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 publicly-traded Delaware corporation.
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 to utility and industrial companies in Japan, Taiwan and South Korea. See "The Joint Venture" below.
The principal executive offices of the Company are at 1221 McKinney, Suite 600, Houston, Texas 77010-2015 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, 1994, VICO, in its capacity as the Joint Venture operator, had approximately 2,000 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 materially 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 9-1/2 10 10 10 Low 8-3/8 8-1/2 9-1/8 9
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
Source of prices: American Stock Exchange
(b) Holders. As of February 14, 1995, 10,778,590 IPUs were outstanding and held by approximately 4,172 holders of record.
(c) Payments per Indonesian Participating Unit.
Period Payment Date Payment
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 First Quarter - 1994 May 31, 1994 0.60 Second Quarter - 1994 August 29, 1994 0.29 Third Quarter - 1994 November 29, 1994 0.45 Fourth Quarter - 1994 March 1, 1995 0.49
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.
BUSINESS The Joint Venture
The Joint Venture participants are INTERNATIONAL (15.625%), VICO (7.5%), LASMO Sanga Sanga Limited (an indirect subsidiary of LASMO) (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 1.1 million acre area in East Kalimantan (East Kalimantan Contract Area). In accordance with the requirements of the PSC, during both 1991 and 1994, the Joint Venture selectively relinquished approximately 10 percent of the PSC area. The Joint Venture must relinquish a further 10 percent of the PSC area 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 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, 1994, the following wells were drilled in the East Kalimantan Contract Area:
Total Completed Field Wells Productive Dry Suspended Location Drilled Wells Holes Wells
Badak 186 176 7 3 Nilam 161 161 - - Semberah 57 53 4 - Mutiara 51 43 7 1 Pamaguan 32 26 6 - Wailawi 6 6 - - Other 46 6 31 9
Totals 539 471 55 13
Two significant fields, Badak and Nilam, have been discovered in the East Kalimantan Contract 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 Contract Area: Mutiara, Semberah, Pamaguan and Wailawi.
The tables below summarize completed exploratory and development drilling from 1992 through 1994 for the East Kalimantan Contract Area.
EXPLORATORY DRILLING
Wells Dry Year Drilled Discoveries Holes
1992 2 0 2 1993 3 0 3 1994 2 1 1
Totals 7 1 6
DEVELOPMENT OR FIELD EXTENSION DRILLING
Completed Wells For For For Dual Dry Year Drilled Gas Oil Oil & Gas Holes
1992 31 24 5 2 - 1993 31 25 1 3 2 1994 20 10 1 8 1
Totals 82 59 7 13 3
Of 471 completed productive wells in the East Kalimantan Contract Area, approximately 268 contain more than one completion in the same bore hole.
Three wells were in progress as of December 31, 1994. This includes wells that were drilled but not completed at the end of 1994. 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 a below), average sales prices (excluding transportation costs) and production (lifting) costs of such production for the years 1992 through 1994.
Years ended December 31, 1994 1993 1992
Gas Production for LNG (MMCF) (a) 735,116 637,847 621,600
Company's Net Share (MMCF equivalency) (b) 90,046 80,873 77,264
Average Sales Price per MCF (c) $2.45 $2.75 $2.92
Average Production (Lifting) Cost per MCF $0.12 $0.13 $0.14
(a) 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.
(b) 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.
(c) 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 (a) 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. Costs incurred to operate and maintain wells and related equipment and field facilities are considered to be production costs.
During 1994, the Company's share of the Joint Venture's expenditures was approximately $52 million, including $2 million of exploration expenditures and $32 million of development expenditures. In 1995, the Company's share of the Joint Venture's expenditures is expected to total $49 million, including $2 million of exploration expenditures and $29 million of development expenditures. The 1995 budgeted expenditures primarily reflect continued development drilling required to maintain adequate gas deliverability and to maximize cash flow.
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, 1991, 1992, 1993 and 1994 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, 1991 135,712 7,615,739 Dec. 31, 1992 146,055 7,436,171 Dec. 31, 1993 203,068 7,187,995 Dec. 31, 1994 224,995 7,149,560*
* equivalent to approximately 6,914 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.
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 of approximately 2.5 billion cubic feet of gas per operating day and a peak production capacity of approximately 639,000 barrels or 101,500 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 six train plant is the largest LNG processing facility in the world and has the capacity to deliver 275 cargoes per year.
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; at December 31, 1994 the floating interest rate was 6.1875 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 supplies the LNG required for the LNG sales contract with Osaka Gas, Tokyo Gas and Toho Gas for the sale of 2,020 trillion BTUs over a twenty-year period which commenced in 1994. In August 1991, Pertamina and an international consortium of commercial banks completed project financing of $750 million of which $699 million was required to fund the construction of Train F and related support facilities at an interest rate of LIBOR plus 1.25 percent; at December 31, 1994 the floating interest rate was 6.5625 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 which commenced in December 1994.
As a result of the production performance of Train E, Pertamina has 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 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 14).
During 1994, Pertamina authorized construction of a seventh LNG processing train (Train G), a third LNG/LPG dock, an additional LPG storage tank and other support facilities at the LNG Plant. These facilities are scheduled for completion in late 1997. The total funding, including interest, for the project is expected to be approximately $975 million. In January 1995, proposals were requested from the Japanese and other commercial banks for non- recourse financing to be repaid over ten years. Train G will supply LNG for sales contracts agreed to during 1994 - the 1973 Sales Contract Extension, the Korea Medium Term Sales Contract and the Taiwan Medium Term Sales Contract (see pages 14 and 15 for contract descriptions).
In addition, preliminary studies are currently being conducted by Pertamina, the Joint Venture and other production sharing contractors regarding the planning, development, financing and construction of an eighth train (Train H), which could come on stream early in 2000, to primarily support long-term contracts preliminarily agreed to in 1994 with CPC and Korea Gas Corporation.
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 major 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 1994 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 294,000 189,630 2000 Taiwan LNG Sales Contract Train F and Support Facilities 699,000 688,285 2004 Train F LNG Sales Contract
2nd Loading Dock & Train E Support Facilities 135,000 16,200 1995 1973 LNG Sales Contract (a)
LPG Facilities 157,700 74,165 1999 LPG Sales Contract
(a) 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
1992 211 606 $3.00 1993 216 621 $2.82 1994 247 716 $2.52
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 Joint Venture and other gas producers in Indonesia 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. The Joint Venture's allocation in the LNG sales contracts has declined over time since the initial 1973 Sales Contract, when the Joint Venture was virtually the only supplier to the LNG Plant, to the present when there are several other major production sharing contractors supplying gas to the LNG Plant and sharing in the allocation of volumes. 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 the 1981 LNG Sales Contract, the Train F LNG Sales Contract and the Korea II LNG Sales Contract, where the buyers bear the risk of loss and the transportation costs. In those instances where the seller bears the risk of loss during shipment, the cargoes are insured.
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.
In January of 1994, deliveries began under a 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 ending in 2013.
