History
Oryx Energy sank into a billion-dollar loss in 1994, sold assets to repair its balance sheet, recovered to profit, and was absorbed by Kerr-McGee in 1999.
1994-1995: Crisis and restructuring
Oryx Energy Company was the oil and gas exploration business that Sun Company spun off in 1988, and it still owned 98% of and managed Sun Energy Partners, L.P. For 1993 it reported a $100 million net loss (-$1.08 a share), with production down 10% on asset sales and natural decline.
In March 1994 it adopted a restructuring plan. It would sell properties making up about a third of its U.S. onshore fields, though under 4% of worldwide reserves, and cut 20% of its workforce. It expected a $161 million pretax charge and at least $61 million of annual savings from 1995.
The worst came in the 1994 results. In February 1995 the company announced a turnaround plan with a new accounting policy for testing the value of oil and gas properties, deeper cost cuts and a strategy to cut debt significantly. Its fourth quarter showed $14 million of net income, against a $52 million loss a year earlier. The full-year net loss was $1,025 million (-$10.53 a share). Almost all of it was a $948 million non-cash accounting change that cut the carrying value of producing properties by $1,355 million. The board suspended the dividend, which had already been cut from $0.30 to $0.10 a share in 1992, and shareholders' equity became a $347 million deficit.
1995-1996: Selling to repay debt
Asset sales became the way out. In 1995 Oryx sold U.S. producing assets for $76 million, its whole Indonesian position for $67 million and Gabon assets for $2 million. In August it closed the sale of its U.K. North Sea Alba field assets for $270 million. In October it added a further agreement, signed in June, to sell its North Sea Block 48/15a interests, covering the Audrey and Galleon fields and the Ensign discovery, for $120 million. All proceeds went to reducing debt.
The result was a recovery. For 1995 Oryx earned $135 million, helped by $137 million of net gains from the sales, partly offset by a $23 million extraordinary debt-related loss and a $16 million restructuring charge. Production fell 10%, which the company expected as a result of the sales.
1996-1997: Credit restored
By mid-1996 the company could borrow again. In July it issued $150 million of senior notes due 2004, in the same month it acquired additional U.K. North Sea interests. Net income rose to $163 million for 1996, as realized oil prices climbed 20% to $19.56 a barrel and U.S. gas prices rose 24% to $2.14 per mcf (thousand cubic feet), while costs kept falling. In August 1997 it registered a new $500 million securities shelf, replacing most of an older 1992 program that had about $8 million of capacity left. For 1997 net income reached $170 million on $1,197 million of revenue, and oil output grew 6% to 115,000 barrels a day, even though the realized oil price slipped to $18.43.
1998-1999: Absorbed by Kerr-McGee
In October 1998 Oryx agreed to be acquired by Kerr-McGee Corporation in an all-stock, tax-free merger. After a 1-for-0.369 reverse split, each Oryx share would convert into one Kerr-McGee share, subject to shareholder votes and antitrust clearance.
The 1998 results were weak. In January 1999 Oryx recorded a $49 million after-tax non-cash write-down on certain U.S., mostly offshore, fields, reflecting continued weak oil and gas prices. Two days later it reported a 1998 net loss of $95 million (-$0.90 a share), against $170 million of profit in 1997, as revenue fell to $820 million from $1,197 million. The fourth quarter lost $71 million, compared with $39 million of profit a year earlier.
On 26 February 1999 Oryx deregistered its NYSE-listed common stock after the Kerr-McGee merger was completed, ending its run as an independent public company.
Written from the 15 story beats below (1994 to 26 Feb 1999), which come from the company's own announcements and filings.