Item 1. Business
General
Unimar Company (the Company) was organized as a general partnership in 1984 under the Texas Uniform Partnership Act. The partners are LASMO (Ustar), Inc. (Ultrastar), a Delaware corporation and an indirect, wholly owned subsidiary of LASMO plc (LASMO), a public limited company organized under the laws of England, and Unistar, Inc. (Unistar), a Delaware corporation and a direct subsidiary of Union Texas Petroleum Holdings, Inc. (UTPH), a Delaware corporation. UTPH is approximately 38 percent owned by two partnerships controlled by an affiliate of Kohlberg Kravis Roberts & Co. (KKR) with the remaining outstanding common stock publicly held.
The Company's sole business is its ownership of ENSTAR Corporation (ENSTAR) which, through its wholly-owned subsidiaries, Virginia International Company (INTERNATIONAL) and Virginia Indonesia Company (VICO), has a 23.125 percent working interest in, and is the operator of, a joint venture (the Joint Venture) for the exploration, development and production of oil and natural gas (gas) in East Kalimantan, Indonesia, under a production sharing contract (Production Sharing Contract or PSC) with Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina), the state petroleum enterprise of the Republic of Indonesia. The majority of the revenue derived from the Joint Venture results from the sale of liquefied natural gas (LNG). Currently, the LNG is sold principally to utility and industrial companies in Japan, Taiwan and Korea. See "The Joint Venture" below.
The principal executive offices of the Company are at 1221 McKinney, Suite 600, Houston, Texas 77010 and its telephone number is (713) 654-8550. A Management Board consisting of six members, three appointed by each partner, exercises management, budgeting and financial control of the Company. As of December 31, 1993, VICO, in its capacity as the Joint Venture operator, had approximately 2,130 employees in the United States and Indonesia. The Company presently does not have any other employees. All aspects of the Company's business that are not associated with the management of the Joint Venture, such as operations, legal, accounting, tax and other management functions, are supplied by employees of the partners in accordance with management agreements.
The Company can give no assurance as to the future trend of its business and earnings, or as to future events and developments that could affect the Company in particular or the oil industry in general. These include such matters as environmental quality control standards, new discoveries of hydrocarbons, and the demand for petroleum products. Furthermore, the Company's business could be profoundly affected by future events including price changes or controls, payment delays, increased expenditures, legislation and regulations affecting the Company's business, expropriation of assets, renegotiation of contracts with foreign governments, political instability, currency exchange and repatriation losses, taxes, litigation, the competitive environment, and international economic and political developments including actions of members of the Organization of Petroleum Exporting Countries (OPEC). See Item 7 - Management Discussion and Analysis of Financial Condition and Results of Operations.
Description of the Company's Indonesian Participating Units
(a) Market information. The Company's Indonesian Participating Units (IPUs) are listed for trading on the American Stock Exchange under the symbol "UMR." The following table shows the reported high and low sales prices of the IPUs on a quarterly basis:
INDONESIAN PARTICIPATING UNITS' PRICE RANGE
First Qtr. Second Qtr. Third Qtr. Fourth Qtr. High 9-1/8 10-1/4 9-3/4 9-1/2 Low 6-7/8 8-1/4 8-5/8 8-1/4
High 8 6-1/2 7 7-5/8 Low 5 5-1/4 5-3/4 6-3/8
Source of prices: American Stock Exchange
(b) Holders. As of March 1, 1994, 10,778,590 IPUs were outstanding and held by approximately 4,301 holders of record.
(c) Payments per Indonesian Participating Unit.
Period Payment Date Payment
First Quarter - 1992 June 1, 1992 0.35 Second Quarter - 1992 August 31, 1992 0.37 Third Quarter - 1992 November 30, 1992 0.54 Fourth Quarter - 1992 March 1, 1993 0.44 First Quarter - 1993 June 1, 1993 0.46 Second Quarter - 1993 August 30, 1993 0.28 Third Quarter - 1993 November 29, 1993 0.45 Fourth Quarter - 1993 March 1, 1994 0.38
Each IPU entitles the holder thereof to receive until September 25, 1999, a payment (Participation Payment) for any quarterly period equal to the product of (i) a fraction, the numerator of which is 1 and the denominator of which is equal to the number of IPUs outstanding on the last business day of such quarterly period, multiplied by (ii) the amount by which cumulative Net Cash Flow (as defined below) through the end of such quarterly period exceeds the aggregate amount of all preceding Participation Payments in respect of all IPUs. If Net Cash Flow is zero or negative for any quarterly period, no Participation Payment for that quarter will be made.
The amount of Net Cash Flow for any quarterly period is equal to the product of (i) a fraction, the numerator of which is equal to the number of IPUs outstanding on the last business day of such quarterly period, and the denominator of which is 14,077,747, multiplied by (ii) 32 percent of (a) all cash actually received in the United States by INTERNATIONAL and VICO (for purposes hereof, the Special Subsidiaries) during such quarterly period from their aggregate 23.125 percent interest in the Joint Venture (or actually received by them outside the United States if they voluntarily elect not to repatriate such cash) minus (b) an amount equal to the sum of (A) the aggregate amount of all accruals or expenditures made by the Special Subsidiaries during such quarterly period as a result of their interest in the Joint Venture, (B) foreign or domestic taxes paid by the Special Subsidiaries, (C) any award, judgment or settlement and related legal fees incurred by the Special Subsidiaries, (D) certain operating expenses incurred by the Special Subsidiaries, and (E) the amortization of capitalized advances made by the Special Subsidiaries for certain major capital expenditures, together with interest thereon.
Participation Payments for any quarterly period will be paid 60 days in arrears to holders of record on the date 45 days after the last day of the period. Participation Payments of less than $0.01 per IPU for any quarterly period will be accumulated and paid when Participation Payments in any succeeding quarter, together with previously unpaid amounts, exceed $0.01 per IPU.
Units of Measure Restatement
In order to better conform the Company's disclosures to those of its partners, the definition of a Net Equivalent Cargo and MCF have been revised. All relevant disclosures relating to prior years have been restated to conform to these two new definitions.
Net Equivalent Cargo (NEC)
In prior years one NEC equaled the quantity of LNG delivered for the Joint Venture's 97.9 percent interest in a 1973 Sales Contract shipment or any average of 2,873 BBTUs of gas. The definition of a NEC has now been changed to the quantity of LNG delivered in a 1973 Sales Contract shipment or an average of 2,942 BBTUs.
MMCF of Gas
In prior years an MMCF of gas was referred to as "wet gas" which contained residual amounts of condensate. This definition has been changed to "dry gas" after any residual condensate has been removed. As an example, approximately 3.1 billion cubic feet of wet gas are required to produce 2.9 trillion BTUs of LNG; whereas, approximately 3.0 billion cubic feet of dry gas are required to produce 2.9 trillion BTUs of LNG.
BUSINESS The Joint Venture
The Joint Venture participants are INTERNATIONAL (15.625%), VICO (7.5%), LASMO Sanga Sanga Limited (an indirect subsidiary of LASMO formerly called Ultramar Indonesia Limited) (26.25%), Union Texas East Kalimantan Limited (an indirect subsidiary of UTPH) (26.25%), and Universe Gas & Oil Company, Inc. (a subsidiary of a consortium led by Japan Petroleum Exploration Co., Ltd.) (4.375 %). In addition, Opicoil Houston, Inc. (an affiliate of the Chinese Petroleum Corporation) holds a 16.67 percent equity interest and a 20 percent voting interest, with the remaining 3.33 percent non-voting equity interest held by assignees of Opicoil Houston, Inc. VICO in its capacity as the Joint Venture operator conducts exploration and development activities within the PSC area. The cost of such activities is funded by the Joint Venture participants. The vote of participants holding 66-2/3 percent of the total ownership is generally required for approval of significant matters pertaining to the Joint Venture.
Terms of Production Sharing Contract
Under a PSC with Pertamina that was amended and extended in 1990 until August 7, 2018, the Joint Venture is authorized to explore for, develop, and produce petroleum reserves in an approximate 1.4 million acre area in East Kalimantan. In accordance with the requirements of the PSC, during 1991, the Joint Venture selectively relinquished approximately 10 percent of the PSC area. The Joint Venture must relinquish 10 percent of the PSC area by April 23, 1994; 10 percent by August 7, 1998; 10 percent by December 31, 2000; 15 percent by December 31, 2002 and 15 percent by December 31, 2004. However, the Joint Venture is not required to relinquish any of the PSC area in which oil or gas is held for production. Additionally, pursuant to the terms of the PSC, the Joint Venture, having produced 185 million barrels of oil, paid Pertamina a $5 million non-cost recoverable bonus in March 1993.
Under the PSC, the Joint Venture participants are entitled to recover cumulative operating and certain capital costs out of the crude oil, condensate and gas produced each year, and to receive a share of the remaining crude oil and condensate production and a share of the remaining revenues from the sale of gas on an after-Indonesian tax basis. The method of recovery of capital costs is a system of depreciation and amortization that is similar to U.S. tax accounting methods. The share of revenues from the sale of gas after cost recovery through August 7, 1998 will remain at 35 percent to the Joint Venture after Indonesian income taxes and 65 percent to Pertamina. The split after August 7, 1998, will be 25 percent to the Joint Venture after Indonesian income taxes and 75 percent to Pertamina for gas sales under the 1973 and 1981 LNG Sales Contracts, Korean carryover quantities and the seven 1986 liquefied petroleum gas (LPG) Sales Contracts (and any extensions thereto) to the extent that the gas to fulfill these contracts is committed from the Badak or Nilam fields; after August 7, 1998, all other LNG sales contract revenues will be split 30 percent to the Joint Venture after Indonesian income taxes and 70 percent to Pertamina. Based on current and projected oil production, the revenue split from oil sales after cost recovery through August 7, 2018 will remain at 15 percent to the Joint Venture after Indonesian income taxes and 85 percent to Pertamina. These revenue splits are based on Indonesian income tax rates of 56 percent through August 7, 1998 and 48 percent thereafter.
In addition, the Joint Venture is required to sell out of its share of production 8.5 percent (7.2 percent after August 7, 1998) of the total oil and gas condensate production from the contract area for Indonesian domestic consumption. The sales price for the domestic market consumption is $0.20 per barrel with respect to fields commencing production prior to February 23, 1989. For fields commencing production after that date, domestic market consumption is priced at 10 percent of the weighted average price of crude oil sold from such fields. However, for the first sixty consecutive months of production from new fields, domestic market consumption is priced at the official Indonesian Crude Price (ICP). The participants' remaining oil and condensate production is generally sold in world markets.
The Joint Venture has no ownership interest in the oil and gas reserves. The Joint Venture has long-term supply agreements with Pertamina for the supply of gas and petroleum gas to be liquefied at a liquefaction plant owned by Pertamina at Bontang Bay (the LNG Plant) and sold to certain buyers pursuant to sales contracts. The Joint Venture, other participating production sharing contractors and Pertamina together market the LNG and the LPG produced at the LNG Plant and LPG facilities and, as to the amounts allocable to the PSC, the Joint Venture and Pertamina divide the net proceeds in accordance with the percentages set out above.
