SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d 16 OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF MARCH, 2002
GULF INDONESIA RESOURCES LIMITED
(Exact name of Registrant as specified in its charter)
COMMISSION FILE NUMBER 1-14698
NEW BRUNSWICK, CANADA
(State or other jurisdiction of incorporation or organization)
20TH-24TH Floor, Wisma 46 - Kota BNI, Jalan Jenderal Sudirman Kavling 1,
Jakarta, Indonesia 10220
(Address of principal executive offices)
Registrants telephone number, including area code: (62-21) 574-2120
Indicate by check mark whether the Registrant files
or will file annual reports under cover Form 20-F or Form 40-F
Form 20-F Form 40-F X
--- ---
Indicate by check mark whether the Registrant by furnishing the information
contained in this form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
--- ---
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.
GULF INDONESIA RESOURCES LIMITED
(Registrant)
By: "Alan P. Scott"
-----------------------------------
Alan P. Scott, Corporate Secretary
Date: May 8,2002
Total number of sequential pages - 20
Exhibit Index appears on page 2
GULF INDONESIA RESOURCES LIMITED
FORM 6-K FOR THREE MONTHS ENDED MARCH, 2002
1. EXHIBIT INDEX
-------------
FIRST QUARTER REPORT TO SHAREHOLDERS
FOR THE THREE MONTHS ENDED MARCH 31, 2002 p.3-20
Page 2 of 20
[LOGO]
GULF INDONESIA RESOURCES LIMITED
INTERIM REPORT 1 - FOR THE THREE MONTHS ENDED MARCH 31, 2002
(ALL DOLLAR AMOUNTS IN THIS REPORT ARE UNITED STATES DOLLARS)
In the first quarter of 2002, Gulf Indonesia exceeded its profit result for the
previous corresponding period, despite the significantly weaker crude oil price
environment during the quarter. The achievements of the quarter included:
o Cash generated from operations for first quarter 2002 of $32 million, or
$0.37 per share, and earnings of $10 million, or $0.11 per share.
o A net cash surplus of US$93 million at March 31.
o Gulf Indonesia signed a Memorandum of Understanding for the supply of up to
50 mmcf/d of gas to the island of Batam.
o Testing of the Suban-7 well in the Corridor block at a rate of 63 million
cubic feet per day, with the drilling of Suban-8 scheduled to commence
during July.
o Completion of a 2,523 square kilometer 3D seismic survey over most of the
Ketapang block and a portion of the adjacent Pangkah block in East Java.
The company believes this to be the largest offshore proprietary 3D seismic
survey ever undertaken in Indonesia.
The first quarter results are as follows:
<Table>
<Caption>
Three Months Ended March 31
2002 2001
------------ ------------
CASH GENERATED FROM OPERATIONS
Millions of dollars 32 37
Per share 0.37 0.42
EARNINGS
Millions of dollars 10 9
Per share 0.11 0.10
VOLUMES (gross sales)
Thousands of barrels of oil equivalent per day(1) 41.5 41.7
PRICES (average realized price)
Dollars per barrel of oil equivalent(1) 16.29 21.30
OPERATING COSTS (average)
Dollars per barrel of oil equivalent(1) 1.85 1.87
</Table>
(1) Natural gas converted at 6:1
Cash generated from operations for the first three months of 2002 totaled $32
million or $0.37 per share compared to $37 million or $0.42 per share for the
first three months of 2001, as the impact of lower prices and slightly lower
volumes was partially offset by lower government take and current taxes.
Earnings for the first quarter of 2002 were $10 million or $0.11 per share
compared to $9 million or $0.10 per share for the same period in 2001, as lower
cash generation was more than offset by significantly lower exploration expense.
Gulf Indonesia Resources Limited
PRODUCTION & DEVELOPMENT ACTIVITIES
ONSHORE GAS
Corridor Gas Project
Natural gas sales from the Corridor Gas Project averaged 153 mmcf/d in the first
quarter of 2002 compared to 144 mmcf/d in the first quarter of 2001.
During the first three quarters of 2001, gas takes by Caltex were below the
take-or-pay levels in the contract and Gulf Indonesia received oil volumes
equivalent to the contracted take-or-pay quantities of gas, thereby maintaining
a minimum level of Duri crude oil liftings. In the fourth quarter of 2001,
Caltex increased its off-take rate significantly compared to the prior quarters
in 2001 and the company recognized revenue at prices realized at the time the
oil was received. This trend continued into the first quarter of 2002.
Caltex II
Construction of Phase 1 of the Suban field facilities continued in the first
quarter. The Suban field is scheduled to commence production in late 2002 to be
available to supply gas for the Caltex II sales contract.