In July of 1994, deliveries began under a LNG sales contract with Korea Gas Corporation (Korea II LNG Sales Contract) for the sale of at least 2,044 trillion BTUs over a twenty-year period ending in 2014. The LNG Plant will provide 50 percent and the Arun Plant 50 percent of the LNG requirements for the contract.
In January of 1995, deliveries began under the Korea Medium Term Sales Contract with Korea Gas Corporation for the sale of 315 trillion BTUs (108 cargoes) over a five-year period ending in 1999. The Joint Venture has been allocated a 22 percent equity interest in these deliveries pending final agreement among Pertamina and the East Kalimantan producers.
During 1994, Pertamina reached agreement to extend the 1973 and 1981 LNG Sales Contracts. The 1973 Sales Contract Extension involves the sale of 4,368 trillion BTUs (1,522 cargoes) over a ten-year period commencing in 2000. The 1981 Sales Contract Extension involves the sale of 941 trillion BTUs (320 cargoes) over a five-year period commencing in 2003. Also executed was the Taiwan Medium-Term Sales Contract for the sale of 46 trillion BTUs (16 cargoes) between 1998 and 1999. The Joint Venture has been allocated a provisional 22 percent equity interest in deliveries under the 1973 LNG Sales Contract Extension and the Taiwan Medium- Term Sales Contract (both included in Package V). The equity sharing percentage for the 1981 Sales Contract Extension (included in Package VI) is expected to be similar to that of Package V.
Other Gas Sales - The Joint Venture is 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. In 1994, Pertamina executed a twenty-year contract, commencing in November of 1997, for the sale of approximately 70 MMCF per day of gas to be supplied by the Joint Venture to a local methanol plant at a price not less than $1.25 per MMBTU for the first ten years.
Marketing and Distribution of LPG
Pertamina has individual sales contracts with seven Japanese utility companies for the sale and delivery of 9,217,000 metric tons of LPG through the year 1998, of which 3,877,000 metric tons will be produced by the LPG facilities at the LNG Plant. In 1994, 23 cargoes, including spot sales, totaling 827,000 metric tons were shipped to Japan. The first 385,000 metric tons of LPG sold under the contract were sold at the weighted average price for all LPG imported into Japan, except from Indonesia and Abu Dhabi, plus a premium of $10.97 per ton. The next 305,000 metric tons of LPG sold under the contract were sold at the aforementioned price plus a premium of $18.31 per metric ton. The remaining LPG was sold on the spot market at prevailing prices. The LPG is extracted from the gas stream and stored at facilities at the LNG plant. The Joint Venture was allocated a Package IIIB equity rate for the revenues from the first 379,000 metric tons sold, a Package IV equity rate for the revenues from the next 147,000 metric tons sold, and a Package V equity rate (on a provisional basis) for the revenues from the remaining 301,000 metric tons sold during 1994, 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 1992 through 1994 are:
Years ended December 31, 1994 1993 1992
Total Oil and Condensate Sales (barrels) (a) 22,635,461 20,905,232 18,633,441
Company's Net Share (barrel equivalency) (a) 1,966,686 1,928,005 1,804,511
Average Sale Price - f.o.b. Indonesia (per barrel) (b) $16.58 $18.31 $20.65
Average Production (Lifting) Cost (per barrel) $0.72 $ 0.77 $ 0.80
(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 losses of $0.32 and $0.02 per barrel in 1993 and 1992 respectively. Effective July 1, 1993, the Company is no longer exposed to marketing fluctuations incurred on the sale of its share of oil and condensate.
The Joint Venture's sales of oil and condensate averaged approximately 49,700 barrels per day (BOPD) during 1994, compared to approximately 48,600 BOPD during 1993.
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.
1994 1993 1992 1991 1990 (millions of dollars)
Operating revenues $198 $201 $206 $208 $203
Earnings from continuing operations 36 30 24 18 7
Net earnings 33 30 24 18 11
Total assets 422 449 472 500 519
Debt and security subject to mandatory redemption - 33 32 31 50
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 $85.6 million in 1994, compared to 1993 cash flow of $81.5 million. Capital expenditures of $34.4 million were primarily spent on continued development drilling in the Badak, Nilam, Mutiara and Semberah fields as was the case in 1993. Net capital distributions in 1994 to the partners from the Company were $18.1 million (1993, $41.1 million). The decrease in distributions to the partners was primarily attributable to the redemption of $36.4 million of debt as discussed below.
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.
During 1994, the Company paid the Internal Revenue Service $4.0 million to settle its 1984 windfall profit tax dispute. The Company had fully reserved for this liability. The Company continues to maintain a $3.8 million reserve and accrue interest for the potential exposure in a royalty dispute.
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. 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 1995 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, South Korean and Taiwanese industrial and utility companies. 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 1994, 138 net equivalent cargoes were shipped, of which 124 were under these long-term contracts. In 1995, the Company anticipates shipping approximately 134 net equivalent cargoes.
In the first quarter of 1994 the LNG plant began deliveries of LNG under a twenty year sales contract with Osaka Gas, Tokyo Gas and Toho Gas (Train F LNG Sales Contract) for the delivery of 2,020 trillion BTUs. In July 1994, the plant began deliveries to Korea Gas Corporation (Korea II LNG Sales Contract) under the terms of another twenty-year sales contract for 2,044 trillion BTUs, 50 percent of which will be supplied by the LNG plant.
During 1994, Pertamina entered into the Korea Medium Term Sales Contract with Korea Gas Corporation for the delivery of 315 trillion BTUs or 108 LNG cargoes which deliveries commenced in January 1995 and continue until 1999. The Joint Venture's revenue sharing percentage is provisionally determined to be 22.0 percent with a retroactive adjustment to be made upon finalizing the revenue sharing percentage between all parties.
During 1994, Pertamina executed agreements to extend the 1973 and 1981 LNG Sales Contracts. The 1973 Sales Contract Extension involves the sale of 4,368 trillion BTUs (1,522 cargoes) over a ten-year period commencing in 2000. The 1981 Sales Contract Extension involves the sale of 941 trillion BTUs (320 cargoes) over a five-year period commencing in 2003. Also executed was the Taiwan Medium-Term Sales Contract for the sale of 46 trillion BTUs (16 cargoes) between 1998 and 1999. The Joint Venture has been allocated a provisional 22 percent equity interest in deliveries under the 1973 LNG Sales Contract Extension and the Taiwan Medium- Term Sales Contract (both included in Package V). The equity sharing percentage for the 1981 Sales Contract Extension (included in Package VI) is expected to be similar to that of Package V.
Capital expenditures of the Joint Venture relate to the exploration and development of the oil and gas fields. In 1995, the Company's share of the Joint Venture expenditures is expected to total $49 million, including $2 million of exploration expenditures and $29 million of development expenditures. The 1995 budgeted expenditures primarily reflect continued development drilling required to maintain gas deliverability and to maximize cash flow.
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, 1994 which would have a material impact upon the Company's financial condition or operations.
