value $.05 per share; issued:
11,814,427 shares (1995) and 11,477,500 shares
(1994); outstanding: 11,814,427 shares (1995) and
11,468,313 shares (1994) .......................... 591 574
Additional paid-in capital .......................... 276,785 272,817
Accumulated deficit ................................. (182,625) (184,676)
Treasury stock, at cost; 9,187 shares (1994) ........ -- (342)
Unearned compensation ............................... (353) (525)
Notes receivable from officers ...................... (105) (142)
--------- ---------
Total stockholders' equity ....................... 94,297 87,710
--------- ---------
Total liabilities and stockholders' equity ... $ 225,581 $ 223,894
========= =========
The accompanying notes are an integral part of these
condensed consolidated financial statements.
1
AMERICAN EXPLORATION COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for per share amounts)
(Unaudited)
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
-------------------- -------------------
1995 1994 1995 1994
-------- -------- ------- --------
REVENUES:
Oil and gas sales.................................. $20,327 $11,145 $38,159 $ 20,511
Gas settlement income.............................. -- 167 879 231
Gain on sales of oil and gas properties............ 296 190 443 212
Other revenues (costs), net........................ 102 (60) 81 (79)
------- ------- ------- --------
Total revenues.................................. 20,725 11,442 39,562 20,875
------- ------- ------- --------
COSTS AND EXPENSES:
Production and operating........................... 6,762 4,237 13,524 7,955
Depreciation, depletion and amortization........... 7,820 6,703 15,552 12,912
General and administrative......................... 1,498 1,590 2,983 3,669
Taxes other than income............................ 1,708 1,168 3,138 2,349
Exploration........................................ 40 103 160 914
Impairment......................................... -- 54 -- 6,818
------- ------- ------- --------
Total costs and expenses........................ 17,828 13,855 35,357 34,617
------- ------- ------- --------
INCOME (LOSS) FROM OPERATIONS......................... 2,897 (2,413) 4,205 (13,742)
------- ------- ------- --------
OTHER INCOME (EXPENSE):
Interest expense................................... (1,880) (1,695) (3,851) (3,372)
Other income, net.................................. 31 83 152 291
------- ------- ------- --------
Total other expense............................. (1,849) (1,612) (3,699) (3,081)
------- ------- ------- --------
INCOME (LOSS) BEFORE INCOME TAXES
AND EXTRAORDINARY ITEM 1,048 (4,025) 506 (16,823)
Income tax provision.................................. (58) (248) (11) (259)
------- ------- ------- --------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM............... 990 (4,273) 495 (17,082)
Extraordinary gain on extinguishment of debt.......... -- 2,042 2,456 2,042
------- ------- ------- --------
NET INCOME (LOSS)..................................... 990 (2,231) 2,951 (15,040)
Preferred stock dividends............................. (450) (450) (900) (900)
------- ------- ------- --------
NET INCOME (LOSS) TO COMMON STOCK..................... $ 540 $(2,681) $ 2,051 $(15,940)
======= ======= ======= ========
NET INCOME (LOSS) PER COMMON SHARE:
Primary and fully diluted:
Income (loss) before extraordinary item......... $ .05 $ (.67) $ (.03) $ (2.55)
Extraordinary item.............................. -- .29 .20 .29
------- ------- ------- --------
NET INCOME (LOSS) PER COMMON SHARE........... $ .05 $ (.38) $ .17 $ (2.26)
======= ======= ======= ========
NUMBER OF COMMON AND EQUIVALENT SHARES:
Primary and fully diluted.......................... 11,814 7,051 11,811 7,051
======= ======= ======= ========
The accompanying notes are an integral part of these
condensed consolidated financial statements.
2
AMERICAN EXPLORATION COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
FOR THE SIX MONTHS
ENDED JUNE 30,
-------------------
1995 1994
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ..................................... $ 2,951 $(15,040)
Adjustments to arrive at net cash provided by
(used in) operating activities:
Depreciation, depletion and amortization ........... 15,552 12,912
Gain on sales of oil and gas properties ............ (443) (212)
Exploration expense ................................ 142 449
Impairment expense ................................. -- 6,818
Extraordinary gain on extinguishment of debt ....... (2,456) (2,042)
Other, net ......................................... 274 591
Changes in operating working capital:
Accounts receivable ................................ 994 1,078
Other current assets ............................... 235 (947)
Accounts payable and accrued liabilities ........... (2,689) (5,963)
Other operating ....................................... 1,247 100
-------- --------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES .............................. 15,807 (2,256)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of oil and gas properties ................. (10,212) (7,460)
Development and exploration expenditures .............. (13,267) (12,430)
Proceeds from sales of oil and gas properties, net .... 2,441 914
Other investing ....................................... 2,781 (370)
-------- --------
NET CASH USED IN INVESTING ACTIVITIES .............. (18,257) (19,346)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Bank debt borrowings .................................. 39,500 19,000
Bank debt repayments .................................. (5,000) (1,500)
Bridge debt borrowings ................................ -- 6,638
Bridge debt repayments ................................ (31,128) --
Repayments of other debt, net ......................... (1,060) (3,869)
Preferred stock dividends ............................. (900) (900)
Debt and equity issuance costs and other .............. 37 (599)
-------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES .......... 1,449 18,770
-------- --------
NET DECREASE IN CASH AND TEMPORARY CASH INVESTMENTS ...... (1,001) (2,832)
CASH AND TEMPORARY CASH INVESTMENTS AT
BEGINNING OF PERIOD ..................................... 9,973 12,236
-------- --------
CASH AND TEMPORARY CASH INVESTMENTS AT
END OF PERIOD ........................................... $ 8,972 $ 9,404
======== ========
The accompanying notes are an integral part of these
condensed consolidated financial statements.