Sumatra Gas to Singapore
During the quarter, three gas development wells were drilled in the South Jambi
B block. These comprised two development wells at the Teluk Rendah gas field and
one at the Geger Kalong gas field. These fields are targeted to supply gas from
the South Jambi B block to the Sumatra Gas to Singapore contract, commencing in
late 2003.
ONSHORE OIL
Gulf Indonesia's share of onshore crude oil and condensate volumes for the first
quarter of 2002 was 12,100 b/d, compared to 13,900 b/d in the same period last
year. The 13 percent decrease in sales is a reflection of natural reservoir
decline and the impact of wet weather during January and February that resulted
in an inability to service wells and higher downtime.
OFFSHORE OIL AND GAS
Gulf Indonesia's share of offshore gas volumes for the first quarter of 2002
averaged 10 mmcf/d compared to 1 mmcf/d during the first quarter of 2001. This
increase reflected the ramp-up in sales volumes since the commencement of gas
sales from the West Natuna Gas Project in March 2001.
Sales of offshore crude oil and condensate for the first quarter of 2002
averaged 2,300 b/d, compared to 3,700 b/d in the same period last year. This
sharp decline arose from a combination of natural reservoir decline in mature
oil fields in the Kakap block, contributions from condensate sales from the gas
produced for the West Natuna Gas Project and the impact of an increase in
inventory build rate from 200 barrels per day in the first quarter of 2001 to
800 barrels per day in the first quarter of 2002.
East Java
During February, a development plan for the Ujung Pangkah field was submitted to
Pertamina. Ujung Pangkah is located in the Pangkah block where Gulf Indonesia
holds a non-operated 22 percent interest.
2
Gulf Indonesia Resources Limited
GAS MARKETING AND BUSINESS DEVELOPMENT ACTIVITIES
SOUTH SUMATRA
On April 17, Gulf Indonesia, Pertamina, the state oil and gas company of
Indonesia, and PGN, the Indonesian state gas distribution and transmission
company, announced the signing of a Memorandum of Understanding (MOU) for the
sale of gas from south Sumatra to PGN for the eventual sale to end-users on the
island of Batam.
Under the MOU, up to 50 million cubic feet per day (mmcf/d) of natural gas would
be supplied from the Corridor PSC operated by Gulf Indonesia. PGN will seek to
market the gas to various industrial and commercial consumers, the state power
company and residential consumers on the island of Batam. The gas would be
delivered through the pipeline facilities from south Sumatra to the island of
Batam and on to Singapore that are currently under development for the Sumatra
Gas to Singapore gas sale agreement which was signed in February 2001. The
construction of the pipeline is expected to commence during June 2002, with
completion scheduled for late 2003.
The company actively pursued marketing opportunities for new gas supply to
domestic customers in West Java and Sumatra in Indonesia, to Malaysia and to
Singapore.
EAST JAVA
Discussions for the sale of gas from the Ujung Pangkah gas field in East Java
are at a preliminary stage.
This project envisages the supply of gas to the East Java market where a
significant supply shortfall is anticipated to emerge over the next three years.
3
Gulf Indonesia Resources Limited
EXPLORATION & DELINEATION ACTIVITIES
ONSHORE GAS -- SOUTH SUMATRA
Production testing of the Suban-7 appraisal well was completed during the first
quarter of 2002. Evaluation of the test data is ongoing and gas reserves
implications are yet to be determined. During January, Suban-7 flowed gas at a
rate of 63 mmcf/d through a 1 3/8 inch choke, confirming the presence of high
deliverability gas reservoir in the northwest extent of the field.
The Suban-8 appraisal well, located in the south of the field, is scheduled to
commence drilling during July 2002. This well, and possible additional Suban
appraisal wells, will help determine the extent of Suban gas reserves potential.
Reinterpretation of a 3D seismic survey recorded during 1999 commenced during
the first quarter in order to incorporate data obtained from recent appraisal
drilling.
Also in South Sumatra, a 2D seismic survey over parts of the Corridor
and Sakakemang blocks commenced in March. This survey envisages the acquisition
of 657 km of seismic data - 523 km in the newly acquired Sakakemang block and
134 km in the Corridor block - over a period of approximately six months. The
objective of the survey is to increase the inventory of gas prospects in the
company's south Sumatra acreage with a view toward drilling some of these
prospects during the 2003/04 timeframe.
The SE Mengoepeh-1 gas discovery in the Tungkal block is scheduled to be tested
during the second quarter of 2002. SE Mengoepeh-1 is located approximately 26
kilometres from the gas infrastructure currently planned for development in the
neighboring South Jambi B PSC.