Results of Operations
1994 Compared to 1993
Net earnings for the year ended December 31, 1994 were $33.1 million as compared to $30.5 million for the year ended December 31, 1993. Included in the 1994 results was an extraordinary loss of $3.1 million for the redemption of its 8 1/4 percent debentures. The increased net earnings for the 1994 period benefitted from decreased interest expense, depletion, and exploration cost partially offset by lower oil and gas revenues. Cash flow from operations for the year ended December 31, 1994 was $85.6 million as compared to $81.5 million for the year ended December 31, 1993.
Revenues for the year ended December 31, 1994 were $197.9 million compared to $200.6 million in the corresponding 1993 period. The decrease in revenues was attributable to an 11 percent and 9 percent decrease in the average price received for LNG and crude oil, respectively, partially offset by a 9 percent increase in LNG volumes. The Joint Venture's share of LNG volumes in 1994 increased 35 trillion BTUs to 404 trillion BTUs (138 net equivalent cargoes) as compared to 369 trillion BTUs (127 net equivalent cargoes) in the 1993 corresponding period. The increase in LNG volumes was made possible by the completion of the plant expansion in late 1993 allowing for the commencement of two twenty-year contracts with certain Japanese and South Korean buyers. Crude oil and condensate volumes net to the Company in 1994 and 1993 were 2.0 million barrels and 1.9 million barrels respectively.
The average price received for LNG in 1994 decreased to $2.52 per million BTUs as compared to $2.82 per million BTUs for the corresponding 1993 period. The realized crude oil price fell $1.53 per barrel to $16.46 per barrel in 1994 as compared to $17.99 per barrel in the same 1993 period. Additionally, the 1994 results benefitted from a favorable non-taxable crude oil revenue final settlement from 1993 reflecting a reallocation of certain capital expenditures from gas to oil.
The table below summarizes the volumes and average prices for the Company's sales for the years ended December 31, 1994 and 1993:
1994 1993 Volumes LNG (TBTUs) 93.4 85.3 Crude (MMBLS) 2.0 1.9 Prices LNG ($/MMBTU) 2.52 2.82 Realized Crude Oil ($/BBL) 16.46 17.99
Production costs for 1994 increased $0.9 million to $19.6 million as compared to the prior year. Depletion, depreciation and amortization for 1994 was $50.6 million, a decrease of $2.2 million from the prior year, reflecting higher proved reserves partially offset by higher levels of production. During 1994, proved reserve additions included approximately 2.7 million barrels of oil and 96.3 billion cubic feet of gas.
Interest expense for 1994 decreased $4.5 million from the prior year reflecting the repayment of the Company's 8 1/4% debentures on January 5, 1994. An extraordinary loss of $3.1 million was recognized due to the redemption of the debentures.
Exploration costs decreased in 1994 as compared to the prior period due to lower dry hole costs and lower seismic costs. During 1994, the Company drilled two exploration wells, making one discovery as compared to 1993 when the Company wrote off three dry holes.
General and administrative expenses for 1994 were $1.9 million a slight increase over the prior year.
The effective tax rates for 1994 and 1993 were 70 percent and 74 percent respectively. These rates were the aggregate of Indonesian source income taxed at a 56 percent rate, and certain expenses attributable to Unimar activities which are not deductible in the partnership. The decrease in the effective rate was principally the result of decreased non-deductible interest expense.
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 reversed $3.5 million in 1993 as being no longer required. At the same time, the Company 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 the $2.8 million in 1992 due to the absence of certain non-recurring charges. Both interest expense and interest income were in line with the results for 1992. 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.
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, 1994 and 1993, and the related consolidated statements of earnings, cash flows, and partners' capital for each of the three years in the period ended December 31, 1994. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements 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, 1994 and 1993, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 1994, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Houston, Texas February 24, 1995
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (in thousands of dollars unless otherwise indicated)
(1) THE COMPANY
Unimar Company (the Company) is a general partnership organized under the Texas Uniform Partnership Act, whose partners are Unistar, Inc., a Delaware corporation and a direct subsidiary of Union Texas Petroleum Holdings, Inc. (UTPH), a Delaware corporation, and 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. Each partner shares equally in the Company's net earnings, distributions and capital contributions.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Presentation
The Company's consolidated financial statements include the accounts of the Company and its subsidiaries including its proportionate share of the activities of an Indonesian joint venture (the Joint Venture). All significant intercompany accounts and transactions have been eliminated.
(b) Inventories
Inventories primarily consist of materials and supplies and are generally priced at the lower of cost (moving average cost method) or net realizable value.
(c) Accounting for Oil and Gas Properties
Oil and gas exploration, development and production activities are accounted for by the successful efforts method of accounting. Under this method of accounting, the cost of acquiring undeveloped oil and gas leasehold acreage, including lease bonuses, brokers' fees and other related costs are capitalized. Provisions for impairment of undeveloped oil and gas leases are based on periodic evaluation and exploratory experience. Costs to drill and equip exploratory wells that find proved reserves are capitalized while costs associated with unsuccessful exploratory wells are expensed. Other exploratory expenditures, including geological and geophysical costs and annual lease rentals are expensed as incurred. Costs incurred to drill and equip productive wells, including development dry holes and related production facilities are capitalized.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued) (in thousands of dollars unless otherwise indicated)
(c) Accounting for Oil and Gas Properties (continued)
Depreciation, depletion, and amortization of successful oil and gas exploration wells and all development costs are determined under the unit-of-production method based on estimated recoverable proved developed reserves. Leasehold costs of producing properties are depleted on the unit-of-production method based on estimated proved developed and undeveloped reserves.
The Company generally provides for depreciation of other property, plant and equipment on a straight-line method over the estimated useful life of the assets. The range of rates used to calculate depreciation is 2-1/2 percent to 11 percent on buildings and 3 percent to 33-1/3 percent for other property items.
Oil and gas assets are reviewed when they are fully placed in service to insure that capitalized costs of the asset do not exceed undiscounted future net pre-tax cash flows and are reviewed annually.
(d) LNG Revenue Recognition
The Company recognizes its share of liquefied natural gas (LNG) revenues net of Pertamina's plant operating costs, transportation charges and project debt service. The Company is not a party to any gas balancing arrangements.
(e) Income and Other Taxes
The Company is a partnership and; therefore, does not pay income taxes. Since the Company's subsidiaries are corporations, income taxes included in the accompanying financial statements represent the domestic and foreign taxes applicable to such entities.
The Company's subsidiary, ENSTAR Corporation (ENSTAR), and its subsidiaries file a consolidated federal corporate income tax return.
Certain income and expense items are recorded during different periods for financial statement and income tax purposes. Deferred income taxes are provided for these differences.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued) (in thousands of dollars unless otherwise indicated)
(e) Income and Other Taxes (continued)
The Company follows the Statement of Financial Accounting Standards No. 109 (Statement 109), "Accounting for Income Taxes." Under Statement 109, the liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. An impairment evaluation, with reserves recorded as necessary for any tax benefit not expected to be realized, is required of deferred tax assets. A current tax expense or benefit is recognized for estimated taxes payable or refundable on tax returns for the current year.
(f) Concentrations of Credit Risk
Financial instruments which may subject the Company to concentrations of credit risk consist principally of short-term investments and trade receivables. The Company's excess cash is invested in time deposits with major banks. These deposits are purchased at a maturity of three months or less, and have minimal risk.
