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AMERICAN OIL AND GAS CORPORATION ANNOUNCES THIRD QUARTER RESULTS AND CALLS CONVERTIBLE PREFERRED STOCK FOR REDEMPTION

AMERICAN OIL AND GAS CORPORATION ANNOUNCES THIRD QUARTER RESULTS AND
 CALLS CONVERTIBLE PREFERRED STOCK FOR REDEMPTION
 HOUSTON, Nov. 9 /PRNewswire/ -- American Oil and Gas Corporation (NYSE: AOG) today announces net income applicable to common stock of $6.1 million or $0.25 per share ($0.24 fully diluted) for the quarter ended Sept. 30, 1992, compared with $3.8 million or $0.22 per share ($0.21 fully diluted) for the third quarter of 1991. AOG also reports increased earnings for the nine months ended Sept. 30, 1992. Net income applicable to common stock for the first nine months of 1992 was $13.2 million or $0.63 per share ($0.61 fully diluted), compared with $9.2 million or $0.56 per share ($0.53 fully diluted) for 1991.
 Operating income for the third quarter of 1992 increased $3.8 million or 45 percent over that reported for 1991. The increase was due principally to the inclusion of the operating results of the natural gas processing facilities acquired in April 1992 and the favorable disposition of certain contractual matters. The gross margin from the natural gas liquids (NGL) business increased 16 percent from the second quarter 1992 with continued strong prices and rising processing volumes. The margin on natural gas sales declined from 1991 due to the reduction in premium-service sales to irrigation customers and certain off-system utilities, while alternative sales in a period of rising gas purchase costs resulted in reduced margins. This seasonal change in sales mix was offset by the resolution of certain contractual matters made possible by utilizing the company's system flexibility and storage facilities to reduce gas costs.
 AOG also announces that it is calling all the outstanding shares of its convertible preferred stock for redemption on Jan. 20, 1993. The majority of the preferred stock is convertible at $8.25, with the remainder convertible at $7.125. Consequently, the company anticipates that holders of the preferred stock will elect to convert their shares to AOG's common stock. Upon conversion, the number of common shares outstanding will increase by approximately 2.5 million and AOG's annual preferred stock dividend requirement of approximately $1.8 million will be eliminated.
 The company has reached agreement with a syndicate of five banks, led by Citicorp, for a new $75 million revolving credit facility. Approximately $25 million of the facility will be used to replace existing borrowings with the remainder available for general corporate purposes. Documentation is in progress, and the closing is expected within the next several weeks. The company has also substantially completed an amended and restated loan agreement with Prudential Insurance Company of America ("Prudential"). The new agreement covers the Company's existing $45 million of senior indebtedness with the revisions reflecting the company's improved financial condition. Additionally, Prudential has made available to the company a private shelf financing of $50 million to be used for general corporate purposes.
 AOG recently began a two-phase expansion of pipeline capacity in South Texas. Webb/Duval Gatherers ("Webb/Duval"), a 110-mile natural gas gathering and transportation system, 51 percent owned and operated by a subsidiary of AOG, will install compression to enhance the system's gathering capabilities and increase daily throughput by 30,000 Mcf. In late November, the company, through its subsidiary American Gathering L. P., will also complete an 16-mile pipeline with capacity of 85,000 Mcf/d that will connect the southern portion of the Webb/Duval system to a major trunkline owned by Valero Natural Gas Partners, L.P. This new pipeline will significantly improve access by producers to the processing plants served by Webb/Duval.
 Effective Oct. 30, 1992, Mr. John D. Curtin, Jr., executive vice president of Cabot Corporation ("Cabot"), joined the company's board of directors. Mr. Curtin replaced Mr. John G.L. Cabot, vice chairman of Cabot, as one of Cabot's two representatives on the company's board of directors.
 American Oil and Gas Corporation is in the natural gas gathering, processing, transporting and marketing business.
 AMERICAN OIL AND GAS CORPORATION AND SUBSIDIARIES
 Consolidated Statements of Operations
 (Unaudited -- In Thousands, Except Per Share Amounts)
 Periods ended Three months Nine months
 Sept. 30, 1992 1991 1992 1991
 Revenues:
 Natural gas sales $ 89,733 $ 75,091 $252,449 $259,806
 Natural gas liquids sales 20,354 1,653 37,876 6,148
 Transportation 2,373 1,591 7,161 5,734
 Other 1,183 171 1,958 673
 TOTAL 113,643 78,506 299,444 272,361
 Operating Costs and Expenses:
 Cost of sales 87,211 60,252 233,696 220,941
 Operation and maintenance 5,282 2,618 12,775 8,126
 General and administrative 4,312 3,970 12,069 11,369
 Depreciation & amort. 3,926 2,728 10,474 7,561
 Taxes-other than inc. taxes 866 666 2,401 1,880
 TOTAL 101,597 70,234 271,415 249,877
 Operating Income 12,046 8,272 28,029 22,484
 Other Income (Expense):
 Interest income 140 233 612 1,275
 Interest expense (2,130) (1,828) (6,439) (5,852)
 Equity in loss of
 WellTech, Inc. -- -- -- (1,108)
 Other, net (63) 12 206 930
 TOTAL (2,053) (1,583) (5,621) (4,755)
 Income Before Income Taxes 9,993 6,689 22,408 17,729
 Provision for Income Taxes 3,422 2,025 7,671 5,770
 Net Income 6,571 4,664 14,737 11,959
 Preferred Stock Dividends 467 898 1,563 2,740
 Net Income Applicable to
 Common Stock $ 6,104 $ 3,766 $ 13,174 $ 9,219
 Earnings Per Common Share:
 Primary $ 0.25 $ 0.22 $ 0.63 $ 0.56
 Fully diluted $ 0.24 $ 0.21 $ 0.61 $ 0.53
 Number of Shares Used in
 Computing Earnings Per Share:
 Primary 24,493 16,904 20,858 16,444
 Fully diluted 27,588 20,319 24,211 20,319
 Common Shares Outstanding at
 End of Period 23,210 16,227 23,210 16,227
 -0- 11/9/92
 /CONTACT: William P. Conner, chief financial officer of American Oil and Gas Corporation, 713-739-2900/
 (AOG) CO: American Oil and Gas Corporation ST: Texas IN: OIL SU: ERN


SH -- NY077 -- 8758 11/09/92 13:52 EST
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Date:Nov 9, 1992
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