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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE PERIOD FROM JANUARY 1, 1997 THROUGH OCTOBER 14, 1997.
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO __________.
COMMISSION FILE NUMBER 0-11871
FULL TITLE OF THE PLAN AND THE ADDRESS OF THE PLAN,
IF DIFFERENT FROM THAT OF THE ISSUER NAMED BELOW:
AMERICAN EXPLORATION 401(k) PLAN
NAME OF ISSUER OF THE SECURITIES HELD PURSUANT TO THE PLAN AND THE
ADDRESS OF ITS PRINCIPAL EXECUTIVE OFFICE:
AMERICAN EXPLORATION COMPANY
1331 LAMAR, SUITE 900
HOUSTON, TEXAS 77010-3088
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AMERICAN EXPLORATION 401(k) PLAN
TABLE OF CONTENTS
Page
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Report of Independent Public Accountants....................................................................... 2
Financial Statements:
Statements of Net Assets Available for Benefits, with Fund Information,
as of October 14, 1997 and December 31, 1996........................................................... 3
Statement of Changes in Net Assets Available for Benefits, with Fund Information,
for the Period From January 1, 1997 through October 14, 1997........................................... 4
Notes to Financial Statements.......................................................................... 5
Supplemental Schedules:
Schedule I - Schedule of Reportable Transactions - Transactions in a Series for the Period
From January 1, 1997 through October 14, 1997.......................................................... 8
Schedule II - Schedule of Reportable Transactions - Single Transactions for the Period
From January 1, 1997 through October 14, 1997.......................................................... 9
Signatures..................................................................................................... 10
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Retirement Committee
of the American Exploration 401(k) Plan:
We have audited the accompanying statements of net assets available for
benefits of the American Exploration 401(k) Plan as of October 14, 1997 and
December 31, 1996, and the related statement of changes in net assets available
for benefits for the period from January 1, 1997 through October 14, 1997. These
financial statements and the schedules referred to below are the responsibility
of the Retirement Committee. Our responsibility is to express an opinion on
these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for benefits of the
American Exploration 401(k) Plan as of October 14, 1997 and December 31, 1996,
and the changes in net assets available for benefits for the period from January
1, 1997 through October 14, 1997, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of reportable
transactions for the period from January 1, 1997 through October 14, 1997,
included as Schedule I and II, are presented for purposes of additional analysis
and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The fund information included in the statements of net
assets available for benefits and the statement of changes in net assets
available for benefits is presented for purposes of additional analysis rather
than to present the net assets available for benefits and changes in net assets
available for benefits of each fund. The supplemental schedules and fund
information have been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
As discussed in Note 1, effective October 14, 1997, American Exploration
Company elected to merge the American Exploration 401(k) Plan into the Louis
Dreyfus Natural Gas Corp. Profit Sharing and 401(k) Plan.
ARTHUR ANDERSEN LLP
Houston, Texas
March 31, 1998
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AMERICAN EXPLORATION 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
AS OF OCTOBER 14, 1997 AND DECEMBER 31, 1996
T. Rowe Price Trust Company
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Participant-Directed
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American Growth International New Growth Prime Stable
Exploration Stock Stock Income and Income Reserve Value Loan
Common Stock Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund
------------- ---------- ----------- ----------- ---------- ----------- ----------- ---------
ASSETS
Investments, at market value......$ - $ - $ - $ - $ - $ - $ - $ -
------------- ---------- ----------- ----------- ---------- ----------- ----------- ---------
NET ASSETS AVAILABLE FOR
BENEFITS as of October 14, 1997...$ - $ - $ - $ - $ - $ - $ - $ -
============= =========== =========== =========== ========== =========== =========== =========
ASSETS
Investments, at market value......$ 473,181 $ 2,077,474 $ 448,033 $ 519,231 $ 209,278 $ 444,254 $ 117,100 $ 122,222
------------- ----------- ----------- ----------- ---------- ----------- ----------- ---------
NET ASSETS AVAILABLE FOR
BENEFITS as of December 31, 1996..$ 473,181 $ 2,077,474 $ 448,033 $ 519,231 $ 209,278 $ 444,254 $ 117,100 $ 122,222
============= =========== =========== =========== ========== =========== =========== =========
Nonparticipant-
Directed
------------
American
Exploration
Common Stock Total
------------ -----------
ASSETS
Investments, at market value...... $ - $ -
------------ -----------
NET ASSETS AVAILABLE FOR
BENEFITS as of October 14, 1997... $ - $ -
============ ===========
ASSETS
Investments, at market value...... $ 822,187 $ 5,232,960
------------ -----------
NET ASSETS AVAILABLE FOR
BENEFITS as of December 31, 1996.. $ 822,187 $ 5,232,960
============ ===========
The accompanying notes are an integral part of these financial statements.
