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T&K Draft of 3/25/94
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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(Mark One) FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number: 0-7062
NOBLE AFFILIATES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 73-0785597
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
110 West Broadway 73401
Ardmore, Oklahoma
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code:
(405) 223-4110
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of Each Exchange on
Title of Each Class Which Registered
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Common Stock, $3.33-1/3 par value New York Stock Exchange, Inc.
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
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Aggregate market value of Common Stock held by nonaffiliates as of March
14, 1994: $1,065,252,298.
Number of shares of Common Stock outstanding as of March 14, 1994:
49,943,530.
DOCUMENTS INCORPORATED BY REFERENCE
Listed below are documents parts of which are incorporated herein by
reference and the part of this report into which the document is incorporated:
(1) 1993 annual report to the shareholders - Parts I and II.
(2) Proxy statement for the 1994 annual meeting of shareholders -
Part III.
(3) Form 10-K for the year ended December 31, 1991 - Part II.
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TABLE OF CONTENTS
PAGE
PART I
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Oil and Gas. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Acquisitions. . . . . . . . . . . . . . . . . . . . . . . . . 1
Exploration Activities. . . . . . . . . . . . . . . . . . . . 2
Production Activities . . . . . . . . . . . . . . . . . . . . 4
Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Regulation and Risks. . . . . . . . . . . . . . . . . . . . . 5
Competition . . . . . . . . . . . . . . . . . . . . . . . . . 6
Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Offices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Oil and Gas. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Item 3. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . 12
Item 4. Submission of Matters to a Vote of Security Holders. . . . . . . . 12
Executive Officers of the Registrant . . . . . . . . . . . . . . . 12
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Item 6. Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . 13
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations. . . . . . . . . . . . . . . . . . . . . . . 14
Item 8. Financial Statements and Supplementary Data. . . . . . . . . . . . 14
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.. . . . . . . . . . . . . . . . . . . . . . . 14
Item 10. Directors and Executive Officers of the Registrant.. . . . . . . . 14
Item 11. Executive Compensation.. . . . . . . . . . . . . . . . . . . . . . 14
Item 12. Security Ownership of Certain Beneficial Owners and Management.. . 14
Item 13. Certain Relationships and Related Transactions.. . . . . . . . . . 14
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.. 15
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PART I
ITEM 1. BUSINESS.
GENERAL
Noble Affiliates, Inc. is a Delaware corporation organized in 1969. The
Registrant is principally engaged, through its subsidiaries, in the exploration
for and production of oil and gas. In this report, unless otherwise indicated
or the context otherwise requires, the "Company" or the "Registrant" refers to
Noble Affiliates, Inc. and its subsidiaries.
OIL AND GAS
The Registrant's wholly owned subsidiary, Samedan Oil Corporation
("Samedan"), has been engaged in the exploration for and production of oil and
gas since 1932. Samedan conducts its exploration and production operations
throughout the major basins in the United States, including the Gulf of Mexico,
and in foreign jurisdictions, primarily in Canada and Africa. For information
regarding Samedan's oil and gas properties, see "Item 2 - Properties - Oil and
Gas" on pages 7 through 11 of this report.
In this report, unless the context otherwise requires, Samedan refers to
Samedan Oil Corporation and its subsidiaries. In this report, quantities of oil
are expressed in barrels ("bbls"), and quantities of natural gas are expressed
in thousands of cubic feet ("Mcf"), millions of cubic feet ("MMcf") or billions
of cubic feet ("Bcf").
ACQUISITIONS
During 1993, Samedan spent approximately $418.5 million in proved property
acquisitions. Of the $418.5 million in acquisitions, two of the transactions
totalling $405.0 million were purchases of proved oil and gas properties from
Freeport-McMoRan, Inc. ("Freeport-McMoRan") and FM Properties Operating Co.
("FMPO"). In July 1993, Samedan acquired from Freeport-McMoRan and FMPO for
$100,000,000 all their interests (an approximate 70 percent working interest) in
East Cameron blocks 320, 331 and 332, which are located in federal waters
offshore Louisiana. The blocks contain seven suspended oil and gas wells, and
as of June 30, 1993, these properties had estimated proved undeveloped reserves
of 4.3 million bbls of oil and 76.6 Bcf of gas. Production facilities for these
properties are under construction. Such facilities will be capable of handling
gross production of 10,000 bbls of oil and 100 MMcf of gas per day.
Installation of the production facilities is expected to occur in late 1994.
In October 1993, Samedan acquired substantially all the remaining oil and
gas properties from FMPO for $305,000,000. Such acquisition included 40
producing blocks in the Gulf of Mexico and three oil and gas fields onshore in
the United States.
At year end 1993, the Gulf of Mexico blocks were producing 1,800 bbls of
oil and 80 MMcf of gas per day, primarily from three fields: Mississippi Canyon
365 (67 percent working interest), South Pass 83 (61 percent working interest)
and Vermilion 161/162 (40 percent working interest).
The onshore fields included in the acquisition consist of two gas fields
and one oil field. The Bowdoin gas field is located in Phillips and Valley
Counties, Montana. The field, which Samedan operates, is 50 miles long and
25 miles wide and contains approximately 550 wells which produce from a shallow,
low pressure formation. Samedan's working interest is approximately 57 percent.
Production from the field is sold to KN Energy, Inc. under a gas purchase
contract having a term coexistent with the life of the field at prices currently
above the spot market. The contract provides for the sale of 10.5 MMcf of gas
per day at a price which was $3.34 per Mcf in December 1993, and increases each
month thereafter by four-tenths of one percent to a maximum of $6.75 per Mcf.
Samedan estimates the field, which is producing at a rate of 10.5 MMcf of gas
per day net to Samedan's interest, has a reserve life in excess of 37 years.
The Niobrara gas area is located in northeastern Colorado and northwestern
Kansas, and the wells in which Samedan acquired an interest were producing at
year end 1993 approximately 8 MMcf of gas per day net to Samedan's interest.
Samedan's working interest in the area is approximately 62 percent.
Samedan also acquired a 50 percent non-operating working interest in the
South Belridge oil field in Kern County, California. The field produces oil
from two separate zones, the Diatomite, which is under waterflood, and the
Tulare, which is a steamflood operation. Production from the unit is
approximately 2,660 bbls per day net to Samedan's interest.
Also in 1993, Samedan spent $4.4 million on acquisitions of unproved
properties. These properties were acquired primarily through domestic onshore
lease acquisitions, various offshore lease sales and Canadian land sales.
EXPLORATION ACTIVITIES
Samedan, by itself or through various arrangements with others,
investigates potential oil and gas properties, seeks to acquire exploration
rights in areas of interest and conducts exploratory activities, including
geophysical and geological evaluation and exploratory drilling, where
appropriate, on properties for which it acquired such exploration rights.
Samedan has been engaged in exploration and development of oil and gas
reserves in federal and state waters offshore Texas and Louisiana since 1968 and
has remained active in these areas of the Gulf of Mexico throughout the past 25
years during which it has drilled, or participated in the drilling of (through
December 31, 1993), 595 gross wells. In 1993, Samedan drilled or participated
in the drilling of 12 exploratory wells (5.7 net) and 22 development wells (7.3
net) in federal and state waters offshore Texas and Louisiana. Of the 34 gross
wells drilled, 22 (9.2 net) were completed as productive wells and 12 (3.8 net)
were abandoned as dry holes. The Registrant intends to remain active in these
areas of the Gulf of Mexico. As of December 31, 1993, the Registrant had 44
undrilled leases in the Gulf of Mexico, with expiration dates ranging from 1994
to 1998, in which the Registrant currently intends to conduct future exploration
activities.
The following paragraphs in this "Exploration Activities" section describe
significant domestic activities in 1993.
GULF OF MEXICO. Samedan encountered a multi-pay oil and gas discovery on
its 44 percent owned Vermilion 371 block, located offshore Louisiana in 297 feet
of water. The discovery well logged four potential hydrocarbon-bearing zones,
three of which were tested. On a combined basis, the well flowed 2,119 bbls of
oil and condensate and 9.3 MMcf of gas per day. The second well was drilled
4,950 feet to the southeast of the discovery well and logged 102 feet of oil and
gas/condensate pay sands in four zones. The third well on the property was
drilled 5,350 feet to the northwest of the discovery well and logged 131 feet of
oil and gas/condensate pay sands in five zones. A fourth well is scheduled to
be drilled during the first quarter of 1994. Production facilities are being
designed for the property and initial production is projected for 1995.
