1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D. C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1995 Commission File Number 1-7940
PATRICK PETROLEUM COMPANY
(Exact name of registrant as specified in its charter)
Delaware 38-2276752
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
301 West Michigan Avenue, Jackson, Michigan 49201
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code (517) 787-6633
NONE
Former name, former address and former fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common shares outstanding as of August 2, 1995: 19,765,226
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PATRICK PETROLEUM COMPANY
INDEX
Page No.
--------
Part I. Financial Information
Consolidated Balance Sheets
June 30, 1995 (Unaudited) and December 31, 1994................ 3
Consolidated Statements of Operations
Six Months Ended June 30, 1995 and 1994 (Unaudited)............ 5
Consolidated Statements of Operations
Three Months Ended June 30, 1995 and 1994 (Unaudited).......... 6
Consolidated Statements of Cash Flows
Six Months Ended June 30, 1995 and 1994 (Unaudited)............ 7
Notes to Consolidated Financial Statements........................ 8
Management's Discussion and Analysis of Financial
Condition and the Results of Operations......................... 11
Part II. Other Information....................................... 15
Exhibit 11 - Computation of Net Earnings (Loss) per Common Share.. 16
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PATRICK PETROLEUM COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER, 31
--------------------------
1995 1994
------------ ------------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents.................... $ 487,624 $ 748,811
Marketable securities (Note D)............... 928,400 1,434,800
Accounts receivable:
Trade, net of allowance.................... 179,760 509,136
Accrued oil and gas revenue................ 636,524 743,401
Prepaid expenses and other................... 100,209 33,421
Assets held for resale....................... 836,238 836,238
----------- -----------
TOTAL CURRENT ASSETS...................... $ 3,168,755 $ 4,305,807
OTHER ASSETS:
Investments in Penske entities
(at cost).................................. $ 2,508,716 3,344,954
Investment in Pecos pipeline, net............ 1,957,144 2,089,384
Other investments and deferred charge........ 140,862 197,439
------------ ------------
TOTAL OTHER ASSETS....................... $ 4,606,722 $ 5,631,777
PROPERTY AND EQUIPMENT:
Oil and gas properties (full cost method --
--$4,911,364 and $5,626,003 excluded
from amortization in 1995 and 1994,
respectively).............................. $ 37,388,339 $35,885,937
Furniture, fixtures and equipment............ 2,461,762 2,462,062
------------ ------------
$ 39,850,101 $38,347,999
Less accumulated depletion and depreciation.. (19,928,381) (18,882,785)
------------ ------------
TOTAL PROPERTY & EQUIPMENT.............. $ 19,921,720 $19,465,214
------------ ------------
TOTAL ASSETS.......................... $ 27,697,197 $29,402,798
============ ============
See notes to consolidated financial statements.
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PATRICK PETROLEUM COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31,
---------------------------
1995 1994
------------ ------------
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable............................. $ 1,544,487 $ 2,045,333
Accrued liabilities.......................... 395,542 423,137
Reserve for contingent liabilities (Note C).. 1,018,244 1,022,000
Current portion of long term debt............ 1,000,000 5,000,000
------------ ------------
TOTAL CURRENT LIABILITIES................. $ 3,958,273 $ 8,490,470
LONG TERM DEBT (Note B):
Bank Debt.................................... 8,173,861
Subordinated Collateralized Notes............ 5,000,000
------------ ------------
TOTAL LONG-TERM DEBT $ 8,173,861 $ 5,000,000
STOCKHOLDERS' EQUITY (Notes B and E):
Preferred stock, par value $1.00 per share;
authorized -- 10,000,000; issued 1,175,000
(liquidating preference $10 per share,
aggregating to $11,750,000). $ 1,175,000 $ 1,175,000
Common stock, par value $0.20 per share;
authorized 40,000,000 shares -- issued
19,981,076 in 1995 and 1994............... 3,996,215 3,996,215
Additional paid-in capital.................. 82,088,679 82,088,679
Retained earnings (deficit)................. (71,335,041) (71,494,176)
Unrealized gain on marketable securities.... 347,350 853,750
------------ ------------
$ 16,272,203 $ 16,619,468
Less:
Treasury stock at cost -- 215,849 shares
in 1995 and 1994.......................... 707,140 707,140
------------ ------------
TOTAL STOCKHOLDERS' EQUITY............... $ 15,565,063 $ 15,912,328
------------ ------------
TOTAL LIABILITIES & STOCKHOLDERS'
EQUITY............................... $ 27,697,197 $ 29,402,798
============== ============
See notes to consolidated financial statements.
