SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
COMMISSION FILE NUMBER: 1-11675
TRITON ENERGY LIMITED
(Exact name of registrant as specified in its charter)
CAYMAN ISLANDS NONE
- ---------------- -------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
Organization)
CALEDONIAN HOUSE, JENNETT STREET, P.O. BOX 1043, GEORGE TOWN, GRAND CAYMAN,
CAYMAN ISLANDS
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (345) 949-0050
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) 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.
Number of Shares
Title of Each Class Outstanding at July 31, 2000
Ordinary Shares, par value $0.01 per share 36,544,030
----------------------------
TRITON ENERGY LIMITED AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements
Condensed Consolidated Statements of Operations -
Three and six months ended June 30, 2000 and 1999 2
Condensed Consolidated Balance Sheets -
June 30, 2000 and December 31, 1999 3
Condensed Consolidated Statements of Cash Flows -
Six months ended June 30, 2000 and 1999 4
Condensed Consolidated Statement of Shareholders' Equity -
Six months ended June 30, 2000 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 19
Item 3. Quantitative and Qualitative Disclosures about Market Risk 26
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 27
Item 4. Submission of Matters for Vote of Security Holders 28
Item 5. Other Information 28
Item 6. Exhibits and Reports on Form 8-K 30
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TRITON ENERGY LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------- --------------------
2000 1999 2000 1999
--------- -------- -------- ---------
Oil and gas sales $ 79,496 $59,622 $154,001 $108,792
Costs and expenses:
Operating 15,465 19,186 31,296 38,162
General and administrative 5,774 4,843 10,349 9,778
Depreciation, depletion and amortization 13,397 15,285 27,406 30,656
Special charges --- --- --- 1,220
-------- -------- --------- ---------
34,636 39,314 69,051 79,816
-------- -------- --------- ---------
Operating income 44,860 20,308 84,950 28,976
Interest income 2,014 2,660 4,791 5,238
Interest expense, net (4,087) (5,954) (8,837) (11,937)
Other income (expense), net 522 (716) (520) 207
-------- -------- -------- ---------
(1,551) (4,010) (4,566) (6,492)
-------- -------- -------- ---------
Earnings before income taxes 43,309 16,298 80,384 22,484
Income tax expense 14,516 5,415 25,067 9,714
-------- -------- -------- ---------
Net earnings 28,793 10,883 55,317 12,770
Accumulated dividends on preference shares 7,339 6,972 14,680 13,945
-------- -------- -------- ---------
Earnings (loss) applicable to ordinary shares $21,454 $ 3,911 $40,637 $ (1,175)
======== ======== ======== =========
Average ordinary shares outstanding 36,225 36,350 36,060 36,505
======== ======== ======== =========
Basic earnings (loss) per ordinary share $ 0.59 $ 0.11 $ 1.13 $ (0.03)
======== ======== ======== =========
Diluted earnings (loss) per ordinary share $ 0.48 $ 0.11 $ 0.94 $ (0.03)
======== ======== ======== =========
See accompanying Notes to Condensed Consolidated Financial Statements.
TRITON ENERGY LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
ASSETS JUNE 30, DECEMBER 31,
2000 1999
------------ ----------
(UNAUDITED)
Current assets:
Cash and equivalents $ 79,251 $ 186,323
Trade receivables 3,397 17,246
Other receivables 29,632 23,814
Deferred income taxes 9,178 20,090
Inventories, prepaid expenses and other 21,941 7,806
------------ ----------
Total current assets 143,399 255,279
Property and equipment, at cost, less accumulated depreciation
and depletion of $463,006 for 2000 and $436,103 for 1999 582,904 524,152
Investment in affiliates 186,574 93,188
Deferred taxes and other assets 102,773 101,856
------------ ----------
$ 1,015,650 $ 974,475
============ ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 9,144 $ 9,027
Accounts payable and accrued liabilities 71,137 62,576
Deferred income and other 4,841 22,347
------------ ----------
Total current liabilities 85,122 93,950
Long-term debt, excluding current maturities 400,062 404,460
Deferred income taxes 9,215 6,677
Other liabilities 6,629 6,336
Shareholders' equity:
5% preference shares, stated value $34.41 6,375 7,214
8% preference shares, stated value $70.00 362,944 363,555
Ordinary shares, par value $0.01 364 358
Additional paid-in capital 529,601 531,904
Accumulated deficit (382,211) (437,528)
Accumulated other non-owner changes in shareholders' equity (2,451) (2,451)
------------ ----------
Total shareholders' equity 514,622 463,052
Commitments and contingencies (note 6) --- ---
------------ ----------
$ 1,015,650 $ 974,475
============ ==========
The Company uses the full cost method to account for its oil and gas producing
activities.
See accompanying Notes to Condensed Consolidated Financial Statements.
TRITON ENERGY LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(IN THOUSANDS)
(UNAUDITED)
2000 1999
---------- ---------
Cash flows from operating activities:
Net earnings $ 55,317 $ 12,770
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation, depletion and amortization 27,406 30,656
Additional proceeds from forward oil sale --- 30,000
Amortization of deferred income (8,814) (17,627)
Deferred income taxes and other 7,556 7,767
Changes in working capital pertaining to
operating activities (15,276) (13,737)
---------- ---------
Net cash provided by operating activities 66,189 49,829
---------- ---------
Cash flows from investing activities:
Capital expenditures and investments (74,398) (49,959)
Purchase of affiliate (88,800) ---
Other 128 3,491
---------- ---------
Net cash used by investing activities (163,070) (46,468)
---------- ---------
Cash flows from financing activities:
Payments on revolving lines of credit and long-term debt (4,529) (14,514)
Issuance of 8% preference shares, net --- 217,805
Issuances of ordinary shares under stock compensation plans 10,935 97
Repurchase of ordinary shares --- (9,685)
Dividends paid on preference shares (14,682) (2,875)
Other (1,735) ---
---------- ---------
Net cash provided (used) by financing activities (10,011) 190,828
---------- ---------
Effect of exchange rate changes on cash and equivalents (180) (139)
---------- ---------
Net increase (decrease) in cash and equivalents (107,072) 194,050
Cash and equivalents at beginning of period 186,323 18,757
---------- ---------
Cash and equivalents at end of period $ 79,251 $212,807
========== =========
See accompanying Notes to Condensed Consolidated Financial Statements.
TRITON ENERGY LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 2000
(IN THOUSANDS)
(UNAUDITED)
OWNER SOURCES OF SHAREHOLDERS' EQUITY:
5% PREFERENCE SHARES:
Balance at December 31, 1999 $ 7,214
Conversion of 5% preference shares (839)
----------
Balance at June 30, 2000 6,375
----------
8% PREFERENCE SHARES:
Balance at December 31, 1999 363,555
Conversion of 8% preference shares (611)
----------
Balance at June 30, 2000 362,944
----------
ORDINARY SHARES:
Balance at December 31, 1999 358
Issuance of shares 6
----------
Balance at June 30, 2000 364
----------
ADDITIONAL PAID-IN CAPITAL:
Balance at December 31, 1999 531,904
Issuances under stock compensation plans 10,929
Conversion of preference shares 1,450
Cash dividends (14,682)
----------
Balance at June 30, 2000 529,601
----------
TOTAL OWNER SOURCES OF SHAREHOLDERS' EQUITY 899,284
----------
NON-OWNER SOURCES OF SHAREHOLDERS' EQUITY:
ACCUMULATED DEFICIT:
Balance at December 31, 1999 (437,528)
Net earnings 55,317
----------
Balance at June 30, 2000 (382,211)
----------
ACCUMULATED OTHER NON-OWNER CHANGES IN SHAREHOLDERS' EQUITY:
Balance at December 31, 1999 (2,451)
Other non-owner changes in shareholders' equity ---
----------
Balance at June 30, 2000 (2,451)
----------
TOTAL NON-OWNER SOURCES OF SHAREHOLDERS' EQUITY (384,662)
----------
TOTAL SHAREHOLDERS' EQUITY AT JUNE 30, 2000 $ 514,622
==========
See accompanying Notes to Condensed Consolidated Financial Statements.
TRITON ENERGY LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS IN TABLES IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
1. GENERAL
Triton Energy Limited ("Triton") is an international oil and gas exploration and
production company. The term "Company" in this report means Triton and its
subsidiaries and other affiliates through which the Company conducts its
business. The Company's principal properties, operations, and oil and gas
reserves are located in Colombia, offshore Malaysia-Thailand and offshore
Equatorial Guinea. The Company is exploring for oil and gas in these areas, as
well as in southern Europe, Africa, and the Middle East. All sales currently
are derived from oil and gas production in Colombia.
In the opinion of management, the accompanying unaudited condensed consolidated
financial statements of the Company contain all adjustments of a normal
recurring nature necessary to present fairly the Company's financial position as
of June 30, 2000, and the results of its operations for the three and six months
ended June 30, 2000 and 1999, its cash flows for the six months ended June 30,
2000 and 1999, and shareholders' equity for the six months ended June 30, 2000.
The results for the six months ended June 30, 2000, are not necessarily
indicative of the final results to be expected for the full year.
The condensed consolidated financial statements should be read in conjunction
with the Notes to Consolidated Financial Statements, which are included as part
of the Company's Annual Report on Form 10-K for the year ended December 31,
1999.
Certain other previously reported financial information has been reclassified to
conform to the current period's presentation.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities." This Statement as amended in
June 2000 by SFAS No. 138 "Accounting for Certain Derivative Instruments and
Certain Hedging Activities - an Amendment of SFAS No. 133" establishes
accounting and reporting standards for derivative instruments and for hedging
activities. It requires enterprises to recognize all derivatives as either
assets or liabilities in the balance sheet and measure those instruments at fair
value. The requisite accounting for changes in the fair value of a derivative
will depend on the intended use of the derivative and the resulting designation.
The Company must adopt SFAS No. 133 and No. 138 effective January 1, 2001.
Based on the Company's outstanding derivatives contracts, the impact of adopting
this standard would not have a material adverse effect on the Company's
operations or consolidated financial condition. However, no assurances can be
given with regard to the level of the Company's derivatives activities at the
time SFAS No. 133 and No. 138 are adopted or the resulting effect on the
Company's operations or consolidated financial condition.