3
AMERICAN EXPLORATION COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) BASIS OF PRESENTATION
The condensed consolidated financial statements included herein have been
prepared by American Exploration Company ("American" or the "Company"), without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission. The financial statements reflect adjustments of a normal recurring
nature which are, in the opinion of management, necessary to present fairly such
information. Although the Company believes that the disclosures are adequate to
make the information presented not misleading, certain information and footnote
disclosures, including significant accounting policies, normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. It is suggested that these condensed consolidated financial
statements be read in conjunction with the financial statements and the notes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1994, as amended by Form 10-K/A. Certain amounts in the prior
year's consolidated financial statements have been reclassified to conform with
current classifications.
As discussed in Note 5, the Company effected a one-for-ten reverse split
of its common stock (the "Reverse Stock Split") during the second quarter of
1995. The stockholders' equity accounts on the accompanying consolidated balance
sheets have been restated to give retroactive recognition to the Reverse Stock
Split for all periods presented. In addition, all references to number of shares
of common stock and per share amounts have been restated.
(2) ADOPTION OF NEW ACCOUNTING STANDARD
Effective March 1995, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets." Under the provisions of the new statement, if the net book
value of an individual proved oil or gas field is greater than its undiscounted
future net cash flow from proved reserves, then the excess of the net book value
over the fair value is recognized as an impairment of the asset. Because the
Company changed its accounting policy on impairments during 1994, the adoption
of SFAS No. 121 had no effect on the 1995 financial statements.
(3) APPL CONSOLIDATION
During 1994 and January 1995, the Company purchased limited partners'
interests in the APPL Partnerships and net profits interests and debt interests
in the APPL Debt Programs (the "APPL Consolidation"). In January 1995, the
Company repurchased the remaining two investors' interests in several APPL
Partnerships and the APPL Debt Programs for a combination of $1.3 million in
cash and the issuance of approximately 346,000 shares of the Company's common
stock, thereby eliminating the remaining $6.6 million of nonrecourse debt
outstanding at year-end 1994. The elimination of the APPL debt in 1995 resulted
in an extraordinary gain of approximately $2.5 million. No income tax expense
has been recognized on the extraordinary gain.
In May 1995, New York Life Insurance Company ("New York Life") transferred
certain of its limited partner's interests in oil and gas properties not
acquired in the APPL Consolidation to ANCON Partnership Ltd. ("ANCON"). The
Company acquired a 20% interest in these properties for approximately $6.7
million in cash, which was financed through the Company's bank credit facility.
4
(3) APPL CONSOLIDATION - (CONTINUED)
The following pro forma summary of consolidated results of operations for
the six months ended June 30, 1995 and 1994 gives effect to the APPL
Consolidation as if it had occurred as of January 1, 1994.
(In thousands except for per share amounts) FOR THE SIX MONTHS
ENDED JUNE 30,
------------------------------
1995 1994
-------- --------
Pro forma revenues ..................................................................... $ 40,278 $ 40,638
Pro forma loss before extraordinary item ............................................... (22) (14,676)
Pro forma loss to common stock ......................................................... (22) (4,084)
Pro forma loss per common share: Primary and fully diluted:
Loss before extraordinary item ................................................... $ -- $ (1.26)
Net loss ......................................................................... -- (.35)
Weighted average shares outstanding:
Primary and fully diluted ........................................................... 11,814 11,664
The pro forma amounts do not purport to be indicative of the results of
operations of American that may be reported in the future or that would have
been reported had this transaction occurred as of January 1, 1994.
(4) DEBT
In February 1995, the Company used excess borrowing capacity under the
bank credit facility to refinance the $31.1 million balance outstanding under
the bridge facility which had been provided by New York Life to finance a
portion of the APPL Consolidation. Primarily due to the refinancing, bank debt
increased from $28.0 million outstanding at year-end 1994 to $62.5 million at
June 30, 1995. In July 1995, American repaid all of the outstanding bank debt
primarily using the proceeds from the sale of the Company's interest in the
Sawyer Field, discussed in Note 9.
The borrowing base under the bank credit facility is redetermined by the
banks semiannually, and in May 1995, the borrowing base was redetermined at
$75.0 million. In July 1995, in conjunction with the sale of the Sawyer Field,
the borrowing base was reduced to $55.0 million. The accompanying consolidated
balance sheets reflect $7.5 million of current maturities of long-term bank debt
as of June 30, 1995, with the current portion representing the excess of the
total outstanding bank debt at that date over the borrowing base which became
effective in July.
(5) REVERSE STOCK SPLIT
On June 13, 1995, American's stockholders approved an amendment to the
Company's Restated Certificate of Incorporation which effected the Reverse Stock
Split and also reduced the number of authorized shares of common stock from
200,000,000 to 50,000,000. As a result of the Reverse Stock Split, the number of
outstanding shares of common stock was reduced to 11,814,427 shares outstanding
at June 30, 1995, from 118,144,275 shares outstanding immediately prior to the
Reverse Stock Split. In addition, approximately $5.3 million was reclassified on
the consolidated balance sheet from common stock to additional paid-in capital.
The remaining shares of treasury stock held by American prior to the Reverse
Stock Split were cancelled.