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PATRICK PETROLEUM COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
SIX MONTHS ENDED
JUNE 30,
------------------------
1995 1994
----------- -----------
REVENUES:
Oil and gas sales.................................. $ 1,949,199 $ 5,953,423
Gain on sale of investments........................ 1,563,762 6,466,100
Revenue from pipeline system....................... 799,838 459,461
Other income....................................... 559,602 48,584
----------- -----------
$ 4,872,401 $12,927,568
EXPENSES:
Production taxes................................... $ 98,897 $ 420,328
Lease operating costs.............................. 692,420 2,216,440
Depletion, depreciation and amortization .......... 1,207,167 3,222,968
General and administrative......................... 1,577,818 1,599,153
Interest........................................... 503,419 1,201,703
Writedown of oil and gas properties................ 3,241,000
----------- -----------
$ 4,079,721 $11,901,592
EARNINGS BEFORE EXTRAORDINARY ITEM................... $ 792,680 $ 1,025,976
EXTRAORDINARY ITEM:
Early extinguishment of debt........................ 163,545 1,232,832
----------- -----------
NET EARNINGS (LOSS).................................. $ 629,135 $ (206,856)
=========== ===========
NET EARNINGS (LOSS) PER COMMON SHARE................. $ - $ (.03)
=========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING.................. 19,765,226 19,765,226
=========== ==========
See notes to consolidated financial statements.
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PATRICK PETROLEUM COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED
JUNE 30,
------------------------
1995 1994
----------- -----------
REVENUES:
Oil and gas sales.................................. $ 1,030,650 $ 3,103,553
Gain on sale of investments........................ 1,563,762
Revenue from pipeline system....................... 229,838 194,961
Other income....................................... 493,486 9,160
----------- -----------
$ 3,317,736 $ 3,307,674
EXPENSES:
Production taxes................................... $ 56,742 $ 221,409
Lease operating costs.............................. 429,748 1,335,344
Depletion, depreciation and amortization .......... 626,062 1,746,816
General and administrative......................... 974,716 956,647
Interest........................................... 238,370 495,242
Loss on sale of investments........................ 32,392
Writedown of oil and gas properties................ 3,241,000
----------- -----------
$ 2,325,638 $ 8,028,850
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM.............. $ 992,098 $(4,721,176)
Early Extinguishment of Debt........................ 163,545
----------- -----------
NET INCOME (LOSS).................................... $ 828,553 $(4,721,176)
=========== ===========
NET INCOME (LOSS) PER COMMON SHARE................... $ .03 $ (.25)
=========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING.................. 19,765,226 19,765,226
=========== ==========
See notes to consolidated financial statements.
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PATRICK PETROLEUM COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months
Ended June 30,
-------------------------
1995 1994
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)........................................ $ 629,135 $ (206,856)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depletion, depreciation and amortization............... 1,207,167 3,222,968
Writedown of oil and gas properties.................... - 3,241,000
Extraordinary charge, early extinguishment of debt..... 163,545 1,232,832
Dividends from investing activities.................... (102,273)
Gain on sale of assets................................. (1,563,762) (6,466,100)
(Increase) decrease in:
Accounts and notes receivable......................... 436,253 465,863
Prepaid expenses and other............................ (66,788) (86,046)
Assets held for resale................................ 1,516,318
Other investments..................................... (77,892) (76,420)
(Decrease) increase in:
Accounts payable...................................... (500,846) (1,137,277)
Accrued liabilities................................... (29,351) (531,076)
----------- -----------
Total Adjustments.................................... $ (533,947) $ 1,382,062
----------- -----------
Net Cash Provided By Operating Activities............ $ 95,188 $ 1,175,206
CASH FLOWS FROM INVESTING ACTIVITIES:
Maturities and sales of investments...................... $ 2,400,000 $11,745,000
Dividends from Penske entities........................... 102,273
Proceeds from disposition of properties.................. 69,642 $ 461,277
Proceeds from adjustments relating to ANPC acquisition... - 747,201
Capital expenditures..................................... (1,571,901) (2,612,263)
----------- -----------
Net Cash (Provided By) Investing Activities.......... $ 1,000,014 $10,341,215
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from bank borrowings............................ $10,173,861 $ 250,000
Principal payments of bank borrowings.................... (1,000,000) (558,249)
Principal payments of Subordinated Collateralized note... (10,000,000) (10,000,000)
Prepayment for early extinguishment of debt.............. (60,250) (1,039,540)
Preferred Stock Dividend................................. (470,000) (470,000)
----------- -----------
Net Cash Used In Financing Activities................ $(1,356,389) ($11,817,789)
----------- -----------
Net Decrease In Cash And Cash Equivalents............ $ (261,187) $ (301,368)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD.......... 748,811 685,654
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD................ $ 487,624 $ 384,286
=========== ===========
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PATRICK PETROLEUM COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(1) For a description of the accounting policies followed refer to
the notes to the Company's annual consolidated financial
statements for the year ended December 31, 1994, included in Form
10-K filed with the Securities and Exchange Commission on March
31, 1995.