2. ACQUISITION OF TRITON PIPELINE COLOMBIA - INVESTMENT IN AFFILIATE
In May 2000, the Company acquired from an unrelated third party, for $88.8
million in cash, 100% of the shares of Triton Pipeline Colombia, Inc. ("TPC"), a
formerly wholly owned subsidiary up to its disposal on February 2, 1998. TPC's
sole asset is its 9.6% equity interest in the Colombian pipeline company,
Oleoducto Central S.A. ("OCENSA"). OCENSA owns and operates the pipeline and
port facilities, which transport and handle crude oil from the Cusiana and
Cupiagua fields to the Caribbean port of Covenas. The investment in TPC is
accounted for under the cost method.
3. TRADE RECEIVABLES AND INVENTORIES, PREPAID EXPENSES AND OTHER
Trade receivables were $3.4 million and $17.2 million at June 30, 2000 and
December 31, 1999, respectively. June 2000 crude oil liftings occurred early in
the month, resulting in the collection of substantially all of the trade
receivables at June 30, 2000. Crude oil inventory was $13.6 million and $3.7
million at June 30, 2000 and December 31, 1999, respectively.
4. LONG-TERM DEBT
In February 2000, the Company entered into an unsecured two-year revolving
credit facility with a group of banks. The credit facility, which matures in
February 2002, gives the Company the right to borrow from time to time up to the
amount of the borrowing base determined by the banks, not to exceed $150
million. At June 30, 2000, the borrowing base was $150 million. Borrowings
bear interest at various spreads ranging from 1.5% to 3% over the prime rate or
adjusted London Interbank Offered Rate (LIBOR). The credit facility contains
various restrictive covenants, including covenants that require the Company to
maintain a ratio of earnings before interest, depreciation, depletion,
amortization and income taxes to net interest expense of at least 2.5 to 1 on a
trailing four quarters basis. The restrictive covenants also prohibit the
Company from permitting net debt to exceed the product of 3.75 times the
Company's earnings before interest, depreciation, depletion, amortization and
income taxes on a trailing four quarters basis. As of June 30, 2000, the
Company had no outstanding borrowings under this facility.
5. EARNINGS PER ORDINARY SHARE
For the six months ended June 30, 1999, the computation of diluted net loss per
ordinary share was antidilutive, and therefore, the amounts for basic and
diluted net loss per ordinary share were the same.
The following table reconciles the numerators and denominators of the basic and
diluted earnings per ordinary share computation for earnings from continuing
operations for the three months ended June 30, 2000 and 1999 and six months
ended June 30, 2000.
INCOME SHARES PER-SHARE
(NUMERATOR) (DENOMINATOR) AMOUNT
----------- ------------- ---------
THREE MONTHS ENDED JUNE 30, 1999:
Net earnings $ 10,883
Less: Accumulated dividends on
preference shares (6,972)
-----------
Earnings available to ordinary shareholders 3,911
Basic earnings per ordinary share 36,350 $ 0.11
=========
Effect of dilutive securities:
Stock options --- 55
----------- -------------
Earnings available to ordinary shareholders
and assumed conversions $ 3,911
===========
Diluted earnings per ordinary share 36,405 $ 0.11
============= =========
THREE MONTHS ENDED JUNE 30, 2000:
Net earnings $ 28,793
Less: Accumulated dividends on
preference shares (7,339)
-----------
Earnings available to ordinary shareholders 21,454
Basic earnings per ordinary share 36,225 $ 0.59
=========
Effect of dilutive securities:
Stock options --- 2,306
8% preference shares 7,259 20,744
5% preference shares 80 185
----------- -------------
Earnings available to ordinary shareholders
and assumed conversions $ 28,793
===========
Diluted earnings per ordinary share 59,460 $ 0.48
============= =========
SIX MONTHS ENDED JUNE 30, 2000:
Net earnings $ 55,317
Less: Accumulated dividends on
preference shares (14,680)
-----------
Earnings available to ordinary shareholders 40,637
Basic earnings per ordinary share 36,060 $ 1.13
=========
Effect of dilutive securities:
Stock options --- 2,075
8% preference shares 14,519 20,753
5% preference shares 161 196
----------- -------------
Earnings available to ordinary shareholders
and assumed conversions $ 55,317
===========
Diluted earnings per ordinary share 59,084 $ 0.94
============= =========
6. COMMITMENTS AND CONTINGENCIES
For internal planning purposes, the Company's revised capital spending program
for the year ending December 31, 2000, is approximately $256 million, excluding
capitalized interest and acquisitions. The $256 million comprises approximately
$187 million for exploration and development activities in Equatorial Guinea,
$58 million for the Cusiana and Cupiagua fields in Colombia and $11 million for
the Company's exploration activities in other parts of the world.
During the normal course of business, the Company is subject to the terms of
various operating agreements and capital commitments associated with the
exploration and development of its oil and gas properties. Management believes
that such commitments, including the capital requirements in Colombia,
Equatorial Guinea and other parts of the world, as discussed previously, will be
met without any material adverse effect on the Company's operations or
consolidated financial condition. See Item 2. Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Requirements.
GUARANTEES
At June 30, 2000, the Company guaranteed the performance of a total of $11.4
million in future exploration expenditures to be incurred through September 2001
in various countries. A total of approximately $6 million of the exploration
expenditures are included in the 2000 capital spending program related to a
commitment for two onshore exploratory wells in Greece. These commitments are
backed primarily by unsecured letters of credit.
LITIGATION
In July through October 1998, eight lawsuits were filed against the Company and
Thomas G. Finck and Peter Rugg, in their capacities as Chairman and Chief
Executive Officer and Chief Financial Officer, respectively. The lawsuits were
filed in the United States District Court for the Eastern District of Texas,
Texarkana Division, and have been consolidated and are styled In re: Triton
Energy Limited Securities Litigation. They allege violations of Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5
promulgated thereunder, and negligent misrepresentation in connection with
disclosures concerning the Company's properties, operations, and value relating
to a prospective sale of the Company or of all or a part of its assets. The
lawsuits seek recovery of an unspecified amount of compensatory and punitive
damages and fees and costs. The Company has filed a motion to dismiss the
lawsuits for failure to state a claim, which is pending.
The Company believes its disclosures have been accurate and intends to
vigorously defend these actions. There can be no assurance that the litigation
will be resolved in the Company's favor. An adverse result could have a material
adverse effect on the Company's financial position or results of operations.
In November 1999, a lawsuit was filed against the Company, one of its
subsidiaries and Thomas G. Finck, Peter Rugg and Robert B. Holland, III, in
their capacities as officers of the Company, in the District Court of the State
of Texas for Dallas County. The lawsuit is styled Aaron Sherman, et al. vs.
Triton Energy Corporation et al. and seeks compensatory and punitive damages and
interest. Following the Court's order to replead, the plaintiffs amended their
petition and alleged fraud, negligent misrepresentation and violations of the
Texas Securities fraud statutes in connection with disclosures concerning the
prospective sale by the Company of all or a substantial part of its assets
announced in March 1998. The Court has dismissed all claims of certain
plaintiffs and some claims of the remaining plaintiffs for their failure to
plead causes of action cognizable in law. In May 2000, the Court ordered the
remaining plaintiffs to replead their claims relating to their alleged purchases
of stock and has stayed discovery pending its further orders. In response to
this order, the plaintiffs filed second and third amended petitions in June 2000
adding allegations relating to the Company's 1996 reorganization as a Cayman
Islands corporation. The defendants have challenged the sufficiency of the
plaintiffs' third amended petition and a hearing on that matter is set on August
25, 2000. On July 31, 2000, the plaintiffs filed a fourth amended petition,
which the defendants intend to challenge.
On August 22, 1997, the Company was sued in the Superior Court of the State of
California for the County of Los Angeles, by David A. Hite, Nordell
International Resources Ltd., and International Veronex Resources, Ltd. Prior
to this litigation, the Company and the plaintiffs were adversaries in a 1990
arbitration proceeding in which the interest of Nordell International Resources
Ltd. in the Enim oil field in Indonesia was awarded to the Company (subject to a
5% net profits interest for Nordell), and Nordell was ordered to pay the Company
nearly $1 million. The arbitration award was followed by a series of legal
actions by the parties in which the validity of the award and its enforcement
were at issue. As a result of these proceedings, the award was ultimately
upheld and enforced.
The current suit alleges that the plaintiffs were damaged in amounts aggregating
$13 million primarily because of the Company's prosecution of various claims
against the plaintiffs, as well as alleged misrepresentations, infliction of
emotional distress and improper accounting practices. The suit seeks specific
performance of the arbitration award, damages for alleged fraud and
misrepresentation in accounting for Enim field operating results, an accounting
for Nordell's 5% net profit interest, and damages for emotional distress and
various other alleged torts. The suit sought interest, punitive damages and
attorneys fees in addition to the alleged actual damages. On September 26, 1997,
the Company removed the action to the United States District Court for the
Central District of California. On August 31, 1998, the district court dismissed
all claims asserted by the plaintiffs other than claims for malicious
prosecution and abuse of the legal process, which the court held could not be
subject to a motion to dismiss. The abuse of process claim was later withdrawn,
and the damages sought were reduced to approximately $700,000 (not including
punitive damages). The lawsuit was tried and the jury found in favor of the
plaintiffs and assessed compensatory damages against the Company in the amount
of approximately $700,000 and punitive damages in the amount of approximately
$11 million. The Company believes it has acted appropriately and has appealed
the verdict. Enforcement of the judgment has been stayed without a bond pending
the outcome of the appeal.
The Company is subject to certain other litigation matters, none of which is
expected to have a material, adverse effect on the Company's operations or
consolidated financial condition.
7. CERTAIN FACTORS THAT COULD AFFECT FUTURE OPERATIONS
Certain information contained in this report, as well as written and oral
statements made or incorporated by reference from time to time by the Company
and its representatives in other reports, filings with the Securities and
Exchange Commission, news releases, conferences, teleconferences, web postings,
or otherwise, may be deemed to be "forward-looking statements" within the
meaning of Section 21E of the Securities Exchange Act of 1934 and are subject to
the "Safe Harbor" provisions of that section. Forward-looking statements
include statements concerning the Company's and management's plans, objectives,
goals, strategies and future operations and performance and the assumptions
underlying such forward-looking statements. When used in this document, the
words "anticipates," "estimates," "expects," "believes," "intends," "plans" and
similar expressions are intended to identify such forward-looking statements.
These statements include information regarding:
- drilling schedules;
- expected or planned production capacity;
- future production of the Cusiana and Cupiagua fields in Colombia,
including the Recetor license;
- the completion of development and commencement of production offshore
Malaysia-Thailand;
- future production of the Ceiba Field in Equatorial Guinea, including
volumes and timing of first production;
- the acceleration of the Company's exploration, appraisal and
development activities in Equatorial Guinea;
- the Company's capital budget and future capital requirements;
- the Company's meeting its future capital needs;
- the Company's utilization of net operating loss carryforwards and
realization of its deferred tax asset;
- the level of future expenditures for environmental costs;
- the outcome of regulatory and litigation matters;
- the estimated fair value of derivative instruments; and
- proven oil and gas reserves and discounted future net cash flows
therefrom.