5
(6) DERIVATIVES
The Company periodically enters into commodity price swap agreements to
hedge its oil and gas production sold under market-based prices. The following
table details the swap agreements currently in effect:
PRODUCT CONTRACT PERIOD DAILY PRODUCTION FIXED PRICE MARKET PRICE REFERENCE
- ------- ----------------------- ----------------- ----------- ----------------------
Gas May 1995 - April 1996 10,000 mmbtu $ 1.78 Houston Ship Channel
Gas May 1995 - April 1996 5,000 mmbtu 1.80 Henry Hub
Gas June 1995 - May 1996 20,000 mmbtu 1.81 Houston Ship Channel
Gas June 1995 - May 1996 10,000 mmbtu 1.84 Henry Hub
Oil May 1995 - December 1995 2,000 barrels $18.70 NYMEX WTI
Oil July 1995 - December 1995 1,500 barrels 18.55 NYMEX WTI
With regard to the commodity price swap agreements, if the market price is above
the fixed price, the Company will pay to the counterparty the difference between
the fixed price and the market price; and if the market price is below the fixed
price, the Company will receive that difference from the counterparty.
(7) CONTINGENCIES
LEGAL PROCEEDINGS
LOUISIANA STATEWIDE CONTRACT. In December 1992, a U.S. District Court
ruled that Louisiana Intrastate Gas Corporation ("LIG") had underpaid a
subsidiary of the Company under a statewide gas purchase contract ("Statewide
Contract") for the 1989 contract year. Pursuant to the ruling by the U.S.
District Court, it was also determined through arbitration that the Company's
subsidiary was underpaid for the period January 1990 to October 1992. The
Statewide Contract covered certain properties acquired by the Company's
subsidiary in 1988 with ownership in these properties assigned to several of the
Company's investment programs. In December 1992, the Company's subsidiary agreed
to terminate the Statewide Contract effective October 1, 1992 in exchange for a
cash payment from LIG and a three-year replacement contract providing for
market-based pricing. Upon appeal to the Fifth Circuit Court of Appeals, the
Court of Appeals held in December 1994 that there was no reversible error and
affirmed the trial court's ruling. Neither party appealed this ruling and in
January 1995, the Company received cash proceeds of approximately $1.0 million,
net to its interest, after payment of applicable royalties. The proceeds from
this settlement are reflected in gas settlement income on the accompanying
statements of operations.
SAWYER FIELD - SUTTON COUNTY, TEXAS. The Company and an affiliated
partnership are defendants in a property damage lawsuit in the 112th Judicial
District in Sutton County, Texas styled CLAIRE J. POWERS, ET AL. VS. DON R.
GILLER, ET AL. A related personal injury suit styled JANE GILLER, ET AL. VS.
ENRON CORPORATION, ET AL in the 113th Judicial District in Harris County, Texas,
in which the Company and its affiliated partnership are among the defendants,
has been abated pending resolution of the Sutton County suit. Both lawsuits
arise out of a fire in December 1994 at a cabin owned by the landowner in the
Sawyer Field. As a result of the fire, two hunters died and a third hunter
suffered serious burns.
Pursuant to an arrangement made by the previous operator of the field, the
landowner supplied the cabin with natural gas from a nearby well of which the
Company subsequently became the operator. The Company is alleged to have been
negligent or grossly negligent in failing to properly supply gas to the cabin.
The Company has denied that it was negligent or grossly negligent and will
vigorously defend its interests. The amount of damages being sought against the
Company is unknown at this time since the plaintiffs have not specified damages.
Because of the early stages of these proceedings, it is not possible to quantify
what liabilities, if any, the Company might incur.
LIMITED PARTNERSHIP LITIGATION. In February 1995, the Company and American
Exploration Production Company, a subsidiary of the Company, were served with a
lawsuit instituted on October 14, 1994 styled RICHARD RILEY AND FRANCES RILEY V.
LEROY WOLF, NEW YORK LIFE INSURANCE COMPANY, NYLIFE EQUITY, INC., NYLIFE REALTY
INCOME PARTNERS I, L.P., NEW YORK LIFE OIL AND GAS PRODUCING PROPERTIES II-E,
L.P., LINCLAY INVESTMENT PROPERTIES, INC., AMERICAN EXPLORATION PRODUCTION
COMPANY, JOHN DOES (1-10) AND A.B.C. CORP. (1-10) Civil Action No. 94.5827 (HAA)
presently pending in
6
the United States District Court, District of New Jersey. The plaintiffs allege
various causes of action, including inefficient and wasteful management of
partnership assets, relating to their investment in real estate and oil and gas
limited partnerships. American Exploration Production Company acts as a
co-general partner in the oil and gas limited partnership. The plaintiffs seek a
rescission of their investments, compensatory and punitive damages, and other
relief. The Company believes American and its affiliate have conducted
themselves properly with respect to such limited partnership.
On May 8, 1995, the Court denied the plaintiffs' request to add derivative
and racketeering counts to the complaint, finding that the plaintiffs did not
have standing to bring a derivative claim and that the essential elements of a
racketeering claim had not been properly plead. More recently, the plaintiffs
sought to replead the racketeering and fraudulent concealment counts. The Court
has not yet ruled on the plaintiffs' motion to amend their complaint, but has
stayed all discovery in the case pending a settlement conference between the
parties.