The Company's receivables consist primarily of the revenues derived from the sale of LNG under long-term contracts with utility and industrial companies in Japan, Taiwan and Korea. The buyers of the LNG make payment in United States dollars to a U.S. bank as trustee for the Joint Venture and other parties. The trustee, after deducting plant operating costs, transportation charges and project debt service from the gross LNG sales proceeds, distributes the net proceeds to the Joint Venture participants and other parties. The Company's trade receivables at December 31, 1994 result principally from sales of LNG and oil and are considered current and collectible, and collateral is not required to secure such receivables.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued) (in thousands of dollars unless otherwise indicated)
(g) Fair Value of Financial Instruments
The Company has various types of financial instruments consisting of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities. The carrying amount approximates fair value because of the short maturity of these instruments.
(h) Foreign Currency
The functional currency for translating the accounts of foreign subsidiaries is the U. S. dollar. Transaction gains and losses resulting from the effect of exchange rate fluctuations on transactions in currencies other than the functional currency are included in the determination of net income.
(3) INDONESIAN OIL AND GAS PROPERTIES
The Company, through its subsidiaries, has a 23.125 percent interest in, and is the operator of, the Joint Venture that has certain oil and gas exploration and production rights in Indonesia through a Production Sharing Contract (PSC) which was amended and extended in 1990 until August 7, 2018 with Pertamina, the state petroleum enterprise of the Republic of Indonesia.
Virginia Indonesia Company (VICO), a subsidiary of the Company, is the operator of the Joint Venture and is responsible for conducting exploration and development activities within the PSC area. The cost of such activities is funded by the Joint Venture partners to VICO. In addition to operating management responsibility, the operator acts as a custodian of Joint Venture cash received from its partners until disbursed in payment of operating and capital expenditures. At December 31, 1994 and 1993, cash and cash equivalents included $1,629 and $3,589, respectively, advanced from the other Joint Venture partners.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued) (in thousands of dollars unless otherwise indicated)
(3) INDONESIAN OIL AND GAS PROPERTIES (continued)
In addition, other subsidiaries of UTPH and LASMO each own a 26.25 percent interest in the Joint Venture. The PSC permits the Joint Venture to recover their costs of exploration, development and production - including general and administrative expenses - from oil and gas revenues as follows: capital costs are based on recoverable double- declining balance depreciation over various useful lives, which average fourteen years; non-capital costs are recovered in the year incurred. The Joint Venture, and thus the Company, has no ownership interest in oil and gas reserves and related assets, but rather receives revenues from the sale of oil, condensate, LPG and LNG in accordance with the PSC. 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. Such amounts were purchased for domestic use in 1994, 1993 and 1992. 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. The Semberah field which commenced production in December 1991 is exempt from the domestic obligation pricing until December 1996. In addition, 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 seven 1986 LPG Sales Contracts to the extent that the gas to fulfill these contracts is supplied from the Badak or Nilam fields; after August 7, 1998, all other LNG sales contract revenues will be split 30 percent after Indonesian income taxes to the Joint Venture 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 taxes of 56 percent through August 7, 1998, and 48 percent thereafter.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued) (in thousands of dollars unless otherwise indicated)
(3) INDONESIAN OIL AND GAS PROPERTIES (continued)
Pertamina currently sells liquefied natural gas to Japanese, Korean and Taiwanese utility and industrial customers primarily under five long-term contracts that expire in 1999, 2003, 2009, 2013 and 2014, respectively. Contracted sales of LNG to these customers approximated 72 percent, 68 percent, and 69 percent of the Company's gross revenues in 1994, 1993 and 1992, respectively.
(4) CASH AND CASH EQUIVALENTS
At December 31, 1994 and 1993, cash and cash equivalents includes short-term deposits and highly liquid debt instruments, purchased at a maturity with three months or less, of $3,421 and $8,284, respectively.
(5) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is as follows:
1994 1993
Oil and gas producing properties Proved properties $1,023,546 $991,447 Uncompleted wells in progress - 454 1,023,546 991,901 Less: Accumulated depletion 630,414 579,860 393,132 412,041
Other, net of accumulated depreciation of $1,085 in 1994 and $947 in 1993 1,028 2,336
$394,160 $414,377
(6) ACCRUED LIABILITIES
As at December 31, 1994 and 1993, accrued liabilities consisted of:
1994 1993
Accrued IPU liability $ 5,792 $ 4,804 Indonesian operating accruals 8,179 2,358 Other 1,016 2,152
$14,987 $ 9,314
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued) (in thousands of dollars unless otherwise indicated)
(7) LEASES
VICO leases office space in Indonesia, Singapore and the United States in connection with the operations of the Joint Venture. Rental expense amounted to $4,553, $4,982 and $5,230 in 1994, 1993 and 1992 respectively. Minimum annual rental commitments as at December 31, 1994 under non-cancelable leases are as follows:
1995 $10,827 1996 3,376 1997 1,875 1998 1,371 1999 1,370 2000 and thereafter 1,485
Total minimum lease payments $20,304
Minimum payments have not been reduced by future minimum sublease rentals of $1,717 due under non-cancelable leases.
Certain leases contain renewal options and escalation clauses which require payments of additional rent to the extent of related operating cost increases.
(8) INCOME AND OTHER TAXES
At December 31, 1994, the Company had investment tax credit carryovers of $3,523 that expire in 1995 through 2001, net foreign tax credit carryovers of $23,493 for regular tax purposes and $130,358 for alternative minimum tax purposes both of which expire in 1995 through 1999. The Company has a minimum tax credit of $13,187 that carries forward indefinitely. Deferred tax assets of $23,493 and $22,985 for foreign tax credit carryforwards and $3,523 and $3,523 for investment tax credit carryforwards at December 31, 1994 and 1993, respectively, have been offset by a valuation allowance.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued) (in thousands of dollars unless otherwise indicated)
(8) INCOME AND OTHER TAXES (continued)
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax liabilities as of December 31, 1994 and 1993 are as follows:
1994 1993
Deferred tax liabilities:
Oil and gas proven property costs capitalized for financial purposes and deducted for foreign taxes $162,966 $167,206
For financial reporting purposes, income before income taxes includes the following components:
1994 1993 1992
Pretax income: U. S. $ (2,423) $ (7,026) $(12,089) Foreign 125,056 125,213 120,366
$122,633 $118,187 $108,277
Significant components of the provision for income taxes attributable to continuing operations are as follows:
1994 1993 1992
Current: Federal $ 2,884 $ 2,446 $ 2,942 Foreign 87,777 88,430 87,179 $90,661 $90,876 $90,121
Deferred: Federal $ - $ - $ - Foreign (4,240) (3,164) (5,520) $(4,240) $(3,164) $(5,520)
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued) (in thousands of dollars unless otherwise indicated)
(8) INCOME AND OTHER TAXES (continued)
The reconciliation of income tax attributable to continuing operations computed at the U.S. federal statutory rates to income tax expense is:
1994 1993 1992
Tax at U.S. Statutory Rate 35.0% 35.0% 34.0%
Foreign statutory tax rate in excess of federal statutory tax rate 21.0% 21.0% 22.0%
Expenses not deductible in calculating Indonesian taxes 11.0% 12.8% 13.1%
Unutilized domestic book losses 0.7% 2.1% 3.8%
Domestic income taxed at less than foreign statutory rate 0.4% 1.2% 2.5%
U.S. taxes related to foreign operations 2.4% 2.1% 2.7%
Total 70.5% 74.2% 78.1%
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued) (in thousands of dollars unless otherwise indicated)
(9) INDONESIAN PARTICIPATING UNITS (IPUs)
The IPUs were issued, with no assigned value, in connection with the acquisition of ENSTAR in 1984 and represent a general obligation of the Company to make quarterly participation payments until September 1999, the amount of which will be measured by a fixed percentage of Net Cash Flow (as defined below) from the Joint Venture. While the amount of the Participation Payments, which are treated as reductions from revenues, will vary quarter to quarter depending upon the amount of Net Cash Flow, payment of the amounts due to the IPU holders is an obligation of the Company, not dependent upon the discretion of the partners of the Company. The rights of the IPU holders are those of a general creditor of the Company and thus the IPU holders have no equity interest in the Company in the nature of a general or limited partnership interest or otherwise. The IPU holders derive no economic benefit from the business activities of the Company other than the Joint Venture.