An oil discovery was made and subsequent confirmation wells were drilled on
Samedan's 50 percent owned Vermilion 332 block located in 217 feet of water
offshore Louisiana. Pay thickness, flow rates and other technical data have not
been disclosed.
Offshore Texas, at Brazos 531, Samedan logged 44 feet of gas pay 2,550 feet
north of a discovery well drilled by the offset lease operator. The offset well
tested 9.2 MMcf of gas per day. A mutually agreed upon production unit is being
formed by the Company and the offset lease owners to efficiently develop and
produce the reservoir. The Company estimates it will own an approximate
25 percent working interest in the unit with first production projected for the
fourth quarter of 1994.
Production facilities were in place at year end 1993 on Samedan's South
Timbalier 68 #1 well. Samedan owns a 100 percent working interest in the well
until payout is attained. Thereafter, Samedan will own a
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35 percent working interest in the well until 10 Bcf of gas are produced at
which time Samedan's interest will be reduced to 10 percent. The well is
expected to commence production in the first quarter of 1994 at an estimated
rate of 2,000 bbls of oil and 1.5 MMcf of gas per day.
Development operations are under way and production is expected to commence
at varying times throughout 1994 on the following properties: High Island A-547
(100 percent working interest), High Island A-281 (83 percent working interest),
High Island A-376 (8 percent working interest), High Island A-417 (50 percent
working interest), Brazos 413 (17 percent working interest), Brazos A-51 (50
percent working interest) and Matagorda Island 638 (8 percent working interest),
located offshore Texas; and South Marsh Island 232 (80 percent working
interest), West Cameron 445 (100 percent working interest) and Ship Shoal 315
(25 percent working interest), located offshore Louisiana.
DOMESTIC ONSHORE. Samedan drilled an oil discovery well on its Creek Butte
Prospect in Roosevelt County, Montana. The Harmon 41-18 well was completed at a
rate of 376 bbls of oil per day from the Nisku formation. Additional drilling
is scheduled for 1994.
Samedan formed a waterflood unit in its Six Mile South prospect in Beaver
County, Oklahoma during 1993. Samedan operates the unit with an 82 percent
working interest. Samedan is currently injecting 3,100 barrels of water per day
into the formation and expects oil production response to occur by the third
quarter of 1994. Peak oil production from the unit is expected to be
approximately 700 bbls per day.
In 1993, Samedan continued its infill drilling program in three of its
waterflood oil producing units. Three wells were drilled in 1993 on Samedan's
74.7 percent owned Wildcat Jim Penn Unit in southern Oklahoma, which added
approximately 80 bbls of oil production per day. Total unit oil production at
year end 1993 was 894 bbls per day. Samedan also drilled in 1993 six infill
wells in its 56.4 percent owned North Alma Penn Unit, also located in Southern
Oklahoma, which added approximately 300 bbls of oil production per day. Total
unit oil production at year end 1993 was 1,389 bbls per day. During 1993,
Samedan drilled four infill wells in its 56.8 percent owned South Central
Robertson Unit located in Gaines County, Texas, which added approximately 250
bbls of oil production per day. Total unit oil production at year end 1993 was
3,050 bbls per day.
The following paragraphs in this "Exploration Activities" section describe
significant international activities in 1993.
CANADA. During 1993, Samedan Oil of Canada, Inc., a wholly-owned
subsidiary of Samedan ("Samedan-Canada"), participated in 13 exploratory wells
(6.4 net) and 15 development wells (4.0 net) with interests ranging from 12 to
100 percent. A total of 13 wells (3.7 net) were successfully completed in 1993.
In 1993, Samedan-Canada participated with a 14 percent working interest in
drilling three horizontal wells in its Meekwap oil field in Alberta Province.
The wells were successfully completed and flowing approximately 3,300 bbls of
oil per day at year end 1993. Samedan-Canada anticipates two to four additional
horizontal wells could be drilled in the field during 1994.
In Alberta Province, Samedan-Canada successfully completed its Nevis 4-30
well in its Gadsby Lake Prospect. The well is capable of producing 1,200 bbls
of oil per day, which is substantially in excess of the amount allowed by
regulations. Samedan-Canada expects allowable production in 1994 from the well
to be approximately 50 bbls of oil per day. Samedan-Canada owns a 100 percent
working interest in the well.
At year end 1993, Samedan-Canada was installing a 12-mile pipeline to
connect its Evening Star gas wells to the sales system. First production is
expected during the first quarter of 1994 at a rate of approximately 1 MMcf of
gas per day, net to Samedan-Canada's interest.
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TUNISIA. During 1993, Samedan of Tunisia, Inc., a wholly-owned subsidiary
of Samedan ("Samedan-Tunisia") participated in two exploratory wells (.9 net).
Samedan-Tunisia drilled a dry hole on its 50 percent owned LaMarsa Prospect and
also drilled a dry hole on its 40 percent owned Tazerka Field in 1993.
During the year, the Tazerka oil field, which Samedan-Tunisia operates,
produced an average of 1,835 bbls of oil per day (642 net to Samedan-Tunisia)
from five wells. Production from the field is stored in a floating production
and storage unit, capable of holding 1.4 million bbls of oil, anchored on the
property.
Samedan-Tunisia is currently planning to drill during 1994 two development
wells on its Isis Concession and one exploratory well on its Cap Bon Marin
exploration permit, all offshore Tunisia. Samedan's interests in the Isis
Concession and Cap Bonn Marin permit are 40 percent and 50 percent,
respectively.
WEST AFRICA. Samedan of North Africa, Inc., a wholly-owned subsidiary of
Samedan ("Samedan-North Africa"), owns a 30 percent working interest in the Alba
Field located in a 500,000 gross acre contract area northwest of Bioco Island in
the Atlantic Ocean offshore Equitorial Guinea. During 1993, production from the
Alba Field averaged 4,713 barrels of condensate per day from two wells.
Production facilities were expanded during 1993 to accommodate gross condensate
production of up to 7,200 bbls per day. Samedan-North Africa did not engage in
any drilling during 1993.
INDONESIA. Samedan Oil of Indonesia, Inc., a wholly-owned subsidiary of
Samedan ("Samedan-Indonesia"), owns a 15 percent working interest in a permit
covering approximately 747,000 gross acres in the East Java Sea, offshore
Indonesia. Development of the Camar Field, following extensive drilling and
testing of numerous wells from 1982 through 1989, was completed in 1991.
Production peaked at approximately 9,872 bbls per day in late 1991 before
declining to 2,700 bbls per day at year end 1993, which is below the economic
limits due to high operational costs. At year end 1993, the operator was making
preparations to mothball or abandon the field. The oil reserves and related
costs attributable to the Company's interest in the Camar Field were essentially
written off during 1993.
PRODUCTION ACTIVITIES
As of December 31, 1993, Samedan owned approximately 1,809 net producing
oil and gas wells in the United States and Canada and approximately 4 net
producing oil and gas wells in other foreign jurisdictions. Net production of
oil (including condensate and natural gas liquids), excluding royalty sales,
totaled 6,916,767 bbls in 1993 compared to 6,362,593 bbls in 1992. Net
production of natural gas, excluding royalty sales, totaled 75,139,423 Mcf in
1993 compared to 73,292,461 Mcf in 1992.
Samedan operates approximately 28 percent of the gross oil and gas wells in
which it has an interest, with the remainder operated by others under operating
agreements customarily used in the industry.
MARKETING
Oil produced by the Company is sold to various purchasers in the United
States, Canada and other foreign locations at various prices depending on the
location and quality of the oil. The Company has no long-term contracts with
purchasers of its oil production. Gas is sold primarily under 30-day spot sales
contracts varying in length from one to twelve months. The prices received
under these contracts are affected by factors that impact the pricing of most
commodities: weather, seasonal demand and availability of supply. See "Item 1
- - Business - Oil and Gas - Acquisitions" for a description of a long-term gas
purchase contract covering certain production from the Bowdoin gas field in
Montana. Crude oil, condensate and natural gas are distributed through
pipelines and trucks to gatherers, transportation companies and end users. In
order to manage its exposure to price risks, the Company from time to time
enters into hedging transactions, including crude oil and natural gas futures
contracts.
