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EXHIBIT 99.1
[UNION TEXAS PETROLEUM LETTERHEAD]
Contact: Carol L. Cox
(713) 968-2714
UNION TEXAS PETROLEUM ANNOUNCES THIRD QUARTER RESULTS
EARNINGS INCREASE FOR FIRST NINE MONTHS OF 1995
Houston, October 24, 1995 -- Union Texas Petroleum Holdings, Inc.
today announced 1995 third quarter earnings of 13 cents per share, compared to
17 cents per share in 1994's same period. Net income for 1995's third quarter
was $12 million, versus $15 million a year ago.
For the first nine months of 1995, the company's earnings were 89
cents per share, compared to 57 cents per share for the corresponding period in
1994. Net income for 1995's first nine months was $79 million, up from $50
million in 1994's same period.
THIRD QUARTER RESULTS
"During the third quarter of 1995, Union Texas had increased oil
volumes in the U.K. North Sea which reflected our July acquisition of an
interest in the North Sea's Alba oil field. Higher ethylene margins at our
petrochemical business in the United States had a positive impact on our 1995
third quarter results. Earnings were negatively affected by higher exploration
expenses, increased interest expense and lower liquefied natural gas (LNG)
sales volumes and prices in Indonesia," said Chairman and CEO Clark Johnson.
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Union Texas' share of daily oil sales in the U.K. North Sea grew
from 36,000 barrels in 1994's third quarter to 47,000 barrels during 1995's
same period, primarily due to the company's Alba acquisition which was
completed in July 1995. At its operations in Indonesia, the company said its
LNG sales volumes were off by about 18% in the third quarter of 1995 compared
to year-ago levels.
During the third quarter of 1995, Union Texas' exploration expenses
totaled approximately $22 million including the costs of two wells in Vietnam,
compared to $15 million a year ago.
The company said that its ethylene margins averaged about 14 cents per
pound of ethylene during the third quarter of 1995 and have declined to 13
cents per pound in September 1995. Union Texas' ethylene margins averaged 7
cents per pound in 1994's third quarter. Ethylene volumes were down about 8%
in 1995's third quarter compared to a year ago.
FIRST NINE MONTHS EARNINGS
Union Texas' increased earnings for the first nine months of 1995 were
driven by improved U.S. ethylene margins and sales volumes, increased volumes
in the U.K. North Sea and Pakistan and higher oil and gas sales prices,
partially offset by higher exploration expenses and lower LNG sales volumes.
During the first nine months of 1995, Union Texas conducted an
expanded exploration program and, as a result, recorded approximately $60
million in exploration expenses compared to about $40 million a year ago.
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At Union Texas' petrochemical operations, the company's margins
averaged 16 cents per pound of ethylene during the first nine months of 1995,
up from 4 cents per pound a year ago.
Sales and operating revenues for 1995's third quarter totaled $197
million, up from $194 million for the same period a year ago, due primarily to
higher sales volumes in the U.K. North Sea from the Alba acquisition in July
and increased ethylene sales prices, partially offset by lower LNG sales
volumes and decreased LNG and oil prices. For the first nine months of 1995,
sales and operating revenues were $637 million, up almost 20% from $533
million in 1994's corresponding period, principally reflecting increased sales
prices, higher U.K. North Sea and Pakistan sales volumes and improved ethylene
prices and volumes.
"Union Texas continued to maintain its strong financial position
during the first nine months of 1995," Johnson said. "The company generated
considerable free cash flow from our oil and gas operations and our
petrochemical business. We achieved a major milestone with the Alba
acquisition. In addition to expanding our production volumes and reserves, the
Alba purchase complements our October 1994 acquisition in the undeveloped
Britannia gas project, which is expected to provide a production boost
beginning in late 1998."
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One of the largest independent producers located in the U.S., Houston-based
Union Texas Petroleum Holdings, Inc. (NYSE:UTH) explores for and produces oil
and gas overseas primarily in the U.K. North Sea, Indonesia and other strategic
areas. The company also has petrochemicals interests in the U.S.