These statements are based on current expectations and involve a number of
risks and uncertainties, including those described in the context of such
forward-looking statements, as well as those presented below. Actual results
and developments could differ materially from those expressed in or implied by
such statements due to these and other factors.
CERTAIN FACTORS RELATING TO THE OIL AND GAS INDUSTRY
The markets for oil and natural gas historically have been volatile and are
likely to continue to be volatile in the future. Oil and natural gas prices
have been subject to significant fluctuations during the past several decades in
response to relatively minor changes in the supply of and demand for oil and
natural gas, market uncertainty and a variety of additional factors that are
beyond the control of the Company. These factors include the level of consumer
product demand, weather conditions, domestic and foreign government regulations,
political conditions in the Middle East and other production areas, the foreign
supply of oil and natural gas, the price and availability of alternative fuels,
and overall economic conditions. It is impossible to predict future oil and gas
price movements with any certainty.
The Company follows the full cost method of accounting for exploration and
development of oil and gas reserves whereby all acquisition, exploration and
development costs are capitalized. Costs related to acquisition, holding and
initial exploration of licenses in countries with no proved reserves are
initially capitalized, including internal costs directly identified with
acquisition, exploration and development activities. The Company's exploration
licenses are periodically assessed for impairment on a country-by-country basis.
If the Company's investment in exploration licenses within a country where no
proved reserves are assigned is deemed to be impaired, the licenses are written
down to estimated recoverable value. If the Company abandons all exploration
efforts in a country where no proved reserves are assigned, all acquisition and
exploration costs associated with the country are expensed. The Company's
assessments of whether its investment within a country is impaired and whether
exploration activities within a country will be abandoned are made from time to
time based on its review and assessment of drilling results, seismic data and
other information it deems relevant. Due to the unpredictable nature of
exploration drilling activities, the amount and timing of impairment expense are
difficult to predict with any certainty. Financial information concerning the
Company's assets at December 31, 1999, including capitalized costs by geographic
area, is set forth in note 21 of Notes to Consolidated Financial Statements in
Triton's Annual Report on Form 10-K for the year ended December 31, 1999.
The Company's activities are also subject to all of the operating risks
normally associated with the exploration for and production of oil and gas,
including, without limitation, blowouts, explosions, uncontrollable flows of
oil, gas or well fluids, pollution, earthquakes, formations with abnormal
pressures, labor disruptions and fires, each of which could result in
substantial losses to the Company due to injury or loss of life and damage to or
destruction of oil and gas wells, formations, production facilities or other
properties. In accordance with customary industry practices, the Company
maintains insurance coverage limiting financial loss resulting from certain of
these operating hazards. Losses and liabilities arising from uninsured or
underinsured events would reduce revenues and increase costs to the Company.
There can be no assurance that any insurance will be adequate to cover losses or
liabilities. The Company cannot predict the continued availability of
insurance, or its availability at premium levels that justify its purchase.
The Company's activities are also subject to laws, rules and regulations in the
countries where it operates, which generally pertain to production control,
taxation, environmental and pricing concerns, and other matters relating to the
petroleum industry. Many jurisdictions have at various times imposed
limitations on the production of natural gas and oil by restricting the rate of
flow for oil and natural gas wells below their actual capacity. There can be no
assurance that present or future regulation will not adversely affect the
operations of the Company.
The Company is subject to extensive environmental laws and regulations. These
laws regulate the discharge of oil, gas or other materials into the environment
and may require the Company to remove or mitigate the environmental effects of
the disposal or release of such materials at various sites. In addition, the
Company could be held liable for environmental damages caused by previous owners
of its properties or its predecessors. The Company does not believe that its
environmental risks are materially different from those of comparable companies
in the oil and gas industry. Nevertheless, no assurance can be given that
environmental laws and regulations will not, in the future, adversely affect the
Company's consolidated results of operations, cash flows or financial position.
Pollution and similar environmental risks generally are not fully insurable.
CERTAIN FACTORS RELATING TO INTERNATIONAL OPERATIONS
The Company derives substantially all of its consolidated revenues from
international operations. Risks inherent in international operations include
the risk of expropriation, nationalization, war, revolution, border disputes,
renegotiation or modification of existing contracts, import, export and
transportation regulations and tariffs; taxation policies, including royalty and
tax increases and retroactive tax claims; exchange controls, currency
fluctuations and other uncertainties arising out of foreign government
sovereignty over the Company's international operations; laws and policies of
the Untied States affecting foreign trade, taxation and investment; and the
possibility of having to be subject to the exclusive jurisdiction of foreign
courts in connection with legal disputes and the possible inability to subject
foreign persons to the jurisdiction of courts in the United States. To date,
the Company's international operations have not been materially affected by
these risks.
CERTAIN FACTORS RELATING TO COLOMBIA
The Company is a participant in significant oil and gas discoveries in the
Cusiana and Cupiagua fields, located approximately 160 kilometers (100 miles)
northeast of Bogota, Colombia. Development of reserves in the Cusiana and
Cupiagua fields is ongoing and will require additional drilling. Pipelines
connect the major producing fields in Colombia to export facilities and to
refineries.
From time to time, guerrilla activity in Colombia has disrupted the operation of
oil and gas projects. Such activity increased over the last year and appears to
be increasing as political negotiations among government and various rebel
groups proceed. In one case, a bomb planted near the pipeline caused OCENSA to
halt shipments, which, in turn, caused the operator of the fields to curtail
production for approximately two days. Although the Colombian government, the
Company and its partners have taken steps to maintain security and favorable
relations with the local population, there can be no assurance that attempts to
reduce or prevent guerrilla activity will be successful or that guerrilla
activity will not disrupt operations in the future.
Colombia is among several nations whose progress in stemming the production and
transit of illegal drugs is subject to annual certification by the President of
the United States. Although the President granted Colombia certification in
2000, Colombia was denied certification in two recent years and only received a
national interest waiver for one of those years. There can be no assurance
that, in the future, Colombia will receive certification or a national interest
waiver. The consequences of the failure to receive certification or a national
interest waiver generally include the following: all bilateral aid, except
anti-narcotics and humanitarian aid, would be suspended; the Export-Import Bank
of the United States and the Overseas Private Investment Corporation would not
approve financing for new projects in Colombia; U.S. representatives at
multilateral lending institutions would be required to vote against all loan
requests from Colombia, although such votes would not constitute vetoes; and the
President of the United States and Congress would retain the right to apply
future trade sanctions. Each of these consequences could result in adverse
economic consequences in Colombia and could further heighten the political and
economic risks associated with the Company's operations in Colombia. Any
changes in the holders of significant government offices could have adverse
consequences on the Company's relationship with the Colombian national oil
company and the Colombian government's ability to control guerrilla activities
and could exacerbate the factors relating to foreign operations discussed above.
CERTAIN FACTORS RELATING TO MALAYSIA-THAILAND
The Company is a partner in a significant gas exploration project located in the
Gulf of Thailand approximately 450 kilometers (280 miles) northeast of Kuala
Lumpur and 750 kilometers (470 miles) south of Bangkok as a contractor under a
production-sharing contract covering Block A-18 of the Malaysia-Thailand Joint
Development Area. On October 30, 1999, the Company and the other parties to the
production-sharing contract for Block A-18 executed a gas sales agreement
providing for the sale of the first phase of gas. Under terms of the gas sales
agreement, delivery of gas is scheduled to begin by the end of the second
quarter of 2002, following timely completion and approval of an environmental
impact assessment associated with the buyers' pipeline and processing
facilities. At the first public hearing to discuss the environmental impact
assessment, held in July 2000 in Thailand, nongovernmental organizations raised
opposition to the project, forcing the adjournment of the hearing. A new date
for the hearing has not yet been determined. A lengthy approval process, or
significant opposition to the project, could delay construction and the
commencement of gas sales. No assurance can be given as to when the approval of
the environmental impact assessment will be obtained.
In connection with the sale to ARCO, now British Petroleum ("BP") of one-half of
the shares through which the Company owned its interest in Block A-18, BP agreed
to pay the future exploration and development costs attributable to the
Company's and BP's collective interest in Block A-18, up to $377 million or
until first production from a gas field, after which the Company and BP would
each pay 50% of such costs. There can be no assurance that the Company's and
BP's collective share of the cost of developing the project will not exceed $377
million. BP also agreed to pay the Company certain incentive payments if certain
criteria were met. The first $65 million in incentive payments is conditioned
upon having the production facilities for the sale of gas from Block A-18
completed by June 30, 2002. If the facilities are completed after June 30, 2002,
but before June 30, 2003, the incentive payment would be reduced to $40 million.
A lengthy environmental approval process or unanticipated delays in construction
of the facilities could result in the Company's receiving a reduced incentive
payment or possibly the complete loss of the first incentive payment. In
addition, the Company has agreed to share with BP some of the risk that the
environmental approval process might delay production by agreeing to pay BP
$1.25 million per month for each month, if applicable, that first gas sales are
delayed beyond 30 months following the award of an engineering, procurement and
construction contract for the project. The Company's obligation is capped at 24
months of these payments.
CERTAIN FACTORS RELATING TO THE COMPANY'S OPERATIONS IN EQUATORIAL GUINEA
The Company is a participant in a significant oil discovery, the Ceiba Field,
located on Block G offshore the Republic of Equatorial Guinea. The field is
located in approximately 2,200 feet of water, approximately 35 kilometers (22
miles) off the continental coast. The Company is implementing an accelerated
exploration, appraisal and development program through a two-rig drilling
program. Development of the field will require significant capital expenditures,
the drilling and completion of additional wells and, under the Company's plan of
development, the utilization of a floating production storage and offloading
(FPSO) vessel. Based on discussions held to date with development contractors,
the Company is targeting first oil production to occur by year-end 2000, and the
plan of development provides for initial or phase-one production of about 52,000
barrels of oil per day ("BOPD"). The Company's ability to meet these targets is
subject to the timely drilling and completion of development wells and the
timely performance by the development contractors of their commitments, and is
subject to the risks associated with oil and gas operations and international
operations as discussed previously. The Company can give no assurance that it
will meet these targets.