The largest single customer for Samedan's oil in 1993 purchased
approximately 13 percent of its oil production, and the five largest purchasers
accounted for approximately 48 percent of total oil production.
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The largest single customer for Samedan's gas in 1993 purchased approximately
19 percent of its gas production, and the five largest purchasers accounted for
approximately 44 percent of total gas production. The Company does not believe
that the loss by Samedan of a major oil or gas customer would have a material
adverse effect on the Company.
Oil prices are affected by a variety of factors that are beyond the control
of the Company. The principal factors influencing the prices received by
producers of domestic crude oil continue to be the pricing and production of the
members of the Organization of Petroleum Exporting Countries. The Company's
average per barrel oil price decreased from $20.39 in 1991 to $18.68 in 1992 to
$15.91 in 1993. The Company's average oil prices for 1991, 1992 and 1993
reflected additional amounts per barrel of $1.17, $0.33 and $0.02, respectively,
from hedging oil production.
Substantial competition in the natural gas marketplace continued in 1993.
Gas prices, which were once determined largely by governmental regulations, are
now being influenced to a greater extent by the marketplace. The average price
per Mcf realized by the Company in 1993 was $2.10, 16 percent higher than the
$1.81 realized in 1992. The Company's average gas prices for 1993 and 1992
reflected reductions in the average gas price per Mcf of $.048 and $.045,
respectively, from hedging natural gas production.
On January 13, 1994, the Company formed a wholly-owned subsidiary, Noble
Gas Marketing, Inc., for the purpose of seeking out opportunities to enhance the
value of the Company's gas by marketing directly to end users. It is
anticipated that Noble Gas Marketing, Inc. will also be actively involved in the
purchase and sale of gas from other producers. Such third party gas may be
purchased from non-operators who own working interests in the Company's wells,
or from other producers' properties in which the Company may not own an
interest. It is further anticipated that Noble Gas Marketing, Inc. will engage
in the installation, purchase and operation of gas gathering lines.
REGULATION AND RISKS
GENERAL. Exploration for and production and sale of oil and gas are
extensively regulated at the national, state and local levels. Oil and gas
development and production activities are subject to various state laws and
regulations (and orders of regulatory bodies pursuant thereto) governing a wide
variety of matters, including allowable rates of production, marketing, pricing,
prevention of waste and pollution, and protection of the environment. Laws
affecting the oil industry are under constant review for amendment or expansion
and frequently increase the regulatory burden on companies. Numerous
governmental departments and agencies are authorized by statute to issue rules
and regulations binding on the oil and gas industry. Many of these governmental
bodies have issued rules and regulations with which are often difficult and
costly to comply, and which carry substantial penalties for failure to comply.
These laws, regulations and orders may restrict the rate of oil and gas
production below the rate that would otherwise exist in the absence of such
laws, regulations and orders. The regulatory burden on the oil and gas
industry increases its costs of doing business and consequently affects
its profitability.
NATURAL GAS. The natural gas industry has been regulated under the Natural
Gas Act and the Natural Gas Policy Act of 1978 (the "NGPA"). Under the Natural
Gas Wellhead Decontrol Act of 1989, price ceilings have been eliminated over a
transition period which ended on January 1, 1993.
CERTAIN RISKS. In Samedan's exploration operations, losses may occur
before any accumulation of oil or gas is found. If oil or gas is discovered, no
assurance can be given that sufficient reserves will be developed to enable
Samedan to recover the costs incurred in obtaining the reserves or that reserves
will be developed at a rate sufficient to replace reserves currently being
produced and sold. Samedan's international operations are also subject to
certain political, economic and other uncertainties including, among others,
risks of war, expropriation, renegotiation or modification of existing
contracts, taxation policies, foreign exchange restrictions, international
monetary fluctuations and other hazards arising out of foreign governmental
sovereignty over areas in which Samedan conducts operations.
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ENVIRONMENTAL MATTERS. As a developer, owner and operator of oil and gas
properties, Samedan is subject to various federal, state, local and foreign
country laws and regulations relating to the discharge of materials into, and
the protection of, the environment. The release or discharge of oil from
Samedan's domestic onshore or offshore facilities could subject Samedan to
liability under federal laws and regulations, including the Oil Pollution Act of
1990, the Outer Continental Shelf Lands Act and the Clean Water Act, for
pollution cleanup costs, damages to the environment, civil or criminal
penalties, and orders or injunctions requiring the suspension or cessation of
operations in affected areas. The liability under these laws for a substantial
release or discharge of oil, subject to certain specified limitations on
liability, may be extraordinarily large. If any oil pollution was caused by
willful misconduct, willful negligence or gross negligence, or was caused
primarily by a violation of federal regulations, such limitations on liability
may not apply. Certain of Samedan's facilities are subject to regulations of
the United States Environmental Protection Agency, including regulations that
require the preparation and implementation of spill prevention control and
countermeasure plans relating to the possible discharge of oil into navigable
water.
The Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), also known as "Superfund", imposes liability on certain classes of
persons that contributed to the release or threatened release of a hazardous
substance into the environment. The Resource Conservation and Recovery Act
("RCRA") and regulations promulgated thereunder regulate hazardous waste,
including its treatment, storage and disposal. CERCLA currently exempts crude
oil, and RCRA currently exempts certain drilling materials, such as drilling
fluids and production waters, from the definitions of hazardous substances and
hazardous wastes. Samedan's operations, however, may involve the use or
handling of other materials that may be classified as hazardous substances or
hazardous wastes, and therefore, these statutes and regulations promulgated
under them would apply to Samedan's generation, handling and disposal of these
materials. In addition, there can be no assurance that such exemptions will be
preserved in future amendments of such acts, if any, or that more stringent laws
and regulations protecting the environment will not be adopted.
Certain of Samedan's facilities may also be subject to other federal
environmental laws and regulations, including the Clean Air Act with respect to
emissions of air pollutants. Certain state or local laws or regulations may
impose liabilities in addition to or restrictions more stringent than those
described herein. The environmental laws, rules and regulations of foreign
countries are generally less stringent than those of the United States, and
therefore, the requirements of such jurisdictions do not generally impose an
additional compliance burden on Samedan.
Samedan has made and will continue to make expenditures in its efforts to
comply with environmental requirements. The Company does not believe that it
has to date expended material amounts in connection with such activities or that
compliance with such requirements will have a material adverse effect upon the
capital expenditures, earnings or competitive position of the Company. Although
such requirements do have a substantial impact upon the energy industry,
generally they do not appear to affect the Company any differently or to any
greater or lesser extent than other companies in the industry.
INSURANCE. Samedan believes that it has such insurance coverages as are
customary in the industry and that it is adequately protected by public
liability and physical damage insurance.
COMPETITION
The oil and gas industry is highly competitive. Since many companies and
individuals are engaged in exploring for oil and gas and acquiring oil and gas
properties, a high degree of competition for desirable exploratory and producing
properties exists. A number of the companies with which Samedan competes are
larger and have greater financial resources than Samedan.
The availability of a ready market for Samedan's oil and gas production
depends on numerous factors beyond its control, including the level of consumer
demand, the extent of worldwide oil and gas production, the costs and
availability of alternative fuels, the costs of and proximity of pipelines and
other transportation
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facilities, regulation by state and federal authorities and
the costs of complying with applicable environmental regulations.
EMPLOYEES
The total number of employees of the Company increased from 503 at
December 31, 1992 to 518 at December 31, 1993.
ITEM 2. PROPERTIES.
OFFICES
The principal executive office of the Company is located at 110 West
Broadway, Ardmore, Oklahoma 73401. The principal executive office of Samedan is
in Ardmore, Oklahoma, and Samedan also maintains division offices in Oklahoma
City, Houston, Denver and Calgary, Canada. Samedan maintains three separate
offices in Houston for its international, offshore and onshore oil and gas
operations. Samedan maintains an office in Tunis, Tunisia, from which it
operates its various concessions and producing property in Tunisia. The
principal executive office of Noble Gas Marketing, Inc. is located in Houston.
OIL AND GAS
The estimated proved and proved developed oil and gas reserves of Samedan,
as of December 31, 1993, 1992 and 1991 and the standardized measure of
discounted future net cash flows attributable thereto at December 31, 1993, 1992
and 1991 are included in Note 9 of Notes to Consolidated Financial Statements
appearing on pages 32 through 35 of the Registrant's 1993 annual report to
shareholders, which Note is incorporated herein by reference ("Note 9").