Each IPU entitles the holder to receive, until September 25, 1999, a quarterly participation payment equal to 1/14,077,747 of 32 percent of net positive cash flow. Net Cash Flow, attributable to IPU holders, 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 specified revenues net of specified expenditures from the Joint Venture. The above calculation was the result of negotiations among the parties to the 1984 merger of ENSTAR Corporation into the Company and represents the amount of future income from the Joint Venture that the Company has agreed to pay to the former stockholders of ENSTAR in the form of payments on the IPUs. If Net Cash Flow is zero or negative for any quarterly period, no Participation Payments for that quarter will be made. The Company maintains an irrevocable letter of credit for the benefit of the IPU holders in an amount equal to 240 percent of the most recent quarterly distribution. At December 31, 1994 and 1993, there were 10,778,590 IPUs issued and outstanding. Based on the closing price on the American Stock Exchange of the IPUs at December 31, 1994 of $9.125 per unit, the outstanding IPUs had a total market valuation of $98 million.
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued) (in thousands of dollars unless otherwise indicated)
Calculation of Net Cash Flow and Participation Payments
1994 1993
Positive cash flow:
Gas receipts $188,211 $175,840 Oil and condensate receipts 33,411 34,741 Other non-revenue cash receipts from Joint Venture 5,370 9,799
Total positive cash flow 226,992 220,380
Less negative cash flow:
Expenditures to Joint Venture 56,150 66,184 Indonesian income taxes 90,264 85,401
Total negative cash flow 146,414 151,585
Net positive cash flow from 23.125% interest in Joint Venture $ 80,578 $ 68,795
Net cash flow for benefit of IPU holders $ 19,724 $ 16,922
Participation Payment per unit $ 1.83 $ 1.57
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued) (in thousands of dollars unless otherwise indicated)
(10) LONG-TERM DEBT
The 8-1/4% convertible subordinated guaranteed debentures, due in December 1995, were repaid on January 5, 1994 in the principal amount of $36,400. The debentures had a carrying value at December 31, 1993 of $33,292 resulting in an extraordinary loss on redemption of $3,108, which was recognized in the first quarter of 1994.
(11) BENEFIT PLANS
VICO has a defined contribution retirement plan that covers its eligible employees. Although VICO expects to provide an annual contribution based on a percentage of each eligible employee's salary, the actual contribution is determined at the end of each year by its Board of Directors and may vary depending upon circumstances. Defined contribution pension expense is funded by the Joint Venture participants and the Company's share of such expense for the years ended December 31, 1994, 1993 and 1992 was $211, $263 and $200, respectively.
VICO provides severance pay to its employees based upon salary and length of service. Such severance pay is accrued over the service life of the employees and is funded by the Joint Venture. The Company has provided approximately $1.1 million, $0.2 million and $1.4 million for the years ended December 31, 1994, 1993 and 1992 respectively for its share of future severance payments.
The Company has a defined benefit pension plan established by ENSTAR that covers ENSTAR's former employees who are considered terminated and fully vested. ENSTAR's pension funding policy is to contribute an amount meeting the requirement of the Employees Retirement Income Security Act. The estimated reconciliation of the funded status of ENSTAR's pension plan as at December 31, 1994, 1993 and 1992 respectively was as follows:
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued) (in thousands of dollars unless otherwise indicated)
(11) BENEFIT PLANS (continued)
1994 1993 1992 Actuarial present value of:
Vested accumulated benefit obligation $(16,155) $(17,763) $(16,913)
Projected vested benefit obligation $(16,155) $(17,763) $(16,913) Fair value of plan assets 13,902 14,902 14,353
Unfunded projected benefit obligation (2,253) (2,861) (2,560) Unrecognized net loss 1,243 1,661 1,533 Unrecognized net transition obligation 837 872 907 Adjustment required to recognize minimum liability (2,080) (2,533) (2,440)
Accrued pension cost recognized in the Consolidated Balance Sheet $ (2,253) $ (2,861) $ (2,560)
The minimum liability that must be recognized is equal to the excess of the accumulated benefit obligation over the fair value of plan assets. A corresponding amount is recognized as either an intangible asset or a reduction to Partners' Capital. A reduction of Partners' Capital was required at December 31, 1993 and 1992 since the intangible asset recognized did not exceed the amount of unrecognized prior service cost.
The pension expense for 1994, 1993 and 1992 was composed of the following:
1994 1993 1992
Interest cost $ 1,317 $ 1,300 $ 1,303 Expected return on plan assets (1,063) (1,107) (1,108) Net amortization and deferral 35 35 35 $ 289 $ 228 $ 230
UNIMAR COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued) (in thousands of dollars unless otherwise indicated)
(11) BENEFIT PLANS (continued)
The assumed rate of return used in determining the projected benefit obligation was 8.5 percent, 7.5 percent and 8 percent for 1994, 1993 and 1992, respectively. The assumed long-term rate of return on plan assets was 8 percent for 1994, 1993 and 1992. Plan assets are invested in equity and fixed income securities.
(12) CLAIMS AND LITIGATION
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. The Company also has a reserve of $3.8 million for potential exposure in a royalty dispute. The Company believes it may have valid defenses against such claims.
(13) RELATED PARTY TRANSACTIONS
All aspects of the Company's business that are not associated with the operating management of the Joint Venture, such as legal, accounting, tax and other management functions are supplied by employees of the partners in accordance with management agreements negotiated among the parties. For the years 1994, 1993 and 1992, the charges approximated $400, $500 and $600, respectively.
The Company holds demand notes in the amount of $40,000 from or guaranteed by affiliates of each partner. These funds will be made available to the Company if additional working capital is required.