Under the terms of the production sharing contracts, the Company has the right
to continue to explore the remaining acreage on its Blocks F and G for three
additional one-year periods, provided that the Company commits to drill at least
two exploration wells during that year (one well each year being contingent upon
the Company's identifying an additional structure it believes is a drillable
prospect). Under the current terms of the contracts, the Company is required to
relinquish 30% of each contract's original area in 2000, and an additional 20%
of the remaining contract area by the end of April 2003. Notwithstanding the
requirement for relinquishment, the Company will not be required to surrender an
area that includes a commercial field or a discovery that has not then been
declared commercial. The area or areas to be surrendered is to be designated by
the Company, provided that, where possible, each area is of sufficient size and
convenient shape to permit petroleum operations. There can be no assurance that
the Company will be successful in future exploration efforts on the blocks.
At the request of the Republic of Equatorial Guinea, the Company and its partner
are negotiating amendments to certain terms of the contracts with the government
of Equatorial Guinea. The parties have signed a memorandum of understanding
reflecting the revised terms, and negotiations of definitive amendments are
continuing. The implementation of the revised terms of the contract is subject
to the negotiation and execution of definitive amendments, but there can be no
assurance as to whether, or when, such definitive amendments will be executed.
The current terms of the contracts, and the terms reflected in the memorandum of
understanding, are described more fully in the Company's Annual Report on Form
10-K for the year ended December 31, 1999.
INFLUENCE OF HICKS MUSE
In connection with the issuance of 8% Convertible Preference Shares to HM4
Triton, L.P., the Company and HM4 Triton, L.P. entered into a shareholders
agreement (the "Shareholders' Agreement") pursuant to which, among other things,
the size of the Company's Board of Directors was set at 10, and HM4 Triton, L.P.
exercised its right to designate four out of such 10 directors. The
Shareholders' Agreement provides that, in general, for so long as the entire
Board of Directors consists of 10 members, HM4 Triton, L.P. (and its designated
transferees, collectively) may designate four nominees for election to the Board
of Directors. The right of HM4 Triton, L.P. (and its designated transferees) to
designate nominees for election to the Board will be reduced if the number of
ordinary shares held by HM4 Triton, L.P. and its affiliates (assuming conversion
of 8% Convertible Preference Shares into ordinary shares) represents less than
certain specified percentages of the number of ordinary shares (assuming
conversion of 8% Convertible Preference Shares into ordinary shares) purchased
by HM4 Triton, L.P. pursuant to the Stock Purchase Agreement.
The Shareholders' Agreement provides that, for so long as HM4 Triton, L.P. and
its affiliates continue to hold a certain minimum number of ordinary shares
(assuming conversion of 8% Convertible Preference Shares into ordinary shares),
the Company may not take certain actions without the consent of HM4 Triton,
L.P., including (i) amending its Articles of Association or the terms of the 8%
Convertible Preference Shares with respect to the voting powers, rights or
preferences of the holders of 8% Convertible Preference Shares, (ii) entering
into a merger or similar business combination transaction, or effecting a
reorganization, recapitalization or other transaction pursuant to which a
majority of the outstanding ordinary shares or any 8% Convertible Preference
Shares are exchanged for securities, cash or other property, (iii) authorizing,
creating or modifying the terms of any series of securities that would rank
equal to or senior to the 8% Convertible Preference Shares, (iv) selling or
otherwise disposing of assets comprising in excess of 50% of the market value of
the Company, (v) paying dividends on ordinary shares or other shares ranking
junior to the 8% Convertible Preference Shares, other than regular dividends on
the Company's 5% Convertible Preference Shares, (vi) incurring or guaranteeing
indebtedness (other than certain permitted indebtedness), or issuing preference
shares, unless the Company's leverage ratio at the time, after giving pro forma
effect to such incurrence or issuance and to the use of the proceeds, is less
than 2.5 to 1, (vii) issuing additional shares of 8% Convertible Preference
Shares, other than in payment of accumulated dividends on the outstanding 8%
Convertible Preference Shares, (viii) issuing any shares of a class ranking
equal or senior to the 8% Convertible Preference Shares, (ix) commencing a
tender offer or exchange offer for all or any portion of the ordinary shares or
(x) decreasing the number of shares designated as 8% Convertible Preference
Shares.
As a result of HM4 Triton, L.P.'s ownership of 8% Convertible Preference Shares
and ordinary shares and the rights conferred upon HM4 Triton, L.P. and its
designees pursuant to the Shareholders' Agreement, HM4 Triton, L.P. has
significant influence over the actions of the Company and will be able to
influence, and in some cases determine, the outcome of matters submitted for
approval of the shareholders. The existence of HM4 Triton, L.P. as a
shareholder of the Company may make it more difficult for a third party to
acquire, or discourage a third party from seeking to acquire, a majority of the
outstanding ordinary shares. A third party would be required to negotiate any
such transaction with HM4 Triton, L.P. and the interests of HM4 Triton, L.P. as
a shareholder may be different from the interests of the other shareholders of
the Company.
POSSIBLE FUTURE ACQUISITIONS
The Company's strategy includes the possible acquisition of additional reserves,
including through possible future business combination transactions. There can
be no assurance as to the terms upon which any such acquisitions would be
consummated or as to the affect any such transactions would have on the
Company's financial condition or results of operations. Such acquisitions, if
any, could involve the use of the Company's cash, or the issuance of the
Company's debt or equity securities, which could have a dilutive effect on the
current shareholders.
COMPETITION
The Company encounters strong competition from major oil companies (including
government-owned companies), independent operators and other companies for
favorable oil and gas concessions, licenses, production-sharing contracts and
leases, drilling rights and markets. Additionally, the governments of certain
countries in which the Company operates may, from time to time, give
preferential treatment to their nationals. The oil and gas industry as a whole
also competes with other industries in supplying the energy and fuel
requirements of industrial, commercial and individual consumers. The Company
believes that the principal means of competition in the sale of oil and gas are
product availability, price and quality.
MARKETS
Crude oil, natural gas, condensate and other oil and gas products generally are
sold to other oil and gas companies, government agencies and other industries.
The availability of ready markets for oil and gas that might be discovered by
the Company and the prices obtained for such oil and gas depend on many factors
beyond the Company's control, including the extent of local production and
imports of oil and gas, the proximity and capacity of pipelines and other
transportation facilities, fluctuating demands for oil and gas, the marketing of
competitive fuels, and the effects of governmental regulation of oil and gas
production and sales. Pipeline facilities do not exist in certain areas of
exploration and, therefore, any actual sales of discovered oil or gas might be
delayed for extended periods until such facilities are constructed.
LITIGATION
The outcome of litigation and its impact on the Company are difficult to predict
due to many uncertainties, such as jury verdicts, the application of laws to
various factual situations, the actions that may or may not be taken by other
parties and the availability of insurance. In addition, in certain situations,
such as environmental claims, one defendant may be responsible for the
liabilities of other parties. Moreover, circumstances could arise under which
the Company may elect to settle claims at amounts that exceed the Company's
expected liability for such claims in an attempt to avoid costly litigation.
Judgments or settlements could, therefore, exceed any reserves.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL REQUIREMENTS
----------------------------------
Cash and equivalents totaled $79.3 million and $186.3 million at June 30,
2000, and December 31, 1999, respectively. Working capital was $58.3 million at
June 30, 2000, compared with $161.3 million at December 31, 1999.
The following summary table reflects cash flows for the Company for the six
months ended June 30, 2000 (in thousands):
Net cash provided (used) by operating activities $ 66,189
Net cash provided (used) by investing activities $(163,070)
Net cash provided (used) by financing activities $ (10,011)
Operating Activities
--------------------
The Company's cash flows provided by operating activities for the six
months ended June 30, 2000, benefited from a higher average realized oil price.
The higher realized oil price was partially offset by a decrease in production
from the Cusiana and Cupiagua fields in Colombia. Gross production from the
Cusiana and Cupiagua fields averaged approximately 353,000 barrels of oil per
day ("BOPD") during the first six months of 2000 following an average production
rate for the year 1999 of 430,000 BOPD. See "Results of Operations." Based on a
revised production forecast the Company received in June 2000 from the operator,
the Company expects average gross production for the fields in 2000 will be
approximately 354,000 BOPD.
Beginning in the second quarter of 2000, 254,136 barrels per month, the
amount previously delivered under the forward oil sale, were available for sale
at market prices subject to any hedging arrangements undertaken by the Company.
Investing Activities
---------------------
The Company's capital expenditures and other capital investments were $74.4
million ($64.5 million excluding capitalized interest) for the six months ended
June 30, 2000, primarily for development of the Ceiba Field in Equatorial Guinea
and for development of the Cusiana and Cupiagua fields in Colombia.
In May 2000, the Company acquired from an unrelated third party, for $88.8
million in cash, 100% of the shares of Triton Pipeline Colombia, Inc. ("TPC"), a
formerly wholly owned subsidiary up to its disposal on February 2, 1998. TPC's
sole asset is its 9.6% equity interest in the Colombian pipeline company,
Oleoducto Central S.A. ("OCENSA"). OCENSA owns and operates the pipeline and
port facilities, which transport and handle crude oil from the Cusiana and
Cupiagua fields to the Caribbean port of Covenas.
Financing Activities
---------------------
For the six months ended June 30, 2000 and 1999, the Company repaid
borrowings of $4.5 million and $14.5 million, respectively, and paid cash
preference-share dividends totaling $14.7 million and $2.9 million,
respectively. Additionally, the Company paid stock preference-share dividends
totaling $13.7 million for the six months ended June 30, 1999. Proceeds from
issuances of ordinary shares under the Company's stock compensation plans
totaled $10.9 million for the six months ended June 30, 2000.
Future Capital Needs
----------------------
The Company is implementing an accelerated appraisal and development
program to enable early production from the Ceiba Field in Equatorial Guinea,
with a target of first production by the end of 2000. The Company has
contracted for a floating production storage and offloading (FPSO) vessel that
is expected to provide storage for up to two million barrels of oil and initial
processing capacity of up to 60,000 barrels of oil per day from a single
production unit. Capacity can be cost effectively increased through the
installation of additional processing units. In March and June 2000, the
Company revised its capital spending program announcing a two-rig drilling
program that is intended to enable the Company to complete the Ceiba-1,-2, -3
and -4 wells as production wells, to drill two additional appraisal/production
wells in the Ceiba field, to drill up to four exploration wells and to undertake
additional development work, as well as procure equipment for a water-injection
facility for future secondary oil recovery. The Company will soon submit a
revised work program and budget to the government of Equatorial Guinea for
approval.