ONSHORE OIL -- SOUTH SUMATRA
In the Tungkal PSC, testing of the Mengoepeh-7 appraisal well drilled during the
fourth quarter of 2001 is scheduled in the second quarter. The results of this
test will be used in the preparation of a Mengoepeh field development plan that
the company expects to submit this year.
OFFSHORE OIL AND GAS -- EAST JAVA
During the first quarter, the company completed what it believes to be the
largest offshore proprietary 3D seismic survey ever undertaken in Indonesia. The
2,523 square km survey covered most of the Ketapang block and a portion of the
adjacent Pangkah block and was completed on schedule and on budget. The company
expects to process the seismic data during the second and third quarter, with a
view toward commencing a new drilling campaign during early 2003. A key
objective of the seismic survey is to delineate the extent of the Bukit Tua /
Jenggolo structure that was discovered during 2001 and which has oil and gas
reserves potential.
4
Gulf Indonesia Resources Limited
OUTLOOK
The company continues to pursue exploration and development opportunities in its
south Sumatra and East Java core areas. At present, these activities are focused
on bringing the Caltex II and Sumatra Gas to Singapore projects on line,
delineation of the Suban gas field and interpretation of a major 3D seismic
survey that has been undertaken in East Java.
The signing of an MOU for the sale of gas to the island of Batam is a material
step for the company in the development of its gas business in south Sumatra.
The company is in a strong financial position and is well position to pursue its
present and future development opportunities.
On behalf of the Board of Directors and the employees of Gulf Indonesia,
Paul C. Warwick
President and Chief Executive Officer
April 23, 2002
This report contains forward-looking statements within the meaning of Section
27A of the United States Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, including information about proposed drilling
programs and the results thereof, estimated project completion dates, and the
progress of gas marketing negotiations. Although Gulf Indonesia believes that
its expectations are based on reasonable assumptions, these assumptions are
subject to a wide range of business risks and technical risks, including those
inherent in exploration for oil and gas, and there is no assurance Gulf
Indonesia's objectives will be achieved.
5
Gulf Indonesia Resources Limited
FINANCIAL REVIEW
CASH GENERATED FROM OPERATIONS AND EARNINGS
TOTAL COMPANY
<Table>
<Caption>
THREE MONTHS ENDED MARCH 31
2002 2001
----------------- -----------------
$MILLION $/boe $million $/boe
-------- ------ -------- ------
Gross oil and gas revenue 61 16.29 80 21.30
Government take (9) (2.54) (16) (4.18)
------ ------ ------ ------
Net oil and gas revenue 52 13.75 64 17.12
Other revenue 0 0.09 1 0.37
Operating expense (7) (1.85) (7) (1.87)
Exploration expense (3) (0.73) (11) (2.98)
General and administration expense (2) (0.50) (1) (0.39)
Depreciation, depletion and amortization expense (13) (3.53) (14) (3.78)
Finance charges, net
Cash interest charges, net (0) (0.08) (1) (0.46)
Amortization of debt placement costs -- -- (1) (0.17)
Income tax expense
Current (11) (2.80) (19) (4.94)
Future (6) (1.69) (2) (0.70)
------ ------ ------ ------
Earnings 10 2.66 9 2.20
Add back non-cash items 22 5.94 28 7.63
------ ------ ------ ------
Cash generated from operations 32 8.60 37 9.83
Gross volumes sold (mboe/d) 41.5 41.7
WTI (US$/bbl) $21.64 $28.73
Per share (dollars)
Cash generated from operations $0.37 $0.42
Earnings $0.11 $0.10
</Table>
Cash generated from operations for the first three months of 2002 totaled $32
million or $0.37 per share compared to $37 million or $0.42 per share for the
first three months of 2001, as the impact of lower prices and slightly lower
volumes were partially offset by lower government take and current taxes.
Earnings for the first quarter of 2002 were $10 million or $0.11 per share in
2002 compared to $9 million or $0.10 per share for the same period in 2001, as
lower cash generation was more than offset by significantly lower exploration
expense.
6
Gulf Indonesia Resources Limited
The company's first quarter 2002 results varied from the first quarter 2001
results due to the following:
o A 25 percent fall in the benchmark West Texas Intermediate crude oil price.
This was the primary contributing factor to the 24 percent reduction in
realized prices for the quarter.
o A marginal reduction in total oil and gas sales volumes. The impact of
increased gas deliveries to Caltex and Singapore during the first quarter
was more than offset by natural reservoir decline in the company's mature
onshore and offshore oil fields.
o A reduction in exploration expense due to a reduced rate of exploration
drilling activity. The first quarter 2001 result was adversely affected by
write-off of the cost of three unsuccessful exploration wells during the
quarter.
o A decrease in unit depreciation, depletion and amortization charges due to
an increase in booked proved reserves effective year-end 2001.
o Elimination of net finance charges related to the Corridor Loan due to the
company's decision to repay the entire balance of the Corridor Loan
facility in August 2001.