CEMENT I UNIT - CADDO COUNTY, OKLAHOMA. In 1991, an administrative hearing
was held by the Oklahoma Corporation Commission ("OCC") to establish the cause
of the saltwater contamination of the municipal water supply of the city of
Cyril, Oklahoma and to formulate a plan of abatement of the pollution. Parties
to the hearing included the current and former operators of the Cement, Cement I
and West Cement units as well as American. The Company owns an 18.56% interest
in the Cement I Unit and controls an additional 6.42% interest through
investment programs. In August 1992, the administrative law judge granted the
Company's motion to dismiss on the grounds that the Company had not violated any
statute, rule or regulation of the OCC and that the evidence did not establish
that the Company caused any contamination of the aquifer. The ruling was
subsequently affirmed by the OCC in December 1992. In January 1993, the current
and former operators filed Petitions in Error in the Supreme Court of Oklahoma
to appeal the OCC's decision. Matters raised on appeal included the dismissal of
the Company. The Supreme Court remanded the appeal to the Court of Appeals for
consideration. On April 25, 1995, the Court of Appeals issued a ruling affirming
the Company's dismissal from the proceeding. The Court denied the Petitions for
Rehearing on June 2, 1995, and the other parties to the proceeding have filed
Writs of Certiorari with the Oklahoma Supreme Court. The OCC is requiring the
responsible parties to conduct an investigation and formulate a plan of
remediation during the pendency of the appeal.
In rendering its April 1995 judgement, the Court stated, however, that any
claims which an operator wishes to make against any non-operator (which could
include the Company), pursuant to the plan of unitization, for the
non-operator's proportionate share of any costs incurred pursuant to any
remediation ultimately ordered must be brought in District Court in a new
proceeding. To date, no such claims have been brought against the Company.
It is not presently possible for the Company to determine the extent, if
any, to which it may incur liability for alleged saltwater contamination. Under
the terms of the Company's Purchase and Sale Agreement covering the Cement I
Unit, the predecessor in interest indemnified the Company from and against all
loss, damage, cost and expense relating to ownership for operations of the
purchased properties prior to October 1986.
(8) CASH FLOW INFORMATION
Net cash provided by operating activities includes cash payments for
interest totaling $4.0 million and $2.9 million, net of capitalized interest of
$695,000 and $753,000, for the first six months of 1995 and 1994, respectively.
The Company paid income taxes of $12,000 and $218,000 for the first six months
of 1995 and 1994, respectively.
Noncash investing and financing activities in 1995 were related to the
APPL Consolidation. American issued approximately 346,000 shares of common stock
valued at $12.50 per share to acquire $1.2 million of oil and gas properties,
including working capital, and to eliminate $4.7 million of nonrecourse debt,
resulting in an extraordinary gain of $1.6 million.
7
(9) SUBSEQUENT EVENT
SALE OF SAWYER FIELD
On July 27, 1995, the Company closed the sale of its interest in the
Sawyer Field to Louis Dreyfus Natural Gas Corp. ("Louis Dreyfus") for a purchase
price of approximately $64.0 million net to American's interest. Louis Dreyfus
also purchased additional interests in the Sawyer Field held by certain limited
partnerships for which the Company is the managing general partner. As of
December 31, 1994, the present value of the future net cash flows, discounted at
10%, related to American's interest in the Sawyer Field totaled approximately
$29.7 million. As part of the sale of the Sawyer Field, the Company also sold
approximately 10 Bcf of proved reserves acquired through the APPL Consolidation
in early 1995.
After adjusting for interim net revenues, changes in property values and
transaction costs, American's share of the net proceeds from the sale was
applied to eliminate the Company's outstanding bank debt. The net book value of
the Company's interest in the Sawyer Field is reflected as a current asset in
the accompanying consolidated balance sheet as of June 30, 1995. The Company
expects to recognize a gain on the sale of the Sawyer Field of approximately $8
million, subject to adjustment, in the third quarter of 1995.
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth certain operating information of the
Company for the periods presented.
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
-------------------- ------------------
1995 1994 1995 1994
-------- ------- ------- -------
AVERAGE SALES PRICE:
Gas ($/Mcf)........................................ $ 1.74 $ 2.04 $ 1.71 $ 2.10
Oil ($/Bbl)........................................ 17.39 16.11 16.98 14.57
BOE ($/Bbl)........................................ 12.33 13.46 12.06 13.28
PRODUCTION DATA:
Gas (MMcf)......................................... 7,191 3,409 13,853 6,069
Oil (MBbls)........................................ 449 260 854 533
MBOE............................................... 1,648 828 3,163 1,545
ADDITIONAL $/BOE DISCLOSURES:
Production and operating costs..................... $ 4.10 $ 5.12 $ 4.28 $ 5.15
Production and severance taxes (1)................. .65 .80 .62 .78
Depreciation, depletion and amortization........... 4.75 8.10 4.92 8.36
(1) Excludes franchise and ad valorem taxes.
REVENUES
Oil and gas sales totaled $20.3 million for the second quarter of 1995,
compared to $11.1 million for the same period in 1994. For the first six months
of the year, oil and gas sales totaled $38.2 million in 1995 and $20.5 million
in 1994. The significant increases in sales revenues for the 1995 periods
reflect the doubling of total production volumes which resulted from the
acquisition of investors' interests in oil and gas properties through the APPL
Consolidation and successful development activity.
Oil production and gas production increased 73% and 111%, respectively,
for the second quarter of 1995, as compared to the same quarter of 1994,
resulting in a $10.8 million increase in sales. For the first half of 1995,
sales increased $21.0 million over the comparable period a year ago as oil
production climbed 60% to 854 MBbls and gas production more than doubled to 13.9
Bcf. In addition to the APPL Consolidation, higher production volumes also
reflect the results of drilling activities in the Sawyer, Brazos 440 and West
McAllen fields.
The favorable impact of increased production was partially offset by the
decline in current year gas prices. American's 1995 realized gas price fell to
$1.74 for the quarter and $1.71 year-to-date from $2.04 and $2.10 for the
comparable periods last year. As a result, second quarter 1995 sales revenues
were reduced by $2.2 million and year-to-date 1995 sales were lowered by $5.5
million, net of a $953,000 gain from gas price hedges.