Note 9 also includes Samedan's net production (including royalty and
working interest production) of oil and natural gas for the three years ended
December 31, 1993. Royalty production of both oil and gas (stated in oil barrel
equivalents) is included in the "Crude Oil & Condensate" presentation in Note 9.
Samedan has no oil or gas applicable to long-term supply or similar agreements
with foreign governments or authorities in which Samedan acts as producer.
Since January 1, 1993, no oil or gas reserve information has been filed
with, or included in any report to, any federal authority or agency other than
the Securities and Exchange Commission and the Energy Information Administration
(the "EIA"). Samedan files Form 23, including reserve and other information,
with the EIA.
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The following table sets forth for each of the last three years the average
sales price (including transfers) per unit of oil produced and per unit of
natural gas produced, and the average production (lifting) cost per unit of
production.
Year Ended December 31,
---------------------------
1993 1992 1991
------- ----- ------
Average sales price per bbl of oil (1):
United States . . . . . . . . . . . . $16.05 $18.97 $20.82
Canada. . . . . . . . . . . . . . . . $15.13 $17.19 $19.13
Other international . . . . . . . . . $15.32 $17.87 $16.58
Combined . . . . . . . . . . . . $15.91(2) $18.68(2) $20.39(2)
Average sales price per Mcf of natural gas (1):
United States . . . . . . . . . . . . $2.15 $1.86 $1.77
Canada. . . . . . . . . . . . . . . . $1.22 $1.02 $1.18
Combined . . . . . . . . . . . . $2.10(3) $1.81(3) $1.74(3)
Average production (lifting) cost per unit of oil and
natural gas production, excluding depreciation
(per bbl)(4):
United States . . . . . . . . . . . . $4.26 $4.79 $5.37
Canada. . . . . . . . . . . . . . . . $6.33 $5.16 $4.64
Other international . . . . . . . . . $6.40 $7.24 $9.11
Combined . . . . . . . . . . . . $4.45 $5.02 $5.48
- --------------------------------------------------
(1) Net production amounts used in this calculation include royalties.
(2) Includes per barrel $.02 in 1993, $.33 in 1992 and $1.17 in 1991, from
hedging.
(3) Reflects a reduction per Mcf of $.048 in 1993 and $.045 in 1992, and
includes $.01 per Mcf in 1991, from hedging.
(4) Gas production is converted to oil barrel equivalents based on the
average sales prices per barrel of oil and per Mcf of gas. Net
production amounts used in the calculation of average sales prices for
purposes of computing the conversion ratio excludes royalties.
Conversion ratios for 1993, 1992 and 1991 are set forth below:
United States Canada
------------- -----------
1993 7.46 to 1 12.45 to 1
1992 10.19 to 1 16.85 to 1
1991 11.71 to 1 17.85 to 1
-8-
The number of productive oil and gas wells in which Samedan had interests
and the developed acreage held as of December 31, 1993, were as follows:
PRODUCTIVE WELLS(1)(2) DEVELOPED ACREAGE(3)(4)
---------------------------------------------------- -------------------------------
OIL GAS
---------------------- ------------------------
LOCATION GROSS NET GROSS NET GROSS ACRES NET ACRES
- -------- ------- -------- ----------- --------- ----------- ----------
United States
(onshore) 4,020.0 867.6 1,267.0 675.1 657,496 384,783
Canada 162.5 18.3 62.5 16.1 133,874 41,876
United States
(offshore) 223.5 92.9 360.5 138.7 739,939 273,011
Other International 11.0 3.2 2.0 .6 1,316,837 287,777
------- -------- ----------- --------- ----------- ----------
Total 4,417.0 982.0 1,692.0 830.5 2,848,146 987,447
------- -------- ----------- --------- ----------- ----------
------- -------- ----------- --------- ----------- ----------
- -------------------------------------------------
(1) Productive wells are producing wells and wells capable of production. A
gross well is a well in which a working interest is owned. The number
of gross wells is the total number of wells in which a working interest
is owned. A net well is deemed to exist when the sum of fractional
ownership working interests in gross wells equals one. The number of
net wells is the sum of the fractional working interests owned in gross
wells expressed as whole numbers and fractions thereof.
(2) One or more completions in the same bore hole is counted as one well.
Included in the table and counted as one gross well each are 22.0 oil
wells (14.1 net) and 31.0 gas wells (14.9 net) that are multiple
completions. Also included in the table are 736.5 gross oil wells
(186.7 net) and 58.5 gross gas wells (25.7 net) that were not producing
at December 31, 1993 because such wells were awaiting additional action
or pipeline connections.
(3) Developed acreage is acreage spaced or assignable to productive wells.
(4) A gross acre is an acre in which a working interest is owned. A net
acre is deemed to exist when the sum of fractional ownership working
interests in gross acres equals one. The number of net acres is the sum
of the fractional working interests owned in gross acres expressed as
whole numbers and fractions thereof.
-9-
The undeveloped acreage (including both leases and concessions) that
Samedan held as of December 31, 1993, is as follows:
UNDEVELOPED ACREAGE (1)(2)
--------------------------
LOCATION GROSS ACRES NET ACRES
- -------- ------------ ---------
United States Onshore
California. . . . . . . . . . . . . . 53,300 25,683
Colorado. . . . . . . . . . . . . . . 24,348 17,398
Mississippi . . . . . . . . . . . . . 7,680 5,224
Montana . . . . . . . . . . . . . . . 14,894 5,321
New Mexico. . . . . . . . . . . . . . 9,963 6,495
North Dakota. . . . . . . . . . . . . 15,837 6,124
Oklahoma. . . . . . . . . . . . . . . 23,325 10,561
Texas . . . . . . . . . . . . . . . . 65,091 27,470
Utah. . . . . . . . . . . . . . . . . 9,210 4,817
Wyoming . . . . . . . . . . . . . . . 84,138 26,742
Others. . . . . . . . . . . . . . . . 9,733 4,275
--------- ---------
Total United States Onshore . . . 317,519 140,110
--------- ---------
United States Offshore
California. . . . . . . . . . . . . . 73,984 8,366
Louisiana . . . . . . . . . . . . . . 128,573 71,076
Texas . . . . . . . . . . . . . . . . 151,904 115,575
Mississippi . . . . . . . . . . . . . 28,800 24,960
--------- ---------
Total United States Offshore. . . 383,261 219,977
--------- ---------
International
Canada. . . . . . . . . . . . . . . . 218,498 110,520
Papua New Guinea. . . . . . . . . . . 555,520 109,854
Tunisia . . . . . . . . . . . . . . . 1,769,977 802,885
--------- ---------
Total International . . . . . . . 2,543,995 1,023,259
--------- ---------
Total . . . . . . . . . . . . . . 3,244,775 1,383,346
--------- ---------
--------- ---------
- --------------------
(1) Undeveloped acreage is considered to be those lease acres on which wells
have not been drilled or completed to a point that would permit the
production of commercial quantities of oil and gas regardless of whether
or not such acreage contains proved reserves. Included within undeveloped
acreage are those lease acres (held by production under the terms of a
lease) that are not within the spacing unit containing, or acreage
assigned to, the productive well so holding such lease.
(2) A gross acre is an acre in which a working interest is owned. A net acre
is deemed to exist when the sum of fractional ownership working interests
in gross acres equals one. The number of net acres is the sum of the
fractional working interests owned in gross acres expressed as whole
numbers and fractions thereof.
-10-
The following table sets forth for each of the last three years the number
of net exploratory and development wells drilled by or on behalf of Samedan. An
exploratory well is a well drilled to find and produce oil or gas in an unproved
area, to find a new reservoir in a field previously found to be productive of
oil or gas in another reservoir, or to extend a known reservoir. A development
well, for purposes of the following table and as defined in the rules and
regulations of the Securities and Exchange Commission, is a well drilled within
the proved area of an oil or gas reservoir to the depth of a stratigraphic
horizon known to be productive. The number of wells drilled refers to the
number of wells completed at any time during the respective year, regardless of
when drilling was initiated; and "completion" refers to the installation of
permanent equipment for the production of oil or gas, or, in the case of a dry
hole, to the reporting of abandonment to the appropriate agency.