The following table summarizes the impacts of the above items on the company's
reported results.
<Table>
<Caption>
SALES CASH GENERATED
VOLUMES FROM OPERATIONS EARNINGS
------------ --------------- ------------
(mboe/d) ($millions) ($millions)
THREE MONTHS ENDED MARCH 31, 2001 41.7 37 9
Reconciling Items: -- -- --
Lower realized oil and gas prices -- (8) (7)
Lower oil and gas sales volumes (0.2) -- --
Lower dry hole costs -- -- 8
Lower DD&A rates -- -- 1
Elimination of net finance charges related -- 1 1
to the Corridor Loan
Other/rounding -- 2 (2)
THREE MONTHS ENDED MARCH 31, 2002 41.5 32 10
</Table>
7
Gulf Indonesia Resources Limited
ONSHORE NATURAL GAS OPERATIONS
<Table>
<Caption>
THREE MONTHS ENDED MARCH 31
2002 2001
----------------- -----------------
$MILLION $/boe $million $/boe
-------- ------ -------- ------
Gross gas revenue
Before pipeline tariff 41 17.56 48 22.43
Pipeline tariff (9) (3.72) (8) (3.72)
Government take (2) (1.08) (2) (1.10)
------ ------ ------ ------
Net gas revenue 30 12.76 38 17.61
Operating expense (2) (0.74) (1) (0.60)
Depreciation, depletion and amortization
expense (5) (2.23) (6) (2.54)
Finance charges, net
Cash interest charges, net -- -- (1) (0.78)
Amortization of debt placement costs -- -- (1) (0.30)
Income tax expense
Current (7) (2.73) (15) (6.73)
Future (6) (3.04) (1) (0.76)
------ ------ ------ ------
Earnings 10 4.02 13 5.90
Add back non-cash items 11 5.27 8 3.60
------ ------ ------ ------
Cash generated from operations 21 9.29 21 9.50
------ ------ ------ ------
Volumes sold (gross / net)
mmcf/d 153 144
mboe/d 25.5 24.0
</Table>
Gross revenue before pipeline tariffs in the first quarter of 2002 was $41
million, $7 million lower than the first quarter of 2001, reflecting the
following:
o a 26 per cent decrease in realized prices between the respective periods,
reflecting lower world oil prices. Onshore gas prices are dependent on
crude oil prices as the gas is exchanged for Duri crude oil on an energy
equivalent basis.
o a six per cent increase in sales volumes for the first three months of
2002, due to increased gas demand from the Caltex-operated Duri Steamflood.
Government take in the first quarter of 2002 and 2001 was approximately five per
cent of gross revenue, reflecting the utilization of substantial gas deductions.
Operating expense on a per barrel of oil equivalent (boe) basis for the first
quarter of 2002 was $0.74 per boe, up slightly from 2001 due to the timing of
ongoing operating activities.
The repayment of the outstanding balance on the Corridor Loan in the third
quarter of 2001 resulted in the elimination of interest expense for 2002,
compared to $1 million of interest expense in the first three months of 2001.
Similarly, the amortization of debt placement costs has been eliminated for
2002, compared to $1 million in the first quarter of 2001.
Depreciation, depletion and amortization expense declined in the first three
months of 2002 to $5 million or $2.23 per boe compared to $6 million or $2.54
per boe in 2001. The lower depletion rate per boe for 2002 reflects the benefit
of significant low-cost reserve additions at year-end 2001.
Income tax expense (current and future) in the first three months of 2002 was
$13 million compared to $16 million for 2001, or approximately 57 per cent of
pre-tax earnings in 2002 compared to 56 per cent in 2001.
8
Gulf Indonesia Resources Limited
ONSHORE OIL OPERATIONS
<Table>
<Caption>
THREE MONTHS ENDED MARCH 31
2002 2001
--------------------- ---------------------
$MILLION $/bbl $million $/bbl
-------- ----- -------- -----
Gross liquids revenue 21 19.50 31 24.41
Government take (7) (6.37) (11) (8.62)
----- ----- ----- -----
Net liquids revenue 14 13.13 20 15.79
Operating expense (3) (3.30) (4) (3.16)
Depreciation, depletion and amortization expense (4) (3.98) (5) (4.41)
Income tax expense
Current (2) (2.03) (4) (2.90)
Future (1) (0.57) (2) (1.76)
----- ----- ----- -----
Earnings 4 3.25 5 3.56
Add back non-cash items 5 4.54 7 6.17
----- ----- ----- -----
Cash generated from operations 9 7.79 12 9.73
----- ----- ----- -----
Gross volumes sold (mb/d) 12.1 13.9
</Table>
Gross revenue for the first three months of 2002 was $21 million compared to $31
million for the same period of 2001, reflecting the following:
o a twelve per cent reduction in sales volumes to 12,100 b/d in 2002 compared
to 13,900 b/d in 2001 as the impact of development activities over the past
year were more than offset by natural reservoir declines.
o a twenty per cent reduction in realized prices in 2002 compared to 2001,
primarily due to lower world oil prices.