Payment for LNG and LPG is made in U. S. dollars to a U. S. bank as trustee for Pertamina, the Joint Venture, other participating production sharing contractors and lenders that have provided funds to build the LNG Plant and the LPG facilities. The LNG Plant's processing costs, principal and interest payable on borrowings from such lenders, transportation costs, and certain other miscellaneous costs are deducted from the gross LNG and LPG sales proceeds. The remaining amount represents the net proceeds for gas delivered to the LNG Plant and is divided among Pertamina, the Joint Venture, and the other production sharing contractors in accordance with the terms of their respective agreements.
Exploration and Development
From inception in 1972 up to and including December 31, 1993, the following wells were drilled in the East Kalimantan contract area:
Total Completed Field Wells Productive Dry Suspended Location Drilled Wells Holes Wells
Badak 184 174 7 3 Nilam 154 154 - - Semberah 53 49 4 - Mutiara 44 37 6 1 Pamaguan 32 26 6 - Wailawi 6 6 - - Other 44 8 30 6
Totals 517 454 53 10
Two significant fields, Badak and Nilam, have been discovered in the East Kalimantan area. The Badak field is in the northeast portion of the East Kalimantan contract area, and the Nilam field is located immediately south of the Badak field. Total Indonesie and Indonesia Petroleum, Ltd. (the Total Group), who are not parties to the Joint Venture but have interests in the Nilam and Badak fields, are parties to unitization agreements with the Joint Venture in both fields. All gas and condensate from the Badak and Nilam fields and all oil from the Nilam field, as well as all allowable costs incurred in connection therewith, are deemed attributable to the Joint Venture and the Total Group in the ratio of their respective participating interests under the Badak and Nilam unitization agreements. VICO acts as operator for the Joint Venture and the Total Group in both fields. See "Business - The Joint Venture." The Joint Venture is also producing from four additional fields in the East Kalimantan area: Pamaguan, Mutiara, Semberah and Wailawi.
The tables below summarize completed exploratory and development drilling from 1991 through 1993 for the East Kalimantan contract area.
EXPLORATORY DRILLING
Wells Dry Year Drilled Discoveries Holes
1991 2 1 1 1992 2 0 2 1993 3 0 3
Totals 7 1 6
DEVELOPMENT OR FIELD EXTENSION DRILLING
Completed Wells For For For Dual Dry Year Drilled Gas Oil Oil & Gas Holes
1991 37 30 3 4 - 1992 31 24 5 2 - 1993 31 25 1 3 2
Totals 99 79 9 9 2
Of 454 completed productive wells in the East Kalimantan contract area, approximately 250 contain more than one completion in the same bore hole.
Six wells were in progress as of December 31, 1993. This includes wells that were drilled but not completed at the end of 1993. None of the suspended or "in-progress" wells are included in the tables above.
The Company's share of the costs of the above wells ranged from 18.53 percent to 23.125 percent.
The following table sets forth total gas liquefied and sold as LNG, the Company's net share of such production (calculated on a million cubic feet equivalency basis as described in Note b below), average sales prices (excluding transportation costs) and production (lifting) costs of such production for the years 1991 through 1993.
Years ended December 31, (a) 1993 1992 1991 (Restated) Gas Production for LNG (MMCF) (b) 637,847 621,600 579,001
Company's Net Share (MMCF equivalency) (c) 80,873 77,264 78,598
Average Sales Price per MCF (d) $2.75 $2.92 $3.07
Average Production (Lifting) Cost per MCF $0.13 $0.14 $0.15
(a) All amounts appearing in this table are for dry gas. The 1992 and 1991 amounts were previously reported on a wet gas basis and have been restated as dry gas.
(b) Represents the volumes of LNG delivered and sold to purchasers which is measured by its British Thermal Unit (BTU) content and, for purposes of this table, has been converted to MMCF equivalents based on a ratio of approximately 3.0 billion cubic feet (BCF) of gas required at the plant to produce 2.9 trillion BTUs of LNG. The Gas Production for LNG includes production attributable to UNOCAL Indonesia Ltd., the Total Group and Pertamina. The term "MMCF" refers to 1,000,000 cubic feet of gas measured at 60 degrees Fahrenheit and 14.7 pounds per square inch of pressure.
(c) The net share figures shown above have been calculated by dividing the Company's total LNG revenues for each year by the average price per MCF (in the form of LNG) received by Pertamina for the sale of LNG during such year. The result represents the MCF equivalent of the Company's LNG revenues.
(d) The sales price is based on the average sales price (excluding transportation) per MMBTU of LNG received by Pertamina. The term "MMBTU" refers to 1,000,000 British Thermal Units. The sales price per MMBTU has been converted to a price per MCF based on the conversion ratio referred to in note (b) above. The term "MCF" refers to 1,000 cubic feet of gas measured at 60 degrees Fahrenheit and 14.7 pounds per square inch of pressure.
The Company's production costs are small in relation to its revenues because the Joint Venture's revenues under the LNG contracts are net of costs associated with transporting and converting the gas to LNG and shipping the LNG to the purchasers. The costs, which are considered to be production costs, are those costs incurred to operate and maintain wells and related equipment and facilities.
During 1993, the Company's share of the Joint Venture's expenditures was approximately $59 million, including $5 million of exploration expenditures and $37 million of development expenditures. In 1994, the Company's share of the Joint Venture's expenditures is expected to total $56 million, including $3 million of exploration expenditures and $35 million of development expenditures. The 1994 budgeted expenditures primarily reflect continued development drilling required to maintain adequate gas deliverability.
Reserves
The Company files no reports which include estimates of oil or gas reserves with any federal agency other than the Securities and Exchange Commission.
The estimated proved reserves of gas and of oil and condensate as of December 31, 1990, 1991, 1992 and 1993 attributable to the Joint Venture's interest in the PSC in East Kalimantan were prepared by petroleum engineers employed by LASMO, an affiliate of Ultrastar. Gross proved field reserves are as follows:
Crude Oil and Condensate Gas Total Proved Reserves (000's barrels) (Dry MMCFs)
Dec. 31, 1990 (Gas restated) 149,194 7,294,804 Dec. 31, 1991 (Gas restated) 135,712 7,615,739 Dec. 31, 1992 (Gas restated) 146,055 7,436,171 Dec. 31, 1993 203,068 7,187,995*
* equivalent to approximately 6,966 trillion BTUs.
The Joint Venture, and thus the Company, has no ownership interest in oil and gas reserves but rather has the right to receive production and revenues from the sale of oil, condensate, gas, LNG and LPG in accordance with the PSC and other agreements.
The Company has revised its method of disclosing all proved and proved developed gas reserves from a wet gas basis to a dry gas basis. This change has been effected to conform to the reporting method used by the Company's partners. The Company's estimates of its net share of proved developed and undeveloped reserves, as of December 31 of each year since 1990, are included in the Supplemental Financial Information in Item 8.
LNG Plant
Gas produced from the Joint Venture's interest in the PSC reserves is liquefied at the LNG Plant, which is owned by Pertamina and operated on a cost-reimbursement basis by a corporation in which the Joint Venture owns a 20 percent interest. The LNG Plant currently consists of six processing units (trains) having a combined input capacity at year-end 1993 of approximately 2.6 billion cubic feet of gas per operating day and a production capacity of approximately 626,000 barrels or 99,500 cubic meters of LNG and 28,000 barrels of condensate per day. The five storage tanks at the LNG Plant have a total capacity of 3.2 million barrels of LNG. Gas is supplied to the plant through three pipelines (two 36 inch and one 42 inch) which are connected to the central gas facilities at the Badak field, 35 miles south of the LNG Plant.
The LNG Plant has been developed in four phases. The original facility, which consisted of two trains (Trains A and B) and a dock, was constructed with financing arranged by Pertamina with the Central Bank of the Republic of Indonesia, a consortium of Japanese banks and a corporation owned substantially by the Japanese LNG purchasers, and became fully operational in August 1977. Final payment on the loans was made in the first quarter of 1990.
Expansion of the LNG Plant from two to four trains (Trains C and D) was completed in 1983. Funding was arranged by Pertamina with Japan Indonesia LNG Co., Ltd. (JILCO). Final payment on this financing arrangement was made in the third quarter of 1993.
A fifth processing train (Train E) was completed in 1989 and supplies LNG required for the Taiwan LNG Sales Contract with the Chinese Petroleum Corporation (CPC), the state petroleum enterprise of the Republic of China (Taiwan). Project financing was arranged through a trustee borrowing with a consortium of Japanese banks and is supported by revenues from such sales contract, as well as in certain limited circumstances by portions of other revenue streams. The financing contains two tranches, with tranche A totalling $176.4 million at a fixed interest rate of 11.5 percent, and tranche B totalling $117.6 million at a floating interest rate initially of LIBOR plus 1 percent. The financing is repayable in graduated quarterly payments over ten years that began in the fourth quarter of 1990.
The sixth processing train (Train F) was completed in November 1993 and will supply the LNG required for the LNG sales contract signed in October 1990 with Osaka Gas, Tokyo Gas and Toho Gas (the Buyers) for the sale of 2,020 trillion BTUs over a twenty-year period commencing in 1994. In August 1991, Pertamina and an international consortium of commercial banks completed project financing of $750 million to fund the construction of Train F and related support facilities at an interest rate of LIBOR plus 1.25 percent. Financial support for the financing is limited to revenues from such sales contract. The financing is repayable over ten years in graduated quarterly payments commencing in December 1994. Only $699 million of the $750 million project financing will be required to complete the construction of Train F and its related support facilities.
As a result of the production performance of Train E, Pertamina had undertaken modifications to Trains A through D known as "debottlenecking." Trains C and D were modified in 1992 during regularly scheduled maintenance shutdowns. Likewise, Trains A and B were modified in 1993 during regularly scheduled maintenance shutdowns. Capacity tests on all four trains exceeded design rates such that Trains A through D are now capable of LNG production rates comparable to the most recently completed Train F, an increase of 14 percent, or 22 cargoes in total. The total cost of the Trains A through D debottlenecking project amounted to $79 million. These costs were funded through Package IV revenues (See description of Package IV beginning on page 15).
With the completion of Train F and the debottlenecking project, the expanded six train plant is expected to have the capacity to deliver 275 cargoes per year.
LPG Facilities and Second Dock
The LPG processing facilities at the LNG Plant were constructed concurrently with the fifth processing train. The LPG facilities were completed in 1988, at a cost of approximately $158 million. Financing was made available to Pertamina through a consortium of Japanese banks. A significant portion of the LPG sales proceeds is dedicated to the financing, which is repayable through 1999.