The negative impact of lower gas prices was partially offset by higher oil
prices. For the second quarter of 1995, American realized an average price of
$17.39 per barrel with the 8% increase over the comparable 1994 quarter adding
$575,000 to sales revenues, net of $299,000 losses on oil price hedges.
Favorable oil prices made a more significant impact on the year-to-date period,
averaging $16.98 per barrel in 1995 or 17% above the first half of 1994 when oil
prices were particularly low during the first quarter. For the six-month period,
the increase in oil prices contributed $2.1 million to sales, net of $370,000
hedging losses.
During the first six months of 1995, the Company recorded net gas
settlement income of $879,000 which primarily includes the proceeds received in
the first quarter from certain litigation with Louisiana Intrastate Gas
Corporation. For the first half of 1994, the Company recorded $231,000 of gas
settlement income.
9
EXPENSES
Reflecting the acquisition of interests pursuant to the APPL
Consolidation, production and operating costs increased to $6.8 million and
$13.5 million for the three and six months ended June 30, 1995, respectively,
compared to $4.2 million and $8.0 million for the same periods in 1994. On a
unit of production basis, American's operating cost per BOE decreased to $4.10
for the quarter and $4.28 for the first six months of 1995 from $5.12 and $5.15
for the comparable 1994 periods. The 20% decline in unit operating cost for the
quarter (17% year-to-date) highlights the Company's improved operating
efficiency attributable to higher production from new wells and operating cost
reductions on other properties.
Depreciation, depletion and amortization ("DD&A") totaled $7.8 million for
the second quarter of 1995, compared to $6.7 million for the same period in
1994. For the first half of the year, DD&A totaled $15.6 million in 1995 and
$12.9 million in 1994. Although total DD&A expense increased due to higher
production volumes, DD&A per BOE decreased to $4.75 and $4.92 for the quarter
and six months ended June 30, 1995, respectively, from $8.10 and $8.36 for the
comparable periods last year. The decline in the DD&A rate reflects the effects
of the acquisition of interests through the APPL Consolidation and the reduction
in cost basis on certain properties as a result of an impairment charge recorded
in the fourth quarter of 1994.
General and administrative expense ("G&A") was relatively unchanged for
the second quarter totaling $1.5 million in 1995 and $1.6 million in 1994.
Another measure of improvements in operating efficiency following the APPL
Consolidation is the 53% decline in G&A per unit of production to $.91 per BOE
in the second quarter of 1995 from $1.92 per BOE for the comparable 1994
quarter. For the first six months of 1995, G&A totaled $3.0 million or 19% below
the comparable period a year ago. The year-to-date decrease primarily reflects
personnel reductions in the first half of 1994 partially offset by the loss of
management fees related to the APPL Programs.
Increases in taxes other than income to $1.7 million and $3.1 million for
the quarter and six months ended June 30, 1995, respectively, reflect higher oil
and gas production.
During the first quarter of 1994, American recorded impairment expense of
$6.8 million mainly related to the write-off of the Company's remaining
leasehold costs in Tunisia.
Reflecting higher levels of debt outstanding primarily as a result of the
APPL Consolidation, interest expense increased 11% for the quarter and 14%
year-to-date to $1.9 million and $3.9 million for respective periods of 1995.
EXTRAORDINARY ITEM
The $2.5 million extraordinary gain recorded in 1995 and the $2.0 million
gain in 1994 resulted from the extinguishment of nonrecourse debt in conjunction
with the repurchases of investors' interests in the APPL Debt Programs.
NET INCOME (LOSS) TO COMMON STOCK
American recorded net income to common stock for the second quarter of
1995 of $540,000, or $0.05 per share, compared to a net loss to common stock of
$2.7 million, or $0.38 per share, for the same quarter last year. For the first
six months of 1995, the Company recognized net income to common stock of $2.1
million, or $0.17 per share, compared to a net loss to common stock of $16.0
million, or $2.26 per share, for the same period in 1994. Net income in 1995 is
primarily attributable to income from operations which has resulted from
operating efficiencies achieved through the APPL Consolidation and from the
reduction in the Company's DD&A rate. For the first six months of 1995, income
was also enhanced by the recording of the extraordinary gain and the receipt of
gas settlement income.
10
CAPITAL RESOURCES AND LIQUIDITY
Net cash provided by operating activities totaled $15.8 million during the
first six months of 1995 compared to a utilization of $2.3 million of cash flows
from operating activities during the same period of 1994. The improvement in
operating cash flow reflects the impact of the APPL Consolidation and successful
development activity which together have more than doubled oil and gas
production in the first six months of 1995 as compared to the same period a year
ago. Cash flows for the first half of 1994 reflected negative changes in working
capital of $6.0 million due to the timing of payments relating to accounts
payable and accrued liabilities.
The Company's 1995 capital expenditure budget for acquisitions,
development and exploration is currently set at approximately $35 million.
During the first six months of 1995, capital expenditures for the acquisition of
oil and gas properties totaled $10.2 million, compared to $7.5 million in the
1994 period. Acquisitions in 1995 reflect the purchase of American's 20% general
partner's interest in ANCON for $6.7 million. In this transaction the Company
acquired an interest in certain oil and gas properties which had previously been
owned by New York Life as an investor in the APPL Programs. Acquisition
expenditures in 1995 also include $1.5 million for an interest in the Buckner
Field, $1.3 million related to the APPL Consolidation and the purchases of
several offshore blocks in the Gulf of Mexico. The prior year's acquisition
expenditures include $6.9 million for the repurchase of numerous small
investors' interests in the APPL Programs.