Government take averaged approximately 33 per cent of gross revenue during the
first three months of 2002, similar to 2001 levels.
Operating expense for the first three months of 2002 was $3.30 per barrel
compared to $3.16 per barrel in 2001, primarily reflecting the impact of fixed
costs and lower production.
Depreciation, depletion and amortization in the first quarter of 2002 was
virtually unchanged from the same period in 2001.
9
Gulf Indonesia Resources Limited
OFFSHORE OIL AND GAS OPERATIONS
<Table>
<Caption>
THREE MONTHS ENDED MARCH 31
2002 2001
----------------- -----------------
$MILLION $/boe $million $/boe
-------- ------ -------- ------
Gross oil and gas revenue 8 22.24 9 26.28
Government take -- (0.12) (3) (7.47)
------ ------ ------ ------
Net oil and gas revenue 8 22.12 6 18.81
Operating expense (2) (4.62) (2) (5.18)
Depreciation, depletion and amortization expense (4) (10.41) (3) (9.36)
Income tax expense
Current (2) (5.61) (0) (0.77)
Future -- 1.36 (1) (0.70)
------ ------ ------ ------
Earnings -- 2.84 0 1.29
Add back non-cash items 4 9.05 4 11.57
------ ------ ------ ------
Cash generated from operations 4 11.89 4 12.86
------ ------ ------ ------
Gross volumes sold (mboe/d)
Natural Gas 1.6 0.1
Crude oil and condensate 3.1 3.9
---- ----
4.7 4.0
Inventory build-up (mboe/d) (0.8) (0.2)
---- ----
Gross volumes sold (mboe/d) 3.9 3.8
---- ----
</Table>
Gross oil and gas revenue for the first three months of 2002 was $8 million
compared to $9 million in the same period of 2001 due to lower prices partially
offset by slightly higher volumes.
Sales volumes on a barrel of oil equivalent basis were 3,900 boe/d for the first
quarter of 2002 compared to 3,800 boe/d in the same period in 2001, reflecting
the following:
o gas sales of 10 mmcf/d (1,600 boe/d) for 2002 compared to 1 mmcf/d (100
boe/d) for 2001, reflecting the ramp-up in sales volumes since the start-up
in March 2001 of gas sales from the West Natuna Gas Project.
o crude oil and condensate production of 3,100 b/d for 2002 compared to 3,900
b/d in 2001, reflecting the impact of natural reservoir declines in mature
oil fields partially offset by condensate recovered from the gas produced
for the West Natuna Gas Project.
o an inventory build of 800 b/d in the first quarter of 2002 compared to an
inventory build of 200 b/d in the first quarter of 2001, reflecting the
timing of liftings from the Floating, Production, Storage, and Offloading
vessel.
Realized prices on a barrel of oil equivalent basis declined by 15 per cent
reflecting the impact of lower world oil prices, partially offset by the
increased impact of higher priced gas sales.
Operating expense for the first three months of 2002 was $4.62 per boe compared
to $5.18 per boe in 2001, primarily due to fixed costs and slightly higher sales
volumes on a barrel of oil equivalent basis.
10
Gulf Indonesia Resources Limited
Depreciation, depletion and amortization was $4 million for the first three
months of 2002 compared to $3 million in 2001, due to higher net sales volumes.
The reported depletion rates per gross boe in the first quarter of 2002 reflects
the impact of increased net sales volumes (volumes after government take) as
depreciation, depletion and amortization is calculated on a net volume basis.
EXPLORATION
Exploration expense for the first three months of 2002 was $3 million compared
to $11 million in 2001. In the first quarter of 2002, no exploration wells were
drilled, while in the first quarter of 2001, the company wrote-off the costs of
three unsuccessful exploration wells.
NET CASH FLOW AND FINANCIAL POSITION
During the first three months of 2002, the company's net cash surplus increased
by $1 million to $93 million. Cash generated from operations of $32 million was
offset by $21 million of capital and exploration expenditures. Much of the
remaining variance was attributable to the payment of acquisition costs
associated with the Pangkah block. The company expects to be able to fund its
currently planned exploration and development programs with internally generated
cash and existing cash balances. The company is actively evaluating business
opportunities outside of its current asset portfolio and funding for these
opportunities could be provided by the company's existing cash balances and the
undrawn $65 million credit facility from Conoco Canada.