A second dock facility at the LNG Plant is used for both LNG and LPG deliveries. The portion of the second dock costs attributable to the LPG trade was financed through the same consortium of Japanese banks that financed the LPG processing facilities at the LNG Plant. Financing for the LNG portion of the second dock was provided by a trustee borrowing from Japanese banks.
The table below sets forth information regarding the status of the project financings incurred or arranged by Pertamina to construct the LNG Plant:
Original Principal/ Balance at Final Primary Payment December 31, Payment Source of Financing Amount 1993 Date Repayment (000's) (000's)
Trains A&B and 1st Loading Dock $771,500 $ - - 1973 LNG Sales Contract
Trains C & D 995,800 - - 1981 LNG Sales Contract
Train E 294,000 217,560 2000 Taiwan LNG Sales Contract Train F and Support Facilities (a) 750,000 633,000 2004 Train F LNG Sales Contract
Misc. Capital Projects 42,700 - - 1973 LNG Sales Contract (b) 2nd Loading Dock & Train E Support Facilities 135,000 48,600 1995 1973 LNG Sales Contract (b)
LPG Facilities 157,700 91,640 1999 LPG Sales Contract
(a) Total financing required is not expected to exceed $699 million.
(b) Debt service is allocated among all of the gas producers according to the quantity of gas delivered.
Marketing and Distribution of LNG
Certain information regarding deliveries of LNG from the LNG Plant is set forth below:
BTUs Average Number of LNG in Trillions Price Per Tanker Liftings (Approximate) MMBTU
1991 . . . . . 197 564 $3.16 1992 . . . . . 211 606 $3.00 1993 . . . . . 216 621 $2.82
As a result of variations in LNG tanker capacity among the various sales contracts, the measure of a net equivalent cargo has been established. One net equivalent cargo equates to the quantity of LNG delivered in a 1973 Sales Contract shipment or an average of 2,942 BBTUs.
The following table sets forth information regarding the LNG Plant share of the LNG Sales Contracts grouped together by the Joint Venture's participating percentages in the sales contracts (each such group being referred to as a "package"):
Commencing in 1994, LNG is primarily sold under five long- term sales contracts between Pertamina and buyers in Japan, Taiwan and Korea. These contracts are the 1973 LNG Sales Contract (Package I), the 1981 LNG Sales Contract (Package II), the Taiwan LNG Sales Contract (included in Package IIIB), the Train F LNG Sales Contract and the Korea II LNG Sales Contract (both included in Package IV). The gas processed by the LNG Plant is supplied from the Joint Venture's contract area as well as other fields in which the Joint Venture has no interest.
LNG sales contracts and amendments thereto are executed between Pertamina and the buyers for the sale and delivery of a fixed quantity of BTUs of LNG at a price that reflects an LNG element derived from a basket of Indonesian crude oil prices that is recalculated monthly. A transportation charge is added to the LNG element under all contracts except for Package II where the buyers bear the risk of loss and the transportation costs. In those instances when the seller bears the risk of loss during shipment, the cargoes are insured. The buyers also bear the risk of loss and transportation costs for cargoes under the Train F LNG Sales Contract (included in Package IV), which commenced deliveries in early 1994.
The LNG to be delivered under the sales contracts is supplied from the LNG Plant and from a separate facility at Arun in Sumatra (Arun Plant). The Joint Venture does not supply gas to the Arun Plant or have any interest in revenues from the sale of its product. The allocation of contract quantities between the LNG Plant and the Arun Plant is determined by Pertamina. Presently, all deliveries under the 1981 LNG Sales Contract (Package II), the Taiwan LNG Sales Contract (included in Package IIIB) and the Train F LNG Sales Contract (included in Package IV) are exclusively supplied by the LNG Plant.
The Joint Venture and other gas producers in this area have the opportunity to participate in each sales package. The Joint Venture's equity interest in a sales package is based on its share of gas reserves available for commitment to the package and represents the percentage of gross revenues attributable to the Joint Venture before deducting plant operating costs and debt service.
In January of 1990, certain of the buyers under the 1973 Sales Contract agreed to increase their purchased commitments during the years 1997 through 1999 by approximately 667 trillion BTUs. The LNG Plant will provide 67.1 percent of the additional quantities and the Arun Plant the remainder. The Joint Venture's participation percentage for these quantities was finalized at 27.2064 percent in early January of 1994 after agreement with Pertamina and the East Kalimantan producers.
In October of 1990, Pertamina signed an LNG sales contract with Osaka Gas, Tokyo Gas, and Toho Gas (Train F LNG Sales Contract) for the sale of at least 2,020 trillion BTUs over a twenty-year period commencing in January 1994.
In May of 1991, Pertamina signed an LNG sales contract with Korea Gas Corporation for the sale of at least 2,044 trillion BTUs over a twenty-year period commencing in July 1994, at a price similar to the LNG element of the 1973 LNG Sales Contract. The LNG Plant will provide 50 percent and the Arun Plant 50 percent of the LNG requirements for the contract. In August of 1991, Pertamina signed a contract with Tokyo Gas for delivery of six cargoes from the LNG Plant over two years commencing in 1992. Three of the six cargoes were delivered in 1992 and the remaining three were delivered in 1993. The contract price is similar to the 1973 LNG Sales Contract price. The Joint Venture's participation percentage for these contracts was finalized at 27.2064 percent in early January of 1994 after agreement with Pertamina and the East Kalimantan producers.
In October and November of 1991, Pertamina signed agreements with Osaka Gas and Toho Gas to increase deliveries in 1992 and 1993 by 69 cargoes, of which 51 cargoes would be shipped from the LNG Plant. Of the cargoes to be supplied by the LNG Plant, 25 were shipped in 1992 and the remaining 26 were shipped in 1993. These contracts were split between Package III and Package IV sharing percentages.
In December of 1991, Pertamina entered into an LNG sales contract with several Japanese buyers (the Medium City Gas Companies) for the sale of 358 trillion BTUs over a twenty-year period commencing in 1996. The LNG Plant will provide 50 percent of the LNG requirements for the contract. The Joint Venture's participation percentage for this contract was finalized at 27.2064 percent in early January of 1994 after agreement with Pertamina and the East Kalimantan producers.
As a result of the sales agreements entered into by Pertamina and expected spot sales, the Company anticipates that the Joint Venture will ship approximately 135 net equivalent cargoes in 1994.
Other Gas Sales - The Joint Venture is also obligated to supply approximately 74 MMCF per day of gas to three local fertilizer plants at a price of $1.00 per MMBTU subject to a pipeline tariff. In addition, the Joint Venture is required to supply approximately 5 MMCF per day of gas to the Balikpapan refinery at a price of $1.49 per MMBTU.
Marketing and Distribution of LPG
Pertamina has individual sales contracts with seven Japanese utility companies for the sale and delivery of 1,950,000 metric tons per year of LPG through the year 1998, of which 315,000 metric tons, subject to Pertamina's right to increase or decrease such amount, will be produced by the LPG facilities at the LNG Plant. In 1993, 23 cargoes, including spot sales, totaling 453,000 metric tons were shipped to Japan. The first 285,000 metric tons of LPG sold under the contract were sold at the weighted average price for all LPG imported into Japan, except Indonesia and Abu Dhabi, plus $3 per ton. The next 168,000 metric tons of LPG were sold at the aforementioned price plus a premium of $20 to $22 per metric ton. The LPG is extracted from the LNG stream and stored at facilities at the LNG Plant. Based on dedicated reserves, the Joint Venture is allocated 29.6 percent of the revenues from the first 385,000 metric tons sold and 27.2 percent for sales in excess of 385,000 metric tons per year, after deducting LPG-related operating costs and debt service.
Marketing of Oil and Condensate
Each party to the Joint Venture and Pertamina are entitled to take their respective shares of oil and condensate in kind and to market such shares separately. The Company, through affiliates of Ultrastar and Unistar, markets its share of oil and condensate f.o.b. Santan Terminal, in East Kalimantan, independently of Pertamina and the other Joint Venture participants. The Santan Terminal (operated by UNOCAL Indonesia Ltd.) is used for storing and loading oil produced by the Joint Venture.
The Company's percentage share of the Joint Venture's oil and condensate, except for that sold to Pertamina for Indonesian domestic consumption, is sold at ICP. Prior to July 1, 1993, the price for crude and condensate sales reflected world market conditions at the time of sale. The sales price for the domestic market consumption is $0.20 per barrel with respect to fields commencing production prior to February 23, 1989. For fields commencing production after that date, domestic market consumption is priced at 10 percent of the weighted average price of crude oil sold from such fields. However, for the first sixty consecutive months of production from new fields, domestic market consumption is priced at ICP.
Substantially all of the oil and condensate currently being produced by the Joint Venture from the PSC contract area is being produced from the Badak, Nilam, Mutiara and Semberah fields. The Company's average sales prices and production (lifting) costs for 1991 through 1993 are:
Years ended December 31, 1993 1992 1991
Total Oil and Condensate Sales (barrels) (a) 20,905,232 18,633,441 15,089,945
Company's Net Share (barrel equivalency) (a) 1,928,005 1,804,511 1,337,349
Average Sale Price - f.o.b. Indonesia (per barrel) (b) $18.31 $20.65 $20.59
Average Production (Lifting) Cost (per barrel) $0.77 $ 0.80 $ 0.84
(a) The total oil and condensate sales include production attributable to other contractors' shares of unitized operations in the Badak and Nilam fields. See "Exploration and Development." The net share figures shown above have been calculated by dividing the Company's total oil revenues for each year by the average price per barrel received for sale of oil during such year. The result represents the barrel equivalent of the Company's oil revenues.
(b) Excludes domestic consumption sales. Also excluded are gains or losses incurred on the sale of the Company's share of oil, which resulted in marketing gains/(losses) of $(0.32), $(0.02) and $0.07 per barrel in 1993, 1992 and 1991, respectively. Effective July 1, 1993, the Company is no longer exposed to marketing gains/(losses) incurred on the sale of its share of oil and condensate.
The Joint Venture's sales of oil and condensate averaged approximately 48,600 barrels per day (BOPD) during 1993, compared to approximately 42,700 BOPD during 1992.
Competition and Risks
Indonesian oil competes in the world market with oil produced from other nations. Indonesia is a member of OPEC, and any OPEC-imposed restrictions on oil or LNG exports in which Indonesia participates could have a material adverse effect on the Company.
In addition to the LNG being sold from the Arun Plant, LNG plants in the Middle East, Australia, Malaysia, or elsewhere may provide competition for sales of any additional Joint Venture LNG to Japanese and other markets, beyond the amount under current contracts.
The Joint Venture's activities in Indonesia are subject to risks common to foreign operations in the oil and gas industry, including political and economic uncertainties, the risks of cancellation or unilateral modification of contract rights, operating restrictions, currency repatriation restrictions, expropriation, export restrictions, increased taxes and other risks arising out of foreign governmental sovereignty over areas in which the Joint Venture's operations are conducted. The Company's foreign operations and investment may also be subject to the laws and policies of the U. S. affecting foreign trade, investment and taxation that could affect the conduct and profitability of those operations.