NET EXPLORATORY WELLS
----------------------------------------------------------------
PRODUCTIVE (1) DRY (2)
------------------------------ ------------------------------
YEAR ENDED OTHER OTHER
DECEMBER 31, U.S. CANADA INTERNATIONAL U.S. CANADA INTERNATIONAL
- ------------ ---- ------ ------------- ----- ------ -------------
1991 . . . . 8.51 .38 .15 17.18 2.22 .25
1992 . . . . 6.73 1.33 -- 10.51 7.67 .87
1993 . . . . 5.58 1.10 -- 10.67 5.29 1.30
NET DEVELOPMENT WELLS
----------------------------------------------------------------
PRODUCTIVE (1) DRY (2)
------------------------------ ------------------------------
YEAR ENDED OTHER OTHER
DECEMBER 31, U.S. CANADA INTERNATIONAL U.S. CANADA INTERNATIONAL
- ------------ ---- ------ ------------- ----- ------ -------------
1991 . . . . 24.10 2.75 .53 2.92 .50 --
1992 . . . . 24.85 .98 .30 2.56 .24 --
1993 . . . . 33.07 2.62 -- 3.06 1.37 --
- -----------------------------
(1) A productive well is an exploratory or a development well that is not a
dry hole.
(2) A dry hole is an exploratory or development well found to be incapable
of producing either oil or gas in sufficient quantities to justify
completion as an oil or gas well.
Samedan spent approximately $418.5 million in 1993 on the purchase of
producing oil and gas properties. See Item 1. "Business -- Oil and Gas --
Acquisitions" hereof for a discussion of significant acquisitions in 1993.
Approximately $6.2 million and $47.6 million, respectively, were spent on such
purchases in 1992 and 1991.
At March 16, 1994, Samedan was drilling 9 gross (3.1 net) exploratory
wells, and 19 gross (8.1 net) development wells. These wells are located
onshore in the United States in California, Colorado, Louisiana, New Mexico,
Oklahoma, Texas and Wyoming and Canada in Alberta Province, and offshore Gulf of
Mexico and California. These wells have objectives ranging from approximately
2,800 to 15,200 feet. The estimated drilling cost to Samedan of these wells is
approximately $11,800,000 if all are dry and approximately $24,600,000 if all
are completed as producing wells.
-11-
ITEM 3. LEGAL PROCEEDINGS.
Samedan is an unsecured creditor of Columbia Gas Transmission
Corporation ("Columbia") which filed for protection from creditors under Chapter
11 of the Federal Bankruptcy Code on July 31, 1991, in the United States
Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). IN RE
COLUMBIA GAS TRANSMISSION CORPORATION, Case No. 91-804 (Bankr. D. Del. 1991).
Samedan and Columbia are parties to a gas sales contract, which terminates in
1998, covering a property in the Gulf of Mexico. Samedan's gas sales contract
was rejected by Columbia in its bankruptcy proceeding. On March 16, 1992,
Samedan filed a proof of claim with the Bankruptcy Court in the amount of
approximately $117 million covering approximately $3.0 million for the contract
price on prepetition gas purchases, approximately $2.0 million for the contract
price due on prepetition take or pay obligations, and approximately $112 million
for damages arising from the rejection of Samedan's gas sales contract. The
full amount of Samedan's claim is classified as an unsecured non-priority claim.
The Bankruptcy Court has established a claim procedure pursuant to which the
claim of Samedan, and other creditors with claims arising from rejected gas
sales contracts, shall be determined. Pursuant to such claims procedure,
Charles P. Nomandin has been appointed as claims mediator in order to, among
other things, estimate the claims of producers with claims arising from gas
supply contracts. Samedan is participating in this claims resolution procedure
and intends, if necessary, to advance and litigate the amount of its unsecured
claim. A preliminary Plan of Reorganization for Columbia dated January 18, 1994
has been filed by Columbia, but the applicable schedules indicating the sums
which individual producer claimants, such as Samedan, would receive under such
Plan of Reorganization were not attached to that filing. Columbia has
requested, and the Bankruptcy Court has agreed, that no action be taken by the
Bankruptcy Court on that filing while settlement discussions take place between
Columbia and the various creditor groups. Samedan is participating in such
settlement discussions. It is unknown whether resolution of Samedan's claim
will occur in 1994, or at what amount the claim may be ultimately resolved.
There are no other material pending legal proceedings, other than
ordinary routine litigation incidental to the business of the Registrant and its
subsidiaries, to which the Registrant or any of its subsidiaries is a party or
of which any of their property is the subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following tabulation sets forth certain information, as of March 26,
1994, with respect to the executive officers of the Registrant.
Name Age Position
---------------- ---- -----------------
Robert Kelley (1) 48 Chairman of the Board,
President, Chief Executive
Officer, Director
William D. Dickson (2) 45 Vice President-Finance and
Treasurer of the Registrant
and Operating Committee
Member of Samedan
Boyce Perry (3) 63 Vice President and Operating
Committee Member
of Samedan
W. A. Poillion (4) 44 Vice President and Operating
Committee Member
of Samedan
-12-
Name Age Position
---------------- ----- -----------------
Orville Walraven (5) 49 Corporate Secretary of the
Registrant and Vice
President and Operating
Committee Member of
Samedan
James C. Woodson (6) 51 Vice President and Operating
Committee Member
of Samedan
_____________________
(1) Robert Kelley has served as President and Chief Executive Officer of the
Registrant since August 1, 1986, and as Chairman of the Board since October
27, 1992. Prior to serving as President, he served as Executive Vice
President of the Registrant from January 1986. Mr. Kelley became a
director of the Registrant in July 1986. He currently also serves as
President and Chief Executive Officer of Samedan. He became President of
Samedan in 1984 after serving previously as Executive Vice President and
Vice President-Finance.
(2) William D. Dickson was elected Vice President-Finance and Treasurer of the
Registrant in October 1985. He has served as Vice President-Finance,
Treasurer and Assistant Secretary of Samedan since 1984 and as a member of
the Operating Committee of Samedan since February 9, 1994.
(3) Boyce Perry has served as Vice President - Marketing of Samedan since April
1, 1984. Mr. Perry has been a member of the Operating Committee of Samedan
since June 1, 1984.
(4) W. A. Poillion has served as Vice President - Production and Drilling and a
member of the Operating Committee of Samedan since November 1, 1990. Prior
thereto, he served as Manager of Offshore Production and Drilling for
Samedan from March 1, 1985 to October 31, 1990.
(5) Orville Walraven has served as Corporate Secretary of the Registrant since
January 1, 1989. He has also served as Vice President - Land of Samedan
and as a member of the Operating Committee of Samedan since January 1,
1989.
(6) James C. Woodson has served as Vice President - Exploration of Samedan
since September 1, 1983. Mr. Woodson has been a member of the Operating
Committee of Samedan since August 1, 1986.
The terms of office for the officers of the Registrant continue until their
successors are chosen and qualified. No officer or executive officer of the
Registrant has an employment agreement with the Registrant or any of its
subsidiaries. There are no family relationships between any of the Registrant's
officers.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Registrant's common stock is listed and traded on the New York Stock
Exchange under the symbol "NBL". The table captioned "Dividends and Stock
Prices by Quarters" appearing on the inside back cover of the Registrant's 1993
annual report to shareholders contains certain information with respect to sales
prices of the common stock and cash dividends declared by the Registrant on the
common stock, and such table is incorporated herein by reference.
At December 31, 1993, there were 2,100 shareholders of record of the
Registrant.
ITEM 6. SELECTED FINANCIAL DATA.
Selected financial data of the Registrant is set forth on Page 21 of the
Registrant's 1993 annual report to shareholders and is incorporated herein by
reference.
-13-
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Management's discussion and analysis of financial condition and results of
operations is set forth on pages 15 through 20 of the Registrant's 1993 annual
report to shareholders and is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The consolidated financial statements, appearing on pages 22 through 31,
together with the report thereon of Arthur Andersen & Co. dated January 24, 1994
appearing on page 25, and the unaudited information, appearing on pages 32
through 35, of the Registrant's 1993 annual report to shareholders are
incorporated herein by reference. With the exception of the aforementioned
information and the information expressly incorporated into Items 2, 5, 6 and 7
hereof, the 1993 annual report to shareholders is not to be deemed to be filed
as part of this report.