RISKS AND UNCERTAINTIES
INDONESIAN ECONOMIC AND POLITICAL RISK
Substantially all of the company's assets, except for cash and short-term
investments, are located in Indonesia. Also, the Indonesian government has
exercised and continues to exercise significant influence over many aspects of
the Indonesian economy, including the oil and gas industry. During the first
quarter of 2002, the company did not experience, nor has it historically
experienced, problems from civil unrest or disputes with the Indonesian
government. The company is attempting to mitigate its risk through building
strong relationships with the local communities and government in areas in which
it operates. However, it is unclear at the present time what impact, if any,
Indonesia's current economic and political environment will have on the
company's financial position, results of operations or potential for further
growth in the future.
11
CONSOLIDATED STATEMENTS OF EARNINGS AND
RETAINED EARNINGS
(Unaudited)
<Table>
<Caption>
THREE MONTHS
ENDED MARCH 31
-----------------------
(millions of United States dollars) 2002 2001
- ----------------------------------- ---------- ----------
EARNINGS
REVENUES
Gross oil and gas revenue $ 61 $ 80
Government take 9 16
---------- ----------
Net oil and gas revenue 52 64
Other -- 1
---------- ----------
52 65
---------- ----------
EXPENSES
Operating 7 7
Exploration 3 11
General and administration 2 1
Depreciation, depletion and amortization 13 14
Finance charges, net -- 2
---------- ----------
25 35
---------- ----------
Earnings before tax 27 30
Income tax expense 17 21
---------- ----------
EARNINGS FOR THE PERIOD $ 10 $ 9
========== ==========
RETAINED EARNINGS
BALANCE, BEGINNING OF PERIOD $ 113 $ 81
Earnings for the period 10 9
---------- ----------
BALANCE, END OF PERIOD $ 123 $ 90
========== ==========
PER SHARE INFORMATION (dollars per share)
Cash generated from operations $ 0.37 $ 0.42
========== ==========
Earnings $ 0.11 $ 0.10
========== ==========
Average common shares outstanding (millions) 87.9 87.9
========== ==========
</Table>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<Table>
<Caption>
THREE MONTHS
ENDED MARCH 31
----------------------------
(millions of United States dollars) 2002 2001
- ----------------------------------- ------------ ------------
OPERATING ACTIVITIES
EARNINGS FOR THE PERIOD $ 10 $ 9
NON-CASH ITEMS INCLUDED IN EARNINGS:
Depreciation, depletion and amortization 13 14
Exploration expense 3 11
Future income taxes 6 2
Other -- 1
------------ ------------
CASH GENERATED FROM OPERATIONS 32 37
Changes in non-cash working capital (1) (5)
------------ ------------
31 32
------------ ------------
INVESTING ACTIVITIES
Capital expenditures and exploration expenses (21) (26)
Decrease (increase) in cash restricted in use -- 36
Changes in non-cash working capital (9) (20)
------------ ------------
(30) (10)
------------ ------------
FINANCING ACTIVITIES
Long-term debt repayments -- (15)
------------ ------------
INCREASE (DECREASE) IN CASH 1 7
CASH AND SHORT-TERM INVESTMENTS, BEGINNING OF PERIOD 91 107
------------ ------------
CASH AND SHORT-TERM INVESTMENTS, END OF PERIOD $ 92 $ 114
============ ============
</Table>
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
<Table>
<Caption>
March 31, December 31,
(millions of United States dollars) 2002 2001
- ----------------------------------- ------------ ------------
(Unaudited)
ASSETS
CURRENT
Cash and short-term investments $ 92 $ 91
Cash restricted in use 1 1
Accounts receivable 49 39
Inventory and other current assets 37 39
------------ ------------
179 170
PROPERTY, PLANT AND EQUIPMENT 783 778
------------ ------------
$ 962 $ 948
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT
Accounts payable $ 47 $ 58
Accounts payable - parent/affiliates 9 10
Other current liabilities 23 13
------------ ------------
79 81
Future income taxes 261 255
------------ ------------
340 336
------------ ------------
SHAREHOLDERS' EQUITY
Share capital (Note 2) 499 499
Retained earnings 123 113
------------ ------------
622 612
------------ ------------
$ 962 $ 948
============ ============
</Table>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(amounts expressed in millions of United States dollars, except where otherwise
noted)
(Unaudited)
1. BASIS OF PRESENTATION
The interim consolidated financial statements of the company include the
accounts of all subsidiary companies, have been prepared by management in
accordance with accounting principles generally accepted in Canada and
conform in all material respects with International Accounting Standards.