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AMERICAN EXPLORATION 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE PERIOD FROM JANUARY 1, 1997 THROUGH OCTOBER 14, 1997
T. Rowe Price Trust Company
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Participant-Directed
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American Growth International New Growth Prime Stable
Exploration Stock Stock Income and Income Reserve Value Loan
Common Stock Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund, Inc. Fund
------------- ---------- ----------- ----------- ---------- ----------- ---------- ---------
NET ASSETS AVAILABLE FOR
BENEFITS as of December 31, 1996...$ 473,181 $2,077,474 $ 448,033 $ 519,231 $ 209,278 $ 444,254 $ 117,100 $ 122,222
------------- ---------- ----------- ----------- ---------- ----------- --------- ---------
ADDITIONS:
Dividends.......................... - - - 26,090 5,036 15,162 5,610 -
Employer contributions............. - - - - - - - -
Employee contributions............. 211,713 169,573 60,475 52,799 71,957 35,772 14,257 -
Employee loan interest income...... 145 3,238 862 543 767 730 110 -
Employee loan principal payments... 8,930 43,837 9,280 8,091 3,851 4,642 1,666 (80,297)
Interfund transfers, net........... 75,696 (112,668) 10,429 (19,644) 16,929 12,669 16,589 -
Net change in fair value........... 247,853 506,850 54,655 9,472 58,935 - - -
------------- ---------- ----------- ----------- ---------- ----------- --------- ---------
Total............................ 544,337 610,830 135,701 77,351 157,475 68,975 38,232 (80,297)
------------- ---------- ----------- ----------- ---------- ----------- --------- ---------
DEDUCTIONS:
Distributions...................... 25,661 384,334 39,908 60,989 20,753 102,823 996 21,835
Employee loans..................... 100 12,350 1,200 3,215 2,535 21,500 1,700 (42,600)
Transfer to Louis Dreyfus Natural
Gas Corp. Profit Sharing and
401(k) Plan....................... 991,757 2,291,620 542,626 532,378 343,465 388,906 152,636 62,690
------------- ---------- ----------- ----------- ---------- ----------- --------- ---------
Total......................... 1,017,518 2,688,304 583,734 596,582 366,753 513,229 155,332 41,925
------------- ---------- ----------- ----------- ---------- ----------- --------- ---------
NET ASSETS AVAILABLE FOR
BENEFITS as of October 14, 1997..$ - $ - $ - $ - $ - $ - $ - $ -
============= ========== =========== =========== ========== =========== ========= =========
Nonparticipant-
Directed
------------
American
Exploration
Common Stock Total
------------ ----------
NET ASSETS AVAILABLE FOR
BENEFITS as of December 31, 1996... $ 822,187 $5,232,960
------------ ----------
ADDITIONS:
Dividends.......................... - 51,898
Employer contributions............. 280,462 280,462
Employee contributions............. - 616,546
Employee loan interest income...... - 6,395
Employee loan principal payments... - -
Interfund transfers, net........... - -
Net change in fair value........... 258,638 1,136,403
------------ ----------
Total............................ 539,100 2,091,704
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DEDUCTIONS:
Distributions...................... 123,147 780,446
Employee loans..................... - -
Transfer to Louis Dreyfus Natural
Gas Corp. Profit Sharing and
401(k) Plan....................... 1,238,140 6,544,218
------------ ----------
Total......................... 1,361,287 7,324,664
------------ ----------
NET ASSETS AVAILABLE FOR
BENEFITS as of October 14, 1997.. $ - $ -
============ ==========
The accompanying notes are an integral part of this financial statement.
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AMERICAN EXPLORATION 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
(1) DESCRIPTION OF THE PLAN
The following description of the American Exploration 401(k) Plan (the
"Plan") provides only general information. Participants should refer to the Plan
Agreement for a more complete description of the Plan's provisions.
GENERAL
The Plan was a defined contribution plan established effective January
1, 1989. The Plan was established to provide eligible employees with a
convenient way to save on a regular and long-term basis through investment in
various types of accounts.
In connection with the merger of American Exploration Company and Louis
Dreyfus Natural Gas Corp., the Plan merged into the Louis Dreyfus Natural Gas
Corp. Profit Sharing and 401(k) Plan ("New Plan"), effective October 14, 1997.
All investments,except American Exploration Company common stock, were
liquidated prior to the transfer of funds to the New Plan. The American
Exploration Company common stock was transferred in-kind to the New Plan. Each
share of American Exploration Company common stock was converted into .72 of a
share of Louis Dreyfuss Natural Gas Corp. common stock plus $3.00 in cash. The
transferred funds were then reinvested based on employee election forms for the
New Plan.