In January 1995, the Company repurchased the remaining two investors'
interests in several APPL Partnerships and the APPL Debt Programs for a
combination of $1.3 million in cash, as mentioned above, and the issuance of
approximately 346,000 shares of the Company's common stock, thereby eliminating
the remaining $6.6 million of nonrecourse debt outstanding at year-end 1994.
Development and exploration expenditures for the first half of 1995
totaled $13.3 million. Significant development projects include completion of
two wells offshore in the Gulf of Mexico in the Vermillion Block 115 and the
West Cameron Block 408 and projects in the West McAllen Field in South Texas.
Approximately $10 million of additional development and exploration expenditures
are budgeted for the second half of 1995. This amount may be increased should
additional opportunities arise.
Bank debt increased $34.5 million in the first half of 1995 as the Company
used its bank credit facility to refinance the $31.1 million balance outstanding
under the bridge debt facility, which had provided interim financing for a
portion of the APPL Consolidation. At June 30, 1995, bank debt totaled $62.5
million; however, American repaid all of the outstanding bank debt primarily
using the proceeds from the sale of the Company's interest in the Sawyer Field,
as discussed below. As a result, the Company's debt to capitalization ratio will
be reduced to approximately 27%. The borrowing base, or amount available, under
the bank credit facility after the close of the Sawyer sale is $55.0 million.
On July 27, 1995, the Company sold its interest in the Sawyer Field to
Louis Dreyfus Natural Gas Corp. for a purchase price of approximately $64.0
million net to American's interest. As of December 31, 1994, American's interest
in the Sawyer Field represented approximately 27% of the Company's total proved
reserves, and the present value of the future net cash flows, discounted at 10%,
related to American's interest in the field totaled approximately $29.7 million.
The sale of the Sawyer Field will reduce operating cash flow by approximately
$800,000 per month, offset by approximately $300,000 per month of interest
expense savings. Management believes that production from recently completed
wells will further mitigate the impact of the sale on operating cash flow. The
elimination of bank debt as a result of the sale places the Company in a strong
financial position which will allow American to pursue other projects in
progress and additional projects in the offshore Gulf of Mexico and onshore Gulf
Coast areas.
The Company intends to fund its planned capital expenditures, commitments
and working capital requirements through cash flows from operations and, if
necessary, borrowings under its bank credit facility. However, if there are
changes in oil and gas prices, which correspondingly affect cash flows and bank
borrowings, or if additional development and exploration opportunities arise,
American has the discretion and ability to adjust its capital budget
accordingly. Other potential sources of capital for the Company include property
sales and financings through the placement of notes or the sale of equity.
Management believes that the Company will have sufficient capital resources and
liquidity to fund its capital expenditures and meet its financial obligations as
they are due.
11
PART II
ITEM 1. LEGAL PROCEEDINGS
Information regarding legal proceedings of the Company is set forth in
Note 7 to the Consolidated Financial Statements in Item 1 of Part I, which
information is incorporated herein by reference.
ITEM 2. CHANGES IN SECURITIES
On June 13, 1995, stockholders of the Company approved a decrease in
authorized shares of American common stock from 200,000,000 to 50,000,000
shares.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's Annual Meeting of Stockholders held on June 13, 1995, the
stockholders elected all of the nominees for directors set forth in the
Company's proxy statement as follows:
AFFIRMATIVE VOTES
VOTES WITHHELD
----------- ---------
Mark Andrews 111,526,869 910,267
Harry W. Colmery, Jr. 111,354,259 1,082,877
Irvin K. Culpepper, Jr. 103,344,980 9,092,156
Walter J. P. Curley 111,353,811 1,081,325
Phillip Frost, M.D. 111,560,269 876,867
Peter G. Gerry 111,365,565 1,071,571
H. Phipps Hoffstot, III 111,368,404 1,068,732
John H. Moore 111,553,466 883,670
Peter P. Nitze 111,369,009 1,068,127
The Company's stockholders also approved a one-for-ten reverse stock split
of the Company's common stock, a decrease in the number of authorized shares of
common stock to 50,000,000 and the related amendment of the Company's Restated
Certificate of Incorporation. This proposal received (i) 107,423,771 affirmative
votes, 4,558,190 negative votes and 236,263 abstentions by the holders of the
Company's common stock and preferred stock voting together as a class and (ii)
99,148,287 affirmative votes, 4,484,989 negative votes and 236,263 abstentions
by the holders of the Company's common stock voting alone as a class. In
addition, the Company's stockholders approved the 1994 American Exploration
Company Stock Compensation Plan with 83,264,877 affirmative votes, 16,094,080
negative votes and 767,490 abstentions. The Company's stockholders also approved
the appointment of Arthur Andersen LLP as American's independent public
accountants for 1995. This proposal received 112,430,917 affirmative votes,
522,832 negative votes and 177,790 abstentions.
ITEM 5. OTHER INFORMATION
DISPOSITION OF ASSETS
On July 27, 1995, the Company sold its interest in the Sawyer Field to
Louis Dreyfus Natural Gas Corp. ("Louis Dreyfus") for a purchase price of
approximately $64.0 million net to American's interest. The Company applied
substantially all of the proceeds to eliminate outstanding bank debt. The
Company expects to recognize a gain on sales of oil and gas properties of
approximately $8 million, subject to adjustment, in the third quarter of 1995.
Louis Dreyfus also purchased additional interests in the Sawyer Field held by
certain limited partnerships for which the Company is the managing general
partner.