Comparative financial highlights follow (amounts in millions, except per share
data):
THREE MONTHS ENDED SEPTEMBER 30,
1995 1994
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Earnings per share ................... $0.13 $0.17
Net income ........................... $ 12 15
Sales and operating revenues.......... $ 197 $ 194
Average common shares outstanding..... 87.8 87.6
NINE MONTHS ENDED SEPTEMBER 30,
1995 1994
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Earnings per share.................... $0.89 $0.57
Net income............................ $ 79 $ 50
Sales and operating revenues.......... $ 637 $ 533
Average common shares outstanding..... 87.7 87.7
Additional financial and operating information appears on the attached pages.
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UNION TEXAS PETROLEUM
FINANCIAL SUMMARY
(amount in millions, except per share data)
THIRD QUARTER FIRST NINE MONTHS
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1995 1994 1995 1994
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Sales and operating revenues $ 197 $ 194 $ 637 $ 533
Net income $ 12 $ 15 $ 79 $ 50
Major operations (a)
Indonesia $ 20 $ 23 $ 74 $ 68
U.K. North Sea $ 3 $ 1 $ 26 $ 20
Pakistan $ 4 $ 3 $ 12 $ 9
Petrochemicals $ 10 $ 4 $ 34 6
Earnings per share of
common stock $0.13 $0.17 $0.89 $0.57
Discretionary cash flow (b) $ 84 $ 75 $ 280 $ 219
Major operations (a)
Indonesia $ 34 $ 37 $ 119 $ 113
U.K. North Sea $ 41 $ 34 $ 121 $ 103
Pakistan $ 6 $ 6 $ 21 $ 19
Petrochemicals $ 17 $ 8 $ 56 $ 13
Average common shares 87.8 87.6 87.7 87.7
See footnotes on page 7.
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UNION TEXAS PETROLEUM
DISCRETIONARY CASH FLOW SUMMARY(b)
(amounts in millions)
THIRD QUARTER FIRST NINE MONTHS
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1995 1994 1995 1994
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Net income $ 12 $ 15 $ 79 $ 50
Less: Equity partnership
income $ 6 $ 5 $ 17 $ 15
Add: DD&A $ 52 $ 48 $ 136 $ 123
Deferred taxes $ (4) $ (7) $ (7) $ (6)
Exploration expenses $ 22 $ 15 $ 60 $ 39
Unimar equity DCF(c) $ 8 $ 9 $ 29 $ 28
Discretionary cash flow $ 84 $ 75 $ 280 $ 219
See footnotes on page 7.
OPERATING SUMMARY(d)
THIRD QUARTER FIRST NINE MONTHS
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1995 1994 1995 1994
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Net crude oil sales (MBBLS/D)
U.K. North Sea 47 36 37 32
Indonesia 5 6 6 6
Pakistan 6 5 6 5
Average crude oil prices (per BBL)
U.K. North Sea $15.16 $15.69 $16.22 $14.53
Indonesia $16.39 $17.41 $17.19 $15.72
Pakistan $13.77 $14.40 $14.41 $13.57
Net natural gas sales (MMCF/D)
Indonesian LNG 191 234 212 228
U.K. North Sea 18 13 29 20
Pakistan 45 40 45 44
Average natural gas prices (per MCF)
Indonesian LNG $ 2.92 $ 3.06 $ 3.06 $ 2.82
U.K. North Sea (e) $ 2.74 $ 1.12 $ 2.91 $ 2.37
Pakistan $ 1.37 $ 1.04 $ 1.32 $ 1.08
Ethylene (per LB)
Sales price $ .25 $ .21 $ .27 $ .18
Margins $ .14 $ .07 $ .16 $ .04
Sales volumes (MLBS/D) (f) 1,180 1,280 1,271 1,145
See footnotes on page 7.
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FOOTNOTES
(a) Excludes corporate items and other worldwide exploration ventures.
(b) Discretionary cash flow (DCF) is net income (less 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's operations.
(c) Unimar equity DCF reflects the company's estimated share of discretionary
cash flow from its equity interest in its Unimar partnership's
operations.
(d) Excludes the Unimar equity partnership.
(e) Excludes capacity charge of $23 million and $21 million in the first nine
months of 1995 and 1994, respectively, from the North and South Sean gas
fields in the U.K. North Sea.
(f) Represents Union Texas' 41.67% net interest in the jointly-owned Geismar
ethylene plant in Louisiana.