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Arkla, Inc.


Announces Year End Results

LITTLE ROCK, AR, Year End 1990 -- Even after adjusting 1989 earnings for that year's write-down, operating income in 1990 was up 28 percent to $317.3 million. Total throughput in 1990 was 1.2 trillion cubic feet, about 6 percent of the total U.S. demand. The addition of Minnegasco will increase our market share to about 7 percent of the U.S. total.

Pipeline -- Arkla Pipeline Group operating income increased to $152.2 million in 1990, a 47 percent increase from 1989's $103.5 million. Throughput increased by 31 percent, reaching 932 billion cubic feet (Bcf).

Distribution -- Operating income in the distribution segment was $137.9 million in 1990, up 4 percent from last year as the inclusion of December operating income for Minnegasco offset the effects of the abnormally warm winter weather.

Exploration and Production -- While our E&P operation experienced a 14 percent drop in operating income to $23.9 million as a result of higher depletion expenses and lower wellhead prices, the company nevertheless extended a five-year trend of increased cash flow and operating revenues while setting all-time company records for natural gas production (58.2 Bcf), oil production (709 thousand barrels), total sales volumes (86.0 Bcfe) and wells drilled (147 gross, 88.0 net).

Capital Spending -- Total capital spending in 1990 was $428.3 million compared to $397.2 in 1989. After deducting payments received from a partner in the Line AC project, the net spending total was $303.3 million. Expenditures in both 1989 and 1990 were higher than normal due to the construction of Line AC and substantial E&P reserve acquisitions in 1989.

Capital spending in 1991 should return to a level that allows us to operate within our cash flow and can be maintained for the long term. With the addition of Minnegasco and E.F. Johnson, our expectations for net capital spending in 1991 total $211.2 million after completion of the sale of interests in Line AC to Texas Gas/Transco and Tenneco/Columbia Gulf.

Contact: Thomas F. McLarty, III, Chairman of the Board, President and Chief Executive Officer, Arkla, Inc., P.O. Box 751, Little Rock, AR 72203 (501) 377-4659.
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Title Annotation:Public Company Corporate Reports
Publication:Arkansas Business
Date:May 6, 1991
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