-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FDlG5+knGzqvByZd3eR8LedQkCkVcOATUUDyoLH4IyfvrkPNacqZP5c/vW+Ph51G ZUV24SpdaGCAxRenB7kaCw== 0000950129-99-003109.txt : 19990712 0000950129-99-003109.hdr.sgml : 19990712 ACCESSION NUMBER: 0000950129-99-003109 CONFORMED SUBMISSION TYPE: 10-K405/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990709 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STONE ENERGY CORP CENTRAL INDEX KEY: 0000904080 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 721235413 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405/A SEC ACT: SEC FILE NUMBER: 001-12074 FILM NUMBER: 99662152 BUSINESS ADDRESS: STREET 1: 625 E KALISTE SALOOM RD CITY: LAFAYETTE STATE: LA ZIP: 70508 BUSINESS PHONE: 3182370410 MAIL ADDRESS: STREET 1: 625 E KALISTLE SALOOM RD CITY: LAFAYETTE STATE: LA ZIP: 70508 10-K405/A 1 STONE ENERGY CORPORATION - DATED 12/31/1998 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A-2 (Mark One) [X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1998 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number: 1-12074 STONE ENERGY CORPORATION (Exact name of registrant as specified in its charter) State of incorporation: Delaware I.R.S. Employer Identification No.72-1235413 625 E. Kaliste Saloom Road Lafayette, Louisiana 70508 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (318) 237-0410 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registered ------------------- ---------------------- Common Stock, Par Value $.01 Per Share New York Stock Exchange 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. [x] Yes [ ] No 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. [ X ] The aggregate market value of the voting stock held by non-affiliates of the registrant was approximately $339,626,060 as of March 15, 1999 (based on the last reported sale price of such stock on the New York Stock Exchange Composite Tape). As of March 15, 1999, the registrant had outstanding 15,080,408 shares of Common Stock, par value $.01 per share. Document incorporated by reference: Proxy Statement of Stone Energy Corporation relating to the Annual Meeting of Stockholders to be held on May 11, 1999, which is incorporated into Part III of this Form 10-K. - -------------------------------------------------------------------------------- 2 TABLE OF CONTENTS Page No. --------- PART I Item 2. Properties................................................... 1 3 ITEM 2. PROPERTIES The Company has grown principally through the acquisition and subsequent development and exploitation of properties purchased from major oil companies. The Company's proved oil and gas reserves at December 31, 1998 were attributable to 15 properties, nine of which are in the Gulf of Mexico offshore Louisiana, and six of which are onshore Louisiana. The Company currently manages four partnerships formed prior to its Initial Public Offering, and less than 5% of the Company's assets are owned through these entities. Oil and Gas Reserves The following table sets forth estimated net proved oil and gas reserves of the Company and the present value of estimated future pre-tax net cash flows related to such reserves as of December 31, 1998. Net revenue and net cash flow amounts include the effects of hedging contracts. All information in this Form 10-K relating to estimated oil and gas reserves and the estimated future net cash flows attributable thereto is based upon the reserve reports (the "Reserve Reports") prepared by Atwater Consultants, Ltd. and Cawley, Gillespie & Associates, Inc., both independent petroleum engineers, as of December 31, 1998. Using the information contained in the Reserve Reports, the average product prices for all of the Company's properties were $10.68 per Bbl of oil and $1.93 per Mcf of gas. All product pricing and cost estimates used in the Reserve Reports are in accordance with the rules and regulations of the Securities and Exchange Commission, and, except as otherwise indicated, the reported amounts give no effect to federal or state income taxes otherwise attributable to estimated future cash flows from the sale of oil and gas. The present value of estimated future net cash flows has been calculated using a discount factor of 10%.
Proved Proved Total Developed Undeveloped Proved --------------- ---------------- --------------- (Dollars in thousands) Oil (MBbls).......................................... 15,242 3,234 18,476 Gas (MMcf)........................................... 200,973 42,297 243,270 Total oil and gas (MMcfe)............................ 292,425 61,701 354,126 Estimated future net revenues before income taxes..................................... $352,727 $35,714 $388,441 Present value of estimated future pre-tax net cash flows........................... $267,560 $18,538 $286,098
There are numerous uncertainties inherent in estimating quantities of proved reserves and in projecting future rates of production and the timing of development expenditures, including many factors beyond the control of the producer. The reserve data set forth herein represent only estimates. Reserve engineering is a subjective process of estimating underground accumulations of oil and gas that cannot be measured in an exact way, and the accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and judgment and the existence of development plans. As a result, estimates of reserves made by different engineers for the same property will often vary. Results of drilling, testing and production subsequent to the date of an estimate may justify a revision of such estimates. Accordingly, reserve estimates are generally different from the quantities of oil and gas that are ultimately produced. Further, the estimated future net revenues from proved reserves and the present value thereof are based upon certain assumptions, including geological success, prices, future production levels and costs that may not prove to be correct. Predictions about prices and future production levels are subject to great uncertainty, and the meaningfulness of such estimates depends on the accuracy of the assumptions upon which they are based. As an operator of domestic oil and gas properties, the Company has filed Department of Energy Form EIA-23, "Annual Survey of Oil and Gas Reserves," as required by Public Law 93-275. There are differences between the reserves as reported on Form EIA-23 and as reported herein. The differences are attributable to the fact that Form EIA-23 requires that an operator report on the total reserves attributable to wells which are operated by it, without regard to ownership (i.e., reserves are reported on a gross operated basis, rather than on a net interest basis). Acquisition, Production and Drilling Activity Acquisition and Development Costs. The following table sets forth certain information regarding the costs incurred by the Company in its development and acquisition activities during the periods indicated.