The consolidated balance sheet of Natural Gas Clearinghouse (a Colorado
partnership) and subsidiaries as of December 31, 1991, and the related
consolidated statements of income, partners' equity and cash flows for the year
then ended, appearing on pages F-2 through F-12 of the Registrant's Form 10-K
for the year ended December 31, 1991 (the "1991 Form 10-K") together with the
report thereon of Arthur Andersen & Co. dated February 21, 1992 appearing on
page F-1 of the 1991 Form 10-K, are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The section entitled "Election of Directors" appearing on pages 3 and 4
of the Registrant's proxy statement for the 1994 annual meeting of shareholders
sets forth certain information with respect to the directors of the Registrant
and is incorporated herein by reference. Certain information with respect to
the executive officers of the Registrant is set forth under the caption
"Executive Officers of the Registrant" in Part I of this report.
The section entitled "Certain Transactions" appearing on page 16 of the
Registrant's proxy statement for the 1994 annual meeting of shareholders sets
forth certain information with respect to compliance with Section 16(a) of the
Exchange Act and is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION.
The section entitled "Executive Compensation" appearing on pages 7 through
16 of the Registrant's proxy statement for the 1994 annual meeting of
shareholders sets forth certain information with respect to the compensation of
management of the Registrant, and, except for the report of the compensation and
benefits committee of the Board of Directors (pages 7 through 10) and the
information therein under "Performance Graph" (pages 15 and 16), is incorporated
herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The sections entitled "Security Ownership of Certain Beneficial Owners" and
"Security Ownership of Directors and Executive Officers" appearing on pages 2
and 5 of the Registrant's proxy statement for the 1994 annual meeting of
shareholders set forth certain information with respect to the ownership of the
Registrant's common stock, and are incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Not applicable.
-14-
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a)The following documents are filed as a part of this report: Page in 1993
Annual Report
To Shareholders
(Incorporated
By Reference)
----------------
(1) Financial Statements:
Consolidated Balance Sheet at December 31, 1993 and 1992. . . . . . . . . . . . . 22
Consolidated Statement of Operations for the three years ended
December 31, 1993. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Consolidated Statement of Cash Flows for the three years ended
December 31, 1993. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Consolidated Statement of Shareholders' Equity for the three years ended
December 31, 1993. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Report of Independent Public Accountants. . . . . . . . . . . . . . . . . . . . . 25
Notes to Consolidated Financial Statements. . . . . . . . . . . . . . . . . . . . 26
Supplemental Oil and Gas Information (Unaudited) and Interim Financial
Information (Unaudited). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(2) Financial Statement Schedules: Page
----
Report of Independent Public Accountants on Financial
Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R-1
V - Property, Plant and Equipment for the three years ended
December 31, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1
VI - Accumulated Depreciation, Depletion and Amortization of
Property, Plant and Equipment for the three years ended
December 31, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1
IX - Short-Term Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . IX-1
All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes thereto.
Financial statements of two 50 percent or less owned entities accounted for
by the equity method have been omitted because, in the aggregate, the
proportionate share of their profit before income taxes and total assets are
less than 20 percent of the respective consolidated amounts, and investments in
such entities are less than 20 percent of consolidated total assets, of the
Registrant.
(3) Exhibits:
The exhibits required to be filed by this Item 14 are set forth
in the Index to Exhibits accompanying this report.
(b) No report on Form 8-K was filed by the Registrant during the quarter
ended December 31, 1993.
-15-
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.
NOBLE AFFILIATES, INC.
Date: March 29, 1994 By: WILLIAM D. DICKSON
----------------------------------
William D. Dickson,
Vice President-Finance and Treasurer
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 and on the dates indicated.
Signature Capacity in which signed Date
- --------- ------------------------ ----
/s/ ROBERT KELLEY Chairman of the Board, President, March 29, 1994
- ----------------------------------- Chief Executive Officer and
Robert Kelley Director (Principal Executive
Officer)
/s/ WILLIAM D. DICKSON Vice President-Finance and March 29, 1994
- ----------------------------------- Treasurer (Principal Financial
William D. Dickson and Accounting Officer)
/s/ ROY BUTLER Director March 29, 1994
- -----------------------------------
Roy Butler
Director March , 1994
- -----------------------------------
Edward F. Cox
Director March , 1994
- -----------------------------------
James C. Day
/s/ HAROLD F. KLEINMAN Director March 29, 1994
- -----------------------------------
Harold F. Kleinman
Director March , 1994
- -----------------------------------
George J. McLeod
/s/ GUY W. NICHOLS Director March 29, 1994
- -----------------------------------
Guy W. Nichols
/s/ JOHN F. SNODGRASS Director March 29, 1994
- -----------------------------------
John F. Snodgrass
S-1
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULES
To Noble Affiliates, Inc.:
We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements included in Noble Affiliates, Inc.'s annual
report to shareholders incorporated by reference in this Form 10-K, and have
issued our report thereon dated January 24, 1994. Our audit was made for the
purpose of forming an opinion on those statements taken as a whole. The
schedules listed in the index above are the responsibility of the Company's
management and are presented for purposes of complying with the Securities and
Exchange Commission's rules and are not part of the basic consolidated financial
statements. These schedules have been subjected to the auditing procedures
applied in the audit of the basic consolidated financial statements and, in our
opinion, fairly state in all material respects the financial data required to be
set forth therein in relation to the basic consolidated financial statements
taken as a whole.
ARTHUR ANDERSEN & CO.
Oklahoma City, Oklahoma
January 24, 1994
R-1
SCHEDULE V
----------
NOBLE AFFILIATES, INC. AND SUBSIDIARIES
PROPERTY, PLANT AND EQUIPMENT
(In thousands of dollars)
YEAR ENDED DECEMBER 31, 1993
----------------------------
Balance at
beginning Additions Retirements Other changes Balance at
Classification of year at cost or sales add (deduct) end of year
- -------------- ----------- ---------- ----------- ------------- ------------
Oil and gas mineral interests,
equipment and facilities $ 1,024,786 $ 508,506 $ (71,527) $ (828) $ 1,460,937
Aircraft and other machinery and
equipment 9,293 295 (146) 9,442
Buildings, leasehold improvements and
furniture and fixtures 14,984 1,090 (179) 15,895
Land 572 222 794
----------- ---------- ----------- ------------- ------------
$ 1,049,635 $ 510,113 $ (71,852) $ (828) $ 1,487,068
----------- ---------- ----------- ------------- ------------
----------- ---------- ----------- ------------- ------------
YEAR ENDED DECEMBER 31, 1992
----------------------------
Balance at
beginning Additions Retirements Other changes Balance at
Classification of year at cost or sales add (deduct) end of year
- -------------- ----------- ---------- ----------- ------------- ------------
Oil and gas mineral interests,
equipment and facilities $ 1,057,015 $ 64,066 $ (95,465) $ (830) $ 1,024,786
Aircraft and other machinery and
equipment 9,589 235 (79) (452) 9,293
Buildings, leasehold improvements and
furniture and fixtures 13,644 1,442 (102) 14,984
Land 505 67 572
----------- ---------- ----------- ------------- ------------
$ 1,080,753 $ 65,810 $ (95,646) $ (1,282) $ 1,049,635
----------- ---------- ----------- ------------- ------------
----------- ---------- ----------- ------------- ------------
YEAR ENDED DECEMBER 31, 1991
----------------------------
Balance at
beginning Additions Retirements Other changes Balance at
Classification of year at cost or sales add (deduct) end of year
