Exhibit 99.1
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News Release
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[GRAPHIC OMITTED] Union Texas Petroleum 1330 Post Oak Boulevard
P.O. Box 2120
Houston, Texas 77252-2120
(713)623-6544
Contact: Carol Cox
713-968-2714
UNION TEXAS PETROLEUM ANNOUNCES
RECORD EARNINGS FOR 1997 FIRST QUARTER
Houston, April 23, 1997 -- Union Texas Petroleum Holdings, Inc. (NYSE:
UTH) today reported record earnings for 1997's first quarter of 74 cents per
share, up from 54 cents per share in 1996's corresponding period, resulting from
$64 million in net income for 1997's first three months, a 33% increase from $48
million a year ago. Sales and operating revenues for 1997's first quarter
totaled $282 million, up from $258 million in 1996's same period.
Chairman and CEO John Whitmire attributed Union Texas' higher earnings
in 1997's first quarter to increased sales prices for crude oil, liquefied
natural gas (LNG) and natural gas and higher crude oil sales volumes in the U.K.
North Sea.
"In the first three months of 1997, we benefited from an 8% rise in our
worldwide oil prices over 1996's same period, averaging $19.45 per barrel in
1997's first quarter compared to $17.93 a year ago. In Indonesia, LNG sales
prices averaged $4.02 per thousand cubic feet (MCF) during 1997's first quarter,
up nearly 22% from $3.30 a year ago. Our worldwide gas sales prices also saw
higher levels in 1997's first three months, averaging $2.37 per MCF or about 28%
above $1.85 from a year ago, " Whitmire said.
In the U.K. North Sea, gas sales volumes rose 33% in 1997's first three
months over the same period a year ago as a result of exceptionally cold weather
in the United Kingdom and continental Europe. The company's cash flow benefited
from higher gas production under its peak-shaving contract at the North and
South Sean fields. Oil sales volumes in the U.K. North Sea were up slightly in
the first three months of 1997 over year-ago levels due primarily to record oil
production from the recently-expanded Alba platform. Alba produced at levels as
high as 109,000 barrels of oil a day gross during the first quarter of 1997.
(Union Texas has a 15.5% working interest in Alba.)
Union Texas also benefited from lower financing costs during the first
quarter of 1997 compared to 1996's same period due to the company's reduced net
debt level, which declined from $631 million at the end of 1996's first quarter
to $496 million at the end of 1997's first quarter.
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The increased sales prices from Union Texas' oil and gas operations
more than offset a decline in LNG sales volumes in Indonesia. On a full year
basis, the amount of natural gas supplied by Union Texas and its co-venturers to
an Indonesian LNG plant is anticipated to decline in 1997 by about 15% as
compared to 1996 levels due primarily to the reduction of deliveries under the
venture's first contract in which the venture had a higher participation
interest.
Ethylene production volumes were down in 1997's first quarter from
1996's same period as a result of a planned two-week "mini-turnaround" at the
Geismar ethylene facility for scheduled maintenance work and other projects to
enhance the plant's production and efficiency. After completion of the
turnaround, the Geismar plant set a single-day production record of 3.8 million
gross pounds of ethylene. (Union Texas operates the Geismar plant, in which it
has a 41.67% interest.)
EXPANDED EXPLORATION PORTFOLIO
"We are off to a very strong start in 1997 in accomplishing a key
objective to expand our portfolio of new exploration opportunities," said
Whitmire. "So far in 1997, we have entered into six new exploration ventures in
China, Yemen, Bolivia, Jordan, Greece and Papua New Guinea. These ventures
represent important steps in our new strategy of expanding Union Texas'
exploration activities in proven oil and gas basins that offer significant
potential for adding reserves and creating value for our stockholders. We are
also moving forward on a number of other new exploration projects. We expect to
participate in 25 to 30 exploration wells this year, up from 13 in 1996. A
majority of our 1997 exploration wells will begin drilling in the second half of
the year, which will be one of the most active drilling periods in the company's
history."
STOCK BUYBACK PROGRAM COMPLETED
Union Texas also announced that it has completed a stock buyback
program to repurchase 2 million shares of its common stock which was announced
in October 1996. During the first quarter of 1997, Union Texas repurchased the
remaining 1,821,264 shares of common stock under the buyback program. "We have
bought 4 million shares of stock for $76.9 million since 1994, including 3.4
million shares since January 1996. The repurchase of our shares represented an
attractive investment opportunity for our company," said Whitmire.
U.K. 17TH OFFSHORE LICENSING ROUND
Union Texas also reported that its wholly-owned subsidiary, Union Texas
Petroleum Limited based in London, is part of a group which was awarded one
tranche in the United Kingdom 17th Offshore Licensing Round conducted by the
Department of Trade and Industry (DTI). Union Texas Petroleum Limited has a 25%
working interest. The operator of the group is Texaco Britain Ltd. with a 35%
working interest. The remaining interests are held by Murphy
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Petroleum Limited (a subsidiary of Murphy Oil Corporation) with a 25% working
interest and Korea Petroleum Development Corp. with a 15% working interest.
Tranche 36 is located in the Rockall Trough area west of the Hebrides
Islands off Scotland's west coast. (A tranche is a group of four to six U.K.
continental shelf blocks. Each block is approximately 77 square miles (about 200
square kilometers). One tranche is equivalent to 34-51 blocks in the U.S. Gulf
of Mexico.) Water depths in Tranche 36 vary from about 3,300 to 4,900 feet
(1,000 to 1,500 meters) with an average of about 3,600 feet (1,100 meters).