Year Ended December 31, ------------------------------------------------------ 1998 1997 1996 --------------- ---------------- ------------- (In thousands) Acquisition costs.................................... $17,748 $43,791 $26,650 Development costs.................................... 54,889 43,762 24,090 Exploratory costs.................................... 81,765 57,770 26,339 --------------- ---------------- ------------- Subtotal........................................... 154,402 145,323 77,079 Capitalized general and administrative costs and interest, net of fees and reimbursements........... 4,480 3,457 2,325 --------------- ---------------- ------------- Total costs incurred................................. $158,882 $148,780 $79,404 =============== ================ =============
4 Productive Well and Acreage Data. The following table sets forth certain statistics for the Company regarding the number of productive wells and developed and undeveloped acreage as of December 31, 1998.
Gross Net ------------- -------------- Productive Wells: Oil (1)............................. 50.00 38.40 Gas (2).............................. 60.00 44.98 ------------- -------------- Total............................ 110.00 83.38 ============= ============== Developed Acres: Onshore Louisiana..................... 2,433.43 2,122.45 Offshore Louisiana.................... 9,170.31 6,303.17 ------------- -------------- Total............................. 11,603.74 8,425.62 ============= ============== Undeveloped Acres (3): Onshore Louisiana..................... 15,608.82 13,116.91 Offshore Louisiana.................... 52,296.94 36,642.77 ------------- -------------- Total............................. 67,905.76 49,759.68 ============= ==============
__________ (1) 4 gross wells each have dual completions. (2) 10 gross wells each have dual completions. (3) Leases covering approximately 1% of the Company's undeveloped acreage will expire in 1999, 1% in 2000, 8% in 2001, 0% in 2002 and 1% in 2003. Leases covering the remainder of the Company's undeveloped gross acreage (89%) are held by production. Drilling Activity. The following table sets forth the Company's drilling activity for the periods indicated.
Year Ended December 31, ------------------------------------------------------------------------------------------- 1998 1997 1996 ------------------------- -------------------------- --------------------------- Gross Net Gross Net Gross Net --------- --------- ---------- ---------- --------- ----------- Exploratory Wells: Productive.................. 6.00 5.21 10.00 8.70 1.00 0.93 Nonproductive............... 4.00 3.35 - - 3.00 2.75 Development Wells: Productive.................. 5.00 4.57 2.00 1.26 4.00 3.60 Nonproductive............... 1.00 0.98 - - 1.00 0.76
Title to Properties The Company believes it has satisfactory title on substantially all of its producing properties in accordance with standards generally accepted in the oil and gas industry. The Company's properties are subject to customary royalty interests, liens for current taxes and other burdens which the Company believes do not materially interfere with the use of or affect the value of such properties. The title investigation performed by the Company prior to acquiring undeveloped properties is thorough but less vigorous than that conducted prior to drilling, consistent with standard practice in the oil and gas industry. Prior to the commencement of drilling operations, a thorough title examination is conducted and curative work is performed with respect to significant defects before proceeding with operations. A thorough title examination has been performed with respect to substantially all producing properties owned by the Company. 5 SIGNATURES Pursuant to the requirements of the Securities Exchange Act, as amended, the Registrant has duly caused this Form 10-K/A-2 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lafayette, State of Louisiana, on the 9th day of July, 1999. STONE ENERGY CORPORATION By: /s/ JAMES H. STONE -------------------------- James H. Stone Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act, this Form 10-K/A-2 has been signed by the following persons in the capacities and on the dates indicated. Signature Title Date --------------- ------------ -------- /s/ JAMES H. STONE Chief Executive Officer and July 9, 1999 -------------------------- Chairman of the Board James H. Stone (Principal Executive Officer) /s/ D. PETER CANTY President, Chief Operating July 9, 1999 -------------------------- Officer and Director D. Peter Canty /s/ JAMES H. PRINCE Vice President, Chief Accounting July 9, 1999 -------------------------- Officer and Controller James H. Prince (Principal Accounting Officer) /s/ JOE R. KLUTTS Director and Vice Chairman of July 9, 1999 -------------------------- the Board Joe R. Klutts Director July 9, 1999 -------------------------- David R. Voelker /s/ JOHN P. LABORDE Director July 9, 1999 -------------------------- John P. Laborde Director July 9, 1999 -------------------------- Robert A. Bernhard Director July 9, 1999 -------------------------- Raymond B. Gary /s/ B.J. DUPLANTIS Director July 9, 1999 -------------------------- B.J. Duplantis -----END PRIVACY-ENHANCED MESSAGE-----