12
At year-end 1994, American's net interest in the proved reserves at the
Sawyer Field totaled 65.5 Bcf of natural gas (approximately 27% of the Company's
total proved reserves on a barrel of oil equivalent basis at that date) and the
present value of the future net cash flows, discounted at 10%, related to
American's interest totaled approximately $29.7 million. As part of the sale of
the Sawyer Field, the Company also sold approximately 10 Bcf of proved reserves
acquired through the APPL Consolidation in early 1995.
PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma condensed consolidated financial
statements (the "Pro Forma Statements") give effect to the sale of American's
interest in the Sawyer Field and the APPL Consolidation. The Pro Forma
Statements also reflect the impact of the second quarter 1995 sales of interests
in several other fields for proceeds of approximately $1.5 million. The pro
forma balance sheet as of June 30, 1995 was prepared assuming the Sawyer sale
was consummated as of June 30, 1995. The pro forma statements of operations for
the six months ended June 30, 1995 and the year ended December 31, 1994 were
prepared assuming that all of these transactions occurred as of January 1, 1994.
As a result of the APPL Consolidation in 1994 and 1995, American acquired
significant additional interests in the Sawyer Field, increasing its working
interest ownership from 12.5% at the beginning of 1994 to 65% at the date of the
sale. Therefore, the pro forma statements of operations reflect the sale of the
65% interest in the Sawyer Field, after giving effect to the APPL Consolidation.
These Pro Forma Statements do not purport to be indicative of the
financial position or results of operations that would have been reported had
these transactions occurred as of the dates indicated above, or that may be
reported in the future.
13
AMERICAN EXPLORATION COMPANY AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1995
(In thousands)
(Unaudited)
HISTORICAL PRO FORMA
AMERICAN ADJUSTMENTS PRO FORMA
----------- ----------- ----------
ASSETS
Current assets:
Cash and temporary cash investments............. $ 8,972 $ $ 8,972
Accounts receivable............................. 12,515 12,515
Assets held for sale............................ 52,227 (52,227)(a) --
Other current assets............................ 890 890
----------- ---------- ----------
Total current assets......................... 74,604 (52,227) 22,377
----------- ---------- ----------
Net property, plant and equipment.................. 149,813 149,813
----------- ---------- ----------
Other assets....................................... 1,164 1,164
----------- ---------- ----------
Total assets................................. $ 225,581 $ (52,227) $ 173,354
=========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt............ $ 7,665 $ (7,500)(b) $ 165
Accounts payable and accrued liabilities........ 26,743 26,743
Other current liabilities....................... 1,725 1,725
----------- ---------- ----------
Total current liabilities.................... 36,133 (7,500) 28,633
----------- ---------- ----------
Long-term debt..................................... 90,045 (53,100)(b) 36,945
----------- ---------- ----------
Other liabilities.................................. 5,106 5,106
----------- ---------- ----------
Stockholders' equity............................... 94,297 8,373 (c) 102,670
----------- ---------- ----------
Total liabilities and stockholders'
equity ................................. $ 225,581 $ (52,227) $ 173,354
=========== ========== ==========
(a) To reflect the sale of American's interest in the Sawyer Field as of June
30, 1995.
(b) To reflect the application of the net proceeds from the sale to reduce
outstanding bank debt.
(c) To reflect the gain on the sale of the properties, which will be subject
to adjustment in the third quarter of 1995.
14
AMERICAN EXPLORATION COMPANY AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1995
(In thousands, except for per share amounts)
(Unaudited)
PRO FORMA ADJUSTMENTS
---------------------------------------
HISTORICAL APPL
AMERICAN CONSOLIDATION SAWYER OTHER PRO FORMA
---------- ------------- --------- --------- ---------
REVENUES:
Oil and gas sales......... $ 38,159 $ 646 (a) $ (7,755)(d) $ (493)(f) $ 30,557
Other revenues, net....... 1,403 70 (a) 1,473
-------- -------- -------- -------- ---------
Total revenues......... 39,562 716 (7,755) (493) 32,030
-------- -------- -------- -------- ---------
COSTS AND EXPENSES:
Production and operating.. 13,524 279 (a) (2,658)(d) (418)(f) 10,727
Depreciation, depletion and
amortization........... 15,552 339 (a) (2,431)(d) (99)(f) 13,237
(124)(b)
General and administrative 2,983 56 (a) 3,039
Taxes other than income... 3,138 26 (a) (168)(d) (33)(f) 2,963
Exploration............... 160 160
-------- -------- -------- -------- ---------
Total costs and
expenses ............ 35,357 576 (5,257) (550) 30,126
-------- -------- -------- -------- ---------
INCOME FROM OPERATIONS....... 4,205 140 (2,498) 57 1,904
-------- -------- -------- -------- ---------
Other income (expense), net . (3,699) 47 (a) 1,914 (e) (1,542)
196 (c)
Income tax provision......... (11) (11)
-------- -------- -------- -------- ---------
(3,710) 243 1,914 -- (1,553)
-------- -------- -------- -------- ---------
INCOME BEFORE EXTRAORDINARY
ITEM ...................... 495 383 (584) 57 351
Preferred stock dividends.... (900) (900)
-------- -------- -------- -------- ---------
LOSS TO COMMON STOCK BEFORE
EXTRAORDINARY ITEM........ $ (405) $ 383 $ (584) $ 57 $ (549)
======== ======== ======== ======== =========
LOSS BEFORE EXTRAORDINARY ITEM
PER COMMON SHARE:
Primary and fully diluted. $ (0.03) $ (0.05)
======== =========
NUMBER OF COMMON AND
EQUIVALENT SHARES:
Primary and fully diluted. 11,811 3 11,814
======== ======== =========
(a) To reflect the results of operations related to the interests in oil and
gas properties which were acquired by American for aggregate cash
consideration of $8.0 million and the issuance of approximately 346,000
shares of the Company's common stock valued at $12.50 per share.