- -------------- ----------- ---------- ----------- ------------- ------------
Oil and gas mineral interests,
equipment and facilities $ 988,918 $ 121,378 $ (50,730) $ (2,551) $ 1,057,015
Aircraft and other machinery and
equipment 8,815 914 (140) 9,589
Buildings, leasehold improvements and
furniture and fixtures 11,584 3,001 (941) 13,644
Land 692 55 (242) 505
----------- ---------- ----------- ------------- ------------
$ 1,010,009 $ 125,348 $ (52,053) $ (2,551) $ 1,080,753
----------- ---------- ----------- ------------- ------------
----------- ---------- ----------- ------------- ------------
V-1
SCHEDULE VI
-----------
NOBLE AFFILIATES, INC. AND SUBSIDIARIES
ACCUMULATED DEPRECIATION, DEPLETION AND
AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
(In thousands of dollars)
YEAR ENDED DECEMBER 31, 1993
----------------------------
Additions
-------------------------
Balance at Charges to
beginning costs Retirements Other changes Balance at
Classification of year and expenses Other or sales add (deduct) end of year
- -------------- ----------- ---------- ---------- --------- ----------- ----------
Oil and gas mineral interests,
equipment and facilities $ 615,044 $ 104,341 (A) $ 12,063 (D) $ (54,746) $ $ 676,702
Aircraft and other machinery and
equipment 3,723 1,332 2 5,057
Buildings, leasehold improvements
and furniture and fixtures 9,236 1,542 (74) 10,704
----------- ---------- ---------- --------- ----------- ----------
$ 628,003 $ 107,215 $ 12,063 $ (54,818) $ $ 692,463
----------- ---------- ---------- --------- ----------- ----------
----------- ---------- ---------- --------- ----------- ----------
YEAR ENDED DECEMBER 31, 1992
----------------------------
Additions
-------------------------
Balance at Charges to
beginning costs Retirements Other changes Balance at
Classification of year and expenses Other or sales add (deduct) end of year
- -------------- ----------- ---------- ---------- --------- ----------- ----------
Oil and gas mineral interests,
equipment and facilities $ 598,123 $ 92,160 (B) $ 10,352 (D) $ (84,426) $ (1,164) $ 615,045
Aircraft and other machinery and
equipment 3,001 1,236 (515) 3,722
Buildings, leasehold improvements
and furniture and fixtures 7,899 1,423 (86) 9,236
----------- ---------- ---------- --------- ----------- ----------
$ 609,023 $ 94,819 $ 10,352 $ (85,027) $ (1,164) $ 628,003
----------- ---------- ---------- --------- ----------- ----------
----------- ---------- ---------- --------- ----------- ----------
YEAR ENDED DECEMBER 31, 1991
-----------------------------
Additions
-------------------------
Balance at Charges to
beginning costs Retirements Other changes Balance at
Classification of year and expenses Other or sales add (deduct) end of year
- -------------- ----------- ---------- ---------- --------- ----------- ----------
Oil and gas mineral interests,
equipment and facilities $ 551,555 $ 77,921 (C) $ 5,328 (D) $ (35,927) $ (754) $ 598,123
Aircraft and other machinery and
equipment 2,765 736 (500) 3,001
Buildings, leasehold improvements
and furniture and fixtures 7,685 1,091 (877) 7,899
----------- ---------- ---------- --------- ----------- ----------
$ 562,005 $ 79,748 $ 5,328 $ (37,304) $ (754) $ 609,023
----------- ---------- ---------- --------- ----------- ----------
----------- ---------- ---------- --------- ----------- ----------
(A) Includes a charge of $9.4 million for dismantlement and restoration on
abandonment of producing properties. At December 31, 1993, the
accumulated reserve balance was $28.3 million.
(B) Includes a charge of $8.9 million for dismantlement and restoration on
abandonment of producing properties. At December 31, 1992, the
accumulated reserve balance was $19.2 million.
(C) Includes a charge of $5.8 million for dismantlement and restoration on
abandonment of producing properties. At December 31, 1991, the
accumulated reserve balance was $11.5 million.
(D) Includes amortization of undeveloped leasehold costs charged to oil and
gas exploration expense.
VI-1
SCHEDULE IX
-----------
NOBLE AFFILIATES, INC. AND SUBSIDIARIES
SHORT-TERM BORROWINGS
Weighted average Maximum Average Weighted
Balance at interest rate at Amount Amount average
Category of Short- December 31, December 31, Outstanding Outstanding interest rate
Term Borrowings 1993 1993 during 1993 during 1993(1) during 1993 (2)
- ------------------------------- ----------------- ----------------- ---------------- -------------- ---------------
Line of Credit with a bank
at Libor plus 1/2% borrowed
on October 1, 1993 repaid
October 21, 1993 -0- -0- $ 175,000,000 $ 9,589,041 4.4%
Installment purchase note on
the acquisition of the Belridge
Field from Freeport-McMoRan
borrowed on October 1, 1993,
due January 4, 1994 $ 95,600,000 3.1% $ 95,600,000 $ 24,096,438 3.1%
(1) Calculated as the sum of the number of days outstanding times the amount
outstanding divided by 365.
(2) Calculated as the weighted average interest rate on the daily balance
outstanding.
IX-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS TO
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended Commission file number:
December 31, 1993 0-7062
NOBLE AFFILIATES, INC.
(Exact name of registrant as specified in its charter)
Delaware 73-0785597
(State of incorporation) (I.R.S. employer
identification number)
110 West Broadway
Ardmore, Oklahoma 73401
(Address of principal (Zip Code)
executive offices)
F-1
INDEX TO EXHIBITS
-----------------
Sequentially
Exhibit Numbered
Number Exhibit Page
- ------- ------- ------------
3.1 Certificate of Incorporation, as amended, of the Registrant as currently in effect (filed as Exhibit
3.2 to the Registrant's annual report on Form 10-K for the fiscal year ended December 31, 1987 and
incorporated herein by reference).
3.2 Composite copy of Bylaws as currently in effect (filed as Exhibit 3.2 to the Registrant's annual
report on Form 10-K for the year ended December 31, 1992 and incorporated herein by reference).
4.1 Indenture dated as of June 6, 1989, between the Registrant and First RepublicBank Dallas, National
Association, Trustee, including form of the Registrant's 10 1/8% Notes Due June 1, 1997 (filed as
Exhibit 4.1 to the Registrant's Registration Statement on Form S-3 (Registration No. 33-14111) and
incorporated herein by reference).
4.2 Indenture dated as of October 14, 1993 between the Registrant and U.S. Trust Company of Texas, N.A.,
as Trustee, relating to the Registrant's 7 1/4% Notes Due 2023, including form of the Registrant's
7 1/4% Note Due 2023 (filed as Exhibit 4.1 to the Registrant's quarterly report on Form 10-Q for the
quarter ended September 30, 1993 and incorporated herein by reference).
4.3 Indenture dated as of October 14, 1993 entered into between the Registrant and United States Trust
Company of New York, as Trustee, relating to the Registrant's 4 1/4% Convertible Subordinated Notes
Due 2003, including form of the Registrant's 4 1/4% Convertible Subordinated Note Due 2003 (filed as
Exhibit 4.2 to the Registrant's quarterly report on Form 10-Q for the quarter ended September 30,
1993 and incorporated herein by reference).
10.1* Samedan Oil Corporation Bonus Plan revised January 1, 1992 (filed as Exhibit 10.1 to the
Registrant's annual report on Form 10-K for the year ended December 31, 1992 and incorporated herein
by reference).
10.2* Noble Affiliates Thrift and Profit Sharing Plan, amended and restated effective as of January 1,
1988 (filed as Exhibit 10.2 to the Registrant's annual report and Form 10-K for the fiscal year
ended December 31, 1987 and incorporated herein by reference).
10.3* Noble Affiliates Thrift and Profit Sharing Trust, amended and restated effective as of January 1,
1988 (filed as Exhibit 10.3 to the Registrant's annual report on Form 10-K for the fiscal year ended
December 31, 1987 and incorporated herein by reference).
10.4* Amendment No. 1 to the Noble Affiliates Thrift and Profit Sharing Plan, dated September 5, 1989,
effective as of September 1, 1989 (filed as Exhibit 10.4 to the Registrant's annual report on Form
10-K for the fiscal year ended December 31, 1989 and incorporated herein by reference).
10.5* Amendment No. 2 to the Noble Affiliates Thrift and Profit Sharing Plan, partially effective as of
October 18, 1989, and fully effective as of January 1, 1990 (filed as Exhibit 10.5 to the
Registrant's annual report on Form 10-K for the fiscal year ended December 31, 1989 and incorporated
herein by reference).
E-1
Sequentially
Exhibit Numbered
Number Exhibit Page
- ------- ------- -----------
10.6* Amendment No. 3 to the Noble Affiliates Thrift and Profit Sharing Plan, partially effective as of
January 1, 1988, and fully effective as of January 1, 1989 (filed as Exhibit 10.6 to the
Registrant's annual report on Form 10-K for the year ended December 31, 1992 and incorporated herein
by reference).