All of the Company's oil and gas activities are subject to the risks normally incident to exploration for and production of oil and gas, including blowouts, cratering and fires, each of which could result in damage to life and property. Production from the LNG Plant, which is the source of most of the Company's revenues, is subject to the risks associated with maintaining and operating a complex, technologically intensive processing plant, including the risks of equipment failures, fire and explosion. To the extent that the seller of the LNG produced by the LNG Plant bears the risk of loss of cargoes, the seller is subject to the usual risks of maritime transportation, including adverse incidents arising from loading and unloading cargoes. In accordance with customary industry practices, the Company carries insurance against some, but not all, of these risks. Losses and liabilities arising from such events would reduce revenues and increase costs of the Company to the extent not covered by insurance.
Item 2.
Item 2. Properties
See Item 1. Business.
Item 3.
Item 3. Legal Proceedings
The Company has pending litigation arising in the ordinary course of its business. However, none of the litigation is expected to have a material adverse effect on the Company's financial position or results of operations.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5.
Item 5. Market for Registrant's Common Equity and Shareholder Matters
Refer to Item 12 for a description of the Registrant's Equity.
Refer to Item 1 for a description of the Indonesian Participating Units.
Item 6.
Item 6. Selected Financial Data
The following financial data was derived from the audited consolidated financial statements of the Company and should be read in conjunction with the consolidated financial statements and related notes included elsewhere herein.
1993 1992 1991 1990 1989 (millions of dollars)
Operating revenues $201 $206 $208 $203 $146
Earnings (loss) from continuing operations 30 24 18 7 (15)
Net earnings 30 24 18 11 11
Total assets 449 472 500 519 608
Debt and security subject to mandatory redemption 33 32 31 50 111
See Note 2(e) to Notes to Consolidated Financial Statements.
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Liquidity and Capital Resources
Cash flow from operations amounted to $81.5 million in 1993, compared to 1992 cash flow of $93.4 million. Capital expenditures of $40.1 million were primarily spent on continued development drilling in the Badak, Nilam, Mutiara and Semberah fields as was the case in 1992. Net capital distributions in 1993 to the partners from the Company were $41.1 million (1992, $58.2 million).
On January 5, 1994, the Company redeemed its 8-1/4 percent convertible subordinated guaranteed debentures, originally due in 1995, in the amount of $36.4 million at a loss of $3.1 million. The redemption was funded through contributions from the partners of the Company.
The Company's ability to generate cash is primarily dependent on the prices it receives for the sale of LNG, and to a lesser extent, the sale of crude oil and LPG. In the event cash generated from operations is not sufficient to meet capital investment and other requirements, any shortfall will be funded through additional cash contributions by the partners. The Company cannot predict with any degree of certainty the prices it will receive in 1994 and future years for its crude oil and LNG. The Company's financial condition, operating results and liquidity will be materially affected by any significant fluctuations in sales prices.
LNG sales are made under five principal long-term contracts and several short- and medium-term contracts with Japanese, Korean and Taiwanese industrial and utility companies. Sales pursuant to the fourth long-term contract (Train F LNG Sales Contract) commenced in the first quarter of 1994; sales under the fifth long- term contract will commence in July 1994. The long- term contracts contain take-or-pay provisions that generally require that the purchasers either take the contracted quantities or pay for such quantities if not taken; such provisions tend to support the Company's ability to generate cash. During 1993, 127 net equivalent cargoes were shipped, of which 107 were under these long-term contracts. In 1994, the Company anticipates shipping approximately 135 net equivalent cargoes.
The sixth processing train (Train F) was completed in November 1993 and will supply the LNG required for the fourth long-term LNG sales contract signed in October 1990 with Osaka Gas, Tokyo Gas and Toho Gas for the sale of at least 2,020 trillion BTUs over a twenty-year period commencing in 1994.
In January of 1990, certain of the buyers under the 1973 Sales Contract agreed to increase their purchased commitments during the years 1997 through 1999 by approximately 667 trillion BTUs. The LNG Plant will provide 67.1 percent of the additional quantities and the Arun Plant the remainder.
In May of 1991, Pertamina signed an LNG sales contract with Korea Gas Corporation for the sale of at least 2,044 trillion BTUs over a twenty-year period commencing in July 1994, at a price similar to the LNG element of the 1973 LNG Sales Contract. The LNG Plant will provide 50 percent and the Arun Plant 50 percent of the LNG requirements for the contract.
In December of 1991, Pertamina entered into an LNG sales contract with several Japanese buyers (the Medium City Gas Companies) for the sale of 358 trillion BTUs over a twenty-year period commencing in 1996. The LNG Plant will provide 50 percent of the LNG requirements for the contract.
The debottlenecking of Trains A through D was completed in 1993. Capacity tests on all four trains exceeded design rates such that the four trains are now capable of LNG production rates comparable to the recently completed Train F, an increase of 14 percent or 22 cargoes in total.
The Company's operating and capital expenditures are directed toward the Joint Venture. Capital expenditures of the Joint Venture relate to the exploration and development of the oil and gas fields. In 1994, the Company's share of the Joint Venture expenditures is expected to total $56 million, including $3 million of exploration expenditures and $35 million of development expenditures. The 1994 budgeted expenditures primarily reflect continued development drilling required to maintain gas deliverability.
The Company can give no assurance as to the future trend of its business and earnings, or as to future events and developments that could affect the Company in particular or the oil industry in general. These include such matters as environmental quality control standards, new discoveries of hydrocarbons and the demand for petroleum products. Furthermore, the Company's business could be profoundly affected by future events including price changes or controls, payment delays, increased expenditures, legislation and regulations affecting the Company's business, expropriation of assets, renegotiation of contracts with foreign governments, political instability, currency exchange and repatriation losses, taxes, litigation, the competitive environment and international economic and political developments including actions of members of the Organization of Petroleum Exporting Countries (OPEC).
The Company's revenues are predominately based on the market price of crude oil, which is denominated in U. S. dollars. Certain operating costs, taxes and capital costs represent commitments settled in foreign currency. Currency exchange rate fluctuations on transactions in currencies other than U. S. dollars are recognized as adjustments to the U. S. dollar cost of the transaction.
The Company is unaware of any unrecorded environmental claims as at December 31, 1993 which would have a material impact upon the Company's financial condition or operations.
Results of Operations
1993 Compared to 1992
Net earnings for the year 1993 were $30.5 million as compared to $23.7 million in 1992. Cash flow from operations for 1993 was $81.5 million (1992, $93.4 million).
Oil and gas production revenues for 1993 were $200.6 million, or lower by $5.3 million when compared to 1992 revenues of $205.9 million. The increase in the Joint Venture's share of delivered LNG sales volumes was not sufficient to offset a decline in the average LNG sales price. The quantity of LNG delivered from the LNG Plant was 621 trillion BTU's (216 cargoes) in 1993 as compared to 606 trillion BTU's (211 cargoes) in 1992. The Joint Venture's interest in the LNG delivered was 369 trillion BTU's (127 net equivalent cargoes) in 1993 as compared to 363 trillion BTU's (124 net equivalent cargoes) in 1992. The average LNG sales price, excluding transportation charges, declined to $2.82 per million BTU's in 1993 as compared to $3.00 per million BTU's in 1992. Crude oil sales volumes of 1.93 million barrels were higher by 7 percent in 1993 as compared to 1992's 1.8 million barrels, while the average crude oil realized sales price of $17.99 per barrel was lower than 1992 by $2.64 per barrel.
Production costs of $18.8 million were lower than 1992 costs by about $6.8 million. This improvement in production costs was caused by a provision included in 1992 related to the Company's prior years' windfall profits tax liability. After a re- evaluation of the ultimate exposure on this tax liability, the Company has reversed $3.5 million as being no longer required. At the same time, the Company has provided an offsetting amount for the potential exposure in a royalty dispute.
Depletion , depreciation and amortization of $52.7 million was lower than 1992 by $4.6 million primarily as a result of a lower depletion rate associated with the increase in proved reserves that more than offset the higher level of LNG volumes delivered.
Exploration costs, including dry holes, of $4.9 million were lower than 1992 by $4.2 million due to a lower level of seismic and dry hole costs.
General and administrative expenses of $1.8 million were $1.0 million lower than last year's $2.8 million due to the absence of certain non-recurring charges. Both interest expense and interest income were in line with last year's results. Other income in 1992 included a non-recurring benefit due to the favorable disposition of a legal action.
The effective tax rates for 1993 and 1992 were 74 percent and 78 percent respectively. These rates were the aggregate of Indonesian source income taxed at a 56 percent rate, and certain expenses attributable to the Unimar activities which are not deductible in the partnership.
1992 Compared to 1991
Net earnings for 1992 were $23.7 million as compared to $18.3 million in 1991. Revenues of $205.9 million in 1992 were lower by $1.9 million when compared to last year as an increase in the Joint Venture's share of delivered LNG volumes was not sufficient to offset a decline in the average LNG price. The quantity of LNG delivered from the LNG Plant increased to 606 trillion BTUs (211 cargoes) in 1992 from 564 trillion BTUs (197 cargoes) in 1991. The Joint Venture's interest in the LNG delivered was 363 trillion BTUs (126 net equivalent cargoes) in 1992 as compared to 354 trillion BTUs (123 net equivalent cargoes) in 1991. The average unit LNG price, excluding delivery charges, declined to $3.00 per million BTUs in 1992 from $3.16 per million BTUs in 1991. The average realized crude oil price decreased slightly to $20.63 per barrel in 1992 from $20.64 per barrel in 1991, while crude oil sales volumes increased 36 percent to 1.8 million barrels.
Production costs of $25.6 million increased $5.0 million and included an amount related to a proposed adjustment by the U. S. federal tax authorities relating to the Company's prior years' windfall profit tax liability.
Depletion, depreciation and amortization of $57.3 million declined $4.2 million principally as a result of a lower depletion rate associated with an increase in proved developed reserves that more than offset the impact of the higher level of volumes delivered.
Exploration costs of $9.1 million decreased $0.6 million over last year's costs.
General and administrative expenses of $2.8 million were $0.3 million lower than last year's level. Interest expense of $4.7 million declined $5.0 million primarily as a result of the payoff of an Indonesian Production Payment bank loan in 1991. Interest income of $0.6 million was $0.7 million lower than 1991 primarily as a result of declining interest rates on short-term deposits.
Other income of $1.2 million in 1992 principally represented the reversal of a provision due to a favorable disposition of certain legal action. In 1991, other (expense) of $0.9 million was mainly a provision for residual domestic operations costs.
The effective tax rates relating to continuing operations for the 1992 and 1991 periods were 78 percent and 82 percent respectively. These rates were the aggregate of Indonesian source income taxed at a 56 percent rate and certain expenses attributable to Unimar activities not deductible in the partnership. The decrease in the effective rate is principally the result of decreased non-deductible interest expense.