The accelerated appraisal and development program for Equatorial Guinea
will require significant capital outlays commencing this year. For internal
planning purposes, the Company's revised capital spending program for the year
ending December 31, 2000, is approximately $256 million, excluding capitalized
interest and acquisitions. The $256 million comprises approximately $187
million for exploration and development activities in Equatorial Guinea ($42.3
million incurred through June 30), $58 million for the Cusiana and Cupiagua
fields in Colombia ($17.4 million incurred through June 30), and $11 million for
the Company's exploration activities in other parts of the world ($4.8 million
incurred through June 30).
In February 2000, the Company entered into an unsecured two-year revolving
credit facility with a group of banks. The credit facility, which matures in
February 2002, gives the Company the right to borrow from time to time up to the
amount of the borrowing base determined by the banks, not to exceed $150
million. At June 30, 2000, the borrowing base was $150 million. The credit
facility contains various restrictive covenants, including covenants that
require the Company to maintain a ratio of earnings before interest,
depreciation, depletion, amortization and income taxes to net interest expense
of at least 2.5 to 1 on a trailing four quarters basis. The restrictive
covenants also prohibit the Company from permitting net debt to exceed the
product of 3.75 times the Company's earnings before interest, depreciation,
depletion, amortization and income taxes on a trailing four quarters basis. As
of June 30, 2000, the Company had no outstanding borrowings under this facility.
The Company expects to fund 2000 capital spending with a combination of
some or all of the following: cash flow from operations, cash, the Company's
committed bank credit facility and the issuance of debt or equity securities.
To facilitate a possible future securities issuance or issuances the Company has
on file with the Securities and Exchange Commission ("SEC") a shelf registration
statement under which the Company could issue up to an aggregate of $250 million
debt or equity securities.
At June 30, 2000, the Company guaranteed the performance of a total of
$11.4 million in future exploration expenditures to be incurred through
September 2001 in various countries. A total of approximately $6 million of
the explorationexpenditures are included in the 2000 capital spending
program related to a commitment for two onshore exploratory wells in Greece.
These commitments are backed primarily by unsecured letters of credit.
RESULTS OF OPERATIONS
---------------------
Sales volumes and average prices realized were as follows:
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
--------------------- --------------------
2000 1999 2000 1999
--------- --------- --------- ---------
Sales volumes:
Oil (MBbls), excluding forward oil sale 3,015 3,184 5,474 6,390
Forward oil sale (MBbls delivered) --- 763 762 1,525
--------- --------- --------- ---------
Total 3,015 3,947 6,236 7,915
========= ========= ========= =========
Gas (MMcf) 109 114 220 215
Weighted average price realized:
Oil (per Bbl) (1) $ 26.32 $ 15.08 $ 24.65 $ 13.72
Gas (per Mcf) $ 1.23 $ 0.89 $ 1.25 $ 0.87
(1) Includes the effect of barrels delivered under the forward oil sale, if
applicable, that were recognized at $11.56 per barrel.
THREE MONTHS ENDED JUNE 30, 2000,
COMPARED WITH THREE MONTHS ENDED JUNE 30, 1999
Oil and Gas Sales
--------------------
Oil and gas sales for the second quarter of 2000 totaled $79.5 million, a
33% increase from the second quarter of 1999, due to higher average realized oil
prices. This increase was partially offset by lower production. The average
realized oil price increased $11.24 per barrel, or 75%, resulting in an increase
in revenues of $33.9 million, compared with the same period in 1999. Oil
production, including production related to barrels delivered under the forward
oil sale, decreased 24% in second-quarter 2000, compared with the prior-year
second quarter, resulting in a revenue decrease of $14.1 million. Gross
production from the Cusiana and Cupiagua fields averaged 342,000 BOPD for the
second-quarter 2000, compared with 434,000 BOPD for the prior-year second
quarter.
As a result of financial and commodity market transactions settled during
the three months ended June 30, 2000, the Company's risk management program
resulted in lower oil sales of approximately $7.3 million than if the Company
had not entered into such transactions. Additionally, the Company has hedged
its West Texas Intermediate ("WTI") price on a portion of its remaining 2000 oil
production. See "Quantitative and Qualitative Disclosures about Market Risk"
below.
Costs and Expenses
--------------------
Operating expenses decreased $3.7 million in 2000 primarily due to lower
pipeline tariffs. On an oil-equivalent barrel basis, operating expenses were
$5.14 and $5.02 in 2000 and 1999, respectively. OCENSA pipeline tariffs totaled
$8.5 million, or $2.85 per barrel, and $12.9 million, or $3.39 per barrel, in
2000 and 1999, respectively. Following the Company's acquisition of the shares
of TPC in 2000, the Company elected to cancel the dividend it would receive as
an owner of OCENSA shares. OCENSA imposes a tariff on shippers from the Cusiana
and Cupiagua fields (the "Initial Shippers"), which is estimated to recoup: the
total capital cost of the project over a 15-year period; its operating expenses,
which include all Colombian taxes; interest expense; and the dividend to be paid
by OCENSA to the shareholder affiliated with that shipper, unless it has elected
not to receive a dividend. Any shippers of crude oil who are not Initial
Shippers are assessed a premium tariff on a per-barrel basis, and OCENSA will
use revenues from such tariffs to reduce the Initial Shippers' tariff.
Depreciation, depletion and amortization decreased $1.9 million, primarily
due to lower production volumes, including barrels delivered under the forward
oil sale.
General and administrative expense before capitalization increased $1.6
million to $8.6 million in 2000. Capitalized general and administrative costs
were $2.8 million and $2.2 million in 2000 and 1999, respectively.
Interest Expense, Net
-----------------------
Gross interest expense for both 2000 and 1999 totaled $9.4 million, while
capitalized interest for 2000 increased $1.9 million to $5.4 million.
Income Taxes
-------------
Current taxes increased to $11.6 million in 2000 from $.9 million in 1999
due to higher pretax income from Colombian operations. During 2000, the
Company's tax expense was approximately $2.9 million lower due to the
amortization of deferred income resulting from anticipated utilization of net
operating losses of an entity that was acquired in the prior year. The income
tax provisions for 2000 and 1999 included deferred tax expense of $2.9 million
and $4.5 million, respectively.
SIX MONTHS ENDED JUNE 30, 2000,
COMPARED WITH SIX MONTHS ENDED JUNE 30, 1999
Oil and Gas Sales
--------------------
Oil and gas sales in 2000 totaled $154 million, a 42% increase from the
prior year due to higher average realized oil prices. This increase was
partially offset by lower production. The average realized oil price increased
$10.93 per barrel, or 80%, resulting in an increase in revenues of $68.2
million, compared with the same period in 1999. Oil production, including
production related to barrels delivered under the forward oil sale, decreased
21% in 2000, compared with the prior-year, resulting in a revenue decrease of
$23.1 million. Gross production from the Cusiana and Cupiagua fields averaged
353,000 BOPD in 2000, compared with 434,000 BOPD in 1999.
As a result of financial and commodity market transactions settled during
the six months ended June 30, 2000, the Company's risk management program
resulted in lower oil sales of approximately $13.4 million than if the Company
had not entered into such transactions. Additionally, the Company has hedged
its WTI price on a portion of its remaining 2000 oil production. See
"Quantitative and Qualitative Disclosures about Market Risk" below.
The delivery requirement under the forward oil sale was completed in March
2000. Beginning in the second quarter of 2000, 254,136 barrels per month, the
amount previously delivered under the forward oil sale and recognized in
revenues at $11.56 per barrel, were available for sale at market prices subject
to any hedging arrangements undertaken by the Company.
Costs and Expenses
--------------------
Operating expenses decreased $6.9 million in 2000 primarily due to lower
pipeline tariffs. On an oil-equivalent barrel basis, operating expenses were
$5.04 and $5.03 in 2000 and 1999, respectively. OCENSA pipeline tariffs totaled
$17 million, or $2.76 per barrel, and $26 million, or $3.44 per barrel, in 2000
and 1999, respectively.
Depreciation, depletion and amortization decreased $3.3 million, primarily
due to lower production volumes, including barrels delivered under the forward
oil sale.
General and administrative expense before capitalization increased $1.2
million, to $15.2 million in 2000. Capitalized general and administrative costs
were $4.8 million and $4.2 million in 2000 and 1999, respectively.
Interest Expense, Net
-----------------------
Gross interest expense for 2000 and 1999 totaled $18.7 million and $18.8
million, respectively, while capitalized interest for 2000 increased $3 million
to $9.9 million.
Income Taxes
-------------
Current taxes increased to $20 million in 2000 from $2.6 million in 1999
due to higher pretax income from Colombian operations. During 2000, the
Company's tax expense was lower by approximately $5.8 million due to the
amortization of deferred income resulting from anticipated utilization of net
operating losses of an entity that was acquired in the prior year. The income
tax provisions for 2000 and 1999 included deferred tax expense of $5.1 million
and $7.2 million, respectively.
Recent Accounting Pronouncements
--------------------------------
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities." This Statement as amended in
June 2000 by SFAS No. 138 "Accounting for Certain Derivative Instruments and
Certain Hedging Activities - an Amendment of SFAS No. 133" establishes
accounting and reporting standards for derivative instruments and for hedging
activities. It requires enterprises to recognize all derivatives as either
assets or liabilities in the balance sheet and measure those instruments at fair
value. The requisite accounting for changes in the fair value of a derivative
will depend on the intended use of the derivative and the resulting designation.
The Company must adopt SFAS No. 133 and No. 138 effective January 1, 2001.
Based on the Company's outstanding derivatives contracts, the impact of adopting
this standard would not have a material adverse effect on the Company's
operations or consolidated financial condition. However, no assurances can be
given with regard to the level of the Company's derivatives activities at the
time SFAS No. 133 and No. 138 are adopted or the resulting effect on the
Company's operations or consolidated financial condition.
Certain Factors That Could Affect Future Operations
---------------------------------------------------
Certain information contained in this report, as well as written and oral
statements made or incorporated by reference from time to time by the Company
and its representatives in other reports, filings with the Securities and
Exchange Commission, news releases, conferences, teleconferences, web postings,
or otherwise, may be deemed to be "forward-looking statements" within the
meaning of Section 21E of the Securities Exchange Act of 1934 and are subject to
the "Safe Harbor" provisions of that section. Forward-looking statements
include statements concerning the Company's and management's plans, objectives,
goals, strategies and future operations and performance and the assumptions
underlying such forward-looking statements. When used in this document, the
words "anticipates," "estimates," "expects," "believes," "intends," "plans" and
similar expressions are intended to identify such forward-looking statements.