In addition to acting as the operator of the Joint Venture, VICO performs engineering, pipeline maintenance, and human resource related services for the operator of the LNG Plant, P.T. Badak Natural Gas Liquefaction Company (P.T. Badak). During the years ended December 31, 1994 and 1993 VICO billed P.T. Badak $21.8 and $33.5 million for services rendered. Accounts receivable from P.T. Badak approximated $2.4 million and $3.3 million at December 31, 1994 and 1993, respectively.
UNIMAR COMPANY AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited)
The following items are contained in this section:
(a) Indonesian oil and gas operations (b) Interim financial data
(a) INDONESIAN OIL AND GAS OPERATIONS
The Company's estimated net share of Indonesian oil and gas reserves is shown in Table 1. The estimated proved reserves of gas and oil and condensate as of December 31, 1994, 1993 and 1992 attributable to the Joint Venture's interest in the production sharing contract in East Kalimantan were prepared by petroleum engineers employed by LASMO, an affiliate of Ultrastar.
Net share estimates are the Company's present best estimates of the share of proved Indonesian reserves attributable to revenue the Company would receive, before Indonesian income taxes, under the terms of the Production Sharing Contract, as extended through August 7, 2018 based upon assumptions regarding levels of Joint Venture expenditures over the life of the project, oil and gas prices, firm contract sales commitments and potential sales opportunities and upon numerous other assumptions. The Company has no ownership interest in the Indonesian reserves in place, but rather shares in production and revenue from the sale of oil, condensate, LPG and LNG in accordance with the Production Sharing Contract. The reserve estimates are subject to revision as prices fluctuate due to the cost recovery feature for field and other operating costs under the Production Sharing Contract and for changes in the Indonesian income tax rate. Because of the number and range of these variables, no representation can be made that the net share estimates set forth below are accurate, and any changes in such variables will impact such estimates and the cash flows the Company may realize in the future.
Oil and gas reserves are considered proved if economic producibility is supported by either actual production or conclusive formation tests. Proved developed reserves are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods. Proved undeveloped reserves are reserves that are expected to be recovered from new wells on undrilled acreage or from existing
INDONESIAN OIL AND GAS OPERATIONS (continued)
wells where a relatively significant expenditure is required to permit production. These estimates do not include reserves which may be found by extension of proved areas, reserves which have been estimated considering known geological and seismic data and previous experience with similar reservoirs, or reserves recoverable by secondary or tertiary recovery methods unless these methods are in operation and showing successful results. These estimates include reserves that are not currently under contract, but which management expects may be marketed during the remaining period in which the Company has the right to produce such reserves, but for which there is no assurance of sales. Estimates of reserves require extensive judgments of reservoir engineering data and are generally less precise than other estimates used in connection with financial reporting. Actual future revenues from proved reserves estimates may vary significantly from estimated future cash flows due to changes in prices of oil and gas, and in the timing of actual production in future periods. Actual production and development costs will vary from those estimated due to inflation and other factors.
INDONESIAN OIL AND GAS OPERATIONS (continued)
TABLE 1
Quantities of Oil and Gas Reserves (Oil in Thousands of BBLS; Gas in MMCF)
Oil Gas
Proved Developed and Undeveloped Reserves:
As of December 31, 1991 11,150 1,011,381
Revisions to previous estimates 1,874 98,117
Production (1,736) (83,158)
As of December 31, 1992 11,288 1,026,340
Revisions to previous estimates 4,044 133,820
Production (1,778) (84,920)
As of December 31, 1993 13,554 1,075,240
Revisions to previous estimates 2,724 96,257
Production (1,891) (92,408)
As of December 31, 1994 14,387 1,079,089
Proved Developed Reserves:
As of December 31, 1991 8,792 656,546
As of December 31, 1992 7,632 733,354
As of December 31, 1993 10,281 727,536
As of December 31, 1994 11,731 877,140
INDONESIAN OIL AND GAS OPERATIONS (continued)
Table 2 shows costs incurred in oil and gas property acquisition, exploration and development activities.
TABLE 2
Costs Incurred in Oil and Gas Property Acquisition, Exploration and Development Activities Years ended December 31, 1994, 1993 and 1992 (Thousands of dollars)
1994 1993 1992
Exploration costs $ 2,545 $ 5,223 $ 7,193 Development costs 31,878 36,328 34,407
Table 3 shows results of operations for oil and gas producing activities.
TABLE 3
Results of Operations for Oil and Gas Producing Activities Years ended December 31, 1994, 1993, and 1992 (Thousands of dollars)
1994 1993 1992
Revenues $197,925 $200,581 $205,847
Production costs 19,618 17,836 19,068
Exploration costs 2,787 4,947 9,066
Depreciation, depletion and amortization 50,554 52,710 57,275
Income tax expense 86,357 87,640 81,386
Results of operations for producing activities (1) $ 38,609 $ 37,448 $ 39,052
(1) Excludes corporate overhead and interest costs.
INDONESIAN OIL AND GAS OPERATIONS (continued)
Table 4 shows a standardized measure of discounted future net cash flows and changes therein relating to proved oil and gas reserves using an annual discount of 10 percent and the Company's net share estimates referred to in the preface to Table 1. Generally, estimated future cash inflows have been computed by applying year-end prices of oil and gas to estimated future production of proved oil and gas reserves. Future development and production costs have been computed by estimating the future expenditures (based on year-end costs) to be incurred in developing and producing the proved reserves, assuming continuation of existing economic conditions. Future income tax expenses have been calculated by using the year-end statutory tax rate for Indonesia of 56 percent through August 7, 1998 and 48 percent thereafter. Indonesian net cash flow estimates are the Company's present best estimates of the share of future net revenues, after Indonesian taxes and capital and operating contributions to the Joint Venture, that the Company would receive if proved reserves are produced under the terms of the Production Sharing Contract, as extended, based upon assumptions regarding levels of Joint Venture expenditures over the life of the project, firm contract sales commitments and potential sales opportunities and upon numerous other assumptions. Additionally, the net cash flow estimates include amounts due IPU holders.
Because of the number and range of these variables, no representation can be made that the net cash flow estimates set forth below are accurate, and any change in such variables will impact the cash flows the Company may realize in the future.
TABLE 4
Standardized Measure of Discounted Future Net Cash Flows and Changes Therein Relating to Proved Oil and Gas Reserves At December 31, 1994, 1993 and 1992 (Thousands of dollars)
1994 1993 1992
Future cash inflows $2,372,316 $2,085,222 $2,627,497 Future production and development costs (593,791) (589,163) (573,047) Future income tax expenses (874,477) (740,808) (1,037,570)
Future net cash flows 904,048 755,251 1,016,880
10% annual discount for estimated timing of cash flows (442,377) (375,500) (496,070)
Standardized measure of discounted future net cash flows $ 461,671 $ 379,751 $ 520,810
INDONESIAN OIL AND GAS OPERATIONS (continued)
The following are the principal sources of changes in the standardized measure of discounted future net cash flows for proved reserves during 1994, 1993 and 1992.