10.7* Amendment No. 4 to the Noble Affiliates Thrift and Profit Sharing Plan, effective as of May 1, 1991
(filed as Exhibit 10.7 to the Registrant's annual report on Form 10-K for the year ended December
31, 1992 and incorporated herein by reference).
10.8* Amendment No. 5 to the Noble Affiliates Thrift and Profit Sharing Plan, effective as of May 1, 1992
(filed as Exhibit 10.8 to the Registrant's annual report on Form 10-K for the year ended December
31, 1992 and incorporated herein by reference).
10.9* Amendment No. 6 to the Noble Affiliates Thrift and Profit Sharing Plan, effective as of July 1, 1992
(filed as Exhibit 10.9 to the Registrant's annual report on Form 10-K for the year ended December
31, 1992 and incorporated herein by reference).
10.10* Amendment No. 7 to the Noble Affiliates Thrift and Profit Sharing Plan, effective as of November 1,
1992 (filed as Exhibit 10.10 to the Registrant's annual report on Form 10-K for the year ended
December 31, 1992 and incorporated herein by reference).
10.11* Amendment No. 8 to the Noble Affiliates Thrift and Profit Sharing Plan, partially effective as of
January 1, 1993, and fully effective as of September 1, 1993.
10.12 Guaranty of the Registrant dated October 28, 1982, guaranteeing certain obligations of Samedan.
10.13 1988 Nonqualified Stock Option Plan for Non-Employee Directors of the Registrant (filed as Exhibit
10.3 to the Registrant's annual report on Form 10-K for the fiscal year ended December 31, 1988 and
incorporated herein by reference).
10.14 Amendment No. 1 to 1988 Nonqualified Stock Option Plan for Non-Employee Directors of the Registrant
dated as of July 28, 1992 (filed as Exhibit 10.13 to the Registrant's annual report on Form 10-K for
the year ended December 31, 1992 and incorporated herein by reference).
10.15* 1982 Stock Option Plan of the Registrant (filed as Exhibit 4.1 to registration statement on Form S-8
(Registration No. 2-81590) and incorporated herein by reference).
10.16* Amendment No. 1 to the 1982 Stock Option Plan of the Registrant (filed as Exhibit 4.2 to
registration statement on Form S-8 (Registration No. 2-81590) and incorporated herein by reference).
10.17* Amendment No. 2 to the 1982 Stock Option Plan of the Registrant (filed as Exhibit 10.8 to the
Registrant's annual report on Form 10-K for the fiscal year ended December 31, 1985 and incorporated
herein by reference).
10.18* 1978 Non-Qualified Stock Option Plan of the Registrant (filed as Exhibit 1.1 to registration
statement on Form S-8 (Registration No. 2-64600) and incorporated herein by reference).
E-2
Sequentially
Exhibit Numbered
Number Exhibit Page
- ------- ------- -----------
10.19* 1978 Non-Qualified Stock Option Plan of the Registrant, as amended July 27, 1978 (filed as Exhibit
1.2 to registration statement on Form S-8 (Registration No. 2-64600) and incorporated herein by
reference).
10.20* Amendment No. 2 to 1978 Non-Qualified Stock Option Plan of the Registrant.
10.21* Amendment No. 3 to 1978 Non-Qualified Stock Option Plan of the Registrant (filed as Exhibit 10.12 to
the Registrant's annual report on Form 10-K for the year ended December 31, 1985 and incorporated
herein by reference).
10.22 Credit Agreement dated as of March 2, 1988, among the Registrant, Bankers Trust Registrant, as
Agent, and the banking institutions listed in Annex I thereto (filed as Exhibit 10.25 to the
Registrant's annual report on Form 10-K for the year ended December 31, 1987 and incorporated herein
by reference).
10.23 First Amendment to Credit Agreement dated as of December 22, 1989, among the Registrant, Bankers
Trust Company, as Agent, and the banking institutions party to the Credit Agreement (filed as
Exhibit 10.16 to the Registrant's annual report on Form 10-K for the year ended December 31, 1991
and incorporated herein by reference).
10.24 Second Amendment to Credit Agreement dated as of October 31, 1991, among the Registrant, Bankers
Trust Company, as Agent, and the banking institutions party to the Credit Agreement (filed as
Exhibit 10.17 to the Registrant's annual report on Form 10-K for the year ended December 31, 1991
and incorporated herein by reference).
10.25 Third Amendment to Credit Agreement, among the Registrant, Bankers Trust Company, as Agent, and the
banking institutions party to the Credit Agreement dated as of October 30, 1992 (filed as Exhibit
10.24 to the Registrant's annual report on Form 10-K for the year ended December 31, 1992 and
incorporated herein by reference).
10.26 Fourth Amendment to Credit Agreement dated as of September 30, 1993 among the Registrant, Bankers
Trust Company, as Agent, and the financial institutions listed on the signature pages thereto (filed
as Exhibit 2.6 to the Registrant's Registration Statement on Form S-3 (No. 33-69248) and
incorporated herein by reference).
10.27 Agreement dated March 31, 1989, by and between Apache Corporation and the Registrant (filed as
Exhibit 2(a) to the Registrant's current report on Form 8-K (Date of Report: May 16, 1989) and
incorporated herein by reference).
10.28 Consent regarding agreement dated April 30, 1989, by and between Apache Corporation and the
Registrant (filed as Exhibit 2(b) to the Registrant's current report on Form 8-K (Date of Report:
May 16, 1989) and incorporated herein by reference).
10.29* Noble Affiliates, Inc. 1992 Stock Option and Restricted Stock Plan, as amended and restated, dated
November 2, 1992 (filed as Exhibit 4.1 to registration statement on Form S-8 (Registration
No. 33-54084) and incorporated herein by reference).
E-3
Sequentially
Exhibit Numbered
Number Exhibit Page
- ------- ------- -----------
10.30 Purchase and Sale Agreement dated as of June 24, 1993 by and between Freeport-McMoRan Oil & Gas
Company Division of Freeport-McMoRan Inc., individually and as Managing General Partner of FM
Properties Operating Co., and Samedan Oil Corporation (filed as Exhibit 2 to the Registrant's
Current Report on Form 8-K dated July 29, 1993 and incorporated herein by reference).
10.31 Purchase and Sale Agreement dated as of September 16, 1993 by and between FM Properties Operating
Co. and Samedan Oil Corporation (filed as Exhibit 2.2 to the Registrant's Registration Statement on
Form S-3 (No. 33-69248) and incorporated herein by reference).
10.32 Purchase and Sale Agreement (Installment Sale) dated as of September 16, 1993 by and between FM
Properties Operating Co. and Samedan Oil Corporation (filed as Exhibit 2.3 to the Registrant's
Registration Statement on Form S-3 (No. 33-69248) and incorporated herein by reference).
10.33 Promissory Note dated October 1, 1993 of Samedan Oil Corporation in the principal amount of $95.6
million payable to FM Properties Operating Co. in connection with the agreement filed as Exhibit
10.32 hereto (filed as Exhibit 2.4 to the Registrant's quarterly report on Form 10-Q for the quarter
ended September 30, 1993 and incorporated herein by reference).
10.34 Letter agreement dated September 16, 1993 between FM Properties Operating Co. and Samedan Oil
Corporation relating to the agreements filed as Exhibits 10.31 and 10.32 hereto (filed as Exhibit
2.5 to the Registrant's Registration Statement on Form S-3 (No. 33-69248) and incorporated herein by
reference).
13 The following information appearing on the following pages of the Registrant's 1993 annual report to
Shareholders: (i) management's discussion and analysis of financial condition and results of
operations, pages 15 through 20; (ii) selected financial data, page 21; (iii) the consolidated
financial statements, together with the report thereon of Arthur Andersen & Co. dated January 24,
1994, pages 22 through 31, and the unaudited information, pages 32 through 35; and (iv) the table
captioned "Dividends and Stock Prices by Quarters," inside back cover.
21 Subsidiaries.
23 Consent of Arthur Andersen & Co.
99 Pages F-1 through F-12 of the Registrant's annual report on Form 10-K for the year ended December
31, 1991, which pages are incorporated herein by reference to such Form 10-K.
- ------------------------
* Management contract or compensatory plan or arrangement required to be filed as an exhibit hereto.
E-4