In 1992, the Company adopted Financial Accounting Standards Board (FASB) Statement No. 109, "Accounting for Income Taxes". The effect of adopting Statement 109 was to decrease net income by $0.3 million and $2.6 million for the years ended December 31, 1991 and 1990 respectively. Refer to Note 2(e) of the Notes to Consolidated Financial Statements for further discussion of the effects of this adoption.
In 1992, the Company adopted FASB Statement No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions". The effect of adopting the new rules did not significantly impact the Company's profits. Postretirement benefit costs for 1991 and 1990, which were recorded on a cash basis, have not been restated.
Item 8.
Item 8. Financial Statements and Supplementary Data
REPORT OF INDEPENDENT AUDITORS
To The Partners of Unimar Company
We have audited the accompanying consolidated balance sheets of Unimar Company and subsidiaries as of December 31, 1993 and 1992, and the related consolidated statements of earnings, cash flows and partners' capital for each of the three years in the period ending December 31, 1993. Our audits also included the financial statement schedules listed in the Index at Item 14(a). These financial statements and schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
As more fully described in the notes to the consolidated financial statements, the Company has material transactions with its partners and affiliates.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Unimar Company and subsidiaries at December 31, 1993 and 1992, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 1993, in conformity with generally accepted accounting principles. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.
Houston, Texas February 28, 1994
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures.
None
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant.
The management, budgeting and financial control of the Company's interest in the Indonesian Joint Venture operations are exercised by a Management Board consisting of six members, three appointed by each partner. The following persons currently serve as members of the Company's Management Board:
GEORGE W. BERKO (age 47) was appointed to the Company's Management Board in May 1992. Since May 1992, he has served as the Partners' representative for Investor Relations, Treasurer and Chief Financial and Accounting Officer of ENSTAR, ENSTAR Indonesia, Inc., INTERNATIONAL, and certain of their subsidiaries, and has been LASMO America Ltd.'s Vice President - Unimar Accounting. From October 1990 until April 1992, he was Vice President, Controller of Ultramar Oil and Gas Limited, and prior to that time, he was a General Manager of American Ultramar Ltd. from December 1984.
IAN D. BROWN (age 44) was appointed to the Company's Management Board in February 1993. He is also Director and Chairman of ENSTAR and certain of its affiliates. In January 1994 he was appointed President and General Manager of LASMO Companies in Indonesia. In January 1993, he was appointed Director, Indonesian Joint Venture for LASMO plc and a member of the VICO Board. Since May 1986, he served as Commercial Manager for LASMO plc, and from February 1987, Managing Director, LASMO Trading Limited, the marketing, trading and transportation affiliates of the parent company.
LARRY D. KALMBACH (age 42) was appointed to the Company's Management Board in February 1993. Since February 1, 1993, he has been Vice President-Finance of UTPH after serving as Vice President and Controller of UTPH since September 1986. Prior to that time, he held various financial management positions with UTPH since 1974.
WILLIAM M. KRIPS (age 54) was appointed to the Company's Management Board in January 1987. He is also a Director of ENSTAR and certain of its affiliates. Since December 1991, he has been Senior Vice President Exploration & Production of UTPH. Prior to that time, he served as Senior Vice President and General Manager - U. S. Exploration and Production, Senior Vice President and General Manager - Hydrocarbon Products Group and Vice President and General Manager - International Operations.
ARTHUR W. PEABODY (age 50) was appointed to the Company's Management Board in February 1992 and in April 1993 was appointed Chairman of the Management Board. He is also a Director of ENSTAR, ENSTAR Indonesia, Inc., INTERNATIONAL and VICO. Since February 1992, he has been Senior Vice President - Exploration and Production of UTPH, and prior to that time, he held various positions at UTPH including Senior Vice President and General Manager - Hydrocarbon Products Group, Vice President - Planning and Administration and Vice President - Acquisitions and Planning.
JERRY L. PICKERILL (age 56) was appointed to the Company's Management Board in June 1992 and also serves as a Director of ENSTAR Corporation. Since February of 1989, he has served as President of LASMO Energy Corporation and is currently President and Director of LASMO America Limited, the holding company for the LASMO U. S. subsidiaries. He previously served as Vice President and General Counsel for CNG Producing Company, Tulsa Division, Vice President and General Counsel of Mapco Oil & Gas, Inc., and an attorney for Amerada Hess Corporation.
As set forth above, control of the Company's operations is exercised by the Management Board. The Company, a Texas general partnership, does not have any Executive Officers.
Item 11.
Item 11. Executive Compensation.
The Company has no executive officers, and no members of the Management Board are paid directly by the Company. All members of the Management Board are full-time employees of UTPH or LASMO, or their respective subsidiaries, and do not receive from the Company any remuneration for their services to the Company. Moreover, the Company has no employees who are compensated for their services to the Company. VICO, a subsidiary of the Company, has employees who are responsible for the daily operating activities of the Joint Venture and are compensated by the Joint Venture. See Item 13 below for information concerning the Company's reimbursement to LASMO for services rendered to the Company by one of LASMO's designees on the Management Board.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The Company is a Texas general partnership and as such has no voting securities apart from the general partnership interests owned by the partners. The table below reflects the beneficial ownership of 100 percent of the partnership interests in the Company as of March 15, 1994:
Name and Address of Amount Beneficially Title of Class Beneficial Owner Owned
General Partnership LASMO plc 50% Interest 100 Liverpool Street London EC2M 2BB England
Name and Address of Amount Beneficially Title of Class Beneficial Owner Owned
General Partnership Union Texas Petroleum 50% Interest Holdings, Inc. 1330 Post Oak Boulevard Houston, Texas 77252
Item 13.
Item 13. Certain Relationships and Related Transactions.
The partners of the Company provide management expertise, office space, and administrative, legal and professional services. For such services, a management fee of approximately $508 and $600 was charged in 1993 and 1992, respectively, including $138 ($96 in 1992) paid in respect of Mr. Berko's services.
The Company holds demand notes in the amount of $40 million from or generated by affiliates of each partner. These funds will be made available to the Company if additional working capital is required.
As operator of the Joint Venture, VICO conducts exploration and development activities within the PSC area. The cost of such activities is funded by the Joint Venture participants to VICO. In addition, VICO performs services for the operator of the LNG Plant, P.T. Badak Natural Gas Liquefaction Company (P.T. Badak). For the year ended December 31, 1993, VICO charged P.T. Badak approximately $32 million ($41 million in 1992) for engineering services and costs incurred on P.T. Badak's behalf. Also, during 1993 VICO billed P.T. Badak approximately $1.5 million ($1.8 million in 1992) principally for field pipeline maintenance services. Accounts receivable from P.T. Badak approximated $3.3 million at December 31, 1993 ($3.0 million at December 31, 1992).
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a)(1) Financial Statements listed below are included as Part II, Item 8 hereof on the pages indicated:
Report of Independent Auditors 25
Consolidated Balance Sheet, December 31, 1993 and 1992 26
Consolidated Statement of Earnings, Years ended December 31, 1993, 1992 and 1991 27
Consolidated Statement of Cash Flows, Years ended December 31, 1993, 1992 and 1991 28
Consolidated Statement of Changes in Partners' Capital, Years ended December 31, 1993, 1992 and 1991 29
Notes to Consolidated Financial Statements 30-44
Supplemental Financial Information (unaudited) 45-51
(2) Financial Statement Schedules listed below are filed as a part hereof on the pages indicated:
V - Property, Plant and Equipment 52
VI - Accumulated Depreciation and Depletion of Property, Plant and Equipment 53
All other schedules are omitted as they are not required or are not applicable.
(a)(3) The following documents are included as Exhibits to this Report. Unless it has been indicated that a document listed below is incorporated by reference herein, copies of the document have been filed herewith.
(2)-1- Merger Agreement, dated May 22, 1984, and Amendment Agreements thereto, dated June 8, 1984 and June 12, 1984 (incorporated by reference to Annex A to the Prospectus/Proxy Statement included in the Company's Registration Statement on Form S-14 (No. 2-93037)).*
(2)-2- Agreement of Merger, dated as of August 28, 1984 (incorporated by reference to Annex B to the Prospectus/Proxy Statement included in the Company's Registration Statement on Form S-14 (No. 2-93037)).*
(2)-3- Divestiture Agreement, dated June 20, 1984 (filed as Exhibit 2.3 to the Company's Registration Statement on Form S-14 (No. 2-93037)).*
(3)-1- Amended and Restated Agreement of General Partnership of Unimar Company dated September 11, 1990 between Unistar, Inc. and Ultrastar, Inc. (filed as Exhibit (3)-4- to the Company's 1990 Form 10-K (No. 18791)).*
(4)-1- Form of Indenture between Unimar and Irving Trust Company, as Trustee (filed as Exhibit 4 to the Company's Registration Statement on Form S-14 (No. 2-93037)).*
(4)-2- First Supplemental Indenture, dated as of October 31, 1986, to the Indenture between Unimar and Irving Trust Co., as Trustee (Exhibit (4)-1 above) (Filed as Exhibit 10.114 to Union Texas Petroleum Holdings, Inc.'s Registration Statement on Form S-1 (No. 33-16267)).*
(10)-1- Joint Venture Agreement, dated August 8, 1968, among Roy M. Huffington, Inc., Virginia International Company, Austral Petroleum Gas Corporation, Golden Eagle Indonesia, Limited, and Union Texas Far East Corporation, as amended (filed as Exhibit 6.6 to Registration Statement No. 2- 58834 of Alaska Interstate Company).*
(10)-2- Agreement dated as of October 1, 1979, among the parties to the Joint Venture Agreement referred to in Exhibit (10)-1- above (filed as Exhibit 5.2 to Registration Statement No. 2-66661 of Alaska Interstate Company).*
* Incorporated herein by reference.
(10)-3- Amendment to the Operating Agreement dated April 1, 1990, between Roy M. Huffington, Inc., a Delaware corporation, Ultramar Indonesia Limited, a Bermuda corporation, Virginia Indonesia Company, a Delaware corporation, Virginia International Company, a Delaware corporation, Union Texas East Kalimantan Limited, a Bahamian corporation, and Universe Gas & Oil Company, Inc., a Liberian corporation.
(10)-4- Amended and Restated Production Sharing Contract dated April 23, 1990 (effective August 8, 1968 - August 7, 1998) by and between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) and Roy M. Huffington, Inc., Virginia International Company, Virginia Indonesia Company, Ultramar Indonesia Limited, Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc. and Huffington Corporation.
(10)-5- Production Sharing Contract dated April 23, 1990 (effective August 8, 1998 - August 7, 2018) between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) and Roy M. Huffington, Inc., Virginia International Company, Virginia Indonesia Company, Ultramar Indonesia Limited, Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc. and Huffington Corporation.