These interim consolidated financial statements have been prepared
following the same accounting policies and methods of computation as the
consolidated financial statements for the year ended December 31, 2001.
These statements should be read in conjunction with the consolidated
financial statements and the notes thereto in the company's annual report
for the year ended December 31, 2001.
2. SHARE CAPITAL
AUTHORIZED:
COMMON SHARES - voting, unlimited number with a par value of U.S.$0.01.
PREFERRED SHARES - unlimited number. These preference shares rank in
priority to the common shares and may be issued from time to time in
series, and with the price, rights, preference, privileges and
restrictions, including voting and conversion rights, to be fixed by the
directors prior to their issue.
<Table>
<Caption>
ISSUED AND OUTSTANDING: NUMBER AMOUNT
- ----------------------- ------------ ------------
COMMON SHARES:
At December 31, 2001 87,927,852 $ 499
Issued pursuant to exercise of stock options 2,000 --
Cancelled pursuant to exercise of stock options -- --
------------ ------------
At March 31, 2002 87,929,852 $ 499
============ ============
</Table>
The company has a fixed option plan. Pursuant to the terms of the Gulf
Indonesia Resources Limited 1997 Stock Option and Incentive Plan, the
company may grant options to its employees at any time prior to December
31, 2007. Options outstanding are granted at prices determined at the time
the option is granted, provided that the exercise price is not less than
the fair market value of the common shares on the date of grant, and have a
maximum term of 10 years. A summary of the status of the company's stock
options as at March 31, 2002 is presented below:
2. SHARE CAPITAL, CONTINUED
<Table>
<Caption>
WEIGHTED AVERAGE
NUMBER EXERCISE PRICE
------------ ----------------
Outstanding, at December 31, 2001 5,238,363 $ 15.42
Granted -- --
Forfeited (17,665) 18.83
Exercised (2,000) 8.10
------------ ------------
Outstanding, at March 31, 2002 5,218,698 $ 15.41
============ ============
Options exerciseable:
At March 31, 2002 4,096,874 $ 17.16
============ ============
</Table>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(amounts expressed in millions of United States dollars, except where otherwise
noted)
(Unaudited)
3. SEGMENT INFORMATION
<Table>
<Caption>
ONSHORE - GAS ONSHORE - OIL OFFSHORE - OIL & GAS
----------------------- ----------------------- -----------------------
THREE MONTHS ENDED THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, MARCH 31, MARCH 31,
----------------------- ----------------------- -----------------------
2002 2001 2002 2001 2002 2001
---------- ---------- ---------- ---------- ---------- ----------
REVENUES
Gross oil and gas revenue $ 32 $ 40 $ 21 $ 31 $ 8 $ 9
Government take 2 2 7 11 -- 3
---------- ---------- ---------- ---------- ---------- ----------
Net oil and gas revenue 30 38 14 20 8 6
Other -- -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
30 38 14 20 8 6
---------- ---------- ---------- ---------- ---------- ----------
EXPENSES
Operating 2 1 3 4 2 2
Exploration -- -- -- -- -- --
General and administrative -- -- -- -- -- --
Depreciation, depletion and amortization 5 6 4 5 4 3
Finance charges, net -- 2 -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
7 9 7 9 6 5
---------- ---------- ---------- ---------- ---------- ----------
EARNINGS (LOSS) BEFORE TAX 23 29 7 11 2 1
Income tax expense (recovery)
Current 7 15 2 4 2 --
Future 6 1 1 2 -- 1
---------- ---------- ---------- ---------- ---------- ----------
13 16 3 6 2 1
---------- ---------- ---------- ---------- ---------- ----------
EARNINGS (LOSS) FOR THE PERIOD $ 10 $ 13 $ 4 $ 5 $ -- $ --
========== ========== ========== ========== ========== ==========
CASH GENERATED FROM OPERATIONS $ 21 $ 21 $ 9 $ 12 $ 4 $ 4
========== ========== ========== ========== ========== ==========
CAPITAL EXPENDITURES AND
EXPLORATION EXPENSES $ 12 $ 5 $ 1 $ 4 $ 2 $ 2
========== ========== ========== ========== ========== ==========
</Table>
<Table>
<Caption>
EXPLORATION CORPORATE TOTAL
------------------------ ------------------------ -----------------------
THREE MONTHS ENDED THREE MONTHS ENDED THREE MONTHS ENDED
MARCH 31, MARCH 31, MARCH 31,
------------------------ ------------------------ -----------------------
2002 2001 2002 2001 2002 2001