(b) To adjust the historical depletion related to the acquired interests to
give effect to the new basis in oil and gas properties under the purchase
method of accounting.
(c) To eliminate historical interest expense related to the nonrecourse debt
of the APPL Debt Programs.
(d) To eliminate the results of operations of American's 65% net working
interest in the Sawyer Field.
(e) To adjust historical interest expense to reflect the elimination of
outstanding bank debt.
(f) To eliminate the results of operations of certain other oil and gas
properties which were sold by American.
Note: The pro forma condensed consolidated statement of operations does not
consider the nonrecurring gain on the sale of oil and gas properties
related to the sale of the Sawyer Field. The Company expects to recognize
a gain of approximately $8 million, subject to adjustment, in the third
quarter of 1995. No income tax expense has been recognized on the gain.
15
AMERICAN EXPLORATION COMPANY AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
(In thousands, except for per share amounts)
(Unaudited)
PRO FORMA ADJUSTMENTS
---------------------------------------
HISTORICAL APPL
AMERICAN CONSOLIDATION SAWYER OTHER PRO FORMA
---------- ------------- --------- --------- ---------
REVENUES:
Oil and gas sales......... $ 50,033 $ 28,310 (a) $(14,143)(d) $ (1,565)(f) $ 62,635
Other revenues, net....... 1,326 (7)(a) 1,319
-------- -------- -------- -------- ---------
Total revenues......... 51,359 28,303 (14,143) (1,565) 63,954
-------- -------- -------- -------- ---------
COSTS AND EXPENSES:
Production and operating.. 21,302 11,655 (a) (5,731)(d) (1,275)(f) 25,951
Depreciation, depletion
and amortization....... 29,616 16,633 (a) (4,168)(d) (354)(f) 32,766
(8,961)(b)
General and administrative 10,035 2,635 (a) 12,670
Taxes other than income... 5,710 1,860 (a) (434)(d) (121)(f) 7,015
Exploration............... 2,559 2,559
Impairment................ 33,570 4,730 (a) 38,300
-------- -------- -------- -------- ---------
Total costs and
expenses ............ 102,792 28,552 (10,333) (1,750) 119,261
-------- -------- -------- -------- ---------
LOSS FROM OPERATIONS......... (51,433) (249) (3,810) 185 (55,307)
Other income (expense), net.. (9,257) (159)(a) 2,706 (e) (4,226)
2,484 (c)
Income tax benefit........... 455 455
-------- -------- -------- -------- ---------
LOSS BEFORE EXTRAORDINARY
ITEM ...................... (60,235) 2,076 (1,104) 185 (59,078)
Preferred stock dividends.... 1,800 1,800
-------- -------- -------- -------- ---------
LOSS TO COMMON STOCK BEFORE
EXTRAORDINARY ITEM........ $(62,035) $ 2,076 $ (1,104) $ 185 $ (60,878)
======== ======== ======== ======== =========
LOSS BEFORE EXTRAORDINARY ITEM
PER COMMON SHARE:
Primary and fully diluted. $ (7.70) $ (5.19)
======== =========
NUMBER OF COMMON AND
EQUIVALENT SHARES:
Primary and fully diluted. 8,061 3,665 11,726
======== ======== =========
(a) To reflect the results of operations related to the interests in oil and
gas properties which were acquired by American for aggregate cash
consideration of $39.1 million and the issuance of approximately 4.6
million shares of the Company's common stock with a weighted average value
of $13.13 per share.
(b) To adjust the historical depletion related to the acquired interests to
give effect to the new basis in oil and gas properties under the purchase
method of accounting.
(c) To eliminate historical interest expense related to the nonrecourse debt
of the APPL Debt Programs.
(d) To eliminate the results of operations of American's 65% net working
interest in the Sawyer Field.
(e) To adjust historical interest expense to reflect the elimination of
outstanding bank debt.
(f) To eliminate the results of operations of certain other oil and gas
properties which were sold by American.
Note: The pro forma condensed consolidated statement of operations does not
consider the nonrecurring gain on the sale of oil and gas properties
related to the sale of the Sawyer Field. The Company expects to recognize
a gain of approximately $8 million, subject to adjustment, in the third
quarter of 1995. No income tax expense has been recognized on the gain.
16
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10(a) Purchase and Sale Agreement, dated June 12, 1995, by and among
American Exploration Company and the partnerships identified on
the signature pages hereof, collectively as Sellers, and Louis
Dreyfus Natural Gas Corp., as Purchaser.
12 Statements Re Computations of Ratios
27 Financial Data Schedule
(b) The Registrant filed the following Report on Form 8-K during the
second quarter of 1995.
1. Form 8-K, dated June 12, 1995, reporting American's intent to
sell its interest in the Sawyer Field and reporting
stockholders' approval of a one-for-ten reverse common stock
split.
17
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.
AMERICAN EXPLORATION COMPANY
Date: August 10, 1995 By: /s/ MARK ANDREWS
Mark Andrews
Chairman of the Board
and Chief Executive Officer
Date: August 10, 1995 By: /s/ JOHN M. HOGAN
John M. Hogan
Senior Vice President
and Chief Financial Officer
(Also Principal Accounting Officer)
18