These statements include information regarding:
- drilling schedules;
- expected or planned production capacity;
- future production of the Cusiana and Cupiagua fields in Colombia,
including the Recetor license;
- the completion of development and commencement of production offshore
Malaysia-Thailand;
- future production of the Ceiba Field in Equatorial Guinea, including
volumes and timing of first production;
- the acceleration of the Company's exploration, appraisal and development
activities in Equatorial Guinea;
- the Company's capital budget and future capital requirements;
- the Company's meeting its future capital needs;
- the Company's utilization of net operating loss carryforwards and
realization of its deferred tax asset;
- the level of future expenditures for environmental costs;
- the outcome of regulatory and litigation matters;
- the estimated fair value of derivative instruments; and
- proven oil and gas reserves and discounted future net cash flows
therefrom.
These statements are based on current expectations and involve a number of
risks and uncertainties, including those described in the context of such
forward-looking statements, and in notes 6 and 7 of Notes to Condensed
Consolidated Financial Statements. Actual results and developments could differ
materially from those expressed in or implied by such statements due to these
and other factors.
ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
Oil sold by the Company is normally priced with reference to a defined
benchmark, such as light sweet crude oil traded on the New York Mercantile
Exchange. Actual prices received vary from the benchmark depending on quality
and location differentials. It is the Company's policy to use financial market
transactions with creditworthy counterparties from time to time, primarily to
reduce risk associated with the pricing of a portion of the oil and natural gas
that it sells. The policy is structured to underpin the Company's planned
revenues and results of operations. There can be no assurance that the use of
financial market transactions will not result in losses. The Company does not
enter into financial market transactions for trading purposes.
With respect to the sale of oil to be produced by the Company, the Company
has entered into oil price swaps with creditworthy counterparties to establish a
weighted average WTI benchmark price of $30.42 per barrel on an aggregate of
600,000 barrels of production during the period from July through September
2000. As a result, to the extent the average monthly WTI price exceeds $30.42,
the Company will pay the counterparties the difference between the average
monthly WTI price and $30.42, and to the extent that the average monthly WTI
price is below $30.42, the counterparties will pay the Company the difference
between the average monthly WTI price and $30.42. In addition, the Company has
entered into option contracts for an aggregate of 300,000 barrels of production
during the period from July through September 2000. As a result, to the extent
the monthly average WTI exceeds $28.43 per barrel, the Company will pay the
counterparty the difference between the average WTI and $28.43, and to the
extent WTI is at or below $22.00, the counterparty will pay the Company $2.00
per barrel.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In July through October 1998, eight lawsuits were filed against the Company
and Thomas G. Finck and Peter Rugg, in their capacities as Chairman and Chief
Executive Officer and Chief Financial Officer, respectively. The lawsuits were
filed in the United States District Court for the Eastern District of Texas,
Texarkana Division, and have been consolidated and are styled In re: Triton
Energy Limited Securities Litigation. They allege violations of Sections 10(b)
and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5
promulgated thereunder, and negligent misrepresentation in connection with
disclosures concerning the Company's properties, operations, and value relating
to a prospective sale of the Company or of all or a part of its assets. The
lawsuits seek recovery of an unspecified amount of compensatory and punitive
damages and fees and costs. The Company has filed a motion to dismiss the
lawsuits for failure to state a claim, which is pending.
The Company believes its disclosures have been accurate and intends to
vigorously defend these actions. There can be no assurance that the litigation
will be resolved in the Company's favor. An adverse result could have a material
adverse effect on the Company's financial position or results of operations.
In November 1999, a lawsuit was filed against the Company, one of its
subsidiaries and Thomas G. Finck, Peter Rugg and Robert B. Holland, III, in
their capacities as officers of the Company, in the District Court of the State
of Texas for Dallas County. The lawsuit is styled Aaron Sherman, et al. vs.
Triton Energy Corporation et al. and seeks compensatory and punitive damages and
interest. Following the Court's order to replead, the plaintiffs amended their
petition and alleged fraud, negligent misrepresentation and violations of the
Texas Securities fraud statutes in connection with disclosures concerning the
prospective sale by the Company of all or a substantial part of its assets
announced in March 1998. The Court has dismissed all claims of certain
plaintiffs and some claims of the remaining plaintiffs for their failure to
plead causes of action cognizable in law. In May 2000, the Court ordered the
remaining plaintiffs to replead their claims relating to their alleged purchases
of stock and has stayed discovery pending its further orders. In response to
this order, the plaintiffs filed second and third amended petitions in June 2000
adding allegations relating to the Company's 1996 reorganization as a Cayman
Islands corporation. The defendants have challenged the sufficiency of the
plaintiffs' third amended petition and a hearing on that matter is set on
August 25, 2000. On July 31, 2000, the plaintiffs filed a fourth amended
petition, which the defendants intend to challenge.
In April 2000, a lawsuit was filed in the High Court of Malaya at Kuala
Lumpur against Carigali-Triton Operating Company Sdn. Bhd. ("CTOC"), the
Malaysia-Thailand Joint Authority and Technip Geoproduction (M) Sdn. Bhd.
("Technip") by Pertiwi Ulung Sdn. Bhd. ("Pertiwi"). CTOC is the operating
company owned by Petronas Carigali (JDA) Sdn. Bhd., a subsidiary of the
Malaysian national oil company, the Company and BP. CTOC operates the
companies' interests in Block A-18 of the Malaysia-Thailand Joint Development
Area in the Gulf of Thailand. The lawsuit related to CTOC's award of the
engineering, procurement and construction ("EPC") contract to a consortium of
companies, including Technip, for the Cakerawala Field gas-development project.
In July 2000, the court dismissed this lawsuit.
ITEM 4. SUBMISSION OF MATTERS FOR VOTE OF SECURITY HOLDERS
The Company held its Annual Meeting of Shareholders on May 16, 2000. At
the meeting, the shareholders of the Company voted on the proposal for election
of three directors for a term expiring in 2003. The directors elected and the
votes cast for or withheld were as follows: Sheldon R. Erikson (54,289,481
votes for and 299,031 votes withheld), Thomas O. Hicks (54,292,818 votes for and
295,694 votes withheld) and John R. Huff (54,288,331 votes for and 300,181 votes
withheld). The following directors continued in office: Jack D. Furst,
Fitzgerald S. Hudson, James C. Musselman, Michael E. McMahon, C. Lamar
Norsworthy, C. Richard Vermillion, Jr. and J. Otis Winters.
ITEM 5. OTHER INFORMATION
Operations Update
- ------------------
Equatorial Guinea
------------------
In June 2000, the Company reported that the Ceiba-3 development well
confirmed the primary reservoir found in the Ceiba-1 and Ceiba-2 wells and
encountered a deeper, similar-quality oil reservoir. Ceiba-3 penetrated 256
feet of net oil-bearing pay based on the analysis of drilling, coring, wireline
logging and samples. The new additional reservoir has an oil-water contact
about 60 feet deeper than the oil-water contact found in the first two wells
drilled in the Ceiba Field. Located 22 miles off the continental coast of
Equatorial Guinea on Block G, the Ceiba-3 well was drilled to a total depth of
9,695 feet in 2,165 feet of water. The well is approximately one mile northeast
of the Ceiba-1 discovery well, announced in October 1999, and confirms the
extension of the Ceiba Field to the north.
In June 2000, the Company reported that the Ceiba-4 development well
confirmed the oil pool found in the Ceiba-1, -2 and -3 wells. Ceiba-4 penetrated
269 feet of net oil-bearing pay in three zones based on the analysis of
drilling, coring, wireline logging and samples. The Ceiba-4 well confirmed the
southern extension of the field, validating lateral reservoir continuity and
connectivity in the oil reservoir tested in the Ceiba-1 discovery well and
confirmed in Ceiba-2 and Ceiba-3. The Ceiba-4 well results support a deeper
field oil-water contact than originally interpreted. Located 22 miles off the
continental coast of Equatorial Guinea on Block G, the Ceiba-4 well was drilled
to a total depth of 8,957 feet in 2,431 feet of water. The well is
approximately one mile southwest of the Ceiba-2 appraisal well.
In July 2000, the Company reported that the Ceiba-5 appraisal well
confirmed the primary oil pool found in the Ceiba-1, -2, -3 and -4 wells, and
encountered a deeper pool with an additional high-quality reservoir not seen in
any of the previous Ceiba wells. Ceiba-5 penetrated 243 feet of net oil-bearing
pay in three zones based on the analysis of drilling, wireline logging, downhole
pressure measurements and rock/fluid samples. The new oil pool has an oil-water
contact 328 feet below the oil-water contact of the primary Ceiba pool. Drilled
on the western flank of the Ceiba structure, the Ceiba-5 well validated the
lateral reservoir continuity and connectivity of the field's primary oil pool to
the northwest. Located 23 miles off the continental coast of Equatorial Guinea
on Block G, the Ceiba-5 well was drilled to a total depth of 9,187 feet in 2,622
feet of water. The well is approximately 1.75 miles northwest of the Ceiba-3
development well.
In addition, the Company has renegotiated and extended into 2001 the
contracts for the two rigs it has been using in the field. Current plans call
for Global Marine's R.F. Bauer drillship to drill an additional five wells,
after which the Company has the option to extend the contract another six
months. In addition, the Company plans to use the Sedco 700 semisubmersible rig
to drill and complete four wells in addition to its current contract, which
encompasses the drilling of one well and the completion of four wells. The
Company expects to then use the rig for another six months to continue
developing the Ceiba Field, after which the Company has the option to extend the
contract another six months.
The Company will soon submit a revised budget and work program to the
government of Equatorial Guinea for approval that reflects the expanded scope of
activity.
Greece
------
In July 2000, the Company completed the first of two commitment wells onshore
Greece in the Aitoloakarnania contract area. The well was a dry hole. The
Company expects that the second onshore commitment well will be completed during
the third quarter.
Gabon
-----
In July 2000, the Company agreed to acquire a 38% interest in the Tolo and Otiti
blocks offshore Gabon. The Company's partners in the two blocks are
Australia-based Broken Hill Proprietary Company Limited (BHP), the operator, and
Sasol, a South African company. The agreement is subject to approval by the
government of Gabon.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: The following documents are filed as part of this Quarterly
Report on Form 10-Q:
1. Exhibits required to be filed by Item 601 of Regulation S-K. (Where the
amount of securities authorized to be issued under any of Triton Energy
Limited's and any of its subsidiaries' long-term debt agreements does not exceed
10% of the Company's assets, pursuant to paragraph (b)(4) of Item 601 of
Regulation S-K, in lieu of filing such as exhibits, the Company hereby agrees to
furnish to the Commission upon request a copy of any agreement with respect to
such long-term debt.)
