SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
SCHEDULE 14D-9
Solicitation/Recommendation Statement Under Section 14(d)(4)
of the Securities Exchange Act of 1934
--------------------
VASTAR RESOURCES, INC.
(Name of Subject Company)
VASTAR RESOURCES, INC.
(Name of Person(s) Filing Statement)
Common Stock, par value $0.01 Per Share
(Title of Class of Securities)
922380100
(CUSIP Number of Class of Securities)
Albert D. Hoppe
Vice President, General Counsel and Secretary
Vastar Resources, Inc.
15375 Memorial Drive
Houston, Texas 77079
Telephone: (281) 584-6027
Charles M. Nathan
Fried Frank Harris Shriver and Jacobson
One New York Plaza
New York, New York 10004
Telephone: (212) 859-8000
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of the Person(s) Filing Statement)
[X] Check the box if the filing relates solely to preliminary
communications made before the commencement of a tender offer.*
*This Schedule 14d-9 relates to the proposed offer by BP Amoco p.l.c.
[VASTAR LETTERHEAD APPEARS HERE]
NR00-9
April 13, 2000
FOR IMMEDIATE RELEASE
VASTAR ACHIEVES THIRD CONSECUTIVE QUARTERLY INCOME RECORD
- ---------------------------------------------------------
AS FIRST-QUARTER EARNINGS RISE 307 PERCENT TO $77.4 MILLION
- -----------------------------------------------------------
Houston, TX -- Vastar Resources, Inc. (NYSE: VRI) today reported first-quarter
2000 net income of $77.4 million ($0.78 per diluted share), the company's third
consecutive quarterly record and a 307 percent increase from the $19.0 million
($0.19 per diluted share) in income reported during the first quarter of 1999.
The increase was primarily attributable to improved commodity prices.
Discretionary cash flow during the quarter increased 73 percent to $266.1
million from $153.6 million in last year's first quarter.
"We are pleased by yet another quarter of great performance," said
President and CEO Charles D. Davidson. "Our strong base of low-cost production
enhanced the favorable impact of the commodity price recovery. Vastar's
performance continues to confirm the overall quality of our assets and
strategies."
Total production was 1,455 million cubic feet of natural gas equivalent per
day (MMcfed), down compared to 1,503
1
MMcfed in last year's first quarter, but up 6 percent from the fourth quarter of
1999. The quarter-to-quarter growth resulted from increased development
drilling, which added significant new production. This extensive development
drilling program is expected to continue throughout 2000.
Natural gas production averaged 1,054 million cubic feet per day (MMcfd),
compared to 1,168 MMcfd in 1999's first quarter. Crude and condensate
production was 46.0 thousand barrels per day (Mbd) compared to 46.7 Mbd in the
same period last year. Natural gas liquids production increased to 20.8 Mbd in
the first quarter of 2000 from 9.2 Mbd in last year's first quarter, as a result
of improved processing economics.
Average wellhead prices for natural gas were $2.19 per thousand cubic feet
(Mcf) during the quarter, up from $1.62 per Mcf during last year's first
quarter. Average realizations for crude oil were $24.73 per barrel, up from
$11.16 per barrel. Average realizations for natural gas liquids were $19.11 per
barrel, up from $8.10 per barrel.
Total cash production costs (operating expenses, SG&A and related taxes)
were essentially flat at $0.54 per thousand cubic feet of natural gas equivalent
(Mcfe), compared with $0.53 per Mcfe during last year's first quarter.
Eight of 14 exploratory wells decisioned during the first quarter were
successful, with discoveries on the Gulf of Mexico shelf and in the Mid-
Continent and Gulf Coast onshore areas. One deepwater well was unsuccessful.
2
Exploration expenses (including dry hole, undeveloped leasehold
amortization and other exploration expenses) were $68.6 million, compared to
$39.0 million in the first quarter of 1999. Dry hole expenses were $37.7
million, compared to last year's first-quarter expenses of $5.4 million, with
most of the increase attributable to the unsuccessful deepwater well.
During the quarter Vastar participated in apparent winning bids totaling
$17.9 million net on 24 deepwater and three shelf blocks at the federal Outer
Continental Shelf Lease Sale 175. If all the leases are subsequently awarded,
Vastar's Gulf of Mexico portfolio will expand to 156 deepwater and 345 shelf
blocks.
Vastar Resources, Inc., headquartered in Houston, Texas, finds, develops
and produces natural gas and liquid hydrocarbons. The company is currently
active in more than 100 key producing fields, with production in the Gulf of
Mexico shelf, Gulf Coast, Rocky Mountains and Mid-Continent areas, and a growing
exploratory and development presence in the Gulf of Mexico deepwater trend.
Additional information on Vastar is available on the company's website at
www.vastar.com.
###
Contacts: James Bartlett (281) 584-3448 (media)
Ellen DeSanctis (281) 584-3477 (financial)
Except for the historical information contained herein, the matters discussed in
this press release are forward-looking statements that involve certain
assumptions, risks and uncertainties which, in the event actual results were
different from those predicted by the company, could
3
negatively impact future results, plans and expectations. Actual results could
differ materially from expectations based upon numerous factors, including: (i)
the volatility and level of hydrocarbon commodity prices, (ii) lower than
expected production rates due to capacity restraints on pipeline systems, other
infrastructure or other reasons, (iii) the inexact nature of reserve estimates,
(iv) the legal and/or regulatory environment, (v) drilling and operating risks,
(vi) competition, (vii) certain natural gas marketing matters and (viii) the
outcome of the proposed acquisition transaction relating to the company's
publicly-owned common stock as previously announced by BP Amoco p.l.c. Further
details with respect to some of the above as well as other assumptions, risks
and uncertainties are detailed from time to time in our reports filed with the
Securities and Exchange Commission, including the material on pages 12-14 in the
company's Report on Form 10-K for the year ended December 31, 1999.