(2) The consolidated financial statements include the accounts of the
Company and all of its subsidiaries. All material intercompany
profits, transactions, and balances have been eliminated.
(3) In the opinion of the Company, the accompanying unaudited
consolidated financial statements contain all adjustments
(consisting of only normal recurring accruals) necessary to
present fairly the financial position as of June 30, 1995 and the
results of operations for the three and six months ended June 30,
1995 and 1994.
(4) The results of operations for the six month period ended June 30,
1995 are not necessarily indicative of the results to be expected
for the full year.
NOTE B -- DEBT
The Company has entered into a new Credit Agreement with a Bank which
provides for a maximum credit facility of $30,200,000, consisting of a
$5,200,000 term loan, and a $25,000,000 revolving line of credit with an initial
borrowing base of $6,000,000 (collectively the "Bank Loan"). The Company had
consummated a short-term interim $2,000,000 Bridge Loan with the same Bank,
which debt was retired as part of the above-described revolving line of credit.
At June 30, 1995 the Company has borrowed approximately $9,173,000 under the
Bank Loan. The Bank Loan offers fixed and variable interest rate options based
on Prime or LIBOR (+2%). The current borrowing rate is 8.125%. The interest
rates will increase by amounts up to .50% on Prime and 1.00% on LIBOR if the
merger described in Management's Discussion and Analysis of Financial Condition
and Results of Operations (page 11) does not occur on a timely basis.
Substantially all of the Company's assets are pledged to secure these credit
facilities.
NOTE C -- COMMITMENTS AND CONTINGENCIES
The U.S. Environmental Protection Agency ("EPA") has identified the
Company as a potentially responsible party ("PRP"") for the cost of clean-up of
"hazardous substances" at an oil field waste disposal site in Vermillion Parish,
Louisiana. The EPA has estimated that the total cost of long-term cleanup of the
site will be approximately $13.5 million, with the Company's percentage of
responsibility to be approximately 3.09%. As of June 30, 1995, the Company has
accrued approximately $500,000 for this liability. The EPA and the PRPs will
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continue to evaluate the site and revise estimates for the long-term cleanup of
the site. There can be no assurance that the cost of cleanup and the Company's
percentage responsibility will not be higher than currently estimated by the
EPA. In addition, under the federal environmental laws, the liability costs for
the cleanup of the site is joint and several among all PRPs. Therefore, the
ultimate cost of the cleanup to the Company could be significantly higher than
the amount presently accrued for this liability.
Additionally, the Company is party to a number of lawsuits arising in
the normal course of business. The Company has defended and intends to continue
to defend these actions vigorously and believes, based on currently available
information, that adverse settlements, if any, in excess of insurance coverage
or amounts already provided, will not be material to its financial position or
results of operations.