(10)-6- Nilam Unit Agreement, effective as of January 1, 1980, to establish the manner in which the Joint Venture and Total will cooperate to develop the unitized area of the Nilam Field (filed as Exhibit (10)-58- to the Company's 1991 Form 10-K (No. 1- 8791)).*
(10)-7- Third Amended and Restated Implementation Procedures for Crude Oil Liftings, effective as of July 1, 1993, among Virginia Indonesia Company, LASMO Sanga Sanga Limited, Opicoil Houston, Inc., Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc. and Virginia International Company.
(10)-8- Amended and Restated 1973 LNG Sales Contract, dated as of the 1st day of January 1990, by and between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as Seller, and Chubu Electric Power Co., Inc., The Kansai Electric Power Co., Inc., Kyushu Electric Power Co., Inc., Nippon Steel Corporation, Osaka Gas Co., Ltd. and Toho Gas Co., Ltd., as Buyers.
* Incorporated herein by reference.
(10)-9- Amendment to the 1973 LNG Sales Contract dated as of the 3rd day of December, 1973, amended by Amendment No. 1 dated as of the 31st day of August, 1976, and amended and restated as of the 1st day of January, 1990 ("1973 LNG Sales Contract"), is entered into as of the 1st day of June, 1992, by and between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, a state enterprise of the Republic of Indonesia (Seller), on the one hand, and Kyushu Electric Power Co., Inc. (Kyushu Electric), Nippon Steel Corporation (Nippon Steel), and Toho Gas Co., Ltd. (Toho Gas), all corporations organized and existing under the laws of Japan, on the other hand.
(10)-10- Amended and Restated Supply Agreement (In Support of the Amended and Restated 1973 LNG Sales Contract) between Pertamina and Virginia Indonesia Company, LASMO Sanga Sanga Limited, Opicoil Houston, Inc., Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc., and Virginia International Company dated September 22, 1993, effective December 3, 1973.
(10)-11- Amended and Restated Badak LNG Sales Contract, dated as of the 1st day of January, 1990, by and between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as Seller, and Chubu Electric Power Co., Inc., The Kansai Electric Power Co., Inc., Osaka Gas Co., Ltd. and Toho Gas Co., Ltd., as Buyers.
(10)-12- Supply Agreement, dated as of April 14, 1981 between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) and the parties to the Joint Venture Agreement, including the Company.
(10)-13- Seventh Supply Agreement for Excess Sales (Additional Fixed Quantities under Badak LNG Sales Contract as a Result of Contract Amendment and Restatement) between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara and Virginia Indonesia Company, Opicoil Houston, Inc., Ultramar Indonesia Limited, Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc. and Virginia International Company, dated September 28, 1992, but effective as of January 1, 1990.
* Incorporated herein by reference.
(10)-14- Bontang II Trustee and Paying Agent Agreement Amended and Restated as of July 15, 1991 among Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, Virginia Indonesia Company, Virginia International Company, Union Texas East Kalimantan Limited, Ultramar Indonesia Limited, Opicoil Houston, Inc., Universe Gas & Oil Company, Inc., Total Indonesie, Unocal Indonesia, Ltd., Indonesia Petroleum, Ltd. and Continental Bank International.
(10)-15- Producers Agreement No. 2 dated as of June 9, 1987 by Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina), Roy M. Huffington, Inc., Virginia International Company, Ultramar Indonesia Limited, Virginia Indonesia Company, Union Texas East Kalimantan Limited, Universe Tankships, Inc., Huffington Corporation in favor of The Industrial Bank of Japan Trust Company as Agent (filed as Exhibit (10)-30- to the Company's 1987 Form 10-K (No. 1-8791)).*
(10)-16- Badak III LNG Sales Contract between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) as Seller and Chinese Petroleum Corporation as Buyer signed on March 19, 1987 (filed as Exhibit (10)-59- to the Company's 1991 Form 10-K (No. 1- 8791)).*
(10)-17- Badak III LNG Sales Contract Supply Agreement, dated October 19, 1987 among Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) and the parties to the Joint Venture Agreement.
(10)-18- LNG Sales and Purchase Contract (Korea II) effective May 7, 1991 between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara and Korea Gas Corporation.
(10)-19- Schedule A to the LNG Sales and Purchase Contract (Korea II FOB) between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara and Korea Gas Corporation.
(10)-20- Bontang III Producers Agreement, dated February 9, 1988, among Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) and the parties to the Joint Venture Agreement.
* Incorporated herein by reference.
(10)-21- Amendment No. 1 to Bontang III Producers Agreement dated as of May 31, 1988 among Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, Roy M. Huffington, Inc., Huffington Corporation, Virginia International Company, Virginia Indonesia Company, Ultramar Indonesia Limited, Union Texas East Kalimantan Limited, Universe Tankships, Inc., Total Indonesie, Unocal Indonesia, Ltd., Indonesia Petroleum, Ltd. and Train-E Finance Co., Ltd., as Tranche A Lender, The Industrial Bank of Japan Trust Company, as Agent and The Industrial Bank of Japan Trust Company on behalf of the Tranche B Lenders.
(10)-22- Amendment No. 2 to Producers Agreement No. 2 dated as of May 31, 1988 among Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, Roy M. Huffington, Inc., Huffington Corporation, Virginia International Company, Virginia Indonesia Company, Ultramar Indonesia Limited, Union Texas East Kalimantan Limited and Universe Tankships, Inc. (filed as Exhibit (10)-44- to the Company's 1988 Form 10-K (No. 1-8791)).*
(10)-23- $316,000,000 Bontang III Loan Agreement dated February 9, 1988 among Continental Bank International as Trustee, Train-E Finance Co., Ltd. as Tranche A Lender and The Industrial Bank of Japan Trust Company as Agent.
(10)-24- Bontang III Trustee and Paying Agent Agreement, dated February 9, 1988, among Pertamina, Roy M. Huffington, Inc., Huffington Corporation, Virginia International Company, VICO, Ultrastar Indonesia Limited, Union Texas East Kalimantan Limited, Universe Tankships, Inc., Total Indonesia, Unocal Indonesia, Ltd., Indonesia Petroleum, Ltd. and Continental Bank International (filed as Exhibit 10.42 to the Union Texas Petroleum Holdings, Inc.'s 1991 Form 10-K (Commission File No. 1-9019)).*
(10)-25- Amendment No. 1 to Bontang III Trustee and Paying Agent Agreement, dated as of December 11, 1992, among Pertamina, VICO, Virginia International Company, Ultramar Indonesia Limited, Union Texas East Kalimantan Limited, Opicoil Houston, Inc., Universe Gas & Oil Company, Inc., Total Indonesia, Unocal Indonesia Ltd., Indonesia Petroleum, Ltd. and Continental Bank International, as Bontang III Trustee (Filed as Exhibit 10.83 to the Union Texas Petroleum Holdings, Inc.'s 1992 Form 10-K (Commission File No. 1-9019)).*
* Incorporated herein by reference.
(10)-26- Amended and Restated Debt Service Allocation Agreement dated February 9, 1988 among Perusahaan Pertambangan Minyak Dan Gas Bumi Negara and Roy M. Huffington, Inc., Virginia International Company, Ultramar Indonesia Limited, Virginia Indonesia Company, Union Texas East Kalimantan Limited, Universe Tankships, Inc., Huffington Corporation, Total Indonesie, Unocal Indonesia, Ltd. and Indonesia Petroleum, Ltd. (filed as Exhibit (10)- 40- to the Company's 1988 Form 10-K (No. 1-8791)).*
(10)-27- Letter agreement between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara and Chinese Petroleum Corporation, dated December 1, 1989.
(10)-28- Memorandum of Agreement (Yokkaichi Extension), made as of December 21, 1989, between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as Seller, and Chubu Electric Power Co., Inc., as Buyer (filed as Exhibit (10)-60- to the Company's 1989 Form 10-K (No. 1-8791)).*
(10)-29- Badak IV LNG Sales Contract dated October 23, 1990 between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina), as Seller and Osaka Gas Co., Ltd., Tokyo Gas Co., Ltd. and Toho Gas Co., Ltd., as Buyers.
(10)-30- LNG Sales Contract dated as of October 13, 1992 between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as Seller and Hiroshima Gas Co., Ltd. and Nippon Gas Co., Ltd., as Buyers.
(10)-31- LNG Sales Contract dated as of October 13, 1992 between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as Seller and Osaka Gas Co., Ltd., as Buyer.
(10)-32- Supply Agreement for Natural Gas to Badak IV LNG Sales Contract dated August 12, 1991 between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, Virginia Indonesia Company, Opicoil Houston, Inc., Ultramar Indonesia Limited, Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc. and Virginia International Company.
(10)-33- Second Supply Agreement for Package IV Excess Sales (Osaka Gas Contract - Package IV Quantities) between Pertamina and Virginia Indonesia Company, LASMO Sanga Sanga Limited, Opicoil Houston, Inc., Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc., and Virginia International Company dated September 22, 1993, effective January 1, 1991.
* Incorporated herein by reference.
(10)-34- Third Supply Agreement for Package IV Excess Sales (Toho Gas Contract - Package IV Quantities) between Pertamina and Virginia Indonesia Company, LASMO Sanga Sanga Limited, Opicoil Houston, Inc., Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc., and Virginia International Company dated September 28, effective January 1, 1991.
(10)-35- Eleventh Supply Agreement for Package IV Excess Sales (1973 Contract Build-Down Quantities) between Pertamina and Virginia Indonesia Company, LASMO Sanga Sanga Limited, Opicoil Houston, Inc., Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc., and Virginia International Company dated September 22, 1993, effective January 1, 1990.
(10)-36- Bontang IV Producers Agreement dated August 26, 1991 by Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, Virginia Indonesia Company, Opicoil Houston, Inc., Virginia International Company, Ultramar Indonesia Limited, Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc., Total Indonesie, Unocal Indonesia, Ltd. and Indonesia Petroleum, Ltd., in favor of The Chase Manhattan Bank, N.A. as Agent for the Lenders.
(10)-37- $750,000,000 Bontang IV Loan Agreement dated August 26, 1991 among Continental Bank International as Trustee under the Bontang IV Trustee and Paying Agent Agreement as Borrower, Chase Manhattan Asia Limited and The Mitsubishi Bank, Limited as Coordinators, the other banks and financial institutions named herein as Arrangers, Co- Arrangers, Lead Managers, Managers, Co-Managers and Lenders, The Chase Manhattan Bank, N.A. and the Mitsubishi Bank, Limited as Co-Agents and The Chase Manhattan Bank, N.A. as Agent.
(10)-38- Bontang IV Trustee and Paying Agent Agreement dated August 26, 1991 among Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, Virginia Indonesia Company, Opicoil Houston, Inc., Virginia International Company, Ultramar Indonesia Limited, Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc., Total Indonesie, Unocal Indonesia, Ltd., Indonesia Petroleum, Ltd. and Continental Bank International.
* Incorporated herein by reference.