1994 1993 1992 (Thousands of dollars)
Standardized measure of discounted future net cash flows at beginning of period $ 379,751 $ 520,810 $ 550,113
Sales and transfers of oil and gas produced, net of production costs (176,275) (177,720) (180,139)
Net changes in prices and production costs 159,985 (367,050) (108,119)
Development costs incurred during the period 31,878 36,328 34,407
Revisions of previous quantity estimates 67,590 104,367 78,074
Accretion of discount 71,775 92,991 100,530
Net change in income taxes (73,033) 170,025 45,944
Standardized measure of discounted future net cash flows at end of period $ 461,671 $ 379,751 $ 520,810
Note: The standardized measure of discounted future net cash flows at December 31, 1994, 1993 and 1992 included $59,571, $59,629 and $90,683, respectively, in future net cash flows attributable to IPU holders (See Footnote 9).
b) INTERIM FINANCIAL DATA (Unaudited)
The following table shows summary quarterly data for 1994, 1993 and 1992:
1st 2nd 3rd 4th Quarter Quarter Quarter Quarter
Year Ended December 31, 1994
Revenues $ 55,151 $ 42,717 $ 51,941 $ 48,116
Operating profit $ 35,384 $ 26,018 $ 31,029 $ 32,530
Earnings before Extraordinary item $ 9,818 $ 8,509 $ 10,088 $ 7,797
Net earnings $ 6,710 $ 8,509 $ 10,088 $ 7,797
Year Ended December 31, 1993
Revenues $ 58,298 $ 38,834 $ 47,840 $ 55,616
Operating profit $ 37,952 $ 21,099 $ 28,331 $ 36,798
Net earnings $ 10,804 $ 3,618 $ 5,350 $ 10,703
Year Ended December 31, 1992
Revenues $ 52,814 $ 45,518 $ 56,642 $ 50,923
Operating profit $ 30,909 $ 25,059 $ 33,456 $ 24,532 (a)
Net earnings $ 7,842 $ 6,207 $ 7,766 $ 1,861
(a) Includes a $6,400 provision for prior year's windfall profit tax liability. /TABLE
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 48) 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 45) 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.
ANDREW E. CROUCH (age 36) was appointed to the Company's Management Board in May 1994. He is also director of ENSTAR and certain of its affiliates. Since May 1994 he has been President and Director of LASMO America Ltd., the holding company for LASMO US subsidiaries. He previously served in a number of senior management positions in LASMO's London, England head office.
LARRY D. KALMBACH (age 43) was appointed to the Company's Management Board in February 1993. He is also a Director of ENSTAR and certain of its affiliates. Since February 1995 he has been Vice President and Chief Financial Officer of UTPH. Prior to that he held several executive and management positions with UTPH including Vice President - Finance from 1993 to 1995 and Vice President and Controller from 1986 to 1993.
WILLIAM M. KRIPS (age 55) was appointed to the Company's Management Board in January 1987 and in May 1994 was appointed Chairman of the Management Board. He is also a Director of ENSTAR and certain of its affiliates. Since 1990, he has been Senior Vice President-Exploration & Production of UTPH. Prior to that time, he served as Senior Vice President - U. S. Exploration and Production, Senior Vice President - Hydrocarbon Products Group and Vice President - International Operations.
ARTHUR W. PEABODY, JR. (age 51) was appointed to the Company's Management Board in February 1992. He is also a Director of ENSTAR, ENSTAR Indonesia, Inc., International and VICO. Since May 1994, he has served as Senior Vice President of UTPH and has held several executive positions with UTPH including Senior Vice President - Exploration and Production, Senior Vice President and General Manager - Hydrocarbon Products Group, Vice President - Planning and Administration and Vice President - Acquisitions and Planning.
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 and its subsidiaries, have 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, 1995:
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 $434 and $508 was charged in 1994 and 1993, respectively, including $109 ($138 in 1993) 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 engineering, pipeline maintenance and human resource related services for the operator of the LNG Plant, P.T. Badak Natural Gas Liquefaction Company (P.T. Badak). For the year ended December 31, 1994 and 1993 VICO billed P.T. Badak $21.8 million and $33.5 million respectively for services rendered. Accounts receivable from P.T. Badak approximated $2.4 million at December 31, 1994 ($3.3 million at December 31, 1993).
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, 1994 and 1993 26
Consolidated Statement of Earnings, Years ended December 31, 1994, 1993 and 1992 27
Consolidated Statement of Cash Flows, Years ended December 31, 1994, 1993 and 1992 28
Consolidated Statement of Changes in Partners' Capital, Years ended December 31, 1994, 1993 and 1992 29
Notes to Consolidated Financial Statements 30-43
Supplemental Financial Information (unaudited) 44-50
All schedules are omitted as they 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. (filed as Exhibit (10)-3- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-4- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)- 5- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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- Fourth 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. (filed as Exhibit (10)-8- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-9- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-10- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-11- to the Company's 1993 Form 10-K (No. 1- 8791)).*
(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. (filed as Exhibit (10)-12- to the Company's 1993 Form 10-K (No. 1- 8791)).*
* Incorporated herein by reference.
(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. (filed as Exhibit (10)-13- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-14- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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.
(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. (filed as Exhibit (10)-17- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-18- to the Company's 1993 Form 10-K (No. 1-8791)).*
* Incorporated herein by reference.
(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. (filed as Exhibit (10)-19- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-20- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-21- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-23- to the Company's 1993 Form 10-K (No. 1-8791)).*
* Incorporated herein by reference.
(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)).*
(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.
(10)-27- Letter agreement between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara and Chinese Petroleum Corporation, dated December 1, 1989. (filed as Exhibit (10)-27- to the Company's 1993 Form 10-K (No. 1-8791)).*
(10)-28- 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. (filed as Exhibit (10)-29- to the Company's 1993 Form 10-K (No. 1-8791)).*
(10)-29- 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. (filed as Exhibit (10)-30- to the Company's 1993 Form 10-K (No. 1- 8791)).*
* Incorporated herein by reference.
(10)-30- 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. (filed as Exhibit (10)-31- to the Company's 1993 Form 10-K (No. 1-8791)).*
(10)-31- 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. (filed as Exhibit (10)-32- to the Company's 1993 Form 10-K (No. 1-8791)).*
(10)-32- 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. (filed as Exhibit (10)-33- to the Company's 1993 Form 10-K (No. 1-8791)).*
(10)-33- 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. (filed as Exhibit (10)-34- to the Company's 1993 Form 10-K (No. 1-8791)).*
(10)-34- 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. (filed as Exhibit (10)-35- to the Company's 1993 Form 10-K (No. 1-8791)).*
* Incorporated herein by reference.
(10)-35- 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. (filed as Exhibit (10)-36- to the Company's 1993 Form 10-K (No. 1-8791)).*
(10)-36- $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. (filed as Exhibit (10)-37- to the Company's 1993 Form 10-K (No. 1- 8791)).*
(10)-37- 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. (filed as Exhibit (10)-38- to the Company's 1993 Form 10-K (No. 1-8791)).*
(10)-38- 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)).*
* Incorporated herein by reference.