NOTE D -- MARKETABLE SECURITIES
The amortized cost and estimated fair market value of marketable
securities as of June 30, 1995, and December 31, 1994 are shown in the tables
below:
June 30, 1995
-----------------------------------------------------
Amortized Gross Unrealized Estimated Fair
Cost Gain Market Value
---------- ---------------- --------------
Marketable equity securities $ 581,050 $ 347,350 $ 928,400
December 31, 1994
-----------------------------------------------------
Amortized Gross Unrealized Estimated Fair
Cost Gain Market Value
---------- ---------------- --------------
Marketable equity securities $ 581,050 $ 853,750 $ 1,434,800
NOTE E -- CHANGES IN STOCKHOLDERS' EQUITY
During the six months ended June 30, 1995, Stockholders' equity changed
as follows:
Balance at December 31, 1994 $15,912,328
Unrealized loss on Marketable Securities (506,400)
Net Income 629,135
Preferred Stock Dividends (470,000)
-----------
Balance at June 30, 1995 $15,565,063
===========
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NOTE F -- SALE OF ASSETS
On December 15, 1994 the Company sold substantially all of its producing
and nonproducing oil and gas properties in Alabama, Louisiana, Mississippi, New
Mexico, Oklahoma and Texas to Unit Petroleum for $16,100,000. Under the terms of
the agreement, the proceeds received by the Company were reduced by the net
revenues from such properties during the period May 1, 1994 to December 15,
1994. The Company received approximately $13,236,000 after such adjustments. In
a related transaction, LLOG Exploration Company exercised its election of
preferential right to purchase the Company's interests in the Bayou Pigeon
Field, Iberia Parish, Louisiana. The Company entered into a Purchase and Sale
Agreement dated December 14, 1994, and closed the transaction December 16, 1994,
receiving approximately $1,569,000.
NOTE G -- TAXES ON INCOME
The following table summarizes the income tax expense and the deferred
tax (benefit) utilization of net operating loss carryforwards as of June 30,
1995.
1995
---------
Current tax expense $ 213,906
Deferred tax (benefit) utilization
of net operating loss carryforwards (213,906)
---------
$ -0-
=========
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Overview and Analysis of Known Trends
On March 10, 1995 the Company entered into an Agreement and Plan of
Merger ("Merger Agreement") with La/Cal Energy Partners of Shreveport, Louisiana
("La/Cal"). The proposed transaction has been approved by the Board of Directors
and stockholders of the Company and the Management Committee of La/Cal and is
subject to approval by the La/Cal partners at a meeting on August 15, 1995.
Assuming approval by the La/Cal partners, the merger is expected to be effective
August 15, 1995.
Under terms of the Merger Agreement, U.E. Patrick, presently President
and CEO of the Company, will be Chairman and Walter G. "Gil" Goodrich, presently
a managing partner of La/Cal, will be President and CEO of the combined company.
In addition, La/Cal and the Company will each nominate six directors to the
Board of Directors of the combined company.
The transaction will take the form of a tax-free exchange of common
stock. To effect the transaction, the Company formed a holding company, Goodrich
Petroleum Corporation ("Goodrich"). La/Cal will contribute its oil and gas
assets to Goodrich Petroleum for 19,765,226 shares of Goodrich common stock.
Through a merger, the Company's common stockholders will be entitled to receive
one share of Goodrich common stock for each of the 19,765,226 outstanding
Company common shares. The Company Series B Preferred stockholders will be
entitled to receive for each of their 1,175,000 shares, one share of Goodrich
Series A Preferred Stock with substantially identical terms. The Company will
continue as a wholly-owned subsidiary of Goodrich.
Capital Resources and Liquidity
At June 30, 1995, the Company had $487,624 in cash and cash equivalents,
a working capital deficiency of $789,518, a current ratio of .80 to 1.0 and
stockholders' equity of $15.56 million.
In 1995, the Company will require funds in addition to its forecasted
cash flow from operations in order to complete the development of its Sean
Andrew Field and certain additional prospects drilled in West Texas. The Company
has entered into a new Credit Agreement with a Bank which provides for a maximum
credit facility of $30,200,000, consisting of a $5,200,000 term loan, and a
$25,000,000 revolving line of credit with an initial borrowing base of
$6,000,000 (collectively the "Bank Loan"). The Company borrowed $2,973,861 under
the line of credit and $5,200,000 from the term loan under the Agreement, adding
to the $2,400,000 proceeds from the partial sale of the Penske Stock, to
refinance and retire the $10,000,000 Senior Subordinated Notes. Interest rates
are at prime with a LIBOR + 2.00% option. Substantially all of the Company's
assets are pledged for this credit facility.