ELIGIBILITY
Prior to January 1, 1997, only salaried employees were eligible to
participate in the Plan. Effective January 1, 1997, the eligibility requirements
of the Plan were amended to permit all employees who were regularly scheduled to
work at least twenty hours per week to participate in the Plan on the first day
of the month immediately following the employee's date of hire.
EMPLOYEE CONTRIBUTIONS
Employees could make Salary Deferral Contributions to the Plan of up to
15% of the employee's base salary, limited to the maximum total annual
contribution allowed by federal tax laws. These contributions were made through
payroll deductions and were deducted from the employee's salary each pay period
before federal income taxes were withheld. The Plan also provided for Voluntary
Employee Contributions of up to 10% of the employee's base salary. Such
contributions were made with after-tax dollars. However, the aggregate amount of
an employee's Salary Deferral and Voluntary Employee Contributions for any year
could not exceed 15% of the employee's base salary.
An employee's contributions to the Plan may have been invested in one or
in a combination of six mutual funds offered under the Plan. In addition, an
employee may have chosen to invest in the common stock of American Exploration
Company (the "Company"). An employee may have, at any time, changed the mix of
his existing investments or changed the investments in which future
contributions were placed.
EMPLOYER CONTRIBUTIONS
The Company provided Matching Contributions to the employee's account of
$1.00 for each $1.00 of Salary Deferral Contributions, up to a maximum annual
Matching Contribution. Effective January 1, 1997, the Plan was amended such that
the limit on the Company's annual Matching Contribution was increased to 5% of
the employee's base salary or $7,500, whichever was less. These contributions
were made in the form of common stock of the Company.
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(1) DESCRIPTION OF THE PLAN (Continued)
The Company could also provide Discretionary Employer Contributions,
which were allocated to each employee's account based upon the ratio of each
employee's base salary to the total base salaries paid to all employees
participating in the Plan. There were no Discretionary Employer Contributions
during 1997.
ALLOCATION OF EARNINGS
Earnings or losses of the Plan's investments were allocated daily to
participants' accounts.
VESTING
Participating employees were always fully vested in all employee and
employer contributions, and such amounts could not be forfeited for any reason.
DISTRIBUTION OF BENEFITS
An employee, or the employee's beneficiary, was entitled to receive a
single lump sum distribution of the employee's account balance upon the
occurrence of any of the following events: termination of employment with the
Company, death or permanent disability of the employee, retirement or attainment
of the age of 59 1/2.
TERMINATION
The Employer could terminate, amend or modify the Plan at its option. If
the Plan were to be terminated, then after the payment of expenses, any
unallocated contributions, income and expenses would be allocated among the
members' accounts.
EMPLOYEES' RIGHTS
Employees could make withdrawals from their accounts in the event of
immediate and significant financial need based on the provisions of the Plan.
Employees could also borrow from their accounts subject to various legal
requirements regarding, among other things, the amount of the loan, the interest
rate to be charged and repayment terms. The rate of interest that was charged on
a loan was the current Prime Rate plus 1%.
As required by federal tax laws, the Plan was subject to certain
limitations on contributions by highly compensated employees, as defined under
such laws. Such limitations were designed to protect the rights of other
employees. There was no liability to refund employee contributions to highly
compensated employees at October 14, 1997 or December 31, 1996.
In addition, the sum of amounts contributed to each of a participant's
accounts in all of the Company's defined contribution plans could not exceed the
lesser of $30,000 or 25% of such participant's compensation. There was no
liability to refund employee contributions due to the effect of this provision
at October 14, 1997 or December 31, 1996.
The Plan was also subject to certain provisions which became effective
if more than 60% of the present value of its total assets were allocated to the
accounts of key employees, as defined under federal tax laws. There were no
restrictions due to these "top-heavy" provisions during 1997 or 1996.
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(2) SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements are presented on the accrual basis of
accounting. The investments of the Plan are stated at fair value based on
published closing quotations as of the end of the period. The Stable Value Fund,
which is a common collective trust, is valued at $1 per unit. This fund invests
a substantial portion of its assets in Guaranteed Investment Contracts which are
fully benefit-responsive and for which the contract value generally reflects
fair value. Through October 14, 1997, the year-to-date rate of return for the
Stable Value Fund was 4.6%. As of December 31, 1996, the annual rate of return
for the Stable Value Fund was 6.09%. Participant loans were valued at their
principal amounts which approximate market. Net appreciation (depreciation) in
the fair value of investments consists of realized and unrealized gains (losses)
from investments.
USE OF ESTIMATES
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions which affect the reported amounts of net assets available for
benefits at the date of the financial statements and the reported amounts of
changes in such net assets during the reporting period. Actual results could
differ from those estimates.
