EXHIBIT 99.5
MAYNARD OIL COMPANY
Pro Forma Condensed Consolidated Statements of Operations (Unaudited)
For the Year Ended December 31, 1994
Pennzoil
Property
Maynard Acquisition
Historical Historical Pro Forma Pro Forma
Amounts Amounts Adjustments Amounts
(Thousands of Dollars, Except Per Share Amounts)
Revenues:
Oil and gas sales
and royalties $ 13,359 $ 5,413 $ -- $ 18,772
Costs and expenses:
Operating expenses 4,971 2,098 -- 7,069
Dry holes and abandonments 837 -- -- 837
Lease rentals and seismic 332 -- -- 332
General and administrative 1,676 -- -- 1,676
Depreciation and amortization 4,727 -- 1,790(a) 6,517
12,543 2,098 1,790 16,431
Operating profit 816 3,315 (1,790) 2,341
Other income (deductions) 380 -- (808)(b) (428)
Income before income taxes 1,196 3,315 (2,598) 1,913
Income tax expense (benefit) 253 -- (32)(c) 221
Net income $ 943 $ 3,315 $(2,566) $ 1,692
Weighted average number of common
shares outstanding 4,891,592 4,891,592
Income per common share:
Income before accounting
change $0.19 $0.35
MAYNARD OIL COMPANY
Pro Forma Condensed Consolidated Statements of Operations (Unaudited)
For the Three Months Ended March 31, 1995
Pennzoil
Property
Maynard Acquisition
Historical Historical Pro Forma Pro Forma
Amounts Amounts Adjustments Amounts
(Thousands of Dollars, Except Per Share Amounts)
Revenues:
Oil and gas sales and royalties $ 4,264 $ 1,129 $ -- $ 5,393
Costs and expenses:
Operating expenses 1,795 286 -- 2,081
Dry holes and abandonments 67 -- -- 67
Lease rentals and seismic 10 -- -- 10
General and administrative 250 -- -- 250
Depreciation and amortization 1,456 -- 374(a) 1,830
3,578 286 374 4,238
Operating profit (loss) 686 843 (374) 1,155
Other income (deductions) 98 -- (175)(d) (77)
Income before income taxes 784 843 (549) 1,078
Income tax expense 200 -- 43(c) 243
Net income $ 584 $ 843 $ (592) $ 835
Weighted average number of common
shares outstanding 4,891,379 4,891,379
Net income per common share:
Net income $0.12 $0.17
MAYNARD OIL COMPANY
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(a) Depreciation, depletion, and amortization of the Pennzoil Properties
determined by using the unit-of-production method.
(b) Recognize interest expense associated with the borrowings incurred to
fund the acquisition at an annual rate of 7.94 percent and the loss of
interest income associated with the cash utilized to fund the
acquisition at an annual rate of 4.8 percent, which would have been
incurred if the Pennzoil acquisition had occurred on January 1, 1994.
(c) Record the tax effect, at 34 percent for U.S. Federal income taxes, of
the pro forma adjustments and net income from the Pennzoil properties
for the year ended December 31, 1994 and the three months ended March
31, 1995.
(d) Recognize interest expense associated with the borrowings incurred to
fund the acquisition at an annual rate of 7.4 percent.
SUPPLEMENTARY OIL AND GAS INFORMATION (Unaudited)
Estimated Net Quantities of Proved Reserves
Proved reserves are estimated quantities of crude oil and natural gas
which geological and engineering data demonstrate with reasonable certainty
to be recoverable in future years from known reservoirs under existing
economic and operating conditions.
The following pro forma historical data as of December 31, 1994 gives
effect to the acquisition of the Pennzoil Properties.
Pennzoil
Properties
Company (Historical) Pro Forma
Proved Reserves
Crude Oil, Condensate and
Natural Gas Liquids
(Barrels) 6,153,100 994,365 7,147,465
Natural Gas
(Thousands of Cubic
Feet) (MCF) 14,951,400 6,489,229 21,440,629
SUPPLEMENTARY OIL AND GAS INFORMATION (Unaudited)
(continued)
Standardized Measure of Discounted Future Net Cash Flows Relating to Proved
Reserves
The following table sets forth the computation of the standardized measure
of discounted future net cash flows relating to proved reserves, estimated by
the Company as of December 31, 1994. Future cash inflows represent expected
revenues from production of proved reserves based on December 31, 1994 prices
and any fixed and determinable future escalation provided by contractual
arrangements in existence at that date. Escalation based on inflation and
supply and demand are not considered. Estimated future production and
development costs related to future production of proved reserves are based
on December 31, 1994 costs. Future income tax estimates are included based
on tax rates currently in effect. A discount rate of 10% is applied to the
annual future net cash flows.
The methodology and assumptions used in calculating the standardized
measure are those required by Statement of Financial Accounting Standards No.
69. This data is not intended to be representative of the fair market value
of the properties' proved reserves. The valuation of revenues and costs do
not necessarily reflect the amounts to be received or expended. In addition
to the valuations used, numerous other factors are considered in evaluating
known and prospective oil and gas reserves.
Standardized measure (in thousands of dollars):
Pennzoil
Properties
Company (Historical) Pro Forma
Future cash inflows $123,865 $23,000 $146,865
Future production costs (61,969) (10,311) (72,280)
Future development costs (2,166) -- (2,166)
Future net cash flows 59,730 12,689 72,419
Future income tax expense (benefit) (8,590) 473 (8,117)
51,140 13,162 64,302
Discount at 10 percent (16,929) (3,304) (20,233)
Standardized measure of
discounted future net
cash flows from estimated
production of proved oil
and gas reserves after
income taxes $34,211 $ 9,858 $ 44,069