The Company will continue to consider other sources of financing,
including the public or private sale of debt or equity securities, as it has
done in the past.
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The instability of hydrocarbon pricing could have a material effect on
the Company's revenues, cash flows and borrowing capacity. The Company
continually evaluates its proved and unproved oil and gas properties. Any long
term continuation of depressed price levels may impair the value of the oil and
gas properties.
LONG TERM OBLIGATIONS
The Company's non-equity capitalization at June 30, 1995 consisted of
$5.2 million of indebtedness from the term loan.
On May 2, 1995 the Company retired all of the $10,000,000 10.75% Senior
Subordinated Notes outstanding. A portion of the debt was retired with the
$2,400,000 in proceeds from the exercise of the first put of Penske stock. The
remaining Senior Note indebtedness was retired with proceeds from the Company's
new credit facility. The rate of interest on such borrowing is 8.125%. The
prepayment penalty incurred was $60,250. The Penske stock was transferred as
collateral to the lender as part of the credit agreement.
If the merger with La/Cal occurs, a change of control as defined in the
sale agreement with Penske Corporation will transpire. Penske has advised the
Company that it intends to exercise a call on the remaining 151,584 shares held
by Patrick. If the merger occurs, and Penske exercises its call, the Company
anticipates receiving approximately $9.6 million.
CAPITAL EXPENDITURES
During the period ended June 30, 1995, the Company's capital
expenditures were $1,571,901. The expenditures were for development costs of
$1,100,239, exploration expenditures of $422,912, and acquisition of leasehold
interest of $48,750. In addition, the Company received proceeds from the sale of
interests in oil and gas assets of $69,642.
In order to preserve current available cash, the Company intends to fund
its portion of certain on-going drilling expenditures by selling a portion of
its interest in seismic and acreage cost or borrowing on its working capital
credit facility. This method of funding has been used by the Company in previous
exploration efforts. The Company will still be responsible for its share of
completion costs and any future project development or seismic expenditures.
The Company has no material binding commitments for capital expenditures
at June 30, 1995. However, the Company anticipates capital expenditures
primarily to develop its Sean Andrew Field and other West Texas properties.
ADOPTION OF ACCOUNTING STANDARDS
The Financial Accounting Standards Board has issued SFAS No. 107,
"Disclosures about Fair Value of Financial Instruments". SFAS No. 107 extends
existing fair value disclosure practices for some instruments by requiring all
entities to disclose the fair value of financial instruments for which it is
practicable to estimate fair value. Management has determined that the effects
on the financial statements from the adoption of this statement, which is
required to be adopted by the Company in 1995, will not be material.
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RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1995
COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1994
During the six months ended June 30, 1995, the Company earned $629,135
compared to a loss of $206,856 for the same period of the previous year.
Revenues decreased to $4,872,401 during 1995, compared to $12,927,568 for 1994.
Oil and gas sales decreased $4,004,224 and revenues from pipeline systems
increased $340,377. The decrease in oil and gas sales is primarily due to the
sale of producing properties to Unit Petroleum in December, 1994. Included in
operations for the six months ended June 30, 1995, is a gain of $1,563,762
resulting from the sale of a portion of the Company's remaining Penske
investment. The Company also recorded revenue of $93,712 resulting from the
collection of accounts receivable previously written off as uncollectible. In
1995, the Company also recorded a dividend of $102,273 from its investment in
Penske. In addition, the company also recorded revenue from revisions of
previous estimates of oil and gas sales of $210,712.
A comparison of production volumes and average sales prices of oil and
gas produced and sold by the Company for the periods presented is as follows:
Production Volumes 1995 1994
------------------ ------- -------
Crude oil and condensate (Bbls) 75,098 138,794
Natural gas (Mcf) 222,913 1,411,567
Average Sales Price
-------------------
Crude oil and condensate (per Bbl) $ 16.57 $ 16.00
Natural gas (Mcf) $ 1.53 $ 2.30
Expenses decreased to $4,079,721 during the six months ended June 30,
1995, compared to $11,901,592 for the same period of the previous year.