(10)-39- 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)-40- 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. (filed as Exhibit (10)-42- to the Company's 1993 Form 10-K (No. 1-8791)).*
(10)-41- 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. (filed as Exhibit (10)-43- to the Company's 1993 Form 10-K (No. 1- 8791)).*
(10)-42- 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.
(10)-43- Amendments to Arun and Bontang LPG Sales and Purchase Contract, dated October 5, 1994, between Pertamina, as Seller, and Mitsubishi Corporation, Cosmo Oil Co., Ltd., Nippon Petroleum Gas Co., Ltd., Showa Shell Sekiyu K.K., Japan Energy Corporation, Idemitsu Kosan Co., Ltd., and Mitsui Oil & Gas Co., Ltd., as Buyers. (filed as Exhibit 10.88 to the Union Texas Petroleum Holdings, Inc.'s 1994 Form 10- K (Commission File No. 1-9019)).*
(10)-44- 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. (filed as Exhibit (10)-45- to the Company's 1993 Form 10-K (No. 1-8791)).*
* Incorporated herein by reference.
(10)-45- 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)-46- 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. (filed as Exhibit (10)-47- to the Company's 1993 Form 10-K (No. 1-8791)).*
(10)-47- 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. (filed as Exhibit (10)-48- to the Company's 1993 Form 10-K (No. 1-8791)).*
(10)-48- Addendum to Badak IV LNG Sales Contract Supply Agreement (effective October 23, 1990), dated January 31, 1994, by and between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara ("Pertamina") and Virginia Indonesia Company ("VICO"), LASMO Sanga Sanga Limited, Opicoil Houston, Inc., Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc., and Virginia International Company.
(10)-49- Memorandum of Agreement for Purchase and Sale of LNG During 1995 - 1999 between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara ("Pertamina") ("Seller") and Korea Gas Corporation ("KGC") ("Buyer") for the sale and purchase of certain quantities of LNG.
(21)-1- List of Subsidiaries of the Company.
(23)-1- Consent of Ernst & Young LLP.
(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, 1994.
* 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 22, 1995 By /S/ WILLIAM M. KRIPS William M. Krips 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 22, 1995.
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 Chairman of the (LASMO Representative) Management Board (UTPH Representative)
By /S/ ANDREW E. CROUCH By /S/ ARTHUR W. PEABODY, JR. Andrew E. Crouch Arthur W. Peabody, Jr. Management Board Management Board (LASMO Representative) (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. (filed as Exhibit (10)-3- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-4- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-5- to the Company's 1993 Form 10-K (No. 1- 8791)).*
(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- Fourth 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. (filed as Exhibit (10)-8- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-9- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)- 10- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-11- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-12- to the Company's 1993 Form 10-K (No. 1-8791)).*
* Incorporated herein by reference.
(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. (filed as Exhibit (10)-13- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-14- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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.
(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. (filed as Exhibit (10)-17- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-18- to the Company's 1993 Form 10-K (No. 1-8791)).*
* Incorporated herein by reference.
(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. (filed as Exhibit (10)-19- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-20- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-21- to the Company's 1993 Form 10-K (No. 1-8791)).*
(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. (filed as Exhibit (10)-23- to the Company's 1993 Form 10-K (No. 1- 8791)).*
* Incorporated herein by reference.
(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)).*
(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.
(10)-27- Letter agreement between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara and Chinese Petroleum Corporation, dated December 1, 1989. (filed as Exhibit (10)-27- to the Company's 1993 Form 10-K (No. 1-8791)).*
(10)-28- 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. (filed as Exhibit (10)-29- to the Company's 1993 Form 10-K (No. 1-8791)).*
(10)-29- 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. (filed as Exhibit (10)-30- to the Company's 1993 Form 10-K (No. 1- 8791)).*
* Incorporated herein by reference.
(10)-30- 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. (filed as Exhibit (10)-31- to the Company's 1993 Form 10-K (No. 1-8791)).*
(10)-31- 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. (filed as Exhibit (10)-32- to the Company's 1993 Form 10-K (No. 1-8791)).*
(10)-32- 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. (filed as Exhibit (10)-33- to the Company's 1993 Form 10-K (No. 1-8791)).*
(10)-33- 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. (filed as Exhibit (10)-34- to the Company's 1993 Form 10-K (No. 1-8791)).*
(10)-34- 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. (filed as Exhibit (10)-35- to the Company's 1993 Form 10-K (No. 1-8791)).*
* Incorporated herein by reference.
(10)-35- 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. (filed as Exhibit (10)-36- to the Company's 1993 Form 10-K (No. 1-8791)).*
(10)-36- $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. (filed as Exhibit (10)-37- to the Company's 1993 Form 10-K (No. 1- 8791)).*
(10)-37- 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. (filed as Exhibit (10)-38- to the Company's 1993 Form 10-K (No. 1- 8791)).*
(10)-38- 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)).*
* Incorporated herein by reference.
(10)-39- 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)-40- 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. (filed as Exhibit (10)-42- to the Company's 1993 Form 10-K (No. 1-8791)).*
(10)-41- 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. (filed as Exhibit (10)-43- to the Company's 1993 Form 10-K (No. 1- 8791)).*
(10)-42- 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.
(10)-43- Amendments to Arun and Bontang LPG Sales and Purchase Contract, dated October 5, 1994, between Pertamina, as Seller, and Mitsubishi Corporation, Cosmo Oil Co., Ltd., Nippon Petroleum Gas Co., Ltd., Showa Shell Sekiyu K.K., Japan Energy Corporation, Idemitsu Kosan Co., Ltd., and Mitsui Oil & Gas Co., Ltd., as Buyers. (filed as Exhibit 10.88 to the Union Texas Petroleum Holdings, Inc.'s 1994 Form 10-K (Commission File No. 1-9019)).*
(10)-44- 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. (filed as Exhibit (10)-45- to the Company's 1993 Form 10-K (No. 1-8791)).*
* Incorporated herein by reference.
(10)-45- 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)-46- 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. (filed as Exhibit (10)-47- to the Company's 1993 Form 10-K (No. 1-8791)).*
(10)-47- 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. (filed as Exhibit (10)-48- to the Company's 1993 Form 10-K (No. 1-8791)).*
(10)-48- Addendum to Badak IV LNG Sales Contract Supply Agreement (effective October 23, 1990), dated January 31, 1994, by and between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara ("Pertamina") and Virginia Indonesia Company ("VICO"), LASMO Sanga Sanga Limited, Opicoil Houston, Inc., Union Texas East Kalimantan Limited, Universe Gas & Oil Company, Inc., and Virginia International Company.
(10)-49- Memorandum of Agreement for Purchase and Sale of LNG During 1995 - 1999 between Perusahaan Pertambangan Minyak Dan Gas Bumi Negara ("Pertamina") ("Seller") and Korea Gas Corporation ("KGC") ("Buyer") for the sale and purchase of certain quantities of LNG.
(21)-1- List of Subsidiaries of the Company.
(23)-1- Consent of Ernst & Young LLP.
(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, 1994.
* Incorporated herein by reference.