3.1 Memorandum of Association (previously filed as an exhibit to the Company's
Registration Statement on Form S-3 (No 333-08005) and incorporated herein by
reference)
3.2 Articles of Association (previously filed as an exhibit to the Company's
Registration Statement on Form S-3 (No 333-08005) and incorporated herein by
reference)
4.1 Specimen Share Certificate of Ordinary Shares, $.01 par value, of the Company
(previously filed as an exhibit to the Company's Registration Statement on Form 8-A
dated March 25, 1996, and incorporated herein by reference)
4.2 Rights Agreement dated as of March 25, 1996, between Triton and The Chase
Manhattan Bank, as Rights Agent, including, as Exhibit A thereto, Resolutions
establishing the Junior Preference Shares (previously filed as an exhibit to the
Company's Registration Statement on Form S-3 (No 333-08005) and incorporated herein
by reference)
4.3 Resolutions Authorizing the Company's 5% Convertible Preference Shares (previously
filed as an exhibit to the Company's and Triton Energy Corporation's Registration
Statement on Form S-4 (No. 333-923) and incorporated herein by reference)
4.4 Amendment No. 1 to Rights Agreement dated as of August 2, 1996, between Triton
Energy Limited and The Chase Manhattan Bank, as Rights Agent (previously filed as an
exhibit to the Company's Registration Statement on Form 8-A/A (Amendment No. 1)
dated August 14, 1996, and incorporated herein by reference)
4.5 Amendment No. 2 to Rights Agreement dated as of August 30, 1998, between Triton
Energy Limited and The Chase Manhattan Bank, as Rights Agent (previously filed
as an exhibit to the Company's Registration Statement on Form 8-A/A (Amendment No.
2) dated October 2, 1998, and incorporated herein by reference)
4.6 Unanimous Written Consent of the Board of Directors authorizing a Series of
Preference Shares (previously filed as an exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1998, and
incorporated herein by reference.)
4.7 Amendment No. 3 to Rights Agreement dated as of January 5, 1999, between Triton
Energy Limited and The Chase Manhattan Bank, as Rights Agent (previously filed
as an exhibit to the Company's Registration Statement on Form 8-A/A (Amendment No.
3) dated January 31, 1999, and incorporated herein by reference)
10.1 Amended and Restated Retirement Income Plan (previously filed as an exhibit to
Triton Energy Corporation's Quarterly Report on Form 10-Q for the quarter ended
November 30, 1993, and incorporated by reference.)
10.2 Amended and Restated Supplemental Executive Retirement Income Plan. (previously
Filed as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year
Ended December 31, 1997, and incorporated herein by reference.)
10.3 1981 Employee Non-Qualified Stock Option Plan. (previously filed as an exhibit to
Triton Energy Corporation's Annual Report on Form 10-K for the fiscal year ended May
31, 1992 ,and incorporated herein by reference.)
10.4 Amendment No. 1 to the 1981 Employee Non-Qualified Stock Option Plan. (previously
filed as an exhibit to Triton Energy Corporation's Annual Report on Form 10-K for
the fiscal year ended May 31, 1989, and incorporated herein by reference.)
10.5 Amendment No. 2 to the 1981 Employee Non-Qualified Stock Option Plan. (previously
filed as an exhibit to Triton Energy Corporation's Annual Report on Form 10-K for the
fiscal year ended May 31, 1992, and incorporated herein by reference.)
10.6 Amendment No. 3 to the 1981 Employee Non-Qualified Stock Option Plan. (previously
filed as an exhibit to Triton Energy Corporation's Quarterly Report on Form 10-Q for
the quarter ended November 30, 1993, and incorporated by reference.)
10.7 1985 Stock Option Plan. (previously filed as an exhibit to Triton Energy Corporation's
Annual Report on Form 10-K for the fiscal year ended May 31, 1990, and incorporated
herein by reference.)
10.8 Amendment No. 1 to the 1985 Stock Option Plan. (previously filed as an exhibit to
Triton Energy Corporation's Annual Report on Form 10-K for the fiscal year ended
May 31, 1992, and incorporated herein by reference.)
10.9 Amendment No. 2 to the 1985 Stock Option Plan. (previously filed as an exhibit to
Triton Energy Corporation's Quarterly Report on Form 10-Q for the quarter ended
November 30, 1993, and incorporated by reference.)
10.10 1989 Stock Option Plan. (previously filed as an exhibit to Triton Energy Corporation's
Quarterly Report on Form 10-Q for the quarter ended November 30, 1988, and
incorporated herein by reference.) (1)
10.11 Amendment No. 1 to 1989 Stock Option Plan. (previously filed as an exhibit to
Triton Energy Corporation's Annual Report on Form 10-K for the fiscal year ended
May 31, 1992, and incorporated herein by reference.) (1)
10.12 Amendment No. 2 to 1989 Stock Option Plan. (previously filed as an exhibit to
Triton Energy Corporation's Quarterly Report on Form 10-Q for the quarter ended
November 30, 1993, and incorporated herein by reference.) (1)
10.13 Second Amended and Restated 1992 Stock Option Plan.(previously filed as an
exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1996, and incorporated herein by reference.) (1)
10.14* Form of Amended and Restated Employment Agreement with Triton Energy Limited
and certain officers, including Messrs. Dunlevy, Garrett and Maxted, as amended and
restated June 28, 2000.
10.15 Amended and Restated Employment Agreement among Triton Energy Limited, Triton
Exploration Services, Inc. and Robert B. Holland, III. (previously filed as an exhibit
to the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998, and incorporated herein by reference.)
10.16 Form of Amended and Restated Employment Agreement among Triton Energy Limited,
Triton Exploration Services, Inc. and each of Peter Rugg and Al E. Turner. (previously
filed as an exhibit to the Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1998, and incorporated herein by reference.)
10.17 Letter Agreement among Triton Energy Limited, Triton Exploration Services, Inc.
and Robert B. Holland, III dated December 17, 1998. (previously filed as an exhibit to
the Company's Annual Report on Form 10-K for the year ended December 31, 1998 and
incorporated herein by reference.)
10.18 Letter Agreement among Triton Energy Limited, Triton Exploration Services, Inc.
and Peter Rugg dated December 10, 1998. (previously filed as an exhibit to the
Company's Annual Report on Form 10-K for the year ended December 31, 1998 and
incorporated herein by reference.)
10.19 Form of Bonus Agreement between Triton Exploration Services, Inc. and each of
Al E. Turner, Robert B. Holland, III, and Peter Rugg dated July 15, 1998. (previously
filed as an exhibit to the Annual Report on Form 10-K for the year ended December 31,
1998 and incorporated herein by reference.)
10.20 Amended and Restated 1985 Restricted Stock Plan. (previously filed as an exhibit
to Triton Energy Corporation's Quarterly Report on Form 10-Q for the quarter ended
November 30, 1993, and incorporated herein by reference.)
10.21 First Amendment to Amended and Restated 1985 Restricted Stock Plan. (previously
filed as an exhibit to Triton Energy Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995, and incorporated herein by reference.)
10.22 Second Amendment to Amended and Restated 1985 Restricted Stock Plan. (previously
filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996, and incorporated herein by reference.)
10.23 Executive Life Insurance Plan. (previously filed as an exhibit to Triton Energy
Corporation's Annual Report on Form 10-K for the fiscal year ended May 31, 1991,
and incorporated herein by reference.)
10.24 Long Term Disability Income Plan. (previously filed as an exhibit to Triton Energy
Corporation's Annual Report on Form 10-K for the fiscal year ended May 31, 1991,
and incorporated herein by reference.)
10.25 Amended and Restated Retirement Plan for Directors. (previously filed as an exhibit
to Triton Energy Corporation's Annual Report on Form 10-K for the fiscal year ended
May 31, 1990, and incorporated herein by reference.)
10.26 Contract for Exploration and Exploitation for Santiago de Atalayas I with an effective
date of July 1, 1982, between Triton Colombia, Inc., and Empresa Colombiana
De Petroleos. (previously filed as an exhibit to Triton Energy Corporation's Annual
Report on Form 10-K for the fiscal year ended May 31, 1990, and incorporated
herein by reference.)
10.27 Contract for Exploration and Exploitation for Tauramena with an effective date of July
4, 1988, between Triton Colombia, Inc., and Empresa Colombiana De Petroleos.
(previously filed as an exhibit to Triton Energy Corporation's Annual Report on Form
10-K for the fiscal year ended May 31, 1990, and incorporated herein by reference.)
10.28 Summary of Assignment legalized by Public Instrument No. 1255 dated September 15,
1987 (Assignment is in Spanish language). (previously filed as an exhibit to Triton
Energy Corporation's Annual Report on Form 10-K for the fiscal year ended May 31,
1993, and incorporated herein by reference.)
10.29 Summary of Assignment legalized by Public Instrument No. 1602 dated June 11, 1990
(Assignment is in Spanish language). (previously filed as an exhibit to Triton
Energy Corporation's Annual Report on Form 10-K for the fiscal year ended May 31,
1993, and incorporated herein by reference.)
10.30 Summary of Assignment legalized by Public Instrument No. 2586 dated September 9,
1992 (Assignment is in Spanish language). (previously filed as an exhibit to Triton
Energy Corporation's Annual Report on Form 10-K for the fiscal year ended May 31,
1993, and incorporated herein by reference.)
10.31* Triton Exploration Services, Inc. 401(K) Savings Plan, as amended and restated
June 1, 2000.
10.32 Contract between Malaysia-Thailand Joint Authority and Petronas Carigali
SDN.BHD. and Triton Oil Company of Thailand relating to Exploration and Production
of Petroleum for Malaysia-Thailand Joint Development Area Block A-18. (previously
filed as an exhibit to Triton Energy Corporation's Current Report on Form 8-K dated
April 21, 1994, and incorporated herein by reference.)
10.33 Credit Agreement among Triton Colombia, Inc., Triton Energy Corporation,
NationsBank, N.A. (Carolinas) and Export-Import Bank of the United States
(previously filed as an exhibit to Triton Energy Corporation's Annual Report on Form
10-K for the fiscal year ended December 31, 1995, and incorporated herein by
reference.)
10.34 Amendment No. 1 to Credit Agreement among Triton Colombia, Inc., Triton Energy
Corporation, NationsBank, N.A. (Carolinas) and Export-Import Bank of the United
States. (previously filed as an exhibit to Triton Energy Corporation's Annual Report
on Form 10-K for the fiscal year ended December 31, 1995, and incorporated herein
by reference.)