---------- ---------- ---------- ---------- ---------- ----------
REVENUES
Gross oil and gas revenue $ -- $ -- $ -- $ -- $ 61 $ 80
Government take -- -- -- -- 9 16
---------- ---------- ---------- ---------- ---------- ----------
Net oil and gas revenue -- -- -- -- 52 64
Other -- -- -- 1 -- 1
---------- ---------- ---------- ---------- ---------- ----------
-- -- -- 1 52 65
---------- ---------- ---------- ---------- ---------- ----------
EXPENSES
Operating -- -- -- -- 7 7
Exploration 3 11 -- -- 3 11
General and administrative -- -- 2 1 2 1
Depreciation, depletion and amortization -- -- -- -- 13 14
Finance charges, net -- -- -- -- -- 2
---------- ---------- ---------- ---------- ---------- ----------
3 11 2 1 25 35
---------- ---------- ---------- ---------- ---------- ----------
EARNINGS (LOSS) BEFORE TAX (3) (11) (2) -- 27 30
Income tax expense (recovery)
Current -- -- -- -- 11 19
Future -- (1) (1) (1) 6 2
---------- ---------- ---------- ---------- ---------- ----------
-- (1) (1) (1) 17 21
---------- ---------- ---------- ---------- ---------- ----------
EARNINGS (LOSS) FOR THE PERIOD $ (3) $ (10) $ (1) $ 1 $ 10 $ 9
========== ========== ========== ========== ========== ==========
CASH GENERATED FROM OPERATIONS $ -- $ -- $ (2) $ -- $ 32 $ 37
========== ========== ========== ========== ========== ==========
CAPITAL EXPENDITURES AND
EXPLORATION EXPENSES $ 6 $ 15 $ -- $ -- $ 21 $ 26
========== ========== ========== ========== ========== ==========
</Table>
Gulf Indonesia has four reportable segments: onshore gas operations, onshore oil
operations, offshore oil and gas operations, and exploration. The operations
segments are involved in the production and development of crude oil and natural
gas in Indonesia. The onshore operations are focused on the island of Sumatra
while the offshore operations are located in the west Natuna Sea. The
exploration segment is involved in the exploration for crude oil and natural gas
in Indonesia. Gulf Indonesia's reportable segments are strategic business units
that are managed separately as each has different operational requirements and
focuses. Due to the nature of the operations, there are no intersegment sales
and transfers.
The corporate segment is comprised principally of the impact of interest income
from unrestricted cash on hand, miscellaneous other revenue, crude oil hedging,
and general corporate expenditures.
SUPPLEMENTARY INFORMATION
(Unaudited)
<Table>
<Caption>
THREE MONTHS ENDED MARCH 31
2002 2001
------------ -------------
VOLUMES SOLD (gross/net) (1)
Onshore natural gas (millions of cubic feet per day) 153/146 144/138
Barrels of oil equivalent (thousands of boe per day) (2) 25.5/24.4 24.0/23.1
Onshore crude oil and condensate (thousands of barrels per day) 12.1/8.4 13.9/9.4
Offshore oil and gas
Natural gas (millions of cubic feet per day) 10/10 1/1
Crude oil and condensate (thousands of barrels per day) 2.3/2.2 3.7/2.5
Barrels of oil equivalent (thousands of boe per day) (2) 3.9/3.8 3.8/2.6
Total volumes sold (thousands of boe per day) (2) 41.5/36.6 41.7/35.1
</Table>
(1) "Gross" sales reflect the Company's interest prior to deduction of
government take; "net" sales are after deduction of government
(2) Natural gas converted at 6:1
<Table>
GROSS AVERAGE PRICES
Onshore natural gas (dollars per thousands of cubic feet) 2.31 3.12
============ ============
Oil equivalent (dollars per barrel of oil equivalent) 13.84 18.71
============ ============
Onshore crude oil and condensate (dollars per barrel) 19.50 24.41
============ ============
Offshore oil and gas
Natural gas (dollars per thousands of cubic feet) 3.88 4.25
Crude oil and condensate (dollars per barrel) 20.42 26.31
------------ ------------
Oil equivalent (dollars per barrel of oil equivalent) 22.24 26.28
============ ============
Combined (dollars per barrel of oil equivalent)
Average 16.29 21.30
============ ============
OIL AND GAS REVENUE (millions of dollars)
Onshore natural gas $ 32 $ 40
Onshore crude oil and condensate 21 31
Offshore
Natural gas 3 0
Crude oil and condensate 5 9
------------ ------------
GROSS OIL AND GAS REVENUE 61 80
Government take
Onshore natural gas (2) (2)
Onshore crude oil and condensate (7) (11)
Offshore
Natural gas -- --
Crude oil and condensate -- (3)
------------ ------------
NET OIL AND GAS REVENUE $ 52 $ 64
============ ============
</Table>