(10)-39- Amended and Restated Bontang Processing Agreement dated February 9, 1988 among Perusahaan Pertambangan Minyak Dan Gas Bumi Negara and Roy M. Huffington, Inc., Huffington Corporation, Virginia International Company, Virginia Indonesia Company, Ultramar Indonesia Limited, Union Texas East Kalimantan Limited, Universe Tankships, Inc., Total Indonesie, Unocal Indonesia, Ltd., Indonesia Petroleum, Ltd. and P.T. Badak Natural Gas Liquefaction Company (filed as Exhibit (10)-39- to the Company's 1988 Form 10-K (No. 1-8791)).*
(10)-40- Bontang Capital Projects Loan Agreement No. 1 between Continental Bank International as Trustee under the Badak Trustee and Paying Agent Agreement, Borrower, and The Industrial Bank of Japan Trust Company, Agent, for the Lenders dated as of September 10, 1986 (filed as Exhibit (4)-13- to the Company's 1986 Form 10-K (No. 1-8791)).*
(10)-41- Bontang Capital Projects Loan Agreement No. 2 dated June 9, 1987, among Continental Bank International, as Trustee under the Badak Trustee and Paying Agent Agreement (Borrower), the banks named therein as Lead Managers and Lenders and The Industrial Bank of Japan Trust Company (Agent) (filed as Exhibit (10)-31 to the Company's 1987 Form 10-K (No. 1- 8791)).*
(10)-42- Bontang LPG Sales and Purchase Contract between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as Seller, and National Federation of Agricultural Co-Operative Associations (Zen-Noh), as Buyer, dated February 21, 1992.
(10)-43- Bontang LPG Sales and Purchase Contract between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as Seller, and Japan Indonesia Oil Co., Ltd., as Buyer, dated February 20, 1992.
(10)-44- Arun and Bontang LPG Sales and Purchase Contract between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) as Seller and Mitsubishi Corporation, Cosmo Oil Co., Ltd., Nippon Petroleum Gas Co., Ltd., Showa Shell Sekiyu K.K., Kyodo Oil Co., Ltd., Idemitsu Kosan Co., Ltd. and Mitsui Liquefied Gas Co., Ltd. as Buyers dated July 15, 1986 (filed as Exhibit (10)-60- to the Company's 1991 Form 10-K (No. 1-8791)).*
(10)-45- Bontang LPG Supply Agreement, dated November 17, 1987, between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) and the parties to the Joint Venture Agreement.
* Incorporated herein by reference.
(10)-46- Advance Payment Agreement between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) and Arun Bontang Project Finance Co., Ltd., dated February 16, 1987 (filed as Exhibit (4)-15- to the Company's 1986 Form 10-K (No. 1-8791)).*
(10)-47- Agreement and Plan of Reorganization of ENSTAR Corporation, dated December 22, 1989, by and among Unimar Company, Ultrastar, Inc., Unistar, Inc., ENSTAR Corporation, Newstar Inc., Union Texas Development Corporation, Union Texas Petroleum Corporation and Ultramar America Limited.
(10)-48- Amendment to Agreement and Plan of Reorganization of ENSTAR Corporation, dated May 1, 1990, by and among Unimar Company, Ultrastar, Inc., Unistar, Inc., ENSTAR Corporation, Ultramar Production Company, Union Texas Development Corporation, Union Texas Petroleum Corporation and Ultramar America Limited.
(21)-1- List of Subsidiaries of the Company.
(23)-1- Consent of Ernst & Young.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the last quarter of the fiscal year ended December 31, 1993.
* Incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
UNIMAR COMPANY
March 24, 1994 By /S/ ARTHUR W. PEABODY Arthur W. Peabody Chairman of the Management Board
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated as of March 24, 1994.
By /S/ GEORGE W. BERKO By /S/ LARRY D. KALMBACH George W. Berko Larry D. Kalmbach Management Board Management Board (LASMO Representative) (UTPH Representative)
By /S/ IAN D. BROWN By /S/ WILLIAM M. KRIPS Ian D. Brown William M. Krips Management Board Management Board (LASMO Representative) (UTPH Representative)
By /S/ JERRY L. PICKERILL By /S/ ARTHUR W. PEABODY Jerry L. Pickerill Arthur W. Peabody Management Board Chairman of the (LASMO Representative) Management Board (UTPH Representative)
INDEX TO EXHIBITS
Sequential Numbered Exhibit Number Page
The following documents are included as Exhibits to this Report. Unless it has been indicated that a document listed below is incorporated by reference herein, copies of the document have been filed herewith.
(2)-1- Merger Agreement, dated May 22, 1984, and Amendment Agreements thereto, dated June 8, 1984 and June 12, 1984 (incorporated by reference to Annex A to the Prospectus/Proxy Statement included in the Company's Registration Statement on Form S- 14 (No. 2-93037)).*
(2)-2- Agreement of Merger, dated as of August 28, 1984 (incorporated by reference to Annex B to the Prospectus/Proxy Statement included in the Company's Registration Statement on Form S-14 (No. 2-93037)).*
(2)-3- Divestiture Agreement, dated June 20, 1984 (filed as Exhibit 2.3 to the Company's Registration Statement on Form S-14 (No. 2-93037)).*
(3)-1- Amended and Restated Agreement of General Partnership of Unimar Company dated September 11, 1990 between Unistar, Inc. and Ultrastar, Inc. (filed as Exhibit (3)-4- to the Company's 1990 Form 10-K (No. 18791)).*
(4)-1- Form of Indenture between Unimar and Irving Trust Company, as Trustee (filed as Exhibit 4 to the Company's Registration Statement on Form S-14 (No. 2-93037)).*
(4)-2- First Supplemental Indenture, dated as of October 31, 1986, to the Indenture between Unimar and Irving Trust Co., as Trustee (Exhibit (4)-1 above) (Filed as Exhibit 10.114 to Union Texas Petroleum Holdings, Inc.'s Registration Statement on Form S- 1 (No. 33-16267)).*
(10)-1- Joint Venture Agreement, dated August 8, 1968, among Roy M. Huffington, Inc., Virginia International Company, Austral Petroleum Gas Corporation, Golden Eagle Indonesia, Limited, and Union Texas Far East Corporation, as amended (filed as Exhibit 6.6 to Registration Statement No. 2-58834 of Alaska Interstate Company).*
* Incorporated herein by reference.
(10)-2- Agreement dated as of October 1, 1979, among the parties to the Joint Venture Agreement referred to in Exhibit (10)-1- above (filed as Exhibit 5.2 to Registration Statement No. 2-66661 of Alaska Interstate Company).*
(10)-3- Amendment to the Operating Agreement dated April 1, 1990, between Roy M. Huffington, Inc., a Delaware corporation, Ultramar Indonesia Limited, a Bermuda corporation, Virginia Indonesia Company, a Delaware corporation, Virginia International Company, a Delaware corporation, Union Texas East Kalimantan Limited, a Bahamian corporation, and Universe Gas & Oil Company, Inc., a Liberian corporation.
(10)-4- Amended and Restated Production Sharing Contract dated April 23, 1990 (effective August 8, 1968 - August 7, 1998) by and between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) and Roy M. Huffington, Inc., Virginia International Company, Virginia Indonesia Company, Ultramar Indonesia Limited, Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc. and Huffington Corporation.
(10)-5- Production Sharing Contract dated April 23, 1990 (effective August 8, 1998 - August 7, 2018) between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) and Roy M. Huffington, Inc., Virginia International Company, Virginia Indonesia Company, Ultramar Indonesia Limited, Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc. and Huffington Corporation.
(10)-6- Nilam Unit Agreement, effective as of January 1, 1980, to establish the manner in which the Joint Venture and Total will cooperate to develop the unitized area of the Nilam Field (filed as Exhibit (10)-58- to the Company's 1991 Form 10-K (No. 1- 8791)).*
(10)-7- Third Amended and Restated Implementation Procedures for Crude Oil Liftings, effective as of July 1, 1993, among Virginia Indonesia Company, LASMO Sanga Sanga Limited, Opicoil Houston, Inc., Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc. and Virginia International Company.
* Incorporated herein by reference.
(10)-8- Amended and Restated 1973 LNG Sales Contract, dated as of the 1st day of January 1990, by and between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as Seller, and Chubu Electric Power Co., Inc., The Kansai Electric Power Co., Inc., Kyushu Electric Power Co., Inc., Nippon Steel Corporation, Osaka Gas Co., Ltd. and Toho Gas Co., Ltd., as Buyers.
(10)-9- Amendment to the 1973 LNG Sales Contract dated as of the 3rd day of December, 1973, amended by Amendment No. 1 dated as of the 31st day of August, 1976, and amended and restated as of the 1st day of January, 1990 ("1973 LNG Sales Contract"), is entered into as of the 1st day of June, 1992, by and between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, a state enterprise of the Republic of Indonesia (Seller), on the one hand, and Kyushu Electric Power Co., Inc. (Kyushu Electric), Nippon Steel Corporation (Nippon Steel), and Toho Gas Co., Ltd. (Toho Gas), all corporations organized and existing under the laws of Japan, on the other hand.
(10)-10- Amended and Restated Supply Agreement (In Support of the Amended and Restated 1973 LNG Sales Contract) between Pertamina and Virginia Indonesia Company, LASMO Sanga Sanga Limited, Opicoil Houston, Inc., Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc., and Virginia International Company dated September 22, 1993, effective December 3, 1973.
(10)-11- Amended and Restated Badak LNG Sales Contract, dated as of the 1st day of January, 1990, by and between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as Seller, and Chubu Electric Power Co., Inc., The Kansai Electric Power Co., Inc., Osaka Gas Co., Ltd. and Toho Gas Co., Ltd., as Buyers.
(10)-12- Supply Agreement, dated as of April 14, 1981 between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) and the parties to the Joint Venture Agreement, including the Company.
(10)-13- Seventh Supply Agreement for Excess Sales (Additional Fixed Quantities under Badak LNG Sales Contract as a Result of Contract Amendment and Restatement) between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara and Virginia Indonesia Company, Opicoil Houston, Inc., Ultramar Indonesia Limited, Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc. and Virginia International Company, dated September 28, 1992, but effective as of January 1, 1990.
* Incorporated herein by reference.
(10)-14- Bontang II Trustee and Paying Agent Agreement Amended and Restated as of July 15, 1991 among Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, Virginia Indonesia Company, Virginia International Company, Union Texas East Kalimantan Limited, Ultramar Indonesia Limited, Opicoil Houston, Inc., Universe Gas & Oil Company, Inc., Total Indonesie, Unocal Indonesia, Ltd., Indonesia Petroleum, Ltd. and Continental Bank International.