Vastar shareholders are strongly advised to read both the tender offer statement
and the solicitation/recommendation statement regarding the tender offer
referred to in this press release when they become available, as these
statements will contain important information relating to the tender offer.
Shareholders will be able to obtain these statements and any amendments thereto
and other filed documents for free at the Internet website maintained by the
Securities and Exchange Commission at www.sec.gov. In addition, Vastar
Resources, Inc. will make the solicitation/recommendation statement and any
amendments thereto available for free to Vastar's shareholders. Please direct
your request for the solicitation/recommendation statement to Ellen DeSanctis,
Manager of Investor Relations and Corporate Communications, Vastar Resources,
Inc., 15375 Memorial Drive, Houston, Texas 77079, Telephone (281) 584-3477.
4
VASTAR RESOURCES, INC.
SUMMARY OF OPERATIONS
(Unaudited)
(Millions of dollars except per share amounts)
For the three months
ended March 31,
2000 1999
REVENUES
Sales and other operating revenues $ 596.9 $ 353.8
Earnings from equity affiliate 6.5 5.0
Other revenues 7.1 13.2
------- -------
Gross revenues 610.5 372.0
Less: Purchases (246.1) (130.3)
Delivery expenses (12.4) (2.3)
------- -------
Net revenues 352.0 239.4
EXPENSES
Operating expenses 43.0 50.5
Dry hole costs 37.7 5.4
Other exploration expenses 22.1 24.9
Undeveloped leasehold amortization 8.8 8.7
Depreciation, depletion and
amortization 114.7 113.3
Selling, general and
administrative expenses 13.5 12.7
Taxes other than income taxes 15.1 8.8
Interest expense 14.7 20.5
------- -------
Total expenses 269.6 244.8
------- -------
Income (loss) before income taxes 82.4 (5.4)
Income tax provision (benefit) 5.0 (24.4)
------- -------
Net income $ 77.4 $ 19.0
======= =======
Earned per share(basic) $ 0.79 $ 0.20
Earned per share(diluted) $ 0.78 $ 0.19
VASTAR RECSOURCES, INC.
SUMMARY OF OPERATIONS
(Unaudited)
For the three months
ended March 31,
2000 1999
OPERATIONS
Total production (MMcfed-net) 1,455 1,503
Natural gas:
Production (MMcfd-net) 1,054 1,168
Average wellhead price (per Mcf) $ 2.19 $ 1.62
Crude oil:
Production (Mbd-net) 46.0 46.7
Average realized price (per barrel) $24.73 $11.16
Natural gas liquids:
Production (Mbd-net) 20.8 9.2
Average realized price (per barrel) $19.11 $ 8.10
Discretionary Cash
Flow* ($ millions) $266.1 $153.6
*Discretionary cash flow is derived by adjusting net income for the pre-tax
effects of exploration expenses, depreciation, depletion and amortization, and
the change in deferred income taxes. Discretionary cash flow is not a term
defined by generally accepted accounting principles and should not be considered
as an alternative to net cash provided by operating activities.
[Vastar letterhead appears here]
NR00-10
April 13, 2000
FOR IMMEDIATE RELEASE
VASTAR RESOURCES DECLARES COMMON DIVIDEND
Houston, Texas -- Vastar Resources, Inc. (NYSE: VRI) today declared a
quarterly dividend of $0.075 per common share, to be paid on June 1, 2000 to
stockholders of record May 5, 2000.
Vastar Resources, Inc., headquartered in Houston, Texas, finds, develops and
produces natural gas and liquid hydrocarbons. The company is currently active
in more than 100 producing fields, with production in the Gulf of Mexico shelf,
Gulf Coast, Rocky Mountains and Mid-Continent areas, and a growing exploratory
and development presence in the Gulf of Mexico deepwater trend. Additional
information on Vastar is available on the company's website at www.vastar.com.
As previously announced on March 16, 2000, BP Amoco advised Vastar's board of
its intention to commence a tender offer for the minority stockholding of the
company. The proposal is conditioned on BP Amoco's acquisition of ARCO, which
currently owns the balance of Vastar's stock. Vastar shareholders are strongly
advised to read both the tender offer statement and the
solicitation/recommendation statement regarding the tender offer when they
become available, as these statements will contain important information
relating to the tender offer. Shareholders will be able to obtain these
statements and any amendments thereto and other filed documents for free at the
Internet website maintained by the Securities and Exchange Commission at
www.sec.gov. In addition, Vastar Resources, Inc. will make the
solicitation/recommendation statement and any amendments thereto available for
free to Vastar's shareholders. Please direct your request for the
solicitation/recommendation statement to Ellen DeSanctis, Manager of Investor
Relations and Corporate Communications, Vastar Resources, Inc., 15375 Memorial
Drive, Houston, Texas 77079, Telephone (281) 584-3477
# # #
Contact: James Bartlett, (281) 584-3448 (media)
Ellen DeSanctis, (281) 584-3477 (financial)
1