Production taxes, depletion, depreciation, and amortization decreased $2,337,232
primarily due to the sale of properties to Unit Petroleum. Lease operating costs
decreased $1,524,020, also primarily due to the sale of properties, and general
administrative costs decreased $21,335. Included in general and administrative
expenses is approximately $362,000 of costs directly related to the Goodrich
merger. During 1995, the Company capitalized $180,000 of exploration overhead,
compared to $900,000 during the same period in 1994. Interest expense decreased
$698,284 primarily due to the paydown of the Senior notes. The Company also
incurred extraordinary expenses of $163,545 associated with the refinancing of
the Senior Notes. The Company recorded an extraordinary charge for early
extinguishment of debt of $1,232,832 and a writedown of oil and gas properties
of $3,241,000 during 1994.
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RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1995
COMPARED TO THE THREE MONTHS ENDED JUNE 30, 1994
During the three months ended June 30, 1995, the Company earned $828,553
compared to a loss of $4,721,176 for the same period of the previous year.
Revenues increased $10,062 to $3,317,736 during 1995, compared to $3,307,674 for
1994. Oil and gas sales decreased $2,072,903 and revenues from pipeline systems
increased $34,877. The decrease in oil and gas sales is primarily the result of
the sale of properties to Unit Petroleum. The Company's revenues during the
three month period ended June 30, 1995 also includes a gain of approximately
$1.56 million on the sale of a portion of the Company's Penske investment. Also
included in 1995, the Company recorded revenue of $93,712 resulting from the
collection of accounts receivable previously written off as uncollectible.
A comparison of production volumes and average sales prices of oil and
gas produced and sold by the Company for the periods presented is as follows:
Production Volumes 1995 1994
------------------ ------- -------
Crude oil and condensate (Bbls) 36,829 66,174
Natural gas (Mcf) 119,057 704,906
Average Sales Price
-------------------
Crude oil and condensate (per Bbl) $ 18.56 $ 18.02
Natural gas (Mcf) $ 1.67 $ 2.27
Expenses decreased $5,704,212 (before extraordinary items) during the
three months ended June 30, 1995, compared to the same period of the previous
year. Production taxes, depletion, depreciation, and amortization decreased
$1,285,421 primarily due to the sale of properties to Unit Petroleum. Lease
operating costs decreased $905,596, also primarily due to the sale of properties
to Unit Petroleum. Interest expense and other decreased $256,872 primarily due
to the paydown of the Senior notes. In 1995, the Company recorded $163,545 of
extraordinary expenses associated with refinancing the Senior Notes. In 1994,
the Company incurred a loss on the sale of investments of $32,392 and also
recorded a writedown of the value of its oil and gas properties by $3,241,000.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On March 15, 1995, B.A.R.D. Industries ("B.A.R.D.") filed litigation
against Patrick Petroleum Company, U. E. Patrick and Petrie-Parkman Co., Inc. in
the District Court of Harris County, Texas. B.A.R.D. claims to be beneficial
owner of 3,107,741 shares of common stock in the Company. B.A.R.D. raised
several causes of action including breach of fiduciary duty, breach of
registration agreement, conspiracy and a claim for actual and punitive damages
in an unspecified amount, including attorneys' fees. On April 5, 1995,
B.A.R.D.'s claims against Petrie-Parkman Co. were voluntarily dismissed without
prejudice. On June 16, 1995, all claims and causes of action asserted by
B.A.R.D. against the Company and U.E. Patrick were dismissed with prejudice. In
consideration for the mutual release of claimes asserted by B.A.R.D., the
Company has agreed to reimburse a portion of B.A.R.D.'s legal fees in the amount
of $37,500. In addition, a designee of B.A.R.D. can be named to a seat on the
board of Goodrich Petroleum Corporation if the merger of the Company and
Goodrich is approved by the Company stockholders and certain other conditions
are met by B.A.R.D.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. RESULTS OF VOTES OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
Not applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 11 Computation of Net Earnings (Loss) Per Share
(b) Reports on Form 8-K - None
(c) Exhibit 27 - Financial Data Schedule
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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.
PATRICK PETROLEUM COMPANY
----------------------------------
(Registrant)
/s/Thomas G. Johnson
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Thomas G. Johnson, Controller
DATE: August 9, 1995
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