(3) FEDERAL INCOME TAX STATUS
The Plan obtained its latest determination letter on April 29, 1995, in
which the Internal Revenue Service stated that the Plan was in compliance with
the applicable requirements of the Internal Revenue Code. The Plan has been
amended since receiving the latest determination letter. However, the Plan
administrator believes that the Plan was designed and being operated in
compliance with the applicable requirements of the Internal Revenue Code.
Therefore, the Plan administrator believes the Plan was qualified and the
related trust was tax-exempt as of the financial statement dates.
(4) ADMINISTRATION
The Plan was administered by the Retirement Plan Committee appointed by
the Board of Directors of the Company. The Plan trustee was T. Rowe Price Trust
Company. All administrative expenses of the Plan were borne entirely by the
Company.
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Schedule I
AMERICAN EXPLORATION 401(k) PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS -
TRANSACTIONS IN A SERIES
FOR THE PERIOD FROM JANUARY 1, 1997 THROUGH OCTOBER 14, 1997
Current
Value on
Identity of Purchase Selling Historical Transaction Net Gain
Party Involved Description of Asset Price Price Cost Date (Loss)
-------------- -------------------------- --------------- -------------- -------------- ------------ ------------
American Exploration Common stock - $ 579,439 $ - $ 579,439 $ 579,439 $ -
Company 42,351 shares
T. Rowe Price Growth Stock Fund, 239,371 - 239,371 239,371 -
Trust Company Inc. - 8,416 shares
T. Rowe Price International Stock Fund, 112,164 - 112,164 112,164 -
Trust Company Inc. - 7,535 shares
T. Rowe Price New Income Fund, 87,523 - 87,523 87,523 -
Trust Company Inc. - 9,906 shares
T. Rowe Price Growth and Income Fund, 177,670 - 177,670 177,670 -
Trust Company Inc. - 7,055 shares
T. Rowe Price Prime Reserve Fund, 96,126 - 96,126 96,126 -
Trust Company Inc. - 96,126 shares
T. Rowe Price Stable Value Fund, 48,312 - 48,312 48,312 -
Trust Company Inc. - 48,312 shares
American Exploration Common stock - - 2,381,298 1,795,049 2,381,298 586,249
Company 123,311 shares
T. Rowe Price Growth Stock Fund, - 2,823,695 1,931,325 2,823,695 892,370
Trust Company Inc. - 87,308 shares
T. Rowe Price International Stock Fund, - 614,852 518,213 614,852 96,639
Trust Company Inc. - 40,001 shares
T. Rowe Price New Income Fund, - 616,226 608,825 616,226 7,401
Trust Company Inc. - 68,308 shares
T. Rowe Price Growth and Income Fund, - 445,883 359,852 445,883 86,031
Trust Company Inc. - 15,704 shares
T. Rowe Price Prime Reserve Fund, - 540,380 540,380 540,380 -
Trust Company Inc. - 540,380 shares
T. Rowe Price Stable Value Fund, - 165,412 165,412 165,412 -
Trust Company Inc. - 165,412 shares
The foregoing notes to the financial statements are an integral part of this
schedule.
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Schedule II
AMERICAN EXPLORATION 401(k) PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS -
SINGLE TRANSACTIONS
FOR THE PERIOD FROM JANUARY 1, 1997 THROUGH OCTOBER 14, 1997
Current
Value on
Identity of Purchase Selling Historical Transaction Net Gain
Party Involved Description of Asset Price Price Cost Date (Loss)
- -------------------- ------------------------- ----------- ------------ ------------ ------------ ------------
American Exploration Common stock - $ - $ 2,229,897 $ 1,633,979 $ 2,229,897 $ 595,918
Company 112,551 shares
T. Rowe Price Growth Stock Fund, - 2,291,620 1,526,124 2,291,620 765,496
Trust Company Inc. - 69,464 shares
T. Rowe Price International Stock Fund, - 542,626 452,869 542,626 89,757
Trust Company Inc. - 34,963 shares
T. Rowe Price New Income Fund, - 532,378 524,599 532,378 7,779
Trust Company Inc. - 58,826 shares
T. Rowe Price Growth and Income Fund, - 343,465 275,180 343,465 68,285
Trust Company Inc. - 12,540 shares
T. Rowe Price Prime Reserve Fund, - 388,906 388,906 388,906 -
Trust Company Inc. - 388,906 shares
The foregoing notes to the financial statements are an integral part of this
schedule.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Retirement Committee has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
AMERICAN EXPLORATION 401(k) PLAN
Date: March 31, 1998 By: /s/ CINDY L. GEROW
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Cindy L. Gerow
Representative
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