The license for Tranche 36 has an initial three-year term, which can be
extended by six years.
One of the largest independent producers located in the U.S.,
Houston-based Union Texas explores for and produces oil and gas overseas
primarily in the U.K. North Sea, Indonesia and other strategic international
areas. The company has petrochemical interests in the U.S.
This news release contains forward-looking statements within the
meaning of the Securities Litigation Reform Act that involve risks and
uncertainties, including price volatility, implementation and opportunity risks,
and other factors described from time to time in the company's publicly
available SEC reports, which could cause actual results to differ materially.
Comparative financial highlights follow (amounts in millions, except
per share data):
Three Months Ended March 31,
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1997 1996
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Net income . . . . . . . . . . . . . . . . . . . . $ 64 $ 48
Earnings per share . . . . . . . . . . . . . . . $ .74 $ .54
Sales and operating revenues . . . . . . . . . . . $ 282 $ 258
Average common shares outstanding. . . . . . . . 85.9 87.6
Additional financial and operating information appears on the attached pages.
For additional information, contact:
Carol Cox, media John Zimmerman, analysts and investors
713-968-2714 713-968-2740
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UNION TEXAS PETROLEUM
FINANCIAL SUMMARY
(amounts in millions, except per share data)
FIRST QUARTER
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1997 1996
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Sales and operating revenues $ 282 $ 258
Net income $ 64 $ 48
Major operations (a)
Indonesia $ 36 $ 37
U.K. North Sea $ 38 $ 29
Pakistan $ 9 $ 6
Petrochemicals $ 1 $ 2
Earnings per share of
common stock $ .74 $ .54
Discretionary cash flow (b) $ 131 $ 112
Major operations (a)
Indonesia $ 49 $ 51
U.K. North Sea $ 77 $ 65
Pakistan $ 14 $ 8
Petrochemicals $ 3 $ 5
Average common shares outstanding 85.9 87.6
See footnotes on page 7.
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UNION TEXAS PETROLEUM
DISCRETIONARY CASH FLOW SUMMARY (b)
(amounts in millions)
FIRST QUARTER
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1997 1996
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Net income $ 64 $ 48
Less: Equity partnership
income $ (8) $ (9)
Add: DD&A $ 59 $ 55
Deferred taxes $ (6) $ (8)
Exploration expenses $ 10 $ 14
Unimar equity DCF (c) $ 12 $ 12
Discretionary cash flow $ 131 $ 112
See footnotes on page 7.
OPERATING SUMMARY (d)
FIRST QUARTER
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1997 1996
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Net crude oil sales (MBBLS/D)
U.K. North Sea 47 46
Indonesia 6 8
Pakistan 7 6
Average crude oil prices (per BBL)
U.K. North Sea $19.17 $18.09
Indonesia $21.79 $18.34
Pakistan $19.15 $16.17
Net natural gas sales (MMCF/D)
Indonesian LNG 194 241
U.K. North Sea 79 59
Pakistan 38 43
Average natural gas prices (per MCF)
Indonesian LNG $ 4.02 $ 3.30
U.K. North Sea (e) $ 3.00 $ 2.50
Pakistan $ 1.71 $ 1.29
Ethylene (per LB)
Sales price $ .25 $ .18
Margins $ .08 (f) $ .03
Sales volumes (MLBS/D)(g) 1,168 1,180
See footnotes on page 7.
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UNION TEXAS PETROLEUM
CONSOLIDATED STATEMENT OF OPERATIONS
(amounts in millions, except per share amounts)
(unaudited)
FIRST QUARTER
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1997 1996
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Revenues:
Sales and operating revenues $ 282 $ 258
Interest income and other revenue 2 -
Net earnings of equity investee 8 9
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Total revenues 292 267
Costs and other deductions:
Product costs and operating expenses 81 80
Exploration expenses 10 14
Depreciation, depletion and
amortization 59 55
Selling, general and administrative
expenses 5 5
Interest expense(h) 4 8
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Income before taxes 133 105
Income taxes 69 57
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Net income $ 64 $ 48
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Earnings per share of common stock $ .74 $ .54
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Dividends per share of common stock $ .05 $ .05
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Weighted average number of shares
outstanding 85.9 87.6
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See footnotes on page 7.
SELECTED BALANCE SHEET DATA
(amounts in millions)
FIRST QUARTER
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March 31, 1997 December 31, 1996
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Total assets $ 1,846 $ 1,942
Long-term debt $ 517 $ 558
Shareholders' equity $ 590 $ 586
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FOOTNOTES
(a) Excludes corporate items and other worldwide exploration ventures.
(b) Discretionary cash flow (DCF) is net income (less Unimar equity partnership
income) excluding depreciation, deferred taxes, and exploration expenses,
plus the company's estimated share of discretionary cash flow from its
equity interest in its Unimar partnership.
(c) Unimar equity DCF reflects the company's estimated share of discretionary
cash flow from its equity interest in its Unimar partnership.
(d) Excludes the Unimar equity partnership.
(e) Excludes capacity charge of $19 million and $17 million in the first
quarters of 1997 and 1996, respectively, from the North and South Sean gas
fields in the U.K. North Sea.
(f) Excludes a loss related to feedstock inventory valuation which reduces
margins to a comparable 1996 level.
(g) Represents Union Texas' 41.67% net interest in the jointly-owned Geismar
ethylene plant in Louisiana.
(h) Interest expense is net of amounts capitalized of $8 million and $6 million
in the first quarter of 1997 and 1996, respectively.
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