(10)-15- Producers Agreement No. 2 dated as of June 9, 1987 by Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina), Roy M. Huffington, Inc., Virginia International Company, Ultramar Indonesia Limited, Virginia Indonesia Company, Union Texas East Kalimantan Limited, Universe Tankships, Inc., Huffington Corporation in favor of The Industrial Bank of Japan Trust Company as Agent (filed as Exhibit (10)-30- to the Company's 1987 Form 10-K (No. 1-8791)).*
(10)-16- Badak III LNG Sales Contract between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) as Seller and Chinese Petroleum Corporation as Buyer signed on March 19, 1987 (filed as Exhibit (10)-59- to the Company's 1991 Form 10-K (No. 1-8791)).*
(10)-17- Badak III LNG Sales Contract Supply Agreement, dated October 19, 1987 among Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) and the parties to the Joint Venture Agreement.
(10)-18- LNG Sales and Purchase Contract (Korea II) effective May 7, 1991 between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara and Korea Gas Corporation.
(10)-19- Schedule A to the LNG Sales and Purchase Contract (Korea II FOB) between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara and Korea Gas Corporation.
(10)-20- Bontang III Producers Agreement, dated February 9, 1988, among Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) and the parties to the Joint Venture Agreement.
* Incorporated herein by reference.
(10)-21- Amendment No. 1 to Bontang III Producers Agreement dated as of May 31, 1988 among Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, Roy M. Huffington, Inc., Huffington Corporation, Virginia International Company, Virginia Indonesia Company, Ultramar Indonesia Limited, Union Texas East Kalimantan Limited, Universe Tankships, Inc., Total Indonesie, Unocal Indonesia, Ltd., Indonesia Petroleum, Ltd. and Train-E Finance Co., Ltd., as Tranche A Lender, The Industrial Bank of Japan Trust Company, as Agent and The Industrial Bank of Japan Trust Company on behalf of the Tranche B Lenders.
(10)-22- Amendment No. 2 to Producers Agreement No. 2 dated as of May 31, 1988 among Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, Roy M. Huffington, Inc., Huffington Corporation, Virginia International Company, Virginia Indonesia Company, Ultramar Indonesia Limited, Union Texas East Kalimantan Limited and Universe Tankships, Inc. (filed as Exhibit (10)-44- to the Company's 1988 Form 10-K (No. 1-8791)).*
(10)-23- $316,000,000 Bontang III Loan Agreement dated February 9, 1988 among Continental Bank International as Trustee, Train-E Finance Co., Ltd. as Tranche A Lender and The Industrial Bank of Japan Trust Company as Agent.
(10)-24- Bontang III Trustee and Paying Agent Agreement, dated February 9, 1988, among Pertamina, Roy M. Huffington, Inc., Huffington Corporation, Virginia International Company, VICO, Ultrastar Indonesia Limited, Union Texas East Kalimantan Limited, Universe Tankships, Inc., Total Indonesia, Unocal Indonesia, Ltd., Indonesia Petroleum, Ltd. and Continental Bank International (filed as Exhibit 10.42 to the Union Texas Petroleum Holdings, Inc.'s 1991 Form 10-K (Commission File No. 1- 9019)).*
(10)-25- Amendment No. 1 to Bontang III Trustee and Paying Agent Agreement, dated as of December 11, 1992, among Pertamina, VICO, Virginia International Company, Ultramar Indonesia Limited, Union Texas East Kalimantan Limited, Opicoil Houston, Inc., Universe Gas & Oil Company, Inc., Total Indonesia, Unocal Indonesia Ltd., Indonesia Petroleum, Ltd. and Continental Bank International, as Bontang III Trustee (Filed as Exhibit 10.83 to the Union Texas Petroleum Holdings, Inc.'s 1992 Form 10-K (Commission File No. 1-9019)).*
* Incorporated herein by reference.
(10)-26- Amended and Restated Debt Service Allocation Agreement dated February 9, 1988 among Perusahaan Pertambangan Minyak Dan Gas Bumi Negara and Roy M. Huffington, Inc., Virginia International Company, Ultramar Indonesia Limited, Virginia Indonesia Company, Union Texas East Kalimantan Limited, Universe Tankships, Inc., Huffington Corporation, Total Indonesie, Unocal Indonesia, Ltd. and Indonesia Petroleum, Ltd. (filed as Exhibit (10)- 40- to the Company's 1988 Form 10-K (No. 1-8791)).*
(10)-27- Letter agreement between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara and Chinese Petroleum Corporation, dated December 1, 1989.
(10)-28- Memorandum of Agreement (Yokkaichi Extension), made as of December 21, 1989, between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as Seller, and Chubu Electric Power Co., Inc., as Buyer (filed as Exhibit (10)-60- to the Company's 1989 Form 10-K (No. 1-8791)).*
(10)-29- Badak IV LNG Sales Contract dated October 23, 1990 between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina), as Seller and Osaka Gas Co., Ltd., Tokyo Gas Co., Ltd. and Toho Gas Co., Ltd., as Buyers.
(10)-30- LNG Sales Contract dated as of October 13, 1992 between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as Seller and Hiroshima Gas Co., Ltd. and Nippon Gas Co., Ltd., as Buyers.
(10)-31- LNG Sales Contract dated as of October 13, 1992 between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as Seller and Osaka Gas Co., Ltd., as Buyer.
(10)-32- Supply Agreement for Natural Gas to Badak IV LNG Sales Contract dated August 12, 1991 between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, Virginia Indonesia Company, Opicoil Houston, Inc., Ultramar Indonesia Limited, Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc. and Virginia International Company.
(10)-33- Second Supply Agreement for Package IV Excess Sales (Osaka Gas Contract - Package IV Quantities) between Pertamina and Virginia Indonesia Company, LASMO Sanga Sanga Limited, Opicoil Houston, Inc., Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc., and Virginia International Company dated September 22, 1993, effective January 1, 1991.
* Incorporated herein by reference.
(10)-34- Third Supply Agreement for Package IV Excess Sales (Toho Gas Contract - Package IV Quantities) between Pertamina and Virginia Indonesia Company, LASMO Sanga Sanga Limited, Opicoil Houston, Inc., Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc., and Virginia International Company dated September 28, effective January 1, 1991.
(10)-35- Eleventh Supply Agreement for Package IV Excess Sales (1973 Contract Build-Down Quantities) between Pertamina and Virginia Indonesia Company, LASMO Sanga Sanga Limited, Opicoil Houston, Inc., Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc., and Virginia International Company dated September 22, 1993, effective January 1, 1990.
(10)-36- Bontang IV Producers Agreement dated August 26, 1991 by Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, Virginia Indonesia Company, Opicoil Houston, Inc., Virginia International Company, Ultramar Indonesia Limited, Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc., Total Indonesie, Unocal Indonesia, Ltd. and Indonesia Petroleum, Ltd., in favor of The Chase Manhattan Bank, N.A. as Agent for the Lenders.
(10)-37- $750,000,000 Bontang IV Loan Agreement dated August 26, 1991 among Continental Bank International as Trustee under the Bontang IV Trustee and Paying Agent Agreement as Borrower, Chase Manhattan Asia Limited and The Mitsubishi Bank, Limited as Coordinators, the other banks and financial institutions named herein as Arrangers, Co-Arrangers, Lead Managers, Managers, Co-Managers and Lenders, The Chase Manhattan Bank, N.A. and the Mitsubishi Bank, Limited as Co-Agents and The Chase Manhattan Bank, N.A. as Agent.
(10)-38- Bontang IV Trustee and Paying Agent Agreement dated August 26, 1991 among Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, Virginia Indonesia Company, Opicoil Houston, Inc., Virginia International Company, Ultramar Indonesia Limited, Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc., Total Indonesie, Unocal Indonesia, Ltd., Indonesia Petroleum, Ltd. and Continental Bank International.
* Incorporated herein by reference.
(10)-39- Amended and Restated Bontang Processing Agreement dated February 9, 1988 among Perusahaan Pertambangan Minyak Dan Gas Bumi Negara and Roy M. Huffington, Inc., Huffington Corporation, Virginia International Company, Virginia Indonesia Company, Ultramar Indonesia Limited, Union Texas East Kalimantan Limited, Universe Tankships, Inc., Total Indonesie, Unocal Indonesia, Ltd., Indonesia Petroleum, Ltd. and P.T. Badak Natural Gas Liquefaction Company (filed as Exhibit (10)-39- to the Company's 1988 Form 10-K (No. 1-8791)).*
(10)-40- Bontang Capital Projects Loan Agreement No. 1 between Continental Bank International as Trustee under the Badak Trustee and Paying Agent Agreement, Borrower, and The Industrial Bank of Japan Trust Company, Agent, for the Lenders dated as of September 10, 1986 (filed as Exhibit (4)-13- to the Company's 1986 Form 10-K (No. 1-8791)).*
(10)-41- Bontang Capital Projects Loan Agreement No. 2 dated June 9, 1987, among Continental Bank International, as Trustee under the Badak Trustee and Paying Agent Agreement (Borrower), the banks named therein as Lead Managers and Lenders and The Industrial Bank of Japan Trust Company (Agent) (filed as Exhibit (10)-31 to the Company's 1987 Form 10-K (No. 1-8791)).*
(10)-42- Bontang LPG Sales and Purchase Contract between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as Seller, and National Federation of Agricultural Co-Operative Associations (Zen-Noh), as Buyer, dated February 21, 1992.
(10)-43- Bontang LPG Sales and Purchase Contract between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, as Seller, and Japan Indonesia Oil Co., Ltd., as Buyer, dated February 20, 1992.
(10)-44- Arun and Bontang LPG Sales and Purchase Contract between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) as Seller and Mitsubishi Corporation, Cosmo Oil Co., Ltd., Nippon Petroleum Gas Co., Ltd., Showa Shell Sekiyu K.K., Kyodo Oil Co., Ltd., Idemitsu Kosan Co., Ltd. and Mitsui Liquefied Gas Co., Ltd. as Buyers dated July 15, 1986 (filed as Exhibit (10)-60- to the Company's 1991 Form 10-K (No. 1-8791)).*
(10)-45- Bontang LPG Supply Agreement, dated November 17, 1987, between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) and the parties to the Joint Venture Agreement.
* Incorporated herein by reference.
(10)-46- Advance Payment Agreement between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara (Pertamina) and Arun Bontang Project Finance Co., Ltd., dated February 16, 1987 (filed as Exhibit (4)-15- to the Company's 1986 Form 10-K (No. 1- 8791)).*
(10)-47- Agreement and Plan of Reorganization of ENSTAR Corporation, dated December 22, 1989, by and among Unimar Company, Ultrastar, Inc., Unistar, Inc., ENSTAR Corporation, Newstar Inc., Union Texas Development Corporation, Union Texas Petroleum Corporation and Ultramar America Limited.
(10)-48- Amendment to Agreement and Plan of Reorganization of ENSTAR Corporation, dated May 1, 1990, by and among Unimar Company, Ultrastar, Inc., Unistar, Inc., ENSTAR Corporation, Ultramar Production Company, Union Texas Development Corporation, Union Texas Petroleum Corporation and Ultramar America Limited.
(21)-1- List of Subsidiaries of the Company.
(23)-1- Consent of Ernst & Young.
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the last quarter of the fiscal year ended December 31, 1993.
* Incorporated herein by reference.