10.35 Amendment No. 2 to Credit Agreement among Triton Colombia, Inc., Triton Energy
Corporation, NationsBank, N.A. (Carolinas) and Export-Import Bank of the United
States. (previously filed as an exhibit to the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 1996, and incorporated herein by reference.)
10.36 Amendment No. 3 to Credit Agreement among Triton Colombia, Inc., Triton Energy
Corporation, NationsBank, N.A. (Carolinas) and Export-Import Bank of the United
States. (previously filed as an exhibit to the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 1998, and incorporated herein by reference.)
10.37 Form of Indemnity Agreement entered into with each director and officer of the
Company. (previously filed as an exhibit to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1998, and incorporated herein by reference)
10.38 Description of Performance Goals for Executive Bonus Compensation. (previously
filed as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, and incorporated herein by reference.)
10.39 Amended and Restated 1997 Share Compensation Plan. (previously filed as an
exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, and incorporated herein by reference.)
10.40 First Amendment to Amended and Restated Retirement Plan for Directors. (previously
filed as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997, and incorporated herein by reference.)
10.41 First Amendment to Second Amended and Restated 1992 Stock Option Plan. (previously
filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997, and incorporated herein by reference.)
10.42 Second Amendment to Second Amended and Restated 1992 Stock Option Plan.
(previously filed as an exhibit to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1997, and incorporated herein by reference)
10.43 Amended and Restated Indenture dated July 25, 1997, between Triton Energy
Limited and The Chase Manhattan Bank. (previously filed as an exhibit to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1997, and
incorporated herein by reference.)
10.44 Amended and Restated First Supplemental Indenture dated July 25, 1997,
between Triton Energy Limited and The Chase Manhattan Bank relating
to the 8 3/4% Senior Notes due 2002. (previously filed as an exhibit to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1997, and
incorporated herein by reference.)
10.45 Amended and Restated Second Supplemental Indenture dated July 25, 1997,
between Triton Energy Limited and The Chase Manhattan Bank relating
to the 9 1/4% Senior Notes due 2005. (previously filed as an exhibit to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1997, and
incorporated herein by reference.)
10.46 Share Purchase Agreement dated July 17, 1998, among Triton Energy Limited, Triton
Asia Holdings, Inc., Atlantic Richfield Company and BP JDA Limited.
(previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998, and incorporated herein by reference)
10.47 Shareholders Agreement dated August 3, 1998, among Triton Energy Limited, Triton
Asia Holdings, Inc., Atlantic Richfield Company, and BP JDA Limited.
(previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1998, and incorporated herein by reference)
10.48 Stock Purchase Agreement dated as of August 31, 1998, between Triton Energy
Limited and HM4 Triton, L.P. (previously filed as an exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1998, and
incorporated herein by reference)
10.49 Shareholders Agreement dated as of September 30, 1998, between Triton Energy
Limited and HM4 Triton, L.P. (previously filed as an exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1998, and
incorporated herein by reference)
10.50 Financial Advisory Agreement dated as of September 30, 1998, between Triton Energy
Limited and Hicks, Muse & Co. Partners, L.P. (previously filed as an exhibit to the
Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1998,
and incorporated herein by reference)
10.51 Monitoring and Oversight Agreement dated as of September 30, 1998, between Triton
Energy Limited and Hicks, Muse & Co. Partners, L.P. (previously filed as an exhibit to
the Company's Quarterly Report on Form 10-Q for the quarter ended September 30,
1998, and incorporated herein by reference)
10.52 Severance Agreement dated April 9, 1999, made and entered into by and among Triton
Energy Limited, Triton Exploration Services, Inc. and Peter Rugg. (previously filed as
an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999, and incorporated herein by reference)
10.53 Consulting and Non-Compete Agreement dated April 9, 1999, made and entered into
by and between Triton Exploration Services, Inc. and Peter Rugg. (previously filed as
an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999, and incorporated herein by reference)
10.54 Third Amendment to Amended and Restated 1985 Restricted Stock Plan (previously
filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1999, and incorporated herein by reference)
10.55 Amendment to the Triton Exploration Services, Inc. Supplemental Executive
Retirement Plan. (previously filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1999, and incorporated herein by
reference)
10.56 Third Amendment to the Second Amended and Restated 1992 Stock Option Plan
(previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1999, and incorporated herein by reference)
10.57 First Amendment to the Amended and Restated 1997 Share Compensation Plan
(previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1999, and incorporated herein by reference)
10.58 Amendment dated May 11, 1999, to Amended and Restated Employment Agreement
dated July 15, 1998 among Triton Exploration Services, Inc., Triton Energy Limited
and A.E. Turner, III.(previously filed as an exhibit to the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1999, and incorporated herein by
reference)
10.59 Second Amendment to Retirement Plan for Directors. (previously filed as an exhibit to
the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999,
and incorporated herein by reference)
10.60 Amendment No. 1 to Shareholders Agreement between Triton Energy Limited
and HM4 Triton, L.P. (previously filed as an exhibit to the Company's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1999, and incorporated herein by
reference)
10.61 Amendment No. 4 to the 1981 Employee Nonqualified Stock Option Plan. (previously
filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999, and incorporated herein by reference)
10.62 Amendment No. 3 to the 1985 Stock Option Plan. (previously filed as an exhibit to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999, and
incorporated herein by reference)
10.63 Amendment No. 3 to the 1989 Stock Option Plan. (previously filed as an exhibit to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1999, and
incorporated herein by reference)
10.64 Supplemental Letter Agreement dated October 28, 1999, among Triton Energy
Limited, Triton Asia Holdings, Inc., Atlantic Richfield Company, and BP JDA
Limited (previously filed as an exhibit to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1999, and incorporated herein by reference)
10.65 Gas Sales Agreement dated October 30, 1999 among the Malaysia-Thailand Joint
Authority, and Petronas Carigali (JDA) Sdn Bhd, Triton Oil Company of Thailand,
Triton Oil Company of Thailand (JDA) Limited, as Sellers, and with Petroleum
Authority of Thailand and Petroliam Nasional Berhad, as Buyers. (previously filed
as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1999, and incorporated herein by reference)
10.66 Form of Stock Option Agreement between Triton Energy Limited and its
non-employee directors. (previously filed as an exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1999, and
incorporated herein by reference)
10.67 Form of Stock Option Agreement between Triton Energy Limited and its employees,
including its executive officers. (previously filed as an exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1999, and
incorporated herein by reference)
10.68 Amendment to Stock Options dated as of January 3, 2000, between Triton Energy
Limited and A.E. Turner. (previously filed as an exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1999, and
incorporated herein by reference)
10.69 Form of Amendment to Stock Options dated as of January 3, 2000, between Triton
Energy Limited and its non-employee directors. (previously filed as an exhibit to
the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1999, and incorporated herein by reference)
10.70 Production Sharing Contract between the Republic of Equatorial Guinea
and Triton Equatorial Guinea, Inc. for Block F. (previously filed as an exhibit to the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1999, and incorporated herein by reference)
10.71 Production Sharing Contract between the Republic of Equatorial Guinea and Triton
Equatorial Guinea, Inc. for Block G. (previously filed as an exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1999, and
incorporated herein by reference)
10.72 Supplementary Contract (No. 1) to the Production Sharing Contract for Block A-18
dated 21 April 1994 between Malaysia-Thailand Joint Authority and Petronas
Carigali (JDA) SDN.BHD., Triton Oil Company of Thailand and Triton Oil Company
of Thailand (JDA) Limited. (previously filed as an exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1999, and
incorporated herein by reference.)
10.73 Supplementary Contract (No. 2) to the Production Sharing Contract for Block A-18
dated 21 April 1994 between Malaysia-Thailand Joint Authority and Petronas Carigali
(JDA) SDN.BHD., Triton Oil Company of Thailand and Triton Oil Company of
Thailand (JDA) Limited. (previously filed as an exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1999, and
incorporated herein by reference.)
10.74 Credit Agreement dated as of February 29, 2000, among Triton Energy Limited,
the Lenders party thereto and The Chase Manhattan bank, as Administrative Agent
(previously filed as an exhibit to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1999, and incorporated herein by
reference.)
10.75 Share Purchase Agreement dated as of May 8, 2000 between Triton International
Petroleum, Inc. and The Strategic Transaction Company. (previously filed as an
exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2000, and incorporated herein by reference.)
10.76 Amendment to the Retirement Income Plan dated August 1, 1998 (previously filed as an
exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998, and incorporated herein by reference.)
10.77 Amendment to Amended and Restated Retirement Income Plan dated December 31, 1996
(previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1998, and incorporated herein by reference.)
10.78 Amendment to Triton Exploration Services, Inc. Retirement Income Plan. (previously
filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1999, and incorporated herein by reference.)
12.1* Computation of Ratio of Earnings to Fixed Charges.
12.2* Computation of Ratio of Earnings to Combined Fixed Charges and Preference
Dividends.
27.1* Financial Data Schedule.
99.1 Rio Chitamena Association Contract. (previously filed as an exhibit to Triton Energy
Corporation's Current Report on Form 8-K/A dated July 15, 1994, and incorporated
herein by reference.)
99.2 Rio Chitamena Purchase and Sale Agreement. (previously filed as an exhibit to Triton
Energy Corporation's Current Report on Form 8-K/A dated July 15, 1994, and
incorporated herein by reference.)
99.3 Integral Plan - Cusiana Oil Structure. (previously filed as an exhibit to Triton Energy
Corporation's Current Report on Form 8-K/A dated July 15, 1994, and incorporated
herein by reference.)
99.4 Letter Agreements with co-investor in Colombia. (previously filed as an exhibit to
Triton Energy Corporation's Current Report on Form 8-K/A dated July 15, 1994, and
incorporated herein by reference.)
99.5 Amended and Restated Oleoducto Central S.A. Agreement dated as of March 31,
1995. (previously filed as an exhibit to Triton Energy Corporation's Quarterly Report
on Form 10-Q for the quarter ended June 30, 1995, and incorporated herein by
reference.)
- ---------------------------------
* Filed herewith
(b) Reports on Form 8-K
Form 8-K filed on May 3, 2000 to announce results for the quarter
ended March 31, 2000, and to report certain information
regarding litigation.
Form 8-K filed on June 14, 2000 to announce the results of the
Ceiba-3 well off-shore - Equatorial Guinea and to update
production information for the Cusiana and Cupiagua fields in
Colombia.
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.
TRITON ENERGY LIMITED
By: /s/W. Greg Dunlevy
-------------------------------
W. Greg Dunlevy
Vice President, Finance
Date: August 10, 2000